The “BDE” of billionaires is next level.
Jeff Bezos made an announcement that he’s going to space via Blue Origin.
Whether he didn’t want to be outdone or wanted to steal all the spotlight (clever), Richard Branson announced he was doing the same via Virgin Galactic.
Only earlier.
But the billionaire race to space is just a sideshow to the real race to space.
Bezos and Amazon might control a significant portion of e-commerce and even tech infrastructure (through Amazon Web Servers). However…
- There is an even bigger play here: Control over the internet itself.
And it all begins right before the Dot Com boom…
The Battle for Global Signals
In November 1998, a new company called Iridium launched a brand-new satellite communications service.
And just ten months later, the company filed for Chapter 11 bankruptcy.
They’d failed to take into account one pretty simple fact: it requires billions of dollars to launch satellites into space.
Twenty years later, Elon Musk is barging into the exact same space.
Only he’s doing it Musk-style, using his now-typical (and ultra-successful) gameplan.
First, he’s turned the really expensive thing into a commodity, just like he did with electric cars and rocket ships.
His company, Starlink, is on the verge of creating satellites on an assembly line.
Second, he’s his own customer.
SpaceX needs a continually full calendar of payloads to take to space, and Starlink always needs to get satellites up to build out its network. It’s a win-win.
Third, he’s leveraging the U.S. government (okay, your taxpayer dollars) to fund the entire thing.
Starlink has been picking up lucrative FCC contracts to provide satellite-based internet to areas all across the United States.
And fourth, the company is making a ton of money before it has even fully launched, and using that to fund future growth.
- Starlink already has $500 million worth of subscribers and reservations.
Even the founder of Iridium knows the eventual outcome:
“I wish Mr. Musk well,” he said. “I expect him to succeed.”
Iridium was just building a satellite phone service, but Starlink is taking that a few major leaps further.
Starlink wants to be the internet service provider for the world…
And when it’s fully built out, it will upend the world order in much the same way the internet did in the late ‘90s and early ‘00s.
The Starlink concept is really simple. With a small, pizza-box-sized satellite dish, a user can access the internet from anywhere in the world.
Anywhere.
A barge in the Suez Canal… The top of Mt. Everest…
The Sahara Desert…
The service is currently being tested in a few countries. In true Musk fashion, they’re calling it the “Better Than Nothing Beta Test.”
Already, it’s pretty great. Testers are getting better than 100 Mbps speeds. And by the end of the year, that’s expected to reach 300 Mbps.
(For context, the average U.S. internet speed is <200 Mbps.)
And it’s just going to keep getting better…
- Starlink’s original stated goal was 1 Gbps internet—four times the fastest country in the world, Singapore.
And they’ve promised the FCC they will provide the internet with zero contracts, early cancellation fees, and no data caps.
All for the whopping price of $99. But that’s expected to come down.
As Musk tweeted:
- “Starlink is a staggeringly difficult technical & economic endeavor. However, if we don’t fail, the cost to end-users will improve every year.”
Once Starlink is fully operational, a majority of internet users won’t even consider anything else.
Which begs the question…
When and how will all of this unfold?
As of early 2019, less than 5,000 satellites total had ever been launched.
Starlink projects that 12,000 satellites will be necessary to provide reliable global internet coverage at ultra-fast speeds.
Seems impossible, right?
The first small batch of Starlink satellites was sent into space via SpaceX in May 2019.
Right now, there are now nearly 1,500 Starlink satellites in orbit.
More importantly, the frequency of launches is accelerating—from six months between the first two is now down to just nine days between launches. Expect that to become hourly.
Yes, hourly.
Further, Musk is preparing a new Starship, which will be able to haul four times as many satellites per trip.
In other words…
- Starlink is going to get bigger than expected, much faster than expected, all paid for by U.S. customers through the FCC.
It gets better. The satellites will be de-orbited after three or four years.
So just like Teslas, SpaceX will be able to upgrade them on a rolling basis.
In an early 2021 presentation, Starlink revealed they plan to reach speeds of 10 Gbps—in part by using lasers to communicate between satellites.
This isn’t about faster Netflix and porn speeds.
- This is going to revolutionize where, when, and how business is done.
And it’s going to have massive ramifications for global politics and the world order.
OK, I’m going to channel President Reagan for this next title:
“Mr. Musk, Tear Down This Firewall”
Once the satellites are in space—remember, more than twice as many have ever been launched—there will not be room for a second internet service provider.
China and Russia fear this in a big way.
The Space Race was in my book, The Rise of America, if you want to know more.
But if Musk is successful: The game will be over.
And the second-order effects of a single, global internet service provider will be unlike anything you’ve seen before.
For example, right now, Jeff Bezos (Amazon), Mark Zuckerberg (Facebook), Sundar Pichai (Google), and Tim Cook (Apple) wield incredible power.
As you’ve seen, a flip of the Twitter or Facebook PNG switch can instantly mute someone from the world stage.
- Elon Musk is positioning himself to be the person with power over the people who have power.
Once he controls the world’s internet, he can dictate what is and is not transmitted worldwide.
You can bet that major world powers and governments are watching this closely.
And you’re probably aware of the so-called “Great Firewall of China,” which the government uses to determine what users can access.
Russia, India, Iran, Syria, and Vietnam also have or are implementing similar programs.
With Starlink, users will be able to circumvent that filter. It’s a little difficult to block all of the space.
I’m even willing to speculate that Starlink will open-source the patents for the receiver dishes, just like Tesla did. Same guy in control.
But all of that is nothing compared to the real competition unfolding.
Because the world’s biggest country and the world’s biggest entrepreneur both have the same grand ambition:
- Get to Mars. First.
SpaceX knows the entire space launch industry is only worth about $5 billion in revenue a year.
Global internet access? That’s a $1 trillion+ market…
Or the size of China’s entire GDP in 1999.
With that kind of revenue, SpaceX—and Elon—have a shot at winning this thing.
Over the course of the next year, we’re going to watch a no-holds-barred fight, with Earth as the arena.
Like the founder of Iridium, my money’s on Elon.
And to all those who bash Elon, I ask—what have you done to make society better?
Until next time, stay safe.
Regards,
Marin
