Innovator: Mark Dankberg

November 4, 2013

The Arthur C. Clarke Innovator Award was presented to Mark Dankberg, Chairman and CEO of ViaSat on 22 October 2013 in Washington, D.C. Following are his prepared remarks that evening.

Thank you so much. I’ve been a huge fan of Arthur C Clarke since I was a kid & to be recognized for innovation in satellites by his foundation means a great deal to me. It seems like my generation grew up with the space program & of course Arthur Clarke is intertwined with that.

You can’t think of the space race without President Kennedy’s famous speech in 1962 at Rice University. We choose to go the moon – not because it is easy, but because it is hard. Some of you have to remember that one of the ways he pointed out just how hard, was by asking – obviously purely rhetorically – “Why does Rice play Texas?”. Apparently he handwrote that line in himself shortly before his speech.

One of my most vivid memories of space in the 1960’s was going to see 2001 at the Cinerama Dome in Hollywood in 1968. You’ll see that it had quite an effect on how I looked at the world.

18 years later, in 1986 – we started ViaSat. Along the way, I ended up going to Rice, where watching Earl Campbell run through the Rice defense I got an even greater appreciation of JFK’s race to the moon speech.

This was ViaSat in 1986, with my 2 co-founders Steve Hart & Mark Miller & our only other 2 employees that year. Mark & Steve both deserve an enormous amount of credit for the innovative things we’ve done since then. And now, we’re working at a scale that needs all the creativity & dedication of the almost 3 thousand people who make things happen at ViaSat.

When we started it was just the 3 of us, with no money & working out of my house. We each had little kids & big mortgages. We started pretty much at the bottom of the food chain, doing studies & building test equipment. Actually our MC this evening, Dr. Joe Bravman, gave us a huge break when the Fairchild Division that he ran gave us a subcontract to develop & produce a very precise signal to noise test set for satellite modems for the Army. Eventually we got to where we were building modems & complete satellite networking systems. We developed a strong conviction that bandwidth was really THE value proposition for satellite data networks & beginning about in 2000 we starting pulling together all the skills we would need to build a radical new space system.

In 2008 we felt we had the opportunity to go for it. We had done tons of preparation & analysis. We knew there were big risks, but we felt we understood them & could manage them. So, we signed a contract to build the satellite we had envisioned & designed, which is ViaSat-1. There was a lot of skepticism. We were going to have a single satellite that had more bandwidth than all the rest of the satellites over North America, combined – including several Ka band satellites that were built especially for broadband. First we had to convince our board of directors that it was a great idea.

We don’t actually have any photographs of that first meeting where we laid out that plan – but in my mind I have an image of the reaction.

But, that part worked out & the next big step was to tell our investors. It turned out we announced ViaSat-1 at a Wall St. investment conference in Jan, 08. There aren’t any photos of that meeting, but I have a pretty clear memory of going into that meeting.

Overall, I would describe the immediate reaction in the stock market as negative. Some of our investors thought we were just incredibly desperate. I remember one who said “What was your board thinking? How could they let you do this?” That one sold a lot of ViaSat stock.

Here’s a chart of the 6 months just before & after we started ViaSat-1. And, just for good measure, this was pretty much right in the middle of the worst financial crisis since the Depression. We had to finance a $500M project whose fundamental purpose was to put more Gbps in space than anyone had ever done. But, hardly anyone in the satellite industry put much value on Gbps. Then 3 months later, in Sept 09, Lehman filed for bankruptcy & things really got ugly.

I remember all this as a somewhat challenging time for us.

But, fundamentally ViaSat was a profitable & still growing company & there were investors who DID think this made sense. I remember one who said we had a great 20 year track record, if we thought this was the best thing we had ever done, then buying our stock at half price was a big opportunity. He bought a LOT of stock. Overall we raised close to a $1B including the first significant amount of debt we ever had, to build & launch the satellite, build out a huge fiber network, & acquire WildBlue, to deliver a retail consumer broadband service.

Throughout it all, we all believed that we were going to transform satellite broadband. I kind of was envisioning this transition scene in 2001.

At CES in Jan 12 – almost exactly 4 years after the public announcement – we introduced the Exede broadband service using ViaSat-1. This title from an article on the tech blog Ars Technica may have been the best at capturing what many people thought about the state of satellite broadband before ViaSat-1, and the impact all those Gbps could have. We even got recognized by mainstream media like Popular Science & the Guinness Book of World Records.

Then earlier this year, the FCC published the latest in their series Measuring Broadband America. This was the first time they thought it would be worthwhile to include satellite – our Exede service. They were quite surprised, but included the results & some nice words around it. Satellite had a poor reputation for NOT even delivering even the low ~1 Mbps-ish speeds promised. But, here we were offering for $50/mo 12 Mbps & we did the best at OVER delivering compared to our rated speed. Better than DSL, cable & fiber.

And, you can see Wall Street came around, too. Here’s our stock price picking up from where that last chart left off. It’s in the range of double what it was before we started ViaSat-1.

I think one of the biggest impacts ViaSat-1 will make is still yet to come. Even before the satellite was launched JetBlue Airlines came to believe in our vision of fast satellite broadband. We got FAA & FCC certification this summer & the first aircraft is in test flights now. It will make its official first public debut in a few weeks. It’ll be the first in flight WiFi able to give high speed connections to EVERYONE on board. And, it’s economical enough that JetBlue is going to start by offering it for free.

So, overall it’s a very cool story. Here’s a famous quote from Sir Arthur that sums up the experience well. He describes the 3 phases that anything really new & innovative goes through. It can’t be done. Well, maybe it can, but it wouldn’t be worth it. And, finally “I knew it all along”.

It seems like we should be declaring victory & riding off into the sunset.

But, the plan all along was to show that Gbps in space was what mattered & then to keep going. So, in May we started ViaSat-2 with Boeing. We have a new architecture that builds on ViaSat-1, but should have twice the bandwidth economics, 7 times the coverage area, & unprecedented flexibility in managing all that bandwidth. The ocean coverage should be really exciting.

We don’t have photos from the board meeting where we discussed ViaSat-2, which is an even bigger investment than ViaSat-1 was. Our board is a little older & wiser this time. But, here’s kind of the impression I have of that meeting.

We’re back to Phase 1 of Sir Arthur’s 3 phases of reaction. Here’s another of his famous quotes, that I really like, “Any sufficiently advanced technology is indistinguishable from magic”. We are already getting this reaction to what we’re aiming to do with ViaSat-2. We know people are saying it’s impossible unless we have some kind of magic. How cool is that? We have some really ambitious technologies we’ve been working on to improve on ViaSat-1 & we’re betting a lot that they’ll work.

I’ll leave you with this image from the end of 2001. It’s how we think about the ViaSat-1 story. We’re hoping it’s just the beginning of what we can do.

Thank you once again. For the recognition & for listening to our story. One last great quote & image to think about.