Mikhail Kokorich sold all his retail assets to fulfill his youthful dream of conquering space. He is going to become the cosmic Steve Jobs and the Russian Elon Musk at the same time.

Interplanetary downshifting. Space tourism no longer seems like an exorbitant dream to Mikhail Kokorich; he is seriously developing a travel plan
Photo: Dmitry Lebedev, Kommersant

Text: Nikolay Grishin

“It’s not that I’m thinking about flying into space - I’m 100% sure that I will fly,” says the founder of Dauria Aerospace, Mikhail Kokorich. “Space is now not as expensive and inaccessible as we used to think due to stereotypes.”

The 37-year-old entrepreneur has made space projects his main business. By 2013, Mikhail, together with his partners, launched the production of low-cost small satellites in the Moscow region and in Silicon Valley, and created a company in Munich that is preparing a “cloud” platform for processing data from satellites. He expects to open a space App Store, where entrepreneurs can easily and naturally come up with applications and services for consumers, using data from space photography and m2m telemetry.

Siberian meteor

Mikhail Kokorich’s entire entrepreneurial career has been a series of reincarnations and experiments. Mikhail graduated from the famous Lavrentiev Physics and Mathematics School in Novosibirsk Akademgorodok, then from the Faculty of Physics at Novosibirsk State University. The start-up capital was earned from mutual offsets, imports and supplies. In the 2000s, he switched to retail - created, for example, Chudodom, the first chain of stores in the home merchandising format in Siberia, which he then merged with Lipetsk Uyterra. Kokorich’s most ambitious project is the purchase of Tekhnosila in 2010. The total debt of the company of the Zaitsev brothers then exceeded $400 million. Co-owner of MDM Bank Igor Kim, whose collateral was the main assets of Tekhnosila, offered to head the network to Mikhail Kokorich. He invested about $50 million of his own funds into the company and gained control over Tekhnosila. The number of stores was reduced by more than half - to one hundred, but Kokorich found a common language with suppliers. Things were getting better when, in 2012, Kokorich unexpectedly announced that he was selling Tekhnosila. The company was bought back by MDM Bank.

“Technosila had every chance to repeat the fate of the bankrupt Mir. We brought the company to profit and sold it. We managed to make money,” says Mikhail. He realized that it would not be possible to create a mega-retailer, and began to collect ideas for a new project. For example, I was thinking about releasing drones, but I realized that there is no civilian market for drones yet. In space, according to Kokorich, a real revolution is about to begin.

$4 billion will finance the federal space program in Russia in 2013. The main money went to the development of cosmodromes

Flight of enthusiasts

The space industry was initially the domain of the most powerful states and corporations, and the budgets of the simplest projects amounted to hundreds of millions and billions of dollars. The lack of common standards leads to the fact that often every part, every board is manufactured in a single copy for a specific project. Kokorich compares the early period of space exploration to the era of mini-frame dominance before the advent of personal computers. When uniform standards appeared in this industry, the cost of computers dropped radically. A similar story, only much slower, is happening with satellites.

A million dollar swing. Mikhail Kokorich has always been interested in space. He studied at the correspondence aerospace school of the Physics and Technology Institute, subscribed to magazines on aviation and astronautics, and bought a powerful telescope for home.
Photo: Dmitry Lebedev, Kommersant

Already in the mid-1990s, private companies began to enter the space market and began to use components used in industry in the production of satellites—SSTL, Orbital Science, Sierra Nevada and others. At the end of the 2000s, the turn of rockets and manned spacecraft came: the most notable projects were Elon Musk’s Falcon and Dragon and Richard Branson’s SpaceShipTwo. In 1999, the small satellite industry adopted a single CubeSat standard. It's like Lego for satellites: various, usually small, devices are assembled from standardized components. According to space research enthusiast and blogger Vitaly Egorov, the standard was invented at Stanford, and initially such satellites were assembled mainly by scientists and students.

Assembling the satellite is still half the battle. To put it into orbit, you need a launch vehicle (launch cost $50-100 million). But small space enthusiasts have found a way to radically reduce costs. For example, using a piggyback, a collateral launch, when small satellites are launched together with the main “large” spacecraft. Up to several dozen satellites are often launched at a time. Another way is to launch from the ISS: satellites are sent into orbit through a debris release hole. Sometimes astronauts carry the satellite out, going into outer space and simply pushing the device to the side.

Thus, it is now possible to launch a small satellite into orbit for several hundred thousand dollars. True, until recently, most of these satellites were used only for scientific purposes and entertainment. For example, one Japanese student launched a satellite that flies around the Earth and flashes LEDs. This limits its functionality.

Russia launched 24 rockets into space in 2012. Only one launch was unsuccessful. The country's share of the global commercial launch market was about 30%

I would like to go to heaven

Initially, Kokorich decided to organize the production of satellites. “Mikhail was one of the first to come to us with a proposal to establish the production of aircraft. He infected me with his enthusiasm, and he had the money to implement his plans,” says Sergei Zhukov, head of the space technology cluster of the Skolkovo Foundation.

Then in the US, in Silicon Valley, Dauria Aerospace merged with a small company that produces components for small satellites. Production is now located a stone's throw from Google's office - in the NASA Ames Research Park.

In 2012, Dauria Aerospace won the Roscosmos tender to create two microsatellites for space imaging. Another contract - with the American Planetary Society for two spacecraft with a solar wind sail - was inherited from the American company. The total amount of concluded and planned contracts, according to Kokorich, is already several tens of millions of dollars.

However, Kokorich understood that making satellites for sale was not the easiest or most profitable business. Demand is limited and highly dependent on government conditions. So he decided that Dauria Aerospace should sell information and services rather than satellites. To do this, you need to acquire your own constellations of satellites in orbit.

Space low-cost

Since 1957, when the USSR sent the first satellite into orbit, earthlings have managed to launch more than 6 thousand devices. Most of them have long been out of order. There are about a thousand satellites in operation. They monitor the weather, provide satellite communications, television and geolocation. “These are mainly commercial telecommunications and government missions. We are one of the first to create a low-cost group of small devices to solve specialized business problems,” says Kokorich.

Dauria Aerospace launches the first satellite in February 2014 - this is the experimental DX-1 with a payload in the form of a receiver of AIS signals, which are transmitted by all ships in the world's oceans. In April, DX-1 is followed by two Perseus-AIS satellites.

The next step is the deployment of the Perseus satellite constellation. Kokorich is going to send six satellites into orbit, each of which costs about $5 million. The satellites are small (only 12 kg, 10 x 20 x 30 cm), so they will be put into orbit by a “propelled” launch for several hundred thousand dollars. The main purpose of the Perseus devices is space photography of the Earth in three spectral ranges. Interestingly, the same images can be obtained for free, for example, from the American Landsat satellite. But there is a nuance: Landsat films the surface of the entire Earth once every 18 days. Perseus’s image parameters will be weaker, but the Earth will be imaged much more often—once a day. Perseus will allow, for example, to quickly detect forest fires, monitor floods, illegal logging and buildings. “Essentially, we compete in the speed of aerial photography, but we can provide the data much cheaper,” says Kokorich. The space imaging market is now estimated at $3 billion a year.

Dauria Aerospace plans to sell information through CloudEO, a cloud platform for storing and distributing space information. In essence, this is a space analogue of the App Store. Kokorich is betting on many small clients, rather than a few government orders. “I’m a retail specialist,” Mikhail laughs.

Another project is the Pyxis satellite constellation. Their launch is planned for 2015-2016. The satellites will provide Internet for the Arctic regions of Russia, Canada, and Scandinavian countries. The fact is that at high latitudes, geostationary satellites cannot provide stable communications. Pyxis will be launched into a special elliptical orbit, providing signals to areas where oil and gas workers need communications.

“To invest in space, you need to love this topic. At the same time, you need serious financial investments and, as a result, the skills to convince investors. Somehow everything came together for us,” says Kokorich.

In October 2013, he managed to infect an investor with his enthusiasm: the I2BF Global Ventures fund invested $20 million in Dauria Aerospace. The founding partners of the fund - a graduate of the Stanford engineering school Ilya Golubovich and a candidate of technical sciences in the field of optics Alexey Belyakov - also dream of space and seriously expect to transform hobby into business.

Jean Botti, chief technical director of EADS:

— The cost of satellites and launches has now fallen. There really is a place in space for medium and even small businesses. Although I’m not sure that there will be very many space companies, the investments are still large.

Space as a premonition of profit