The Earth observation business: part Amazon, part Blue Origin

Jeff Bezos was interviewed at Satellite 2018 and asked about the differences between how he started Amazon versus his rocket company Blue Origin. He astutely observed that Internet companies are relatively easy to start because they ride on an infrastructure that has existed for some time, while space companies must build their own infrastructure—sort of like if Uber had to build cars and the interstate highway system before it could launch its app. That’s why the number of internet millionaires could fill a phone book and why you could count the net number of successful commercial space businesses on your fingers.

When Amazon sold its first book in 1995, it was able to leverage three key pieces of existing infrastructure: global parcel delivery, credit cards for online payment, and of course the Internet as a sales channel. As a business-to-consumer company, it could use these three elements to scale its sales very rapidly, resulting in the classic Silicon Valley “hockey stick” of growth. Blue Origin, on the other hand, is building the infrastructure – highly affordable, reliable and available launch vehicles – so that one day “two kids in a dorm room will be able to start a really important space company,” as Bezos put it.

Blue Origin’s New Shepard Booster landing in West Texas after a successful Mission 7 (left) and an Amazon shipping truck. (Images courtesy of Blue Origin and Amazon)

Through this lens, the early days of the Earth observation business were more like Blue Origin than Amazon. DigitalGlobe had to build an entire infrastructure: satellites, ground stations, global communications networks, imagery production and delivery platforms, etc.

The business-to-business nature of Earth observation also has similarities with Blue Origin. Unlike Amazon, a business-to-consumer company that could leverage the Internet to serve millions of customers and scale rapidly, Earth observation customers are enterprises and governments, while most consumers get Earth imagery for free from enterprises such as Google, Apple, Bing, Here, etc. Unlike with consumers, enterprise sales cycles are long, and government sales cycles are even longer. Neither buys directly over the Internet. Reaching them requires a sales channel. Selling to them (particularly governments) requires establishing contract vehicles, which often takes much longer than establishing a willingness to buy. Building a highly talented global sales force and distribution channel—and establishing contract vehicles—was perhaps the most challenging piece of infrastructure that DigitalGlobe had to build! These realities should temper the “hockey stick” growth aspirations of anyone starting or investing in a new Earth observation business.

In other respects, DigitalGlobe’s business model has parallels to Amazon. Last year I blogged about the many similarities: both had to invest in the development of tools to help customers use their offerings; both had to vertically integrate to benefit from scale; and both had to become a one-stop shop for the products and services their customers need, regardless of who makes them. The development of a partner ecosystem is perhaps the strongest parallel.

Moving our entire 100-petabyte imagery archive to the AWS cloud was a huge part of the equation. Our GBDX platform now allows both experienced and novice customers to extract valuable insights from satellite imagery at scale, without owning and operating the infrastructure needed to work with petabytes of imagery. And if GBDX is like the Amazon desktop site or mobile app, then the recently introduced GBDX Notebooks product moving us toward the remote sensing equivalent of Amazon’s “buy now with 1-click” button.

DigitalGlobe over the past two decades has built both the Earth observation infrastructure and the ecosystem and tools that are powering the new space economy. As part of the Maxar family, the company now has access to even more space hardware, data and AI capabilities. So rather than building their own cars and highways from scratch, organizations with geospatial aspirations should come take a ride with DigitalGlobe, join the many who have, and enjoy a more Amazon-like experience on top of the Blue Origin heavy lifting by DigitalGlobe!