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and participation may vary. Limited time offer. Turn off

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your phone. Price and participation may vary. Limited time

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offer. Terms apply. Hello

1:23

and welcome to How I Built This Lab. I'm

1:26

Guy Raz. So it seems pretty

1:28

clear that within, say, 50 years,

1:30

most cars will likely be electric.

1:33

The internal combustion engine is on

1:35

its way out. But that's not

1:38

necessarily the case for air travel. So

1:40

far, it's been difficult to figure out how

1:42

to create a long range commercial electric

1:46

But when it comes to shorter distances, electric

1:49

planes will start to play a much bigger

1:51

role, especially in

1:52

transporting goods like medicine and

1:55

packages. One of the leading companies

1:57

in the space is Beta Technologies. They've

1:59

developed.

1:59

electric planes that can fly more than 350

2:02

nautical miles. The

2:05

company's founder, Kyle Clark, is a

2:07

bit of a jack of all trades. He's a

2:09

serial entrepreneur who started three other

2:11

companies and he's also a former

2:14

NHL hockey player. But he's always

2:16

been mainly interested in building

2:18

planes. In fact, the name of his company

2:20

could be traced back to his early reputation

2:23

as a tinkerer. My passion

2:25

was designing things, building things. And,

2:28

you know, even the name of our company,

2:29

Beta, which which

2:32

is named because of my nickname in hockey

2:35

because Beta was the nerd in

2:37

the in the Matrix movie in the back, always

2:39

hammering away on his computer. And

2:41

and on the hockey team, everyone had a nickname

2:44

and my nickname was Beta because I was

2:46

a nerd and I was always studying and

2:48

just doing applied math and engineering.

2:51

And so so on the hockey team,

2:53

I was a little bit of an outsider respected,

2:56

but an outsider focused

2:58

on designing things and building things. I

3:01

read that your dad ran a machine

3:03

shop that that made

3:05

items for researchers at the University

3:07

of Vermont. And you as a teenager

3:10

and as a kid, we used to go to that machine shop

3:12

and like take parts and just tinker

3:14

around and make stuff. So what

3:16

were the kinds of things you were making?

3:19

Yeah, I mean, this was probably the best education

3:21

a kid could ever have. It was called the

3:23

Instrumentation and Model Facility, where

3:26

professors would come in with wacky ideas

3:28

and the machinists would figure out ways to

3:30

build it. And so my jobs

3:33

there were actually taking, you know, 20

3:35

years of drawings and converting them

3:38

into computer models and

3:40

and then serving them back to the machinists or sort

3:43

of bringing them to the professors. And

3:45

all I was doing was really copying the

3:47

designs of other people.

3:49

And on the side, I was building parts

3:51

for airplanes, for iceboats, for go carts.

3:55

You know, after hours, we called it government work

3:57

or G jobs. And and

3:59

I.

3:59

built a whole lot of stuff in that machine shop, which

4:02

I can say now, because my dad's retired and, you

4:04

know, no repercussions for him at the university.

4:07

So when you got to, to Harvard

4:10

and you studied material science and engineering,

4:12

did you think that

4:15

you would go into aviation? Was that

4:17

sort of your goal? Yeah, there's no, there

4:19

was no question in my mind at that point that I was going

4:22

into aviation. In fact, I was building

4:24

all kinds of airplanes in my dorm room. And,

4:26

uh. When you say building airplanes, like model

4:29

airplanes? Yeah, mostly model airplanes.

4:32

Um, but you know, I'd go over to the local airport

4:34

and help people build experimental airplanes.

4:36

And even before that, in high school, started

4:38

building real scale ultralights

4:41

and, and airplanes. Um, I, I

4:43

read that while you were an undergraduate,

4:46

you wrote your thesis

4:47

on designing a hybrid electric

4:51

airplane. And at the time, this is 2004,

4:53

some of your mentors,

4:55

their professors were like, this is not realistic. You

4:58

can't really, this won't work. Can

5:00

you, can you tell me what you were designing?

5:03

Yeah, it was a hybrid electric design because

5:05

I started to realize that electric

5:08

propulsion had unique advantages over

5:10

traditional reciprocating engines. And,

5:13

uh, and that was actually called beta air. Um,

5:16

and that was kind of the, the, the germ of the

5:18

whole beta air idea. Of course it wasn't

5:21

fully baked. It was just the beginning of it. All

5:23

right. So you do this thesis, but, but after you

5:25

graduate, you actually kind of went in a different

5:28

direction. You went on to found a

5:30

few other companies, um, including

5:32

a company called Itherm Technologies and

5:35

another one called Energy Management Systems. Uh,

5:38

both of which you would go on to sell. Um,

5:40

and then you also started another company called

5:42

Venture.co, which was a, I guess like a social

5:45

network for entrepreneurs.

5:46

Um, but all the while in the back of your mind, you

5:48

were, you were still thinking about something

5:50

in aviation.

5:51

Oh, it was straight in the front of my mind. I was

5:54

developing notebooks and notebooks of

5:57

ideas on how to make beta air

5:59

a reality.

6:00

And so the idea that you had

6:02

for beta at the time, what

6:04

was it? Was it exactly

6:07

as you laid out in your thesis or had it evolved

6:09

into something different by that point? Yeah,

6:12

it had evolved to a passenger aircraft, a

6:14

two-person passenger aircraft with a high wing,

6:16

a hybrid drive train and a pusher propeller.

6:19

Your vision was to do a two-passenger

6:22

electric aircraft, like a drone, that

6:24

could be used for leisure

6:27

or for just private aviation, because

6:29

presumably it wouldn't go that far.

6:32

That's correct. It was a private

6:34

plane that you could take to an

6:36

airport, disconnect parts

6:38

of a motorcycle from it. There was a whole idea

6:40

around enabling point-to-point

6:42

travel. Wow. It would be a motorcycle

6:45

embedded into an electric plane? That's right.

6:48

Wow. And look, the – It's

6:50

like a transformer. It is. And

6:52

it was really – it still is a very elegant design,

6:54

and someday I'm going to go and bring it to the market.

6:57

Cool idea. I want that. Me

6:59

too. So you would – because it's like

7:01

when you see like an RV with like a – you

7:04

know, towing like a small vehicle behind it,

7:06

basically, or a motorcycle. You basically could

7:08

fly somewhere, drop the plane

7:10

off and get on your motorcycle and go to the final destination.

7:13

That's

7:13

right. And you would actually ride your motorcycle straight

7:15

out. And that's what made it hybrid, because

7:18

you'd use the high-power density motorcycle

7:20

engine to maintain the

7:23

charge on batteries that would be the primary

7:25

propulsion to the airplane.

7:26

Wow. All right. So this

7:29

is your idea. And do you have any interest?

7:32

Anybody who was like, this is it.

7:34

This is – I'm in.

7:36

I met a few people that were in,

7:39

but nobody that was able to

7:43

catalyze it alongside me. And

7:46

meanwhile, I was sponsoring

7:48

teams at the university here to

7:52

build elements of it. So I

7:54

had several years of actually senior

7:56

design teams that had built a

7:58

flying drone that you flew – flew from the ground doing

8:01

the same idea, a fixed wing aircraft,

8:03

he flew from the ground. Ironically, those

8:05

people now work here. But

8:07

I was just materializing and

8:10

formulating the ideas. There

8:12

were a lot of believers in what

8:14

I was doing, but look,

8:16

it takes a lot of dough to bring

8:18

an aircraft to market. And

8:21

so there's a bit of a initiation cost to

8:27

bring it from that. We're flying scale models,

8:30

flying computer simulations, have

8:32

designs to, look, we're gonna go build a real

8:34

airplane and fly it. I mean, even with your access

8:36

to the University of Vermont and students

8:38

there, and the fact that you had sold

8:41

businesses previously, did

8:43

you have the capital to independently finance

8:46

this? No, not independently.

8:48

And I was aware of that. This

8:51

is hundreds of millions of dollars, even optimistically.

8:55

Yeah. All right, so meantime,

8:58

I guess you're invited to present or

9:01

to go down to either

9:03

a conference or some

9:05

kind of presentation that was hosted by

9:08

a woman named Martine Rothblatt, who some

9:11

people will know that name, a pioneer,

9:13

very famous engineer.

9:16

She's a co-founder of SiriusXM,

9:18

United Therapeutics. You know,

9:21

she's given TED Talks, have seen her TED

9:23

Talks amazing

9:25

story of innovation. She's

9:30

working on an electric helicopter,

9:33

I guess,

9:34

and what you're invited down to go assess

9:36

it, or what was the story? Yeah,

9:39

exactly. So Martine,

9:41

through a couple other colleagues that I knew, had

9:44

been very interested in having people download

9:47

to her thoughts on electrifying aviation.

9:50

And one of the entry points was the assessment

9:53

of this electric helicopter. Like you said, she

9:55

had commissioned to be built. And

9:58

so I was given, you know, a rough. of

10:00

what it was and asked

10:02

to come and present how batteries, inverters,

10:05

and motors are either fit or

10:07

unfit to electrify aviation.

10:10

And about halfway through my presentation

10:13

on batteries, this gal who I

10:15

didn't know at the time, Martine Rothblatt, she

10:18

kind of interrupted me. She said, who are you and where are you

10:20

from? And I said, I'm Kyle,

10:22

I'm from Vermont. I've

10:24

worked a lot in batteries, motors, inverters, and

10:26

other such things. And she goes, are you getting paid to

10:28

be here? And I

10:29

said, no. And she goes, I can tell. And

10:32

I didn't know quite how to respond to that.

10:34

Maybe she was like, I can tell you're an idiot. Yeah,

10:37

well, that was my first thought, right? But

10:40

what she meant was that I was expressing

10:42

so much passion and so much care about

10:45

this that this wasn't a job

10:47

for me. And she goes, we

10:49

should talk.

10:52

And so after the meeting, we're

10:54

standing in the entryway of the Philadelphia Yacht

10:56

Club where this meeting was. And she goes,

10:59

come to see me on Friday morning at

11:01

my house in Vermont.

11:03

And so I plan to do that.

11:06

So just to sort of clarify

11:08

what she was working on, she was interested in coming

11:10

up with some kind of electric helicopter,

11:13

because she had started this company, United Therapeutics.

11:16

And she wanted to figure

11:18

out a way to transport, I guess, synthetic

11:21

or donated organs from

11:23

hospitals to patients, but she wanted to do

11:25

it in an environmentally responsible

11:28

way. So she's trying to figure out this challenge,

11:30

right?

11:31

Yeah, I mean, she said to me, there's no sense in creating

11:33

an unlimited supply of lungs to save

11:35

people's lives if we're gonna destroy our environment.

11:38

So what's interesting about Martine

11:40

and a lot of folks that I've met that, she actually doesn't have

11:42

a concept of how to do it. But

11:45

she has an idea of the elements

11:48

to get it done and what she wants done or what

11:50

is feasible. So she had written this 10 point

11:53

spec of what she thought was realistic

11:56

and aspirational at the same time to

11:58

move organs. And actually,

11:59

she didn't care what it looked like, whether

12:02

it was a helicopter or a drone, a

12:04

fixed-wing plane, a balloon, as

12:06

long as it met this spec.

12:08

Okay, so you end up going

12:11

to Martine's house, and you

12:13

spent pretty much all day with her, right? Like talking

12:15

about this electric plane project and aviation

12:18

more broadly than what, like at the end

12:20

of your time together,

12:22

I guess she gave you some sort of special assignment?

12:25

Yeah, so I leave there somewhere

12:27

before 11 o'clock at night, and

12:29

she goes, listen, why don't you write down how

12:31

you would elicit critical thinking and aviation?

12:34

And again, that's another interesting, not

12:36

how you'd build an airplane, but how would you elicit

12:39

critical thinking and aviation? And

12:41

so I went home, I painted a watercolor,

12:44

rode all over it, and sent it to her at

12:46

about 4 a.m., and

12:48

I went to bed for a couple hours, got up

12:50

a couple hours later, went out to the garage, was

12:53

building another motorcycle, and

12:55

my wife comes out with my phone, and there's

12:57

a text on it from Martine, and

12:59

it just says, two words, it says, you're

13:02

on.

13:03

And I'm like, wow, I mean,

13:06

now I gotta actually like create this

13:08

company. I've got a customer,

13:11

I've got a vision, and

13:14

I told her that in 10 months, we

13:16

would create this electric

13:18

aircraft and fly it across the country.

13:21

We're gonna take a quick break, but when we come back, Kyle

13:23

spends months building an aircraft

13:25

just to scrap it and start all over

13:27

again. Stay with us, I'm Guy Roz, and

13:29

you're listening to How I Built This Lab. If

13:32

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13:35

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13:37

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13:44

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13:46

taking a week. If this is you, you should

13:48

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13:51

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13:52

entrepreneur, you should know that you've

13:54

been doing it and if it's you, you should know these

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16:09

Welcome back to How I Built This Lab. I'm Guy

16:11

Roz and my guest today is beta technologies

16:13

founder Kyle Clark. Back

16:15

in 2017, he started designing an all-electric

16:18

aircraft for transporting organs

16:20

and critical medical supplies. So,

16:23

all right, so you get this commitment

16:25

from Martine Rothblatt. And

16:27

at that point, I guess she wired you

16:29

one and a half million dollars in seed capital for

16:32

beta technologies.

16:33

Yeah, interestingly enough, it wasn't

16:36

actually in seed capital. She

16:38

proposed to be a customer. So

16:41

she did not take an equity position in the company.

16:43

She just said, I believe in what

16:45

you're doing. Let me fund this as

16:47

a customer.

16:48

Wow. So with $1.5 million,

16:51

you said, this is nuts. You

16:56

said within 10 months, I'm going to have a prototype.

16:59

That's right. So

17:03

how did you do that? How did you start to even do

17:05

that?

17:06

Look, I mean, you have to be wildly

17:09

audacious and stupid

17:11

to do any of this stuff, knowing that

17:13

the probability of failure is pretty high. However,

17:17

what I did then is I opened up my black

17:19

book and I called the 20 smartest

17:21

people that I've ever worked with and

17:24

started to convince them to come and work with me. And

17:27

my pitch was simple. Look, let's go change the world.

17:30

I'm not going to pay anything. And I don't

17:32

know where this is going. And they started joining the

17:34

team. But I'll tell you what the

17:36

other interesting

17:36

thing I did is I had this early

17:39

revelation that it was more

17:41

important to me that this business and this

17:43

idea was successful than I got

17:45

any financial gain out of it. So day

17:47

one, I took 70% of the business and

17:50

usually people take eight or 10 or seven or

17:53

5% of the business and say, that's going to be the employee

17:55

pool. I took 70% of the business

17:57

and I said, this is what I'm going to use to attract.

18:00

people to be really meaningfully a part

18:02

of this. And, you

18:04

know, diluted myself, but I would

18:06

rather be a meaningful

18:09

business and a smaller equity holder than

18:12

a big equity holder in a business that can't do something.

18:15

So, your initial idea was to have a

18:17

two-passenger aircraft. Her

18:19

idea was totally different. It was not to

18:21

transport passengers. It was to transport

18:25

medical supplies, organs, right? So,

18:27

now you're focusing on creating

18:31

a plane design, really purpose-built

18:33

design for transporting goods.

18:36

Yeah. I mean, there was a couple of big points that

18:38

she made was no more of this hybrid

18:40

talk. We're going... All

18:43

electric. All electric, zero operational emissions.

18:45

We'll figure out how we charge that in a sustainable

18:48

way as well. We wanted vertical.

18:50

We need to go hospital to hospital, and

18:53

we needed to move cargo. Like

18:55

you said, now the most critical cargo you can imagine

18:58

is human organs, right? Somebody's life's

19:00

on the line. It's very valuable. And

19:03

it doesn't... It's cost

19:06

per mile or per hour or whatever is nearly

19:08

irrelevant relative to the benefits it's providing.

19:12

All right. So, you have got this team gathered.

19:14

You're going to start to work on building this

19:16

electric transport aircraft.

19:19

And was the original design going

19:21

to be a drone, sort of a fixed-wing drone

19:23

design?

19:24

Yeah. We started with a fixed-wing drone

19:26

design with eight rotors that

19:28

took off vertically, thrust-vectored forward.

19:30

That means the rotors tilt in the air

19:33

to push the air backwards after it's pushing

19:35

it down. And we designed, built, and

19:37

flew a 4,000-pound version

19:39

of this with me in it after 10

19:42

months, and we kept our promise. And

19:44

when we did that,

19:46

Martine looked around and she's

19:48

like, wow, not only did you elicit

19:50

critical thinking in aviation, you

19:52

just blew past companies that

19:54

were funded to the tunes of hundreds of millions

19:57

of dollars with this small

19:59

scrappy,

20:00

you know, a proactive and

20:03

and and frankly pragmatic team in Vermont

20:07

I want you to build me a commercial version of that All

20:10

right. So you figured out how to build this and

20:12

when you you had this prototype

20:15

What did it do? I mean, how far did it fly?

20:18

It flew for about 17 minutes

20:20

at a time And and

20:23

we were really restricted to flying over the

20:25

airport So we did about a hundred

20:27

test flights in it though Wow, and and

20:29

we brought it up to about 65 knots,

20:32

you know, shut the shut the torque down put

20:34

it on the wing You know did

20:37

it in heavy crosswinds a lot of maneuverability.

20:39

It was actually a remarkably good

20:41

performing aircraft

20:43

And did you go in in some

20:45

of those early flights yourself?

20:48

Oh, I did them all Yeah, and and how did it

20:50

fly? I mean, I mean did it feel like you were flying

20:52

a helicopter or or a plane

20:54

or not quite either? No, what's

20:56

fascinating about it is that this particular

20:59

plane had eight

21:00

11 foot diameter rotors. Okay,

21:02

and they were they were positioned for spots coaxially

21:05

So they were turning in alternate directions at each corner

21:07

of the airplane And by the

21:09

way, and these rotors would would rotate

21:12

up and sort of down midair

21:14

to sort of fly horizontally Then they would rotate

21:17

to land so you could just like land like a helicopter Exactly.

21:20

Exactly. So you take off like a helicopter

21:22

But it wasn't that beating sound of a helicopter

21:25

because every rotor is turning at a different

21:27

speed So it almost felt like you were

21:29

swimming and it

21:30

was like a whooshing sound yet

21:33

because electric motors produce Instantaneous

21:35

torque. It was incredibly responsive

21:38

almost dangerously responsive and you've seen a drone.

21:40

Yeah do aerobatics it is you're inside

21:43

that and And and

21:45

the the aircraft handled way better than any

21:47

helicopter I'd ever flown And

21:50

and and all of a sudden you're like this sounds

21:52

it different. It feels weird and the controllability

21:55

is spectacular Yeah, I mean,

21:57

it's like an electric car when you first

21:59

time you sit in front

21:59

one, you hit the gas or the accelerator

22:03

just takes off like a rocket. That's right. I mean, even the

22:05

cheapest electric car feels like a Porsche. Yeah, it's

22:07

amazing, actually. So, all right.

22:10

So you get this off the ground and

22:13

Martin Rothblatt, who had

22:15

huge contracts with other, there were

22:17

other companies working on this technology,

22:20

essentially

22:21

took most of most or maybe all of those

22:24

contracts and just diverted it to your, your company.

22:27

That's exactly right. Almost $50 million. That's

22:29

right. Yeah, $48 million she

22:31

had out in contracts elsewhere and

22:34

she, she brought those back in because they were behind

22:36

schedule, not keeping promises and

22:38

she redirected that at us and said, go build

22:41

a commercial version that I can move organs with. So,

22:44

so we did, but you know, we learned what

22:47

not to do in that aircraft because in

22:49

all those test flights, we learned what was not reliable,

22:52

which was problematic from a noise and EMI

22:54

perspective and, and

22:56

focused all our efforts on making the simplest,

22:59

most elegant aircraft that we could. All

23:02

right. So you spend most of 2018 trying

23:04

to commercialize this prototype,

23:06

but after working on this for about a

23:09

year, I

23:10

guess

23:12

you decided to kind of tear up the

23:14

plans of this thing that had worked that

23:16

you liked, that Martin liked, and

23:19

you sort of were like, no, we got to start over. What,

23:22

what, what happened?

23:23

Yeah. I mean, the, the reality

23:25

was that all that testing and all that critical

23:27

thinking revealed that we had

23:30

an aircraft that probably couldn't be certified

23:32

and probably wasn't the highest performing

23:35

aircraft. In terms of it didn't,

23:37

in terms of range, in terms of what? Yeah,

23:40

range and payload, range and payload. And,

23:43

and, and some of the big realizations we had were

23:45

that, um, that it was too complex to

23:47

make truly What we need

23:49

is a really simple aircraft. So it

23:52

was hard. I had to go to Martin

23:53

and say, look, I

23:55

think the right thing to do for our program

23:58

is to retire Ava. That's what we.

23:59

called the first aircraft and start

24:02

designing this new one. And here's what it's

24:04

gonna look like in concept. And

24:06

she came to me and she said, I remember this very

24:09

specifically, she goes, if you're asking me

24:11

if you kept your promise, Kyle,

24:13

you did.

24:14

And that's all she said to me. And

24:17

I sat there thinking about it. And what she was really saying

24:20

was that

24:21

you did the right thing, you elicited critical

24:23

thinking and electric aviation. Now go

24:25

do the thing you said you're gonna do.

24:28

All right, tell me a little bit about what

24:30

some of these specs were in terms of things

24:33

that we would

24:36

understand non-technical people. Like

24:38

for example, how far did you want

24:40

these to fly? What

24:42

kind of payload? What could it, how much

24:45

freight could it carry? What were you trying

24:48

to get to?

24:49

Yeah, so the initial specs that Martine

24:51

had outlined, and she did this by taking

24:53

simple physics around four

24:55

elements of flight, lift over drag ratio, which

24:58

is how slippery the aircraft is, the empty weight fraction,

25:01

which is how much is left over for batteries, the

25:03

battery energy density, and the conversion

25:05

efficiency. All of those things together said

25:08

the theoretical maximum of

25:10

an electric airplane was to fly about 250

25:12

nautical miles. Within

25:16

the context of flying at 100 knots and

25:18

carrying 600 pounds and having

25:21

less than a 50 foot wingspan. And

25:23

I could tell you all the reasons for those things, but

25:25

fundamentally we wanted to be able to deploy

25:28

them immediately without regulatory

25:30

change or helipad changes and

25:33

do meaningful work, which was move organs. So

25:36

can you describe how you redesigned it?

25:38

Yeah, after we did all these analyses, we

25:40

realized that the simplest and

25:42

most elegant and lowest drag version

25:45

of an electric vertical takeoff and landing

25:47

aircraft was to kind of make it

25:49

really simple. It has a big 50 foot

25:51

wing that's on the top of the fuselage.

25:54

It's 44 feet long from the tip to the tail.

25:57

It has two longitudinal, we call them boom.

26:00

You can imagine just two big long tubes down

26:03

the wing and on the four corners

26:05

of those two long tubes are 12-foot

26:08

diameter

26:09

rotors with motors underneath them and And

26:12

that's what picks the airplane straight up in the air and

26:14

then right at the tail There's a conventional

26:16

propeller with another electric motor

26:18

and the way it works is that those

26:21

four rotors on the top pick the aircraft

26:23

up off the ground at the hospital and Then

26:25

if you imagine that rear

26:27

rotor turning on and pushing the aircraft

26:30

forward those top rotors start

26:32

reducing their thrust as the wing starts

26:35

to develop lift and 30 seconds

26:37

after you take off You've totally

26:39

shut down your top rotors and you

26:41

and you stow them like javelins straight

26:44

into the wind And the pusher

26:46

motor is pushing you now through the air So

26:48

you have

26:48

this super slippery airplane that

26:51

used a lot of power But remember energy

26:54

is the integration of power over time. Yeah, but

26:56

it was a very short amount of time so

26:58

you didn't use a lot of energy to pick this thing

27:00

up and make a runway in the sky and

27:03

Then you're off to deliver the organ and

27:05

at the other end you do just the reverse Wow.

27:08

All right. So how long did it take you to

27:10

get Alia up and running another 18

27:12

months?

27:14

That's right. That's about it. What it took it took us

27:16

from August of Of 2018

27:19

and and our first round

27:21

the pattern flight was January

27:23

1st 2020 So it took us under 18

27:26

months with a fresh You know clean

27:29

sheet design or had to build the molds and the

27:31

structure design a flight controller write the code

27:34

build the propellers and And

27:36

put it in the air safely That

27:39

that is actually an exceptionally fast

27:41

program

27:43

So now as you were obviously,

27:45

you know Building

27:48

this out you have to assume

27:50

you had to raise a lot more money and you have because

27:52

this Was going to become

27:55

much much more expensive to do that Did

27:59

at what point did?

27:59

did the business model kind of evolve

28:02

to,

28:03

maybe it didn't evolve, maybe it was always

28:06

the idea, but it seems like

28:08

now the model is to really

28:11

work with transport and delivery companies

28:13

down the road like UPS and Federal

28:15

Express and Amazon. Did

28:18

that become clear pretty soon after you

28:20

started to collaborate with Martine that that's what this could

28:22

be?

28:23

Absolutely, yeah, I mean her and I talked

28:25

a lot about this, the cost to develop an aircraft

28:28

program and everything, and what we agreed

28:30

to was that even

28:32

though she was funding to like you said before,

28:34

this $46 million contract to

28:37

develop the aircraft, she

28:39

knew that that wasn't enough to develop an aircraft.

28:42

So she took a license to be

28:44

able to use this in organ and tissue delivery,

28:47

yet we maintained the ability to build

28:49

this airplane for military, passenger,

28:51

cargo, logistics, surveillance,

28:53

all these other applications, and

28:56

that allowed us to go to the financial

28:58

markets and say look, we've got

29:00

not only a launch customer, but a launch customer

29:03

that is funding R&D, and

29:05

she only wants one and a half

29:07

percent of the total market opportunity. All

29:10

these other massive markets are available to

29:12

us, and

29:15

we believe we have the best design. And

29:18

when we started, our business gone through a

29:20

few phases. We were a think tank, we were

29:22

a product development company, we were an engineering

29:23

company, then we went into this

29:27

commercial exploration over the last,

29:30

I'd say 2022, where

29:32

we started doing demonstration flights for

29:34

UPS and Amazon and the

29:36

Marines and the Army and the Air Force,

29:39

and the thing really worked, and

29:41

we were able to prove to our customers

29:44

that we had something that worked really

29:46

well, and in doing so, we got

29:48

orders, and of course that led to funding.

29:52

We're gonna take another quick break, but when

29:53

we come back, more from Kyle on commercializing

29:56

Beta's electric aircraft and how

29:58

the company is changing logistics.

29:59

as we know it. Stay with us.

30:02

I'm Guy Roz and you're listening to How I Built

30:04

This Lab.

30:05

Music

30:16

In the first part of the 20th century, the Hilton family

30:18

had a lock on the hotel industry by offering

30:21

upscale service at a modest price. The company

30:23

was expanding fast and buying up iconic

30:26

properties across the country, like the Plaza and

30:29

the Waldorf Astoria. But their unchallenged

30:31

rise wouldn't last. An ambitious

30:34

Mormon named J.W. Marriott

30:36

decides to pivot from restaurants to hospitality,

30:39

and he's after Hilton's business, developing

30:42

modern hotels across the world. But

30:44

both the Hilton and Marriott families will have

30:46

to contend with their share of drama in finding

30:48

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30:51

to stay solvent in a high-stakes

30:53

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30:54

Hi, I'm David Brown, the host of Wondery Show

30:56

Business Wars. We go deep into some of the

30:58

biggest corporate rivalries of all time.

31:01

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Make sure to follow Business Wars wherever you get

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your podcasts. You can listen ad-free

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on the Amazon Music or Wondery app.

31:24

Welcome back to How I Built This Lab. My guest today

31:26

is Kyle Clark, co-founder and CEO

31:29

of Beta Technologies. It's a company

31:31

that's building and commercializing all

31:33

electric aircraft. So, alright,

31:35

let's talk about how this impacts logistics

31:39

and delivery, right? Like, I think

31:41

the two main logistics hubs

31:44

in the U.S. are Louisville and Memphis. Those

31:46

are really important hubs. But, you

31:49

know, a DC-9 or

31:51

whatever is being flown is still going to land at LAX

31:53

or

31:54

SFO or whatever. These

31:56

Alia planes, electric

31:59

planes, there will be. Yeah,

32:01

absolutely. So right now, you're right, it's a radial network

32:04

where if I ship something from Vermont

32:06

to Buffalo, New York, it'll go from

32:08

Burlington to Manchester, New Hampshire to Philadelphia

32:11

down to Louisville at the hub, gets sorted

32:13

along with another 5 to 8 million packages,

32:16

and then it'll get sent out to Buffalo,

32:19

which by the way is only 130 miles

32:21

from where I sit today. So even if you do

32:23

like next day air, it's going to go on

32:26

three or four different planes before it goes back to...

32:28

Absolutely. Because look, they got to bring everything

32:30

to the hub and then redistribute it. Now,

32:33

if they're very short range, they drive it like if it's going

32:35

from Hartford to Boston or New York to

32:37

Hoboken. So

32:40

that's a 1300 mile trip

32:43

from Burlington to Buffalo if you go that route,

32:45

where if you go direct, it's 130 miles, right?

32:49

So the hub and spoke

32:51

network of yesterday

32:54

will be replaced by a mesh network

32:56

of the future where we

32:58

have already saturated, as you pointed out, Memphis

33:00

and Louisville. You can't put any more jets

33:03

in there every night. The jets can be bigger,

33:06

but the biggest jets, the 757s

33:08

and the MD11s, they're already going in out of there.

33:11

And so these logistics

33:13

companies, the express cargo companies, they

33:16

need a way to grow and accommodate

33:19

the growing

33:19

e-commerce shipping market.

33:22

So they imagine, and

33:24

this is what we've been demonstrating, by the way, we just completed

33:27

a bunch of flights with these guys.

33:30

They imagine doing direct point

33:32

to point, like I said, a mesh network of the future.

33:35

What fundamentally enables it is the airplane

33:37

because not only is it sustainable

33:40

and all electric, but it's substantially

33:42

lower cost. And when you put those

33:44

things together, you can start to right

33:46

size the aircraft and sweat

33:48

the asset and use it continuously

33:51

from point to point, from Burlington to Buffalo, Buffalo

33:53

to New York City, New York to Portland, Boston

33:55

to Hartford. And

33:57

it starts to kind of hit parody with trucking.

33:59

And the whole logistics world

34:02

changes. And these aircraft

34:05

essentially can land in these sort of purpose-built

34:08

helipad-type areas, maybe at airports,

34:11

where they would just be charged

34:13

as they sit there. And then, so let's

34:15

say you want to send something from Burlington to Buffalo.

34:18

What you're essentially saying is that you would

34:21

maybe drop it off at a UPS store. That

34:24

UPS, you know, a van would deliver

34:26

them all to Burlington Airport as they do now.

34:29

But instead, the, you know, the package

34:32

is going to the northeast would be

34:35

flown to Boston

34:36

on one of these electric planes instead of going down

34:39

to Louisville.

34:40

Yeah, but even better than that. So

34:44

in the near future, the next few years, they'll go to

34:46

the airport only because of regulatory challenges

34:48

of putting off airport landing sites. But

34:51

in the next four to six years, what'll

34:53

happen is these aircraft will actually go to the

34:55

distribution center, which is where the UPS

34:58

trucks is. They don't even have to go to the airport. And

35:00

it'll go directly from a distribution center. And

35:02

when there's sufficient package volume

35:05

between Burlington and Buffalo,

35:07

they'll fly the airplane directly

35:09

to Buffalo.

35:10

And so it omits all the handoffs

35:13

and the trucks and the airport access.

35:16

And that's, we're going to get there. It's going to take

35:18

a couple of steps. Like you said, it's going to go to the airports

35:20

first. But

35:24

that's the future of what we

35:26

call a distributed mesh network of cargo and

35:28

logistics. So are you commercializing

35:30

any of this right now? I mean,

35:33

are you restricted from commercializing it

35:35

because you still need FAA approval

35:37

for

35:39

flying these aircraft

35:41

in a commercial setting?

35:43

Yeah, it's not a yes or no answer.

35:46

So we are commercializing with the military.

35:49

So we received what they call a military flight release

35:51

to get paid to fly for the military. So

35:53

we're doing that. We've been doing that for more than a year. We've

35:55

had Air Force and Army pilots flying our

35:57

planes. We're deploying planes into bases

36:01

and we've flown into bases and they're

36:03

doing operational experimentation.

36:07

And then domestically, we've

36:09

been flying trial missions with Amazon

36:11

and UPS and other customers where

36:13

we're not allowed to get paid. So we move packages

36:16

for charity, for example, because

36:18

we don't have FAA certification yet. When

36:21

we get FAA certification, they can use

36:23

it for commercial hire. But the secret

36:25

little knob there is that we just got

36:27

regulatory approval to do

36:30

this over in the Middle East for

36:32

hire, for commercial, making money.

36:35

And what countries?

36:36

The first regulatory letter

36:38

we have is from the UAE between Abu

36:40

Dhabi and Dubai. And they're oftentimes like

36:43

two or three years ahead of the rest of

36:45

the world and what they're

36:47

sort of willing to experiment with.

36:50

Yeah. So it's fascinating

36:52

thing where here in the US when you

36:54

go and you propose a new thing in a regulated

36:57

environment, the first question is,

36:59

is how does that relate to our entire mental

37:02

inertia and prejudice of what regulation means

37:04

in the context of what's already been certified?

37:07

Over there, they asked the simple question

37:09

like, prove to me it's safe, it's

37:11

reliable for the mission that you're going to do.

37:14

And you're not trying to redefine what a

37:16

turbine engine is. They're looking very forward.

37:19

Here we kind of

37:20

compare it to all the stuff we've already done

37:22

first before we can move forward. So

37:24

they just fundamentally move faster in a regulated

37:27

world.

37:28

And right now, are there

37:30

any operational charging stations or

37:33

not yet? Yeah, absolutely. We've

37:35

built a network for all these test flights that

37:37

goes from here in Vermont down to Arkansas. We've commissioned

37:40

a bunch down the East Coast. And right now we're

37:42

building a network that connects Texas to Florida.

37:46

And so we have about 105 permits

37:48

around the country for charging stations.

37:51

And are they at airports or near airports?

37:53

Yeah, they're predominantly at airports. And

37:55

the neat thing is we put a charger in

37:58

and then we put a dispenser like the... part

38:00

that plugs into the vehicle on the airport

38:02

side and on the parking side. And

38:05

we have been flooded with people

38:08

who go to the airport to use a super

38:10

fast charger, because it's higher power

38:12

than a Tesla supercharger, to charge

38:14

their cars or their trucks or their package delivery vans.

38:16

Wow.

38:17

So realistically, what

38:19

is the time frame? I mean, this

38:22

future we're talking about, having these short

38:24

hops, 250

38:25

mile hops, where

38:28

packages are delivered, maybe even humans are delivered on

38:30

these all electric planes. I mean, they fly.

38:33

I think you've had 22,000 lifetime

38:35

miles on these aircraft. So they

38:37

work. You know they work. You've

38:40

flown them all over the United States.

38:42

Realistically, do you have a sense, like,

38:45

are you able to say, you know, by 2025, this

38:48

is just going to be normal. It's going to be like, you

38:50

know, like the internet. It's just

38:52

something anticipated 20 years ago. Yeah,

38:56

absolutely. I mean, look, I'm

38:58

at the risk of sounding too optimistic. By 2030,

39:01

you'll see more electric airplanes in the air

39:03

than gas powered airplanes. And

39:06

when you walk into our production facilities,

39:08

people walk in and they're like, what are you doing?

39:11

Like, how could you, you're

39:12

proposing to build more airplanes out

39:14

of this facility than the largest

39:17

producer of general aviation

39:19

aircraft right now. And I'm like, of course we are.

39:21

And if you walked into our facility, you'll see it'll

39:23

be the largest net zero building east of the Mississippi.

39:27

And we're turning it on here in a couple months. And

39:29

we're already building conforming product.

39:33

And those aircraft will go into type

39:35

certification testing. And yes, by 2025,

39:37

they're doing commercial operations

39:39

here in the US. And

39:42

then we just basically

39:42

build them as fast as we can. I mean, we

39:45

have a 600 unit backlog right now, right? We

39:48

have to, our biggest impediment

39:50

right now is ourselves. And

39:53

we're working our tails off to industrialize

39:56

this, put these aircraft in the air. And

39:58

there's a line around the block to get on.

39:59

like I said, it is amazing.

40:02

And it's not complicated why.

40:04

You're at a six to half the cost

40:07

of flying gas powered airplanes and

40:10

you're doing it sustainably. The

40:12

aircraft doesn't need much

40:14

more than that. And I guess you

40:16

don't really have to worry. I mean, are you thinking about

40:22

cross country, a range

40:24

that could, 3,000 miles or is that just...

40:26

Absolutely. Yeah, I mean, look, two comments

40:29

on that. It is just a matter

40:31

of time. Anybody who's going to

40:33

pretend that everything that can be invented

40:36

has been invented, then they shouldn't

40:38

be in technology, right? We

40:40

aren't that smart yet. We're getting smarter every day.

40:43

Therefore, battery energy and sea is going to go up. But

40:45

here's the interesting thing. It's an entire new

40:47

paradigm in aviation because when

40:50

you buy an airplane, its worst performance

40:52

will be on its first day. And

40:54

every year when you put new batteries into that,

40:57

you get better performance. And then

40:59

if you say, I'm not going to put batteries in this year,

41:01

I'm going to put a hydrogen fuel cell, or I'm going

41:03

to put a hybrid system in. Yeah, we're

41:06

flying thousands of miles already with

41:09

that technology. And now

41:12

you put it into something that has this ever increasing

41:15

adoption of energy

41:17

storage mediums. It's a

41:19

fascinating new paradigm in aviation. So

41:22

we absolutely will be flying coast

41:25

to coast. I know I'm an evangelist.

41:27

I've recognized that I'm about to jump through the

41:29

microphone right now because I'm so excited about it. But

41:31

it's an entire

41:34

new paradigm that people are, in some cases,

41:36

in denial of because their businesses

41:39

don't allow them to accept it yet. And

41:41

the other thing that I think people are under appreciating

41:43

is when I take people up in the electric planes

41:46

and they get in it and the propeller, remember,

41:48

is 20 something feet behind you. And

41:51

the windows go from your forehead

41:52

all the way down to your feet and it's silent

41:55

inside the cockpit. So you lose

41:57

the claustrophobia, you lose that anxiety from

41:59

all the no-win.

41:59

and the percussion of the propeller.

42:02

And it's beautifully quiet and

42:05

the visibility and that you can hear

42:07

the air coming over the wings and over the fuselage

42:09

and you feel like a bird. I know that sounds corny,

42:12

but you can hear the wing stay

42:14

like near a stall and then you bring it down,

42:16

you go faster and it starts accelerating. It's

42:18

like you don't even need an air speed indicator because you just feel

42:21

the plane strapped to your shoulders which

42:23

you never get, you get it in a glider sometimes, but

42:26

in an electric airplane, it's magical.

42:28

And nevermind how

42:29

good it feels to me, for passengers

42:32

that are flying these in the future, they're not gonna

42:34

be like, oh God, I gotta go in that beating

42:36

drum of a claustrophobic plane. They're like,

42:38

this

42:39

is awesome. How much

42:42

of an impact can this have

42:44

on reducing carbon emissions?

42:47

Look, so cars are

42:49

going electric, scooters, motorcycles, Marines

42:52

going electric, rail went hybrid a long time ago and

42:54

it's incredibly sustainable. Aviation

42:57

has this bow wave of unconsumed technology

43:00

and we prioritize weight and performance

43:02

over sustainability. And so unfortunately

43:05

we operate in this cognitive dissidence as aviators

43:08

that we're doing something good as we fly around the

43:10

country, but what we're doing is we're using 1960s

43:13

technology and turbines and jet engines

43:16

and we're polluting the environment and even

43:18

with leaded fuel in piston engines,

43:20

right? So with that

43:22

as a foundation and the fact that new technology

43:25

isn't being adopted by 2035,

43:26

if we don't do anything about

43:28

aviation, it will be the biggest producer

43:31

of carbon emissions and transportation. We're

43:33

doing something about it, right? Not

43:35

only that,