#170 What It Takes to Build a Billion-Dollar Space Company with Dylan Taylor, CEO of Voyager

Chris, great to be with you. Well, you got my name, of course. Dylan Taylor, founder and CEO of a company called Voyager Technologies. We're an aerospace, defense, and space company located in Denver. Founded the company in August of 2019, went public earlier this year on the NYSE. And yeah, my pleasure and honor to be with you. Look forward to the conversation.

Very cool. I didn't know that. That's great. Yeah, I did get the chance to go suborbital in December of 2021. So yeah, that was a dream come true.

Well, great question. So for me, this has always been my passion since I was literally three, four years old. Always passionate about space, always passionate about frontier technology. And you know, really kind of grew up in business running large public companies. That was really kind of my skill set if I had one. But like a lot of folks, you know, was doing that and was successful in quotes, but maybe just feeling a bit purposeless and unfulfilled. And so for me, I really reflected on what am I truly passionate about? What impact can I make on the world? What's my purpose? What's my legacy? All those kinds of questions that people have, and for me it had always been space. And back in 2019, this is pre-COVID of course, the co-founder of the company and myself were looking at the landscape and we thought there's a lot of really interesting things happening technologically in space, but a lot of these companies that might be 50 employees, led by a technologist, they don't really know how to scale their business. They don't really know how to compete with the large aerospace primes. And the primes, they're capable of doing anything, right? Landing people on the moon, you name it, but they're not particularly innovative because they're not really set up to do that. So the thought was we're falling further behind our adversaries, China, Russia, you name it. We have a lot of technological innovation, but it's not being harnessed. And can we create an operating company, a platform like a Danaher, a Haiko, if you know those companies, and really harness this innovation and be the best of both worlds. Be prime contractor capable, but denominated on entrepreneurialism, flexible, adaptable business model. So that's what we set out to do. Very mission-driven company. We're patriots. We believe very strongly that this country represents a value system, the Western value system that's important to the world, and it's vulnerable in today's day and age. And so we believe very strongly that having strategic capability and leaning into the innovation curve is really important for this country. And so that's what we set out to do. And you know, we've had some success, but we're just getting started. Our best days are ahead of us.

You know, very carefully as they say. To me, rule one is pick the right co-founder. And there was a young man that I had mentored after his military service. His name is Matt Cter, a co-founder, and he's a fantastic, tremendously talented individual. But he had flown the F-15E Strike Eagle combat missions in Syria, Iraq, and Afghanistan. He was a Distinguished Flying Cross award winner. He was a Jabara Award winner, which is even a bigger deal for those who know what that is. And after leaving the military, I was kind of mentoring and coaching him a little bit. And he ended up going to Wall Street, which is sort of what I had recommended he do. Worked for Goldman Sachs. And about that time, when I was thinking about creating what has become Voyager, Matt was thinking the same thing. So I think picking the co-founder is really important. And then of course your first 10, 15 employees, I think, are as important, right? Because they're going to set the stage. And there's this old adage, Chris, I'm sure you've heard it: A's hire A's and B's hire C's, which is in my experience 100% true. So bringing in real A talent from the get-go, I think, was really important. But of course, you're selling them on a vision, not on an existing platform. So they really had to buy into what we were doing.

Yeah. August 15th, 2019. That's right.

Yeah, well, initially we were really focused on this notion that NASA and other agencies were going to further commercialize. So we had a big strategy anticipating that NASA was going to commercialize the International Space Station and build not a government replacement but a commercial replacement. That ended up being a very sound bet because we ended up winning one of the phase one contracts with NASA. Our project is called Starlab, which will be in orbit in 2029 and will be an amazing, game-changing platform for the future of humanity in low Earth orbit. So super excited about that. So that ended up being validated. We did not anticipate, I don't think, when we founded it, how important defense would be to our business, national security to our business. We had acquired some technology that ended up being a complete game-changer on smart missile defense systems, and that technology is on things you could call more generally Golden Dome type activities. And so I didn't anticipate that when we founded the company, and that's, I don't want to call that a pivot, but it's been a big part of our growth story, and I would not have anticipated that back when we founded the company.

Yeah, I do actually. I mean, I think start with the end in mind, right? So for example, we knew or we believed that NASA was going to, like they did with the space shuttle, if you remember the space shuttle way back in the old days. The government, George Bush, the first George Bush, canceled the shuttle, privatized launch, right? That's what gave birth to SpaceX and others. We thought the same thing was going to happen on so-called destinations with the ISS. And so in anticipation of that, we said, okay, what do we need to be a safe pair of hands where NASA would feel comfortable awarding a contract to us for that? And we believed you needed a services component where you could demonstrate you could service the space station, and you needed a human-rated hardware component. So we basically reverse-engineered that.

And there was a company in Houston called Nanorax. Nanorax was the biggest commercial user of the International Space Station. And again, they were a great company, founder-led, but they were looking around in the industry and saying, okay, we know the industry is changing, we don't want to sell to one of the big 150,000-employee companies, we don't want to sell to a private equity firm. So we were a really good option for them. So we acquired them, and then there was an unfinished hardware component to what they had planned, which was a commercial airlock. An airlock is about the size of an SUV. It's how you get in and out of the station. The two airlocks on the International Space Station, one was Japanese and small and old, and one was Russian, which is off limits to the Western countries really. And so NASA was keen to get a commercial airlock on station, but they didn't have necessarily the funding to do that. So we put our risk capital in, got that commercial airlock completed. NASA launched that on a SpaceX rocket to the International Space Station. We got it installed with the last kind of node on the ISS and we were able to get that online and commission it and get it working.

So about that time NASA was coming out with the RFP for the so-called CLLD, Commercial LEO Destination. And we had the services piece, we had the hardware piece, and we were literally, Chris, we were 20 months old when we won that contract. Probably the largest infrastructure project in space. And we won that. We weren't even two years old yet. And by the way, we called the airlock the Bishop Airlock after the chess piece, right? Because it was a strategic move that we were making. And so I think, back to the question behind your question, if someone's listening to this and they're like, okay, there's this huge opportunity in our industry, how do I go pursue it? I think just mapping it out and saying, okay, and don't think about what you have, think about what you can get, right? And just kind of reverse-engineer it. And by the way, you can buy that, you can build it, you can partner, right? There's a lot of different ways that you can actually execute on it, but I think being strategic about the capabilities. And that's the way we think about it. We think about it in terms of assembling capability. And I think a lot of people probably do that, but they're just maybe not looking at the whole chess board the way they probably should.

Right, there's basically two screens that we have. One is what's in the best interest of the country, and I mean that sincerely, it's like what capabilities this country needs. So sometimes we have to communicate our point of view to the customer because they might not see it the way we see it, so we try to shape that. But then the other thing that we're focused on is where is the value capture the highest, and by value capture I'm talking about ultimately free cash flow conversion. So in space, in defense, there's a lot of parts of the market that you could go after, but it's very CapEx-heavy, right? So it might be profitable in quotes, but if you look at the CapEx required to achieve that revenue and that EBITDA, there's basically nothing left over in terms of free cash flow. So we're looking at very CapEx-light, very capital-efficient parts of the market. So think of technology that's very exquisite, very disruptive, very innovative. That's the part of the market where we want to play, as opposed to kind of legacy widget-making, you have a factory, it's very capital-intensive, you're competing mostly on price. That's not typically the way we think about things.

Oh, all of it. I mean, building the space station, I'll start there, Chris, just so people can understand it easier, I think. You know, the International Space Station is the most complicated machine humans have ever built. I think it deserves a Nobel Peace Prize. It's brought countries' coalitions together. We've had humans living up there for I think 26 years now continuously. So I think it's an amazing testament to technology and cooperation and all that. So to be able to build a commercial space station that's even more capable, that can take us into the future and counter the rise of China and other adversaries, to me if you can't get excited about that, you're in the wrong... To me it's like so obvious that that's such a cool, amazing project. And my passion, having seen the Earth from space, I'd love to have like a G7 meeting up there or a UN Security Council meeting up there or something. Because I do think it changes your point of view, and I can attest to that because I've been up there, and the people that I know who have been up there have had the same experience. So to me, I'm most excited about that just because it's a cool project, and the idea that you can kind of sit on your front porch and look up at night and see Starlab flying over your head and know that humans are up there living and working and doing research, I think is one of the coolest things I could conceive.

Yeah, I mean, I think there's a couple that I would point to that are already on our team. So SpaceX, I think, is the 800-pound gorilla if you will. They're a partner of ours. They're going to launch our space station. We'll launch on Starship. So I think they're great things. Palantir is another one. People don't think of Palantir as a space company, but they're an investor in Voyager and they're also an investor in our commercial space station joint venture, Starlab. So Palantir, I think, is another great example. We're partnered with Nvidia on an edge computing initiative. We just made a minority strategic investment in Latent AI, which is doing some really interesting embedded firmware intelligence on the actual chip layer. And then we're partnered with other companies too, or legacy companies, right? Like Airbus is a partner on the space station, Mitsubishi is a partner on the space station. So we have a lot of partners, but I would say the most capable are the primes, of course, because they can do pretty much anything they set their mind to. But I think at the intersection of capability and innovation, I would say SpaceX would be a leader. Blue Origin, which is Jeff's company, I think, is making some hay as well. I'd like to think Voyager's in the mix there also. But that's kind of how I would see it.

Yeah, I think Jeff and Elon have been super influential and positive for the industry. I mean, without SpaceX, we wouldn't have this robust capability to go to space every, you know, 36 hours, I think, is how frequently SpaceX is now launching. I think Starlink is a game-changer as well. So I really credit Elon for cracking the code on rocket reusability. So yeah, Elon's been hugely influential.

And then yeah, I think Jeff also has had a big impact. Jeff is an O'Neillian, which I consider myself an O'Neillian as well. For those of you who don't know what that is, there was a guy named Gerard K. O'Neill, or Jerry O'Neill, who was a professor at Princeton back in the 70s who wrote a book called The High Frontier, which kind of talks about taking heavy infrastructure on Earth and moving it off-world and kind of treating the Earth as a national park, if you will, and getting all the heavy industry off the Earth. And there's a lot more to the philosophy, but Jeff is very focused on O'Neill-type concepts, as am I. So I think Jeff has made a big impact. I mean, he changed my life because without Jeff's New Shepard rocket, I would not have had the opportunity to see the Earth from space. So I think they've both made big contributions to the industry and are great positive elements for what we're doing.