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Harshan and Jacob talk about how they mach33.aero is building a PPP model to help startups to promote innovation and entrepreneurship in defence, aersopace and spacetech.
The NewSpace India podcast brings you insights by providing glimpses of the past, addresses the present challenges and installs a vision for the future from experts who have been involved in India's space activities.
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[00:00:00] Narayan: Hi, you're listening to the new space, India podcast, a biweekly talk show that exclusively brings insights from the Indian space activities ecosystem. I'm your host neuron, the co-founder of India's first space focused think tank spaceport. Sarabhai. Guests on the new space in depth podcast, help you understand space activities related macro and micro trends within India, in all aspects, including space history, local industry space, science, technology, evolution, law, and policy art, and more, the new space in their podcasts is supported by Dassault systems, a global leader in providing businesses and people that collaborative virtual environments to enable sustainable innovation.
That's all system solutions, support startups, small and medium scale enterprises and original equipment manufacturers in developing disruptive solutions for space launches and satellites. Hi, and welcome to yet. Another episode of the new space in their podcast. [00:01:00] I'm here at the offices of mark 33 arrow, a public private partnership that is set up to help the aerospace, defense, and space ecosystem in India to manage.
And I'm here with Jacob and Hirschman who are driving this initiative, structuring all the programs that marketed three arrow is planning to launch in the upcoming months. This is a very unique initiative that mark 33 arrow acting as an industry interface between the private sector and the startups and government labs at the same time, trying to create an interface between the.
Mr Louie, get into the actual conversation about what marquetry arrow does. It would be great to know your background's for Jacob and Russian as to what brought you
[00:01:48] Jacob: here. Hey, thank goodness. Thank you for coming over and thank you for having us on this interesting podcast. So a quick brief, I've been a technologist management technologies in my area or [00:02:00] the past Lebanon audience being in the development sector with social alpha and the toddler class for the past four and a half years.
And it was an interesting opportunity, right? So looking at the kind of problems that our country has been facing and trying to see the kind of technologies that could solve this problems is what actually serendipitously led us to this entire concept of looking at deep tech space of aerospace and defense and trying to build something around that so that we can utilize this technology better.
And yeah, that's how I ended up here. And that's all social life basically nominated me to dive this initiative.
[00:02:33] Harshan: Hi this is ashen me and Jacob as Erica was mentioning our leading the Mac activity initiative. Currently, I have fairly recently joined that social alpha and magnetically initiative.
We have just launched the initiative in December before this. I used to work for the government of India investing there. And as for my educational background, I am an MBA and an engineer who started off the career in the private. And then slowly got interested in the impact [00:03:00] space and the government space and changed career parts into this.
In the past, I have been focusing on early technology commercialization and looking at impact sectors, looking at sectors like agriculture, climate and livelihoods have been the start point of my career. And that's where I got interested in social alpha as well. But when you look at areas where technology support is needed, I found that space.
Overarching area, which can create impact across these sectors, across these areas. And which is an area that has received a little attention in terms of how things can really scale up in the sector. So that's how I decided that it's an opportunity to make an impact. It's an opportunity to come in early in a space that is still receiving attention that is still opening up for new opportunities and use my experience and my background in early technology commercialization to support winters and help them scale in the sector.
So that was the idea of [00:04:00] us like coming in and setting up this public private partnership. Incidentally, because of the experience with government, I think a public private partnership was the right way to go. As far as my career was concerned, because I did understand how the government operates from my experience with both with the federal government, at the government of India, with investing there and at government of Caroline at the state level.
So I thought, why not bring this onto the table, establish a partnership that can actually move the needle in the, in a sector of critical importance for the country. And how do we come in and change the narrative in the space tech ecosystem. That is, that was the whole,
[00:04:38] Narayan: thank you for that introduction.
Both you guys are doing some very interesting work that is very necessary for this ecosystem to grow and develop at the moment. As I see it, there is nobody who is really present in doing what you are trying to do with. You acting as an industry interface between the government and the private sector and especially with a startup focus.
I think it will [00:05:00] be interesting to hear from you guys. What is the difference between social alpha and mark just to give a clarity to the listeners as well.
[00:05:09] Jacob: Absolutely. Thanks that in fact, that will be a video animated discussion too, because see social alpha has been in existence for the past five years now.
We are a multi-stage innovation curation in venture development plans. Focusing on science and technology base entrepreneurs, we're solving that far reaching out. And this, that our country has been facing with the past seven odd years. So typically if you look at it the thesis with social and for functions, or typically, if you look at our, they have been checked their challenges, it has been primarily addressed through state or philanthropic capital.
Now the entire thesis at social level was that, how do you bring an entrepreneur? We went to this entire problem statement. How do you enable entrepreneurs so that they can actually solve these problems? How do we create the right kind of ecosystem for them to solve these problems? And this can only be possible if it is deep tech, science and technology based innovation.
You also, you shouldn't need to be sustainable. Your [00:06:00] solutions needs to be scalable. And that was the concept behind the establishment of social Edify. So we're not a founder. I note had this idea in 2015, he was supported by various organizations, including the government of India to establish an entity called social alpha.
And over the past five and a half, six odd years, we have been successful enough in supporting 200 startups in various sectors across the country. We have done seed investments in 60 plus. And we have supported them to various other opportunities through programs to accelerate us through incubation labs and through facilities.
Now, in this Johnny of social alpha, we realized, again, like I said, the focus was on supporting deep tech entrepreneurs or deep tech startups. And if you see right from around 2018, the space tech or the aerospace technology or the aerospace sector in our country was. The country, the sector was opening up.
There was opportunities for this technology to look at other spaces. There was opportunities for these technologies to create long lasting impact in [00:07:00] the space or create sustainable impact in the development sector of our country. And that is where social alpha got attracted to the space. And thankfully we had the opportunity to have an discussion with CSI renewal.
They were onboard with the entire idea of setting up a new entity, which would like focusing on developing entrepreneurship. Technologies in this space and look at the far reaching dual use of these technologies. And that was basically the Genesis of . Obviously the seeds were sown in late 2018, but it took a couple of years, especially considering the areas of strategic importance that martyr is involved in.
We had to bring multiple stakeholders on board bringing multiple players together so that such a platform can be successful in a private public partnership model. And in 2020. 2020 September, we were officially established and we did a formal launch in 2021 in December where all the parties came together and we were able to announce to the public, seeing that yes, mark, the three arrow platform is live now.
And that was the essential Genesis, right? [00:08:00] The entire idea behind this is that, how do we look at the beep tech space in aerospace, aviation, and space tech, and look at not only the core accessibility of the space, but also look at dual use cases of these technologies and trying to create an ecosystem where core use as well as dual use can bloom and can flourish and create another wave of entrepreneurs and another wave of economic impact in our country.
So that was the entire Genesis of Margaret. Social life
[00:08:30] Narayan: Hirsch. And you've also had an interesting background of having worked in the private sector in the state government and with the central government within west India as well. And obviously, we had some part crossing between each other with some of the work that I've also done with the spacebar Kayla effort with so many different experiences across different entities, different levels of.
What is your sense of the gaps that are existing, that a public private partnership like can [00:09:00] bridge from your perspective?
[00:09:02] Harshan: Yeah, not, and that's a great question. I think different entities in this ecosystem play different kinds of tools, right? So for example this sector, the aerospace space tech sector is a sector that needs one patient care.
To a long dissertation period, which means it needs infrastructure support to test and validate the solutions that are very costly to set up that are very quick CapEx intensive, right? And then there is this need of entrepreneurship that needs to come through from from a community that is a startup community.
So these three communities have a very important role. One as government, there is a limitation for the government in terms of providing capital, providing patient capital and providing investments that lead to some sort of interactivity because the government has different sources and different pirates.
But what the government can come in is with two things. One, the government can come in with policies. The government can come in with interventions to create an ecosystem that can flourish. And that [00:10:00] we see the government has finally come around. In the recent past, we've seen a flurry of announcements from the government side that indicate that the government is already open to the possibility of space tech, really becoming an important sector, as well as the sector that.
Attract entrepreneurial activity that can add economic value to the country, to in a much larger event create impact. So that standpoint, I think the PRI the government sector is now clearly come in with the policies that enable this this ecosystem while there is a lot of way to go in terms of the way ahead.
But I think there is a good start as well. The other thing the government brings onto the table is the infrastructure that the government has created through its investments over years, the expertise that the government has created through the research and development labs that it is established.
So for example, the inhale itself is a good example, right? The government has invested so much years into services and energies to creating an ecosystem of infrastructure that's available at any meal that currently. Has finally through Matt 33, been open up, [00:11:00] opened up for startups to access. So this the problem of huge infrastructure CapEx intensive investments have now gone away because the government has created a pathway for that.
Similarly, social alpha, any entity in that space is basically coming in to provide the patient care. Because capital is not something that the government is going to provide. So that value is something that the private ecosystem is coming up with. And the third piece is the entrepreneurial activity, the startup ecosystem, and the kind of the kind of entrepreneurs that are mission driven, the entrepreneurs that are committed to create a long-term impact of the entrepreneurs that are ready to basically risk.
Take risks. From all these standpoints, what I see is that there is a convergence of this thought process that has come together, but it needs a plan. And it's a platform for all these resources to come together. It needs a, noncompeting kind of a structure. And that's what we've been able to.
We try to provide at Mac 33, because all these resources, all these priorities are essentially non-competitive in nature. All of [00:12:00] them are geared up towards a common goal of creating entrepreneurship, creating impact, and creating ventures that can change the paradigm of space. They can enhance paradigm of the sectors.
So that is something that I believe through this public private partnership that we are trying to enable and eat entity in this structure has a role to play. And I believe at least in terms of thinking in terms of alignment, we are at some stage where the thoughts are aligned and we are now trying to build it as.
[00:12:26] Narayan: So Jacob, you have a partnership with the national aerospace laboratory and they have obviously their own set of rules and guidelines as to how they can interface with the industry. And even if somebody inside the nail wants to help certain startups or so on, I'm sure that they have their own set of limitations because of the centralized rules in which laboratories like them can engage with.
And the ecosystem in general, one of the challenges of our aerospace and defense and space ecosystem is that there is no incentivization [00:13:00] for IP generation that comes from engagement with an R D laboratory in general. So for example, it becomes very difficult for a laboratory like NLRS or anybody like that, to engage with startups in them, investing in these companies to help them.
Either mature product by being a co-investor or. By putting together a very easy procurement framework that enables these companies to mature their product with an anchor customer, being such a laboratory. And even if there are some means in which they can do some sort of an investment in IP development, ultimately that IP is called assigned.
This may change the startups themselves who are getting some sort of a small investment from these organizations to commercialize this technology because of the part ownership of the public entity in the, from all the conversations that you are having with all of these laboratories that are owned by federal government or state.
[00:14:00] What is it that you are learning and what are they willing to do with respect to the changes and the support that they want to offer to many of the emerging startups within this landscape of aerospace? Very
[00:14:10] Jacob: interesting question. And so I would call this as a continuous process, right? It's the overnight, nothing is going to change because there are rules that are set in stone and they have to go by, they have to abide by it because that has happened.
There is a justification to these rules also, as in, this is two eight . So the idea is through platforms such as radar data. And we firmly believe that we are not going to be the first platform like this. We believe many more government institutions and organizations will go ahead and replicate it on the basis of the success that we hope to achieve in the immediate future.
The idea behind such initiatives is that, can we also bring these institutions closer to identifying what is the actual market cap gaps that is available? And especially from a startup point of view, These are large organizations, right? For them to get a micro level understanding of [00:15:00] the challenges that startups are facing, or entrepreneurs are facing might not be an easy task through platforms such as smart, 33 dot arrow and art associated organizations, late social alpha.
Can we create this visibility for them because gradually we believe, and we have a precedent to show that, so a reason space policy, a reason Bruin policies are all examples in the right sense for us to see that the team has had. It might be slow, but it is steady. So that's a good thing that are, so we are hoping through initiatives like martyr three dot arrow, we are able to bring that market reality or the market need from an entrepreneurial and start to community, to larger research organizations and tell them that, see, this is the need of the, these are the kinds of changes that we need to do.
And what we have seen in our interactions with most of these government labs and organizations, they are very receptive to the idea. They are also trying to. How do they evolve to make sure that they can contribute to the larger, good. They have done some exemplary work over the past seven decades [00:16:00] now, how do they translate that?
And how do they sustain the momentum that they have created? How do we make sure that the kind of infrastructure that we have built today can help scale the kind of impact that we can create on the ground, the scale, the kind of commercial impact that can be created on that? How do we ensure optimum utilization so that entrepreneurs can also look at this as a, say, a co-lab that they can work with as a good research facility that they can work with.
And interestingly, the central government has also bought about a few policies. So for example, today, a scientist can actually become an entrepreneur without even leaving his job. He can just find a co-founder and go establish an enterprise by him. These are pathways that we need to explore. These are pathways which are there, which are unexplored.
So policies are there just that these policies are unexplored. Now, how can through platforms like us? We bring these policies about we, we create a realistic. This evolution model so that people know that, yes, this is entrepreneurial is a pathway that we want to take or building a startup is something that we can do and ensure that is a mission [00:17:00] alignment with the kind of objectives that can be achieved.
So it is an evolving process. It's a slow process, but it will never nevertheless happen.
[00:17:07] Narayan: Hirsch. And I started out as a space entrepreneurs almost more than 10 years ago now. And at that time in India, almost, there was nothing with respect to investors in the space or aerospace landscape. There was not even the buzzword of really startups.
We were just considered under the industry that has just having very little people in there. And today, the landscape has changed drastically with internet billionaires, and then people who understand deep tech ecosystem who are willing to take bets, several VC funds who have now opened up to investing in places like the space in that.
And that's all a great thing at this time as an entrepreneur, every minute is quite expensive when you're not spending the time with either your customer or your product. Whenever we visited this role as a young company, at that time, they used to entertain us for sure, because we had something interesting to share [00:18:00] and we would get our own set of tea and biscuits and people would listen to us patiently, but then the followup would be very bleak with respect to getting any sort of engagement going with.
It becomes very important to understand why a program like yours is interesting for a particular company. And if that aligns with their product or service that they are developing, what kind of companies do you see aligning with division of master degree ATO? And once you've identified a particular company as aligning with what you have in mind, what are the incentives as well as initiatives that you have for them?
And how do you work with them?
[00:18:37] Harshan: That's again. I think the pathway for Mac 33 in our mind is very clear. So the broad thesis with between the Mac 33 establishment happened was to enable dual use and create new markets for these things. And dual-use primarily tuned towards impact because, as our parent organization, social alpha, a JV partner in Israel and us, ourselves being a nonprofit [00:19:00] entity our imperative is to create impact through the use of technology and any company, any startup, any innovator who's working on, looking at leveraging aerospace space tech technologies to address a larger market.
To address challenges beyond this the limited difference or a very narrow use cases are a potential partner for us in terms of their growth journey, right? And to any startup, any entrepreneur who comes to us with such a thesis fit we have three pathways that we have in mind for my category.
So the first pathway, which is for early stage, which is TRL 1, 2, 3, for example, is an EIR program that. That's a completely in-house entrepreneurial. The students. That we have designed and that we are in the process of like officially launching as well, that will have components of enabling the start, enabling an idea to grow and supporting it all the way.
And we have presidents again from our parent partner, social alpha that has very successfully enabled this [00:20:00] model and developed several enterprises that are now valued much, much higher than any deep tech startup that you would see in the country today. So that EIR model is one of the offerings.
And when we partnered with any startup, whether it is at any stage where it is, , we ought to make sure that we come in and add value to them. Add value to the Xenia. As you rightly pointed out any minute and entrepreneurs spins away from the core need of developing the product as a waste of time for them.
And then we completely recognize that. So we would only be coming in whether it's a thesis and where we are prepared to buy. To the hill to develop their solutions, to develop their product and creating. The second pathway that we have in mind for people who are a little bit more mature, right?
Who are, who have an early prototype in mind, but not completely commercialized is our longterm incubation offering. And that long-term incubation offering comes with a host of things. And it's a standard incubation program, but it what we bring onto the table is two things. One the expertise that we have access to with the public private partnership model that we have, [00:21:00] and with the larger partner ecosystem that we have developed two validation opportunities for their thesis.
We also cater to other markets we're partners. So we have a strong partnerships that we are already have established in sectors like agriculture. So if somebody has a and this is a very emerging area, and this is a really big focus area for the. So we want to enable those value adds to any bar, any startup any entrepreneur who's getting incubated with us.
And then there is the activation pathway, which is completely a business incubation market access kind of model for late stage startups that who have already figured out their model who just need that. Next customer to scale. And that's where we come in with the other offerings, including seed funding, including our pre-seed funding and including the opportunity to access and raise funds going forward.
So broadly we have structured it in a way that we are able to provide full stacks of. For any entrepreneur working in the space and based on customized on the need of the startup and the the gap [00:22:00] that they want us to address. And we would want to make it mutual and we would want to partner with them in their journey from end to end.
So that does the model we have in mind. So again, to any startup, and recently we have had this conversations with a couple of startups where they approached us. But we we told them that since this is an area where we see, we cannot add that. It would not be a proper for us to just take you in and then make you another incubator in our cohort.
So we are very clear in terms of our approach in terms of chasing quality over quantity. So we don't want to end up becoming another space where there are a hundred startups without adding any value to them. We would rather pick three or four who are mission aligned. We're aligned to our cost and who have possibilities of addressing larger markets.
That is a core idea here. If there is no dual use possibility, if there is no larger market beyond the traditional markets, I think then we might not be able to add a lot of value to them. So that is the fundamental thought process.
[00:22:56] Jacob: And that also limits the possibility of scale for the organization.
Also, I [00:23:00] see quite a lot of times, especially when you look at deep tech startups, the founders or the entrepreneurs, they are so aligned with their mission, not also aligned with the. They actually failed to see what is the larger market that is available. And that's a trend that we have seen, you would have also seen that in the, your experience in the sector where people would have an exemplary product, but they fail to understand what is the larger problem statement that the product is addressing it.
And that kind of like does not create a scalable model. Now through our interventions, through the strength that we have created in the business incubation model or the business acceleration model, can we create a platform for them to understand that, Hey, That is a core technology or violet is a code problem area that you are addressing beyond all.
And beyond that there is a much larger customer base, or there's a much larger customer market that you can look at. And what do you need to actually attain that market? So how do you reach out to that market? So do you have the right business models for that? Do you have the right strategies for that?
Do you have the right kind of ecosystem to do a product validation or testing for that? Do you have the right kind of customer base to do better? [00:24:00] Can you even do a DFM to make sure that your product has got the right form factor to like cater to that kind of an audience. So that's the kind of partnership ecosystem that'd be upgraded.
So through social alpha, as well as our other organizations, which is, they're not a VC, one of our partner in any LDL department, we have created this ecosystem so that you'll get access to across the stack like expertise. So yeah that's the thing that we believe that we bring.
[00:24:22] Harshan: Just today morning, we had a conversation with a startup what a fantastic product.
But again, the market alignment was completely gone for a toss. They were looking at a very narrow segment of the market and addressing a problem that had ramifications across the board. So we, so that kind of startups would fit our mandate because we know that we can add value in terms of helping them positioning their product, helping them accessing new markets and helping them scale.
So that's okay.
[00:24:48] Narayan: When you actually compare what has happening in India versus the U S Europe, Australia, UK, and other places, the synergies, when it comes to the public funded research and development [00:25:00] enterprises and the private sector, and especially startups is missing deeply in India. There seems to be a deep sense of distrust when it comes to these publicly funded entities.
Looking at a lot of these startups as competition, rather than people that need to be supported for the country to grow in terms of technology and jobs and productivity. Now this remains one of the core issues that need to be solved in this country for. Real economic activity and products to arrive out of the space defense and aerospace ecosystem in the country.
And this actually leads to this point of cultural change within institutions themselves that have been around for more than 50 years in many cases. And that's not easy because cultural tenders are always very difficult to. At any institutions, because people have their own incentives inside these organizations and they have to align for them to also be supportive of what is happening externally [00:26:00] in those organizations.
So obviously this is a massively big bottleneck or a problem that we'll need quite some changes at institutional levels and in processes for things to really align for companies to be then supported in a way in which it becomes very synergistic. Rather than people trying to be at loggerheads between federally funded research institutions versus the private sector in the aerospace and defense and space rail 10 years ago, when I was reading several tenders in the defense and space ecosystem in India, it used to be very funny to see that several of these kinds of.
Needed you to have an organization that had at least 10 years of experience doing something and the level of financial input, which then allowed you to bid on any of these contracts, without which you were not even eligible to bid. And that in a world that has so much changing with respect to startups and the landscape within the aerospace.
Space [00:27:00] realm is very different today. Now, with all the efforts that you guys are doing, do you see this culture changing within these institutions? I know that's a very difficult question to answer. It would be great for this whole ecosystem to achieve a level where are the RDRs roar on a nail and trust.
Small company or an emerging company with a product and is supporting them with capital with all sorts of resources when it comes to testing and consulting and so on, in a way in which it really reflects that they are working together to develop indigenous capabilities, rather than always looking at them with an eye of mistrust and very little belief in.
[00:27:45] Jacob: Absolutely not. And in fact over the past couple of years, or the past three to four years, there are examples to show that how the government is also evolving here. So I would say one of our partners IDEXX. So we recently had a partnership with IDEXX, which is part of the defense innovation [00:28:00] organization.
They have created a separate body, which kind of we're just the IDEXX body. Procures products from startups for the defense side. So through the disc, which is the defense, India startup challenge, they have created a pathway for startups to directly provide services and products to the almond, to the Navy and the air.
This is a good example, right? This is the right example of how our defense policies evolving, but you don't have to have the background of being established for 10 years, 20 years, having an order book of thousand grows for you to actually provide a product. And this is changing and the same changes that happening in other spaces.
So DRD also has a TDF, which is a technology development fund, which also looks at how can they support startups and out of DC, which is a national distortion development corporation. Founding partners. They hold the mandates for the technology transfer from all the CSI labs in the country. And they then have a fund where they trying to work with startups so that they can get access.
And this is where this beauty of the incubation model also come into play, right? Because with the incubation modern [00:29:00] and the way it is gunman entities also setting up their own incubation center, does it, does the art of getting a firsthand access to the kind of startups coming out of that space, the aggregating and understanding of the kind of technology that is evolving that.
So that is creating up bag it or not, or it is creating a platform where this dust issues are slowly eroding that people have started believing that yes, they are also on the same journey with us. They are also trying to look to build technologies that can solve a problem. I believe the sector level of change.
And in all the next 10 years, we will see wonders does happen in this space. At least that's my personal opinion here. There's the
[00:29:36] Harshan: evolutionist like for us to see, right? There are two kinds of dynamics that is playing out here. What we see one is obviously the top-down pressures that are now coming to a lot of these folks in the middle level, where I think there is an intent, a clear intent that's articulated at the highest level of the garden.
Talking about the need to engage more with startups need to engage the ecosystem to develop solutions for the country. And [00:30:00] the, obviously the messaging of all that has also helped. So the top down process is one thing, and then there is a proliferation. Champions at the lower level as well, who are keen to engage in a new set of officials?
I would say earlier, maybe 10 years ago, when you started, there will be one official in any of these bodies who would be interested to engage with startups. Now you can see for yourself, there are 10 instead of one. So it's, again, it's a continuous evolution process of building trust across these entities.
But what I can see is that obviously the direction. And this will play out. This will play out the top down the bottom up pressures will come to a kilt where I think the whole system is going to open up and enable a lot more participation from the ecosystem to all these bodies. And I think it's going to be with.
When you look
[00:30:48] Narayan: at the space industry that has the upstream of the industry and the downstream, and the upstream is about building satellites and rockets and things like that. Then when it comes to the downstream, we are really looking at analytics for most [00:31:00] observation and communication related devices that people can use on the ground.
And so on. So obviously when you're talking about dual use, it could be a mix of both of them where it could be at your lowest for upstream or your loose off the down. Now we've recently undertaken a study at spaceports alibi, where we have more or less now identified about a hundred startups when it comes to the space industry in itself.
And that's a pretty good sample size given that there were not many, maybe even five years. What stage of the startup development are you looking at when it comes to engagement with ? Is it really the early establishment or are you looking at a level of MVP that already exists with the company after which they can come to you guys to then have you as a launchpad to go to bigger and brighter things?
So
[00:31:49] Jacob: that's why the three-pronged approach that has Janelia mentioned helps us also. So our idea is to look across the broad across the board. Sorry. And here also why, if it's like a really [00:32:00] mature company where we don't think we'll be able to add significant value. Then there is no sense in us working with them, right?
Because unless there is a Delta or unless there's a differential that we can add to their box, then there might not be much value that we can bring to the table. So we are definitely not looking at ourselves as an investment organization that just invest in an organization and then wait for the boot go.
The idea is how do we walk along with them and their entire journey. So right from helping them understand the business models, helping them understand the. I played the product better look at new customer basis. And investment is only part of that, right? It's just a vehicle that kind of enables the larger ecosystem.
So we want to look at multiple pathways, but I think the census, we will look at early, early stage, maybe that first titration product MVP, ready looking for their first customer. That could be a sweet spot is what I think I. If they are very mature, then we don't see a lot of value that we can bring to the table.
So at [00:33:00] least that's the
[00:33:00] Harshan: thought process. That's our thinking currently, but maybe once we have so since we have just three months old, three months new, I would say maybe we will find a sweet spot where we could come in and add significant value to folks who are mature. Folks who need our services, but currently are thinking.
Since startups at the early stage might need much more handholding and much more discovery of the potential of their businesses and potential of this solutions. I think that's where we could come in and add maximum order value. And we want to make sure that is something that we keep as a coordinator.
[00:33:36] Narayan: And how was it that startups come to you? Is this a cohort-based system or is it apply as you want? And it's open throughout the year and people can apply whenever they want. And then you guys contact them after having received their application and gone through the background of the company, or how does this relate?
So we
[00:33:54] Jacob: do both. So the we, we are blend do both the programs. In fact, we are launching our first program [00:34:00] in the UAV space in the next couple of days, but we have around the application form also open. We just launched a couple of days back on our website. Anyone who wants to reach out to us can reach out to us on our website at mark 33 dot arrow.
There is an application form, and then we will get in touch with you to understand the kind of technology, whether that is a thesis for it, et cetera. But apart from that, we do see running cohort driven programs, every. In the coming yard where it will be focused on different sectors. So we have one coming up in UAV.
We are looking to launch one in the space sector soon in the next six months or so. And obviously defense is another area that we will also look at, but aerospace, aviation space, we will keep continuing running programs. We will have continental programs running in this space. And at the same time, there is a round Robin approach also where we take where you can actually reach out to us on a.
[00:34:49] Harshan: And another aspect of what we want to bring onto the table is the international collaborations with, for this ecosystem in the country, right? Because if you look at NRN, you understand this much better [00:35:00] than both of us may be the ecosystem out of India is much more mature. And there is a lot of expertise, a lot of resources that Indian startups who are working on this these technologies could actually leverage, right?
So we want to act as a bridge. For India while enabling startups and in there to grow also for startups and technologies across the globe who are working on solving these problems and to have some sort of a foothold them in that. And the nature of some of these problems are global, essentially.
So there is no one who can look at solving a problem only exclusively for India. So if somebody's solving it for, in that can solve for the globe and vice versa. So we want to enable that that piece as well, apart from the programs that we discussed.
[00:35:40] Jacob: Especially the downstream global applications are downstream technologies acute.
So how do we create a conducive ecosystem for the international community of startups also to look at India as a market and similarly, how can it did start to start looking at the international community as a market for them too. So we hope to achieve that too.
[00:35:57] Harshan: That's an important aspect of how we [00:36:00] look at this program.
Evolving. You briefly
[00:36:02] Narayan: mentioned that you would also be investing in some of these companies and. Equity based investments that you yourself will be doing based on the assessment, or is it a fixed ticket that you would invest in them or a grant or something like that? Do you have a certain framework at this time on this investment site of metallic green arrow?
[00:36:22] Jacob: So our investment thesis is an evolving process today. We are also looking at the kind of asks that does need in the sector, but I understand the kind of ticket sizes that we should do. But this will be what we read. So basically this will be money that we raised through a gunman support or through support from our parent organizations, extubate, we look at what is the kind of mandate fit.
And then we will see what is the kind of capital pools that is needed. But today the idea is to have both the grant and inequity based sport, depending upon the kind of programs that we run. But like I said, this is an evolving thesis. We also want to study the sector better. We also want to understand the kind of asks from the startups better.
Take a, take [00:37:00] a better idea about the kind of capital pools that needs to be brought to the, and
[00:37:04] Narayan: when you say that, have you arrived at any number as to what it is, or is it fluid at this time? Currently
[00:37:11] Harshan: it is fluid because we have, we are talking to like startups or approaching us and trying to understand what is something that we can bring onto the table.
And what is the kind of broad ticket sizes that. We do have a standard model that we have implemented and perfected over years, but that's a different sector. That's a different maturity level of startups that we are looking at. Here's the sector is different. The asset different, the kind of fundraisers are different.
But that being said, when we back a startup, I think we do want to have the skin in the game and that's why we do take equity. And we do participate in equity. And the second thing we are doing and the initiation of that's going to happen during the perfect school where we are putting together investor coalition to look at startups in the sector, because this stock, this sector needs more of interactivity and that's our underlying thought process here.
And where we can come in and validate those [00:38:00] solutions. We can come in and validate those markets of dual use possibilities that the startups offer and then put together a mock 33 investor coalition of like-minded investors, minded, venture capitalists, who can come in and then support these startups to scale.
But we will be the people who will be validating, curating, and putting our skin in the game first before asking anyone else.
[00:38:26] Jacob: curated deal book. Also looking at the kind of startups kind of problem statements that they're addressing. If we can create a curated set of books that the mocker three arrow coalition can get access to, then that they would believe is one of the successes that this sector actually needs to.
[00:38:43] Narayan: As you look to what is present across the country, in terms of the facilities and access to capital and resources and even connections to scientists centers.
All of this is very heavily skewed to the Southern part of India. We know that most of the laboratories when it comes to aerospace and [00:39:00] defense and space at all, mostly based in the Southern part of India. And so are the companies and the startups as well. So obviously it doesn't mean that there are not going to be founders that are interested to start companies in other parts of the country.
And even in remote places, out of the Nazis, for example, they may be companies that are interested in starting off in these areas based on their experiences that they have lived through. How do you take into account this geographical divide that we have in terms of the facilities and access to everything when it comes to investors, facilities, scientists, and so on, have you designed the program to take into account these things?
When it comes to encouraging founders from any part of the country to be a part of the mark third degree arrow.
[00:39:48] Jacob: So one thing is this, our model is a purely virtual based model, right? So we don't mandate that there is a physical acceleration model or a physical incubation module, but a physical support model [00:40:00] for any of the startups that we plan to work with.
So we have pretty certain that we will look at a virtual model. And the second thing that we have thought through, and this will take some time also, as in the idea is to build a current facility as a. Why would we want to build spokes across the country? And this is not something that we can achieve, say like the next two months, three months or so this is going to be a sustained effort.
That is. For this, but we also realize that this is the need of the art. And in fact, this was a conversation we had a couple of days back where we also understood that. See, there is a concentration of resources in south India. How do we also look at other states? Or how do we also make sure there is an equitable access to resources to people from other parts of the country?
And that was the idea behind setting up. This is a hub-and-spoke model where wildly start with the current hub. We are definitely exploring the need to build spokes across the country. We can create an equitable access to resources. And at the same time also create ecosystems in all of these pockets, right?
Because today the ecosystem has developed here because the infrastructure is developed yet tomorrow [00:41:00] with India, also evolving as a country and more and more facilities coming up. I'm sure. In fact, we are sure that the ecosystem will keep developing the other parts of the. So along with that, we will also name the people, also build sparks across the country and we are open to partners.
So today, if there are partners who think that they can work with us and help us build this hub and spoke model, nothing like that, we are happy to see how can we engage with. And help bring our expertise there and help the entire ecosystem
[00:41:23] Harshan: there too. Yeah that's the intent of having some sort of a national footprint and national partnerships as well.
So that's why we are closely working with, say, for example, startup in the habits has access in which opens up opportunities for innovators across the country. Access to the sources and our partnership, we believe would enable them to discover my 33 and reach out to us. So that is the kind of bridges we want to build by enabling and by, by talking to people who have the national footprint and ensuring that we are partnering with them to be able to open up our facilities and our capabilities to the entire country.
And over time, as Jacob was mentioning, [00:42:00] we want to have physical presence system. Across the country at different centers. And Northeast is a very interesting possibility for us as well, because that's completely underserved fix our mandate in terms of impact as well.
[00:42:10] Jacob: And this virtual model is something that we have been able to successfully do in our parent organization, social alpha, right?
So working across multiple sectors in a virtual model, supporting startups, right from say, Kashmir to catalog, to withdraw to Assam. This is something that we've been able to successfully do there. So that is a model that we can easily replicate in the sector is what.
[00:42:30] Narayan: You mentioned about this, Ken, the IDEXX, which is the procurement, as well as the startup support program.
When it comes to defense sector, are you looking at something like that for the space sector and having something of that nature in the space sector will be really great for all the startups that are up and coming.
[00:42:48] Jacob: That's something that we would love to do. In fact, we hope at some point we can actually make a representation on something similar or a similar model to the department.
But yeah. And happy to work along with [00:43:00] you not write on this to make sure that we can take this to
[00:43:02] Harshan: fruition. So we have this in our plan as well in terms of developing something for this sector. And as we said at the beginning, it's a big aerospace space sector seem to be an area where there is still a gap in terms of understanding apart way for startups to collaborate with the larger ecosystem.
And we want to enable it,
[00:43:21] Narayan: given that the defense guys have done this in their ecosystem. It may be easier to take that and convince the space guys to say that they can look at it and then template it accordingly and in the space
[00:43:34] Jacob: sector. And in fact, you get a larger set of customers also to work with, right?
Especially if you look at space and both upstream and downstream applications of space you can look at a multi-sectoral customer use cases. Which is much more than defense in fact, right? The ticket sizes in defense could be louder. You are looking at a much bigger chunk of the market that you can get into with space.
[00:43:52] Harshan: Some validation is happening, right? Because we stick startups are now seeing like investments more than so different startups are not seeing the rate of investment. That's the basic start of [00:44:00] the scene, which means that the venture capital community is finally come around to understand that the market is huge.
And maybe I think it's time for the government also to have an enabling kind of a program or.
[00:44:12] Narayan: Given that you guys speak to a lot of the startups in and around the country, across the aerospace, defense, and space. What is your experience and reading of the quality of the startups against the quantity that we have.
So do you believe that there are certain areas that we can see improvement with or do you see that certain signal-to-noise problems are around with the quality of the startups? Are, do you believe that there is a fair number of very high quality startups that you see in the sector?
[00:44:44] Harshan: So we see a lot of quality.
Actually, we are, we're quite baffled by the the quality and the the technological capability of a lot of the people that we meet this ecosystem. But as is typical for any deep tech ecosystem, I think the challenge is to basically position [00:45:00] and position their product that aligns to the needs of the market.
And that is where we see a lot of the gaps that a lot of these founders chasing very narrow markets and. Articulating their product proposition, a very technical lingo, which is not consumable to a live lay man or consumable to a customer sitting on the other side. So we see us trying to add a lot of value in this space.
Like the product solutions, the technological capabilities is something that's Burlington in there as time. And again, prove this it's like indigenous capability in the space. So in terms of the quality has, as I said to me, we quite baffled, but we do see that there are gaps that needs,
[00:45:40] Jacob: it's a product market fit issue.
So from SIA technology development point of view, there is quality. But from understanding the market from understanding the right product market fit, understanding the right customer base. So affordability accessibility is an important aspect in a country like India, understanding these aspects.
These are the things that the entrepreneurial community here would need. [00:46:00] And one biggest thing that they will have to also think about is not only look at the government of India is the only customer. And that is the reason why we keep focusing on the aspect of dual use. Because the moment you look at a single our customer, you are losing your ability to.
How do you look at this larger customer base that is available? How do you look at your product market fit? How do you make sure that you are not getting confined by the facts that you are developing a product for a singular use case? How do you make sure that your product is embracing a larger set of use cases become market and this concept of how do you look at your total obtainable market your serviceable obtainable market that had disappeared market.
All of this is what will define how the skills, so it is not a matter of quality. It is a matter of how do you make sure that there is sustained quality and sustained output for the kind of business goals that you have set out for yourself. So I think that's where the gap is, and not in the quality of the entrepreneurs or the quality of the team.
[00:46:53] Narayan: From the initiatives that you are running now, do you expect to hit certain numbers when it comes to a certain number of cohorts or a certain number [00:47:00] of companies per year or something like that where you would then want to benchmark yourself based on that? Or what is it that you have in terms of the goals?
[00:47:09] Jacob: And I think specifically. Point earlier also comes into space, right? We want to look at quality more than quantity. So if we are able to create significant impact, say for three, four startups in AI, rather than doing hundred startups and not adding any value and not helping the needle move, if you are able to support three or four startups and make sure that over the next two to three years, they are able to create significant impact on both social economic, as well as across the technology landscape.
I think that's the target that we have set at
mark
[00:47:36] Narayan: 30. Beyond the startups and their problems. And so on, there are other very interesting problems that need to be solved such as how do you actually create a pathway for some of the most talented Indians who have gone on to do their PhD and are fairly, very well-experienced across different space missions in places like DLR or NASA or Jax arts on where [00:48:00] they've been working.
And I do have a friend of mine and many other friends, for example, who are in these positions. Sometimes there is a possibility that they are always looking to come back to India and they want to contribute back here. But unfortunately there is no appropriate middle level leadership position on ownership level positions for missions that they are able to find for themselves to make that case to come back.
And that's often a big problem in terms of the. Brain gain back to the country in itself. And this is something that the Chinese have done very well where they've gone on to absorb back talent from the. International to have gone to other countries. And then they've developed a sense of the technology and I had experience at tone and they make it very easy for them to come back and be absorbed.
And given some leadership positions within the organizations to run with missions or run with projects that they can then contribute back to. And essentially the country is [00:49:00] really gaining from all of this. Is this something that you think is just just too far and beyond at this time, or do you see any role for mark that it's three and eventually maybe for you guys to also plug away into making sure that this kind of channel exists in a way in which we can also get back a lot of the talent that has gone away from the country.
[00:49:24] Jacob: Might be too early for us to maybe make a comment on that because he, again, looking at the, the kind of pathways that we can offer today, I would take this from a different point of view, where if you look at how the markets are opening up, especially in the space in the aviation sector, in our country, the opportunities as a private individual, Laura is a private player.
Rather than just looking at the age, old age, old adage of looking to come back and then maybe enter into a mid senior level position, say a government organization. I believe through platforms such as us, you can create a better pathway for yourself in the [00:50:00] entrepreneurial ecosystem. And the advantage is that you can work very closely with these kind of larger organizations, both government nongovernmental, private organization.
So I believe the opportunities in that pathway are much bigger and that could be something that we could enable a lot, or that could be something that today we could look at, like enabling faster. Because on the they have their own mandates. So the government has its own rules and these might not be something that we would be able to influence very
[00:50:28] Harshan: soon.
And I don't believe the people who coming back will with their expectations might find it worthwhile once they come in, because there might be an expectation mismatch in terms of how the organizations operate and all that
[00:50:39] Narayan: as well. And I guess, there is a case for some of these people to take some risks, to start up by themselves and.
[00:50:47] Jacob: Absolutely. Absolutely.
[00:50:48] Harshan: And an EIR program is open for them. We had da
[00:50:51] Jacob: programs exactly targeted like at your friend. So if he's open to it, we are happy to like support and build that program.
[00:50:58] Narayan: And [00:51:00] how is the EIR, the entrepreneurship and residence program structured here at Moffitt?
[00:51:05] Jacob: So typically we are looking at an 18 month timeline for that.
And the idea is to also understand their needs and look at it from a stipend model and also a product developing support model. So again the sizes of that and all is still evolving. We are hoping to launch the first year cohort in the next six to seven months. We want to make sure that we understand the sector because we have an existing AI program and social alpha, but with the sector changing that there is a change or contextualization of the program that is needed.
And we are currently working.
[00:51:36] Narayan: Beyond the startups and the institutions like NL and CSIR and this role and so on. Are there any other institutions or partners that you guys are looking to work with that could reach out to you or could be of interest? When it comes to curating these programs that you are doing at this time?
[00:51:57] Jacob: Absolutely. I think we are looking for
[00:51:58] Harshan: across the board as a [00:52:00] second open book in terms of our model, right? As we mentioned at the beginning, it's a non-competitive model who wants to create impact and act in the space that ecosystem we want to partner with them. We want to see how we can add value to what they want to do and how they can add value to what we are trying to do.
So the underlying objective is. So it can be an academic institution who wants to provide expertise to mentor people. It can be a private aerospace entity who wants to come and like support startups in the country. So it can be anyone who has interesting the space. And we are open to partnering with anyone who has a similar.
In my end number, similar mission, and the idea
[00:52:38] Jacob: is to be the ecosystem, right? So we are absolutely certain that we alone will not be able to move the needle. The idea is how can we collaboratively do that? And more the number of people who join hands together, the more the force in moving the needle forward.
So it's an open book. So we are looking across the board, whoever can like help in the larger mission on how do we look at this space and help build code as well as do we use these technologies? [00:53:00] I think that would be the best persona.
[00:53:03] Narayan: Great. I think this is a fantastic conversation and I congratulate you both on putting everything together.
This will be very interesting to reflect back after a few years to see how things went and how they were planned. And I obviously want to be involved as much as I can in helping you guys and supporting in whatever way I can.
[00:53:30] Harshan: one of the important calls to the particle system. So I'm sure
we've continued to have your support and guidance as we build.
[00:53:41] Narayan: Thank you so much in listening to some of my suggestions, and it's always great to learn from you guys and also share some of my experiences having seen and worked with a lot of the interesting companies that are out there. Again, kudos to you guys for putting together this whole thing.
When it comes to [00:54:00] reaching out to you guys, what do you recommend that people do in case they want to reach out to you? Is it best that they reach out to you by email or by website or. How best can companies or even to be entrepreneurs, reach out to you at this time. So the
[00:54:16] Jacob: best of the website, and they can always reach out to us on our email.
So we have an email where you can connect to mark that three dot arrow, which is a reach at Martha three dot arrow. And both of us will respond as soon as possible. Once we get. But our website is a good space to reach out to us too. And we are physically located within the CSI at an ale campus on old airport road.
In Bangalore. We have a separate office called Marta three dot arrow, right at the gate of CSR in here. If anyone's around, feel free to drop. It be happy to entertain you
[00:54:45] Narayan: Jacob and Hershey. And this has been a terrific conversation. Thank you so much for inviting me here to mark 33. And I look forward to working with you guys and see how we all together work towards establishing a very strong aerospace, defense and basical [00:55:00] system here in India in the upcoming year.
[00:55:02] Jacob: Thank you. Thank you for listening patiently to abuse and thank you for giving us this space and giving us the ability to express our views about in this important space in our country today.
[00:55:14] Harshan: Thank you. Bye
[00:55:21] Narayan: Thank you for listening into this episode of the new space in depth. If you enjoyed this conversation, please share this episode with anyone you believe will enjoy listening to it. You'll be able to find the new space in their podcast, in any of the podcasting platforms that you may be using, including apple, Google, Spotify, YouTube.
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