Hello and welcome to the novel and non obvious podcast where we discuss the intellectual property topics impacting the startup world. My name is Yoriko mori to the host of this podcast and founder of patents integrated today. We welcome Vanessa Clark and William kowalski, the pair behind Somos Space We'll be discussing I. P. Issues related to space companies and space startup companies. Welcome Vanessa and William. Hi Yuriko, thanks for having us. So we've known each other for a number of years now and I've watched your company from just that Nascent idea and as you're launching the company and you've grown to 20 employees now, what has your journey been like? That's a big question. I mean, um so I have a song on my default playlist on Spotify that I run to and it's the first song when I start to run and it's called Mountain at My Gates.
And I'm like, yeah, like, you know this this run is just Overcoming a mountain every day at a startup. It feels like we're back at the base of the mountain and I think this song, I'm like, yeah, I know we're making progress and we're doing great things, but like that mountain in front of us, what we have to do to realize the business that we want seems to grow with every step we take. So William is right. It has been Rocky, but it's also been really successful. But sometimes we don't take the time to do a retrospective and look at everything we've accomplished, but it's definitely been fun and definitely been a really great learning experience. Yeah, I mean it's amazing the number of things that you have to learn how to do and do very quickly in a short amount of time to get things off the ground, particularly as the founders, there is no well let me ask x y z at the company has done this before because everything just stops with you and you have to find a solution sometimes that day to whatever problem is facing you. Yes, the two of you have had, you've had your own careers up to this point, you know, Vanessa in, in aerospace engineering and William in finance, has that been an asset for your company?
The fact that you do have these backgrounds that you bring together for this company, there are really two things like one out industry is really convoluted in terms of procurement and licensing and operations and norms and quality assurance and so many little pieces that have to come together, the space mission is really a million miracles that happen in concert and knowing how those things can go wrong is really an asset. So I think that it's paramount for anyone starting a space startup to have someone in their leadership team who has executed space missions before. On the flip side, it's a really different environment. So I was fortunate in one of my previous jobs, I had a lot of freedom to go find problems and solve them and that is a completely different mindset, what you experience in a lot of larger aerospace companies and so I was fortunate to have relevant experience there, but not everyone has that.
Yeah, I mean for me having done financial planning before this, you learn very well how to ask a lot of poignant questions and I think that has made us, I don't know if successful is the right word, but survived through things like covid and to be as capital efficient as possible, learning how to ask the engineering team, just a lot of questions and really dig into why are we buying this specific thing? Have we explored other options to buy less expensive alternatives? And even bringing a different perspective, say when we're pursuing government contracts, having been in a position that was heavily focused on sales. You know, learning that even though it's the government and you're responding to a solicitation, they don't buy because you have this cool awesome technical solution they buy because you're solving a specific problem and how are you wording your response to show very plainly and obviously that you are addressing that problem with your cool technology.
So that's a good point there. So I know that for example, I I'm affiliated with an accelerator program in Colorado Springs that's specifically related to space technologies. So I know that the government, the US government in particular has been putting money towards small startup companies that are creating these solutions. Can you tell us about the challenges for small companies to work with government contracts? There's certainly a very large learning curve I think the Department of the Air Force and now you have us Air Force and the Space Force together have done a really good job in creating new pathways to bring small companies into the fold and make the contracting process a little less opaque and rigorous. So for us it was learning how do you comply with all the rules both on the accounting side, on your I.
T. Infrastructure side you know making sure you're talking to the right people using the right language and then beyond that knowing the I. P. Implications of government contracts. You know this is something that we had to learn as we go. What are S. P. I. R. Data rights? What does that actually mean when you're proposing through an other transaction authority in O. T. A. What do those data categories mean under far contracts? What do these certain categories mean? What actually are you giving to the government for the contract payment? They're not just saying here's money. Small business go and be fruitful and multiply. You know they're getting something back and what that something is is sometimes very specific and you have to be very careful on the wording and contracts and knowing what you're doing. Yeah I know that your company has raised both investor money as well as do work on government contracts. How do you as a company decide on which to put more emphasis?
Oh, that's a good question to date referees, two rounds of funding and we've won a couple of million dollars in government contracts. Our philosophy as a company right now, while we're in the development stage, is that any government contract that is completely aligned with our product development is an opportunity to offset dilutive capital. So our baseline plan is to go raise all of the development dollars that we need from the venture capital industry. We always keep an eye out for ways to offset that because it's better for us and our existing investors and we're just getting a process in place now where we can assess things like our win probability and the effort required to see if that we actually have an R. O. Y. From distracting key members of the company to go and write a proposal for the government. But fundraising for us and winning government contracts definitely aren't mutually exclusive. We try to have a good balance for us, especially as we've grown in size and are pursuing bigger contracts, learning how to think about where we're putting our energy.
I mean, if you say we have a million dollar opportunity and there's a 10% chance that we're gonna win it. So our probability weighted win is 10,000 $100,000. If it takes the whole company one month to write that proposal, we actually will lose money on the contract because our probability of winning if we wait that out, we actually spent more money proposing than we would win. Now you could say, well if we win we get the million dollars, but there's still a 10% chance of winning and being very methodical on where we're devoting time. And does it make sense to pursue this? That is the most disciplined answer that I have heard from a startup company regarding government contract proposals. So that's great that you've really thought about the R. Y. Of these proposal submissions and preparation. I see way too many companies that become essentially tied to the S. P. I. R. Programs because that's where their funding comes from.
And there they're having to pivot all the time trying to satisfy the government contract requirements. So kudos to you for that. I want to step back a little bit and ask you to talk about why you started this company in the first place because like, like I mentioned earlier, you both had very productive careers before this and you were well known and well regarded in your industry, why start your own company, a space company. Nonetheless. This is a story that I like talking about a lot. So my background is aerospace engineering. So I have worked to launch vehicle manufacturers. I've worked for satellite manufacturers and I've also worked for the german space agency and working in launch vehicle design, you're really designing those systems around customer needs. So what you think satellite operators want. And then on the flip side, satellite operators are designing their systems to suit what launch vehicles are available.
And having worked in both sectors the parent that there is this spiral down to mediocrity. The launch vehicles aren't optimal for what the current and future satellite operators want and satellites aren't optimal based on their missions. They're really, really constrained by launch vehicles. There is really no other industry where the first logistics step getting to where you want to operate constraints, drives costs and drives other limitations. As much as the space industry, you have to cram your entire revenue generating assets in a launch vehicle fairing and send it to space for tens of millions of dollars. Like it is a very peculiar industry in terms of logistics And so with my experience in the industry, I wanted to change this and the best way to do it is the architecture that we're developing. Well, we actually operate orbital transfer vehicles that we call O. T. V. S. These are basically space tugs.
These systems reside in space and not able to relocate satellites on orbit, which means that you can assemble satellites on orbit, you can ride share in a rocket, have satellites going to different destinations launching the same rocket rather than the modus operandi that we have today where a single launch vehicle launches a single payload. And so this is kind of the shift in logistics that we need to realize the potential of humans to be a space faring species in terms of commercial utilization of space and also human exploration of space beyond earth and the moon. Now, the reason why I thought I needed to start a company to do this is based on some of the research that I've been doing now about seven years ago. The concept of orbital transfer vehicles and the technologies that we're developing in terms of advanced and based propulsion just weren't taken up by industry. The large operators in the industry get a lot of their revenues in the government. One of their key focuses is mission assurance and reliability and they are not incentivized to innovate.
One of the key exceptions to this is obviously SpaceX and they've definitely led the charge for the space industry, but this was definitely a challenge and an innovation that was best tackled with a startup. So in 2017 I went looking for a co founder and was fortunate enough to be introduced to William and persuade him that this was a life changing and industry changing opportunity for me at the time when Vanessa and I first met, I really enjoyed what I did for a living before this, you know, had a great career path ahead of me. But I thought, well I'm not married, I have no kids. I've always loved space. I used to run a physics website when I was in high school. If there was ever a time to try something like this now would be the time they're not being married and having no kids. Part is not true anymore. But you know, at the time I think, yeah, why not? You know, I can always go back to what I did before and let's, let's take a shot at this. And I'm, you know, no matter what would happen to a thomas, I think both of us agree that this was the right decision and we've just learned so much and how to build a company, how to run a company, how to run our own professional lives really.
Yeah. So the two of your partners and business as well as partners in life, which is pretty awesome. So as a space startup. Now, even though you do have the backgrounds that you have, how do you gain credibility with your potential partners, your potential investors, all of those people that are outside looking at a company that needs to raise millions of dollars as a baseline to get started. So this is one of our biggest challenges and it's going to continue being one of our biggest challenges really. A lot of what we do associated with commercial sales is associated with building credibility. One of the first things we did as a company, when we're still just two co founders was go out and talk to a bunch of prospective customers, engage their risk profile and what it would take to de risk our services for them. So they would be interested in procuring them. A lot of the response was we want to see you successfully demonstrate your services, including the highest risk technical elements on orbit.
No one really wanted to be the first and this is kind of typical in the space industry. No satellite operator really wants to be the fast on the launch of a new launch faithful. Now, even though our systems are less risky than launch vehicles, it's still the same. And so we've shaped our development plan, our capitalization plan, our go to market strategy around having an early on orbit demonstration and we've decided to make that demonstration really significant and demonstrate not just fundamental things for our business, but also demonstrated in a way that is clearly at scale already Our first mission and the first spacecraft that we're operating in early 2023 are the same spacecraft that will be serving customers in the future. There are some companies that looked at launching much, much smaller satellites and doing demos that didn't really mean anything. But we decided to take an approach where our demonstration clearly was meaningful and clearly with Deer risk for our customers, some of the aspects of our operations they were concerned about.
Now the other thing that we've had to do is build a really great network and team. So we have really strong partners, both from vendor perspective and also from an investor perspective. We also have a really great technical advisory board who's been supporting us from a promotion and a technical perspective as well. So that all little things that have come together to help us build our credibility, anything you want to add. Yeah, So I would say credibility begets credibility and it is an incremental process and for us we started getting involved in as many government things as we could and just getting our name out there in industry organizations and learning what some of the needs were on the government side, which we can then flow into winning some small contracts to start off moving into bigger contracts to show that there is a willing buyer at least on the research development and engineering side, which then we can flow into investors to get more credibility, hire more people get more credibility.
The next step for us is proving that we can put a spacecraft in orbit that functions the way we say it can and as hard it is, it it is to build the credibility, it's very easy to destroy it. We don't want to be like some space companies that have gone up and claims their propulsion system can do X and it did not do that and lose a whole bunch of customers because of that. On the government side. You know, one of the things that we learned is there is actually databases for poor past performance and if you have poor performance on a contract, you can end up on these databases and make it very, very difficult to impossible to win future government awards. So there's like a black list. Oh wow, I did not know that. So I know that there's a lot of competition actually in your industry with a lot of startup companies at various stages.
How do you distinguish yourselves from other competitors out there? We've had a core strategy that we've been really sticking to. So some of like our core tenants are one that we are low cost, like we are a pretty scrappy team, we operated first two years of the company spending less than a half a million dollars doing some critical development um to date, we've spent really little cash and taken some really innovative approaches to keep costs down and William alluded to this before. But he is really, really good at keeping spending on a really tight leash and making sure that all of our money is well spent. So being frugal is one big differentiator because the large aerospace primes can't do this. And some of our startup competitors who are a little more capitalist than us also come through this. Our second big focus has been on to technology verticals. So the first technology vertical is, in our opinion, the best technical approach for our business which is for our systems to reside on orbit and rendezvous with payloads once the pillows are launched to do this in a way that is affordable, ubiquitous and scalable.
We've had to develop a lot of technologies in the house and a lot of the I. P. That we've developed to date has been around this core element. We feel that this is a big differentiator from a technology perspective but also in the long run it's going to be a differentiator from a cost perspective because we don't have to build a new orbital transfer vehicle every time a customer goes up, you can advertise the costs over multiple missions and also we save the customer a lot of money because they don't need to have extra mass and volume available on the launch for our system since we're already in space. The second big technology vertical is efficient in space propulsion. Now we really feel that historically the technologies that have flown on rockets and satellites are an evolutionary dead end, they have been good for the applications they were designed for. But if we look to the future for moving around efficiently in space, having big industrial emissions to the moon, sending astronauts and humans to mars and the asteroid belt, these propulsion technologies don't really make sense.
And so our philosophy has always been, let's fix something that's affordable now and meets our purpose but it's scalable to what we want in the future. And so our selection in propellant for moving around the space, our selection for propulsion mechanism. So what our actual thrusters are on, what our spacecraft all scalable to the future. And if we're competing against other companies, how fast we can move and how little propellant we use are really going to be the big differentiator. And we have laid the foundation to be the leader in the field based on decisions we've already made today. One of the things, in fact, I just had a conversation with somebody just recently about how for a company to be successful these days, especially innovative companies. They can't just innovate on what's in front of them right now, but they do need to anticipate what's coming down years down the line, um, as a business. So on the operation side, how do you plan for something like that, William? Like you have your needs now, how do you anticipate, you know, five years from now, where you want to be a lot of Excel Files.
Um, what we did early on and you may remember this, you know, Yuriko, you first knew us is we, we did start with the long term vision. We started very much focused on space nuclear and then it was breaking it down on, well, what are the interim technology development steps that we can add value, show value to eventually get to that. So we always had a high level idea of where we wanted to go and you just do some rough estimations, you know, you can hand wavy where things are gonna be. And then as we get two more near term, it's just adding more fidelity to the plan that we have. So we've always had it we've always had it laid out But maybe the next 12 months is really, really defined 12 months after that is pretty defined the 12 months after that is I think we need around this the 12 months after that is sure that sounds about right but just the discipline of of thinking into the future I think it's so important.
So we the two of you and I met in an accelerator program. So speaking of R. O. I. S of some of these participation or even grant programs have these accelerator programs giving you good ry I know that you've done several in a couple of the big profile ones. Yeah, I would say the benefit can be pretty varied and for us, you know, the two programs that were hands down most valuable for different reasons was techstars and you mentioned before the catalyst accelerator program down in Colorado springs to the ladder. It really helped us learn what we don't know about the government contracting world, heavily focused in the Department of Defense Space and all the other things that we have to be thinking of as we grow as a company from what an F.
C. L. Is a facility clearance, what A D D 2 54 is and how you Get classified information and what things we need to be thinking of now. So that if in 24 months we wanted to go that route. We're already prepared on the text our side. Yeah. So we also did techstars in early 2019. It's an equity based program that we also Received $120,000 in investment. With that. It was such a phenomenal program, it had a completely different focus and we had different objectives. Also, it was so great being in a cohort of really diverse companies, somewhere in SAS, somewhere in consumer, it was really exciting to see how other startups operate and how they could improve. I think one of the big learnings that we've had with accelerators and programs like this is so right out. What are your objectives in doing the program and validate with the program leader. So the Director of program Manager that, hey, can we actually accomplish this new program and then make sure that you can before you either invest your time or your equity or Words or whatever the program entails.
If you don't have an eye on what you want out of the program, you can just sit in there as a participant and not implement the lessons learned or take advantage of the resources in front of you. So I think that with textiles and other programs that we have done having those objectives and coming back to them on a daily basis, like really, really helped us make the most of these programs and I recommended anyone doing something like that. Does something similar. So then where do you want to be in for five years? So you said you've got to launch planned in early 2023. And then how do you envision your company progressing from that point? Our long term vision for the future is twofold one is that we completely decouple satellite and space mission design from launch vehicles so that really anyone who wants to do business in space with a satellite or explore in space is able to regardless of where that is, if it's in a high difficult to access of it, if it's insistent in the space or beyond Earth, we want to enable that future.
So in the short title, I guess the midterm to get there, we want to be operating at scale. So having multiple orbital transfer vehicles on orbit serving satellite operators who want to get to orbits that either they can't afford to get to today or that they just simply can't access today with the technologies that are available. And so from our first two spacecraft that are launching in early 2023 in 4-5 years, we want to increase that by an order of magnitude. There is a big market for satellites in Earth orbit and it's growing exponentially right now, which we want to be a part of. I have a whole fleet of them in space as you've built your company to this point, has there been anything unexpected that you've had to learn or experience that surprised you sir? I have one thing that was actually really surprising that's raising venture capital.
It's really a sales process and running fundraising like a tight sales process with a Crm and a pipeline in different stages and materials that you treat like sales materials has been really important and I wasn't expecting that definitely expected it to be more like a banking transaction when you're like, hey, I can make money. If you give me money, write me a check. It's, it's a lot more elaborate and it's definitely something that we've learned over the past couple of years and I think I've become pretty good at. Yeah, I mean, I could think of a few things, you know, a big one that comes to mind that I'm very diligent at in the startup ecosystem. There's always more to be done than you have time to do and really learning that tasks Meetings your calendar, email can take up the available volume if you don't really control it. So I'm pretty strict about shortening all the company meeting lengths.
Like it was an hour meeting. Well, can we do this in 30 minutes and seeing like all right, we can cut out a lot of filler in this meeting. This. Like there's a lot of things that don't need to happen, you know, trying to be more efficient in everything that we're doing because we all have a lot of things to do. And the only way we can achieve the frugality that we want to achieve to hit the customer price points we want to hit is being very cognizant of everyone's time and how we're spending resources, everyone's time is worth money to the company so spending it efficiently is really important. You know, the other thing is I mean we've heard this so many times in the accelerators we've done and from other people in startup land but how critical having the right people is to the company and really being able to trust the people on your team is ridiculously important because again going to the other point we all have more to do than we have time to do. So being able to say, you know here is a problem, go solve it and having the confidence that they will do that and you don't have to have regular checkups and kind of looking into them helps.
So this feeds into our hiring process where resumes are interesting and you can review them where you went to school is interesting. I don't know anybody's G. P. A. In the company. But what school projects have you done? What problems have you solved? What problems that previous jobs have come up that you've identified and solved. Like how are you thinking critically about problems because when you come to a thomas we don't have an engineering manual to hand you and say this is how we do things, how we do things is just how you solve the problem that day and maybe as we grow and in the five years there were 100 people we'll have some of those things but right now we just need problem solvers. So be the Marie kondo of the space startup world, does this person bring you joy? So because we are an I. P. Podcast and I work with you on your I. P. Portfolio, are there things related to I.
P. That were unexpected or that you had to learn during the process of building your company? All of it. Yeah, all of it. What do you mean by that? No one at the company had filed So learning that entire process. The difference between a provisional and a non provisional was interesting and then learning the filing schedule and dates and milestones that all stuff that we had to learn but then or a space company with the space twist our services and products are going to be not in the country where we file, they'll be in space and so some of the big questions that we actually have our, okay, do we need to file internationally? If so where is there a difference between method of use patterns and design patterns so having to go look at the whole ecosystem and then compare that to where we need protections has been a big learning that we're still continuing.
Yeah. And I know that you and I have talked a lot about where are your competitors operating, where are you going to be building your vehicles? Where are your competitors building things, where are they being launched? Where are they being used? All of those things? So yeah that's that's a very unique problem that you have that not too many of my other clients have. And I think the other part that I know that the two of you and I have talked about a lot is budgeting on the I. P. Process and just not having to be hit with unexpected expenses and having those things to be part of Williams, big spreadsheet. I mean exploring where you're gonna file and translating your patent into Russian and filing in Russia is not cheap and you can't just do that with every idea that you have and being very methodical on what are we filing where we filing because again resources are always limited. Yeah. And then the other thing that comes into that is when to file because obviously we want to have priority date when we can but sometimes when unsure if this is a design or a method of use it will actually implement in the final form of our services.
So balancing like whether we file at that point or deleted decision point and then when we converted that to non provisional has also been a learning process. I think we're getting better at it there with your support. Yeah definitely. And I think the other aspect of your industry too is that there are some really really big incumbents that file a lot of I. P. A. And because government contracts are involved like I mentioned earlier there are I. P implications to taking some of the government money. So these are all complicated parts in a multi parametric equation. Yeah and as I've stressed to the engineering team on multiple occasions patents and N. D. A. S. Are only as useful as you have money to defend them in court to an extent. And if we release too much information even with N. D. A. S. You know we can't exactly go up against Lockheed in a legal battle because the reality is we only have so much money to spend on certain things.
And I. P. Court battles do not add value to the company so making sure that everyone is always very cognizant on what we're telling people is it under N. D. A. Even if it's under N. D. A. Are there certain things that we probably shouldn't say because they are really proprietary and we want to keep that very close. You know this goes back to having the right people on the team like everyone has to be thinking of all these things not just their very narrow focus on I designed bolts for this part of the spacecraft for sure. And I think what strikes me about the way that the two of you run your company is how disciplined it is so that when you were talking about raising VC money and how you have to have a crm and you have to be very mindful about the process flow and no William, you're minding the money and and people's time you run your business with such discipline that really impresses me as a last question, do you have any advice for other audacious space companies or just people with really big audacious ideas that want to start a company?
I have two pieces of advice. I don't know if you wanted to jump in, I would say you should find mentors who will question your assumptions very rigorously and not just tell you this is a great idea and let you waste a lot of time pursuing something that maybe they don't want to hurt your feelings and they didn't really think it was a good idea. Our best mentors and advisors were ones who were very tough. Yeah, so part of my advice was also going to be to find mentors, find people who have accomplished similar things to what you yourself want to accomplish because you need a mentor who is credible and who you can give a lot of weight to their advice. If they haven't run a startup before or executed a program similar to yours before or sold to a similar customer that you want to sell to. Like their advice has less credence and to carry less weight than someone who is giving you different advice, who doesn't have the same experience.
I think Ray Dalio's book really talks about how they do experience weighted decision making and I think that you don't have to do it quite that formally, but make sure that you're listening to the right people and surround yourself with people who are informed. Um, I was going to add to that. You know, it made me think of something I was able to run my own accelerator. It should never be about. These are the things you should do because every company is a little bit different. Their path to success is always different. But there is definitely a list of things you should not do and that's what my accelerator will be, its Williams accelerator for things you definitely don't want to do running a company. All right. My second piece of advice to someone wanting to do something audacious is related to listening to people, particularly when you're fundraising and you're talking to customers, our customers and particularly our conservative. A lot of them do dismiss audacious plans or ideas either because they get brownie points for being conservative in the case of some investors and analysts or in the case of some mentors and former entrepreneurs like they want to justify to themselves why they have failed.
Like I remember conversations in previous careers where very senior launch vehicle executives were adamant that SpaceX couldn't land and reuse boosters. They had attempted to lead programs similar to that decades ago but had failed. And so they were trying to justify their own shortcomings just because other people have failed, doesn't mean that you will have to understand where they're coming from and if you're going to give their advice and input any credibility so just keep going but try to filter all of the advice that you get to the best of your ability. Everything is a data point. Everything that you hear is a data point taken into consideration, but you decide what to do with it. Well, thank you so much for being gracious guests and friends. All the best of luck to you going forward. I love the fact that you are dreaming big and actually executing in a way that is disciplined and makes sense and logical.
So congratulations to you all the best of luck for future successes. And I look forward to to hearing more news about your space tugs. We should have more news coming out soon. Thank you. This is this is a lot of fun. We hope you enjoyed this episode of the novel and non obvious podcast. Our guest today have been Vanessa Clark and William kowalski of space. You can find more information about the company at space dot com. Feel free to send us comments or suggestions for a startup and I p related topics you'd like us to discuss on this podcast. At info at patents Integrated dot com. Our producer is Joel Davis of analog digital marketing specialist is tim Sprinkle of Layup content. Our theme music used with permission is the Workday Takata from A Life In a Day, composed by sri slider and performed by Michelle Stanley and flute, Jeff. Look, Watch, Warren, guitar and cello. Here's our obligatory disclaimer. The content of this podcast is informational only and not intended to be legal advice.
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