This Week in Startups (E2208): Why We Need Ferries and Tugboats in Space w/ Orbital Operations

Date: November 13, 2025
Host: Jason Calacanis (with Alex and Lon Harris)
Guest: Ben Schloninger, Co-founder and CEO of Orbital Operations

Episode Overview

This episode explores the vision and technical strategy behind Orbital Operations, a space startup developing "space tugs"—vehicles that move, ferry, and reposition satellites in orbit. Through a deep-dive interview with Ben Schloninger, listeners gain insight into how reusable, cryogenic-propelled vehicles could transform the economics and logistics of space infrastructure, with broad implications for both commercial and defense applications. The episode broadens out with archival insights into OpenAI’s early days, an AI chatbot demo, and a retrospective on Robinhood’s growth—highlighting how startups tackle new frontiers from space to AI to fintech.

1. Orbital Operations: Tackling In-Orbit Movement and Infrastructure

1.1 Mission and Problem Statement

• Main Objective: Orbital Operations aims to solve the problem of movement in orbit. Satellite mobility, repositioning, and defense are all increasingly vital as space becomes more commercialized and contested.
• Key Innovation: Development of a reusable, cryogenically fueled orbital maneuvering vehicle—essentially a "space tug, ferry, or tractor"—to transfer payloads between orbits efficiently and cost-effectively.

"If we had to really break it down in the kind of shortest amount of words, we're fixing the problem of movement out in orbit."
— Ben Schloninger (03:47)

1.2 Modernizing Space Logistics

• Traditional Limitation: Satellites were “one-and-done” in fixed orbits; new demands require agile, mobile assets.
• Low Earth Orbit (LEO) Landing Pad: New reusable rockets (Starship, Nova) excel at LEO delivery, but not at hauling beyond.
• Space Tugs as Infrastructure: Orbital's vehicles would meet rockets in LEO, then ferry satellites to higher orbits (geosynchronous, lunar, etc.) and return for reuse.

"Low Earth orbit basically be your stopping point, your port... Being dropped off in low Earth orbit where they could meet a vehicle like ours that could grab and then ferry you out to higher orbits."
— Ben Schloninger (05:37)

1.3 The Cryogenic Propellant Breakthrough

• Vehicle: Astraeus, the company’s first cryogenic orbital maneuvering vehicle.
• Cryogenic Advantage: Use of liquid hydrogen and oxygen offers far more efficient propulsion but historically could not be stored in orbit due to thermal challenges.
• Core Tech: A “space refrigerator” that actively chills propellant tanks, allowing long-term storage—critical for long missions and reuse.

"We will be the first... to store liquid hydrogen for extended periods of time [in orbit]. That is going to be a big milestone that Orbital Operations will pull off."
— Ben Schloninger (09:29)

1.4 Engineering and Safety Challenges

• Inheritance of Reliable Components: Using "heritage level" propulsion (proven rocket engines/avionics), focusing innovation on cooling systems.
• De-risking: Ground and subscale demos will precede full hardware deployment.

"The real core technology... is this kind of refrigeration cycle... we're really bringing that to the commercial market to solve the movement problem."
— Ben Schloninger (08:40)

1.5 High Thrust for Military and Commercial Needs

• Contrast with Electric Propulsion: Unlike low-thrust electric (ion) engines, Astraeus offers rapid, high-thrust maneuvers—important for defense, rapid logistics, or escaping hazardous zones.

"We're looking to be about 18,000 pounds of thrust—very, very rapid response... particularly in defensive applications."
— Ben Schloninger (12:47)

2. Economic Model, Refueling, and Scaling

2.1 In-Orbit Refueling

• Refueling Innovation: Refill the tug not with cryogenic fuel (hard to store/handle), but with water—split into hydrogen/oxygen via electrolysis, a technique used on the ISS.
• Self-Sufficiency: Initially, Orbital Operations will deploy its own water tanks but envisions a marketplace for water in orbit, possibly supplied by other commercial providers or even lunar/asteroidal mining.

"We want water. That is what we would like to refuel with... We would love to see the economy expand out more. Maybe there's water mined on the moon."
— Ben Schloninger (15:12)

2.2 Current and Projected Demand

• Demonstration Timeline: First subscale demo—about 1/5 the size of the final vehicle—set for early 2027.
• Market Projections:
  • Defense: 4 busy vehicles could serve core government/defense needs.
  • Commercial: With $1.4 billion in Letters of Intent, 8+ tugs needed to meet current demand, scaling to 15–20+ as the market grows.

"With just our LOIs... if the refuel was two months long and we wanted to hit all our missions, in a year it'd be about eight vehicles just running these ferries back and forth."
— Ben Schloninger (21:42)

2.3 Economics and Pricing

• Per-mission Cost: A trip from LEO to lunar orbit for a small/medium satellite is estimated at $5–10 million.

"If you wanted to go from low Earth orbit to geosynchronous or low lunar orbit... the $5–10 million range."
— Ben Schloninger (22:44)

2.4 Funding and Roadmap

• Capital Needs: $150–200 million to reach full-scale operational deployment.
• Business Model: Aspires to serve both defense and commercial (“dual use”) customers—required by both economics and government contracts.

"Tons of government dollars coming on the space defense. But also the dual use case will always be very front and center in their minds."
— Ben Schloninger (27:41)

3. The Market & Geopolitical Context

3.1 Startup Advantage and Government Interest

• Government Shifts: Agencies now actively seek out startup innovation, moving away from traditional “primes.”
• A New Era: Explosion of new space companies, increasing contracts, and a sense that in-space logistics must evolve fast.

"From what we're feeling... the government's going—they don't want to work with the primes anymore... They want to get that startup mentality and bring that innovation to the forefront."
— Ben Schloninger (16:57)

3.2 Defense, Dual Use, and the End of Space as a Sanctuary

• Militarization: Massive government spending (tens to hundreds of billions) is flowing into missile tracking, interceptors, comms, and more—demands rapid in-orbit mobility.
• Dual Use “Takeover”: Technology must serve both commercial and defense customers to win contracts and achieve resilience.

"It does seem like the happy peaceful humans working together aerospace is kind of coming to a close."
— Alex (00:36)
"Yes, 100%."
— Ben Schloninger (26:40)

3.3 Memorable Quotes & Insights

• On Space Industry Change:
  "It feels like we've entered a new era... It is 100% like just very different in just the last couple of years—really just the way people have talked and who is getting contracts."
  — Ben Schloninger (16:57)

• On Orbital Operations’ Vehicle Design:
  "We look a lot more like the third stage of a rocket than we do a traditional satellite. Like, we are bigger."
  — Ben Schloninger (19:02)

4. Archival Segment Highlights

4.1 OpenAI Retrospective (2018 with Greg Brockman)

• Mission Clarity: Even in 2018, OpenAI’s core purpose—to ensure AGI benefits “all of humanity”—has been consistent.
• Nonprofit Structure: Originally structured to avoid profit-driven motives given the existential scale of the mission.
• Progress in AI: Brockman cited 2012’s deep learning moment and saw LLMs as the future.

"Our goal at the end of the day is not to generate huge profits for us... The goal here is to build a system... that benefits all of humanity."
— Greg Brockman (30:45)

• Early LLMs: Already experimenting with models reading thousands of books to perform language tasks—prescient foundation for GPT models.
• Compute as the Bottleneck: Emphasized how advancements (thanks to gaming GPUs/Nvidia) enabled AI’s progress, not mere theory.

"The reason that we're able to do it... is because our computers are a lot faster. The real core innovation... was when people realized that they could train neural networks on GPUs."
— Greg Brockman (38:25)

• The “Shovel Sellers” Theorem:

"You want to know who makes the money? It's always the people that make the shovels."
— Greg Brockman (49:16)

4.2 AI Demo: Character AI (Oliver)

• Product Intro: Character AI allows users to chat with customizable bots "posing" as celebrities or fictional scenarios, plus practical use cases like language practice and interview prep.
• Custom Avatar Creation: Users can build and share digital characters—including synthesizing voice clones from podcast audio.
• Ethics and Regulation: Noted concerns about overuse, NSFW content, and mental health implications; called for more regulation.

"There are so many positive use cases... but there are also scary ones that I think will... keep people more isolated than is healthy."
— Oliver (56:21)

4.3 Going Back in Time: Robinhood’s Early Days

• Product Simplicity: Focused on an easy, gamified stock trading experience, removing friction that hampered earlier brokerage accounts.
• Growth Story: Virality driven by product-market fit and a gamified waitlist—no paid marketing needed initially.

"By the end of the first week, we had over 50,000...within a year almost a million people signed up, making us by far the largest pre-launch audience of any financial product in history."
— Vlad Tenev (63:14)

• Evolution: Robinhood didn’t originally plan to do crypto—emphasizes the value in evolving product vision as markets develop.

5. Notable Quotes & Timestamps

• On Movement in Space:
  "We're fixing the problem of movement out in orbit."
  — Ben Schloninger (03:47)

• On Cryogenic Storage:
  "We'll be the first... to store liquid hydrogen for extended periods of time [in orbit]."
  — Ben Schloninger (09:29)

• On Pricing:
  "If you wanted to go from low Earth orbit to geosynchronous or low lunar orbit... the $5–10 million range."
  — Ben Schloninger (22:44)

• On Startup-Government Dynamics:
  "They don't want to work with the primes anymore... They want to get that startup mentality and bring that innovation to the forefront."
  — Ben Schloninger (16:57)

• On AI Compute:
  "The real core innovation... was when people realized that they could train neural networks on GPUs."
  — Greg Brockman (38:25)

• On Tech Hype and Danger:
  "If you look today at examples of AI technologies, it's not really clear if the world's better for them being out there... Deepfakes... I'm not really sure that the world's better as a result."
  — Greg Brockman (35:14)

6. Episode Structure & Key Segments

• [00:00–21:00]: Orbital Operations interview with Ben Schloninger
• [28:57–49:16]: OpenAI retrospective and discussion (with Greg Brockman clips)
• [50:05–56:57]: Character AI demo and commentary (with Oliver)
• [56:57–72:54]: Robinhood’s history and fintech retrospectives (with Vlad Tenev)

7. Takeaways for Listeners

• Space logistics is entering an era of greater complexity—agile movement, on-orbit refueling, and defense are shaping new startup opportunities.
• Cryogenic storage and reusable vehicles are seen as the next game-changers for space infrastructure and economics.
• Both government and commercial space markets are actively prioritizing innovation, dual use, and startup participation.
• Startups that solve foundational problems (in space, AI, or fintech) and build in adaptability can define entire new industries.
• Monumental innovations come from both rethinking the basics (like movement and fuel in orbit) and leveraging advances (like GPU compute for AI).
• Hype cycles will come and go—successfully navigating them requires a focus on real customer value, operational discipline, and readiness to evolve as markets change.

[End of Summary]