Welcome to Connect the Dots, the podcast about investing in the companies of tomorrow. We connect the dots between technology, growth, and long-term thinking. Today, Simon and I are joined by the man behind a company that is hard to put in a box. Voyager builds defense systems, a commercial space station, and a lunar lander. Please welcome co-founder, Chairman, and CEO Dylan Taylor of Voyager Technologies. Dylan, great to have you with us.
Thank you, Max and Simon. Great to be with you.
Yeah, absolutely. Great. It's an honor to have you here. But before we start, of course, we have to give out a quick disclaimer. So everything you hear in this episode today is for information and entertainment only. It's not investment advice, and it is not a recommendation to buy or sell any security. Max and I may hold positions in the companies we discuss. And Max, I'm handing over to you for our first question.
Yeah, sure. Let's start from the beginning. So, you founded Voyager back in 2019 with the idea of building an integrated space and defense company rather than a single product company, and what we found very interesting. What did you see back then that made that the right structure to go forward?
Right. Well, I appreciate the question and, again, great to be with you both. Yeah, we just turned seven years old, actually, about a week and a half ago. And as you mentioned, when we founded the company—it was Matt Kuta and myself, my co-founder, who's our president—and we really thought there was a strategic imperative to have a company like Voyager.
And what we recognized in the industry was that at the very top of the capability stack were the aerospace primes, the very large multinational companies really capable of doing any kind of mission that you can conceive, but maybe not particularly ambitious, maybe not particularly innovative, maybe not flexible, maybe not adaptable, and really more order takers than what I would call solution providers, kind of waiting for the customer to tell them what their needs were.
And then of course on the innovation side, you had a lot of highly innovative, highly technological companies that were making waves and having an impact, but were struggling in scaling their businesses. Maybe the founder didn't know how to run a business at scale, maybe didn't know how to capitalize the company sufficiently. And so these companies would get to like 50 to 100 employees perhaps and would struggle on taking that next step.
And so what we thought was it's really important, if the industry collectively and globally is to move forward, to have companies like a Voyager that could thread the needle between being prime contractor capable, but really denominated on innovation and entrepreneurialism and flexibility and adaptability, because you have to of course, in this modern world, lean into the technology curve. If you're utilizing existing technology, by definition, in 24 months, you're already going to be behind, right? So, you have to lean forward into the technology curve.
So, we thought if we could create a company like that, not only would customers gravitate towards a company like that because they want other choices, they want a safe pair of hands, but they also want innovation. But probably more importantly, the best people in the industry would gravitate towards a company like that and would want to work for a company like that. So seven years in, obviously we still have a lot of work to do; our mission is not completed. But we're very gratified and very happy with the progress we've made. And as you alluded to, and I know we'll talk about it, we're doing very large-scale infrastructure projects, whether it's commercial space stations, lunar landers, or golden dome propulsion technology. So we have been trusted with these mission-critical projects, but we're very much a new type of company, as you mentioned earlier.
That's a great point. I mean, the space market was very fragmented, and you basically integrated a lot of parts in the value chain and made it a customer-centric model. I think that's very interesting in that market, and I think, Simon, you got the next question.
Yeah, thank you so much for this great introduction. Lots of valuable information here already. So let's dive a little bit into the commercial case for low Earth orbit, and let us talk about the part of the business that most investors find hardest to size: the commercial opportunity in orbit. So my question to you is, Dylan, what is the outlook for a commercial business in low Earth orbit, and who are the customers beyond government?
Right. So think of LEO, commercial low Earth orbit, as a commercial operating layer. Think of it as a domain. So in that domain exists hardware, and that hardware could be commercial space stations, it could be satellites, it could be rockets that are up there temporarily and then of course come back home with astronauts on it. So think of it as a domain. And the reason I'm framing it that way is we'll later talk about other domains like Lunar and Lagrange, but think of it as a domain.
The limiting factor for that domain previously had been the ticket price to get there, right? So in US dollar imperial units, it was $100,000 a pound to get to orbit in the Space Shuttle. Now we're approaching hundreds of dollars a pound. And when Starship comes online, not only will we have access at this lower cost per kilogram to orbit, it's also the cadence and availability of launch, right? Humans are now launching to orbit every 36 hours or so. So that's completely changed the game. So now that we have access to low Earth orbit, a lot of business plans that previously didn't close now open up, right?
So that's why you see this proliferation of constellations, whether it's for national security customers or whether it's for internet access. This is why you see commercial space stations becoming viable space stations like ours, Starlab, which is a single launch to orbit taking advantage of this larger format that Elon's building with Starship. So that's really what has changed.
So what I like to tell people is think of demand and supply being evenly balanced in time—just basic economics. But when you have a threshold issue like access to space, when you raise the bar, so to speak, and allow more access, it doesn't address the demand, it creates demand, right? And so I think this is the part that people don't fully understand or appreciate. So when you think about a commercial space station, for example, what people do is they start with the ISS, they look at the existing partners, they look at the existing research docket, they look at the existing astronaut flow, and they say, 'Well, that's the size of the market. It will grow like 4 or 5% a year, and that's what we can expect.' It's like, no, that's not the way it works.
The reason there's not more biopharma research in microgravity, or semiconductor manufacturing, or organelles being printed, or quantum computing being done is because we have a supply constraint, right? That's the issue. And so as this access and availability comes online, the market is going to expand dramatically. We already see that with the proliferation of satellite constellations, so it's a very similar concept with pretty much any other LEO use case you can make. So that's the key point I really want to emphasize to folks.
And by the way, that's just the existing, call it, ISS ecosystem—ESA, NASA, JAXA. This isn't to mention all the new space agencies; I think we now have 75 around the world. It's not to mention all the national security customers, including, by the way, Germany. As we know, the defense spending in Germany is dramatically increasing, right? And the vast majority of that increase in spending, as my understanding is, going to be allocated to the space domain, right? It won't be tanks; it'll be space-based assets. So I think it's really important to understand this concept of supply creating demand as opposed to addressing demand directly.
So the size of the market's massive. I mean, we already have $500 million of pre-commitments for Starlab, our space station. And the way we think about Starlab is it's an operating platform. So you can imagine multiple Starlabs: maybe one for a particular sovereign nation, maybe one for a national security customer, maybe a bespoke station for a particular use case like biopharma or semiconductor manufacturing. So there's a huge opportunity we see in LEO that I just don't think people have fully priced in or fully appreciate what's actually happening there.
It sounds so exciting, and I really did like your saying that space is opening up so many different opportunities. And especially Voyager having so many footsteps in different markets sounds really exciting to me, actually. With that, Max, I'm handing over to you for the next question.
Dylan, you already touched on the part of demand and supply, and my question is basically: growing into demand usually sounds like a nice problem, but in most cases it's not. And how do you approach scaling when demand can outpace capacity dramatically?
Yeah, it's a brilliant question. So just a little bit of history: I used to live in Switzerland, and I was actually part of the electronics industry addressing automotive. Fun fact: the company I worked for had a plant in Dresden shortly after East Germany became reintegrated. The reason I'm bringing all this up is I've studied supply chains for a long, long, long time. And what you find in these complex supply chains is there's always a mismatch, as you're alluding to, between demand and capacity, right?
And oftentimes what you'll find is companies that are very successful versus companies that are not successful are the ones that can do a better job of addressing capacity availability when it's needed and aren't overcapacity when it's not, right? So by definition, what that means is you need to be better at forecasting demand than your competitors, let's say, and you also need to build more flexibility in your capacity systems, right? So in other words, if you build a facility, for example, that can only make one particular product and the demand for that product doesn't materialize the way you thought it would, then you're saddled with capacity that doesn't have additional utilization, right?
The reason I bring all this up is our approach is a bit different, which is we're investing in locations with technology clusters that are capable of doing a lot of different things that we know customers will need in the future. And we might be a little bit off on the demand for a particular order or a particular product, but that could be balanced out by demand from another complementary technology or product.
So for example, we have this American Defense Complex, we're calling it, in Pueblo, Colorado, which is in southern Colorado a couple hours south of Denver, which is our corporate headquarters. And that facility is really built around propulsion technology. So there we have the ability to do hot fire testing; we have the ability to do energetics testing. So these are very specialized sites because, as you would expect with this kind of activity, you can only do it in certain locations. But at that complex, there are a lot of different things that we can produce. And therefore, as we bring that capacity online, not only are we highly confident it's going to be completely filled up, but if we're off a little bit on a particular program or a particular rocket motor or particular piece of the energetics technology stack, we can balance it out with other activities that we have within the same technology category.
So that's really been our approach is to build these centers around the country. We're investing in places like Huntsville, Alabama; Houston, Texas; Long Beach, California; Denver; Pueblo, as I mentioned; Pittsburgh, where Lunar Systems is based. And the idea is to build as much capacity as we can see, but also to build this maximum flexibility in our ability to address demand. And I think that's one of the key things that a lot of people in the industry have gotten wrong.
And it's also, by the way, why we partner with companies heavily. So for example, when we won the Starlab space station contract with NASA, the very first thing we did is asked ourselves who are the right partners that we can bring into this model so that we don't necessarily have to lay out all the capex—that capex might exist in partners like Airbus, Mitsubishi, Palantir, and others—and how do we create a capacity model that maximizes the ability to be successful, but also regulates the physical plant that we actually have to build out? So it's very much the way that we think about things, and I think that flexibility in the operating model is going to be extremely beneficial to us as supply and demand balances out over time.
Thanks. That's very interesting. Basically the whole equation, demand and supply: on the one side, you want to help the customer, but on the other side, getting the supply in the right order, like all the financing part behind it on the balance sheet, that's basically on par. I think that forecasting part that you touched on is very important.
So now I have a really interesting question coming from our audience, and you did talk a little bit already about that, but maybe we can dive in a little bit further. When we look at Voyager Technologies, we can describe the company maybe with the saying 'two businesses under one roof,' right? So the question therefore is: Voyager's business combines space, defense, and national security, and how do these segments complement one another, and why do they belong in the same company?
Well, I think they belong in the same company for a very important reason, and that is going back to the thesis that I said at the beginning. The world—I'll focus on the US for a moment—the US needs a company like Voyager to make sure that we're not only delivering mission-critical solutions, but that we're staying ahead of rivals in technology and innovation. That's really, really, really important, because if we don't do that, then I think the US and its Western allies would fall further behind rivals like China, whether it's return to the moon or whether it's national security and missile defense. So I think the 'why' applies to both pure-play space and pure-play national security. That's reason one.
Reason two is, increasingly, the domain that national security is focused on is not the ground or the sea or the air, even; it's space, right? Because it's the ultimate high ground. It's been said a hundred times, but if you're a general fighting a war, you want as many assets as you can high above the battlefield. That's going back to the Napoleonic Wars and even before that, right? So space really is the ultimate high ground in any kind of national security, whether it's gathering intelligence, or acting on that intelligence, or defending assets. So increasingly, space-based assets really are defining national security.
You see that, for example, with Golden Dome. A big part of that is hypersonic missile interception, which is of course nuclear-tipped missiles that might be inbound from an adversary traveling at Mach 6 or Mach 7, but those go into space before they come back down. And then other assets that are actually based in space that you need to address from a national security and defense standpoint. So I think those are the two whys: ultimate high ground and the fact that a company like Voyager needs to exist to address both of those concerns.
I think the third point I would make is, if you look at the technology that is relevant to the leading edge of space-based assets and the leading edge of national security—whether that's propulsion, whether that's electronics, whether that is artificial intelligence, quantum, material science—all those technologies have synergies between those two areas as well. So I think for all those reasons, these two areas belong in the same company. And in fact, we have a single executive running both businesses, because that's how integrated they've already become in many respects. So to me it's pretty straightforward, and I think if you fast-forward three, four, five years, it's going to be obvious to really all companies that their national security business and their space business is really the same business.
Thank you so much for highlighting the different parts of your company, the different divisions, and also for giving us some really interesting examples. Another big part of the business is about our next question, and I'm handing over again to Max in this case.
And the question is about the moon part. I think, Dylan, on your background picture, you're already on the moon, but regarding the question: you acquired a company called Astrobotic and it's now called Voyager Lunar Systems, and basically it's a lunar mission carrying NASA, ESA, and commercial payloads, and it's only a month away. What is riding on that landing for the business, not just the mission?
