Pathfinder

An Interview with Ian Cinnamon

Mo Islam
Ian, welcome back to the show.

Ian Cinnamon
Mo, it’s great to be here. Thanks for having me.

Mo Islam
Guess what! You have the honor of ringing in the 100th episode of Pathfinder.

Ian Cinnamon
That is a huge deal of all the possible guests you chose me.

Mo Islam
What can I say? We started the show in May, 2022. It’s been roughly two years of Pathfinder episodes. It’s been fun.

Ian Cinnamon
Incredible. I’m proud to say I’ve really tried to listen to all 100 of them. So are all 99 to date and hopefully this one will hopefully be as good as the rest.

Mo Islam
Well, I was gonna say, you know, it’s funny, I was gonna, you know, we were actually thinking about what do we do for episode 100? like, should we do like a recap or, do something? We thought about it, but ultimately we decided that like, let’s just get, you know, let’s just get someone on the show that we like. And plus, I don’t know if you remember, my very first hosted episode was you. And I remember talking. I remember we were chatting before we were recording and I was like, dude, it’s my first time hosting this. Like, I don’t know how it’s going to go. Just like, bear with me. And you were like, don’t worry, man, you got this. Like you’re giving me like words of encouragement. So I appreciate that.

Ian Cinnamon
Hey, you clearly have done a phenomenal job and the podcast is still going strong. So honored to be episode 100.

Mo Islam
Well, we had a lot more work to do. So here’s to another 100 or dare I say a thousand episodes maybe, we’ll see. it’s not your first rodeo. So super excited to chat again. Importantly and very, know, huge news, Apex just raised a $95 million Series B. So congratulations on that. We’re gonna talk more about that in just a second. But first, I know you’ve been on the show before, but there might be, you know, first time listener. Give us a quick background Ian, on Apex, and how you got to building satellite buses.

Ian Cinnamon
Absolutely. So I’ll give you the quick TLDR of all of this. But Ian Cinnamon, CEO of Apex, started the company with a good friend of mine, Max Benassi. He spent his career at SpaceX scaling up manufacturing. For me, I actually come more from the software side where I built AI and computer vision systems that basically applied that technology to different aspects of US government data sets. And one of those was downstream satellite data. ended up selling my prior company to Palantir where I get to focus on kind of the satellite data aspect and realized firsthand in dealing with all these companies producing amazing data sets off their satellites that there was a huge bottleneck and it was no longer the launch side and it was not the payload side, but it was the bus side. So started Apex to build satellite buses at scale. And here we

Mo Islam
So, when we first spoke, or your first time on the show, you were really just getting started, you were just raised around. Give us sort of the highlights, what’s changed between now and your recent round?

Ian Cinnamon
Well, it’s funny, I think back and I think we last recorded, it must have been nine or 10 months ago or so. And it feels like it could have been a decade. A lot has happened in that time, which is pretty exciting. But I guess at a high level, when we first chatted, I believe we had just raised our Series A, things were moving along quite nicely, but we had nothing in space. We had the idea of the first vehicle we wanted to get to orbit, you know, within a year after starting working on it. And since that time, we are incredibly fortunate to have brought together an amazing team that succeeded in that. So we got our first production vehicle. So it was not some minimum viable product, but it was really the first production satellite bus off the line to orbit earlier this year on SpaceX Transporter 10. And now we’re building a whole lot more of them for a bunch more customers that have since come in. yeah, the team is growing. moving into our new facility in LA next week, actually. lot of good movement.

Mo Islam
So 95 million is a big round. So tell me a little bit about like what were some of the key factors that drove investor confidence in you and the model.

Ian Cinnamon
So what have been in my opinion and look, I’ve been very fortunate to be have this not be my first rodeo running a venture backed company. I’m also very fortunate to have had experience sitting as an investor, right? Both as an individual angel investor and working in an institutional firm as well. And one thing that we really set forth when we started Apex was we didn’t want to build a company that was operating kind of as a science project had hopes and dreams of some future technologies coming online. What we wanted to do was build a real business with phenomenal unit economics that could be a massive $10, $20, $100 billion business in today’s market. And as these kind of step function changes happen over time, grow bigger and bigger and bigger. So with our fundraise, we really leaned into the idea of saying, hey, look, we’re building a business that has real unit economics proven our ability to do it with N of one, right? Sample size of one. And now we’re gonna go ahead and keep doing this over and over and over again as customer demand keeps increasing and scale up that manufacturing. So that story of we did it once and now, you know, we’ve shown that demand and we’re gonna keep doing it and get more effective as we go, I think really resonated with those investors.

Mo Islam
And, you know, what does the financing mean for the company? Like what are sort of next steps from now?

Ian Cinnamon
Yeah, so when we set out to raise the run, we actually did not initially plan to raise such a large round that we ended up raising, right? We set out to raise way less than the 95 and we’re very fortunate to have a lot of demand. And when it came down to it, what we really focused on with the point of the fundraising was to be in a position where we could scale up our manufacturing and move building a handful, call it a dozen or so of these satellite buses every year to building 20, 30, 40, 50, eventually 100 of these per year with that capital raised. So the whole idea here was not, we need to go do R&D to try to get to something. It was really adding fuel in the fire and being able to scale up that production in a much faster way

Mo Islam
What was it like fundraising in this environment? And tell us a little bit about the investors in the round.

Ian Cinnamon
Yes. So I’ll start with telling you a little bit just about the fundraising environment. what I will say is, you know, we are definitely not in a ZIRP era. We’re not in a zero interest rate phenomenon era anymore. Investors are not just throwing money at anything that moves, you know, and not saying that every investor used to do that, but I think there were a lot of companies funded that, you know, kind of fell into the idea more of a kind of science project or R&D than kind of a real fundamental business. And I think now what we realized is there’s a lot of investors out there. There’s a tremendous amount of excitement about industries that are growing rapidly, such as the space industry. But those investors do not want to invest on kind of the hopes and dreams of things coming true, right?

They want to see the real fundamentals of the business, understand what the pathway is to the public markets and see basically how those dots connect. And what I will say one of the very challenging aspects of the fundraise is if you look at the public markets today, most of the space companies in the public markets, except for kind of the big legacy defense primes, were SPACs. And the SPACs have not done very well in the market, right? I mean, you’ve talked to a lot of them, you know better than I do. So being able to tell the story of how we’re different than those companies and how that’s not reflective of kind of the business we’re trying to build was definitely something we had to face head on during the fundraise.

Mo Islam
So just taking a step back, let’s talk a little bit about the market, right? So what is the market opportunity for satellite buses? And has your perspective on that changed since you started the company?

Ian Cinnamon
Yeah, so when we first started the company, what we noticed was there was a tremendous amount of commercial demand for these satellite buses, right? There were a lot of everything from Earth observation companies to communications, not just Starlink, but, you know, other operators doing kind of different things on the communication side, let alone all of the kind of newer space charges as well, everything from in space manufacturing to lunar missions, et cetera. And what I will say is since starting the company, we have seen that market continue to be there. I will say, I think it’s gotten a little bit leaner as companies are a little bit more focused on, okay, how can they actually monetize some of those aspects? But what we’ve also seen happen is tremendous growth on the government side. So that’s both civil missions, that is DOD missions and that’s US government, also allied nations as well, allies of the US. And seeing that strong growth and that need for more buses has been very exciting for Apex because we built the company to fill that need. What I will say is there’s a lot of bus manufacturers out there, right? The idea of a satellite bus is nothing new by any means. What we have noticed is the customers who are used to buying satellite buses from the companies that have been building them for the last several years are not satisfied with those buses and are looking for something different and something new.

Mo Islam
So before we started the episode, you actually requested, you asked for something that no one asks for, which is to get spicy on this episode. So, and I said, if that’s what you’re asking for, Ian, we can do that. So I have a question for you. So on our last episode, we had a space economist named Pierre Lionnet on the show. Are you familiar with

Ian Cinnamon
I have not listened to that episode yet, so I am tardy on that one, but fill me

Mo Islam
So Pierre is a space economist for Eurospace. He’s based in France and Paris. Fascinating guy. He’s been analyzing the industry for 30 years. So he’s like, you know, since 1994, I think. And his, you know, his perspective on the industry has evolved and changed. at the end of the day, you know, he says that all of his conclusions are always data driven. He doesn’t look at what for he doesn’t spend much time on forward projections, what, you know, historical trends. And he says that if you take Starlink out of the equation, the growth in the sort of demand growth of launch has been pretty like stagnant. Now I haven’t like gone back and looked at all this data and in detail, I’m just sort of, you know, a bit going off of what he said. And one of the things that he said that’s actually more related to you is he said, if you take Starlink out of the equation, there’s not really serious demand for buses. What do you think about that? Hey, you did ask me to get a little spicy.

Ian Cinnamon
Yeah. I, one, I did, I love this. No, I’m excited. I’m excited to address this head on because I think this is something that does come up, right? There were, you know, you’ve had guests on, past podcasts that have said, is the best market kind of oversaturated, right? Is there room for more investors? Is there room for not just, you know, you $200 million company like some of the SPAC companies out there, but it’s a really room for something tremendously large in this space. So what I would say is I think there are two ways to look at this. So one is what is the current, you know, as this gentleman said, stagnant demand in the industry and then is that demand growing over time and what’s happening there? So if you just look at where the industry is today, right? So again, we’re not looking at forward-looking projections. We’re just looking at what’s being purchased today.

According to our bottoms up analysis that we’ve done, there’s something around $30 to $35 billion of annual satellite bus spent. Now that is across the kind of the one-off, crazy exquisite things like the James Webb Space Telescope that of course is not something that we would participate in, but that’s also inclusive of everything from Space Development Agency and all the satellites that they’re launching all the way to kind of the more traditional sat com operators like the SES is or the ViaSats, etc. That does not include Starlink or Kuiper because they’re not buying buses. They’re all fully in-house. So if you look at that overall market and you look at who’s supplying those actual buses and you go talk to the people buying those buses and you say, are you happy? Are you looking for a new vendor? You know, are we meeting the need? What we are overwhelmingly hearing is they are desperate to find a new vendor, right? If you look at even just space development agency and the tremendous work that they’ve done on Tracnhe zero, Tranche one, Tranche two, they just released RFI for trunk three. A lot of the issues that at least I’ve seen publicly recorded come down to the satellite bus side, right?

There was the case where Raytheon had their issues with their SDA bid due to the issues with their in-house bus supplier Blue Canyon not being able to deliver those buses on time on schedule. We’ve seen tremendous issues from a lot of different people with some of the other legacy best providers as well. And look, they’ve all done a great job. I don’t mean any ill will to them, but I think the market is shifting to wanting something that is more reliable and is able to be delivered a lot faster. So if you just look at where the market is today, I think there’s a tremendous opportunity for a company like Apex to be the, you know, dare I say it, Apex predator of satellite buses and kind of take over that existing market and fill the need that is currently not being met by the current providers. So that’s just where the market is today. Now, that doesn’t necessarily disagree with the economist point on, well, maybe it’s a little bit latent. What I will say though, is what we’re noticing in the market is there is a growing interest on moving from these large geo satellites, right, to a constellation of proliferated, attritable small sats, which is exactly what we so even if the total spend on satellites is remaining constant, we’re seeing that spend shift from buying one $500 million Geo satellite bus to buying, you know, call it 25 small sat buses that we would make and things like that. And therefore we are seeing the market for small sat productized satellite buses growing quite a bit, even if the overall space market is not necessarily growing at a fast according to that economist. Does that make sense?

Mo Islam
Yeah, that’s fair. and we’ll talk about, I think, kind of future growth. like, for now, like what segment of the market are you focused on? Like where I mean, you let’s just take your $35 billion number. You know, where can you what’s your kind of initial niche where you know you could like start to really win out on contracts?

Ian Cinnamon
Yeah, so we are very lucky right now in Apex to have sold quite a few of the Aries satellite buses. We’ve developed quite the backlog. We are approaching now nine figures in sales and backlog, which is tremendous. If you look at what we’ve sold too, there’s really two core demographics and markets that I think is really, really resonating. And one is government and customers and end users. So to be very clear as a bus provider, we are typically not selling directly to the government, whether it’s US or allied nations, because governments typically want a fully integrated space vehicle or a capability. Instead, we’re collaborating with a number of different primes or system integrators. And they do a great job of bringing everything together. So we’ve had quite a bit of traction on that front and then separately, we’ve had quite a bit of traction on the commercial earth observation market, both with companies that have historically built satellite buses in-house and are realizing that, okay, we’re no longer in the zero-interest rate environment. We want to get a little bit leaner and we want to focus more on what can we buy that is a set product and we could focus just on the payload side, as well as companies who are looking to get to orbit much quicker, which is one of our main value propositions.

Mo Islam
How are you, you mentioned earlier, it’s a fairly competitive space, how are you positioning yourself versus competitors? So on a head-to-head bid, what’s standing out on Apex, or for Apex?

Ian Cinnamon
So I will say there are a number of satellite bus vendors out there. We do not see the current industry is overly competitive. And what I mean by that is there’s different niches within the industry, right? So if you’re going and building the satellite bus, again, I’ll use the extreme example of the James Webb Space Telescope. We’re not competing in that, right? It’s not our size class. That’s an exquisite system, et cetera. If you were a customer looking to buy a very fast to deliver productized small sat bus, that is us, right? And if you look at kind of the $35 billion market that I previously described, we see kind of our niche and where we’re fitting in to be about 50% of the market and growing within that market. So what I would just say is we have yet to see any other bus company kind of meeting that same niche where they’re able to deliver the satellite buses quickly very reliably with an upfront and transparent price point. We’ve seen a lot of people claim that and this industry is ripe with the idea of kind of over promise under deliver, which can definitely be a challenge for us because we have to prove to the market that we’re not falling into that category and we’re actually gonna, you do what we say. But in terms of actually delivering on that, I think if you really talk to the customers and don’t just look at what people say, you’ll notice that there’s really not many people delivering.

Mo Islam
Right. How do you think about SpaceX and their bus building capabilities?

Ian Cinnamon
Yeah, I mean, SpaceX is a tremendous complementary company to Apex, right? We, frankly, would not exist without SpaceX, right? They have removed the bottleneck on the launch side. It’s funny, people, oftentimes, when they think about the overall satellite bus market, they say, look, like you could just take a Starlink and sell that bus and boom, it competes with Apex. And again, I go back to, you have to look at the overall $35 billion bus market and segment the different aspects of it. And what I would say is the kinds of buses that SpaceX builds are fundamentally different from what Apex offers. SpaceX, typically, if you’re looking at kind of their Starshield product, they’re selling that as a service, not as necessarily, oh, let me go just sell a couple of these buses. And fundamentally, that makes more sense for them as a company, right?

If you think about the architecture of something like Starlink, you I personally use it. It’s a tremendous system. It is designed to have a lot of reliability at the system level. So what I mean by that is if you have a Starlink terminal on your house, you’re going to have very reliable internet. That does not necessarily mean that the satellite buses for each Starlink vehicle need to be built with tremendously high reliability because the overall system reliability is what they’re looking at. So if you take that Starlink bus and try to sell that to somebody, they need to be looking at it from a full system level for it to work for what they need, which is different than the customers that we focus

Mo Islam
Sure. And are you, you’re currently focused on LEO, Low Earth Orbit, right? Do you have any plans to build products that are outside of that orbit?

Ian Cinnamon
Yes, absolutely. So we’ve tried to be super transparent about our roadmap since launching the company, right? So our whole mentality is, frankly, I don’t believe that CubeSats or anything smaller than an ESPA class vehicle is anything more than kind of good for R&D or kind of a test. For a real constellation style customer, you need a larger vehicle. So we start with our ESPA vehicle, which is Aries. We go bigger from there, which is Nova, which is ESPA Grande. Then we have a much larger kind of flat stack configuration vehicle called Comet. All of those are intended for LEO. And then after that on our roadmap, we have the geo qualified version of Ares and then eventually Nova and eventually Comet. So we start with LEO and then we’ll move into geo after

Mo Islam
Can you remind the audience how you came up with the names for your buses?

Ian Cinnamon
It was very, very scientific. I will say to take a step back, one of the things that Max and I, my co-founder, when we realized that we had to work together on this, brought us together, was we both had dogs that were named after space themes. So my dog is Aries, his dog is Nova. So when it came time to name our satellite buses, it was pretty logical to name them after the dogs. And it was obvious which is which. My dog Aries is a 13 pound dog. Max’s dog Nova is like an 80 pound dog, so Aries would be the S-BAR class one and Nova would be the S-BAR grande

Mo Islam
Let go and is comet someone’s dog. I mean, I know that’s a very dog-like name.

Ian Cinnamon
Yeah. So Mo, you’re hitting on a real sore spot in the office right now. So, we needed somebody with a space theme dog name in the office to name comet after and nobody, everyone, we have a lot of dog owners in the office, but people did not have one with the space theme name. So we tried asking our employees if they’d be willing to change the name of their dog to something. Everybody said no. And that was the point I knew that I didn’t know if we had the right team. Joking. Our team is amazing. So we are currently looking, we’re hiring right now. And if you want a job at Apex and you have a dog named Comet, I promise you’ll come to the front with a hiring queue.

Mo Islam
That’s very bold of you to ask someone to say hey, would you change your dogs name?

Ian Cinnamon
I asked like four different people and they all said no and I just I cried inside a little bit.

Mo Islam
It’s fair. Yeah, I don’t know if I would do that, I get it. get it.

Ian Cinnamon
I don’t know if I would either to be frank, I actually respect them more for saying no.

Mo Islam
Yeah. Well, let’s talk about Mission 1. Right, so if I’m not mistaken, it was fastest from clean sheet design to mission success, right? You know, the record that you guys broke. I want to hear sort of your thoughts on how you got it done, sort of in the timeline that you were aiming and what was it like maybe go into a little bit of the emotional side of like, what was it like to see your satellite, you know, launch on Transporter and then work.

Ian Cinnamon
So I will say, it’s funny, you mentioned the record. Amazingly, there’s really not, like the Guinness Book of World Records does not really care that much about space, unfortunately. So I wish there was some way of knowing for sure. We should actually reach out to them and say, we deserve a record. So what we are fairly confident of, and we would love for you guys to help validate this, is nobody has launched a, it was not, like Mission One was not some minimum viable product or some test run, right? It was the production run of our Aries vehicle. And so what we say was the first production run of a satellite bus to get working in orbit in that timeframe. And that’s the record that we set. So we’re incredibly proud of that.

The reason we’re so proud of that is the number one thing our customers care about is how quickly they can get to orbit, whether they’re a commercial customer or government customer, they care about getting their payloads operational in space faster. So that’s what we deliver. So for mission one, let’s just say it was not easy to set that record. Really when it comes to getting any satellite into orbit, there’s a few steps, right? The first one is you gotta design the vehicle, then you gotta get the parts for the vehicle, you gotta assemble and test the vehicle, and then you have to launch it and make sure the thing actually works. And the engineering side of it, you know, there’s a way to do that, people have done it before, we had to rapidly accelerate that, we were able to do that. Getting all the parts in-house, incredibly difficult. We had to send people on our team all over the world to basically work with suppliers and help the suppliers kind of redo their production lines to move at the speed that we needed, which is great because we’ve now developed amazing relationships with them, but we got all the parts in-house. Once all the parts were in-house, we’re really proud that we designed ARIES from the beginning to focus on all these design for manufacturing principles, which meant that it only took eight from all the parts here to a fully assembled vehicle in the clean room. And then of course we went through our testing regime, which, you you do the vibration testing, thermal vacuum testing, EMI, EMC, all the normal things you want to do to make sure it’ll work in orbit. And then I think the thing that was most stressful for us was Transporter 10 was initially set to launch January 1st, and we oriented the entire company to be ready for January 1st.

And that was a mad scramble. SpaceX then moved it from January 1st to February to March and eventually took off March 4th. But there was this almost nervous energy for the couple months where we were ready to launch and we are waiting, right? We’re like, we’ll get delayed again. Like all we want to do is see this thing fly. So that was this kind of like all this pent up energy started forming. And the moment that it actually launched out of Vandenberg, we had half the team up in Vandenberg to watch the launch and half the team down here. I’m actually in our mission ops you could see Aries right now is just passing over Australia, which is kind of fun, but they were in here kind of flying the satellite themselves. And just the feeling that we had when the satellite separated from the rocket and within a few seconds, we got the first radio pings from the satellite. had a UHF beacon on there because we knew how crowded the transfer launch would be. And the pings were these state of health packets that basically said, here’s the status of the satellite. So we immediately knew that it powered itself on, the solar panels were about to deploy and everything was going to plan. And the moment that we got that first packet, it was like this like just amazing sigh of relief over the entire company. Like I think at that point, I just wanted to like cry out of joy. It was the most incredible feeling. Like we didn’t just launch it, but like it turned on and it was working. Of course, there was a lot we had to work out and a few anomalies we had to resolve before we could turn it over to let the customers actually use it. But seeing that it was power positive, we had coms with it. I mean, there’s no better feeling in the world.

Mo Islam
Well, so as a founder, there’s no question that you knew it was going to be successful. But tell me a little bit about like, okay, you know, we’re launching this satellite. Like, I think it’s going to go well, or I hope it’s going to go well. like, what did you, what was your expectations of the mission?

Ian Cinnamon
So I will be completely honest with you. one, will say success is not binary. It’s definitely a spectrum to say the least. And I remember sitting at Vandenberg and we’re waiting for the launch and I’m looking up like how many Falcon 9 launches there had been with no failures. And in my head, I’m immediately thinking, well, at some point there’s going to be a failure. Like it’s just the odds, right? Like something is going to go wrong. Is this the launch up until SpaceX confirmed that our satellite separated. All I was thinking about was like, all right, the transporter 10 is going to be, you know, the first time Falcon 9 has a failure, there it goes. Like that was the only thing going through my head. And like the odds of that happening, obviously are incredibly low. SpaceX is amazing. But that’s all I could think about was like, oh my god, it’s fully out of our hands right now. Because at that point, you’re relying on somebody else to get you to orbit. Now SpaceX again, amazing company, you know, they’ve had this incredible success rate, but it truly is out of your hands, right? Like there could be an anomaly, something could go wrong and it’s fully out of your control. And to me, that was the scariest moment. The moment we separated and we had comms again, I felt good because I have full faith in our engineering team and what we did and how we tested the hell out of the satellite. And we had all these contingency plans of if this software doesn’t work, we have all these watchdogs and ways of, you know, getting back in touch with it. And we felt good. It was really the part where it’s fully out of our hands that to me was the scariest.

Mo Islam
So you guys did it in nine months, but it sounds like that there was a two month delay there that was not your fault. So are you saying that you could have done it in seven months? Is that what I’m hearing?

Ian Cinnamon
I would, you know, I’m not gonna go today. It was about a year or so. I guess we could have done it in about nine months. I will say we were, I doubt anybody.

Mo Islam
Well, point is, my point is was that was there was there a two month like timeline there that you know wasn’t

Ian Cinnamon
Yes, but I will say in any good engineer and our entire team took full advantage of those two months to run through just a bunch of mission ops simulations and testing to make sure it would go well. So if we launched two months sooner, could there have been some software bug that we hadn’t been able to test previously? Maybe, who knows? So at the end of the day, I’m happy with the record that we set. We’re good.

Mo Islam
I mean, look, you know, when I was, don’t know if he’s gonna date me. I don’t know if I’m like at the age where I have to even say that. But when I was a kid, I had, remember getting a Guinness World Record like book, you know, like the Scholastic Book Fair. don’t know if you, yeah, those are, you know, some of the greatest weeks of elementary school. And I remember like, you know, my dad was like, yeah, you can get a book. And I was like, my God. So I ended up getting Guinness World Record Book and it was like the year 2000 edition. So it was like this like, I actually think I have it somewhere. Still like in my parents place.

Ian Cinnamom
I have the same one at my parents’ house somewhere.

Mo Islam
Do you know what I’m talking about? Yeah, so this beautiful metal looking book, holographic cover, exactly, Anyway, I actually like, I don’t know, 10 years ago maybe, I remember like finding it and I was like looking through it I was like, man, do they have dumb records? So I can’t imagine that if you submitted it that they wouldn’t like seriously like, I don’t know, I think you have a shot. It would be kind of fun. I don’t know if people would I don’t know if it would help you with anything, but I think it would be a fun little thing

Ian Cinnamon
You know what? think I’m gonna take an action item out of this amazing call that we’re on and go shoot them a note. You never know.

Mo Islam
Okay, good. There you go. Now, okay, I wanna touch on one thing you brought up, which is like this delay that occurred, right, because of SpaceX. You you’re building this model where you’re like, we’re gonna get you this bus very quickly, right? And I’m not saying that’s the key value prop, but it’s one of the value propositions. What do you think, how do you think about launch, right? Because right now there’s a lot of debate, there’s tons of articles out there about like, you know, SpaceX and critical about SpaceX and how they’re like treating competition. I’ve heard from a few different variety of different sources about like, you know, launch bottlenecks and the ability to not be able to get something up in space on time. Not that the product itself is not ready, but you know, there’s no room on the launch vehicles. Maybe talk a little bit about that. How are you thinking about that and your business? Is it something you’re even thinking about? Like, what are you what are you hearing from customers?

Ian Cinnamon
So a couple of things. So what I would say is first, the way that we deal with launch, the very first mission, we flew it ourselves. We booked our own launch. It was basically an IRAD funded mission, right? We have customers on there, but they were along for the ride. It was our mission. After this first one, our whole mentality is we deliver the bus to a system integrator, to a customer. They are responsible for figuring out when they launch it. Maybe they want to store it on the shelf. Maybe they want to launch it. So we are not super intimately involved with the launch side, we’re on the bus provider side. That being said, you’re right, our value prop is we will make sure the bus is not the bottleneck, right?

That is our core goal. Now, what I have noticed from customers is there is definitely a difference in mentality between government and commercial customers. And on the government side, I think they’re used to a world where if you rewind 5 years, 10 years, right, the frequency of launch that was happening, was far less than we’re at now. mean, even a year ago was far less than we’re at now. But the point being, you know, a two month delay is nothing compared to what everybody is used to, especially on the government side. It’s, small, like, I mean, that is like tremendous that you can even launch out frequently. Like that’s nothing. So on the commercial side, though, I think it’s a little bit of a different equation where many of our customers and many of the business models that I’ve seen are very much reliant on every day in space or some amount of revenue being generated, right? They’re collecting imagery, they’re providing some connectivity service, etc. So every day of delay is a direct cost to that business. And if they already have a constellation up, a delay could mean a lack of replenishment, which means degraded service. If they don’t have anything up yet, maybe it delays their next fundraise and the company doesn’t have enough cash, right? It’s very, very scary. And I think those types of companies are much more sensitive to a few months delay a quarter to that.

Now, that being said, on what I have noticed is there are so many new launches being added by SpaceX all the time. Like they recently announced their bandwagon launches in addition to transporter. They’re bringing more and more online. So even if there’s some delays, like the number of launches that are occurring that are open to these rideshare missions, let alone dedicated launch is just increasing. The other thing that I would say is, and I know talked about this extensively on the podcast, but there’s, you know, lot of other launch companies out there, right? You have Rocket Lab, which is launching very reliably. You have ULA. I mean, we just had outside the US some great launches occurring as well, which is tremendous. That’s opening up the capability. The new of all the great startups, right? The Relativities, the Stokes, et cetera, et cetera. So I, the way that I see it is the launch bottleneck is not solved as in we’re done. But it is actively at the point where it is being solved, where I would not go start a new launch company. I don’t think it’s a major issue. I think it’s something that we’re in really good position as an industry on today.

Mo Islam
Sure. Yeah, I think that’s fair. You know, I think that what’s interesting is more so the fact that, you know, there are a lot of great startups and there are all these other organizations outside SpaceX, but the story of, you know, there’s going to be other providers has been a story that’s been, or operational providers that we’ve been talking about for a few years now, and it still feels like a couple years, a few years away. But you’re right, it’s going to be solved, it’s going to be figured out. don’t think there’s going to be a bottleneck in launch, at least in the medium term, looking out into the medium term. Let’s talk about customers. So, we touched on it a little bit earlier, but I want to specifically talk about the government. You just mentioned them as far as how they think about launch cadence and timing, but historically what’s been pretty well known is that when you’re dealing with a government customer, you’re dealing with lot of complexity and customization. And your value proposition is that, we’re going to build these buses that you’re not going to need to do a lot of that. So maybe talk a little bit about how you balance your model versus what the needs of the government have been, historically, I should say.

Ian Cinnamon
Absolutely. I will say Apex fundamentally is a product first company. And what I mean by that is we are distinctly not an engineering services company. So before we started working on Aries, before we started thinking about Nova, Comet, GeoAries, et cetera, et cetera, myself, Max, our team talked to well over a hundred different customers. And by customers, mean everybody from US government, that were out to system integrators who are applying to those RFPs, to commercial customers, to international, all of the above. And what we did was we basically said, okay, great. Let’s make a giant spreadsheet of all the payloads that people are trying to fly, all the con ops that they have, all the requirements, and let’s see where we can envelope different things. And the whole business model of what we set forth is not a one size fits all satellite bus, not some giant satellite bus that could do a bunch of things, because let’s be honest, that’s not going to work for any con ops. What we said was we could treat it much more like automotive manufacturing.

We have a base model and you have different configuration packages you add on that, right? Let’s say both of us drive a Toyota Corolla. Maybe you get the one with the roof rack and the snow tires and the seat warmers. you know, I get that I’m the founder. So I get the base model, the cheapest one on the lot. It’s the same car made on the same manufacturing line that the technicians installed something different at the point of, you know, build. We think of the satellite bus is the same way, so you could go on our website and you can configure a satellite bus for your mission needs without us having to do any new NRE. It’s a set number of SKUs, a set number of products. Now, what that means is we can design or configure a satellite bus without any customizations or any new NRE that envelopes most payload requirements if you’re looking at small sats that are designed to work in constellations, right? We’re not going to go do these crazy bespoke things, but that does not mean that we’re going to meet the exact needs of the payload, meaning we might have provided more power.

We might be a little over spec for what they need. There’s also the requirements that sometimes pop up that say, well, this payload needs, you know, this kind of thermal dissipation or this kind of voltage or, you know, a gimbal or something like that. And that’s why as the bus provider, this is why we don’t do payloads and we don’t do system integration. We go to the system integrators and the partners that we work with and we say, here’s our bus. feel free to add something on the payload deck that now makes it so it meets this requirement. So the way that I see it is what we tried to distill down is what is the fundamental highest level set product that you can have on a space vehicle, which our hypothesis is that is the satellite bus. And then everything above that satellite bus level, we will let the system integrator, the prime or the customer configure, customize and modify themselves. Think of it like you go buy a Toyota Corolla, you send it to the aftermarket auto body shop who goes and puts on some spoilers or whatever you might want.

Mo Islam
So do you think that that sort of the way you’re thinking about it is helping you position for a large government contract

Ian Cinnamon
Yes. And what I would say though is with a caveat and the caveat is it’s not positioning us to go win a large government contract. It’s positioning us to help amazing primes go with large government contracts. We want to be the enabler of them, right? I want to help the primes win more government contracts at better margins and frankly deliver better capabilities to our war fighters because our war fighters deserve better.

Mo Islam
and you have no desire to be an integrator.

Ian Cinnamon
No, because that breaks the productized model, right? Like, you know, sometimes all of integrators come to us or primes come to us and say, are you going to go compete with us and be a prime? And my response to them is we are a product company in order for us to deliver on the margins that we’re trying to deliver on and the value prop, we must remain a product company. The moment you go into integration and you go into payloads and you go into flying a mission, you’re an engineering services company where you are working on engineering services multiples, not product multiples.

Mo Islam
Why was it important for you to create an e-commerce workflow on your website?

Ian Cinnamon
People buy buses that way. We have now had customers buy buses using the e-commerce workflow. They put down the deposit with their credit card, and then we send them the full contract and they sign and they wire us the rest. That’s exactly it works.

Mo Islam
Is that the norm, so you’re telling me you had a full transaction without anyone jumping on the phone.

Ian Cinnamon
Well, so we had a full satellite bus reservation, which is all the website lets you do. And then once you reserve it with your credit card, then we send you the full contract. And of course, there some questions that are asked and then they sign the contract. yes, we had a full satellite bus reservation that then led to a full satellite bus sale. All initiated through the website.

Mo Islam
Well, that’s pretty cool.

Ian Cinnamon
Yep. And I will say, so I will say that’s not the norm, right? Commercial customers love it because it lets them move fast. The reason that we put it together initially was not so that people could go buy a satellite bus with a credit card. Although, Mo, I am curious what the payload corporate card limit is because depending on how high it is, I expect a payload satellite flying very soon. The real reason we put it on the website was we have three value propositions for customers. Deliver satellite buses really quickly, have them be reliable because it’s a product, and then upfront and transparent pricing. We’re not necessarily the cheapest, but we’re upfront and transparent. And to be upfront and transparent, you’ve got to be able to see the prices without getting on the phone with someone. You’ve got to go on the website and see it. So our thought was if we build a configurator on the website that let people configure it, why not let them just take the next step

Mo Islam
Yeah, I think that’s fair. It’s funny that we live in a world where you can get transparent pricing on satellite buses, but you know, I’m actually doing some event planning for some future, from future events later this year. And I’m like going on these websites and I’m like event. And then I’m like, I have to fill out all these forms every single time. I’m just like, I just want to know how much it costs to reserve the place.

Ian Cinnamon
Well, think about it this way. Typically in the industry, you have to go not just fill out forms, you have to fill out forms and then pay for some study to get an FFP. And then it’s a nightmare for us. We do not believe in the business model where we should price our bus to how much somebody can afford. We should price our bus to a fair price that keeps Apex and business and growing and lets the person we’re selling to thrive. So that’s how we do business.

Mo Islam
Yeah. Yeah, no, I think that’s a great model. So I want to talk about scaling production because you are going from you mentioned like a dozen or so to many, more. How are you managing those supply chains? How much is being built in-house? Maybe talk a little bit about like, how much automation are you envisioning in the manufacturing process?

Ian Cinnamon
Yep. So supply chain is key to what we do. A line that we always use in the company is the hardest part of building anything in aerospace is having the parts there to actually put together. We do not believe in going in-house or vertically integrating for the sake of it. What we say is for all of our satellite buses, we have an every sub component on that satellite. We have price targets, we have reliability targets, and we have lead time targets all of those under the guise of the scale that we’re ordering at. Right. So if we are buying one of them, there are different targets in them for buying a hundred of them. And if we find suppliers that can meet all of those criteria, we are happy to go work with suppliers. Now we will always dual source because, you know, we want to make sure that we protect our customers from any shortages or issues. But we are preferences to work with suppliers. That being said, we’ve had suppliers when we project out how many we need next year and the year after. They say to us either, well, we just can’t hit that, in which case we immediately initiate vertical integration so that we could get way ahead of it before the supply chain actually breaks. Or the supplier will sometimes come to us and say, can we collaborate?

Can you help us build a more robust manufacturing process so that we can meet your needs? And then we kind of start partnering with them in a deeper way. We work out a longer term deal that’s sustainable, et cetera. So the view on supply chain, would just say the quick summary is it’s always evolving, right? Because as we continue to scale, things will certainly change. That being said, parts of the satellite bus are made in-house and parts are purchased and that will change over time and probably lead to a little bit more in-house. But again, hopefully some suppliers are listening to this. We want to work with you, just you got to work with us at the quantities and the lead times we need. And if so, let’s do some business. That being said, when it comes to actually building these satellite buses, I think the idea of automation, you know, I know there’s some other satellite bus vendors out there that have rooms full of robotic arms. You know, I think frankly, like it’s all a farce, right? It’s movie magic, it’s a theater. It’s really trying to trick customers who do not fully understand manufacturing into believing that they’re valuable. And to me, think it’s a huge negative on the industry that there are some companies out there that do that. The reality of the situation is no company is making 50,000 satellite buses a year, 10,000 satellite buses a year. The market’s just not there, right?

The market is in the hundreds per year, maybe the thousands per year. And even at the scale of 5,000 a year, the idea of having automation and robotic arms that are assembling these satellite buses is just, it’s a lie. That doesn’t the numbers don’t up. And I’m not just saying that really. We’ve run the trades. We’ve looked at the studies. It doesn’t make sense. Right. It looks flashy. It doesn’t make sense. Now for subsystems and smaller components like, yeah, maybe it might make sense. But at a high level, we are firm believers in running the trades and doing the research and asking, do we actually need automation here? And the reality is it is more efficient and more flexible and faster and higher quality right now to use humans. I’m all for the latest and greatest AI companies to make some crazy automated manufacturing process that we use, but based on today’s technology does not make sense.

Mo Islam
So give us a sense of right now, like team size, your facilities, location, how you’re thinking about expansion.

Ian Cinnamon
Yep, so we’re here in Los Angeles. Mo, I expect you when you’re out here for the July 25th happy hour, which everybody should attend, I’ll be there. Come visit us, come hang out. We are in Playa Vista, so we’re a little bit contrarian that we’re not in the gundo, although a lot of respect for the companies that are, but we’re just north of LAX. We are, actually currently sitting in our old facility. We’re moving into our new facility next week, which we’re very excited about. It’s 50,000 square feet in Playa Vista. It’s called Factory One. So very excited to be working out of there. The company now is north of 50 people and we’re rapidly growing that looking to double in the next couple quarters or so. So we are definitely hiring if ever choose to move away from journalism and move into satellite bus building? Well, we can use you.

Mo Islam
Well, I’ll need to get a dog first so we might have to start there

Ian Cinnamon
You do. And you’ll name that dog Comet, right? You have a deal. You’re hired.

Mo Islam
Exactly. Or maybe I’ll come up with something else. You know, I’m gonna be a little more forward thinking I’m gonna come up with a dog name that you don’t have a bus named after yet. So that’s what I’ll do Exactly, exactly, exactly

Ian Cinnamon
Well then you’re gonna design the new bus. There we go.

Mo Islam
So, 100 million bucks, big round, we talked about this. Maybe tell us a little bit about, and you don’t have to give us an exact number, but what kind of magnitude of capital do you think you’re gonna need before we see a self-sustaining apex or a liquidity

Ian Cinnamon
So one of the things that I’m really proud of with our company is before we raised the Series B, we were in a position where if we did not raise the Series B, we could be self-sustaining. We were in a position where we had a set product, we’re making it, we’d make money on that product, we reinvested it in the company, we could stay alive. Now, without a Series B, we would not have been able to scale up manufacturing to be able to start delivering for constellation-sized contracts, to be winning things like SDA contracts, or some of the larger commercial contracts, et cetera. So what this money lets us do is put fuel in that fire and scale up that manufacturing. But the entire premise behind Apex and how we’re operating as a real business with real unit economics means that any additional venture capital, investment, debt, et cetera, we choose to bring in will only help us scale faster. It’s not money that keeps us alive. Right. We are I think the phrase is like default alive or whatever that means, which is we actually make real money, which I’m very, proud of.

And we’re going to want to raise more to scale up faster and kind of go from, you know, again, our goal has never been to build a billion dollar company or 10 billion dollar company. Frankly, I find that boring. We want to be an order of magnitude bigger than that hundred billion or bigger. That’s what we’re aiming for. So we’re going to need more to go do that. What I would say is in terms of liquidity event or an exit. You know, it’s really, really simple, which is, we’re taking this all the way. We’re, turning this into a absolutely gigantic institution that will stay on the test of time. And what that means is at some point during that process, I’m sure it’ll make sense to do some sort of direct listing or go public in some fashion. And, it, what, if, and when that time comes, like we’re happy to entertain that as a way to fundraise and keep on growing. But the end goal is not a liquidity event or an exit. the, there is no end goal, right? The goal is to really be institution that stands the test of time and be the truly largest supplier of satellite bus platforms in the galaxy.

Mo Islam
So, well, I like that you said galaxy. We use that terminology a lot to describe our media goals.

Ian Cinnamon
Good, it’s when you said payload thinks a lot about the galaxy, it’s really just because you’re so focused on needing to buy a satellite bus for payload. So I understand. get it. It’s tempting.

Mo Islam
Yeah, okay. I remember my question. So you mentioned earlier this isn’t your first rodeo. So you’ve built a company before. This is your second company. I don’t know how many companies you have to build to be called a serial entrepreneur, but let’s use that term for now. What are some key insights that you’ve gleaned in company building since you’ve started Apex? Like new things that you’d want to share with someone listening to show thinking about starting a company.

Ian Cinnamon
So I will say I have a slightly contrarian take on just what you said right before that, which is I do not want to be thought of as a serial entrepreneur because I’m a big believer that if you really found a tremendous company you can grow, it should be the last company you ever start. Right. So a serial entrepreneur implies that there are some issues with the first ones where you have to keep on going. And the dream here, we set out to do with Apex is like, this is the last company I want to start, and I want to keep running this for the rest of my life and have a next generation of people running it after me. Right? Like that is the goal. So I don’t want more. That being said, I’ve definitely been fortunate to have made a bunch of mistakes in prior ventures that I’ve tried to do some successes to and have definitely had a lot of learnings there. But yeah, the goal is not to be a serial entrepreneur, I would say.

Mo Islam
I like that. I like that. And I’m sure investors like to hear that too. But in all seriousness, I know you’re being earnest about that. And it’s fair. I think it’s funny in other industries, like just to pick on software, right? I think you see and hear more of that. I think in space is it’s one of those like romantic industries that yes, like there is like this desire to make money, but there’s also this like grander vision for humanity. And I do think people, you know, a lot of folks turn that into like a life mission. So I certainly appreciate that. So with that actually being said, give us sort of the long-term vision. Like what is Apex? Where is Apex in 10 years?

Ian Cinnamon
So where we are today is we’re supplying satellite buses for kind of, you know, let’s say different mission sets that are putting a handful of different satellites into space. Over the next year or two, I want to see us grow and kind of put on our grownup clothes and evolve into a company where we’re supplying constellations of satellite bus platforms, right? Doing everything from directed device to government constellations to whatever it may be really operating at a nice hefty scale there. From there, my hypothesis is over the course of the next call five to 10 years, there’s going to be a major inflection point in the industry. Things like Starship will come online. There’s going to be a lot more initiatives around lunar missions, things like that.

Things where I would never put frankly like venture money now, but I think call it 5 or 10 years down the line. I think there’ll be a great opening for that. And as that happens, I would love to see everything that Apex has for Earth to be replicated on the moon, on Mars, and deep space, and so much more, and kind of keep that company growing. I will say, we also have some, what I would call, long-term grand visions of, you know, we will often take a step back and ask ourselves, okay, if we are the go-to satellite bus platform supplier that’s enabling all these people to put things in space, what are extra things that we could help offer to our customers that we are uniquely positioned to offer given we are kind of the de facto standard for satellite bus platform. So not ready to talk about those yet, but I will say there are some kind of grand visions in there that help us grow from being called a $10 to $20 billion company into the $100, $200 billion company, call it 10 years from now.

Mo Islam
So I’ll give you a slightly different take. So let’s just say 10 years, Apex is a hundred billion dollar company. There’s no way you’re to be a hundred billion dollar company without some movie, some biopic made about Ian Cinnamon along the way. So what I want to know actually, this is payload, right? We asked the hard hitting questions. I want to know who is playing Ian in the movie about Apex.

Ian Cinnamon
I mean, I want it to be documentary. We don’t need a fiction film. I want it to be the real thing. I want to play Eden. There we go.

Mo Islam
Fair enough, fair enough. I’ll take that. I’ll take that question. By the way, that’s my new question I’m going to ask founders. Who’s playing you in the biopic of

Ian Cinnamon
I love it. I love that. I love that question. I think that’s a great one.

Ian Cinnamon
No, who’s playing you? Because you’re going to be the figurehead that basically created the best podcast, the best journalist outlet in the industry. Who’s playing you? Who’s playing Ari?

Mo Islam
come on, I’ll have to think about the Ari question, but I don’t know, like get some Bollywood star and I’m sure it’ll fit. I have some in mind that I would be very, very appreciative if they played me in some future Battle Pick, but that’s a conversation for another day. Ian, pleasure to have you on the show. Super fun as always. Thanks for being on it. And I think maybe we’ll get you on the show every time you raise like a hundred million or more, we’ll get you back on the show. Yeah, every hundred million, exactly. Exactly, exactly.

Ian Cinnamon
I love it
You have a deal. You have a deal. We’ll talk about the progress every 100 million. What is on the table with us? Exactly. Any more satellites for an orbit?

Mo Islam
But anyway, thanks for being on the show. Can’t wait to have you

Ian Cinnamon
Thanks Mo.

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