Inside Aurora’s Push to Make Autonomous Trucking Real | Chris Urmson

29:47And I don't know exactly when it's going to work. And I'm clear how the business model is going to... Uber didn't exist. So even the notion of ride hailing and taxis were the biggest metaphor, but how big is that market? I just don't think it could have happened. The amount would have been modest,$20,$30 million by today's standard. But if you look at how long it's taken, waymo and again this is not lazy people they're working hard and focused on it um you know they started 2009 and it's 2025 so 16 years to get something that's starting to look like scale and real it's a long time to ink that is a long time yeah and and when 16 years just to get the first cars on the road.

30:39Yeah. 15 years for the first cars, but yeah. Yeah, exactly. And this is why I'm saying, and I feel at Aurora, you know, we've been at it eight years now and, you know, we've been fortunate to have investors who understood the mission we were on and we've, we've worked hard to make sure they understand this is not a three months in hockey stick. This is an eight years and, you know, transform and industries play. And so I'm incredibly thankful for their patience. But 16 years is even more. Crazy. So when you started on that project, how often did it cross your mind? I don't know if this can even be done.

31:21Because the amount of edge cases that exist in the real world is absurd. Yeah. And by the way, this is one of the early amazing use cases for applied AI. Totally. And what we think of as AI today was not what it was then. Absolutely not. And so I think there's an expression, ignorance is bliss. And I think that was key to this, right? And the kind of the more engineering and business one is, you know, think like an amateur or dream like an amateur and execute like a professional. And I think if we, certainly if I had understood how hard this was going to be, I think I would have found something else to do.

32:00But don't you think you did understand? Like if you didn't understand, who could understand? Nobody. I don't think any of us did. I think certainly in 2009, you know, it was like, this was hard. How hard can it be? Right. And I think that's key to any endeavor. I think if you ask anybody who started a company, like surely you knew how hard this was going to be, maybe for second or third time founders, but anybody who starts the first time does not appreciate what they're getting into. I think that's the whole theme of your podcast. And in hindsight, what were the moments that were the hardest that you thought?

32:34Yeah. I don't know. Like, I don't see how we're going to get through this one. What problems? It's always been people problems, right? The technology, I, again, maybe too optimistic. The technology, you're going to figure it out, right? You put enough sweat into it and you get smart people around. We'll get that figured out. So the people stuff is always delicate. And at least for me, the stuff that's the hardest, right? Not because I care, right? I want our people to be successful. I want folks who work with me, if they're investing their time and their effort into it, and they're kind of gracing this with themselves, I want that to be worth it for them.

33:17And so it's always been people things like the, you know, there's been a lot of press around the Ed Levandowski, Google stuff that happened back in the day. And that was very stressful and difficult to navigate. Leaving Google was a really tough decision because, again, the company had been incredibly generous to me, given me a privilege and opportunity to do something amazing. And ultimately, it was time to get out of the way. How long were you there for? How long? Nine till six, seven, seven and a half years. Wait, and can I just like quickly visit the Lewandowski thing? Because I forgot about that.

33:55I wish I had. You didn't. And you were running the group at the time? Mm-hmm. And what happened? He was one of the key. Yeah, he was one of the founders. With you? Yeah. When I moved to California, I slept at his apartment. I had a room in his apartment for the first couple months until we found a place. And he was one of the founders with you. And then after a few years. Yeah. And he, you know, and Anthony's off doing his own thing now and, you know, wish him the best, I guess.

34:30But one of the core values we have at Aurora is operate with integrity, right? Right. In that I think that you owe it to the people you work with, you owe it to your corporate partners that you, you know, you, you operate with integrity with them and they can trust you and you can build a relationship because I think that is how you build enduring value together. Anthony does not exemplify that value. He stole the tech and brought it to Uber. Is that right? That is what, yes, that's what he was found guilty of. So he was actually convicted of that. Yes, he was. Yes. I completely forgot about that.

35:02Yeah, yeah. I got a pardon from Trump. And you were in the middle of all this. Yeah. Did you have to go to court? Did you have to testify? I was deposed and Google settled the day before Larry had to testify. And so I didn't have to do that, but I did have to testify in the arbitration dispute that they had with Google. Oh, my gosh. Yeah. And, you know, on the one hand, like it was an easy situation for me. You just have to not lie. Right. On the other, you know, it was less that was that was not such a big deal. Honestly, it was took time and, you know, dredged stuff up. But it was more.

35:49Navigating the interpersonal dynamic that comes with that kind of thing happening at the company. Right. I imagine it's a gigantic distraction for everybody, too. Yeah. And again, at any organization, if you have someone that is kind of trying to pull it apart while you're trying to accomplish something, you know, it's destructive. And I was not effective enough at communicating to Larry, Sergey, and the other leaders like, hey, this is what's happening. I wish I'd done a better job of that. I think it probably would have caused less pain for everyone involved if I had been more effective at that.

36:30But, you know, live and learn. Did you think that it was going to kill the project? There were a couple of moments where it felt like I remember. And I think this all came out in there. This is all out there. I'm pretty sure. But I remember, so 2011, we had hit a milestone and Anthony was like, hey, we should just leave and go do this on the outside. And I was like, no, I don't think that's right. I think, you know, Google's invested with us. We're here. We kind of owe it to them to keep building this. At least I feel like I owe it to them to keep building this. and I will never forget that a couple of the senior engineers on the project at the time you know it was we've been working late kind of they were like hey Chris can we go talk and they take me into a conference room the three of them and me and they're like so we've negotiated with Anthony we want you to come be CEO of this thing you know we're going to give you the equity that you should have in it and let's go do this and I'm like guys yeah so it one, it was very touching, right?

37:42These are people I continue to have a ton of respect for, and really, they're very great folks. But I'm like, no. And it felt at the time there was a real risk that, yeah, that that would tear it apart, right? These were folks that were key to what we were doing they were again people i have a ton of respect for and really admire and so they end up you know kind of falling under the pied piper's spell and kind of get pulled out then to uber well at the time it wasn't uber this was to go start this was to this was before uber wasn't until 2015 16 this was 2011 to go start something independent i was like okay well that that's kind of the heart of the team gone yeah um oh my god so so that that was like very important engineers to the project.

38:36Very important. Not just engineers, but friends and kind of, you know, saying they were important engineers understates the importance, right? They were the core heart of the project. Meanwhile, you're making real progress. Well, we had been. We'd been doing great stuff and moving along, but, you know, you get to these moments. And I think a lot of companies have these inflection moments where it's okay. You know, for a long time, you're like, that's the goal. Right. Because that's the next important thing is the company we need to accomplish to get to where we're going. And at some point you like and it seems out of reach and then it gets almost within reach and then you do it.

39:14And that's OK. Now there's another goal. Right. And that that inflection moment, you know, maybe it's getting your first product into market. Maybe it's having the technological breakthrough on something. You know, you need a reset and a recommitment. um and you know and this was one of those moments and certainly uh it was taken advantage of as a okay maybe we should you know shake things up and do something different but fortunately um we kind of stuck it out together um and how big was the team at that point ish there was probably uh i don't know call it 40 engineers 40 yeah and you're losing like four or five key people just like that well more uh except these were four or five where this was three who came and they recruited a few others well they didn't so they ended up not leaving at all either right they they ended up only anthony did and he didn't even leave at that time wow um uh and again go back to my inability to kind of communicate uh the strife that was happening the strife yeah so yeah how'd you feel like and like like shit you know like like you know it was great on the one hand um like so there was a lot of different emotions right and that's what makes it complicated there was one which was um the sense of duty i had to the company uh right and and as the leader of the team and holding this together um you know there was like a level of appreciation that these folks um were like thought enough of me that they weren't just kind of bouncing without me they were trying to set me up to be successful with them uh there was frustration like why are we even having this conversation um there's fear around like is this like are we toast um uh you know disappointment you know like what are you thinking and credulity like there was you know it was all there you know um none of the good emotions but all the other stuff and how long were you able to keep that band together until it ultimately fell apart it never fully fell apart that's the magic right that that if it had way more would exist today uh and so those core engineers those core people stayed yeah they did um uh some of us left in 2016 ultimately uh but i think by that time as you hope for anything you take you know you build like it was able to outlive you right i I think for me, that's one of the things that's amazing.

41:46Like I've take, you know, what Waymo's done since I left is due to Dimitri, to Kendra, the team that's done that work. And, you know, it's awesome. Right. And it's a lot of hard work and they had to wrestle with a lot of things. But there's a part of me that will always be really proud of the fact that I helped kind of set the culture, set the organization, you know, set the path that got that to a starting point. And then they, you know, carried it forward. And it's awesome. I will always be thankful to Dimitri. You know, at the time when I left, you know, I was pretty disappointed that he didn't come with me and we didn't go do something together.

42:28but um in retrospect i'm really appreciative of the fact that he did stay and that he has been such an important part of driving that forward uh and it's meant that that time that i spent there you know is resulting in something meaningful in the world right and that's cool that's really cool did you cry the first time you got noemo no did you get emotional uh i've been selling a lot of self-driving cars it was just awesome actually the first time i got away my i went for a ride with dimitri uh we went around san francisco and it was just like this is awesome right and it's doing the thing um you know it's kind of like when you're uh i can't even think of the right metaphor with the kids um probably like when so our kids both are off of college and you know you You get them off to college and they're like, oh, they're kind of like a full on real human being grown up.

43:27Right. And it was kind of a similar kind of pride. You know, that quote, the future is here. It's just unevenly distributed. Yes. When when I see the Waymos that are driving around San Francisco, I can't tell you how quickly it normalized in my mind that like this is just this is how it is. Yeah. And like you would think after having seen people behind a wheel your entire life that it would take this prolonged period of time to just like societally adjust to seeing that nobody's driving the car. It happened like that. And now, you know, I'm so used to it that when people come in, visit me, like I just had my cousins here from Vancouver last weekend, they're like, I'm not going in there.

44:11No way. Like, what do you mean these things are driving around? Like it's, and this is Vancouver. Yeah. Like we're on the West coast here, you know, isn't that crazy? Like, like it's, it's all happening right here. And in my mind, I'm like, yeah, of course, like this is, this is the way of the world. But every once in a while I get reminded like, oh, it's just, it's the future is just right here. Yeah. And I think like anything else, certainly anything that's transformational, people will naturally and appropriately have skepticism, right? That, you know, you think of like elevators. For a long time, you had to have a person riding in the elevator to press the buttons because, you know, it was kind of scary otherwise, right?

44:59And, you know, when cars, automobiles were first being sold in the U.S., in some states, you had to have a person walk with flags in front of the car so that it wouldn't scare the horses. Right. Like there's just like things that happened where it takes time for society to adapt a little bit. I think there's other times where the value is so profound that even though you couldn't have imagined it a moment ago, it happens pretty quickly. And, you know, I think of like the iPhone. Or Uber or Airbnb. Some of these. Yeah. Yeah. Don't you think like the idea of staying in somebody else's house? Yeah.

45:45I'll say I'm a little still, you know. My experiences with Airbnb have been a little mixed. But Uber certainly, you know, the iPhone, I think it was like, if you'd asked me in, again, 2006, do I want like a piece of glass with no phone digits in my pocket? The answer is like, what for? Right. Whereas in 2011, it was clear that you needed these things. Um, and so I think that my experience with people riding in self-driving vehicles has been that independent of the initial state, it goes through, um, like a, a very short sequence. Right. So at first either they're super skeptical and they're like, you know, this is BS.

46:29Let me look for, you know, the dude hiding on the street driving or whatever. Um, or it's terrifying or this is amazing. Right. Those are kind of the three states they started. They get in the vehicle. For the first two or three minutes, it's, oh my gosh, there's no one touching the steering wheel. And it's driving and there's no one touching it. And that takes two or three minutes. And then by about five, 10 minutes, they're kind of like, is that all it does? Like, yeah, we're doing 65 miles an hour in the 101. Yeah, that's all it does. It's a self-driving car, what you expect. And then by 15 minutes, they're on their phone, right?

47:11And like, and it just happens, right? And so, you know, your cousin's from Vancouver, you know, get them to get them one. And I bet you that's the way it plays out. And my theory on this and why I think it normalizes pretty quickly is that we're all used to being driven, right? Whether it's riding a taxi or an Uber or your significant other driving or your parents driving you as a kid, it's just kind of normal to be in a vehicle and have somebody else driving it. And so once you get over the, there's not a person sat in that seat doing it, the experience is the same. And then similarly, when you're walking down a street in San Francisco, all those other cars you're not controlling and they're driving by.

47:55and so yeah at first it's kind of crazy that there's nobody in that but very quickly that's oh yeah it's just another vehicle driving by that i don't control can i give you my theory on it please i'd love it yeah it'd be better than mine my theory is that we are way more adaptable as humans than we think and i think that we grossly underestimate how adaptable we are in every situation in every situation and i think we play out these stories in our mind that when something happens, good or bad, life changing or not, we oversubscribe some emotion to how we're going to feel and adapt in that situation.

48:35And then we get in the situation and then we normalize just incredibly quickly. Whether that's like, you know, you always think about if you're a kid and what life would be like when you're rich. And then all of a sudden you get rich and guess what? like after a week, you're like, oh, this is what rich feels like. Now I'm just rich. Or you always think about the dream car that you're going to get. And then you get that dream car. And then after a week, guess what? It feels like every other car you've ever driven, you know, or you think about the, you know, the loss of a parent or a loved one or something, God forbid.

49:08And then that happens. And then guess what? You move on. Like life just normalizes. I think that's right. I think it's part of the human, you know, part of what makes us human is that adaptability or, And, you know, I think about the folks fighting in Ukraine today, right? Inhumane, awful. And yet it's just there's folks who are able to adapt to that, survive it, work through it. So, yeah, I think that's also true. Yeah. When when was part of the deal when Waymo spun out that you were going to leave? Like, no, no, I.

49:48I believe when you work somewhere and you disagree with what's happening, you've got kind of three choices, right? You can help fix it. You can get in line or you can get out of the way. And there were some decisions that were being made that I didn't agree with that I tried to address, tried to steer in the way that I thought would be most effective for the company to be successful, was unsuccessful in doing that, didn't really believe in the trajectory that we were on in the moment for whatever reasons. And given that the team reported to me and it wasn't fair to them and it wasn't fair to Google that I'd be there.

50:37And so it was time to get out of the way, Was it people things or tech things that you disagreed with? It was more people and some strategy things. Okay. Yeah. That makes sense. Yeah. And did you, before that point, see yourself as a lifer? Totally. You know, if you'd asked me even a year earlier, I'd have been, I'm going to be here for the next decade building this, right? I, you know, it turns out I have just somewhere else. You know, I felt incredibly, just incredibly lucky, right, that I had somehow stumbled into this opportunity to build something transformational, to do it at a company where I believed in the values that we espoused and got to work with amazing people.

51:24And it was hard to imagine something better. That was your first real job too, right? Yeah, I'd worked for a defense contract. That was not great. I was a faculty member. you know that was lovely if we can call that a real job like a real job in industry a real job in industry they work hard you know i think you know what i mean yeah i know what you mean it was yeah it was and it was awesome what's crazy like having that kind of job that kind of responsibility managing all these people going through all of this turmoil you must have been getting home every night like what is going on like how did i even end up here yeah yeah uh it was It's, yeah, right.

52:02And both good and bad, right. That there was, you know, if you looked at what we had accomplished and what we were building, it was, it's mind blowing, right. Like, you know, and it's one of these things that there's people who work on really important technology, but it's intangible, right. If you think about credit card processing, right. The rails that allow us to all commerce to occur around the world. Like that's incredibly interesting. interesting, really hard technology. But if I tell you I work on, you know, the rails for international commerce, you're like, okay, what do you do? You know, if I tell you we're working on self-driving cars, it's like, you can understand that, right?

52:46You've got to like, you have a reaction viscerally one way or another about it. You understand what driving means. You understand how important that is um and so yeah it's just it's just neat to be able to work on something like that and can i revisit when you when you came out of the the shadows at google and told people what you were doing yeah what like was there like a reveal yeah we um that was an amazing day um uh we so google their company all hands is called tgif um thank god it's friday even though they do it on a thursday which is entertaining in and of itself um uh but it was done for good reason it was done because you know they've got internationally they had the fortune of being a big international company right right you know friday saturday yeah exactly um but it still players.

53:42And yeah, I got to get up on stage in front of, I don't know, probably 60 ,000 Googlers at the time and be like, hey, we do awesome stuff at Google. And by the way, we make cars drive themselves, right? And talk about the tech. And, you know, it's a company of engineers and, you know, being able to kind of lay out some of the cool technology and, you know, it was, you know, you become an instant folk hero um crazy it was very cool what were the biggest in hindsight were there any decisions probably technology oriented that you underestimated how important they were looking back um i'm sure nothing leaves to mind i can tell you one at aurora

54:39Mm-hmm.

55:01So you can figure out a distance from that. The farther you shoot out, the more the beam gets dispersed, the less energy that comes back. So if you want to see further, you need to shoot more energy out. At some point, you're shooting out so much energy that you'll either, depending on the wavelength, you'll either burn people's retina or you will boil the aqueous fluid in their eyeballs, which you don't want to do. Doesn't sound like it. Not a good thing to do, right? And for trucks, sorry to interrupt you, but for semis, because they're going on long roads at night, whatever, you need more distance.

55:36You need more range. Kinetic energy for a truck driving at 70 miles an hour versus a car driving in an urban environment at 15 to 25 is about 50 fold. So the amount of stopping distance is larger and all of that. And so anyway, so we knew that this lighter technology was out there. We knew what the limit of it was, and we knew that wasn't far enough to be able to drive trucks safely. Um, and so we spent a bunch of time in the first couple of years of the company, uh, trying to find a technology to unlock the ability to drive at high speeds on the freeway with big trucks. Uh, and we ultimately found this company in, uh, Montana called Blackmore.

56:15And they had built a special way called frequency modulated continuous wave, a special way to measure how that, that time of flight for the light. And the way they do that is instead of looking for a bright spike to come back, they look at wave interference and they look at the phase difference in the waves. And that allows you to figure out that phase difference allows you to figure out how far things are. That's how I would have done it, too. Totally. It's completely, completely obvious. But the magic in this, and this is, again, in the, you know, of course, I knew this, is that that self-interference thing is called self-heterodyne, where you're kind of overlapping these waves.

56:53And it turns out that through magic of physics and hand waving is a 10 to 20 fold amplification of the signal. And so that means that for the same amount of energy, you can see much further. And so when we discovered, we saw this team and, you know, thought about this technology in the past. We're like, it's just not feasible. Met this team. Randy Riebel was the founder of it. He's like, oh, we're doing FMCW. I'm like, yeah, right. and then you know i'll take the meeting but i don't believe you then got to know him got to know the team i was like oh they've actually cracked this uh and so we ended up acquiring that company um at aurora in 2018 um it was about 70 people something like that and it is one of the best acquisitions you could imagine it's one of the fundamental bits of technology we have yeah And it's one of those acquisitions, you hear all acquisitions fail, or at least most acquisitions fail.

57:55And this one's the opposite of that. It has turned out to have been, we were right about the need for the technology. We were right that these guys know how to solve it. And we were right that we could industrialize it. And the teams, for the most part, stuck around. And it's on every one of our trucks today. Wow. And without it, I don't know how, I can imagine alternatives, but this one works. And how long from when you left Google, started Aurora and then did that acquisition? Yeah. So I left Google and I spent I did not leave Google to start Aurora. I left Google because it was time to get out and then spent, I don't know, three or six months trying to figure out what to do.

58:34And so we started Aurora kind of in earnest at the beginning of 2017. And I think we acquired Blackmore. And was the original charter of Aurora then not semi-trucks because you didn't know if the technology could actually get there? Yeah, it was not. So our mission has been the same from day one, which is to deliver the benefits of self-driving technology safely, quickly and broadly. But we if you look at our early pitch decks, you know, when we it was, OK, we're going to do cars and then, you know, we'll look at adjacencies like trucking and other places. And again, that was partly because we just didn't see how you could actually see far enough to drive these things.

59:15Right. You're going to do kind of a Waymo competitor. Yeah. Sounds like Waymo. Yeah. And was there a world where during those three to six months you were not going to do something in self-driving? Like because you're like, I've done this for too long. Yeah, it certainly it certainly crossed my radar. I was trying to figure out what to do. Right. I was pretty down. and was looking at what the opportunities was. And it was very flattering, right? When I left Waymo or when I left Google, it made national news, which was like, well, that's kind of cool. And so I got a lot of interest and had a lot of really good conversations with folks.

59:55And I ended up like, I was trying to think about what do I want to do next? And really it came down to minimizing regret, right? And I was thinking through and I was like, well, I believe in this technology. It's going to happen. And, you know, when I'm talking to my grandkids one day, I don't want to be like, you know, I could have been a contender. I could have been, you know, I could have helped make that happen. And so, you know, when I did the math, like did the reason through it, it was, you know, so we could I could start a company to go do this and we could fail. And it's like, you know, right.

1:00:34You tried, didn't work out, but it happens. Start a company, it kind of works, but I don't like it. You're like, okay, I can hand it off and leave. Or we can start a company, it's successful, and you enjoy it. And that's, you know, obviously the happy path and the one you hope for. And it seemed like all of those options were better than, you know, at some point in the future going and saying, you know, I could have done that. I could have been part of that, you know. um and so that that was why i ultimately decided to to kind of get back into it um also felt like i had a unique set of experiences and skills that you know i could have gone and been a product or programmer engineering manager on something else but it would have missed chunk of value that i have right which is understanding the space and the technology and you know what's needed to make it work and so that seemed like i should go use that right that's like you know without I'm trying to sound goofy about it, but that's kind of my purpose, right?

1:01:36Was to go do this and make it happen, given the experiences I'd had. And then the decision to start a company rather than go, you know, I had an opportunity to go to lead self-driving development at a couple of different OEMs and a couple of different tech companies. I decided that the right path was to start a company because I'm a big believer that a well-run company executes on its mission. and that at some point things go badly and you have to put the chips down and you should put them down on the things that are aligned with your mission. And so if you're a car company, your mission is not to deliver the benefits of self-driving technology safely, quickly, and broadly.

1:02:24If you're Ford, it's something like, you know, enable every American to be able to buy a reasonably priced car. something like that. I don't know if that's still it, but it's, it's that gist, you know, if you're Google, it's, uh, organize the world's information to make it universally, uh, accessible. Um, and so at some point, this is a hard problem. Most companies are not going to have the patience that Google has. Uh, and so if we're going to go do this, need to do it in a place where we can control our destiny and that we're not going to end up being the bet that other companies don't make.

1:03:07And if you look at what's happened over the last 10 years, there's been a number of these efforts, whether it's Apple shutting down Titan or Ford and Volkswagen shutting down Argo, or most recently General Motors shutting down Cruise. At the end of the day, each of these companies has looked at their mission and said, my resources, whether they're people or dollars or time, are not being served by not serving our company's mission by doing this work. And so that seemed like it was clear to me when we started Aurora that that was going to be one of our benefits was that we knew what we were about.

1:03:48We were focused on this and maybe we'll fail. But we at least control our destiny. And out of the gate, did you just have to raise a bunch of money? I imagine you had no difficulty fundraising. In the private markets, we raised $300 million,$395 million in the private markets. Okay. Okay. That's not that crazy. No. No, I feel like we've been pretty - That's pretty good. We were pretty efficient. In total - SaaS companies are raising more than that. Yeah, well, but at the time, like we did our series A was, I think, 90 million raised, which felt large. Yeah, right. What year was that? That was 2017.

1:04:39Right a year before the acquisition of the company in Montana. Yeah. What was it called? Blackmore was the company. Blackmore. First light is the technology that we call it internal. So a year before you acquired Blackmore, you raised the A. Yeah. And then when did you SPAC? We SPAC'd in 2021. So when everybody was SPACing, it turns out. Okay. Yeah. But it turns out you're one of the only SPACs that's actually retained its value. Yes. It was rough for a while, right? SPAC'd at like 21 bucks a share or something? No, you SPAC at 10. Right. Everybody, that's part of the thing. It's 10. And then bounced along.

1:05:16We got down to one. No way. Yeah. $1? $1.21. Yeah. And it went from, I think it was$17. Not that I pay attention to the stock market. Right, right, right. Yeah,$17 in late November to$1.21. I think it was under$3 by February. Right. And this was the combination of the invasion of Ukraine and, you know, whatever was happening in the markets. And now you're back up to basically. Yeah, we're bouncing around$7. We've been up to 10. So I feel pretty. It's like a$12 billion-ish company. Yeah. Yeah. 12, 13, somewhere like that. Why did you, like, it is, like, how many other companies are close to their SPAC price?

1:06:06I don't pay attention to that. I think there's very few. Yeah. Yeah. And I think there's a few things. Because you could have raised money in the private markets. It would have been hard to raise the quantum we wanted to raise at the time in the private markets. At the time, a lot of the folks that you actually want to be raising from at that point were tied up with major investments in a couple of private, like big private things. Like Rivian at the time was private. They went public a little bit later. so a bunch of folks were interested in kind of auto tech had a lot of their powder tied up in that um you know stripe was sucking a lot of money in at that point uh there was a few couple other ones that i mean the activity in general at that point was low low low yeah yeah so if we had not like if we had not gone public when we did we'd be dead now i am highly convinced of that because Because, you know, so we raised the money, like, you know, we did the SPAC and kind of raised the money in mid-21.

1:07:08We went public in November. Markets collapsed in 22. And so if we had not raised in 21 and had been trying to get raised in the private market in 22, no chance. Or if we had, it would have been a massive down route. It would have wiped out our employees. It would have just been disastrous. Still must have been pretty unnerving. going public and then it sucked losing whatever it was like 95 of your value yeah 80 something for a long period of time yeah and it and your employees are probably looking at you like yeah dude what the heck are you doing right and and it was it was complicated right that that was rough there i'll tell you why it was rough and i'll tell you the silver lining right So the rough parts are you've just taken a bunch of money from investors and people think about investors as the fund managers.

1:08:05And those are wealthy people that are successful. And, you know, but but the funds you take the money from are people's retirement. Right. And their teachers and lawyer or not lawyers, teachers and firefighters and police officers and public sector employees. and you know there's a fund manager who has got to know you and and do company and done their analysis and like yeah this is something to bet on and so you've just taken a chunk of some people's retirement and dropped it by 85 percent right that sucks um uh and then internally uh your employees you know were like amazing we made it we got public we raised this money and, you know, I'm worth this much, but I'm locked up for six months.

1:08:54And then before we get to that six-month lockup period being open, you know, I'm worth a tenth of that or an eighth of that. That sucks. Didn't even make it to the six months. Didn't make it to the six months, right? It crashed in the opening bit there. The, you know, there's the voices from the outside, see all these facts were all BS and smoke and mirrors. And we were not. I think in retrospect, it looks like we were not. But you get thrown in with the rest of the stuff that's kind of crap. And then just operationally, internally, you've got employees and you give them equity incentives and suddenly, you know, at$1.25 a share instead of$10 a share, the amount of equity that you can afford to give without diluting the company out drops dramatically.

1:09:45uh right and so you've got to navigate that there's just a lot of complexity um and emotions uh and you know one of the things as a leader you do through that is you try to reassure but again with integrity like look gang this sucks it's not us you know cisco dropped 90 percent Amazon's dropped 90%. You know, like companies that you would respect and think have been incredibly successful had days where it just got wiped out and then built back. And so, you know, if you believe in what we're doing here, if we keep our heads down and execute, it'll come back. Did you believe? Yeah. But boy, did you have to put a brave face on.

1:10:32Oh, 100%, right? I believed. Did I, was I certain? No, right? Because we knew we needed to raise more money. But did I believe we could? And did I believe that if we executed that ultimately, that I, again, I'm maybe optimistic, maybe naive, but I do believe that you can build trust with folks. And that the investors that have bet on us since we were private get it. That if I look at the T. Rowe price, which is a major, I think our largest shareholder at this point, they've been an investor with us with our B. They support us when the stock was low. They've reaped a benefit from that, which is great.

1:11:17But by being honest with them, by telling them what we're dealing with, by setting reasonable expectations, they were able to make informed decisions. And I think that that's gone a long way for us. Getting back to the misery, the the upside of that was people talk about missionaries versus mercenaries as employees right the folks who are there for the the vision the mission the folks who are there just to make a buck you know there's a period with self-driving technology self-driving companies like that was the hot stuff and you get rich quick and and uh and you find out who those people are pretty quick right um and and and i don't that sounded judgmental right and i think every one of us are different phases of our life and there's different priorities and sometimes you just need to make some money right uh and sometimes you like the mission but you need to make the money and this seemed like there was an alignment of the two and so as the stock is doing its you know its uh titanic impression um over the next couple of months you know a bunch of people leave.

1:12:24Right. And in the moment that hurts because these are people you like and you're working with. What you come to realize is that the people who believe the people who are truly committed, the ones who, you know, and some of them may have been, but they just couldn't afford to. So let's, I don't, again, don't want to disparage the folks who left, but you do find the people who are committed. Right. And, and that is additive, the culture, right. Cause it, it, it no longer, you know the questions you know in the all hands are no longer about like hey stocks down what are you going to do about it and it's more hey how are we going to make the company succeed right and you can interpret the first as the second but it wasn't um and and just culturally the vibe is different and we're all about the same thing right and it's uh and that i think was a secret blessing of this is that like, yeah, it was a great filter.

1:13:21We had, you know, 1800, 600, 1800 people, something like that. Uh, and we still do today, but the people who are here are on the bus for the right reason. How many are there? Are there self-driving Aurora semis on the road today? Yes. How many? So we have about 30 trucks. Uh, we run 10 or 15 of them every day. They have an operator on board, but we've hauled over two and a half million miles for customers, right? So hauling, whether it's packages for FedEx, intermodal trailers for Schneider, refrigerated trailers for Hirschbach, right? So, you know, in that Dallas-Houston and now Fort Worth to El Paso as well.

1:14:09We're hauling goods for folks. Dallas to Houston. So it's all in Texas. It's all in Texas right now. We've also gone out to Phoenix. We ran an experiment to make sure we could expand. Part of our thesis is that we can expand this relatively quickly. And that seems to work. Do you want to stay in semis? I want to build a business that's self-sustaining. Freight is the right place to do that. And then ultimately, the technology that we have will go all kinds of places, right? And is the category of freight broader than semis in your mind? Yes, but middle mile freight is a massive market. So trucking in the U.S.

1:14:44is a trillion dollar market.

1:14:51The unit economics of trucking are that we pay people to drive trucks or we pay for driving trucks three times as much as we pay for driving an Uber. And so if you think about entering a market, what you'd like is a market where there's high revenue per unit, because then if your COGS is high to begin with, you're still actually making money. And then you can drive COGS down and increase the margins meaningfully. And then the other part is that you want to look at the structure of the market. So ride hailing is what a 50, 60 billion dollar market today in the US. Now, the way you're going to expand the ride hailing market is driving down the price to consumers because it's a purely elastic market.

1:15:38And so what that means is if you want to grow from that 50 to 60 billion dollar market to the two trillion dollar personal mobility market, you actually have to drive your revenue number on a unit on a unit basis down. whereas in trucking we're slotting in in a market where the pricing umbrella the next best alternative is a person driving a truck which on average in the u.s is 97 cents per mile and so we don't have to drop prices to grow margin to grow market we just slot in and you know fill in for some of these folks who are leaving the market and the shortage that we have in the space so large market don't have to drive the cost down uh and real need um and so it feels like let's go win there let's use that to drive up our volumes that'll drive down the cogs for us because you know one of the big drivers is hardware and the more you make of it the lower it costs um and then we'll go take this amazing technology the process is all of the non-sexy stuff in building and running that business and apply that into the personal transportation space and apply it into other spaces over time.

1:16:45How far do you think we are from the moments that you and I are having with Waymo now, just like seeing them on the street all the time with Aurora Semis? Much like Waymo, it'll depend where you are. Today, if you drive between Dallas and Houston, you'll probably feel that way, right? We have trucks on that road every day.

1:17:13Within a year, we expect to expand outside of Texas. And we'll start to work across the Southern Freight Belt, and then we'll ultimately build into the rest of the United States. But we're going to be out there on the freeways much more so than in the cities to begin with. Eventually, we'll get to your store. But for the next little while, we're going to be focused on getting to the distribution centers. These kind of industrial park areas on the edges of cities were a lot of good homes. With no driver? With no driver. Like right now, there is a driver? Right now, there's an operator on board.

1:17:47But soon, you want to remove it? Yeah, we're aiming for April. Wow. So like, you know, kind of a month from now. Wow. Yep. It's kind of exciting. That's incredible. It really is. Yeah. I guess the obvious question in my mind is kids that are born in kids that are born now, are they going to be like, are they going to have a driver's license? I think if kids born now, I don't think they'll need to. They maybe they want to. Some people like riding horses. But I do think it'll be a comparable thing to like, I think it's going to take a little longer than 15 years for it to be comparable to horses.

1:18:24But 50 years from now, it will be. And do you think it's going to be like, can you, do you think that the way the world will play out is that you will just take that software technology and just retrofit it into these cars? Or do you think it's going to be brand new sets of cars? So first, it's important to understand it's not just software, right? That when we talk about the Aurora driver, it is software and that's an important part of it. Well, there's a bunch of interest, like we talked about LIDAR earlier. There's different LIDAR, radar, camera, the computer that goes in there, the networking.

1:19:00There's a bunch of hardware elements to this you have to get right as well. So you're not going to just kind of throw it in a car and hope. You have to do a bunch of engineering work to do the integration, have confidence you can do this safely. I think that within the next five years, you'll start to really see actually intentionally designed vehicles for full automation. Right. And. Optimist and. kind of someone who's a bit practical about this is it turns out building a car at scale is hard and takes a bunch of investment and you know they're they're only really profitable unless you're very specific brands if you can make hundreds of thousands of them and so you need to kind of go up this curve where you can get to the point where you where it's worth actually mass producing a custom vehicle um that's gonna take a little while to get to that scale right waymo's had you know a few hundred i think i heard 700 something like that vehicles um it's a bit of a step to tens of thousands of vehicles but that'll happen within the next few years that makes total sense but let me ask you this like you drove a rivian here yeah i've obviously had rj on yeah uh what they're doing their approach to this is probably this is fascinating like how this is all going to play out it's unbelievable um they correct me if i'm wrong but have licensed their software to people like volkswagen yeah okay and so then would what volkswagen do is would they maybe like the question is if they want autonomy yeah and they don't believe that they can get to full self-driving on their own with their own company are they gonna have to rebuild cars From the manufacturing plant?

1:20:49No. Or can they just retrofit this stuff with some hardware and some software? It's not really retrofit, but it will be like, it'll be come and work with us. We will bring the self-driving capability and integrate it. So today we work with Volvo and Peterbilt, Volvo and Packard, who makes Peterbilt. They have their own trucks. They make the trucks. And again, part of our philosophy is let's do what we do best in world and let's go work with others who do best in world in what they do. And so they make the truck. We make the driver. That's kind of the conceptually it's that simple. And we work with them to make sure that the truck has the right places to bolt the things on, has the right ways to talk to it, has the right power.

1:21:35And what will happen starting in 27 is that if you're a trucking company, you'll call up Pack R or you'll call up Volvo or another OEM if we get a chance to work with another OEM and say, I'd like to get the Peterbilt 579 with the Aurora driver installed on that. And you'll buy the truck, the thing that you would think of as a truck. You buy that from Pack R and you'll have a subscription with Aurora. And then we will drive that truck for you and you'll pay us on a mile basis. This will look a lot like the way these businesses operate today, right? They buy a truck and they hire a person and pay them to drive it for them.

1:22:17Same kind of thing. And how much work is it to trick out the trucks with the Aurora hardware and software? Much like anything else, there's a bunch of work you do up front, right? And so we've been working for a couple of years and we'll continue to work for a couple more years with these companies to do the work. But it'll come off the assembly line. And that's actually really neat, right? Is that we've got our hardware kit that we're designing. We're working with Continental, which is one of the world's biggest tier one manufacturers. They're going to ship hardware kits to Volvo. They're going to ship them to Peterbilt.

1:22:52They'll ship them to anyone else we work with. As that truck comes down the line, they'll have got an order in, you know, much like when you might order. A new truck. A new truck. New truck coming off the line. Yep. You order it. You might order it with something else, like these mud flaps. Instead, you'll order it with the Aurora driver and it'll come out of the factory, kit it up with our stuff in it. So you're going to focus on new trucks that are rather than taking the existing fleet and retrofitting them. That's exactly right. And the way - Similar to Waymo is like, yeah, it's Waymo cars.

1:23:22Totally. Except it won't be Aurora trucks. That's right. Right. They're going to be FedEx trucks or they're going to be Werner trucks or they're going to be Schneider trucks. And, you know, there's an appeal to let's retrofit them on these trucks. But the reality is that the big fleets actually turn over their trucks every three years or so. Right. So they're buying a new truck. That's pretty frequent. Exactly. And so the value, like for us, it makes more sense to be part of that purchase chain than it does to try to go through and deal with the logistics of drilling holes in trucks and building crap on them.

1:23:57Let's just like have them get a real product. That makes sense. Yeah. That makes total sense. We think so. And the reason that they're flipping over so often is because they're driving such long distances. So there's a couple of different reasons to drive it. Compared to like a car in the city or something. Yeah, totally. So there's a couple of reasons. One is that these are very much TCO businesses, right? Total cost ownership businesses. And so the really thoughtful truck companies know at this point, my maintenance costs go up, my uptime goes down. And so that's the time to drop it off because it drops below my profitability targets for the truck.

1:24:37That's one reason they do it. Another reason is that they're trying to hire new drivers. And if you're a truck driver, one of the things that's appealing to you is you get a new truck rather than one that, you know, Johnny drove for the last three years and slept in and slopped his chili all over. Totally. So that drives it as well. And so and then, yes, they drive a bunch of miles. Right. That, you know, today they'll drive an average of 150 ,000 miles a year, which is about, you know, somewhere between 10 and 50 times what you or I will drive. Yeah. Dang. Yeah. And do you have a perspective on how it'll play out in the consumer market?

1:25:13Not yet in depth. I expect that the ride-hailing entry is actually the right way to start because I think that societally it's actually the better option. And I think if you look at cities where the price value curve is crossed, like you think about New York, most people in New York don't own a car because the cost of parking it and maintaining it and driving it just so high that it's worth taking the subway or taking a black car or taxi. Talked earlier about this price elasticity. If you're able to bring the cost down of the self-driving technology, at some point there's more cities where it will make sense for you just to call Waymo than it will for you to park and own your own car.

1:26:04Yeah, that makes sense. And so that so I think it will happen that way, that it'll start as this service. And then as you're the cost of delivering that service drops down and thus you can bring the price down to serve more customers, you'll get crossover points so that you're able to bring more and more people into this. And maybe, you know, for a lot of families, doesn't replace their primary car at first. It replaces their secondary car. and then ultimately it'll get to the point where in you know like the bay area you know there'll be enough density of this that you just you know you don't bother owning a car at some point you don't bother owning a car rather than owning a self-driving car you just call an uber or whatever exactly because the cost is going to get so low because the margins get so much better for an uber because they don't have to pay the drivers and that kind of thing the safety the insurance exactly and for you the price is just it doesn't have it gets below the point where it is worth it for you to own the car.

1:26:56Much like if you're in San Francisco, a lot of people, again, don't own cars. I think it was New York first and then San Francisco was kind of followed. Totally. And you think if you were running Uber today, would your strategy be to take new cars off the line and put self-driving in them or take exist like buy Jubin's car and retrofit it with? I think you would want to work with... So Uber's business is historically, You should talk to Dara, who's on our board and great supporter of what we do. But his vision, as far as I understand it, is to be the network, right? To be asset light and invest where necessary to seed the market so that they can kind of maintain that marketplace role and supply and demand matching role.

1:27:46So I think probably prefers people, you know, like new vehicles to come in. But I don't see Dara buying your car and retrofitting it. That seems like not his core business. Makes sense. I guess what I'm really trying to figure out is, can my car, will I be able to start sending emails from my car soon? Like, is my car going to be able to do? Yeah, I don't think so. Right. I think you're going to at some point you'll be able to either buy a car or, you know, get the service to be able to ride in one. yeah all right yeah i better get to selling uh i um i really i really appreciate you doing this i'm fascinated yeah in a year or two can we do one like in the back of a pickup that's driving itself or an 18-wheeler uh that's what i meant an 18-wheeler yeah that'd be fun we'll get you in one of those that'd be cool i would enjoy that yeah um because it's about to happen it is like i said, we are working to be on the road next month.

1:28:46So it's going to be exciting. Do you want to run this company forever? Forever is a long time, but for the foreseeable future, yeah. I tell our team all the time, I couldn't imagine, I wouldn't want to be the CEO of any other company, or certainly any other AV company. I think the combination of the people we have, the technology we have, the partnerships, the business plan that we have, like it's incredibly exciting. Yeah. I'm thrilled that you're at the helm of a company that's pushing the boundaries and the limits of what's possible right now. Me too. I'm thrilled. So thank you. Pleasure. Are you hiring?

1:29:26We're always hiring. Yeah. Any key roles, anything in specific that you're hiring for? Um, we're always looking for folks who have a mind for like actually deliver, not just kind of, we want engineers who are awesome. Uh, and we, but they need to have a passion for serving the product, right. And delivering what we need together. So, uh, there's not any particular role that we're focused on right now, but we're always looking. And when you hear the word grit, what do you think of? Uh, when I hear the word grit, what do I think of? Uh, first thing. is like dirt on the road. But no, it's like wrestling with it, right?

1:30:09Like making it through it. Just hard work. Chris, thank you. Pleasure. Thank you. That's it for now. If you like the episode, please leave us a review or go back into the archives where we've done more than 200 episodes with some fantastic folks. This podcast is a Kleiner Perkins Production, and I'm Juven. Thanks for listening.