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by Heather B. Hayes
Virginia Business
May 2004

For years, the satellite business tended to have a one-size-fits-all mindset: huge. Yet Dr. Rick Fleeter, a former senior scientist at NASA’s Jet Propulsion Laboratory, believed that making smaller satellites would not only make them more affordable but more valuable. While government and commercial satellites were being built for no less than several hundred million dollars a piece, the amateur radio world (which Fleeter enjoyed as a hobby) was building miniature versions for less than $10,000.

“At the time, space was seen as so expensive that only a few organizations —the big government agencies and a few major corporations — could use it,” Fleeter says. “But there were plenty of people out there who didn’t want to build Hubble. They just wanted to put an instrument in space and do relatively modest experiments. So if we could make space cheaper and we could make it faster, there would be a lot more uses for it.”

Fleeter saw so much potential that in 1988, he founded AeroAstro Inc. and began building small satellites. How small? Small enough to be checked as luggage on a commercial flight, as Fleeter recently did when taking three products out to Los Angeles for testing. While traditional satellites weigh anywhere from 1,500 to 10,000 pounds, AeroAstro makes satellites weighing as little as 5 pounds and no more than 300 pounds.

As a result, its products —which cost anywhere from $500,000 to $10 million—are now being used by NASA and universities. They carry small scientific payloads into space, run low-cost, demonstration flights of risky, more expensive satellite programs, act as flying companions to larger satellites—taking pictures and performing close-range diagnostics — and are used as affordable members of satellite clusters.

Convincing people of the merits of smaller satellites hasn’t been easy. In fact, it’s only been in the last several years that AeroAstro’s fortunes started to take off. The company grew more than 1500 percent from 1999 to 2002, finally topping the $10 million mark in 2002 and reaching $11.5 million in 2003.

Fleeter attributes much of the company’s recent success to the industry’s embrace of a smaller satellite, as well as the development of complementary business lines. When it first started building satellites, AeroAstro also had to build its own miniaturized parts—including radios, computers, power systems and other subsystems. “We started selling those parts to other people who also wanted to build lower-cost spacecraft,” Fleeter says. “We now sell more in terms of radios than we do in satellites.”

AeroAstro also provides a simple communications service that can be implemented through small satellites. SENS, as the service is known, offers a one-way method for sending short messages back about a satellite’s location or the health of a piece of equipment. Additionally, the company also spends much of its time researching, developing and proposing new technologies. “We’ve used this part of our business to get government R&D contracts to build more advanced types of radios and other sensors that we need for the navigation and attitude control of these satellites,” Fleeter says.

Despite the success, Fleeter admits that the company’s sudden and extended growth has been painful. Over the last five years, AeroAstro — which has only two direct competitors — has more than doubled its number of employees to 50, and it recently moved to a rented 24,000-square-foot facility that has two electronics laboratories and three “clean” (or zero contamination) rooms. As a result, he says, 2004 will likely be a breather year, with revenues remaining flat. “We were founded with no money, we’ve never really had any money and we nearly ran ourselves out of cash growing to this size,” says Fleeter, who would prefer a steady 20 percent long-term growth rate. “So we’re finding that we need to take it easy for a while and regain our financial equilibrium.”

Still, Fleeter has plans for 2005. After 12 years of convincing people that small satellites actually work in space, he’s now pushing to get them recognized for their mission possibilities, including communications, space transportation and remote sensing. For example, AeroAstro is gearing up to sell a fairly high-performance but still tiny Earth-surface imaging satellite. In addition, the company plans to offer a do-it-yourself kit so customers can build the satellites themselves, “without having to be rocket scientists,” Fleeter says.

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