SPEAKER_00: hello and welcome back to twist my name is alex and when i was but a humble young boy i read a book called the bible and one thing that i talked about was mana coming down from heaven well as it turns out there's a company out there in the world of startups that is using that name because they are also bringing down goods from the sky called mana it's a drone delivery company based originally out of ireland that is growing quickly raising a lot of money and proving that the future really is not evenly distributed i didn't know enough about this company so i'm really glad to bring it to you so please join me in welcoming to the show it's bobby healy bobby how you doing oh it's a pleasure to be here i have to kind of confess because i know i know zipline here in the states i i've paid a little bit of attention to the you know every three year amazon post about how they've solved drone-based deliveries and to me it's always felt slightly out of reach but learning about your company hot damn uh you guys are doing enormous volumes across two different continents so first of all how did i become so far behind on mana and its drone delivery success i'm i'm almost embarrassed

SPEAKER_04: well so because we're we started in europe um so we're kind of the ryan air of this industry we think and being based in ireland we're pretty below the radar it takes years to get a business like this or a tech stack like this operationally clean and ready to launch so we haven't even tried in the united states up until now and now now's the time because of the regulator environment so the reason you haven't heard of us is because we haven't been looking to be found and and now we are we've raised in a lot of capital we're doing a lot of deliveries like 300 000 and counting and now we're all in on usa so it's time for start talking to folks and kind of educating everyone around what's important in the industry which is unit economics in our view um and so and here we are and you're going to see

SPEAKER_05: and hear a lot more from us yeah we're going to dive into economics in a second but i want to talk about how the business is is structured in terms of how it operates kind of on the ground and in the sky one thing that mana does uh talk a lot about is the speed of its deliveries you guys talk about deliveries being as quick as three minutes which is insane and awesome uh but i'm curious about how that works so how do you guys have um the drones kind of provisioned inside of a city or community that you operate in currently and is this a higher cap x requirement to have the ability to reach

SPEAKER_07: people so quickly because i would presume you would need more drone depots in more places than kind of

SPEAKER_04: one centralized hub yeah so we have in a city take a city example so you look at dublin for example or tulsa big city very dense about half a million suburban households and we would have one central depot in the middle of the city and all the aircraft live there and look at nice they all migrate back there they get their maintenance inspection if they're due maintenance inspection they'll get maintenance work done and then every morning all our drones fly out to various different locations around the city and they will sit on pads they're waiting for business they'll migrate dynamically across those pads so think of it as a not terribly unlike a waymo where you know the cars will be migrating around the city in their case to charge in our case to get maintenance and you go where the action is so the the really nice thing about food delivery is you get about 20 minutes notice that the product needs to be moved because the prep time is about 20 minutes for hamburger and fries so that is the time when if we don't have an aircraft at that location we'll send one there ready to pick up the delivery so there's a that structural kind of insight that you have with drones that you don't

SPEAKER_13: have with other things it's really useful so sticking to the food case here so i think that's what everyone kind of immediately thinks about when they consider drone deliveries um talk to me about the

SPEAKER_05: linkage between customer orders delivery platforms and how that plugs into to mana because i can see this working economically several different ways so i'm curious about how you get that information early and then also how that kind of interfaces in a business sense with those providers yeah so we

SPEAKER_04: we've we contracted with all of the big players so doordash uber eats in europe just eat deliveroo and so on and so they bring the orders to us we we get them by api it goes to the restaurant they get told to prepare the product we get told and we acknowledge that we can fly that product at that time from that location so all that happens the consumer interestingly in europe now just eat for example default to drone delivery they don't default to road-based delivery so you actually have to work harder to choose road-based delivery that's a big statement i think to how good and how much better drone delivery is

SPEAKER_19: that would be in markets where mana is where we are yeah yeah exactly they hit our api if we reply yes

SPEAKER_10: we can do that then the consumer will be given drone delivery is number one option yeah you know

SPEAKER_19: i have spent a reasonable lot of time in europe uh but i am most certainly an american and when i think

SPEAKER_05: about the suburban american world i'm thinking about lawns that are relatively large kind of flat spaces

SPEAKER_00: or you could land things uh my experiences in europe they tend to be slightly more dense uh living environments so how does that translate for for drone deliveries because i can see working here with

SPEAKER_21: our big old backyards but i'm not sure it's the same setup it's much harder here um so we we yet to

SPEAKER_22: find a house we can't deliver to uh so that's a good thing and and dublin and helsinki are extremely dense

SPEAKER_04: so helsinki's 90 apartments uh dublin is really dense but we can deliver onto a trampoline and we frequently do fun fact 15 of suburban gardens have a trampoline in them um so we only need about two meters wide flat inanimate area on which we can deliver and so so in suburban context we don't have a problem the real trick is actually delivering on high winds so we deliver from pretty high up and we put and we put the bag down you know g the gps positioning is one thing right you know where you are accurately but getting the bag where you know the bag needs to be is about flight dynamics and and stuff like that so you couldn't build a business like this in a more difficult place than ireland because we're a windy place windy windy rainy everything we get four seasons a day um so we're we're we're and we've nailed like we're 97 available in irish weather which means we're 800 percent available in any other country normal right right so we're we're well battle-hardened i would

SPEAKER_05: say uh and the proof is kind of in the numbers now you mentioned 300 000 deliveries uh when i was reading through your series b announcement 50 million dollars announced at start of april of this year

SPEAKER_00: yeah you guys have said 250 000 uh deliveries so what's the current pace is it uh over a hundred

SPEAKER_29: thousand a month now i'm trying to just figure out how quickly you're growing as we add bases now

SPEAKER_04: as we add one base for us right is about roughly about a hundred thousand deliveries annually and we've added another 10 bases now already here and aren't they won't be as productive as us bases and we have about 40 bases contracted in the united states so we were aiming rough target about 2 million annualized deliveries by the end of 26. we don't know what our target is for the end of 27 depends on how the end of 26 goes and but but the whole industry is there is kind of ourselves zipline google amazon we're all throttling up at the same time because of that regulatory kind of change that's happened and so for us we can do that with our eyes closed we could do 10 million deliveries with our eyes closed it's a matter for us now just you know eating the elephant one bite at a time and i think the whole industry is moving to a point now where capital is going to drive pace it's no longer regulated uncertainty or tech or any of those things product market fit all those things and for us at least the difference is i mean i think it's fair to say all of the the great companies that are doing this are ready to scale and already scaling the difference with us is we're we're marching positive already we already make money on nearly every delivery we do the only deliveries we don't make money on the last leaders like a pint of milk a liter of milk whatever and those are the ones that get people in the door but but we're actually quite a strong margin already on on a per flight basis and our

SPEAKER_05: locations that we open up are profitable already so when i order uber eats here in my current hometown of providence rhode island i often pay slightly higher food prices i pay a black box of service fees and other things i pay a delivery fee and then i pay a tip how does my economics change from the consumer

SPEAKER_35: perspective when i'm using one of your drones versus paying bob to drive around in his camera okay so

SPEAKER_36: you've identified a real problem and you put together a solid solution and a business model that you believe in so you're all set to launch your new company right not so fast if you want investors and potential customers to take your new business seriously you need to consider forming a delaware c corp and that's where northwest registered agent comes in they're going to give your new company a real identity that means an address for your public filings a domain a custom website a business email and of course a phone number and that's going to take just 10 minutes and 10 clicks they don't charge hidden fees customer service is available around the clock they're not overwhelming your inbox with spam and they make it easy to cancel at any time so get all the advantages of a delaware c corp independent regardless of where in the u.s you're operating from visit northwest registered agent.com twist for more details and the links are in the show notes so i think the way consumers and

SPEAKER_04: and restaurants for that matter should look at this is we're going to drive the marginal cost of drone delivery down to about 20 cents per delivery and by by the end of by the end of this year our marginal cost sorry our marginal cost is already a fraction of what it costs a road-based delivery and by the end of this year we'll we'll likely be in the kind of one to two dollar marginal cost territory and so what the way the consumer should think about this is well look if if everything's gone robotic and automated now and digital why would i need to consider the cost of you know the 15 cost plus tip that it takes a guy in a car or a motorbike whatever it is so the question is where does that value go who who pockets that difference i think the consumer will definitely pocket something but i think the restaurant could pocket some of it and i think the aggregators are going to do great too and the other thing is don't only think about cost the cost is is a given in this case think about our nps like our nps the last five years we've been flying and is high 80s early 90s net net promoter score that's a higher nps than apple have or any of the best companies in the world have and it's not because we're geniuses it's because the mode of a flying robot carrying your product and getting hot french fries a hot coffee not melted ice cream delivered to your backyard in three minutes that it just gets people so excited about about buying stuff that you're you're naturally going to be much happier and that floats all boats right that means that consumers will order more aggregators will be happy businesses will be happy everyone wins i mean if i could order food from around my town

SPEAKER_05: and pay closer to restaurant prices and get it faster and hotter i'm paying less for a better service which means my usage will go through the roof yeah i mean and i'm already i've got young kids so like there's been many a night when i'm like ordering something at night because i forgot to eat dinner you know so this is super pertinent to to to my needs uh the capital point you made is very interesting to me it sounds like if you solve the uh demand side and the getting things down side from drones and getting them up two drones then all you do need then is capital to build out operations buy more drones and land more partnerships so 50 million dollars in series b it's a lot of money uh but i do know that some of your competitors in the u.s are raising nine figure rounds in the 600 800 million dollar range so do you guys have enough capital to compete if capital has become

SPEAKER_07: kind of the the bottleneck to growth as you've described it yeah it's not capital has never been a

SPEAKER_04: bottleneck for us um you know we have never been ready to scale the business yet and our costs are a fraction of anyone else's so as we scale we'll actually generate cash so our our locations the location we roll i would say 10 aircraft is contribution positive day one because we get a demand from aggregators and then it's so it's producing cash it pays itself off in somewhere between seven and 12 months depending on utilization so we will use desk for a lot of our growth and we'll of course use equity as well so we're match ready we're we're fit and ready so we're not going to need as much capital as anybody else and that should allow us to scale much more quickly um but as i said i don't think any of the players in this industry are going to be constrained for capital because we started where we started our costs are a tenth of what it costs to do the same thing in the united states that's just labor cost so that all that advantage goes away when we scale operation in the usa but as i said you know having contribution positive economics even on low utilization means that you know we can be very very efficient with capital i feel like we buried

SPEAKER_05: the lead a little bit here which is uh the drones that you're using um to actually pull off these deliveries because it seems that if you're going to have such strong contribution margins from you know recently deployed drones they must be super durable they must be super good at all the things so talk to me about the the drones that you're using and also what what they bring to the

SPEAKER_07: business apart from just kind of the core mechanics of delivery excellent question because that really

SPEAKER_30: that really gets to the to the real function here one of our drones does 75 000 deliveries in its

SPEAKER_04: lifetime so it's the first thing the maintenance cycle is we're less than half a percent maintenance downtime per aircraft and that half a percent is what actually adds the cost because you've got a scale of maintenance organization so we've been using the same design aircraft for over five years so it's it's tested it's just simple as hell and it's a really low cost of ownership so 75 000 flights over to life means that it's just i mean the capital cost is inconsequential to to the actual revenue generates but even more important is the maintenance cost the actual cost of ownership into every flight that we fly is tiny so we think like a low-cost airline we do not think like tesla or spacex or any of those guys we think like ryanair or southwest when they were good that's that's really what's going to be the winner in this business it's going to be low-cost airline mentality

SPEAKER_53: all right i i agree with everything you just said especially the point that southwest used to be

SPEAKER_54: good and is now not i never wanted yeah coke united thank you very much i wanted southwest

SPEAKER_04: which i used to have complexity as well connecting flights all this stuff that they layered on all make sense if you're looking to grow but relentless focus on cost and operation efficiency is what we'll win in this space it ain't cool or sexy or any of that stuff it's going to be absolutely obsession with unit cost and efficiency assuming that you have safety right when i think

SPEAKER_33: about ryanair and other kind of ultra low-cost providers what i think about them is like

SPEAKER_05: i don't even mean this in a rude way bobby but kind of the commoditization of air travel and so when you're talking about you know the importance of efficiency and so forth to me it sounds like you're you kind of imagine that in time there's going to be quite a lot of companies that can offer drone-based delivery so you're going to win not by being the flashiest your you know tesla example but

SPEAKER_00: instead just being downright the most efficient so really the right example is it's not really wow it's

SPEAKER_04: pretty solid it's a commodity product alex it's commodity product like just like it's not like i said it's not people aren't buying drone delivery they're buying a hamburger or burrito they our customers do not care that they're getting to buy drone delivery anymore they're just buying a burrito so therefore your marginal cost of getting that product for the customer needs to be lower than the road-based equivalent or you're not winning and then once we're all there then it's going to be not a race to the bottom but you know warren buffett said you know in a commodity market he with the with the best uh cost base will win right so you know there's lots of truck drivers in the world with lots of small logistics companies but amazon are crushing it because of scale and the efficiency of their network does those reinforcing the kind of network effect of a large logistics network so therefore if you concentrate and provide a dense network of delivery drones and you already have lower costs your nobody is going to touch you on competition i want to get to your us expansion next but

SPEAKER_05: i'm curious about uh the getting set up in a new area question i've talked to a lot of self-driving companies wabi and waymo and everybody and there's different approaches to mapping and kind of understand the world that you're operating in when you have a self-driven vehicle now clearly of course drones up in the sky very different but you probably still need to know like for my house if i order

SPEAKER_00: where's my backyard where are the trees so what what is what is the time an investment look like to

SPEAKER_04: prepare to go to let's say tulsa yeah big fat zero um nothing nothing uh so we here's what happens we sign a location a bit of real estate the roof of a restaurant or the or their car park we put aircraft on the ground we plug in our unit the charging system and it's it's done there's like you can literally straight away start ordering through doordash or uber eats when that happens or through our own ordering app and if you as a consumer order with us the first time we've seen you we'll ask you to verify your address we'll show you a picture of your house and you'll say yes that's where it is and that's it done and we'll automatically select the location to deliver on to in batch and then we'll fly there to deliver the product then the aircraft takes over and decides itself if that's a safe area to deliver or not so it'll detect children underneath or obstacles anything like that and if there's anything in the way the aircraft will just bring the product home it won't deliver and if there's nothing in

SPEAKER_33: the way it'll deliver it's all fully automated what would it cost and hear me out for me to bribe you

SPEAKER_54: to bring this to where i live sooner than you're currently planning because road islands full of

SPEAKER_04: irish people so we can be there very quickly uh so like we're focused right now rest of this year on oklahoma and texas that's all we're going to do but 27 we have really ambitious plans for 27 and as i said a lot of it will be determined on what we can achieve in 26 but we're we're supremely confident that we're going to absolutely knock it out of the park and we see ourselves being a leader in the united states not too much time from now won't be this year but we we can definitely be there next

SPEAKER_05: year i i believe it so let's talk about the us uh you mentioned that the regulations have either changed or become clear in a way that's opened up the door for you guys to expand here in the states

SPEAKER_69: talk to me about that progression and i'm curious about the regulatory differential between um let's

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SPEAKER_04: so uh there's an executive order about 12 months ago now um from the administration that says america wants to gain drone dominance right and that's in response to geopolitics that was the trigger because if you had asked me more than a year ago i would have said usa is nearly in last place and europe is china is leading then it's europe and then it's usa and that's now upside down now the usa is the world leader in readiness to scale this technology thanks to a new administrator in the faa and an executive order so what we've seen and is witnessed by the growth of everyone in the usa is usa is open for business in this technology and finally we've reached the point where and we we just got four new locations approved in the usa took 30 days that would have taken years before and we've seen in our friends you know our frenemies uh that are over there same thing it's just absolutely nothing in the way of scaling this industry and and and so behind that there's the old part 135 regs the part 107 regs and the upcoming part 108 regs and and all of these are progressions towards an endpoint of unlimited scale but 135 and 107 have not been really fit for purpose because of the overheads associated with them and now with 108 we see the perfect set of regulations to scale the industry so to me

SPEAKER_05: just talking to you i'm actually more excited than i've ever been about this industry and its growth because it feels like you've really solved all the problems and you know you're going to finance it and it's positive if you can unit economics and your drone technology is sorted out um how long until i can call one of your drones to my house not just for a delivery but to put in um i don't know like some soup that i made and send it to a friend of mine because to me yeah why not like i why can't i use

SPEAKER_04: in my original business plan eight years ago for this business when i have the you know when i wrote the notes if the next use or the next wave of this after we democratize access for restaurants and aggregators to get delivery it was then peer-to-peer delivery right so you could be baking delicious cakes or cookies in your house and you can make a living out of it and you can suddenly reach 400 000 customers with an automated delivery system that costs peanuts and so that is in my list of things to do it's just we you know like i said how to eat the elephant one by the time there's 92 million suburban homes in the united states that we want to we want to get to and build a meaningful commercial relationship with over the next five years so i think you will get that peer-to-peer delivery you're asking for but it'll come sometime after uh the first wave of growth that we all go

SPEAKER_33: through yeah i was thinking about it as peer-to-peer like you know let's say that some other parent

SPEAKER_54: needs a pacifier or a particular medicine or whatever i could just send it to them without having to like deal with car seats and imagine the marketplace you could build imagine a marketplace

SPEAKER_04: you could build on top of this where you've got a million people living in the city that can literally connect with each other with a five-minute flight they can deliver anything to each other now there's obviously other considerations to think about with that but if you think with with an innocent lens that's going to really power the local economy like a way that's never been seen before and so whereas now we we all live on gigantic amazon fulfillment centers and they make their logistics scale serve that really well with drones and robotics you have this new ability to really do localized hyper localized stuff that's even cheaper than these giant networks so the you know it's it's

SPEAKER_24: difficult to imagine what other things you could do with it there's so many options here but i think

SPEAKER_19: the ability for people to build a business on top of the infra you're building is is incredibly interesting and under explored when we think about during deliveries because i think you're right

David Friedberg: people do think about them as burgers and fries now we we have that already i said we've got for example one ice pop i don't know if you got ice lollies you would call them a small little business

SPEAKER_04: popsicles we call them here yeah popsicles right so we got a small little indie popsicle maker to family business they got their factory out in their back garden and they're selling in the summer they're selling thousands of ice pops a day to our system delivering straight to household so that's already happening what you're talking about so we're just doing it in a selective way it's not really period to peer it's a small business to everybody else but it's already happening you

SPEAKER_05: are going to have to have some really interesting regulations on uh keeping people in the future p2p product from not sending cocaine through the drones yeah i feel like it's going to be tricky

SPEAKER_04: when i was chuckling yeah yeah yeah 100 yeah that's the thing with robots is robots don't ask questions right and so so that'll be a factor but it's it's not something right now we're preoccupied with

SPEAKER_62: all right uh last question for me is uh the job growth thing so when i was just going back through

SPEAKER_05: your series b announcement from a couple weeks ago you guys talked about growing from 170 people to over 570 and you know it's interesting because when i think about technology companies today everyone's talking about you know static team size letting people go so really kind of encouraging to see that you're very into hiring humans but are is that because of the unique elements of your business

SPEAKER_69: need to have these drone depots and maintenance and so forth or are you just a bit more human positive

SPEAKER_97: than some other technology leaders that i talked to we love humans i love humans uh so the truth is

SPEAKER_04: we're pivoting from or or migrating from being a pure technology company um you know where we have about 200 folks in dublin to being an operational airline essentially and and with that comes all this overhead of maintenance just all the operation like you have to clean bird crap off your motor so there's stuff that you know humans you know just you need humans for so most of our people we'll hire will be the ops people that just operate everything and then the other big thing is we're moving manufacturing to the united states so interesting okay yeah so that's a big deal right so we're in as much as we can we want to have a us-only supply chain for our aircraft there in the usa so that would mean a lot of heads probably of the 400 people that we've we budgeted for this for this particular phase of business probably about 300 of them will be in oklahoma well shout out to the uh

SPEAKER_00: the oklahoma economy um the oakies uh up the oakies uh yeah uh flat central probably not too hard i i mean

SPEAKER_04: it's kind of the phoenix of you're struggling for good things to say it's a great place i love it uh i mean it's so there's so much diversity all over the usa it's a wild crazy place i will admit and oh yeah but so is texas so is the usa that's what's great about it uh and i'm moving there so it's going

SPEAKER_109: to be even better yeah no we'll take any uh you know america's a big place we got a lot of space come

SPEAKER_05: on down uh but bobby i i think that people should now understand what you're doing and i think they're going to hear a lot more from you guys in the next i guess you know nine to 21 months kind of through the end of this year through the end of next year so uh if people want to learn more what's the website

SPEAKER_00: and uh do you want to shout out a job you're looking to fill here in the us that the right

SPEAKER_04: person might be listening to so the website is mana.aero aero and it's a fun website and then the job is everything but mechanical engineering key electrical engineering software obviously in the usa particularly head of manufacturing so that's the hard one to fill so somebody to lead our manufacturing efforts over there um everything else is all engineering stuff all right and i do

SPEAKER_05: really want to thank you for your commitment to when you open your first northeast hub it'll be in providence rhode island you heard it here first folks it's a contract it's the deal yeah no bobby an

SPEAKER_00: absolute treat and um i hope everything goes as well as you think because i'm very lazy and like to stay

SPEAKER_119: home so thank you very much for me very much today we're going to war no we're not going to get into a tank we're not going to get into a ship i'm not going to fly off an aircraft carrier instead we're going to talk about the use of drones in war and where they do well and where they don't do well one issue we've seen across the ukrainian battlefield after the russian invasion is that there's a lot of gps jamming going on that means if you depended on using gps to fly your drones to where they're supposed to go you might have a bad time drones sometimes even go off course landing in the wrong country which is a big problem in international relations but one thing that we can do is improve the ability of drones to fly without gps and that brings us to today's guest which is a company called theseus they are building a system that allows drones to fly without

SPEAKER_05: needing satellites to tell them where they are at apparently it uses google maps and a camera sounds very simple to tell us more about it ian laffey is here ian how you doing i'm doing great alex thanks for having me oh dude an absolute pleasure and um normally it doesn't matter where our guests are calling in from because startups are a global game and people travel but uh tell me where

SPEAKER_123: you're at and why if you can yeah i'm here in kiev i've been here for a couple weeks and will be here

SPEAKER_125: for several more um just flying our system with a bunch of different people uh partnering with

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SPEAKER_129: what you have built and why but can you just give me the the snapshot of the drone industry in ukraine

SPEAKER_119: clearly at the forefront of drone technology now helping countries around the middle east defend themselves but what's it like to be in the uh in the mix i think the most interesting thing about

SPEAKER_133: the drone industry here is uh how competitive it is how much of a free market it is so i think when

SPEAKER_125: you look at defense in general in the us um and the way that we procure things uh like we we are at war now but the wars that we are at and the wars that we go into are much different from the war here and

SPEAKER_133: here you have like a front line you have a place where thousands and thousands and thousands of people are fighting every day and uh the technology needs to work there and it's very easy to get it out there and so i think that that really lends itself to you know you hear a lot about scrappy startups but also just like much faster iteration cycles because you can take something and actually know if it works

SPEAKER_136: on the order of like days instead of you know many many many months to years you're not doing as much

SPEAKER_119: testing in the lab versus deploying on the field so you have a pretty quick uh information feedback loop on how the technology works and what's doing well what's not doing well i i guess that's a real benefit to the improvement of drone technology terrible circumstances but at least we're making some progress um how fast is the uh the drone versus drone technology race advancing because i know that also you know of course russia uses a lot of drones and ukraine uses a lot of drones so is it um

SPEAKER_05: something where you can kind of see one side pull ahead and the other side catch up and back and

SPEAKER_141: forth like that yeah i think the big advantage that ukraine has is uh starlink so that they they have

SPEAKER_142: access to starlink and and russia doesn't have access to starlink um you're seeing more ai drones

SPEAKER_133: coming out of ukraine than you're seeing out of russia um i think russia clearly has an advantage in the uh call it like lucas type you know shahed type drones um we produce like hundreds of them every day um and yeah i mean it's it's definitely it's definitely constantly changing um it seems like a situation

SPEAKER_145: where there's there there are no winners right there's only losers um yeah yeah yeah it it it it doesn't seem like anybody is kind of breaking away um as as far as as that goes so starlink is a

SPEAKER_119: great segue into kind of what your company does now when i think about connectivity i'm familiar with how gps works and i know that there's other gps equivalents from other nations and blocks around the world uh and we also now have for the first time really in human history functional satellite internet across a large amount of the planet so tell me about the connectivity issues that drones are having in ukraine and then walk me from there into how your technology plugs the resulting gaps the interesting

SPEAKER_133: thing when you look at starlink right is it's a it's very modern uh it's got this these panels and they're they're very directional and that's not how gps works at all um you have these geostationary

SPEAKER_125: satellites that have been around for uh decades and they're very very low power and um and and they're also in like known frequencies and so what that means is it's very very easy to basically shout

SPEAKER_133: over them with a different radio and and then you end up jamming them uh and and so what you see here is jamming across the whole spectrum you know there's a radio spectrum um and you can cover different parts of it with different amounts of power uh and gps is kind of just a band where if you let it go without being jammed uh it's just so devastating in terms of precision guided munitions and and your ability to collect information and isr um that it's basically an absolute necessity to jam gps and so you see that just universally jammed in addition to communication links uh being jammed uh different links in different places at different times um and so what we do is we kind of circumvent the whole

SPEAKER_125: problem with radio uh like you said um at the beginning or maybe in in the preamble before we started like it's it's a camera and there's satellite maps on board and it tells the drone

SPEAKER_133: where it is and we've spent a a lot of time training and algorithm that's able to look at very old very

SPEAKER_136: out of date very bad satellite maps uh and very bad camera imagery and still figure out where it is uh

SPEAKER_156: given all of those circumstances so the way that i understand this in is that if you have a topographical

SPEAKER_119: map and a camera you can essentially look out through the camera see what you see compare it to the map and then get a reasonable understanding of where you are uh but to me that does not sound incredibly precise now with gps when i'm in new york city it can tell which corner at an intersection that i'm at so it's it's incredibly precise and quick so how much uh fidelity do we lose by going to your system and to be clear i understand that it's the only one that works so like i'm not trying

SPEAKER_158: to be unkind but i'm just curious about how well we can do compared to the gps that people

SPEAKER_141: listening to this probably already know and understand it's a great question uh gps is is

SPEAKER_125: amazing um and i think what's really interesting about uh about this is you've had these kinds of solutions for you know decades on if you look at something like a tomahawk missile right like that

SPEAKER_133: has uh that has a laser rangefinder and a really good topo map and it can figure out where it is um really

SPEAKER_125: what we see ourselves as doing is like taking that from like yeah government level um maps and and a really nice rangefinder onto you know like a 25 camera off amazon and very low resolution maps um and

SPEAKER_133: so to answer your question yeah that the answer is not very precise so we advertise 30 meter median accuracy um and that is enough to get you from a to b but it's not enough to tell you where you are on on a street corner um but that's kind of also something that's like uh pretty important to us

SPEAKER_136: once you start getting into higher levels of precision um you know there's there's a lot more

SPEAKER_119: considerations around that kind of technology so 30 meters sounds like a lot but actually i don't think it is because and i i don't mean to be kind of crass about this but some drones go boom and i wouldn't want to be 30 meters away from one of them doing so so i presume there is a a margin for error in

SPEAKER_133: yes marketing yeah the the the going boom is not you know it's it's not really like a the the core focus for us um what we're focused on is is getting uh drawn from a to b over very long ranges um and over

SPEAKER_125: very complicated environments so if you need to fly a drone for 600 kilometers um you know in a straight line over fields and still know where you are uh we can help you with that but it you know that kind of um like last mile targeting and like uh strike capability has just not been a focus for us

SPEAKER_119: so i think then that we should better understand what that use case is you're describing when do i need to send a drone in a straight line for six hours and to be clear i'm exposing my lack of operational knowledge of drone warfare here but that's not a circumstance that i kind of expected unless you're going deep into a enemy country for example you know back to the topic of of radios

SPEAKER_125: uh right is is like um to maintain communication with a drone is uh difficult in a jammed environment

SPEAKER_133: and so if you want to go and you want to take pictures of things and and fly around and stream video back or go and record data over some place um without getting jammed and be able to go complete that mission and then come home um or you know go fly that mission and then stream data back over starlink the

SPEAKER_125: whole time um these are things that we we help with um and i i would just say uh that is uh generally like

SPEAKER_137: this stuff that we like to to talk about and focus on is is kind of those capabilities my understanding

SPEAKER_119: is that starlink is actually pretty difficult to jam is that correct yeah it's just like a physics

SPEAKER_125: problem um they have a highly directional antenna uh and it's uh it it makes it much more difficult to

SPEAKER_119: uh to jam that that kind of phased array so in time do you think that we get smaller and smaller satellite internet receivers a la starlink or whatever from you know blue origin or from the e or whatever and does that does that dramatically change the state of drone warfare or do you think that we're still going to need gps replacements uh without kind of real-time satellite connectivity

SPEAKER_179: uh to ensure that we can keep doing the drone operations that we need to get done i think you said

SPEAKER_181: kind of two things there and and the first definitely like you're you're just gonna see um you know

SPEAKER_136: you're gonna see starlink direct to cell you're gonna see like a tiny little chip that connects

SPEAKER_133: your phone uh your phone or your drone to a satellite um from anywhere in the world where spacex lets you do that um the the thing that i would say there is is that um you know communications and positioning are kind of two different things so like you think about your iphone you have a lte network that

SPEAKER_136: lets you call people and you know look at twitter and then you have the gps which lets you you you know you combine that with the lte to then use google maps or to find where you are in the woods

SPEAKER_133: um and so you know it's kind of two separate things the other thing i'd say that's super interesting with starlink and i think this was something that we always viewed as like a risk for our business but it's been interesting to see them move in the opposite direction is starlink actually

SPEAKER_136: because it's satellites flying around they know where the satellites are like you can position off of starlink and so a lot of people um in ukraine as well as in the us had begun to use starlink

SPEAKER_133: panels uh and use a positioning feature that's already in them to fly their drones um and they're you know there's some pros and cons to that over vision uh but i think this goes live in about seven days it may be like nine days but um starlink has basically just like completely uh blocked that capability or made it like so inaccurate that you know it's it's maybe like 50 kilometers precise unless you pay them a bunch of money for like military starlink uh contract and so um you know that that's just not really the domain that we operate in um for me like the point of a drone is is that it's cheap um and we in the us and other places have like really great technology like i think you're always going to need a great aircraft but um there's there's a certain value that you get to making something just like dirt dirt dirt cheap and and making millions of them well i mean that's why

SPEAKER_119: using a camera and maps is incredibly cheap as you said you can buy some of that stuff off of amazon so tell me about uh the company's product itself and the fact that it can work on i think you guys say pretty much any drone i would love to better understand um how it attaches and also what does it cost to

SPEAKER_142: get one of these onto a drone today yeah so we um right now uh what we have is uh so we started off i guess i'll i'll back up is we started off with with this box um and you put this box onto the bottom

SPEAKER_125: of a drone and it it plugs in and it pretends to be gps um and there's actually like a bunch of people that do uh similar stuff there weren't really when we when we started but there's a bunch um and what

SPEAKER_133: we found with that is that it kind of sucks for a bunch of technical reasons i won't get into and so what we realized is that um you can actually just pull the software out of that and design it in such a way that a you can run it on basically any computer so you don't need a gpu you don't need

SPEAKER_125: anything fancy you can run it on like a 65 raspberry pi um and then also building in just a variety of

SPEAKER_133: cameras so thermal cameras um electro optical or just like regular cameras um and supporting all of those things out of the box and so um for us that's kind of been the evolution of a product is like uh we still sell that as physical hardware but then also offering that to customers who they themselves have really developed supply chains they already have the compute on board um they have the

SPEAKER_136: ability to go and buy these systems and it's like you know very open book i mean i'll even say it here

SPEAKER_137: on the on the podcast right it's like it's a camera and a raspberry pi and an sd card right like there's no there's no secrets don't give away the secret sauce i mean i think i could probably actually put

SPEAKER_69: those together over a weekend with enough clawed credits you know i i think you could definitely put

SPEAKER_133: it together yeah it's it's um the hardware is um it basically needs to be a commodity and and honestly like the the whole thing needs to commodify because these things just need to get cheaper and cheaper

SPEAKER_136: and cheaper um and this has been kind of something that i i've been thinking about a lot is like you know position a position as a product it's like you don't need to build a differentiated positioning product you need to build a really good positioning product and deliver it at a lower cost basis and a

SPEAKER_119: higher scale this reminds me a little bit of like the automotive industry because one thing that someone told me who works in robotics is that you know if you make a component for automotive they're going to grind you down on cost and they're also going to demand that it works for like 200 000 miles being bounced around in a hot temperature so they just want simple high performance cheap and it sounds like that kind of maps to what we need for our drones but ian it sounds like then the company these

SPEAKER_158: years has become much more a software company than a combined hardware and software company at the end

SPEAKER_141: of the day i see us as a a reliability company like our job is to solve uh solve the problem of autonomy

SPEAKER_133: so since since we've started um our goal has been to keep good guys from getting killed and what that looks like to me is is having less people on the battlefield where they can get killed and the

SPEAKER_136: way that you do that is you make systems more autonomous or you make the systems that are piloted by people able to be piloted from farther away from the dangerous places and so in order to do that you need to make those systems reliable because really the job of an operator in a combat zone is reliability humans are very good at solving uh you know problems that crop up on the fly we have very high common

SPEAKER_133: sense and so we kind of fill in the gaps in reliability in systems and so how i see our company is is that we take these systems that are pretty unreliable and uh you know you could say like janky or hacky and we make them more reliable and so what that looks today is um you know the most most most foundational aspect of autonomy like you can look at a drone that was made in like 2003 and before jamming that had a higher level of autonomy uh to any drone that you're going to see in in ukraine flying up until maybe the last year or so and and so by just delivering the position to the drone you're increasing the reliability of it you're increasing that autonomy level back up to something

SPEAKER_136: that's that's on par um and then we see that as as just like extending out farther and farther from there

SPEAKER_119: so essentially we got really far with drone technology when gps worked just generally speaking and now that we are in a post gps era for warfare drones we've had to essentially rebuild to get back to the level of autonomy that we had okay well that's difficult but i'm glad we we've gotten there what can you tell me about progress in the theseus technology because you guys have been at this now for a couple years you're in ukraine you're doing i presume testing of some sort but how quickly does the technology improve and is it improving along a accuracy axis or more of a cost

SPEAKER_133: and reliability axis with accuracy there's like um you know just regulatory considerations so that's not really like a priority for us um we actually don't want to make our system more accurate right now um

SPEAKER_125: that being said uh yeah just reliability and cost i think you hit the nail on the head there um and it's

SPEAKER_136: really just a matter of like i think even myself like i'll just speak for myself here like it's um it's very very very very very very different to like field a piece of technology

SPEAKER_133: uh in a war zone versus um not in a war zone and um and so i i think for us you know the first half of

SPEAKER_125: our of our company's life has just been getting our product to even work well enough that it it makes

SPEAKER_133: sense for somebody to use it um and then the past year has been oh okay we know that this works we know that it works well how do we go how do we get this um you know to scale one million and what are

SPEAKER_143: all the roadblocks that we need to knock down in order to to do that how many drones a year does ukraine

SPEAKER_119: need and what do you think should be the capacity of the united states to manufacture drones because i know there's been a lot of talk about re-industrialization of the united states building our manufacturing capacity back up but it's hard for me to tell where i sit if that's a lot

SPEAKER_158: of people cosplaying and bob the builder hats or if they're actually making um you know real progress

SPEAKER_133: towards shovels in the ground i love all drone companies uh they are our customers so they're uh you know uh good things to say uh only um so ukraine right now is it like i don't know six to eight

SPEAKER_125: million drones a year um the u.s we we have this historic uh drone dominance program um that is uh i think it's 300 000 drones over the next two years um i've talked to um you know the the guy who runs that program and what they've said which i think is really good is that the the focus of that program is um yeah it's to get the one-way attack drones that's very important but it's also uh kind of a

SPEAKER_133: shock to the supply chain to incentivize american companies to bring components out of china um and i i think that like everybody talks about this so i'll try not to harp on it too much but it is really really surprising the the level to which everything is made in china and i'll just take one example which is like a camera um you know you can get a sensor that's made in japan or korea pretty easily like the actual array of of silicon that that takes in the light um to get the lens made outside of china is more difficult and then to get if you as like just a small business not like a larger company

SPEAKER_136: wanted to get the pcb that goes on the back of that sensor and get that made outside of shenzhen

SPEAKER_133: you basically can't do that without paying like four or five six times as much and and your options are just like so so so limited um and i think you basically just see that across every level of the stack and it's not it's basically all these little load bearing points where you you rip one thing out and

SPEAKER_143: you go down like two levels of the supply chain and then you realize oh actually this one very niche

SPEAKER_119: thing is only made in china are american drone companies both startup and from maybe even the primes are they doing the work to reconstitute those supply lines here in the states or for the foreseeable future in are we not going to be able to do enough in nation manufacturing to kind of like

SPEAKER_133: supply our own drone components i'm scared now i've been really impressed by what like the the top american drone companies have have been doing and how creative they get and and also like i think yeah

SPEAKER_136: time is a factor and and having demand is a factor but you also realize like none of this none of this stuff is that hard individually like in aggregate it becomes basically impossible but like that pcb

SPEAKER_133: example it's like okay well if you have this if you have this demand like you can put together pcbs in lots of places you just have to get enough people together that they go go to somebody in a different country and they say hey we need this the key thing that we need to figure out in our country is like how do you have a real commercial industry around these microelectronics because you you look at like the american industry in you know the 40s 50s it's like this heavy industry you know you mentioned the

SPEAKER_136: automobile industry um that lends itself to these like very large systems and we have a culture that lends

SPEAKER_133: itself to that we have a culture also that lends itself to like information technology right like we we were we were the country that first invented the filing cabinet just because we love information so much and like storing it so then of course when a computer comes out like we just have this domestic demand for computers but then you look at china and they've just been making all the world's stuff for so long that they have all of these smaller component manufacturers that serve a very large domestic market and so now that we're seeing like war or defense change to bias towards small electronic components and we're having to ask ourselves like oh this this has significantly more of an impact on on the battlefield than we had thought five to ten years ago just cheap small electronic components like what can we do in the us such that we are you know we have domestic demand at scale for

SPEAKER_119: cheap small electronic components do you know um that that uh that project cost plus drugs it's essentially like i think it's maybe it's mark cuban who's working on this they seem to just make generic drugs in the us for a very low price i feel like we need some billionaire to be like i'm gonna make the pcb base company and i'm gonna make pcbs at cost and we're gonna make no money but if you need springs pcbs you know carbon screws whatever the we will make it and then just like just

SPEAKER_05: do it with the existing capital base because this is not impossible it's definitely not and i i think

SPEAKER_136: defense is like a great reason to focus on i just i do think i i don't know i mean i get very scared because i i just don't think like i i i don't think that there's that much of an incentive in our current commercial industry like without a ton of protectionism for us to move like back towards manufacturing like there's there's so many regulations against making stuff so few people like we we have like such a high labor cost that it's like you know and people talk

SPEAKER_133: about automation i think that's like one way out but it's like you know who is going to be the person that is putting together these these tiny little components all day for two dollars an hour and how do we even compete uh against that and so like i i don't really have the answers to that but it's it's definitely like a a huge problem um because i think we we're just kind of waking up to the fact that like uh a lot of things that we have not invested in turn out to be like very very important um in a you know

SPEAKER_156: global geopolitical arms race of sorts yeah this is why i think even uh us you know staunch no industrial

SPEAKER_119: policy folks are starting to go well what if we had a little bit of industrial policy just yeah just a dusting on top you know because capitalism is is amazing and such a great engine but it does not

SPEAKER_141: always foresee national security needs well we're also highly regulated right like we we have so we we have a minimum wage we have environmental protections like i'm not saying get rid of

SPEAKER_133: the minimum wage and like child labor and and dump things into rivers but like you know you don't necessarily need more laws like a lot of it can be solved also by having less laws but i i don't think that there's a lot of demands from our population for that zero yeah also i would say like i think we we think about this it's it's in vogue in like silicon valley and like among people that that make things to be talking about these issues but like maybe this is a little pessimistic but i i just don't think that the average american like particularly cares um that much uh about um about a lot of these

SPEAKER_171: issues the average person only cares about what they've recently seen on television and what their friend told them like we're not talking about yeah sorry like i don't know i don't know if that brings me down i mean if if we only do things that the average person cares about we're not going to do much but we will watch a lot of american idol i guess i'm just saying i i don't know if you're

SPEAKER_133: gonna see like broad popular support for like uh you know deregulating critical industries um

SPEAKER_125: because i think if anything we're seeing like an increase in demand for regulation of of critical industries like nuclear again i i don't know you know i think maybe people just spend a lot of time on on twitter like everybody wants to deregulate nuclear which i think is like good

SPEAKER_133: build more nuclear reactors like that that's kind of a new thing but then so so that's thumbs up but you know you also see like uh we want to regulate ourselves out of out of ai um and i i think it's also like yeah i think america just has a lot of um we have a hard hand that we've been dealt and i i think we'll figure it out but you know the thing that keeps me up at night is like we we allow ourselves to uh be exposed to all this information from every country in the world comes onto our internet and speaks to us in english and and convinces our citizens of different things um and like you know i spent some time looking at like what would it be like to like do propaganda on like behind the chinese firewall like if i wanted to run it's it's impossible like you just can't do it um but it's like well documented very easy uh to to influence the the minds of of americans and and so i think

SPEAKER_129: that really works to our detriment i could talk to you about that issue and that set of issues for about seven years but for the sake of this interview i'm going to loop us back to theseus this is not

SPEAKER_119: sadly the ian and alex talk about the future of industrial policy hour um so before i let you go i'm really curious about your time at yc you guys were i believe uh the company said in a release i think the first defense tech company to go through the famed accelerator so just really quickly how was that and do you think that um it would help the issues we're describing if there were like another like 50 theses equivalent going through american accelerators to jumpstart these processes yeah i mean

SPEAKER_142: i think it was great um i i really have never uh experienced like a higher density of really

SPEAKER_125: talented intelligent like kind uh motivated people um then then in yc um and i think we had like you know aaron is a really great group partner aaron epstein and just like it was a really great experience um i i think they've started to invest like way way way more um into defense i have heard a thing that like with accelerators they typically just follow what the founders are interested in so yeah i think there's just been an uptick um you know for example our company started out of a hackathon like i didn't wake up one day and and and be like oh i want to i want to start this company it's just there's there's so many

SPEAKER_133: problems like even to the conversation we were just having like i think you can look at the world and you can see these problems and and feel like oh there's nothing i can do or you can just pick

SPEAKER_125: an issue and start working as hard as you can towards it and so luckily i think you see a lot of companies um you know coming out of the us and silicon valley now that that are focused on on kind of these key um aspects of working in the national interest i think it's already started happening

SPEAKER_133: do i think that there could be more of it um yeah but then also to the thing i was just saying like maybe also like commercially focused not just defense focused because uh we're not like

SPEAKER_136: we're not ukraine and we have a different problem set than than they do and we're not actively being

SPEAKER_240: invaded well we are currently um in a different region dealing with drones so you know i i don't

SPEAKER_119: think look no matter what you can say about america we do get busy you know we have a history of being a busy nation so i think there's a lot of um a lot of places we get to place technology uh ian listen thank

SPEAKER_05: you so much what's the website and i do hope that tonight you get some more sleep and that russia does not

SPEAKER_251: bomb keep as much so that way you can actually sleep yeah thank you i appreciate it it's uh theseus.us

SPEAKER_53: t-h-e-s-e-u-s.us awesome and uh i don't get to say this too often because i try to stay pretty much impartial with founders but i hope you kick maximum ass and um i hope the technology goes even better

SPEAKER_119: than you expect because i would like ukraine to win and soon thank you for coming on in thanks i

SPEAKER_151: appreciate it take care