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Management in Practice

How to Build a Space Station

Nanoracks has grown from facilitating science research on the International Space Station to building a commercial space station of its own. Co-founder Chris Cummins ’89 explains how the firm has navigated disruption and built a collection of capabilities that opened up opportunity.

A rendering of a space station in orbit

A rendering of the planned commercial space station Starlab

Courtesy of Nanoracks

Q: Nanoracks was founded in 2009. What was it like to launch a space startup at that point?

There were very few space startups and credibility was low. Nanoracks was one of the first, if not the first company, knocking on the door at NASA saying, “Hey, if you give us some room on the International Space Station (ISS), we'll figure out how to use it.”

A lot of people thought we were crazy because, at the time, NASA had only committed to operating the space station through 2015. We believed that it would be extended, and it has been, several times.

But we also thought it was good timing because from 1998, when the first segment was launched, until the ISS was completed in 2011, most of the focus was on how to get it all to work. When we approached them, they were realizing that if you’re going to build a space station and send astronauts to it, you don’t want them sitting up there twiddling their thumbs. You want them conducting research and making discoveries.

To their credit, NASA understood they are the masters of engineering and flight operations, but the agency was not set up properly to fully utilize the ISS, so they designated the nonprofit Center for the Advancement of Science in Space (CASIS) to manage the science and research. And prior to CASIS they gave us the opportunity to develop a commercial model.

We serve as an intermediary—connecting customers who want to do science, research, and technology testing in orbit with NASA who wants to make sure that the space station stays up there and that it’s safe for all the astronauts. At this point we’ve sent over 1,300 payloads to the ISS.

Q: Why did NASA trust you?

One of our core capabilities is carrying out NASA safety and verification work efficiently. It’s very tricky and important. Our team is very experienced; some of them developed the original NASA safety requirements for the space station while working at the agency.

When we were getting started, the shuttle program was coming to an end, so there were a lot of capable human-space-flight people in a risk-taking mode because they could see that stable jobs were going away and there were not a lot of other opportunities.

Nanoracks was also extremely lucky in having Jeff Manber as our CEO. In addition to establishing the Office of Space Commerce in the Commerce Department, he had worked with Energia, which is something like a combination of Boeing and NASA in Russia. They developed Soyuz and the Russian parts of the ISS. NASA folks knew Energia had a strong impact on human spaceflight.

Q: Why did customers want Nanoracks’ services?

Our business strategy has been to understand what people want to do and find solutions to the bottlenecks that are keeping them from doing it. Customers want to do experiments; they don’t want to master NASA paperwork or learn to build a payload. They want the data from their Cubesat; they don’t want to figure out the details of deploying it.

We were one of the pioneers in having a commercial-services offering for space experiments—what’s called an indefinite delivery/indefinite quantity contract—that made it simpler for federal agencies to use our services. We got good enough at doing the bureaucratic paperwork and the safety processes that groups at NASA used (and continue to use) our services to conduct experiments and other activities on the space station. NASA found we could get stuff through their system faster than NASA could itself.

One of the things I learned in my politics course at Yale SOM is that organizations are not monolithic. There are thousands of different parts of NASA, and they have different capabilities, budgets, etc. Whether it’s NASA, DOD, or a pharma company, these huge organizations are made of many groups. Each group has specific interests and needs to be treated as an individual customer, not an undifferentiated part of the larger organization.

Q: Part of what let you move customers’ projects forward efficiently is that you standardized the hardware for research. How does it work?

Our Nanolab modules are small boxes with electrical connections for power, data, and communication. When we send a payload up, astronauts unpack them and mount them in our racks and make sure each module is running. The experiments take place inside the module. After a defined period, often a month, they are pulled out and repacked to be returned to Earth.

We also have a platform on the outside of the space station. That’s used for projects testing the impacts of a vacuum or the various types of radiation in space. Often the projects are developing sensors or electronics that will be used in satellites.

Q: Nanoracks also deploys small satellites.

In 2013 we began deploying Cubesats off the space station. These satellites are about the size of a bread box. They do a lot of earth observation work and produce many of the images we see from space. But they can do many different things, and as people—and especially commercial startups—realized that, demand grew quickly.

We’d done some very good engineering and managed to get NASA comfortable with letting us deploy small satellites off from the space station. We can deploy 48 of the small 1U-sized Cubesats or 16 of the 3U-sized Cubesats at a time. For several years, we were the largest Cubesat deployer in the world. Our services advanced several leading commercial companies, such as Planet and Spire.

Q: One way that Nanoracks deploys satellites is through the Bishop Airlock, which is the only operational, privately funded large facility on the space station. How did that come about?

We were deploying Cubesats through the Japanese airlock. They go outside the ISS on an arm and the deployer we built jettisoned the satellites away from the station. But there were only so many openings a year; we were having to turn people away.

We believed the Japanese had the ability to do more openings, so we thought we could encourage them by suggesting we’d build our own airlock. We called it Bishop for the chess piece. We made our move. They didn’t bite, so we ended up having to build it, which was in itself a big achievement.

Rideshare on expendable rockets like SpaceX’s Transporter mission has taken off with significant reductions in prices from five years ago and more launches. A lot of the CubeSat market now deploys from those rockets. The Bishop is now getting used much more for in-space tech demonstrations like the one just done with Gitai, a robotics company.

Q: What did the shift in the Cubesat market do to your business?

We were disrupted. But even as we were doing very well with Cubesat launches, we knew that the huge demand meant others would figure out ways to compete. We’ve learned you must be alert to your environment and understand that the competition may not be a similar service but a substitute.

The history of Nanoracks has been to continually ask, based on what we’ve done, what can we do next? We started off with simple experiments inside the space station. Then we developed a system to hold experiments outside. Then we figured out how to deploy Cubesats. Then we figured out how to build our own airlock. Then we were able to look at building our own space station.

If all you need to know is whether your new sensors or electronics function in space, then putting them in a Cubesat and sending it up on a rideshare mission is an option. Where we are different is that we can put your research on the outside of the space station and then you get your hardware back to examine. For some that’s important, but not for everybody.

The question becomes, as the space economy develops, how do you take advantage of the growing infrastructure? How do you understand the new opportunities? How do you make customers successful?

Q: Has building the Bishop Airlock paid off?

We proudly have customers for the airlock. Our experience is that it often can take about five years of platforms actually operating before the research and tech development communities say, “Oh, that does make sense. I can figure out how to use that.”

Successfully building the Bishop Airlock in an affordable way elevated Nanoracks. It showed we could manage an infrastructure project for human spaceflight.

The history of Nanoracks has been to continually ask, based on what we’ve done, what can we do next? We started off with simple experiments inside the space station. Then we developed a system to hold experiments outside. Then we figured out how to deploy Cubesats. Then we figured out how to build our own airlock. Then we were able to look at building our own space station.

Q: The International Space Station is scheduled for decommissioning in 2030. Nanorack’s Starlab proposal was one of three chosen by NASA, in 2021, to be developed as potential commercial replacements. The other two were from Blue Origin and Northrop Grumman. Where does the project stand?

Our target is to launch Starlab as early as 2028. We’re moving along. It’s no simple task. NASA gave us $160 million for the first phase. Sometime in the next two years, NASA will set out requests for proposal for accommodations for astronauts and that is a key opportunity for the space industry and critical to maintaining a permanent U.S.-crewed presence in space.

Organizations that didn’t get funding in the first phase are allowed to bid, so there may be new participants. But Northrop Grumman has already decided rather than pursuing their own design they’re joining our effort. Their primary human-related space activity is the Cygnus supply vehicle that goes up to the space station. They’re now doing work to make sure that that’s compatible with Starlab. That fits their corporate focus better than trying to build a whole space station.

Q: In addition to partnering with Northup Grumman, Nanoracks has brought in several other companies, including Airbus. And Nanoracks became a part of Voyager Space. How does this all play into the process?

It’s a matter of assembling the right technical capabilities, strategic proficiencies, geographic reach, and financial wherewithal to take on such a large project.

Nanoracks has developed the capacity to provide an array of services in space. In 2021, we became part of Voyager Space. The companies owned by Voyager are capable of an even broader range of activities and are positioned to grow well together and in cooperation with government and commercial customers.

A lot of people in the aerospace industry will talk about the Customer with a capital C, and that means the government. NASA was very excited by the proposals that came in that talked about NASA being one of several customers. That’s definitely our approach. Along those lines, we partnered with Airbus, which brings deep connections to the European Space Agency and all of the participating countries that have human space flight programs and want to continue to send their astronauts into space. And we very recently partnered with Mitsubishi in Japan.

Q: How many space stations do you expect in orbit in the next 5 or 10 years?

NASA would very much like there to be at least two U.S. providers, but that doesn’t count foreign space stations. For instance, China is operating its Tiangong space station in orbit today.

This commercial space station program is the third iteration of using commercial suppliers. NASA started doing commercial resupply of the space station in 2012. SpaceX’s Dragon capsule delivered cargo—doing it successfully really helped save SpaceX when it was going through early rough times. Orbital, which is now part of Northrop Grumman, was the other provider, with the Cygnus. There have been failures in both those launch vehicles. That demonstrated why it’s very good to have alternatives.

After commercial resupply came commercial crew. SpaceX is now delivering crews to the space station. The other competitor is Boeing, however, they have yet to complete a human mission with their Starliner. That, again, underscores the importance of not relying on just one supplier.

Q: What are the business opportunities you are watching in the space economy?

The core thing to watch is how people take advantage of declining costs of getting to and from space. When SpaceX gets their next generation launch vehicle [Starship] going, it may cut the cost of launch by another order of magnitude.

Here’s one way to think about that: in the mid-1980s, it was probably a good bet to build a business that was positioned to take advantage of computing costs coming down dramatically. I’m hopeful that’s the right analogy for what’s to come in the space economy.

Q: Are there specific fields that seem promising?

Nanoracks and Voyager are betting on manufacturing in the next 5 to 10 years. With the number of experiments going on, there’s a good chance we will see a breakthrough—some material-science process that requires microgravity and yields low mass but very valuable materials. Maybe a protein crystal for biopharma or a colloidal crystal for active optics. That would kick off a lot of industry activity. It could make Starlab a truly great investment.

From a finance perspective, anything much more than 10 years out has pretty close to zero present value—unless it’s absolutely huge. That’s said, there’s a lot of interest in space-based solar, whether for satellites or for transmitting power down to earth in spots where you need huge amounts of energy like a production facility. It’s likely at least 10 or 15 years out.

Further out, if you’re going to manufacture anything in space, it’s much better to get materials from the moon rather than bringing them up from earth.

Q: How did you develop an interest in space?

It started with a picture book at our local children’s library. I was also one of the successful targets of NASA’s PR campaigns in the 1960s. The interest stayed with me. I wrote a paper about working in space when I was in high school. And my applications essay to Yale SOM focused on developing opportunities in space.

The thing that initially attracted me to Yale SOM was a profile of Bill Claybaugh who worked for both NASA and private space companies. I thought, “Oh, that makes sense; you want to understand both the government side and the business side of these opportunities.”

When we started Nanoracks, I got the job I always wanted, except the industry wasn’t there until the late 2000s, so my job search was 30 years long.

Q: And it required helping to create the company you wanted to work for.