Y Combinator Startup Podcast
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?
00:04:48 · Philip Johnston, S3
[00:04:48] S0: Yeah. I mean, it was incredible. So just to tell people a bit about StarCloud one. So we'd set this launch date, you know, eighteen months in the future, and we initially started with something quite unimpressive. Like, we were gonna fly some NVIDIA jets and chips. They've been flown in space before, and we were gonna try and do some new new workloads on there. Yeah. So it was Adi that came on and said, no. We need to do something way way cooler than that. And, we actually ended up putting five GPUs on there, two... Three from NVIDIA, two from ARM, but the most interesting one was this NVIDIA h 100. We did some crazy things. Like, for example, you have to put it through thermal cycling, and we didn't have time to... We, like, book the the vacuum chamber, the thermal and vacuum chamber. And... But we needed to know, okay, if we heat up this phase change material and cool it down, heat it up and cool it down, is it gonna crack anything? And so at like 5AM, the day we had to ship it down, we're working through the night. Adi and Ezra are like dunking this thing in an ice bath to cool it down. Oh my god. And then we pull it out of the ice bath and I'm like, are you sure it's gonna be fine with the electronics? They're like, don't worry about it. Yeah. It's totally fine. They pulled it out of the ice bath, then we had these, like like, hair dryers to heat it up and melt all the wax. Yeah. Like, or like hot air guns, and then we're dunking it back in the ice bath. It is a miracle that it works, to be honest. [00:06:03] S3: You can just do things.
00:06:03 · S3, Philip Johnston, S4, S2, S1
[00:06:03] S3: You can just do things. [00:06:04] S0: You can just do things. Yeah. This is this is the kind of thing you can do as a startup because we actually had a quote from one of the primes on what it would cost to do StarCloud one, they said 75,000,000 to a $100,000,000. I mean, [00:06:13] S4: we did the [00:06:14] S0: whole of StarCloud two, including the launch for $2,000,000. Yeah. So, yeah, leading up to the to the launch, I mean, we we got the most incredible separation video. I think we're gonna play it [00:06:23] S2: now. Starcloud one, separation confirmed. [00:06:26] S0: So half the time as it deploys, it will be behind the shadow of the earth and you don't see anything. The other half of the time, it will deploy not into the silhouette of the earth. And so, I mean, it just is the most perfect, like, deployment video I've ever seen. And this was played by Jensen as he walked on stage at the GTC conference this year. This five story tall, like, screen behind him playing the StarCloud one separation [00:06:48] S3: video. Amazing. [00:06:50] S0: So, no, it was the most incredible feeling seeing this, deploy. [00:06:53] S1: Where was the team for this? Did you all, like,