The aerospace industry has been particularly resistant to disrupting in Japan. In the rest of the world, launch vehicle and spacecraft technology has made incredible gains over the past decade, but here in Japan its still mostly the same government contracts going to the same major contractors.

Naomi Kurahara of InfoStellar, has come up with an innovative way to leverage existing aerospace infrastructure and to collaborate globally by renting out unused satellite ground-sataion time, Airbnb style.

You see when an organization launches a satellite, they also build a ground station to communicate with it. The problem is, that as the satellite obits the Earthy, it’s only in communication range of the ground station for less than an hour a day. The rest of the time the ground station just sits there.

By renting out that unused time ground-station operators earn extra income, and the satellite operators are able to communicate with their satellites as often as they need.

It’s a great interview and I think you’ll enjoy it.

Show Notes for Startups

  • Why the Airbnb for satellites startup model makes sense
  • The demand-side problem
  • Why this market is much larger than it seems today
  • The key growth drivers in the satellite market
  • Why the Japanese aerospace industry can’t innovate
  • How to run a startup as an expectant mother
  • What challenges women scientists still face in Japan
  • How Japan could better support working moms

Links from the Founder

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Transcript from Japan

Disrupting Japan, episode 56.

Welcome to Disrupting Japan – straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me.

Aerospace in Japan is particularly resistant to disruption. Over the past decade, the rest of the world has seen incredible gains in both launch vehicles and spacecrafts. But Japan has been moving slowly. Sometimes it seems as if she’s determined to stay the course with the same government contracts going to much the same corporate heavyweights year after year.

Naomi Kurahara of InfoStellar once had plans of changing the Japanese aerospace industry. But along the way she went out on her own with a plan that bypassed Japan’s major players and targeted the global market. You see, when an organization launches a satellite, they usually also build an antenna and a ground station to communicate with that satellite. The problem is that as the satellite orbits the Earth, it’s only communications range with the ground station for less than an hour a day. The rest of the time the ground station just sits there.

So, Naomi decided to pool all of the unused ground station time together and rent it out to satellite operators, Airbnb style. Everybody wins by sharing resources. The ground station operators get income by renting out their facilities and the satellite operators get to communicate with their satellites far more often.

But Naomi explains it better than I can, so let’s get right to the interview.

Tim: Cheers! I’m sitting here with Naomi Kurahara, the CEO and fearless founder of InfoStellar, so thanks for sitting down with me.

Naomi: Thank you for inviting me.

Tim: Now, InfoStellar is basically time-sharing for satellite ground station, or Airbnb for satellites, but it’s a complex idea so why don’t you explain a little bit about what InfoStellar does.

Naomi: Okay, the reason I started this business is the aerospace space has an issue for cost. Like satellite is expensive, and rocket is expensive, and ground station is expensive because, maybe, not many people are using.

Tim: Well, aerospace is incredibly expensive but actually I think before we get into InfoStellar’s business model, I think it’s going to be best if you explain what ground stations are and how they work.

Naomi: Okay, so there is three main components for space business. That’s the ride, or spacecraft, and the rocket, which delivers the spacecraft from ground to space, and after the delivery, the operator has to control the spacecraft somehow because most of spacecraft doesn’t have people on board. It could be a space station, maybe only space station. But most of the spacecraft do not have an operator, so the ground operator has to control this spacecraft. So we need to send some commands. For that, we use radio and radio communication. So the antenna system and some computers to process the commands.

Tim: So the ground stations, they’re what’s around the big parabolic antennas that everyone’s used to seeing on the ground and they both get data from the satellite?

Naomi: And to the satellite.

Tim: And give instructions back to it? Okay. Now that that’s clear, tell us about InfoStellar’s business.

Naomi: To go back to the issue of this business, the cost. The cost is so expensive in this business, it’s difficult to launch or start. And for the ground site, one ground station, including one dish antenna, maybe it costs $300,000. So to reduce the starter’s price, there is only one way to reduce the cost, which is to increase the usage.

Tim: So increase the usage of the ground stations?

Naomi: Yes. If only one person uses, maybe 1% or 2% of the whole time is used.

Tim: So InfoStellar allows the sharing of these ground stations, right? So, traditionally, if I’m putting up a satellite—I build my satellite, I pay someone to launch it into orbit for me, do I usually build a dedicated ground station to track that satellite?

Naomi: I say yes because most of the satellites, the government requires you to stop anytime. Make sense? So the many operators have to have one ground station at least.

Tim: Now, how much downtime does a ground station have? If I’ve launched my satellite and I’ve got my ground station, in one day, how many minutes, or how many hours are that ground station and that satellite communicating?

Naomi: It depends no location. For Japan, I can get only 30 minutes per day of communication time.

Tim: 30 minutes per day? So 23 hours and 30 minutes, it’s just not being used? And that’s the time that InfoStellar wants to rent out and to share.

Naomi: To reduce the cost, I want to make the usage higher.

Tim: Right. That makes sense, renting out that unused capacity. Now, I don’t imagine that all ground stations are the same. They must have different frequencies and different ways of communicating with the satellites. How does InfoStellar work with that.

Naomi: Well, all satellites have different but I can still categorize some satellites because the frequency, there is an allocation amount for satellites. For example, there is a band called X-band, it’s about 8GhZ so for satellites, can use about 8 to 8.4GhZ, and the other X-band satellites cannot use.

Tim: Okay. So it is fairly standardized. All right. The protocol used to communicate between a ground station and a satellite must be completely different for every satellite so how does it work?

Naomi: Just a program. The many satellites have a protocol or an option. So I have to make sure that every station can process the many, many satellites.

Tim: Okay, but I would imagine the stations themselves, they don’t have to understand the data they’re getting, right? They just have to collect it and send it into the cloud and get it to where it has to go.

Naomi: Correct. I have to think about the analog side and the digital side; for an analog signal or digital signal. For the antenna, they take care of the analog and for analog it’s more easier. Many satellites can be categorized or they have some subbed out frequencies.

Tim: It sounds like there’s enough standardization so you can at least attack the problem. So, for any multi-sided marketplace, you’ve got the supply side and the demand side. And the biggest challenge is always getting both sides on board together. So let’s first talk about the supply side. Have you been able to get a good collection of ground stations signed up for this service?

Naomi: Okay, they need the dish antenna but also I need to have another type of antenna called Yagi antenna. The antenna looks like a fishbone on the buildings or the houses—that’s called a Yagi antenna. So other types of antennas can receive or can transmit the UHF or VHF frequencies. It’s not VHF or UHF, it’s a type of frequency category.

Tim: So who owns the ground stations that are signing up?

Naomi: So, for Yagi antennas, the individual person. For the dish antenna, maybe a private company or sometimes a university has.

Tim: All right. You’ve gotten ground stations throughout Southeast Asia on board? And how did you make those sales? How did you convince people to join this?

Naomi: Well people who have antennas, the people usually have their own satellite because the two operating their satellites, they have their antennas or their ground station. So they have the same issue, they have the antenna on one station but the usage is 30 minutes to 1 hour per day.

Tim: I see. So I guess on the supply side it’s an easier case because they’re not using it for 23 hours a day. Okay. So it’s very appealing to them.

Naomi: Yes, they have a maintenance cost issue. Sometimes the Yagi antenna requires maintenance to change frequencies or get some new functions, so they still need maintenance and maybe $5,000 to $10,000 per year.

Tim: So $5,000 to $10,000 per year for maintenance costs?

Naomi: Yes. So it’s not big but it still costs.

Tim: Sure, it makes sense. If they can get a little bit of income to pay for the maintenance, it’s a great idea for them. That makes sense on the supply side. So let’s talk about the demand side. I’m curious, how big is this market? How big is the market in ground station sharing?

Naomi: That’s a question for me too because I can account for the current market. I can the list up current spacecraft service providers and I can count their revenue or funding for a year.

Tim: Well, yeah, when you look at the overall market. But most of the market you can’t sell too. For example, the military, you can’t sell to them. They’ve got their own ground stations and such.

Naomi: Private, U.S. private companies for using satellite image, they are saying that private and public militaries also.

Tim: But would, for example, do you think the military or a large government organization would rent ground station time from an individual or a university?

Naomi: Well, I think military just gets data from these from the data provider and they don’t care that it came from which station.

Tim: Interesting, okay. So I guess maybe it is bigger than I was thinking.

Naomi: Yes. And for our business, the current market is not enough I am thinking. And I think the market will increase very quickly. It’s getting bigger from current times.

Tim: There really does seem to be this huge amount of innovation right now in aerospace. And the cost of launching a satellite and the cost of building a satellite seems to have dropped like 90% over the past 5 or 6 years. Just incredible growth all of a sudden. So I guess you’re counting on that growth in these new industries to make up the bulk of your clients in the years to come. That makes sense.

Naomi: 30, maybe 20 years ago, we never expected to use a smartphone or tablet for business and for daily life. We would never expect Google Maps is such a strong tool.

Tim: That’s true and now it’s part of our everyday life, we don’t think about it. Where do you think the growth will come from? What industries do you think are going to be using these new, cheaper satellites?

Naomi: Well, that’s also a good question. For example, the many businesses stays not city or big data, or for example, Google is trying to do unmanned driving system.

Tim: Yeah, Google’s driverless cars.

Naomi: That system requires the car, of course, but not only that. They need map information and the sensing information, and maybe GPS information.

Tim: Right, they’ve announced they’re launching a satellite array of like 1,200 satellites—some huge number of satellites.

Naomi: So something that is captured in space that can be combined to the other industry. That’s kind of combined for a close industry service. Yes. I think that will increase.

Tim: So we’ll see a lot of different companies taking advantage of sensor data?

Naomi: Yes.

Tim: You’re probably right. I mean, maybe 20 years from now there will be some obvious application that we’re not imagining right here in this room.

Naomi: Yes. Google Maps shows just a picture but if the picture is updated in real time, what happens? Or if you have temperature data for all over the world.

Tim: Right. And I guess since the satellites are up there, it’s much cheaper to rent additional ground stations than to launch another satellite. That makes sense. Let’s talk a little bit about you for a minute because you’re sort of a non-typical founder in Japan.

Naomi: What do you mean non-traditional?

Tim: Well, you got your Ph.D in Electrical Engineering at Kyushu Institute of Technology, right? Then you were a researcher at the University of Tokyo for a few years. And I think InfoStellar was actually based on a research paper you published, wasn’t it?

Naomi: Yes. But the concept itself was not from me. It existed from more than 10 years before.

Tim: Okay, so when you decided to leave your university job and found this company, were there university or government programs that helped you out? Were there mentors and advisors or did you just make the jump on your own?

Naomi: I just jumped on my own.

Tim: Really? That’s a pretty big jump.

Naomi: Well, between university and InfoStellar I was in a private company also. So it’s not a big jump. Maybe.

Tim: What made you finally decide to leave your job and start the company?

Naomi: When I was in university, I wanted to become an astronaut or I wanted to work in a bigger, major satellite company. But during post-doc, in University of Tokyo and during when I was joining the private company, it was different. I mean it was not something I expected.

Tim: How was it different?

Naomi: Well, the job itself was very exciting. I enjoyed it a lot. But I saw thought some new spacecraft, or new space business, or new space industry cannot be created or cannot be born in all the space.

Tim: Okay. So even though aerospace is very high tech, it just didn’t seem like you were working on new things?

Naomi: Well, the technology, they are doing very high tech things about space, but they cannot change the world or they cannot change the industry.

Tim: So they’re making small, incremental improvements? They’re not making disruptive change?

Naomi: Yes. They do step-by-step, but they cannot be a Microsoft, or Apple, or Google.

Tim: Okay, yeah, well especially in Japan, aerospace is—you’re basically selling to the government.

Naomi: Right.

Tim: It’s a lot like working for the government.

Naomi: Right. I hope nobody creates a bigger company because many people are listening.

Tim: I think they would probably agree with you. I don’t think that’s a big secret. Well let me ask you a little bit of a personal question. Because after your Ph.D and your post-doc work at the University of Tokyo, you were on a really good career path and then you left to start your own start-up, was your family supportive of that? Or what did they think?

Naomi: It was tough to tell them I leave the company or I leave universities. My parents are over 60, they are typical Japanese. They think staying in universities or staying in a big company is the best way of living.

Tim: Well it’s a very safe way to live.

Naomi: Safe way, yes. It was very difficult to talk.

Tim: So they were not happy about the idea?

Naomi: They accepted, but they were like, “Okay?”

Tim: Have they changed their opinion or are they still hoping you will go back to a proper job?

Naomi: They are hoping!

Tim: Well, when you made that change, what was the biggest difference you saw between the academic world and the big company world and the start-up world? What was the biggest gap you saw?

Naomi: For academic, we have goals and we work for the goal. But if the goal is not achieved, it is okay. I mean, it is not okay but there is no punishment.

Tim: Yeah, nobody gets fired, nobody loses their job. That’s true. In a start-up, if you miss your goal, your company might be over.

Naomi: Yes.

Tim: Do you find that exciting or is that just stressful?

Naomi: Exciting. Well, it’s stressful but—I think that’s a big difference.

Tim: One of the biggest things, like you were telling me before, is you’re going to be a mom soon. How are you going to balance that? Are you going to sort of put the company on hold for a while?

Naomi: I cannot do that.

Tim: Not an option?

Naomi: No. Maybe I take a week or two weeks off but I have to check e-mails and I have to communicate with my team via Skype or internet.

Tim: That’s going to be really challenging.

Naomi: I know.

Tim: But I understand what you mean. When things are in motion, you can’t just stop them.

Naomi: No, I cannot.

Tim: Let me ask you a bigger question about Japan. Prime Minister Abe talks a lot about making Japan more friendly to working moms. Actually, everyone talks about it a lot. If Abe asked your advice on what the government should do to make things better for working moms, what would you tell him?

Naomi: Well, I really hope the government helps the working mom or working women. But it is so difficult because I believe there are many changes required, like I was in the engineering field a long time and, I’m sorry but, typically older men have an idea, something women or mothers have to stay home, and have to take care of the children.

Tim: So there’s still a lot of discrimination in technical fields?

Naomi: Yes and so a major change is required.

Tim: Let me dig into that for a second. So, for example, in your Ph.D class and your post-doc, how many women researchers were there?

Naomi: In my same year? Only me.

Tim: Oh, just you? So we definitely need more.

Naomi: We didn’t have many Ph.D students in my year. Maybe 30 or 40 only. But still—

Tim: But still, only one woman is pretty low.

Naomi: Yeah. And I think the system or social system needs to change because at least a week or two weeks there is a delivery.

Tim: So guaranteed maternity leave?

Naomi: Yes. I have to at least leave at least several periods. But if I am a manager and if I have a very important project, and one person leaves for a few weeks, I may be upset a little bit.

Tim: Yeah. It’s hard for any business to deal with staff taking time off.

Naomi: So I understand the manager’s side of thinking but we need something to cover the mother doing things. I don’t know how.

Tim: Before we wrap up, I want to ask you what I call my magic wand question. And that’s if I gave you a magic wand and I said you could change anything about Japan, the culture, the way of thinking, the education system, anything at all to make it better for start-ups, what would you change?

Naomi: Maybe I change a rule that every student has to take a year after their graduation and the government can pay during—

Tim: During that year off? And what would they do?

Naomi: The student has to go abroad. They cannot stay in Japan.

Tim: Interesting. So it could be, they could go abroad to study or work, or anything?

Naomi: Anything, but they cannot stay in Japan.

Tim: Why is that important?

Naomi: Well, I think the many Japanese are too focused on Japan. It would be nice if everyone looked outside of Japan.

Tim: Okay, so it would just give them a more global perspective. When they went into business, they wouldn’t be so focused on the Japanese market and the Japanese way of doing things. Excellent. Thanks so much for sitting down with me today. It’s been a great talk.

Naomi: Thank you so much.

And we’re back. You know, maybe more than the business itself, I was impressed with Naomi’s determination to follow her own path. I mean, it’s almost become cliché about how founders fight the system to find their dreams but the hard truth is that most start-up founders today aren’t fighting the status quo. They’re riding high on it. Start-up culture is celebrated today. Starting a company is seen as respectable and even admired. Funding is easy to obtain, and once funded, people tend to be supportive of your vision.

Talking with people like Naomi, however, reminds us what it really means to do things on your own terms. From being the only woman in her Ph.D and post-doc programs, to going against the wishes of her family to start her own company, to running that company as a single mom. She’s not so much celebrating doing things her way. She’s just doing it. Ground station rental may be a very small market today but it’s one that might see explosive growth in the coming decade and it looks as though InfoStellar is set to grow right alongside with it.

If you’ve got a love for aerospace and satellites, Naomi and I would love to hear from you. So come by and let’s talk about it. When you drop by, you’ll find all the links and sites that Naomi and I talked about and much, much more in the resources section of the post.

And I know you’ve been meaning to do this for a while now, but when you get the chance, please leave us an honest review on iTunes. It’s really the best way you can support the show and help us get the word out. But most of all, thanks for listening and thank you for letting people in Japanese start-ups know about the show.

I’m Tim Romero and thanks for listening to Disrupting Japan.