An era when the name NASA is no longer compelling ..2

Major Challenges faced by Deep tech startups

The second is when finances run out and it is unable to attract new investment. As I have stated, deep tech businesses must tackle two challenges at the same time. Typical IT firms must only create goods that answer client issues. (Of course, this is not an easy task.)

Deep tech startups, on the other hand, must first overcome technical issues before moving on to commercial issues. This is due to the fact that, in contrast to general tech companies, which employ known and commercialized technologies, deep tech startups use novel technologies that have never existed before. Only then do you begin to create things that will generate revenue.

Deep tech firms require more time to mature since both of these issues must be solved. According to a survey conducted by the European startup market research firm Dealroom, it takes 1.5 years for general IT businesses to secure their first follow-up funding following the seed investment.

This difference is not unique to seed investment rounds. It continues when you receive the next round of investment. It is said that deep tech startups require an additional year or so longer than general tech startups to attract five follow-up investments. You can think of it as receiving investment one round later than others.

Therefore, in order to survive during this period, we have to create a profit model that can somehow increase the runway and "live" for a longer time. There are many areas in deep techs, such as robotics, a giant deep tech startup called NASA, quantum computing, and blockchain. One of the oldest and most familiar fields is space technology.

The insecure perception about Space technologies in the US

The idea of ​​sending people into space has been around for a long time. But space development began in earnest in the 1950s. When the Soviet Union successfully launched the satellite Sputnik 1 in 1957. The Cold War relationship with the Soviet Union at the time ignited a fire in the United States.

Soon after, The US  founded the famous NASA (National Aeronautics and Space Administration) and focused its entire nation's capabilities on space technology. It is said that in the late 1960s, more than 4% of the total US budget was invested in space. Over the past 40 years or so, the US and the Soviet Union have made competitive investments. Both launched satellites into the sky and sent people to the moon. This resulted in the rapid development of space technology.

However, as the Soviet Union declared disintegration in 1991 and the Cold War ended, investment and interest in the space industry gradually cooled. It was the Columbia explosion in 2003 that completely poured cold water on it. In 2003, the US Space Shuttle Columbia exploded in mid-air while returning to Earth from a mission, killing all seven crew members.

As a result, the perception of space technology as "very risky and expensive" is starting to take hold in the United States. In fact, as is the case with the early development of deep tech in general. It is true that no matter how many rockets they launched into space and sent how many people to the moon. NASA and the US government did not achieve tangible economic results through this.

The turning point in the Space Industry of the US

Of course, it is true that while researching space technology, various new technologies such as water purifiers, airbags, and vascular surgery were derived to make our lives more convenient. However, these discoveries were only coincidental and secondary achievements. They would not have been the main purpose of space exploration that NASA had dreamed of.

When it comes to the main business models of the aerospace industry, we can often imagine businesses such as mineral extraction, passenger and cargo transportation, and satellite communications. Although astronomical money has been poured over 50 years, the US government's space industry is not; We can't create a sustainable business model and stay in the realm of "experimental investment".

Therefore, the US administration would have decided to better use the money to invest in other technologies. That could produce more realistic and clear benefits. You might have thought that it would be better to put this money into the IT industry in Silicon Valley, which is developing rapidly at the same time.

As the U.S. government turns its eyes, it marks a major turning point in the space industry, which has been a symbol of the state-led industry. The proportion of NASA's budget, which once amounted to a whopping 4% of the US annual budget, remained at around 1% until the 1990s then decreased to 0.4% in 2020, and continues to go downhill.

And NASA is launching a program called Commercial Orbital Transportation Services (COTS). So far, if NASA has directly launched rockets and spacecraft to transport manpower and materials into space, in the future, it has started a program that entrusts it to private companies.

How did a big deep tech startup like NASA fail at commercialization

For two reasons, many deep tech startups

(1) fail to commercialize or

(2) fail to continue funding

I was told it would fail. NASA collapsed due to the same reason. First, although there are inherent limitations as a national institution. The deep tech company only focused on the development of the original technology and was behind in its commercialization.

In other words, a startup called NASA has failed to create products and services of sufficient value to consumers. By focusing only on developing original technologies. As is the case with many deep tech startups. It failed to commercialize it while focusing on technology development rather than problem-solving.

Next, funding from the US government, which was thought to be eternal, did not last long and failed. However, the United States is a democracy, where the leader changes through elections every four years. When leaders change, government interests change, and budget plans change accordingly.

Of course, the story might be different if NASA had achieved meaningful growth. As startups usually grow their businesses one step further and receive Series B and Series C investments step by step. But NASA did not, and the high cost and risk of launching the rocket became difficult.

Today is the era of private companies. Now the name NASA no longer makes people's hearts flutter. However, perhaps because NASA has developed the original technology with astronomical budget support for a long time, private companies are now blooming.

And considering the costly nature of space technology, it might be appropriate for private companies that can focus on minimizing this cost to take the lead. NASA's vision is to "improve the quality of life on Earth."

Can NASA achieve its purpose of existence if many consumers can benefit from it?