46: Space Robots Are Helping Hedge Funds Invest

SPEAKER_1 (0:00)

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Tracy Alloway (0:24)

Hello, and welcome to another edition of the Odd Lots Podcast. I'm Tracy Alloway, executive editor of Bloomberg Markets. My co-host, Joe Weisenthal, is away, and so I have a replacement co-host for you. I'm actually really excited about this. It's Matt Levine. He is, of course, the Bloomberg View columnist and quite possibly one of the funniest, most original financial writers out there. So thanks so much, Matt, for joining us today.

All right, Matt, let's start this off with a thought exercise. Let's say you're an investor and you're interested in investing in the shares of a company. Let's say it's something like PetSmart.

How do you actually go about figuring out how well PetSmart as a business is doing?

Matt Levine (1:15)

I probably go there with my dog and see what their stores look like.

Tracy Alloway (1:20)

All right, that sounds like a very systematic approach.

Matt Levine (1:23)

Now, I probably read the financial statements, right? Look at the 10K.

Tracy Alloway (1:27)

You would look at their publicly available earnings statements. You would try to figure out what's going on in terms of their revenue trends, things like that. If you were really fancy about it, you might go there with your dog and try to see how many customers are visiting, but that's not really going to help you if you only go to one PetSmart, right?

SPEAKER_1 (1:47)

Right.

Tracy Alloway (1:48)

So what if you could do something different? What if you could actually see how many people were visiting a PetSmart or PetSmart across the country? What if you could see big data, as people like to put it, and figure out how well the PetSmart business was actually doing?

Matt Levine (2:04)

Sounds like it would be pretty helpful.

Tracy Alloway (2:07)

All right. So on today's episode, we are going to talk to a company that is helping investors do just that.

And one of the ways they're doing it is by using satellite data. So having satellite imagery that looks at things like factory activity, things like how many cars are parked out in parking lots behind PetSmart and Walmart and other retailers around the world to try to gauge how those businesses are actually doing. And I know you've written a lot about data on Wall Street, how people use it. So I think you might be into this topic.

Matt Levine (2:38)

That sounds great.

Tracy Alloway (2:40)

All right. So without further ado, let's bring in our guest for today. It is James Crawford. He is the founder and CEO of Orbital Insight. He's also a former NASA scientist. So Matt, you can ask him any robotics questions you might be into as well.

All right, James, thank you so much for joining us today.

James Crawford (3:12)

Hey, Tracy, very happy to be here.

Tracy Alloway (3:15)

Maybe just to begin, you could walk us through what your company actually does, the kind of technology you employ and how people like potential PetSmart investors might find it useful.

James Crawford (3:27)

Sure. Over the last few years, there's been a tremendous growth in the number of satellites over our heads.

And it's interesting, the enabler for that has been a lot of the same technologies that bring you cell phones. So the miniaturization of electronics, rapid reductions in the cost of launch. And so just a lot more images are being taken.

Now, taking the image, though, is only the first start, only the start, because once you take the image, it just sits on a disk somewhere until somebody actually looks at it. And we're getting to the point where there's way more images and there are people that want to stare at them. So to continue your PetSmart analogy, if somebody were to deliver to you a million pictures of PetSmart stores, you'd be a long time flipping through all of them, trying to decide how many cars were in each one of them or what was going on in each picture. So what we really do is we complete that supply chain, if you will. We take the images from all the different satellite companies.

We run them through artificial intelligence software to count cars. We can count trucks. We can count train cars. We can count ships. We can look at agricultural fields, see what the productivity is likely to be. And then we aggregate up, add up all those numbers and deliver an analysis of how different retailers are doing, what the corn yield in the US is likely to be, or other interesting economic questions.