TechTalk: To the Moon! Startup Launches New Era of Data Storage

Chris Stott:

Well, Fritz, thank you for having me. I'm delighted to be here.

Fritz Spencer:

Wonderful. Well, to get us all started, I would love if you could quickly explain your background and maybe how you ended up in aerospace.

Chris Stott:

Oh, thank you, Fritz. Passion is the number one word. I have always loved space and aerospace and sometimes not been the best student. I followed any path I could to get here in the industry. I've been in the space industry about 30 years now. Love it.

Fritz Spencer:

Incredible. So, then let's move on to Lonestar. Tell me a little bit more about Lonestar, what you guys have built and the problem you guys are looking to solve.

Chris Stott:

Thank you. We are putting the first, in an ever-increasing series of capable data centers on the moon, in the moon and around the moon to meet the demand from our customers for terrestrial data backup, for disaster recovery as a service.

Fritz Spencer:

Super interesting. There's so many pieces I want to touch on there, but I'd like to talk about your technology. What makes it unique against other data centers besides being on the moon, of course?

Chris Stott:

Absolutely. And we're here to complement the existing industry, not to disrupt. So, think of us as the ultimate backup location for premium data, mission-critical data. We're up there on Earth's largest satellite. We get a view of the entire world every 24 hours, to service our customers, but we're far enough away to leverage distance, latency and the fact that on the moon we have no atmosphere, we have no climate change, and we have free energy and free cooling. It's a wonderful place to work from. Actually, it's so good, if it wasn't there, we'd have to build it.

Fritz Spencer:

Interesting. So, it's given you a lot of different advantages. I'd love to know a little bit more about the process of getting a data center onto the moon. I don't imagine it's like buying a Delta ticket. Could you tell me more about how you got up there and the process and all the engineering that takes place?

Chris Stott:

Sure. The first two missions are this year. Actually, we've already had the first mission, working with our lunar access provider, Intuitive Machines of Houston, Texas, who themselves launched on a SpaceX Falcon 9. We bought a ride, like FedEx to the moon almost, with Intuitive Machines, who've been great, and they took, on this first mission in February, our software-defined data center, and we tested that on the way to the moon in cislunar space and from the lunar surface itself successfully, by storing data, transmitting documents to and from, like an external hard drive, almost. And then our next mission this coming third quarter, built, ready to go, designed by Bjarke Ingels and the team at BIG, it is a 3D printed data center. It's a beautiful thing. It's eight terabytes, [inaudible 00:03:12] chips and all sorts of SSDs onboard, also fully functional, also solar-powered and is literally sitting in Houston ready to go. It's being integrated to the lunar lander as we speak.

Fritz Spencer:

Wow. So you've gone through a couple of different, I would say, you call them missions, right? And so, your first mission, I believe you went up to the ISS, your second mission successfully landed onto the moon. What were some of the obstacles that you faced on those individual missions that you learned from?

Chris Stott:

Oh no, very much. How to put it together? A really good team. And that is the key lesson in all of this. Good people do amazing things. People of diverse backgrounds, diverse technical backgrounds from the data center industry and from the space industry. Also embracing the changes that we're seeing. This is the second digital renaissance, Moore's law and its application to space and satellite. Now that is disrupting the space industry. The space and satellite industry is the pinnacle of high-tech and now new processes, new storage and new software is allowing us to do so much more from space.

Fritz Spencer:

So interesting, and I think we may have mentioned it on our intro call, but you're the first company to actually do this. Why? What's your why behind all this?

Chris Stott:

Well, honestly, a lot of people look at us like we're lunatics. Every pun intended.

Fritz Spencer:

Lunatics?

Chris Stott:

Yes, every pun intended. So we're working from not so much technology push, but from demand pull. We were approached by a group of customers who said, "Help, we're in pain. We need this problem solving. Please help us to solve this problem." And we went through the data set of their needs and requirements. And lo and behold, much even to our own surprise, the moon, Earth's largest satellite, turned out to be the best place, the very best place to do this from, from legal and regulatory to technical to environmental reasons, to power and cooling and so much more.

Fritz Spencer:

You mentioned a lot of different things there, not only environmental, engineering, aerospace, and I know you have a pretty diverse background. I would love to hear more about the different career paths you've either done or changed or moved from or learned from. Could you shed some light on some of that history?

Chris Stott:

I always had a great passion for politics and law and regulation. I was very fortunate to have spent some time in Washington just before I went off to get my university degrees, but spent time interning in the US Senate and interning on political campaigns in the White House for the first Bush administration, all the way through to then working in the British Parliament for many years, but always with a passion for space. And I realized the hardest thing about getting to space is getting permission. It's all about law and regulation, and that's really the key factor for what we're doing at Lonestar. It is meeting data sovereignty needs for all of us on the planet. Yet, the international boundaries that we have up in space are literally separated by boxes of electronics, there's a host of payloads, digital embassies, as opposed to national boundaries like we have them here on Earth.

So it's the regulatory first that makes everything work for us. But that came from that past of mine and launching rockets with McDonnell Douglas and Boeing, working Deep Space Network and TDRSS and Morewood Lockheed, and then later on being an entrepreneur early in the space industry before it was trendy and created a company called ManSat, which I'm still chairman of, and being run by a fantastic team of Katherine, Jennifer and Alexis and Rachel over there for me. And that's now the world's largest commercial provider of satellite spectrum. So it's always the regulatory opens up the key to everything else. After all, it's all about permission.

Fritz Spencer:

So interesting. There's tons of satellites, almost infinite amounts of satellites that we have above this atmosphere, powering our phones, our internet, everything and you never really think, "Who's authorizing that? Who's launching those? Why are they doing that?" So it's interesting to think about the red tape that you might have to go through just for that. I see Elon launching a new rocket every other week and I think, "Oh, he's just sending them up." So he must be going through a lot of red tape with, I'm assuming, NASA. Is that who you're dealing with as well as the United States Government?

Chris Stott:

No, actually it would be the FAA and the FCC here at home, in the United States and who are incredible people, actually unsung heroes, all of them. They are overworked and under resourced just as the space industry is booming and they are so counted upon to do amazing things. The regulatory team at SpaceX is worked almost 24 hours a day, as you said. They're fantastic. And then every satellite company in the world. Don't forget we're doing something now commercially, that at one point only superpowers could do. And then it was only nations and then groupings of nations, and then it was only international conglomerates. And now high schools can put experiments on the International Space Station. Everything has changed again. It's amazing. The opportunities are immense.

Fritz Spencer:

It's no longer just a nation effort. It's commercial, like you said. And you guys are the first commercial company to really be operating in space this way. I think I saw that you raised over $5 million in your first seed round, or was it your second seed round?

Chris Stott:

No, that was our first seed round and it was great. We were oversubscribed. Led by Scout Ventures, and then we had Seldor Capital, 2Future, Backswing, Atypical, KittyHawk, Iron Gate and the Veteran Fund, and some unique individual investors joined us on that one too. Some family funds. And they got it. They instantly understood what we were doing. It's one, Chris Wake from Atypical actually said, "It sounds crazy when you first hear of this," but the more they looked into it, they said, "Oh, my gosh, this is stone-cold sober." All we're doing is avoiding loss of data. First, we put all this together. So we do that one. Down here on Earth, Fritz, this is where we create data. 8 billion human beings, all of our billions of machines, we create 2.5 quintillion bytes of new data every day more than yesterday. More than half of that is regulated and needs to be stored.

And yet we touch upon an event so traumatic in human history, we still talk about it today, we still teach it today, you still see articles written in the Financial Times in the Wall Street Journal about it today, and it happened 2000 years ago. And that was the burning of the library of Alexandria. A data loss so bad, its trauma is still felt today. And by the way, that was burnt by Julius Caesar's troops in the Roman civil war. Flash forward to today, the place where we create our data and we use our data and it gives us our technological civilization, it gives us all these incredible benefits that we have, this Golden Age, the second digital renaissance, and everything is put at risk every single day by nation state hackers, storms, climate change, human error, data loss, fires, floods. Oh my goodness.

And that's the problem our customers came to us to solve. And we're just about to embark on a Series A, and that will take us to full commercial operations and then after that project, financing. But really, just look at that moon tonight and just look at that and those dark patches, those maria where the lava tubes are, and you see that sunlight burning off the moon. We're solar-powered, naturally cooled. We have a direct line of sight. I remember talking to someone, he said, "How do I know you can see the moon from where you are?" And I was looking through on a video call, I could see the moon through the window behind him. I said, "Sir, look around behind you. Look, that's it right there." It's hard to miss, right?

Fritz Spencer:

So incredible. Yeah. When you think about it, all of human history has occurred primarily, besides some exploration in space, on Earth. All of our data here is stored on Earth. Everything that we've ever known and done is here, and the safest way that you're describing preserving human history almost even, can be on the moon. In the case of especially catastrophic events or wrongdoing by perpetrators, loss of data, having it stored up there as a redundancy just seems so bulletproof.

Chris Stott:

Well, thank you. And, Fritz, this is a living, breathing digital twin 'cause there are incredible organizations like the Art Mission Foundation that take up these amazing diamond disks, laser disks with all the documents and things we need to recover civilization out there for future prosperity. But where is, there a living, breathing... We're an external hard drive for the planet. We're turning the moon into a massive iPhone. It's so much fun, living, breathing, 24 hours a day, drag and drop, put your data on the moon.

Fritz Spencer:

So you mentioned your next seed round. I'm interested, how do you guys plan on deploying that capital? What's the biggest capital pressure that you guys are facing right now?

Chris Stott:

Oh, for us, it is wonderfully going to the market. And we have an RFP out at the moment. We're just going through the responses. We've gone out to 18 commercial satellite manufacturers and asked them to build our next set of missions to the moon. And that's the most wonderful thing. During Apollo, everything had to be built and designed afresh. Today we can go out to 18 amazing satellite manufacturers and say, "Compete for our business." And we then go out to the launch vehicles with the manufacturers and say, "Right, compete to send your rockets with our payloads to space." Same thing with the ground network. We can actually lease buy and build our own ground network now because we're looking at 60 years of sunk investment in space and 60 years of sunk investment in data at Silicon Valley. All we're doing is combining the two. That's the whole essence of the data and space industry. Both industries, we build incredible machines that serve a purpose to make life better for humanity. And never forget 100% of the money spent in space isn't, it's spent down here on the ground, which is where the jobs and the investments and the profits are made.

Fritz Spencer:

So interesting. So tell me, what's next for Lonestar?

Chris Stott:

Oh, for us, this next big mission, this next big test coming up later this year, and then onto our lunar orbiting missions in 2026. And then there's growth out from there. Really, Fritz, what I want to do, what I hope happens when our entire team happens with our customers, is that it just becomes so natural and normal for people to store their data on, in and around the moon. They'll say, "Where else would you store it?" It's just such a beautiful place to do this from. It's so logical and yet so functional.

Fritz Spencer:

So you mentioned that your customers came to you almost begging for this solution. Can you tell me more about the customer base? Whose problems are you solving?

Chris Stott:

Well, these tend to be governments and state governments and major corporates. And actually the first set of customers that came to us were a little surprised we found a solution. So they're still there in the wings, which is great. And then in the meantime, the State of Florida stepped forward, our first public domain customer, and they've been brilliant. We're based out of Tampa, St. Pete in Florida, the Maritime and Defense Hub, an amazing place to work from, but it was so heartening to work with the State of Florida. And we worked with Space Florida, who's the outreach from outer space, and they were very good. They said, "Look, we need help. Here we are. We're one of the fastest growing states. Our infrastructure is booming alongside our population. We understand the importance of data to running our state and everything it provides. And yet here we are, we're surrounded by ocean, we're surrounded by hurricanes and flooding, and we're surrounded by all sorts of geopolitics. Let's take a proactive step forward and let's leverage the 60 years of sunk investment we have made as a state in space and data and more, and let's try this. Let's be the first state out of 50 to take this giant leap and actually store our data off planet."

And so they took out the entirety of our first test mission, of the capacity, and they were brilliant, absolutely fantastic. And the nice thing is, here we are talking, after February, after the successful mission. Intuitive Machines were amazing. SpaceX fantastic. And we transmitted the data to and from. We actually secured their digital data and proved out all of our technical concepts. And they have been a tremendous customer. They're on our second mission as well and all going forward, knock on wood.

Fritz Spencer:

That sounds absolutely incredible. And as a fellow Floridian, I'm so excited that it's happening here in my own state, as well as a fellow space nerd, if you will, especially with the eclipse we've had recently and Lunar Day coming up soon, it's very exciting to know that you guys are literally up there communicating back and forth. And you mentioned a little bit about the customer being the State of Florida. Tell me more about your revenue model. You are a business after all, so how does it operate?

Chris Stott:

Oh, our revenue model is very similar to data storage here on Earth. It's you store your data, you store so much data and depending on how much data you store and how many times you need to communicate backwards and forwards, et cetera, that's the charging. It is a pure commercial model. But think of us as a new market tier. This is one of the first times, as evolved tool-using apes, we're able to take the technology that we've spent 60 years building and really leverage it. And that's what we do in space. We put amazing machines in space with cameras and antennas on them and that service the markets on Earth. And that's exactly what we're doing here. It's giving us the ability to do a new tier of market service. We like to say, we like to think, we’re like a smart device because we're able to take a step out with a viewpoint looking back, saying, "Right, how can we really do this so very well and support the needs of our customers? How about this as a service?" And so far, so good.

Fritz Spencer:

Wow, so incredible. I love hearing every step of the way and especially what you guys are looking to do next. Well, Chris, I want to thank you so much for taking the time to have this conversation with me today. It's been an absolute pleasure.

Chris Stott:

Fritz, everyone, thank you very much for having me and I truly appreciate the opportunity today. Thank you. Please go see us at lonestarlunar.com.

Fritz Spencer:

Beautiful. And thanks to our listeners for tuning into TechTalk, the entrepreneurs and innovators who turn to EisnerAmper for accounting, tax, and advisory solutions to help propel their success. Subscribe to the EisnerAmper podcast to listen to more TechTalk episodes or visit eisneramper.com for more tech news that you can use.

Transcribed by Rev.com