Zephyr Aurora: Taking Shape [42]: An Index Plate

Zephyr Aurora: Taking Shape [41]: An Index Plate

Zephyr Aurora: Taking Shape [40]: Making the Tools

Zephyr Aurora: Taking Shape [39]: Making Tools

Sometimes you need to make the tools to make the rocket.

New Sponsor: Hexcel

Team Phoenicia has been working on composites for over a year now. We have already produced one very strong, new composite, Cryocarb(tm) that is both cryogenic and corrosive compatible. We are now working on other composites as well for other aspects than tanks that we could use for our GLXP mission and spinout in turn.

Hexcel has stepped up to help us by becoming a sponsor of Team Phoenicia's GLXP efforts. We will be using their new and extremely strong fiber for working on greatly improving our strength of both Cryocarb(tm) and our new structural and other composites.

We are extremely excited to have Hexcel join our backers in our quest to land at the lunar south pole and capture the GLXP first place. We look forward to working with them throughout the challenge.

Nanosat Launcher Challenge Seminar Raw Video [1]

Nanosat Launcher Challenge Raw Video Preface

We have had some challenges with prepping the video from the Nanosat Launcher Challenge Seminar. Since we are so far behind in our promised posting of the NLC Seminar videos, we thought we would try uploading the raw footage and then put the polished product as we are finally able.

How are you going to fund your GLXP entry: Developing New Intellectual Property

This posting also originally appeared on our official GLXP blog. More content soon instead of just echoes.

Intro

This is a continuation of our discussion on how we are going to pay for our GLXP entry. Previously, we talked about the nanosat launcher challenge contracting we are doing and sponsorship we are raising. We were hoping to set something that would be useful to our readers and potentially other teams. as we have said, we have no desire to give away all our secrets. However, we do like the idea of there being a real race rather than an anointing of the One True Team. If we can help in a small part to make that happen, we will have done our part.

This post will be covering another topic as to how teams ought to go about getting funded. This is one where the team leader is incredibly passionate about because of experiences while pursuing the GLXP. Sponsorships and doing contract work for others are two ways to raise money, but there is a third that Team Phoenicia is tapping into. That third way is the venture capital community, but they are very risk averse and if anything the GLXP would be a very big risk. So how do you tap into the VC community and still chase moon dreams? That is exactly what we will discuss here.

A Walk About the Valley

Silicon Valley buzzes with more venture capital groups than most places on the planet. Money exchanges hands and contracts are made almost as fast as the seconds tick by. It is not to say that the the money is thrown at people like in the past during the DotCom days, on the contrary, but there are companies being started and funded through a very robust system. First comes angel investors with their cheques up to $100,000 and then the venture capitalists with their funding rounds that can be in the tens of millions or even in a few cases, more. This system works very well for the software, computer, cleantech, and biomedical/biotech arenas. With the fact that SpaceX tapped into the VC community, the thought was that perhaps there might be some interest for Team Phoenicia, albeit on a far, far lower level.

Team Phoenicia has something of a philosophy of learn by doing. In the summer of 2009, Team Phoenicia set out to find out what would be involved in getting some of our funding through the VC network. The team presented to individual VC firms and attended VC gatherings during a six month period. We did not expect to raise money, although it would have been wonderful had it happened. This was meant to be an information gathering mechanism. The results were interesting and enlightening.

"Just What Everybody Needs In Their Backyard"

What we found was that there is, indeed, some curiosity about aerospace or NewSpace in the VC community. With SpaceX being run by one of the more successful entrepreneurs and according to rumor already profitable, the VCs are wondering if there might be some money there for them to make. In that context, Team Phoenicia went out and about. The responses were interesting.

In some cases, the responses were quite polite and curious about what we were doing. They would ask questions and show a great deal of enthusiasm. That enthusiasm though was a 'fanboy' enthusiasm. They were excited that someone was pursuing such a huge undertaking and helping reestablish a human presence, even an unabashedly American presence, on the surface of the Moon. However, they were not interested in sinking their money into the project. Because that was exactly what they feared: their money would sink and never rise again. Aerospace has a reputation for bad cost projection and they were dubious at that point whether or not we would be able to make money.

On the other hand, there was a very different reaction from some VC groups. The single most shocking was when an individual sat mulling over the presentation that had been just given and stated that rockets were just what everyone needs in their backyard. It was somewhat bluntly delivered: that individual really felt like we had wasted the VC group's time, but the message was a good one all the same. What really was the market for all of what we were doing? How in the world would most VCs expect to make money off what landing a robot on the Moon?

After a couple more responses that were similar, if a bit less blunt, Team Phoenicia thought it had better incorporate those inputs and then think about returning to the VC community. As an informational gathering exercise, it was well worth it.

The Message Taken

The meme taken back from meeting with the VCs was that the GLXP was not something they wanted to invest in. If we wanted to get their money for our goal, then we'd have to find an alternate method. They gave us an incredible amount of feedback that has turned out to be useful. They wanted to emphasize that we needed to think and speak in their terms if we wanted their money. That can be a challenge for techies, but as with everything its surmountable.

The information they gave us was invaluable though.

The first was that we were not thinking as a venture capitalist thinks. We might be truly interesting to them, but based on what we presented, they didn't see something worth buying into. Why? First was that the information was geared towards the GLXP goal and ancillary making money. They saw the goal and remembered the costs of Apollo. They didn't equate to the second given the first.

The second part was something we learned: they seek a 10x return on investment. Could we show that building and landing probes on the moon was going to make back for them in profit ten times as much as they put in. The prize was not going to cover that. The contracts that we have seen so far does not cover it either. So how is that money going to materialize?

They also pointed out that the first to market so long as they don't screw up tends to capture an 80% share and the late comes squabble over the remaining 20%. Could we out race our competitors to get there first? How were we going to do that?

Finally, what makes us unique? Was it our business model? Was it our technology? Why should they back Team Phoenicia vs one of our competitors?

That was a lot to internalize. There were more than a few cries of 'but they dont get it.' No, actually, as painful as it was, it was we that didn't get it. We did figure it out though.

Our Response

It took some time to figure out a way that would entice the VCs into investing into Team Phoenicia's efforts. The publicly sharable method is something that space fans have been talking about for a long time: spinouts. There are some serious and horrible myths about what was developed by the space program and specifically the push to the moon back under Apollo. If we were going to actually develop some intellectual property that the VCs wanted to invest in, we were going to have to keep in mind that whatever we developed needed to be applicable beyond the GLXP.

In intellectual property, there are two types that apply here. One is how you do something. This can be a new process or even a new business model. The second type of intellectual property, as far as we can be concerned, can be a tangible form of technology, a product rather than a method. We rescoped the how, but its one of our secrets, so no sharing, sorry. The other one that we actually can talk about is the actual technical spinouts.

We have several technical spinouts that have the VC community very interested. The first that we have talked about is our very strong and versatile composite. This is something that they can get their teeth into and able to work with. A carbon composite that can handle a very wide range of temperatures, is very strong, and can be used with corrosive substances - tested against LOX and HTP - has their interest. The market is huge. There's nothing out there that's comparable and its completely new. They are excited. So are we. It'll bring funding in and it will be something they can make a significant profit off of. In short, its serious intellectual property.

The exciting aspect is that the new composite is not the only one we are spinning out.

The Jist

Intellectual property, new and well defined, is what the venture capitalists can sink their teeth into. It meets their needs for something that will make them lots of money. It also meets our needs that we need cash to get to the moon. The exact business details we're keeping close to our chest as yet.

However, other teams need to approach the GLXP with the same idea in mind. If your team wants to tap into the great funding engine of VCs and whatnot, then the team needs to have solid, developed intellectual property that the VCs can invest in. It cannot be an improved mousetrap though. It needs to fill an unmet need. It needs to have a very high return: shockingly, the VCs are very conservative about their money. Even then, 90% of what they invest in fails.

Once the teams have developed something that the VCs want - and applies to their GLXP goal - money will come.

But not until then.

How are you going to fund your GLXP entry: NASCAR Rocketry

This post originally appeared in our official GLXP blog. The reason that we call it 'NASCAR rocketry' is because of the fact that there will be what we affectionately call 'tank tattoos' on the fuel tanks of our test rockets, landers, and rovers.

Shouting over a 100 dB engine

Paying for the GLXP shot is a tough. The budget ranges that we have seen for the GLXP so far have been between $10 million on the very low side to over $100 million on the high side. Our own is in the $50 million range. How do you come up with that amount though? We talked in general about that already in our second blog post and then touched on the contracts that we are getting paid to build rockets for the Nanosat Launcher Challenge. This post is going to touch on the sponsorship aspect of how we are going to pay for our GLXP entry.

We have gotten a lot of questions about our sponsorships since they are so large in value and a few more than what the average team has been able to come up with. We thought we'd share some bits that would help those seeking to participate in challenges in the future as well as highlight just how serious we are about this endeavor.

It is not really about needs. It is about fit.

A common mistake is for individuals and teams to seek out sponsors that would get their team what they need or want. The teams are really focused on the bits that get them to the moon. This is understandable, but it is a mistake. The reason that they have this view is because they see sponsorships as gifts to the teams to and not what they really are. Sponsorships are NOT gifts: they are business transactions.

When approaching a sponsor, a team needs to keep in mind that they are going in to get something, but they have to ALSO be going in to give something. Sometimes that something is advertising space on their rover or lander or on the rocket they are riding. That's a nontrivial item for exchange. However, it needs to be worth it for the company being approached. By being Team Phoenicia's sponsor, we always ask ourselves, will this company benefit? Will promoting the company be enough for them?

For some companies, they derive more than enough benefit from just getting their name out there or being seen in a positive light by the demographic that is paying attention to the GLXP. However, for several others, it is not. Not even close. For those, the teams need to present something more, a deeper vision, more payoff than merely advertising. Why would a major launch provider want to sponsor a team? What would they get out of it? It's a nontrivial cost to and for them, so....

That when the team has to step up with their own give back. The team has to have that one thing that the sponsor really wants or could use or could leverage for their own advantage. If a team doesn't have that, they are not going to land that sponsor.

The team's needs and the team's offerings need to fit the sponsor that they are approaching.

If at first you don't succeed

One of the most humbling aspects of the GLXP has not been the challenges on the technical side of getting our lander/rover combo to the lunar surface. It has been getting the project funded. From the outset we knew we needed sponsors. Therefore, we went out to get them. It was most definitely humbling.

The next thing we have to advise the teams is that getting sponsorship even when everything goes right takes a lot of work. We spend a couple hundred man-hours to get a single sponsor. This starts with reaching out to see with whom to speak. Then once a person has been contacted, if there is any interest at all. Then it follows through with presentation that has been tailored to that sponsor's needs and whatnot. Then there are multiple rounds of presentations to get all the players on board. Your greatest friend in the company is the marketing department. Your greatest enemy is the dark side: the accountants. The deciding factor is executive management. Get them on board, and least don't annoy the accountants, and a team will likely get a sponsor.

A word of caution though. Team Phoenicia has been quite fortunate with its sponsorships. The fact remains that for every single sponsor on our website - and more than a few that have not yet made it there because the final agreements have not yet been set in stone - we have briefed about twenty (20 others. Yes, we have about a five percent success rate. And that, our dear readers, is a very high success rate. We have learned a lot from each and every failure.

However, 20:1 ratio means a lot of pounding the pavement. That's a lot of work that would-be selenites really need to do to get what they want. If every presentation for a potential sponsor took two weeks of full time effort, the ten announced sponsors required four hundred man-weeks of effort to land. We also have another four that we are in the stages of finalizing. As an aside, we'd love to say more about them, but we are not done and it requires discretion. Soon, we hope, quite soon.

As you might expect, the total man weeks to get the sponsors we have and are finalizing with is several years work for one person. It really, truly means getting out there and pounding the pavement.

If you first you don't succeed, try, try try, try, try, try, try, try, and try again. You need to be stubborn enough to teach stones and make donkeys cry, but you also have to be bright enough that you learn from your failures. But especially learn from your fails.

In the end...

Team Phoenicia believes that we will cover potentially up to 70% of our GLXP bid with sponsorships. We know it is doable. Already based on the sponsorships we are public about, we have over $5 million worth. We have a lot more than that we are hoping to close with and make public over the next few months. We hoped to share a bit of our experience in order to help others. Oh, we want to beat your pants off and take first place and a couple of the ancillary prizes: we're also not showing all our tricks up our sleeves. However, it's a lot more exciting when there is a real race with real contenders rather than just one team. If we can facilitate that, we will. And, hopefully are. If others can benefit from our experiences with NASCAR rocketry, all the better.

After all, this race isn't just a race. It's a method of building our permanent presence on our Moon and that means pushing others up, not down.