Horie's "World's Lowest-Performance Rocket"

Space Observation Rocket "MOMO" Engine Combustion Test, May 23, 2017

This series visits Japanese space startups to explore how space can be utilized. This time, Dentsu Inc.'s Makoto Sasagawa interviewed Takafumi Horie, founder of Interstellar Technologies (IST), and Takahiro Inagawa, president of IST, who are preparing to launch Japan's first private observation rocket within the year.

The rocket they aim to build is, surprisingly, a small rocket with "the world's lowest performance." Launch costs are being raised through crowdfunding, and innovative approaches like offering the right to press the rocket's launch button as part of a ¥10 million investment tier are also drawing attention.

Aiming for the world's lowest-performance rocket through "mass production" and "disposable" design

Sasagawa: Space work is often talked about in terms of dreams and romance, but you two are thoroughly realists, aren't you?

Horie: It's been over 50 years since humans first went to space. Yet ordinary people still can't go. The reason is simply cost. Space development is led by governments, and competitive principles don't function as an industry. Without competition, there's no need to make it cheaper. It's no wonder it doesn't get cheaper. We're failing at the basics.

Inagawa: Theoretically, rocket performance reached near-perfection in the 1960s. Yet global space research remains fixated on pursuing 100% perfection and relentless improvement. The impact of those last few percentage points of improvement on rockets? I believe it's virtually negligible.

Horie: That's why we don't pursue excessive performance. Instead, we drastically cut costs. Think of it like a Ferrari versus a Super Cub as modes of transportation. If you can afford it, a Ferrari is great, but if you just need to get to your destination, a Super Cub is perfectly sufficient. In fact, depending on the destination, the nimble Super Cub might even be more convenient.

Sasagawa: IST's vision of "becoming the Super Cub of the rocket world" is great, isn't it?

Horie: If we can get sponsors, I wouldn't mind if the Super Cub turned into a kei car at all (laughs).

Inagawa: Early satellites weighed about as much as a minivan. We used to launch those huge, heavy things into space from the ground. But thanks to advances in semiconductors, we can now build small, high-performance satellites. It's like the evolution of mobile phones.

Launching large numbers of these ultra-small satellites into orbit to observe Earth. Companies are emerging that monetize this observation data. In Japan, there's Axelspace; in the US, there's OneWeb, which gained attention after SoftBank invested in late 2016. Many players already exist.

Horie: What we want to do is provide a delivery service for those who want to launch these microsatellites. It's the rocket version of that. If we just polish the highest-end product and deliver it to governments and large corporations in the "Shitamachi Rocket" style, the structure of the space industry will never change. To control costs, we use commercial off-the-shelf parts wherever possible. The rockets are disposable, not reusable. That's the defining feature of our rockets.

Sasagawa: So you call it the "world's worst-performing rocket." By the way, is disposable really cheaper than reusable? The Space Shuttle was reusable, and SpaceX continues experiments with Falcon 9.

Horie: That's a common rocket industry trope. A common desire to reuse. They say if you reuse it 100 times, the cost becomes one-hundredth, but there are recovery costs, massive maintenance expenses, and various other factors, so it doesn't contribute that much to cost reduction. Historically, there's still no example of mass-producing rockets, but we're counting on cost reductions through economies of scale.

Inagawa: The correlation between mass production and cost reduction has been proven in the automotive industry. Developing a car costs hundreds of millions of yen, but when production reaches thousands or tens of thousands of units, the selling price drops to several million yen – a two-digit change.

Sasagawa: If satellite launch rockets were mass-produced, what price per unit would you anticipate?

Inagawa: We're looking at the tens of millions of yen range, down from the hundreds of millions previously. As mentioned, demand is emerging, so once mass production starts, we believe costs can be driven down significantly.

Raised 22.7 million yen in launch costs through crowdfunding

Sasagawa: Besides this Tokyo office, IST has a base in Taiki Town, Hokkaido. Why was Taiki chosen as a base?

Horie: Taiki Town already hosts experimental facilities like JAXA's and has deep understanding of the space industry. It boasts vast land, with the south and east sides facing the sea. It also has high sunshine rates and stable weather conditions, making it an ideal environment for rocket launches.

Sasagawa: When I visited for an experiment before, you mentioned wanting to build a factory in Taiki capable of employing thousands. Your goal was to launch 10 rockets per day from Taiki within five years.

Horie: SpaceX was founded in 2002, conducted rocket engine combustion tests in 2004, and achieved its first successful launch in 2007. Today, it's said to employ 4,000 to 5,000 people. Using that timeline as a reference, since IST's factory in Taiki Town opened in 2013, it wouldn't be surprising if a factory employing 5,000 people were established there in about five years.

Sasagawa: Creating 5,000 jobs in Taiki Town, which has a population of just under 6,000. That's a grand vision.

Horie: The rocket business isn't just targeting Japan. There are countries in Asia and Africa that haven't even launched a satellite. There's also the business of building satellites for "our country."

Taiki Town's Multipurpose Aviation Park has a runway. Extending it slightly would allow jet airliners to take off and land. This means satellites could be flown in from overseas and launched from Taiki Town using our rockets.

Sasagawa: The launch test for the observation rocket, which will lay the groundwork for that, is scheduled for 2017, right?

Inagawa: Due to issues like abnormal engine combustion, the schedule has been pushed back from the original plan. However, the project is progressing steadily as we overcome each challenge. The planned observation rocket, "Momo," is 9.9 meters long, weighs 990 kilograms, and is designed to reach an altitude of 100 kilometers.

Sasagawa: The launch costs were funded through crowdfunding, right? I was surprised they raised 22.7 million yen out of the 27 million yen goal. Was this result within your expectations?

Inagawa: I was anxious... (laughs).

Horie: Really? I thought it would happen. HAKUTO, which you're also involved with, is getting so much attention. Interest in space is definitely growing. Compared to before, I think there's a mood where money is easier to raise.

Sasagawa: This crowdfunding campaign is a good example, but Horie-san has made a huge contribution on the PR front. I remember the IST lecture at DMM.make AKIBA in June 2016 – reporters from Sunday Japan were there. After the press conference, you spent over an hour talking one-on-one with the young people who came to listen. That really stuck with me.

Horie: Well, we've still got a long way to go. I want to build even more momentum. At the same time, I sense the public eye is harsh; there's a mood that we won't gain recognition unless we deliver results. To keep development moving smoothly, what we really need right now is talent.

Their target isn't the Moon or Mars, but asteroids.

Sasagawa: This might be a bit premature, but could you share IST's outlook after the observation rocket launch experiment?

Inagawa: If we consider the observation rocket as the first step, after its success, we plan to move toward developing and mass-producing a satellite launch rocket to place ultra-small satellites into orbit. This will be our second stage.

The observation rocket and the orbital insertion rocket. While the difference may not be obvious to the general public, the technical levels involved are vastly different. The observation rocket is merely a milestone. It's just the first step toward an orbital insertion rocket that can circle the Earth.

Horie: We aim to have the satellite launch rocket operational by 2020. Once successful, the third stage would be exploring near-Earth asteroids.

Sasagawa: So asteroids, not Mars like the US and UAE, or the Moon like HAKUTO!?

Horie: If we try to go beyond the solar system, asteroids are ideal as relay points for supply bases. Transporting materials and fuel from Earth is unrealistic and would involve enormous costs and weight.

While the Moon and Mars likely have metal resources, they're assumed to be scarce near the surface. Asteroids, being fragments of planets, are said to contain iron, nickel, and rare metals.

We occasionally see iron meteorites, primarily composed of iron and nickel, fall to Earth. That's proof these resources exist somewhere in space. There might even be asteroids made of rare metals or uranium.

Inagawa: Some people see the Moon as the goal, others Mars. I think each has their own target, but for IST, asteroids are the stepping stone beyond that. In any case, the success of the observation rocket – the first stage – is the absolute prerequisite before the second and third stages.

In July 2016, JAXA and we signed a consulting agreement. It's a contract for JAXA to consult on the facilities, development, and testing required to build the second stage rocket capable of orbital insertion. To advance our joint research going forward, we need to succeed with the preliminary observation rocket and build on that success.

The right to press the launch button costs 10 million yen. The future of consumption lies in this rare experience.

Sasagawa: As the top reward for the crowdfunding campaign, you offered the "right to press the launch button" for a 10 million yen contribution.

Horie: It started as half a joke, but it actually sold. More than making money, it's difficult to have special experiences. I feel a growing number of affluent people are realizing this.

A generation ago, there was this stereotype: "Once you get rich, you buy foreign cars, vacation homes, yachts..." But that was just because people didn't know any other way to spend their money. Now, I feel money is flowing toward places where interesting things happen.

For example, a big-name overseas musician might host a party after their show, inviting only those with the expensive premium tickets. Calling that a shift from "consumption of things" to "consumption of experiences" might sound a bit cliché.

Sasagawa: That consumption trend seems to apply not just to individuals, but to companies too, right? Like using advertising budgets to support space venture activities.

Horie: Absolutely. I hope more and more examples like this emerge, fostering a mood where "planetary exploration, space rockets, or even just doing something special and unprecedented—even if it's not in space—is cool." I expect Dentsu Inc. to identify opportunities that naturally attract corporate interest, match them up, get them involved, increase exposure, and build a movement.

Sasagawa: We'll do our best to meet those expectations. Mr. Inagawa, one last thing. Could you share a bit about your recent development progress?

Inagawa: We're currently conducting daily rocket engine R&D in Hokkaido. We have successes, and we have setbacks. Overcoming those setbacks is where we feel the technology is truly accumulating.

Rocket development may seem glamorous, but it's actually a continuous process of meticulous analysis and testing. We'll advance development step by step to grow the rocket business.

Horie: I've successfully launched a venture company before. Comparing the current phase at IST to that experience, this is the most frustrating period. But after years of daily effort, there comes a moment when all that accumulated work suddenly blossoms. I intend to keep working hard for IST, preparing for the day we reach that moment.

Sasagawa: I'm looking forward to the observation rocket launch. Thank you for your time today.