TEP Story Archives: Transforming Outer Space into a Place of Business with Microsatellites

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Mr. Yuya NakamuraPresident and CEO of Axelspace Corporation/Member of TEP

Private launch of the world's first commercial microsatellite

In September 2012, a new chapter was added to the history of outer space. Axelspace Corporation, a venture company from the University of Tokyo, became the first private enterprise in the world to launch a commercial microsatellite, from a spaceport in Russia. The satellite was 27 cm long on each side and weighed a little under 10 kg. Weathernews Inc., a meteorological information company, uses the satellite as a dedicated satellite for observing sea ice in the arctic region.

With global warming making the arctic sea closer and closer to becoming traversable during the summer, the world's shipping companies are looking to shorten shipping routes and greatly reduce fuel costs. However, the position of countless amounts of sea ice needs to be accurately monitored in order to safely cross the sea.

Since existing earth observation satellites have many users and are not always observing the arctic sea, it is difficult to obtain information about the desired location at the desired time. By having a dedicated satellite, Weathernews can provide a service for indicating safe shipping routes based on high clarity observational information that is obtained frequently.

Low-cost microsatellites that can be quickly developed are now opening up new possibilities for outer space services.

An era where companies can have their own satellite

Conventional large satellites take 5 to 10 years to develop and cost more than tens of billions of yen. In the world of business, it is almost impossible to look ahead 10 years in the future, as market needs will change dramatically during that time. This is why companies are unwilling to make such a large investment, and why private use of outer space is limited.

However, the microsatellites created by Axelspace can be developed in one or two years at a cost of only 100 or 200 million yen, which is two digits cheaper than a large satellite. This means that a company is able to have a dedicated satellite for about the same cost as a helicopter. These cost benefits can also be utilized to launch multiple networked microsatellites to build a real-time earth observation system that can monitor changes in all regions of the globe at high frequency. President of Axelspace, Mr. Yuya Nakamura, is so confident in the potential of microsatellites that he says they may become the next new form of infrastructure after the Internet.

Microsatellites are expected to play an active role in a wide range of fields, such as the agriculture, shipping, and fishing industries, as well as the monitoring of illegal dumping. For example, using satellites for the monitoring of traffic congestion, which currently relies on fixed-point cameras, will enable a wider area to be covered and the precision of information to greatly increase.

Furthermore, satellite use is expected to increase in markets such as Southeast Asia, Africa, and South America. These countries have a strong untapped need for observation in national land development and the building of communication infrastructure, etc. Axelspace is considering expanding its business in a way that can meet local needs, such as exporting packages that provide both satellite development and technical education services.

Outer space consulting business

Unlike large satellites that are developed mainly by nation states with a top-down approach, microsatellites are developed at universities from the bottom up. In 2003, the University of Tokyo had the first successful launch in the world with CubeSat, a microsatellite with a weight of only 1 kg. One member of that laboratory was Mr. Yuya Nakamura, who is now the president of Axelspace. He was involved in three microsatellite projects at university, where he experienced all processes of satellite development; from design and production to launch and operation.

However, a practical need for the new microsatellite was not apparent at the time it was created, and it was only seen as an education tool for university students. While Mr. Nakamura was thinking about whether he could come up with a practical use for the microsatellite other than education, he was approached by Weathernews about monitoring the arctic sea and decided to start a business with his lab colleagues in 2008. His reasoning was "Someone is bound to start a microsatellite business. So why don't I be the first?"

The strengths of Axelspace are its technical skill and ability to provide consulting about outer space based on previous experience. "Manufacturing can be performed by anyone that has the design plans. What is vital is thinking about the outer space service with the customer, that is, what to use the microsatellite for, and incorporating that into the design," asserts Mr. Nakamura.

Although rare for a technology venture company in the high-tech industry, Axelspace has employees that are proficient in communication and project proposal. For example, Mr. Yuta Nojiri, who leads the business development department, was one of the first students of the Entrepreneur Dojo, which is led by Professor Shigeo Kagami of the University of Tokyo. He has been trained since he was a student to think and convey business ideas that utilize outer space development technologies.

Outer space is not a dream, it is a real business opportunity

Although Mr. Nakamura has more than 10 years of experience with satellite development, including his time at university, he has only been a manager for less than four years. There are many things that he must think about as a president, such as business strategy and the management of employee motivation. This is where the entrepreneur network comes into play. "By listening to various stories of other managers, I can learn about successful examples and become able to think about things from a new perspective," says Mr. Nakamura.

In December 2009, Mr. Nakamura joined TX Entrepreneur Partners (TEP) with an introduction from "Tokatsu Techno Plaza," an incubation facility in the Kashiwa Campus area of Kashiwa City in Chiba Prefecture, where his office was located. In addition to participating in gatherings and other events, he directly receives concrete advice on business strategy and introductions to business partners, from Masaru Murai, director of TEP.

"When I talk about outer space, people tell me that it is nice to have a dream, but outer space is not a dream, it is a real business opportunity," says Mr. Nakamura. He plans to launch two satellites in 2012 and wants to build the industry into an infrastructure export industry that represents Japan, like bullet trains. Mr. Nakamura's challenge will continue as we head toward an age where everyone uses outer space on a regular basis.

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