Y Combinator Startup Podcast
00:00:00 · Philip Johnston, S1, S2, S3
[00:00:00] S0: First thing every space company should do is book the first available launch they can. [00:00:04] S1: Before they built the thing that they're going to [00:00:06] S0: launch. Before they built the thing. Before they probably even know what they're gonna launch. Booking a launch is such a good forcing function for a space company. So we founded the company 01/01/2024. January 2, we booked the first available SpaceX rideshare, launch. And we were like, okay. Something is gonna be on that rocket. I'm not sure a 100% sure what it's gonna be at this point, but something is gonna be on that. Sounds [00:00:27] S2: like the same advice for all the software companies. You just gotta keep launching and launching. Same thing. Welcome [00:00:39] S3: back to another episode of the Light Cone. Today, we're sitting down with Philip Johnston, the cofounder and CEO of StarCloud. StarCloud is building data centers in space to address the energy bottleneck that AI is creating here on Earth. Earlier this year, they raised a $170,000,000 led by Benchmark and became the fastest growing unicorn in YC history, just seventeen months after Demo Day. Philip, welcome to the Light Cone. [00:01:05] S0: Thanks so much for having me. [00:01:06] S3: So to start off, why data centers in space?
00:01:06 · S3, Philip Johnston, S4
[00:01:06] S3: So to start off, why data centers in space? [00:01:10] S0: So we are very quickly running up on constraints on where we can build new energy projects terrestrially. And so by building them in space, we get access to this almost unlimited low cost energy in the form of solar. Of course, there's other costs like the cost of launch, and the cost of launch is actually very rapidly trending down, you know, with new launch vehicles coming online, the Falcon nine program, and Starship on the horizon. And so that's the reason we're building data centers in space. [00:01:35] S4: How did you come up with the idea? It's not sort of like the typical idea that if your, people come up with.
00:01:43 · Philip Johnston
[00:01:43] S0: I'd actually been working, I was with McKinsey for a few years, working with the space agencies of different governments, and I could see that the launch cost was very rapidly trending down. And actually in early twenty twenty three, I decided randomly on a weekend to take a trip down to Starbase, Texas, where they're building the Starship launch program even before the first launch. And not many people were were were paying attention back then. And I could see that they were just building a mass... Enormous capacity. So they're building these two Starship gigafactories. They're designed to produce something like three Starships per day. And because Starship is reusable, you know, on a sort of three or four year timeframe, that could lead to us having thousands of times the capacity to get things to space. And so I started thinking, okay, let's just, run the clock forward. If the launch cost was 10 times lower than it is today, and the launch capacity was maybe a thousand times more than we have today, what would make sense that that currently doesn't make sense? And so started thinking about some of the concepts from sci fi that I remember as a kid, you know, like space based solar, where you have these huge solar panels in space. You beam that power down. And essentially, yeah, I just reached out to to a few folks I, you know, I knew in space industry and got connected with a few others and started ideating on, okay, what would make sense if the launch cost was much lower than it is today?
00:02:53 · S1, Philip Johnston
[00:02:53] S1: I'm curious, are there any other ideas that occurred to you during this process when you were thinking of what people could build in space? I mean, [00:03:01] S0: Yeah, it's tons. Mean, definitely looked at manufacturing in space and there's Varda. We looked at asteroid mining and know, obviously, YC has AstroForge. We looked at space hotels. We looked at basically anything where... Which could make sense if the launch cost was a lot lower than it is today. [00:03:17] S1: And how come data centers was the best choice?
00:03:20 · Philip Johnston
[00:03:20] S0: Data centers makes a lot of sense to be the first thing you do because you don't need to reenter a product. So with things like, asteroid mining or with manufacturing in space or space hotels, they require this very expensive reentry process. Initially, what we actually started doing was space based solar. So huge solar panels, and then you beam that power down, and it's it's a concept from, I think, like, the sixties. Even Asimov in the forties was writing about it. The problem with space based solar is you actually lose 95% of the energy in transmission from space to earth. And so for the first two months of the company, that was literally what we're doing. We were called Lumen Orbit because of that that reason, luminosity in orbit in orbit. We were thinking, okay, once we get that power down, what are we gonna be using it for? And even back in '23, most new energy projects were being built for data centers. So we were like, okay, well, either directly or indirectly, this power is gonna go into data centers. Let's rerun those numbers. So initially, we'd run the numbers to know what's the launch cost breakeven that makes sense for space based solar, and we'd come to a number of, like, $50 a kilo. So then we rerun the calculations. We were like, okay, let's spend a month figuring out what would the launch cost breakeven need to be to make data centers in space breakeven. And we came to a much closer to reality number of $500 a kilo, and that's what we think currently that the breakeven launch cost is. And so then we rapidly pivoted the company towards that.
00:04:38 · S3
[00:04:38] S3: So, Philip, you launched StarCloud one in November 2025, and that was a real emotional moment. Like, can you walk us through what that was like?