LIVERPOOL, England — Organizers of this year’s UK Space Conference thought that because the nation’s fast-growing space sector is focused on creating startup companies and generating revenue, inviting a Silicon Valley startup space company would be a good idea.
Spire Global Chief Executive Peter Platzer was an especially logical choice. Spire, which is building a constellation of small environment observing satellites, has established an office in Glasgow, Scotland, in addition to its San Francisco headquarters and an office in Singapore.
Spire is teaming with Glasgow-based Clyde Space, which Platzer called “the world’s most experienced builder of nanosatellites.”
Platzer further flattered the British audience by saying he had considered Strasbourg, France, as the company’s European base before reviewing French government bureaucracy and concluding: “I can tell you, that’s a bad idea.”
With the niceties over, Platzer launched into a 20-minute straight-talk session in which he said Britain may be Europe’s best in venture capital, but that it is like an adult outrunning 6-year-olds in a 100-meter dash.
The better comparison is with the United States, he said, where there is 15 times more venture capital than in Britain.
Britain has an advantage in speaking English, he said, but this may not last long: “I would suggest that you learn Chinese very quickly, because that will change over the next 10-20 years.”
He began his talk by saying he didn’t like being introduced as a “successful” space startup. Spire, now with 60 employees, is less than 3 years old and has raised $80 million in venture capital. “It’s premature to call us a success,” he said. “Investors say, ‘Don’t rockets explode? Didn’t Iridium fail?’ It’s a hard sell.”
Here are excerpts from Platzer’s July 15 remarks.
On diluting the geek factor:
“In the West, graduates in science, technology, engineering and math are growing at 2-4 percent per year. But demand is growing at more than 13 percent per year.
“The single most scarce resource, the thing that keeps me up at night, is access to people. And if you need any kind of space-specific resource, it is even harder.
“One thing we found with people wanting to start a space startup is that they’re all engineers. I am a physicist. I’m definitely capable of geeking out on some cool gadget. The customer doesn’t care. The geek factor in the space industry is higher than in other industries, like the software industry. You have people who are significantly more in love with their extraordinary feats of engineering while the customer, as we would say in the less-proper U.S., doesn’t give a rat’s ass.
“Hire business people as soon as possible. We kept a ratio of almost one-to-one for quite some time.
“That’s one of the challenges. We’re in Silicon Valley, a great location, where we found all the capital. The next office was Asia. Draw a circle around China and India. There are more people living inside that circle than living outside of it. And there’s more GDP [gross domestic product] generated there, and almost all the world’s growth GDP is generated there. And they produce more engineers than the rest of the world combined, many times over.”
On recruiting in today’s tech market:
“You have to pull on every advantage that you have. Pull on the fact that you are a space startup. Tell them: ‘At Google, your code is going to run somewhere in the back of a data center. Work for us and your code is going to run in space.’ That actually gets engineers excited.
“There is a marked shift in what drives people now. You will not get a millennial to work harder by threatening to fire her. She’ll just go somewhere else. Especially if she’s an engineer, she has five people at the door, no matter how old she is or how little experience she has.
“It has gotten so extreme in Silicon Valley. My favorite application letter is the following email:
“‘Hi, I need a minimum salary of $130,000 because I’m already two years out of college and I speak Ruby on Rails [a Web application framework]. For my office, I like large windows and massage chairs. Call me on my cell.’
“I didn’t call. But it is a sign of how extreme it has gotten there and it will move in that direction in the rest of the world. You have to give them something different than a paycheck. You have to give them something that revolves around mastery, autonomy and inspiration — the three pillars for millennials.”
On having a physical presence globally:
“Supply chain is what I underestimated the most. Thinking about vertically integrating earlier rather than later is something I would do differently if I were to do it again.
“Customers want to talk to you in their time zone. Last night I went [to the hotel] and started working San Francisco hours [eight hours earlier than Britain]; it’s not a whole lot of fun. You need to find people to talk to customers and suppliers in their time zones. Keeping your suppliers in check is something you have to do. And satellites don’t care about time zones. Around 60-65 percent of all operator errors happen in the graveyard shift, between 10 p.m. and 4 a.m. If you are in only one country, you have a graveyard shift. So having a global operation makes a lot of sense.”
On the differences between the United States and Europe:
“The biggest single difference between the U.S. and Europe in general — risk appetite being the second-biggest — is the sense of speed. If you train with 6-year-olds for a 100-meter dash, you might feel pretty good about yourself. But they don’t matter at the Olympics. Usain Bolt does.
“Someone just said the average [British startup] company stays in their incubation program for 30 months. … Thirty months in an incubator is ridiculous. Three months is the maximum that anyone should stay in an incubator.
“The sense of speed you get in Europe is what people do in their sleep in Silicon Valley. That is the biggest difference we find. You surround yourself with people that have a drive and sense of speed that is out of this world. Speed is the single most important thing for a startup.
“Don’t plan; do. It’s absolutely crucial that you do things, that you fail, that you iterate. When people from Europe come to our office it’s the single most important thing I tell them and it’s the single least popular message.
“People come to us and say: ‘I have this project I’m working on.’ You don’t have a project. Either you have a company that you’re building, and you’re always behind, and you always feel you’re late, and you’re always scared you’re going to miss the market, or you don’t have anything.
“Don’t talk about the project you’re working on. It is a product you are launching. But if you launch a product that works 65 percent of the time, you launched it too late. It is a mental paradigm shift between what is happening in Silicon Valley, and in New York City now, and what is not happening in Europe — this sense of time. There is a sense of urgency.
“You’re competing on a global basis. Trust me: Whatever you are doing, there are about 1,000 people thinking about the same thing at the same point in time, and about 100 people doing the same thing as you are.
“We iterate on our birds on a continuous basis. We launch every month. Last year there were 74 rockets going up that we could have launched on, so we’re not limited by launch. It has to do with the market and the technology and other things based on customer demand in the market we chose. So we removed launch as a limiting factor for us.
“We iterate with every single launch of the hardware, and we keep on iterating the software. More and more technology is moving from hardware-based to software-based. It’s the iPhone-ization of space. We can change what our satellite does, remotely on Earth, by changing the software.”
Audience question: You raised $80 million in the U.S. Could you have done this in the U.K.?
“No.”
What’s the difference?
“Risk appetite in Europe is just lower. I am not saying this is good. I am saying it is a difference. You don’t have investors in Europe comfortable in taking risks. In the U.S., raising $1 million in seed capital is a two-week story. Raising $1 million out of an incubator, where you finished the three-month program, and you can choose between five top-level investors who want to give you $1 million, and you’re not going to take it. Series A is a different story, Series B is yet another.
“But investors in the U.S. are now coming to Europe because I can buy stuff here for literally one-fifth of the price, because there is no supply of capital. When I talk to investors who say, ‘I don’t know where to deploy my capital,’ I say: Go to Europe. You show up in Europe with 10 million euros ($11 million) and you are the king of the castle. They are starting a $10 million microfund in Silicon Valley once a week.
“So risk appetite, on the investor side and the entrepreneur’s side, is the biggest difference.”