Ep. 66: Winning the Space War, with Dan Smoot, CEO of Vantor

There's a lot of change going on in the world and everybody talks about applying AI and machine learning to it. Great. If the data is not clean, it's not great.

Thanks for having me this afternoon. This is an incredible way to finish our day here at RDF, which of course is a very long day listening to policy and priorities for the US government. I appreciate you having me today.

Well, I think it's important to come to this event. This is where industry meets US defense. We've been doing this for many years, but I think this year is really important because we're between two administrations. Last year we had Secretary Lloyd Austin giving his perspective on priorities and now you've got Pete Hegseth. A little different, definitely different messaging. But it's important because they're aligning priorities. As we serve different missions for the US government, it's always important to make sure we're aligned to those priorities right now. There's a lot of acquisition reform, modernization of weaponry, and modernization of our warfighter. All these things are important to hear how we want to approach them. That's how we adjust our business to make sure we can meet those missions.

I think it's more reinforcement. Over the last several months we've been working with the agencies and our customers and you start to see how they're thinking about things like acquisition reform, which is a big topic at this conference. That's important because we're bringing newer solutions that can really modernize how we look at intel and defense. It's how do you bring that forward when the military is trying to acquire differently. We're not just seeing that influence here in the US, we're also seeing it go across international marketplaces. If you look at the defense strategy released last week, it talks about the international community taking care of themselves and where the US will play to support them as well as domestic priorities. It reinforces things we've been building upon over the last couple months, and it's really important to have those discussions at a forum like this.

Yes, we have.

It's a great question, something that's been top of mind for many people. You're right, Maxar has had a strong brand for doing the most exquisite electro-optical imaging for the industry. We're the biggest player doing this commercially. But part of it was that imaging was what we were known for — 30-centimeter imaging. With the innovation we've been driving, it's how do you take that foundational data built over decades and turn it into more meaningful solutions for intel, defense, and commercial markets by applying new capabilities like advanced AI for object detection, site monitoring, and maritime awareness. Also how we're doing things in space — looking at other objects in orbit, doing non-earth imaging. The wide range of solutions happening now means you have to reorient the eyes of the customer to understand the broader modernization of our company and what we're delivering for government. The second reason is what you mentioned — there was Maxar but there were two parts: the intelligence side and the manufacturing side that space did, specialized in geo-orbit communications and large satellites. They rebranded as Landstar, but we split that off and recently sold it to Intuitive Machines. So there really can't be a Maxar because one piece has moved to another company, causing marketplace confusion. The third piece is the financial markets — when we were publicly traded, it was an imaging company with some financial challenges from satellites on the ground. We've since launched them and become a much stronger, financially viable company. Especially with the sale of Landstar, we're really differentiated in the solutions we're bringing to market. We wanted the financial market to know there was differentiation. Three big points to the decision. It didn't happen overnight. We started this journey back in January, going through naming conventions, working with customers to make sure they understood the brand change, and then the actual launch and move forward. It's something we've been working on for some time.

I think it's like we talk about the changes in the defense and intel community and even in the enterprise and commercial community — automation is really important. Geospatial has been a very manual, analyst-intensive approach to looking at information and trying to solve problems. If you're trying to understand what objects are on the ground, movements of naval ships, fishing vessels for illegal fishing, illegal mining, or civil purposes, you're either parsing through a lot of data or you want it automated so information is presented to you. There's been a major change in looking at applications and driving intelligence — how do you drive more automation? Whether it's maritime awareness through Maritime Sentry, or site monitoring through our S-Change product, those are foundational capabilities, but it's really about driving automation for the end user to pick up changes happening in their environment. That's what's driving these new applications in the new environment we're serving.

Well, one of the first things you have to understand is the foundation of the company. We had six satellites sitting on the ground for a while as we were building them. Now that those satellites are up and fully commissioned, it gives us a whole new capacity and a whole new view. Even the way we're flying them from an orbit perspective enables us to do a lot more. When you have that capacity, you're able to drive and deliver more products. The applications we're building and the groups we're serving are a very different audience now. We have the foundational mapping side of the business that we've been effective at managing for years — still a core part of our foundation. But as we emerge into these other capabilities, you have to demonstrate what you can do in the marketplace. We've taken a much more aggressive view in what we release and share about what we can do as a company. The market also needs to understand some of the things going on. We have a product where people say you can build GPS-denied landscape navigation, which sounds exciting. But the foundation is that we support all the Western countries in the battle of Ukraine. GPS-denied capabilities on a drone are really important because part of the autonomous battlefield is drone capabilities. It turns out that because we have this foundational data and can put it into an application, load it onto a drone, and it can fly by landscape — which is actually more accurate than GPS — it can fulfill those missions.

So that's why you saw the recent media we did with AIDC or some of the work we've done with Saab. Those are the types of things we want to show the world — there are capabilities out there to help the warfighter be successful. The NEI one you were alluding to — yes, we did get into a little national situation.

We may have taken an image of a Chinese asset. They may not have appreciated it when it came out. So they took an image of our satellite. We love when this happens. We decided to take an image back of the satellite that took an image of us. It turns out our image was much better than their image. It was a very fun yet descriptive way to show the power of our non-earth imaging capabilities — basically looking at other on-orbit capabilities in the marketplace. That's actually very relevant when you think about Golden Dome and other solutions countries are worried about. They're actually very worried about what's going on in orbit.

But there's a lot of newer capabilities on orbit.

Correct.

Those are the use cases that are really interesting now.

I think the good news is we're in a mode of growth. With the rearmament going on in Europe, with the new administration's policies from an international market perspective, it's actually opened up the market for us to solve a lot of sovereign problems that nations are now facing. Over the decades, the international community and allies have been really dependent on the US from an intel perspective. Now that they've stepped back, they realize they don't really have their own capabilities. We've been building everything from the space orientation to the ground capabilities to operate and disseminate information from orbit — real-time analytics and insights. They're trying to build capabilities now to catch up, and you can only do that through commercial. It's almost impossible to have the funding and time to do it from a bespoke perspective that the US has had decades to develop. We see this as an opportunity to bring new capabilities to market, and we're seeing real traction internationally, even in Asia-Pacific regions. The second thing is the capitalization of what we've done to get a much stronger business will allow us to invest in new capabilities — potentially onboarding capabilities from other companies, and investing in new on-orbit capabilities. These are things we're going to build and take advantage of through the health of the company.

I think growth. The market positioning is really important for us in the next 12 months.

Just being a satellite imaging company to actually being a comprehensive solutions company — that is really important. We've actually changed everything. We used to just be a perpetual imaging company; now 90% of our revenue is ARR. If you think about market valuation from our investors, they love that. When you talk about net retention rates, having that loyalty from our customers and focusing on expanding their footprint with new capabilities is really important to the investor community. It's really important that we're pushing this new rebranding but more importantly the new technical capabilities into the marketplace. This next 12 months is a lot of that, and then growth.

You hit it right on. We've gone from being a one-time buy type of company — tasking — to buying on a subscription basis. The insight applications I talked about are all subscription, traditional SaaS-based products. Our platforms are going to be subscription-based. We still do some imaging buys — countries will come in and say they want to see an updated area. We'll still sell some of that, and that's the 10% that's still the traditional business. But we've really moved to a reoccurring business now, so there's a lot more predictability. That's just good hygiene for how we want to move forward from a markets perspective.

We had a huge advantage. The company went private — it was a publicly traded company and Advent International and BCI made a huge investment. When you go private, you can actually take the time to reformat and transform the business, and that gave us air cover to do that. But it's not easy. Getting the sales motion right, getting customers to buy in a different way and understand the value — customers understand that technology changes and they have the opportunity to subscribe to those changes versus being beholden to something elongated. That's actually the whole acquisition reform we're seeing in the US government — how do they modernize by using modern capabilities? That's buying software, buying new capabilities in a much more modern way. It's enabled us to transform the business. Changing the sales motion is not easy. I've come from a couple very strong high-tech companies and we've all gone through this transition — none of them have been easy. But once you get there, the sales motion becomes a lot easier, customer acquisition becomes easier, and the predictability in the business is much greater. It's a decision where the benefit outweighs the cost of going through the pain, and you feel like you're on the other side of that particular valley. It's been a two-year journey to get us to this 90%, and I think that's a very healthy foundation to build off of.

Some of the ones that are really cool — we're seeing a shift in the marketplace where 3D landscape or 3D in general is going to become a very powerful tool for lots of our customers. One of the ones we've been working on is a partnership with Anduril on the SPMC, the mission-born simulation we're doing for the US Army. That is incredibly powerful because you're actually doing augmented reality for training warfighters. People are using goggles to look at a simulated battlefield using geospatial insight plus other sensor data to create a format for successful training in a non-dangerous environment. Those are incredible solutions built on a 3D map of the world. Vantor is really special in this way — there are only two companies that have that much depth in 3D imaging of the world: us and Google. Because of our satellite imagery, we're updating it constantly, so we're actually much more modern in that foundation. Mapping companies on the commercial side are using us for foundational 3D mapping in areas where it's not easy to get that mapping — where you can't fly aerial or do drones. So it's effective on the commercial side to modernize their solutions for consumers. You're seeing it on defense, intel, and the consumer side — 3D is going to play an incredible role in how we look at the world. You need to be able to rapidly update that. On the mission side, if you want to do a post-damage assessment of a military action, you need to understand that 3D elevation and all those 3D changes. We're doing it now on the augmented reality side and seeing it at the high-def level for the consumer base.

It's funny — if I have any golfers out there, how many golfers use a Garmin watch? A lot of people don't realize that Garmin is one of our biggest customers. A lot of the mapping foundation that Garmin does — I know hunters that use Garmin capabilities, fishermen that use Garmin capabilities. We're exploring things they could do even in aviation. That's a classic example of how important having this data is. There's lots of other mapping companies using it. Companies that support the automotive side for autonomous vehicles — a lot of those companies building for automotive manufacturers are using our data to quickly and rapidly update for driving cars. Now, to be completely autonomous you need other capabilities on the car, but this is the first part of the foundation. You're seeing this in a lot of commercial places. We've got distribution companies looking at that last mile of how to do things in an automated format. Again, you need a foundation to build off of, and that's what we do.

I think we're facing the same challenges as every company right now — what do you do with this large amount of data and how do you actually compute against it? Processing power and all the other things we're all looking into. Yes, we have petabytes of data. It's not just the data we're producing today — it's the archive of data we've produced up until today. We were talking to someone from a natural resources research organization and they asked if we could give them some history on the polar caps. We've got decades of data, so we can process it together and show what has happened over several decades and what's happening moving forward. To answer your question, our infrastructure costs — we are cloud-based and use a lot of partners — that's not my cheapest part of my business. It's an expensive piece that keeps growing.

It's actually accessible. We've made our archive very accessible from a subscription perspective, and a lot of people do research off of that.

The way we build our archive is pretty accessible because we do a lot of fusion of that data. If you think about building large-scale 3D maps, you're using all the old data as well as all the brand new data to really construct what the world looks like.

It's funny — we're trying to solve it and I think the market's trying to solve it. There's a lot of change going on in the world and everybody talks about applying AI and machine learning to it. Great. If the data is not clean, it's not great. I think one of the big problems everybody's trying to solve is really the data management side. When you start talking about large-scale data like we have — when you're talking about geospatial recognition or spatial recognition of change on the ground, that's a whole different way of thinking about data versus large language models where you're trying to do things on a language basis, which we've kind of solved with things like Gemini and ChatGPT. This other problem is things like WorldView and other people are trying to solve, but it's very hard. It's an incredibly complex business model. People are starting to think about the spatial side, not just the language side. The mathematics is very different. And by the way, space is hard, but building new capabilities on orbit is also something in the marketplace. We're really looking for innovators who can bring new sensors and new capabilities onto orbit. Between those two — because what you build on orbit, you've got to interpret on the ground — they're big problems and not easy ones.

Those are the ones that make a lot of money too.

Clearly you can reach out to us — vantor.com. Great place to go. But never be shy to reach out to anybody from the company. You can email me directly — I'm on the website. We want anybody who wants to come and join this mission. It's a spectacular mission. We get to talk about some of the hero moments — looking at floods and some of the stuff we do for the humanity side of the business, which is actually part of the prideful mission we do as a company. If people are looking for that, it's a great place to work.

Hey, great. Thank you very much for having me today.