Welcome to theÂ second edition of EVA Interviews: The Business of the new Space Age!
Our next guestÂ is Guillermo SÃ¶hnlein,Â founder of both the International Association of Space Entrepreneurs and Space Angels Network. One of the major challenges facing Space entrepreneurs and startupsÂ is finding adequate investmentÂ seed capital, the early-stage funds needed to start and grow their businesses. Angels and sometimes VCs (Venture Capital firms)Â are the usual investors if you can’t self-fund, but they have rarely focused on the new Space industry. Guillermo is actively involved in bringing investors’ attention, funds and expertise to often ignoredÂ SpaceÂ startups. With IASE, heÂ encourages and provides an environment to build entrepreneurship in the new Space industry.
EVA:Â Â Â Â Hi Guillermo!Â Thank you very much for joining us at EVA Interviews and Out of the Cradle. Welcome! I am very much looking forward to our conversation about all the interesting projects youÂ have created to address the challenges facing Space entrepreneurs!Â
Since these interviews are about Space, as well as the economic aspects of our exodus Out of the Cradle, I’d like toÂ begin by asking about Space. I know you do have a personal interest in Space.Â Can you tell us how your interest started and how it has evolved?Â
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â Generally, I have a typical â€œspace enthusiastâ€ response to this question in that Iâ€™ve been interested in space for as long as I can remember.Â Also typical, my interest has gone through three phases: the â€œFantasyâ€ phase; the â€œI Want To Goâ€ phase; and the â€œBusiness Opportunityâ€ phase.Â
Phase I (1966-1984): â€œFantasyâ€Â
In my earliest childhood memories of role-playing, I was always an astronaut exploring new worlds and meeting strange new alien life forms.Â My favorite TV shows were Star Trek, Lost in Space, Battlestar Galactica, and Space:1999.Â My favorite movies were the Star Wars, Star Trek, Space Odyssey, and Alien series, as well as Moonraker (which, other than its space theme, was probably one of the worst Bond films ever).Â My favorite authors were Sir Arthur C. Clarke, Isaac Asimov, Robert Heinlein, and Jules Verne, and Enderâ€™s Game is still one of my all-time favorite books (it was required reading in the Marine Corps and I put it on the reading list for every entrepreneurship class I teach).Â The bottom line is that I grew up fully expecting humans to be a space-faring species in my lifetime and wanting very much to be a part of it.Â
Phase II (1984-2001): â€œI Want to Goâ€Â
As I got older and had to start thinking about what I wanted to be when I grew up (something Iâ€™m STILL struggling with!), I knew that I wanted to be an astronaut.Â I was fascinated by scienceâ€”especially astronomyâ€”but I figured the best career path that would also cater to my athletic interests was to become a pilot.Â I had it all figured out: 4 years at the Naval Academy, 2 years of flight school, 5 years as a jet pilot, 2 years as a test pilot, and on to NASAâ€™s astronaut corps â€¦ and space!Â Then reality set in.Â My appointment to the Naval Academy was transferred to an ROTC scholarship at Berkeley (it turned out someone forgot to check my citizenship status), I lost my 20/20 eyesight during my sophomore year, and similarly NASA started losing its visionary way in the post-Apollo era.Â I became increasing disillusioned, so I attended law school, served on active duty in the Marine Corps, and co-founded a startup tech company in San Francisco during the Internet Boom/Bust era.Â Space slowly became a memory for me.
Phase III (2001-Present): â€œBusiness Opportunityâ€
After we sold our company and I moved to the East Coast in 2001, I did some serious soul-searching.Â I knew that I would be starting another new company, but I wanted it to be in a field for which I had a passion.Â I thought about everything I really cared about: family, sports, music, outdoors, and â€¦ space.Â I decided to re-connect with my inner â€œspace geekâ€ and started exploring business opportunities in this field.Â Since I didnâ€™t have any great ideas of my own, I began to meet with as many knowledgeable folks as I could, helping them where possible and learning as much as they would share.Â This led me to launch the International Association of Space Entrepreneurs (IASE) in 2003 and Space Angels Network in 2006.Â I firmly believe that space offers immense business opportunities for entrepreneurs and investors willing to explore it.Â The fact that â€œspace is a very, very hard businessâ€ simply means that it will require that much more scientific, technological, and commercial innovation â€¦ precisely the ingredients for a â€œNext Big Thingâ€ in new venture creation.Â Best of all, it is a truly global endeavor.Â Would I still like to go into space?Â Sure.Â In fact, Iâ€™m currently re-reading Kim Stanley Robinsonâ€™s Red/Green/Blue Mars trilogy.Â However, my motivations for being actively involved in this worldwide movement are now less personally focused.Â I want to inspire, cajole, and assist as many talented people as possible to realize their dreams of making successful space-related ventures.Â It is something I enjoy doing, it is something that leverages my talents and experiences, and ultimately it is something I think will be my biggest contribution toward helping the human species fully realize its long-term destiny as a space-faring and multi-world species.Â Iâ€™ll let the Musks, Rutans, Bigelows, Carmacks and Bezos of the world blaze the trail going forward, but Iâ€™ll work to pave the road behind them and set a flood of Earthlings hot on their heels.Â
EVA:Â Â Â Â Both IASE and Space Angels Network are very innovative for the new Space industry and unusual even for the aerospace industry. Can you tell us more about the International Association of Space Entrepreneurs? What does it do?Â What areÂ your goals and hopes for it?Â How is it doing so far?Â
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â IASE was originally conceived as a mechanism to engage successful entrepreneurs from outside the space industry.Â By 2002, it was clear that â€œuberâ€ entrepreneurs like Elon Musk, Robert Bigelow, John Carmack, and Jeff Bezos (coming from the software, hotel, gaming and Internet industries respectively) would be able to self-fund theirÂ space ventures because of their significant prior successes in non-space ventures.Â However, there were thousands of other successful entrepreneurs around the world who (a) knew what it took to launch and grow successful ventures, (b) had an interest in space-related opportunities, but (c) may not have had quite the resources of these exceptional â€œuberâ€ space entrepreneurs to fully fund their own space ventures.Â IASE was created to connect those entrepreneurs with each other, with various people necessary for their ventures, and with resources to support their efforts.
Organized in 2003 as a non-profit 501(c)(6) association with role models like Eric Anderson and Lon Levin on its Board of Directors, IASE has gone through several changes as weâ€™ve strived to meet the needs of our entrepreneur constituents.Â Initially, we started down the path of a â€œtraditionalâ€ association, putting on events and creating local chapters.Â However, we quickly realized that we would not be able to scale fast enough to meet the unexpected and overwhelming demand from around the world.Â Therefore, we slowly transitioned to a more virtual model, re-launching in 2008 as the online community you see today.Â With very little promotion beyond word of mouth, we have more than 700 members representing over 45 different countries, and we continue to support our original mission by facilitating connections and dialogue across national boundaries, cultural barriers, and diverse skill sets.Â Despite the ongoing success of the online community, we see this merely asÂ a foundation for the next phase of IASEâ€™s growth.Â There are still many gaps to fill in the â€œinnovation ecosystemâ€ for space ventures, and we are working on a number of ideas for 2009 and beyond.Â We hope to make some more announcements by Q2 of this year.Â Stay tuned!Â
EVA:Â Â Â Â Before we leave the discussion of the IASE, and talk more about the â€œInnovation Ecosystemâ€ and Space Angels Network, do you have any anecdotal evidence of how IASE is meeting your objectives, other than membership growth? I know of at least one consulting engagement that was a direct result of IASE. Do members share with you successes they have had that are due to IASE? (Perhaps that might even be a discussion item for your IASE blog?)Â
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â Terrific (and timely) question!Â The short answer is no, we donâ€™t really have too much evidence of how weâ€™re doing in accomplishing our objectives, at least since we re-launched as an online community.Â Personally, Iâ€™ve benefited from this by connecting with Wahid Tanner, the most active community admin, one of the of current driving forces behind IASEâ€™s growth, and â€¦ someone I have yet to meet in person (he lives in Seattle).Â I also connected with a fellow IASE member during my visit to PanamÃ¡ last year, so that was another welcome benefit of the community.Â That being saidâ€¦ now that IASE is starting to get to a critical mass, we have been talking about soliciting exactly this type of information from the community.Â We will probably do this in the next few months, so perhaps weâ€™ll have more specific data for you when we do a follow-up interview!Â Â
EVA:Â Â Â Â Space Angels Network is the second of the foundational building blocks you have created. Great name by the way! Can you tell our readers first what an â€œAngelâ€ is in the financial world and more about Space Angels Network?Â
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â Let me tryÂ answering both parts of your question separately.Â
Part I: “Angels”
The first part of your question can actually get quite involved, and there has been extensive research conducted and several books written about the topic.Â Since Iâ€™ve found through the years that entrepreneurs have some major misconceptions about â€œangelâ€ investors, let me spend some time on this one and then we can come back to Space Angels Network.Â Iâ€™m not sure where the term â€œangelâ€ came from (at least in this context of investment capital), but usually it refers to specific class of early-stage investor.Â Generally, new startup ventures work through a series of funding sources as they grow:Â
entrepreneurâ€™s time (while working another paying job)
entrepreneurâ€™s savings (including true savings, retirement funds, home loans, and credit cards)
â€œfriends and familyâ€ supporters (e.g., loans, loan guarantees, and equity investments)
institutional early-stage investors (e.g. venture capital firms and corporate venture groups)
institutional growth-/late-stage investors (e.g., venture capital, private equity, and hedge funds)
However, unless the entrepreneur has significant personal resources, comes from a very wealthy family, or starts a venture with extremely low capital requirements, there is often a huge gap between (3) and (4).Â This means that innovative entrepreneurs can potentially exhaust all of their available resources in making significant progress, only to fall short of achieving cash flow-breakeven because they cannot reach the point of attracting early-stage institutional financing.Â
Enter â€œangelâ€ investors. Â
While they can be institutions, these are typically individuals who have made enough money (usually as entrepreneurs, but also as corporate executives, service professionals, public investors, etc.) or inherited enough money to diversify their portfolios with risky investments in early-stage ventures.Â Regardless of who they are, in most ventures angels are the first â€œoutsideâ€ third-party money brought in, and this has so many operational implications that it leads to a completely separate discussion on why entrepreneurs make this particular decision.Â There is absolutely no single way to describe an â€œangelâ€ investor, because they come in so many different flavors.Â At a minimum, they have to have two general qualities:
money to invest and
willingness to invest (entrepreneurs always forget this second part and figure that everyone with money is a potential investor).Â
In the U.S., the Securities & Exchange Commission has set out fairly clear guidelines on the first element, creating a definition of â€œaccreditedâ€ investors that includes having a net worth over $1M or having earned over $200K per year for the previous two years.Â According to the SEC, these types of investors are presumed to have sufficient financial wherewithal that entrepreneurs can solicit investment from them privately without running afoul of public disclosure requirements.Â Therefore, this is the most commonly accepted definition used in the U.S.Â Most other countries do not have this type of limitation, so anyone with money to invest in an early-stage venture may do so â€¦ at their own peril.
Angels invest for a variety of reasons, including: they want to make money; they like the entrepreneur; they like/know the industry; they want to be operationally involved; they want to be a part of something big; they think itâ€™s â€œcoolâ€; etc., etc.Â Unlike venture capitalistsâ€”who are generally all driven by the objective of generating a financial return for the limited partners whose money they manageâ€”angel investors are a diverse bunch driven by diverse motivations.Â Most important, unlike venture capitalistsâ€”who are professional money managers and get paid high fees to invest their LPsâ€™ moneyâ€”angel investors are under no obligation to make investments.Â Many entrepreneurs are surprised to learn that generally speaking an â€œactiveâ€ angel investor may only make 2 investments per year!Â Over the years, I have found these to be two of the most common misconceptions that entrepreneurs have about angel investors, namely, that they all invest for the same reasons and that they all want to (or have to) do is write checks.Â Nothing could be further from the truth.Â To the extent that fundraising is really a sales process, understanding these two fundamental concepts about angels really affects how entrepreneurs pitch, who they pitch, when they pitch, and why they pitch â€¦ as well as their expectations of the results.Â
Phew!Â I donâ€™t know if you were expecting such a dissertation on angel investors, especially since I could probably go on like this for hours.Â However, Iâ€™ve found that most entrepreneursâ€”especially first-timersâ€”really donâ€™t understand angel investors â€¦ even as they solicit funds from them.Â Heck, I work with them on a regular basis, and I still donâ€™t fully understand them myself!Â
Part II:Â Space Angels NetworkÂ
Almost immediately after launching IASE in 2003, we realized that the fledgling space entrepreneur community was going to face another obstacle: no viable source of private (i.e., non-government) funding options for early-stage space ventures.Â The â€œuberâ€ entrepreneurs (Musk, Carmack, Bigelow, Bezos, etc.) had previously generated enough personal wealth to wholly fund their own space ventures.Â However, while these visionary leaders play a significant role in blazing new trails, they areÂ certainly too few in number to constitute a new industry, market, segment, sector, or even trend.Â The rest of the entrepreneur community was going to need access to outside capital sources.Â Our first instinct was to look at venture capital.Â In the 1990â€™s, John Higginbotham created a venture capital firm called SpaceVest and successfully raised an aerospace-focused institutional fund.Â In fact, they went on to raise 3 funds in total, each time gradually expanding their focus to more general early-stage innovative technology ventures.Â By 2005, John had moved on to other opportunities and the firm changed its name to RedShift Ventures, no longer maintaining any focus on aerospace investments.Â Around that same time, NASA bounced around the idea of launching its own venture capital fund, based loosely on the model implemented by the CIA with their In-Q-Tel fund.Â However, for a number of different reasons, this initiative did not go forward which effectively left a vacuum in the financial markets for early-stage space ventures seeking growth capital.Â
So â€¦ a group of us considered going out to raise an early-stage $50-$75M space-focused venture fund.Â We were confident that we could raise the money.Â However, we were not at all confident that we would find sufficient quality deal flow that would generate the ROI results desired by the fundâ€™s limited partners in the timeframe necessary for a closed fund.Â Regardless, the industry (and to a certain extent, our new fund) would still face the problem of financing sources to fund the gap between entrepreneursâ€™ resources and venture capital, a gap usually filled by a vibrant angel investor community.Â We decided to try solving both problems with one solution: we would launch an aerospace-focused angel investor network, a membership organization whose primary purpose was to make investments in early-stage ventures.Â And thus Space Angels Network was born.Â We figured that we could launch this network relatively quickly (raising a fund would take 12-18 months) and with relatively little capital requirements (of course, the labor involved has been huge!).Â Executed properly, the new network would both establish a pipeline of early-stage deals for a new fund and also galvanize a national group of angel investors to feed that pipeline going forward.Â We decided it would be worth running this â€œexperimentâ€ for at least 3 years to see what kind of traction we got.Â This was in April 2006.Â
We spent that year wrestling with different models for running an industry-focused angel network with the entrepreneurs and investors spread out all over the U.S. (most angel groups are geographically focused).Â This may not be apparent to most people, but running this kind of angel group is extremely difficult and has rarely been done successfully.Â However, in the meantime, David S. Rose launched Angelsoft, a Web-based platform for managing angel investment deal flow, and in that application we found our solution.Â We launched our beta site in April 2007 (when Burton Lee joined as co-founder) and worked out some kinks in our model through the rest of the year.Â Along the way, we were fortunate to recruit our Founding Members, including Esther Dyson, Stephen Fleming, David S. Rose, and Ed Tuck, as well as an Advisory Board with deep experience in angel group creation, venture capital, entrepreneurship, new venture creation, and of course aerospace.Â In September 2008, we partnered with Keiretsu Forum Southern California to organize our first Aerospace Venture Forum, where 14 companies presented to an audience of accredited investors.Â Looking forward to 2009, we are expecting to build on our January Forum with New Vantage Group in the DC area by organizing 3 more Forums in Silicon Valley (March 30thwith Plug and Play Tech Center), New York (September), and Los Angeles (November).Â Of course, our primary objective is not to simply conduct events focused on early-stage investment of space ventures, since there are other groups out there doing a terrific job on that front.Â Rather, our focus is on concluding investment deals.Â Our volunteer staff continues to work closely with our Advisory Board, Founding Members, members, entrepreneurs, and network partners to make this happen.Â Despite the ongoing economic recession, we firmly expect that deals will get done this year, and weâ€™re pushing hard in that direction.Â
EVA:Â Â Â Â Â Guillermo,Â you said that in April 2006 you gave the Space Angels Network “experiment” 3 years. Here we are March 2009, almost 3 years later (where does the time go?), have you made sufficient traction to continue and accelerate your efforts?
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â It’s definitely been slow going and much more labor-intensive than we anticipated.Â We went into this knowing full well that what we were trying to do was extremely difficult, namely: (a) starting a new angel investor group (b) focused on a general sector (c) with entrepreneurs and investors spread out across the country.Â And it has been every bit as difficult as we expected … and then some.Â Of course, the economic slowdown hasn’t helped matters.Â
Then again … considering that all of the work has been done by part-time volunteers, I feel like we’ve made TREMENDOUS progress.Â In late-December I sent out an email entitled “Looking Back; Looking Ahead” to our members, Advisors, and Sponsors.Â Â I recapped everything we’ve accomplished so far, and it was fairly impressive (if I do say so myself!).Â We’ve really created a strong platform for early-stage deal-making, so we’re expecting great things as weÂ continue to build our momentum throughout 2009.
EVA:Â Â Â Â I’d like to go back to some of your earlier comments. When I was preparing for our interview, I noticed you like quotes. Your comments on the many gaps in the “Innovation Ecosystem” that need filling reminded me of this quote by Henry David Thoreau:Â
“If you have built castles in the air, your work need not be lost: There is where they should be. Now put foundations under them”.
I always envision his castles asÂ space cities or lunar or MartianÂ settlements. Â I sometimes find thatÂ discussions among budding Space entrepreneurs seem contingent on foundations that do not exist in a practical wayÂ today.Â Some of these areÂ technology foundations, others financial.Â By looking to fill those gaps, youÂ are effectively working on the foundations.Â Weâ€™ve learned about IASE which helps with networking and support systemsÂ and Space Angels Network which addresses the early financial foundation building: WhatÂ other key aspects of the foundation do you feel we need to focus on and build now? What others are you working on? Which, if any, are the companies who have been presenting at the Forums working on?Â
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â I’ll answer theÂ last question first: to the extent that companies are working on “platforms”, they are working on *technology* platforms.Â On the other hand, we’ve been building *ecosystem* platforms, or what you called “financial” platforms.Â Hopefully, the work we’re doing will help others be more successful in the work they’re doing.
As for your first question … generally speaking, innovation consists of three primary ingredients (idea, entrepreneur, capital) going through a “new venture creation” process.Â Along the way, the venture cannot succeed without other elements, such as a labor pool, a customer market, and a sales channel.Â All of this is set against a backdrop of educational, legal, tax, and regulatory regimes, among others.Â ALL OF THESE (and then some) are essential components of a vibrant “innovation ecosystem” … and there is significant work to be done in each area to promote an “aerospace innovation ecosystem.”Â Fortunately, there are many highly qualified and passionate individuals (and organizations) working hard to address any deficiencies or gaps that may exist.
So whatÂ else am I working on?Â Well, as we continue to evolve IASE to further help the entrepreneur community and to establish Space Angels Network within the angel investor community, the next two logical steps for me seem to be venture capital and incubation.Â Over the next 2-3 years, this is where I will probably focus my efforts.Â I’m working with some key individualsÂ on several projects related to raising an aerospace-focused venture fund and creating a globalÂ chain ofÂ aerospace-focused incubators.Â After that, who knows?!
EVA:Â Â Â Â Weâ€™ll look forward to hearing your progress on both those fronts! Incubators could be described as an ecosystem in their own right. Tech and Biotech incubators have provided enormous benefits to young startupÂ companies in their respective industries. Iâ€™m planning a future panel interview to discuss that topic. I hope youâ€™ll participate then!
Are there any lessons youâ€™ve learned or insights youâ€™ve had, since entering the â€œbusiness opportunityâ€ stage of your Space interests that youâ€™d like to share with our readers? Surprises? Observations on the industry? Any areas of opportunity that you feel are neglected but donâ€™t relate to your focus on the innovation ecosystem?
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â Iâ€™ve been fortunate to learn a multitude of lessons through my efforts with IASE and Space Angels Network.Â Most of these have come from the advice of the many highly qualified individuals who have shared their thoughts with me and provided me such sage advice.Â As a small sampling, here are some of my lessons learned (good/bad/indifferent and in no particular order):
- â€œBusiness is Business is Business.â€Â Whether youâ€™re building a space business or a McDonaldâ€™s franchise, the underlying business principles are the same.Â You still need an identifiable market need, a unique value proposition, a financial model that makes sense, and of course an operational plan that gets you to where you want to be.Â Pull together the right team and adequate capital, and then itâ€™s just a matter of execution, execution, execution.
- â€œ21st Century Businesses are Global Businesses.â€Â Every venture in todayâ€™s modern economy needs to have a global strategy.Â This means that you have to consider global competition, partners, markets, labor force, and economic conditions.Â This holds especially true for space-related businesses, which rely on global partners and can provide global solutions from unique vantage points.
- â€œITAR Must be Overhauled/Eliminated (duh!).â€Â Given that all modern businesses are increasingly global, anything that puts artificial restrictions on a ventureâ€™s ability to operate in a global environment necessarily creates risk of failure.Â If we are truly committed to the general vision of a globally competitive American innovation machine, then we need to unleash the pent-up creative force of our space industry BEFORE it gets left behind by a worldwide tsunami of equally passionate (but much less regulation-encumbered) competitors. AND â€¦ at the risk of sounding completely self-centered (on a national scale), I donâ€™t even view this as a U.S. issue but as a global space issue: given the high level of subject-matter expertise, entrepreneurial experience, and capital resources resident within the U.S., the WORLD aerospace community would benefit significantly from our government allowing us the freedom to innovate collaboratively outside our national boundaries.Â
- â€œMoney is Everywhere.â€Â I realize that the current global economic crisis casts a long dark shadow on all aspects of our lives.Â However, Iâ€™ve been stunned by how much money is out there and not only available for entrepreneurs but also eagerly looking for investment opportunities.Â Especially during this economic downturn, there is a huge abundance of capital in the world and every entrepreneur should take heart in knowing they can get a piece of it for their venture.Â Of course, the challenge is getting access to the investors and presenting them with a solid investment opportunity that fits their criteria at just the right time in their investment cycles.Â Then again, thatâ€™s where â€œexecution, execution, executionâ€ comes into play.
Finally, let me steal a quote that I understand was in turn semi-plagiarized from Nike by the early team at XM Satellite Radio, â€œJust F—–ing Do It!â€Â While there is certainly value in thinking about how our human development of space should happen, and talking about what it would take to get us there, and advocating for changes that will allow us to accomplish our dreams, there is absolutely no substitute for taking the bull by the horns and actually making it happen.Â If you have a great idea for a space venture, then get off your butt and do it â€¦ now!
Â EVA:Â Â Â Â Well said! Take action!! As you are, and as are the entrepreneurs whose companies are showcased in your Aerospace Forums, and many others. (Some of whom will be interviewed here in the future!)
At the beginning of our interview, you mentioned that you put Ender’s GameÂ (by Orson Scott Card) on the reading listÂ for every entrepreneurship class you teach.Â Â Â Â (For those unfamiliar with this novel (which both Guillermo and I recommend) a quick synopsis is:Â
Set in Earthâ€™s future, the novel presents a threatened humankind who have barely survived two conflicts with the Formics (an insect-likeÂ alien race also known as the â€œBuggersâ€). In preparation for an anticipated third invasion, an international fleet maintains a school to find and train future fleet commanders. The worldâ€™s most talented children, including Andrew (Ender) Wiggin,Â the novelâ€™s main character, are taken at a very young age to a training center known as the Battle School. There, teachers train them in the arts of war through increasingly difficult games including ones undertaken in zero gravity in the Battle Room where Enderâ€™s genius is revealed.)
I understand how it might beÂ required reading for the Marines. Why do you use it with budding entrepreneurs?
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â Enderâ€™s Gameis required reading in MANY business schools, especially in entrepreneurship courses.Â It is used to teach innovation and paradigm shifts.Â Remember in the story that the whole reason The Battle School was created was not so much to teach combat strategies/tactics to gifted Earth children but rather to learn from the children how to better operate in a space battlefield.Â The military commanders knew that they were facing a paradigm shift so large that they would never be able to wrap their brains around it in time to avert the genocide of the entire human species.Â Their thinking had been far too pre-conditioned under the old (i.e., gravity-based) paradigm.Â They knew that the risk of the Buggers wiping out the entire human race was great enough that they absolutely HAD to find a way of adapting to this paradigm shift.Â The only way to do this was to artificially create a new generation of military commanders completely raised under the new (i.e., zero-g) paradigm.Â
I thought the most interesting part of the story was the sub-plot where the administrators of the School continually struggled to walk the fine line between teaching the kids and learning from them.Â After all, they had to teach them at least SOME military strategies/tactics, but how much could they teach them without polluting their minds with the old paradigm (which is the only one known by the teachers)?Â
As a side note,Â this is precisely why Iâ€™m involved with the International Foundation for Entrepreneurship, Science and Technology (www.ifest.info).Â Among other initiatives, they are trying to put together an interesting student program in cross-national entrepreneurship.Â They want to teach kids from around the world how to launch new ventures, but they want them to do it in an environment where the co-founders are never in the same physical location and therefore never meet in person.Â How can we old-guard entrepreneurs teach â€œvirtual new venture creationâ€ when it runs counter to everything we know?Â However, I believe that kids growing up with the Internet will easily figure out a way and teach us how to do it.Â Of course, we walk that same fine line as the instructors at The Battle School: how much do we teach them about new venture creation without polluting their way of thinking about the process under the new â€œvirtualâ€ paradigm?Â
In a way, Iâ€™m currently conducting this same experiment with Space Angels Network.Â Many experts who have been working with angel investors and angel groups for years are absolutely 100% convinced that angel investors will not write checks to entrepreneurs they have never met.Â However, the Space Angels Network model pretty much relies on them doing just that.Â Iâ€™m convinced that angels will, in fact, make these types of investments.Â It may not be the â€œold guardâ€ angel investors and it may not be this year, but eventually the younger â€œnew bloodâ€ angels WILL do it.Â Itâ€™s simply the new paradigm.Â
EVA:Â Â Â Â There is more evidence of that paradigm shift every day. Not only do I see itÂ inÂ my professional capacity in theÂ investment industry but alsoÂ in the Space industry, in politics and inÂ so many other aspects of society.Â I also find it fascinating the differing insightsÂ that can comeÂ from the same book. Ender’s Game seems to be one of those books! Thanks for sharing that!Â Are there any other books that have had a strong influence on your life and where you are today?
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â If youâ€™re asking generally about influential books, thatâ€™s a really hard question because Iâ€™m reaching WAY back into my childhood.Â Iâ€™d say J.D. Salingerâ€™s Catcher in the Rye (lesson: itâ€™s OK to be different), both trilogies of Stephen R. Donaldsonâ€™s The Chronicles of Thomas Covenant(lesson: your greatest perceived weakness could also be your greatest strength), all Greek/Roman mythology, and anything by Edgar Allan Poe, Kurt Vonnegut, Isaac Asimov, H.G. Wells, Jules Verne, and Sir Arthur C. Clarke.Â If youâ€™re asking specifically about business/entrepreneurship books, thatâ€™s a much easier question because I give this list out all the time (in alphabetical order):Â
- Corps Business: The 30 Management Principles of the U.S. Marines by David. H. Freedman
- Ender’s Game by Orson Scott Card
- Endurance: Shackleton’s Incredible VoyageÂ by Alfred Lansing
- Losing My Virginity: How I’ve Survived, Had Fun, and Made a Fortune Doing Business My WayÂ by Sir Richard Branson
- The Art of the Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything by Guy Kawasaki
- The Art Of WarÂ by Sun Tzu
- The Beermat Entrepreneur: Turn Your Good Idea into a Great BusinessÂ by Mike Southon and Chris West
- The Dip: A Little Book That Teaches You When to Quit (and When to Stick)Â by Seth Godin
- The Monk and the Riddle: The Art of Creating a Life While Making a Living by Randy Komisar
- The Tipping Point: How Little Things Can Make a Big DifferenceÂ by Malcolm GladwellÂ
Â EVA:Â Â Â Since there are so many excellent business booksÂ available, I always find it interesting to learn which booksÂ have influenced successful people. Some news ideas for theÂ TBR (To Be Read)Â pile! Thanks!Â
Guillermo, I like to close byÂ imagining that we are revisiting this conversationÂ from cyberspace, in the future, as we floatÂ in Space (see FAQs)Â for real and ask: Â What additional actionsÂ would you personallyÂ like to have taken between now and then to help make our exodus Out of the Cradle a reality? You may have already answered this when you talked about your future plans within our interview: creating incubators, a Space Venture Capital fund etc. Do you have any last thoughts for us?
Guillermo SÃ¶hnlein:Â Â Â Â Â Â Â I think that it is very important for those of us enamored with space (or at least resigned to the eventual inevitability of an off-planet human species) to recognize, accept, and appreciate that this sentiment is not currently shared by everyone (or even many) â€¦ and thatâ€™s perfectly OK.Â Itâ€™s fine that everyone in the world is not clamoring for more aggressive space exploration or commercialization.Â Itâ€™s fine that we may often find ourselves leaning into a strong headwind or fending off wolves. Â Itâ€™s fine that sometimes we feel that we may spend our entire lives working toward a goal that we may never see fulfilled.Â I think people should focus on knowing what you believe in, staying committed to it, taking action on it, sharing it with others, and collaborating with like-minded individuals.Â If enough of us do that, then we will all accomplish our individual and collective goals.Â Before you know it, weâ€™ll be conducting these interviews again during our voyage to the second Martian colony on the foothills of Olympus Mons!
Guillermo, thank you so much for all your insights into early stage financing, entrepreneurship, angels and the innovation ecosystem!Â One of the reasons I wanted to start these interviews was to show people some of the (less publicized) actions taking place and the opportunitiesÂ available in the entrepreneurialÂ new Space industry. Your comments have been very enlightening!Â Once you are further along on those projects you mentioned, letâ€™s chat again for an update!
Like Jim Dunstan, Guillermo SÃ¶hnlein was one of the first people to agree to participate in EVA Interviews – sight unseen – when it was only a concept and I had no prototypeÂ to show him. Thank you Guillermo! You too are a brave man!
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Disclaimer: Opinions expressedÂ are those of the author and her guest andÂ may not reflect those ofÂ Out of the Cradle; Space Angels Network; the International Association of Space Entrepreneurs; or BMO Nesbitt Burns.Â Copyright belongs to Eva-Jane Lark; please email her at evainterviews (at) gmail (dot) com for permission to use these interviews.Â