An interview with Russian astropreneur Alexander Shaenko

Launching the Sputnik satellite and sending Yuri Gagarin to space, Russia fired the starting gun for the human space race. Russia has been, and still is, one of the pioneering nations in the space sector. One of its rising stars is Alexander Shaenko, engineer and space enthusiast, who set up a team to build the first ever crowd-funded satellite in Russia, the “Mayak” CubeSat. We met with him in Moscow to talk about his entrepreneurial experience, future projects, and Russia as a place for doing space business.

AlexanderShaenko

Astropreneurs: Explain us a little bit about your background and your entrepreneurial experience?

Alexander Shaenko: I graduated from the Bauman Moscow State Technical University in 2005 and specialized in large space structures. After my graduation, I stayed in the educational environment working for two years at the Scientific Research Institute of Special Machine Building (НИИ) at Bauman Moscow State Technical University. At НИИ, I analyzed and tested the deployment process of a Large Space Reflector for a Russian Earth remote sensing satellite. After that, I worked at AutoMechanics Inc. performing dynamics analysis of the Angara-5 launch vehicle, a competitor of the European Ariane 6, and worked as stress engineer at Progresstech LLC developing a code for the Boeing 787 spoilers. Finally, I joined the Dauria Aerospace company working as a lead stress-thermal engineer for the company’s products. I became the chief designer of the Selekhonod project – the only Russian competitor at the Google Lunar X-Prize – and started my Ph.D. studies at the Lebedev Physical Institute of the Russian Academy of Science. My doctoral studies comprised thermal analysis and testing of the Russian space-based telescope Millimetron. In 2014, I started working on the Mayak project.

Astropreneurs: You were the first one to launch a crowd-funded satellite in Russia. How did you come up with the idea of starting a crowdfunding campaign?

Alexander Shaenko: During the Selekhonod project, we attempted to get financing through more traditional sources, such as government funds or support through private companies. We tried, it failed. Still, we became one of the first residents at the Skolkovo Innovation Center. The Mayak project was not a commercial project, it was more about science and technology enthusiasm. Nobody in our team had experience in crowdfunding. It just emerged in Russia one year ago and we gave it a try. We launched the first round of our crowdfunding campaign in mid-2014, the first ever to launch for a Russian space project!

Astropreneurs: Who are your donors and what motivates them to engage in your project?

Alexander Shaenko: Most people were high school students. From the donations, we learned that most of their payments came in very small amounts of 100 or 200 rubles each (US$1.77 – $3.53), which equals the cost of a dinner for them. We think that we reached them through a video by Ian Toplec, an influential Russian video blogger for academic science projects. The main idea of the Mayak project was to involve people in aerospace. Probably, the Mayak project was their first opportunity to get involved in a real space project. During our first round, we were able to raise 407,000 rubles (US$7,184) and 1,993,000 rubles (US$35,176)  in the second campaign on Boomstarter.ru.

IanToplec
Ian Toplec, the russian Youtube blogger talking about the Mayak satellite to his followers

Astropreneurs: Did the money last or did your required a degree of co-financing by the final beneficiary and/or public funds?

Alexander Shaenko: That’s an interesting story. Our marketing team was organizing the crowdfunding campaign, while I was deeply involved in feeding the outreach statements with the correct technical terms and descriptions. Our business plan required 1.5 million rubles (US$26,475). We were successful in our crowdfunding campaign, we didn’t need to find additional co-funding. The money we raised covered all the designing, manufacturing, testing, and delivery to Baïkonour. Apart from the manufacturing, we did the full development, assembly and testing, without the help of other companies!

Boomstarter

Astropreneurs: What organizational and legal hurdles did you encounter when you started setting up your business?

Alexander Shaenko: Two persons were involved in the crowdfunding campaign: the marketing responsible and myself. We agreed previously that if there would be any extra-money to be received after the completion of the project, it would be a bonus for the marketing team. What happened is that, after the completion of the project, we received a delayed crowdfunding donation through a sponsorship by Rocketbank; almost equivalent to the amount that we raised during the crowdfunding campaign. Apparently, the marketing steered the funding such that money would be for them and not the project!
This experience has been a great lesson for us and for astropreneurs in general: if you start doing business with someone, you have to formalize a working baseline. My relationship with the marketing team was very informal and without any contract. For the future, I recommend hiring a professional lawyer!

Astropreneurs: The Mayak satellite failed to complete its mission due to a launch failure. Do you have a new project in mind?

Alexander Shaenko: Our Mayak satellite was launched together with 24 other satellites, of which 10 other satellites failed too. The Mayak failure was caused by a fuel leakage in the rocket. Since that moment, we started to work on a new project and our future company will be called 4110 Bio Tech. The idea is to push commercial exploration beyond low-earth orbit (LEO) and develop the biological life support system for future manned-spaceships and planetary settlements on Mars or the Moon. We are a team of six people, three from Russian IMBP, space biology and medicine institute, and three from the Mayak project. We just started putting in our own money: 100,000 rubles (US$1,765) in total. We have already constructed a first prototype of our biological life support system. It is based on the Chlorella genus, a green microalgae. In the project, we are working closely together with the Institute of Biomedical Problems (IMBP) at the Russian Academy of Science.

Prototype4110Biotech
Bio Life Support System Prototype of 4110 Bio Tech

Astropreneurs: Russia has the longest tradition in spaceflight and until today is one of the most important players in the space business. How would you describe the Russian landscape for space business opportunities nowadays?

Alexander Shaenko: Historically, Russia has been successful in promoting space science and technology, but it suffered from a lack of entrepreneurial spirit. Time is changing. Access to funding for Russian startups has improved in recent years and private companies have emerged in Russia. For instance, Dauria Aerospace is developing a standardized platform of small satellites, Sputnix is specializing in manufacturing high-tech microsatellite components and technologies, as well as microsatellite-based services, CosmoCourse is the first company to get approval from federal space corporation Roscosmos for its space tourism project, Avant Space Systems is developing propulsion system for small satellites, etc. These companies have much more opportunities than the Roscomos companies because they are smaller and faster. Most of these companies are located in the Skolkovo Innovation Center, also known as the  Silicon Valley in Russia or Silicon Moscow. The Center has a Space Cluster, “SK Space” which incubates and accelerates a total of 188 companies. When the companies become “residents” of Skolkovo, with proposed projects and ideas, they are receiving financial assistance. The Center has big industrial partnerships with companies such as Airbus Group and Boeing.

SkolkovoAnnualReport
Skolkovo 2017 Annual Report

However, in Russia, most of the space market is still comprised of Roscosmos companies. Roscosmos can survive without dealing with small companies, but small companies have to negotiate with Roscosmos to develop their business in Russia.

Astropreneurs: Today the EU and the US impose sanctions against Russian businesses and individuals including travel bans and the freezing of international assets, business transactions and investments. Did the sanctions affect your projects?

Alexander Shaenko: No, my project was not affected by sanctions. I heard that Dauria Aerospace closed their locations in Europe and the United States due to sanctions. However, I don’t know the details. I think that these sanctions can inhibit the development of the Russian space sector in the short term, but in the long term they will push the development of an independent Russian industry.

Astropreneurs: Do you have any advice for aspiring astropreneurs who want to start their own company? Do you see any niche where astropreneurs can gain a foothold in Russia?

Alexander Shaenko: To be a good entrepreneur, you need to maintain a good relationship with people, both inside your team and outside the team, with business partners, and governments. It is mostly about interpersonal skills. You cannot know everything in advance. But, if you have the ability to attract people, you will partner up with people from every field and they will ultimately show you the way. Some may call it “leadership” others “networking”. In addition, I assume that it is a good idea to cooperate in fields where Russia is a strong player: space medicine, rocket engines, IT in space applications or nuclear technologies for space.

Further Reading:

Posted by Emeline De Antonio and Timo Ruehl