America at work
This Innovative Space Company Keeps You (and President Trump) Connected in the Air
J.D. Harrison and Jaclyn Neuman | March 13, 2017

Nearly two decades ago, Rick Baldridge – a highly regarded defense and aerospace executive with a long history at industry leaders like Raytheon, Lockheed Martin and General Dynamics – left the Fortune 500 C Suite to join a relatively small and fairly young technology company based near San Diego. At the time, he recalls, ViaSat had a promising technology portfolio and ambitious plans to change the way we stay connected in the in even the most remote, hard-to-reach places.

management-team-rick-baldridge (2)A lot has since changed. During Baldridge’s tenure, ViaSat, a satellite broadband communications company, has ballooned into a multibillion dollar business with thousands of employees across the country. Along the way, the company evolved from a product manufacturer to a worldwide services provider, and in recent years, ViaSat has been lauded as one the nation’s most innovative space firms.

On the other hand, some things haven’t changed at all.

“We’re as determined as ever to continue changing the market for satellite connectivity,” Baldridge, now ViaSat’s president and chief financial officer, said in an interview before the U.S. Chamber of Commerce’s 2017 Aviation Summit last week in Washington. He explained that ViaSat, which launched its first satellite in 2011 and will send its second into orbit next month, provides internet service and secure networking by satellite to commercial, residential and government customers, from families in rural Montana to naval officers at Guantanamo Bay to President Trump when he’s aboard Air Force One.

During our conversation, Baldridge discussed the future of the aviation and aerospace industries (including what he calls the most exciting development for airline passengers), what’s ahead for ViaSat and internet connectivity, and how his company has managed to maintain its constructive, collaborative culture amid accelerated growth. What follows has been edited for length and clarity.

 

Let’s start with the basics: What exactly does ViaSat do, and what lines of business are you in?

We provide high-speed satellite broadband and networking services to the military and commercial markets. We’re about 30 years old, and we spent the first 20 years or so of that as technology providers, and we worked with companies across the spectrum. Over the past decade, we started to make more of our revenue through services, and today, we’re primarily a broadband and networking services company.

Related: NASA THROUGH THE AGES: SPIN-OFF TECHNOLOGIES INVENTED BY THE SPACE AGENCY

Most Americans think cable service or wireless phones when they think about connecting to the internet. Help us understand the role satellite broadband plays now and where you see it heading.

That’s right, and what we’re really focused on is breaking down the notion that satellite is merely a source of last resort for connectivity. See, satellite broadband can allow you to connect anywhere, but due to a number of reasons, many related to speed and cost, if you have an alternative available, such as cable or a wireless phone, you would use that alternative. So satellite has mostly been used by those in places where you don’t have that access, like remote areas on the ground or on an airline.

Our mission is to change that, to make this a more viable alternative for more people, and we’re seeing that happen as the costs keep coming down. We’re seeing it in the government marketplace as well as in the commercial marketplace, with more direct-to-home consumers using of satellite broadband, in addition to an emerging market for Wi-Fi hotspots for the people without access to connectivity.

 

Woman Using Laptop in airplane during flight

 

How has demand for your services in the aviation arena changed in recent years?

Well, being connected is obviously becoming more and more important every day. When you’re getting things like socials services or education through the internet, and when so much of our communications and shopping are taking place online, there’s more demand to stay connected at all times. It’s becoming an integral part of how we live our lives and how we do business, and that means people need to stay connected when they’re in the air, which we can help them do.

Let’s discuss how you’re meeting that growing demand. We understand that you’re preparing to launch the ViaSat-2 satellite next month. How will that improve on your existing services?

With this new satellite, we’re really doubling our capacity and our coverage area, and that’s going to include covering the bridge between North America and Europe so that we can help keep passengers connected on the North Atlantic air routes. We’ll also be able to extend our coverage in the Caribbean. At the same time, for consumers, what they are going to see if much higher speeds with ViaSat-2 – speeds that are very competitive with fiber internet to the home, so you will be able to use as much data and speed as you need for things like Netflix, Amazon video and YouTube.

And there’s already a ViaSat 3 production in the works, right? How will that move the needle?

Correct. If we think about ViaSat-2 as doubling ViaSat-1, ViaSat-3 will be about 4 time or 5 times what we can do with ViaSat-2. It’s actually a series of three satellites, rather than one. It’s the next generation, and it’ll feature technology and parts that really don’t exist anywhere else in the marketplace right now.

Related: MEET THE RADICAL FUTURE OF AVIATION

When can we expect to see those satellites make their way into space?

We expect the first one in orbit sometime in 2019, and that one will go over the Americas. The second will launch about 6 months later in 2020, and that one will go over what we call EMEIA, so that’s Europe, Middle East, India and Africa. The third, which we haven’t started on yet, is scheduled to launch about six months after that and will cover the Pacific region from, say, India to Hawaii.

When you think about aviation and the airline industry in particular, what changes or innovations do you see on the horizon that will change the game for passengers — and perhaps for ViaSat, too?

Look at America Airlines’ recent announcement that they’re getting rid of seat back devices in many of their new airplanes – that’s one we’re watching, and I think you’re going to see more of that. From the airlines’ perspective, the view is that people are bringing on really new devices that have great screens, and they realize that they can save a tremendous amount of money by giving the connectivity to people for free but allow them to use their own devices, so they save money on the screens.

JetBlue has capitalized in this area, too. They have started giving away high-speed connection for free, and they’ve seen their passenger revenue per available seat mile grow faster than any airline in the industry for the last couple years. We think a big chunk of that is because of our service.

 

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Carry that forward to the consumer experience. How will that change the way we travel?

I think it will lead to see more seamless connectivity. Right now, as you’re waiting to board, you’re working on something on your smartphone in the terminal, and then when you board the flight, you switch over to the seatback screen, and then the moment the flight lands, you’re back to your phone. What you’re going to see is that what people are doing in the gate will transition right over onto the airplane and then continue seamlessly when they land and get out on the other end.

Let’s get back to the company. What attracted you to ViaSat in the first place?

What I found in Mark [Dankberg, one of the company’s three founders and now ViaSat Chairman and CEO] was someone who hated bureaucracy, hated rules for no reason, and wanted to treat people the way he wanted to be treated. That resonated with me, and I joined the team in 1999. It was the next logical step for me in my career.

Has ViaSat’s growth been mostly steady or were there key moments that propelled the company?

It has been one foot in front of the other, dating all the way back to the vision that co-founders established from the beginning; that’s that we would grow as fast as we could but no faster. That’s just kind of the way we’ve always run the company. The founders raised $300,000 in the first year and didn’t raise another penny until we went public years later. Even as we’ve grown, we have always stayed within our budget, and we never bet the company on one given thing.

What’s been the key ingredient in ViaSat’s success over the years – what’s the secret sauce?

It has to start with exceptional people. Our view is that an exceptional engineer will produce 20 times what an average engineer will, not 20 percent more. So we’re very, very focused on hiring really strong talent. The other thing you learn very quickly is that highly talented people only want to work with other really strong people. They don’t want people that they think are dead weight around the organization, so that’s what we try to focus on.

 

ViaSat-2

 

How do assess whether you’ve hired a truly “exceptional” person?

If you hire great people and you can tell them exactly what to do, you screwed up, because really great people don’t like to be told what to do. So, I think that’s an important piece. We’re a meritocracy-based, non-hierarchical, non-bureaucratic organization, and we believe that good ideas come from anywhere in the organization. We want our people to question everything, debate everything. So we need people who have that sense of drive.

Related: MANAGEMENT ADVICE FROM THE CEO WHO SAVED CONTINENTAL AIRLINES

Shifting focus to the top of the organization, how do you cultivate a strong leadership team?

For starters, I have found that it’s easier to develop and promote leaders from within the company than to get leaders who have been brainwashed by other organizations to help do what we do. Now, when you select your leaders, you have to make sure that they share those common beliefs; that they’re selfless and that it’s truly about the company or organization, not about them.

Lastly, let’s talk about ViaSat’s hometown, San Diego. What’s the environment like right now for technology companies in that area of California?

We’re doing better. Obviously, Silicon Valley has long been the heart of all the venture capital money around here, but San Diego is moving up. I’m on the board of a company that has three local incubators, and while we work with technology companies that may or may not put down roots here, I’m the biggest advocate for encouraging these companies to establish roots, grow and drive up demand for engineering and technology talent here in San Diego.

We want them to grow locally, and we’re starting to make real progress and starting to see some very disruptive companies emerge. Now, I think it’s really about getting out and telling our story.