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Episode 70: From Pittsburgh to the Moon: Astrobotic Grows in Pennsylvania

In October 2020, Astrobotic, the world’s leading lunar logistics service provider, unveiled its new headquarters in Pittsburgh, Pennsylvania. Later this year, they will embark on their first mission to the moon. To get the full story on why the out-of-this-world company decided to stay and grow in Pittsburgh, we spoke with John Thornton, CEO of Astrobotic, and Mark Thomas, President at the Pittsburgh Regional Alliance.Patience: Companies today can send cargo just about anywhere, cross country, cross-continent, you name it. But the company at the center of today’s episode is taking that even further, specifically to the moon.

Andy: You heard that right. A company called Astrobotic is developing space technology that will make sending payloads to the moon accessible and practical for businesses, government, universities, and even individuals.

 

 

Patience: In October 2020, the world’s leading lunar logistics service provider unveiled its new headquarters in Pittsburgh, Pennsylvania. And later this year, they will embark on their first mission to the moon. The mission will deliver a wide range of payloads from NASA’s lunar science instruments to DHL moon box capsules which are small personal mementos that individuals can choose to send out of this world.

Andy: Welcome to Episode 70 of “The Project: Inside Corporate Location Decisions.” I’m Andy Levine of Development Counsellors International.

Patience: And I’m Patience Fairbrother, also with DCI, and Andy’s co-host of “The Project.”

Andy: Now, this might be the coolest company we’ve ever profiled. Astrobotic is a space robotics company that seeks to make the moon accessible to the world. The company’s line of lunar landers and rovers delivers payloads to the moon for companies, governments, universities, non-profits, and individuals.

Patience: Here is John Thornton, CEO of Astrobotic, who we spoke with in December 2020.

John: My name is John Thornton. I’m the CEO of Astrobotic, and we are building a lunar delivery company to take payloads from all over the world, our customers, up to the surface of the moon and support them with power and communication services. Our first mission flies next year, and our second mission flies in 2023.

Andy: So what exactly does a lunar delivery company do? We asked John to explain.

John: So what we do is we’re like a delivery service. We’re like a DHL delivery service to take payloads up to the surface of the moon. And what we do is we buy a launch to get us up to space. We build the lander that goes from the vicinity of Earth out to the moon and descends and soft lands down on the surface, and we’re like a last leg logistics delivery truck for our customers. We provide the delivery service, and then the communication and power service is for folks that come with us.

Patience: Sounds pretty cool, right, but who exactly uses this service?

John: So some examples of how this works is we were awarded an $80 million contract last year by NASA to deliver about a dozen of their science instruments up to the surface of the moon and operate them, and that’s what our first mission is going to do. We were also commissioned by more than another dozen non-NASA customers from all over the world to send various things up there, from science instruments to rovers and technology demonstrations, and even time capsules and interesting commercial clays up to the surface of the moon. And the whole goal there is to make the moon accessible to the world and make it possible for folks all over the world to access the moon at a routine regular, affordable price and try to usher in a new era of exploration, science, and development of our nearest neighbor, the moon.

Andy: The company was spun out of Carnegie Mellon University in 2007 by a robotics professor named Red Whittaker. So how did it go from a cool idea about making the moon accessible to the world to a reality?

John: We are a 13-year overnight success story. So we got started back in 2007 originally to pursue a thing called Google XPRIZE, which was to be the first to fly to the moon, drive 500 meters, send back pictures and video. We spun out of Carnegie Mellon, and Red Whittaker, our co-founder, really had a lot to do with the very beginning of the company, the formation, the beginnings to kickstart us on this whole direction, and now we’re off and running. So we’re out to build a delivery service, make it affordable, make it routine for folks from all over the world to fly their payloads up to the surface. But it is been a long, hard road. This is a market that did not exist when we started. We had to build that market. We had to build that demand. We made the very first commercial payload lunar delivery sale ever, and then we did it again and did it again and did it again, and then now we finally filled the manifest for the first mission. And we actually already sold our second mission to NASA. So we’re very excited to be kicking these things off and starting with our first mission next year.

Patience: This growth brings us to “The Project” at the center of today’s episode. Astrobotic’s decision to establish their headquarters and continue to grow in Pittsburgh.

John: Well, the big thing for us that we saw is we saw the market for lunar delivery about to take off. We saw that we were very well positioned to take advantage of that industry growth. And at the time, we were renting a place in the Strip District, and we knew that we needed a bigger place to grow. We needed a place to land the missions, to build the spacecraft, to operate the missions on the surface of the moon, and that’s what started the headquarter search.

Andy: The headquarter search was guided by a desire to stay in Pittsburgh, where Astrobotic was founded, but of course, other locations wanted to throw their hat in the ring.

John: We really wanted to stay in Pittsburgh, but we were looking around because almost out of necessity. I mean, we were offered millions of dollars to move to other locations. But at the end of the day, Pittsburgh and Pennsylvania have been a great community and a great support structure for us, and we wanted to do right by the city and the area. I really love it, and I think it’s a great place to grow a business. And I’m excited to have the opportunity to introduce space and space exploration to a whole new region that doesn’t see this on a daily basis like you might see in Houston or Florida. So I think it’s a great honor to be an ambassador for the region for space.

Patience: So you just named dropped a couple of the key kind of space clusters that I think most people are aware of. Are you able to mention the other locations you were considering, or would you rather not disclose that?

John: That was not necessarily a list that we were considering, but we had always planned on staying in Pittsburgh, but we certainly picked up the phone when others were calling and trying to lure us away. But we’ve always wanted to stay here and just tried to do whatever we could to be here.

Patience: From the economic development side, the key was making sure Astrobotic wasn’t tempted by other offers. Here’s Mark Thomas, President at the Pittsburgh Regional Alliance.

Mark: We knew that they were being courted by other places. Pittsburgh is really good at creating detect kind of out-of-this-world start-ups. And so cities and regions are always reaching out to them to see if they can entice them to move to other locations. What we obviously wanted to do, and John was fully invested in Pittsburgh, was make sure they had no reason to look anywhere else.

Patience: We asked John to drill down on the top factors that meant Astrobotic didn’t truly need to look elsewhere.

John: I think the top decision-makers for us for picking Pittsburgh is one is the talent pool. We see Pittsburgh as the cutting-edge location for robotics in the world, and being right next to where that talent is grown and created with Carnegie Mellon and the other robotics companies in town is a competitive edge in space. The second is the quality of life. You get all of the amenities of a big city with a small-town feel. It’s a great place to have a career. It’s a great place to grow a family. It’s just a nice, nice place to be. So combined with a nice work-life balance, I think that really pays off. And then the last, I think, we found a great location here in the north side next to some truly iconic locations like Heinz Field and the Science Center and then in the great neighborhood of Manchester. It puts us in a really unique location in town that I think gives us an opportunity to grow and also gives us an opportunity to be near some of the biggest hotspots in the city that can put us and the region on the map for landing on the moon.

Andy: Beyond these factors, there was one other key component to the company’s ability to grow in Pittsburgh. A loan from the Strategic Investment Fund, which is managed by the Allegheny Conference on Community Development. Mark and his team at the Pittsburgh Regional Alliance identified this early on as a potential key to Pittsburgh’s success.

Mark: When we started to look at what we could offer, the state had programs that could help on tax credits. They had already taken advantage of R&D support from the state. But then we also, as part of the Allegheny Conference, which the PRA is an affiliate of, have a Strategic Investment Fund that we thought would be a good fit for the build-out of their headquarters. And so, all of those things combined created kind of the right trust between our organization and the company that we could do what we could to keep them here.

Patience: John expanded on the reason the strategic investment fund was so crucial.

John: The key there was that we needed some financing for the building. So it’s hard for a young company to put out a large cash outlay of buying a building and renovating it just in cash. So we needed a way to finance it, and that’s where the Strategic Investment Fund stepped in. And that really was key. I mean, you would think that first thought would be, “Oh, go to a bank.” But we are not an established business with not a multi-year track record of success, and banks were pretty hesitant to do business with us despite very strong fundamentals. So that’s where the Strategic Investment Fund really stepped in and filled in that gap and played a key role for our development.

Andy: Unlike other types of incentives that are awarded to a company after they hit job creation goals or other key metrics, the Strategic Investment Fund was designed to provide gap financing upfront when no other options are available. It’s also unique in that it is funded by the private sector.

Mark: So for them, the type of financing they needed to build out their HQ is somewhat rare for a bank or a financial institution for this type of unproven company to receive financing for, and so that is what the SIF program is designed around. And so at the conference, we have two funds. That fund and the Power of 32 fund, which is for site development for projects. So those two funds offer really low-interest financing for programs that are pretty high-risk, but we think have great catalytic potential for the region. We hope that they can really serve as an anchor for businesses to receive additional funding and additional exposure for the reasons businesses to collaborate with them.

Patience: As Mark puts it, while providing financing of this kind could be perceived as risky, he thinks it’s essential to take a risk to support a cutting-edge company like Astrobotic.

Mark: For us, you can imagine trying to explain what a headquarters of this type could appear to be and how that wouldn’t necessarily fit into traditional incentive programs. And so, if anything, we have to be at the cutting edge because our technology is already there, and how do we use traditional economic development tools to support their growth. And it may be risky, but it’s required for us to really deliver the type of growth we want to see happen here.

John: To give our listeners a sense of the timeline of the project, the headquarters discussion was first introduced around December 2019, and it was the summer of 2020 when it finally came to fruition. We asked John if COVID-19 impacted the path forward for the project.

John: It has. We did see some delays through the course of it. So, we purchased the building about a year ago last year, and then renovation has been occurring all through this year. And we saw significant delays in construction from COVID, but partway through, we were able to pick things back up when NASA designated us an essential business and said, “Well, you know what, that moon mission you guys are doing is pretty important for our nation, and we want you to keep working.” So we were doing what we could do to move through that, and that also translated over to the construction side, to make sure that we could continue to build what we’re doing.

Andy: Ultimately, Astrobotic and Pittsburgh got their wish. Astrobotic was able to stay and grow in Pittsburgh, and Pittsburgh was able to keep one of its most cutting-edge companies.

John: At the end of the day, we found our home here in Pittsburgh’s Northside. It’s a 47,000 square foot facility that we’re renovating right now. A portion of that is now open, and it’s going to be home to our 105 employees and growing. It’s going to be where we’re going to control the lander on the surface of the moon. It’s where we’re going to be building up the lander to actually send down to Florida to put on a giant launch vehicle to send up to space. So this is our home. We’re really, really happy to be here in Pittsburgh and excited about all of the talent in town around robotics, and then we import space. So we mix the two together for space robotics, and that’s really the special sauce that’s going to keep us going for a long time to come.

Patience: In closing, we asked John to give us the overview on the upcoming missions Astrobotic has planned. As a reminder for context, we interviewed John in December 2020. So when he says next year, he’s referring to 2021.

John: Our first mission flies in the second half of next year, and that mission will land at a place called Lacus Mortis on the surface of the moon, which translates to Lake of Death. It sounds very dramatic, but we don’t go there because of that, it’s actually just a nice mid-latitude location on the moon with a good flat landing site, basically making it as easy as possible for the landing side. And then operating it on the moon is good for mid-latitude. So that’s the first mission. We’re going to be deploying NASA payloads. We’re going to be bringing commercial payloads. We’re going to be bringing nations that have never landed on the moon or operated on the moon before. So Mexico, for example, is one of our customers on the first mission. They could be the fourth nation after China to operate payload on the surface of the moon. And we get to be a part of that story which is pretty, pretty exciting, and a great honor for us. We’ve got, I think, six other nations aside from the US that will be operating payloads on the moon for the very first time on just our first mission. So we really are making big strides toward making the moon accessible to the world. The second mission flies in 2023, which is also really exciting in its own right. We’re going to the pole of the moon, and the pole of the moon is a hotspot for water. And water on the moon is a really important aspect because you can turn it into rocket fuel. So if you take water, you split it into hydrogen and oxygen, condense it, that’s rocket fuel. That’s the same fuel that powered the shuttle. So can we find water on the moon, produce water fuel, and turn the moon into a refueling station where a spacecraft can go to the vicinity, refuel with lunar fuel, and then go onto Mars and other destinations in our solar system. It be the first industrial use of off-world resource, and I think it’s such a critical next step to pushing humanity deeper into the stars.

Patience: So what’s next for the future of Astrobotic and lunar travel?

John: Well, we think of lunar delivery as just the beginning. If we can establish a regular routine cadence of flights to the moon, then the question is, what do you do next? And that is, you need to have mobility. You need to be able to drive across the surface of the moon. You need to have the infrastructure that can support bigger operations on the moon. You need power. You need communications. You need to be able to robotically access these resources at the poles of the moon to make them useful for a future human endeavor. That’s going to be the future. It’s how do we break the tether of reliance of Earth’s resources when we go to space. Can we use the resources we find on other planetary bodies to live off the land? That’s how we can become true space explorers. We go to Mars. We go to the next destination, and we know we have the technology to survive, to thrive, to build. That’s when we really untether and break the chains of Earth and really, really push ourselves into the stars. That’s what I’m really excited about for the moon. That’s where it all starts. It’s the closest nearest neighbor. It’s the place where we’re going to figure it out for the first time and learn to live on another planetary body.

Patience: So there you have it. It all starts on the moon. Since we last spoke with John, Astrobotic has had several other exciting announcements. In June 2020, the company was awarded a $199 million contract by NASA to deliver a rover to the south pole of the moon in 2023. And in October 2020, Astrobotic officially unveiled their Pittsburgh headquarters. The 47,000 square foot complex is officially the largest private facility in the world dedicated to lunar logistics.

Andy: So, Patience, we are up to the takeaways portion of this episode. Of course, you did both the interviews with John and Mark. What are the three top things that stood out to you from this episode?

Patience: Well, first of all, Andy, what an extremely cool company. As you mentioned at the start of the episode, this is definitely one of the most interesting companies we’ve ever profiled. There was a moment when I was talking to John, and he mentioned their mission to Locus Mortis or the Lake of Death on the Moon, and I just had this moment like, “Wow. I’ve never heard anything like this in my life.”

Andy: Lake of Death sounds like fun, huh?

Patience: Exactly. Second I think the thing that stood out to me on the economic development side was the use of the Strategic Investment Fund. And I think the point that was interesting that Mark made is that, you know, this isn’t like a traditional incentive where, you know, a community is saying, “We’ll give you these tax incentives if you hit these job creation numbers.” They’re actually making a bet on the company before they’ve even made their investment in the community and saying, we’re going to help you with this gap financing even when the banks won’t.

Andy: It’s really a much higher level of risk involved here.

Patience: Exactly. And from his point of view, you kind of have to take those risks in order to keep a company like Astrobotic. And finally, I think, we’ve talked about this on a lot of other episodes, but the concept of having the home-field advantage. Astrobotic was founded in Pittsburgh, and we really heard John say they had a real desire to stay and continue to grow there. We saw this in a couple of recent episodes, a few come to mind for me, “SkipTheDishes” in Winnipeg, “Sweetwater Sound” in Fort Wayne, you know, they just had that kind of pull at their heartstrings that said,” I really want to try to stay and grow here.” So for the community, in that case, it’s really more about making sure you don’t give them a reason to look elsewhere, which was key for this project.

Andy: So that is a wrap on Episode 70 of “The Project: Inside Corporate Location Decisions.”

Patience: We want to thank John Thornton of Astrobotic and Mark Thomas of Pittsburgh Regional Alliance for taking the time to speak with us. Thanks also to Phil Cynar with the “Alliance” for helping us set up these interviews.

Andy: Now this week we bring you some news. Patience and I have decided this will be our last episode of “The Project.” It’s a little bittersweet because we both really enjoyed bringing you an inside look behind the scenes of site selection, but all good things must end, and we believe “The Project” has run its course.

Patience: We’re really proud to leave behind case studies of the 60+ projects for the economic development community. It’s really a great resource for understanding how both US and international companies approach site selection.

Andy: The project is sponsored by DCI. We are the leader in marketing places and have served over 500 cities, states, regions, and countries. To stay up-to-date on the latest research and trends and economic development and tourism marketing, visit the research and insights section of our website aboutDCI.com. And also, sign up to receive our newsletter.

Patience: That’s all for now from “The Project.” We look forward to seeing you at the next economic development conference, once there are conferences again in person. Thank you for listening and supporting “The Project: Inside Corporate Location Decisions.”

 

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