Astropreneurs had the chance to interview Stefano Antonetti of D-Orbit in a wide ranging discussion covering everything from the challenges and lessons from the early days of D-Orbit to the long range vision for the company. D-Orbit is one of the key companies to watch in the establishment and maintenance of an in-space transportation ecosystem that is free of space debris and enables the accelerating growth of a space-based commercial economy.
As they say in their vision:
“D-Orbit is disrupting the space industry by redefining commissioning and decommissioning, addressing shortcomings, preserving space resources, and creating value in the process.”
Astropreneurs: What is your role at D-Orbit?
Stefano Antonetti: We have two big markets at D-Orbit: the commercial market and the institutional market. Sometimes they overlap, as is usual in the space industry. In my role, I primarily deal with institutional: state agencies, governments, and national agencies. We’re very active in the space debris market, and it’s critical to understand the evolving regulatory framework that governs it. We need to express the point of view of D-Orbit and commercial space to the relevant institutions to be sure it is considered in these regulations.
Astropreneurs: And how did you get involved with the company in the beginning? Were you one of the co-founders or did you come on as an employee?
Stefano Antonetti: There are two co-founders right now, and I came as part of the core team. I was part of the initial six people who set up the company. So it was an exciting thing. We were basically six people in a room, and now we’re about 45 people.
Astropreneurs: When did D-Orbit start?
Stefano Antonetti: Officially it was incorporated in Italy in 2011, but for the first two years we didn’t do much. That’s when we were trying to figure out the business plan and trying to raise money. We really started activity in 2013 with the first tests, and by the end of 2013 we sent our prototype to space. Since 2014 our growth has only accelerated.
Astropreneurs: How would you describe D-Orbit to somebody who doesn’t know anything about it?
Stefano Antonetti: D-Orbit is a space transportation company. Space is mostly about satellites and the services they can deliver, but it’s also about transportation of payloads to orbit. Right now we are making end-to-end services that bring payloads of small satellites into orbit, which is essentially launch services. Along with this, we are also moving towards the in-orbit servicing market. So basically moving things from point A to point B in space.
We expect a significant expansion of commercial space activity. We will need to bring payloads from point A to point B. At present that’s done with satellites that have their own propulsion. With our services, this is no longer necessary.
You can come to us with an idea for delivering a service from space. We can help you design the system. We can help to carry that system in space and to be able to deliver the service you want on the ground. In the future, we’ll be able to go up there after your satellite has been placed in orbit and move your satellite, service your satellite, extend the life of your satellite, and eventually remove your satellite at the end of life so it doesn’t become debris.
Astropreneurs: So is it essentially a space tug concept?
Stefano Antonetti: That’s right. Absolutely.
Astropreneurs: Many of our readers are globally minded astropreneurs who can locate their companies wherever it makes sense. Has Italy been a good country for starting a space company?
Stefano Antonetti: Yeah, that’s a good question. So obviously Italy and Europe are not like the US in terms of raising money. However, Italy has a very long tradition in space. It was the third country to launch a satellite to space after the US and Russia. We have many of the leading space companies in the world and a strong tradition in space exploration. There is also a very good connection with the universities. We hire many people from the University of Milan, and they are very well prepared. That’s important because finding the right people is essential. From a business point of view, don’t expect to find large amounts of capital here, but Italy does have good legislation for startups. The bureaucracy is still a bit heavier than other countries, but it’s not that bad, especially in northern Italy. There is a big difference between northern Italy and southern Italy. Northern Italy is much wealthier than southern Italy, the infrastructure is much better, and we are very close to the rest of Europe.
Astropreneurs: So it sounds like Italy is a good place to be for startups with high-quality talent available and a favorable legal environment. Is the smaller availability of capital the only real limiting aspect? Is that also true for Europe generally versus the United States?
Stefano Antonetti: There are some countries in Europe like Luxembourg, France, and the UK, that are investing quite a lot in space. In Italy, we don’t have that much. A couple of smaller towns invest in space, but they are very small. So from that perspective, it’s not ideal. But, operating costs are also lower than the other countries in Europe due to lower labor costs and a significantly lower cost of living.
Astropreneurs: I noticed that you are registered as a B Corporation. What is a B Corporation? What was important to you guys about becoming one? How has it impacted the business?
Stefano Antonetti: That’s a good question. We are very proud to be a B Corporation, something we wanted from the beginning. But before diving into the B Corp, I’d like to address why we started as a space debris company. We think that behind every inefficiency, there’s a big business opportunity. In space, we saw a gap at the end of life. So, like on Earth where you can make money by recycling and closing the loop, this concept can also be applied in space. We are also very committed to environmental protection. We all want to go to space one day, and we want to make that place safe for everybody. We make an effort to translate those concepts into our daily life. Being a B Corp not only means that we need to be an environmentally friendly company, but it also means being respectful towards the people that work in the company and outside the company and trying to contribute to the community around us. So for instance, we try to select suppliers that are in this region to support the local economy. We also have flexible working times. We give a lot of freedom to everyone in the company. We can take the time to help our families. We welcome the kids of our employees to come here and stay here if they need to. If your partner needs to, he or she can work from here too, that’s fine. We also support people who come by train. So when we found that we needed to move to a new headquarters, we made it a number one priority to be close to a train station. So all these things are in the frame of being a B Corp. It doesn’t mean that we are a nonprofit. We are definitely for profit. We hope to make a lot of money, but we also want our technology to make this world to be a better place.
Astropreneurs: How do you become a B Corp? Is it a non-governmental body that certifies a company as a B Corp? How does that work?
Stefano Antonetti: Yes, there is, but Italy is the first country in Europe where the B Corp is a legal status. So, we are a share company and a benefit company, and that’s in our legal status.
Astropreneurs: Have you found that it helps with certain people, like certain kinds of investors, for example? Or, is it mostly for your own personal and team objectives?
Stefano Antonetti: We would be a B Corp anyway. But, investors do love that because they like to report to their shareholders that their investments are environmentally friendly, respectful of the communities, and profitable. I’m not saying it’s the reason why they’ve invested in us, but it is an added benefit.
Astropreneurs: The name of the company implies a focus on deorbiting objects in space, but on your website, the offerings are broad. Did it start with that and then evolve into this broader offering? What drove the change?
Stefano Antonetti: It has always been in the roadmap. We wanted to start to make propulsive devices for space debris mitigation, then move to active debris removal and then space transportation. We had to accelerate that process, and move from space debris mitigation to space transportation quicker than we thought. We had overestimated how the space debris market would unfold. When we started, there was huge attention on space debris and there were many in the scientific and commercial space community working very hard to find solutions. It looked like it was going to be a really big deal. And we still believe that space debris mitigation is a huge market, it was just not that quick to come. So we had to do something quicker which was more profitable in the short term.
Astropreneurs: Who do you now view as the actual customer for the space debris market? We understand that you will sell add-on thrusters to companies who need to make sure they can deorbit their satellites at end of life. However, is there another customer for active debris removal that you were thinking about originally and, and how has that evolved?
Stefano Antonetti: One big thing that we need to see in the future is a large satellite constellation program that can show that they are profitable. Then they will be the number one customer for space debris mitigation/remediation services because it is in their interests to keep the orbits where they operate free of space debris. These orbits are the highways, the infrastructure whereby they make money. That would be the first thing for us and much depends on that. We used to think a lot of institutional customers would come together to push a change of legislation. Current legislation was not made for this kind of business and make it difficult to manage certain aspects. For example, if I’m Italian, what happens if I remove Russian or American space debris and what happens if something happens in the meantime like I collide with somebody else? All of these things are not clear from a legal point of view and one of the reasons why the market is evolving a bit slower than expected. People realize that we have to sort out this kind of regulation aspect before this kind of market can proliferate.
Astropreneurs: What were some of the biggest challenges faced in the beginning and how did you guys overcome them?
Stefano Antonetti: Well, I’m sure the other people in D-Orbit would say different things. I would definitely say raising money and hiring people. So, in the very first stage, raising money was not that easy. That was one of the problems with being in Italy. It’s mainly because investors are not used to space. You need to explain exactly how it works. Maybe you are used to orbital dynamics and so on, but explain that to an investor.
When we started to grow hiring was a problem. When you are small, like this size, hiring the right people is essential, especially if you want to be a company with certain values, and a certain mindset, and to find the right people is really, really difficult. We would like to hire more people from abroad and more women. We have some people from Russia, from the UK, from Portugal, from Belgium, but we want more than that, to attract more foreign people, and more women. At the moment, women are only about 20% of the population of D-Orbit. All these are challenges because a good team of good people really makes a difference. That’s what a company is about. You can buy facilities and infrastructure, but you cannot hire people as easily.
Astropreneurs: Did the hiring challenge constrain your growth at all? Was it something that was you were able to overcome? Did you learn a method for finding those people? Or, has it continued to be a challenge?
Stefano Antonetti: We were quite lucky, I have to be honest. The team is great here. And everyone is into our mindset, we were very lucky. But it also was a long process. We decided to do all the interviews personally. We didn’t want to subcontract that to a recruiting company. So, that was quite time-consuming. However, it didn’t really affect our growth, at least not so far.
Astropreneurs: One of the things that people don’t often talk about, is the emotional strain of being an entrepreneur. Especially in the beginning, there’s a lot of ups and downs and much uncertainty. It affects everyone a bit differently. But, I think it’s helpful for new entrepreneurs to know that it’s a shared experience. What’s your take?
Stefano Antonetti: You know actually, I think it’s the other way around. At the beginning, it was like, “OK, we need to be very careful. This is our baby. We have to do our best.” So, we all really tried to do our best and we were really stressed especially when talking with investors and institutions and so on. We felt that once the company would grow, that we would be a bit more relaxed. But it’s actually the other way around. Before, we were like 10 to 15 people, so we thought that if things went wrong we could start over from zero and find something else. But now we are about 45 people. Things cannot go wrong because you cannot let those people go. It’s such a fantastic team and it’s such a big family we cannot afford to make a major mistake. So now we are even more stressed. Now we are fundraising again and now you’re trying to have the best conditions to get the best employees, to give them more opportunities. There are many, many reasons to be stressed, but we are all very passionate and we like what we do. So, it’s nice to know that people understand the effort that we are doing in keeping all this together. That helps a lot as well.
Astropreneurs: Is having that passion one of the key ingredients to be able to make it through the more challenging times?
Stefano Antonetti: Of course. Most of the people here, they love space and we all have the motivation to one day go up there and that really helps. Of course, it’s not everything. We are not those guys that work 24/7. This is our profession, but we also have other interests in life. What we’ve built is such a beauty. It goes well beyond profit. It’s the beauty of this big family growing up. Everyone is so amazing. The more people you can hire, the more amazing things you can do.
Astropreneurs: As you were going through this whole process, were there any specific resources that you found particularly helpful either in Italy, in accelerators or similars that really helped?
Stefano Antonetti: That’s another point about Italy. It has changed a lot in the last two years. We were in an incubator/accelerator. But at that time, it wasn’t easy to find mentors, to find the companies to collaborate with, and so on. Now things are changing. The Italian Space Agency has a dedicated support team for startups. We also spent three months at the Mass Challenge in Boston in 2015, because we were an invited startup and it was completely different. You could see that it was their job to incubate and accelerate companies. They exactly knew what you needed. They were organizing meetings with investors. They were coordinating training from other successful companies and many other benefits. So I could see it was very different from the incubator we were at here in Italy.
Astropreneurs: That’s interesting. So it’s not so much that the acceleration wasn’t helpful, but rather that when done correctly, it can be very helpful. You just have to find the right one to engage with. It speaks to the point of needing to be selective about where you spend your time with such opportunities.
Astropreneurs: I noticed you have horizon 2020 and the European Commission on your website listed as partners. We’ve identified these as a significant potential source of capital for startups of all kinds, including space. What can you tell us about that experience? Any advice for aspiring Astropreneurs to utilize these resources?
Stefano Antonetti: Both the European Space Agency and the European Commission are doing a great job with that. We got support from the European Commission Horizon 2020. It’s very competitive. The acceptance rate is about 5%. So only 5% of the people that submit a proposal to them is actually eligible for funding. But once you’re into their program, they are very, very good. And of course, they give you good money to do a real project. It’s a very business minded project, so they aren’t that interested in the technical solution as long as the business case is compelling. In Europe it is not much about the money. They can support you with networking, institutional support, and facilities, because ESA facilities are amazing and the people that have created these startup space companies are being mentored by the people at ESA. It’s a really great value.
Astropreneurs: What was the project that you put through Horizon 2020? What was your focus at the time?
Stefano Antonetti: Space debris. We got two grants for developing our space debris products, and now those technologies are products because of the grants we got from the European Commission.
Astropreneurs: A five percent success rate is pretty low. Do you have any advice on making it through that threshold?
Stefano Antonetti: Keep trying. There’s quite a lot of money they can use, but there are many proposals. For the five years of the Horizon 2020 program, it is 80 billion Euro. So it’s a big program. It’s not just space. There are a lot of other domains, but that’s still a lot of money.
Astropreneurs: One thing that we hear from investors is the importance of having a near-term business case, and for space companies, this often requires an Earth application. Did you guys get that from investors? Do you need to focus on any applications on Earth for your intellectual property?
Stefano Antonetti: That’s a good question. We’ve looked into that, but our technology is not really suited for it. Actually, we did it the other way around. We were looking for Earth technology to be used in space. So, for instance, now for our satellites, we use automotive components. But, we have tried to spin off our technology to Earth, but it’s not obvious. We are really talking about space hardware so we’d rather do the exercise the other way around.
Astropreneurs: Did you find investors who didn’t have that as a priority or were you able to show them that you had a path to space-based revenue that was short enough to satisfy the typical investor?
Stefano Antonetti: In the beginning, we started to talk with all the investors, but then we down-selected those investors that we knew understood the situation. Some investors that understand the situation in the space sector well are those that invest in the pharmaceuticals and the medical industries. Because a new drug can take ten years to go to market, they are already comfortable with the time horizon for many space projects’ return on investment.
Astropreneurs: I’d like to go back to what the long-term vision is for D-Orbit. What’s the future state that you see when you think about your long-term view? How do you see the in-space and space to space economy developing and how long you think it’ll take?
Stefano Antonetti: I actually promised not to make any other forecast because the last forecast I did three or four years ago was completely wrong. But, I’ll try to do something anyway. We think that space will see a commercial acceleration for the next five years at least. It’s not easy to talk about more than five years, because five years ago we couldn’t even imagine that a cube set would be used as commercial hardware in space. We do surveys all the time, and now we have about 80 new companies that have announced the intention to launch satellites in the next five years. If that happens, there will be about 25,000 satellites if they all succeed in this absurd scenario. That’s something that we’d be part of. If all those people go there, they will need services. I’m sure that we cannot yet conceive most of the services that will be needed.
One may think that most the services we have available on Earth would be maybe available in space one day. One of our advisors was telling us that the beginning of the automotive industry around the beginning of the 19th century was very similar to what we’re experiencing now in space. Indeed, if you see how the automotive industry evolved at the beginning, you can see some of the trends there compare to what is happening now in space. Ultimately, I think we are going to commoditization in space like the automotive industry was in the beginning of the last century.
Astropreneurs: My last question is, do you have any, any final advice for an aspiring astropreneur?
Stefano Antonetti: Be realistic. It’s one of the mistakes we made at the beginning in that we were too optimistic. Especially in the beginning, there are so many things you don’t know that can appear from one day to the other and ruin your plans. I think to be realistic, is a really good way to be optimistic.
Astropreneurs: That makes sense. But, anybody getting involved as a space entrepreneur, is going to have some level of dreaminess about all the possibilities. It’s sort of what inspires people to do this. So, how do you reframe your thinking so that you can keep that passion, but stay realistic?
Stefano Antonetti: Well, it’s hard to imagine, but the best way to really move faster to accomplish your dreams is to be realistic. Being realistic doesn’t mean to give up your dreams. You have to think if you go too fast sometimes, or you think you can take shortcuts, that’s the moment where you lose time and waste your time. Be realistic and be ready to start from zero again.
It is also especially important to be focused. I know that everyone says, “you need to be focused, you need to be focused.” Yes, it’s true. Be flexible enough to change your product, change everything, but then also pay attention. Because you have the temptation at the beginning to go after every opportunity. You would like to do everything, but, it doesn’t work like that. You have to be focused, and you have to be lucky enough that your focus will be the one that delivers success.
Astropreneurs: That’s all the questions I had. Thank you so much for your time today. I certainly enjoyed the discussion and I’m sure our readers will as well.
Posted by Gary Calnan
For more information about D-Orbit and their array of products and services, visit their website: http://www.deorbitaldevices.com/