How does the innovation ecosystem shape the variation, selection, and retention of dominant designs? We address this question by analyzing the rise and decline of CubeSat as the dominant design in the small satellite industry. Our findings reveal that the evolution of CubeSat cannot be fully understood without considering ecosystem-level dynamics. CubeSat emerged as the dominant design by resolving a critical ecosystem bottleneck—the lack of affordable and accessible launch opportunities for small satellites. CubeSat was selected as the dominant design because it reduces the risks and costs at the small satellite–launch vehicle interface level, including prelaunch mounting and testing, launch, and after-launch deployment. However, its dominance was relatively short-lived (~ 7 years). The widespread adoption of CubeSats catalyzed business model innovations among launch providers, such as ridesharing and piggybacking services, which significantly increased launch availability for small satellites. This greater availability spurred further innovation and standardization at the launch vehicle-satellite interface level, allowing small satellites to bypass the CubeSat design while still minimizing risks and costs. This coevolution among the various technological components of the ecosystem ultimately contributed to the decline of CubeSats. Our findings underscore the importance of considering an ecosystem perspective to understand the evolutionary patterns of dominant designs.
