Open Letter to a Newly Formed Satellite Imagery Company
The text below is adapted from an email I sent to an up-and-coming satellite imagery provider. Some details have been omitted or adapted in order to preserve their anonymity. I hope the advice is generally useful to others in their position.
- Release a small percentage of your data under a truly open license, preferably CC0 1.0 Universal (CC0 1.0) Public Domain Dedication. Ideally, partner with a cloud provider so that data is hosted for free and there are more stakeholders invested in its upkeep than just you (e.g. Earth on AWS, Google Earth Engine, or Microsoft AI for Earth). Let’s call it…1% of your capacity. That has a nice ring to it. “1% for the world…” lol.
- Decide on a price for tasking and for archival data, and share it publicly. This will allow your customers to plan and to prioritize use cases based on what is economically viable. This information will be shared whether you post it publicly or not, but you’ll engender a lot more loyalty if you just commit. You can always change it.
- Gate access to paid data however you see fit, but once “in,” allow customers to disintermediate sales people and simply purchase data directly.
- Invest in education. Marketing is not the same as education — a truly great piece of educational content will help your competitors as much as it will help you, save for the goodwill it will generate.
First, an Acknowledgement of Your Predicament
You face two fundamental dilemmas:
- The proprietary nature of your data is the basis for most of the perceived value of your company. Giving away your secret sauce is counterintuitive at best, self-sabotaging at worst.
- You have two privileged classes of customers. The Federal gov’t is one and all foreign gov’ts are, in aggregate, the other. These two customers have vast resources and existential threats you will be helping to mitigate. They are willing and able to pay more than any other classes of customer. Everyone else is, proportionally, noise.
I recognize you have to survive as a company before you have the luxury of addressing the long tail of commercial uses for your data. I don’t begrudge anyone that focuses on government customers. What I cannot stand is half-assed efforts to address commercial customers’ needs. It’s worse than just never opening the door — not only does it distract you, but it creates animosity toward you where none is necessary. And the animosity soon grows to become a mutual disgust — after all, at least you’re making an effort, right? Maxar, Airbus, and Planet catch a lot of shit despite doing more than anyone else to work with commercial entities. On the other hand, have you ever heard of a commercial entity complaining about Hawkeye 360?
How to Effectively Invest in the Long Tail
There is currently next-to-no commercial demand for satellite imagery (of all sorts). But, at least intellectually, there is demand for satellite imagery derivatives. We face, as an industry, a chicken-and-egg problem. There cannot be demand for imagery if none is easily accessible to experiment with. And there will not be sufficient investment to make imagery more accessible without evidence of demand (or visionary leadership willing to take heat in the short term in order to grow the industry in the long term).
The four primary impediments to imagery accessibility are as follows:
I’m not going to waste time on explaining capacity to the people fundamentally increasing it. But I do want to spend some time on the other three.
The cardinal sin of publishing open data is licensing it restrictively enough that it’s not useful for the thing you’re trying to encourage. Over and over again, earth observation companies have released “open” data in support of humanitarian initiatives, or for researchers, or simply for fun. I put “open” in quotes, because if it’s not licensed for commercial reuse, it’s not technically open, at least according to the Open Knowledge Foundation and other similar bodies.
Your mandate is to maximize value for shareholders, not to save the world. So, I’ll be making my argument through that lens: in my opinion, restrictively licensing data that you give away hurts value for shareholders. The nefarious and ignorant will use it for commercial purposes anyway (thus diluting the value of your remaining data in exactly the way you feared by licensing it restrictively). The lawful and diligent will not, but these are precisely the category of companies you want to work with. By truly giving away your data with no strings attached, you’ll unlock in-kind donations as responsible companies allocate their own research and development dollars to projects involving exploitation of your data. And if you truly believe that real-time monitoring is what drives value for commercial customers, then your archive is not that valuable anyway, except as a reservoir of half-baked training data. Treat your archival data like pickaxes and shovels and your tasking capacity like gold.
The most common complaint among commercial customers of earth observation data is the sales experience. If you force me to inject a 2-month imagery negotiation in the middle of a 2-month pilot project negotiation…I no longer have a pilot project, and we both lose out. The sales infrastructure you build to support selling into the government will stand in direct opposition to your commercial partners’ needs. In one context, they will seem consultative, organized, and “value-added.” But in the other context, they will appear territorial, bureaucratic, and disenfranchised. Simply get out of your own way. Make the difficult choice of what to charge, and live with it. You can always change it — the stakes are extremely low in the early days. Like I said, there is no significant commercial demand for satellite imagery today. If you raise prices 10x, you might piss all three of us off for a while. But if you never publish prices, you’ll always be stuck with a small group of highly motivated niche partners rather than a massive market.
Transparency also brings with it the benefit of enabling self-service transactions, meaning the cost to serve your commercial partners is lower and they are happier. You’re both outsourcing the consultative sales process for free and you get to call your customer a “partner” so they feel better about the whole thing. No commercial EO providers allow for this currently, to my knowledge.¹ Everyone negotiates on an ad hoc basis and gates access (even for repeat partners) behind an army of sales people. It’s infuriating, and a fairly low bar to clear.
This requires little further explanation. I think it serves your best interests to be seen as a “thought leader” in the satellite imagery space, both because it engenders trust with potential customers… and because it optimizes organic search to your lead generation forms. I think the company that provides the most sincere, accessible, and valuable satellite imagery education will have a compounding advantage over their peers. Investing in education is a way to both grow the overall market of people equipped to exploit your data while incrementally growing your share of it. But none of your marketing dollars spent on education will return an investment if you haven’t solved the problems of capacity, licensing, and transparency — it will be a big “top of the funnel” leading to a pinhole.
Of course, this is all easy advice to give. I do think this strategy is not without risk. The first and biggest risk is that it’s all a waste of time and focus — you could have been doubling and tripling down on making the U.S. government happy with your product offering and that might have generated a higher return without all of the headache. The second is that your commercial strategy directly undermines your negotiating power with gov’t customers — what if they’re willing to pay more per unit than the transparent pricing you publish on your site? In many cases, the U.S. will contractually obligate you to give them the best pricing you give anyone (although companies skirt this all the time by defining their products in such narrow ways that it effectively gets them out of this bind). Lastly, you might find yourself enabling competitors. Because you are choosing to generate analytics yourself, some of the markets that internal team will serve will also have external partners that come to you for imagery. Navigating a situation where you are competing with your own partner is tricky, and usually results in bad blood. Too much of that, and your reputation will suffer (after all, it’s a small, small geospatial world).
It would be easier not to entertain any of this at all. But ignoring non-gov’t uses for your data will cap your valuation and your impact.
In chess, there’s a concept of a “poisoned pawn,” a pawn seemingly free for the taking that requires making a positionally fatal risk to capture. I think dabbling in commercial use cases is like grasping at the poisoned pawn — it’s doomed to fail. If you reach for it, you have to fully commit to the complexity that will arise as a result.
¹ I am not referring to the experience of trying to sign on as a reseller for a satellite imagery provider. I am talking about self-service access to raw data that doesn’t involve a complicated legal agreement and sales volume commitments. That’s an open letter for a different day.