Building Unmanned Cargo Planes | David Zagaynov, Poseidon

0:00Today I'm interviewing David Zagainov and he is the co-founder and CEO of Poseidon do you want to just talk about the cargo market in general and how you got into it yeah so before I was a good for the cargo really I can go on my phone right now and I can get my groceries delivered by like 4 p.m. I can get a box in at like by 8 a.m. tomorrow morning if I pay like $2 extra and so I think there's been a massive the world's gone like incredibly small where we buy something from Europe from China from the other side of the United States and it gets to us immediately and that unlocks a bunch of super interesting stuff in terms of like supply chains logistics we're able to build stuff in San Francisco and LA wherever and it's like one of the most complicated like yeah like logistics are a logistical challenge which is fascinating I think what are you inspired by on the logistics side like why does that kind of like light a fire on you I think logistics are like the backbone of like today's economy through the backbone of any like military operation there's incredibly important to like everyday life I think if a logistics network like stopped functioning tomorrow life would look incredibly different we wouldn't be able to like get these like nice rebels in our office every week what is the like first thing that's going through your mind on how to even break into that because I know with you know Amazon prior to Amazon the only reason that that was startable was because USPS already existed and there's a whole bunch of roads paved and all this stuff how are you kind of thinking about it from like a perspective 2025 looking forward when when I was working at Amazon one of the things I'd like noticed was that like we had hyper optimized like a bunch of our logistics infrastructure in terms of like these distribution centers and like the vans that they can't moved on like actually like getting things from like point to point B but like one of the like large things the way we had to optimize are the the planes that were flying everything on and so these planes are like largely the same that like had gotten developed and certified in the 70s and 80s which is like absolutely insane to me that we hadn't made any big leaps forward there and so parker and i started looking around at like what can be done in this space so i know that poseidon basically started out as a like ground effect company and you were trying to build like a plane that took advantage of that and now you're kind of shifting towards cargo how did poseidon start what was that initial idea and then why are you kind of shifting towards now yeah I think when Poseidon started we had seen like the Soviet ground-effect vehicles and in chronoplans as they call them in the 60s and 70s which were these massive massive like like like plane boat hybrids that flew very close to the surface of the water and took advantage of ground effect which gave them increased lift decreased drag and we saw that as a technology that we wanted to like bring forth into the 21st century I think in the meanwhile like the the mission has stayed the same where it's we want to reduce cost per flight on mile and this was a way that we could do it um and so ground effect vehicles are great in like certain operational environments where you don't have to fly over land and your waves are like such a height that like you can be taking advantage of this um but i think what we realized pretty quickly was we didn't want to be just constrained to like a certain market in a certain time uh and we wanted to solve cost per flight ton mile across the entire air cargo spectrum and so ground effect vehicles are still great we're still building seaplanes but we're just expanding beyond that as well i know you mentioned that basically planes have there's been very little innovation you know over the last like 50 plus years yeah um why is that the case and like what are you guys going to be able to do differently now yeah so it's a combo of a few factors uh the first one is like when these vehicles got certified initially um there's a bunch of upfront costs that goes with that it's like hundreds of millions of dollars per vehicle yes yeah up to billions of dollars per vehicles for like the 747s and the like the narrow body wide bodies um and so that our front cost is very prohibitive from doing like very large step changes you can't just like send a new patch note out like you can with software and so then what happens is like iterative improvements where they'll have the the frame that's been certified the engine that's been certified and they'll make small improvements to that and along at the same time the airlines buy the planes and those are large effort costs and so they want to just like maintain and run them for as long as possible and so between those two there's been no like real push for like innovation on that front um so the average like regional air cargo line is flying planes that are an average of 35 to 40 years old and so these are old old airframes and like haven't haven't been updated to like modern tech i know that the way that like cars work or have historically is you sell the car almost like like ford would sell a truck almost at a loss and then they just make up the margin on like the parts as they replace yeah that's very much the case especially with like engines um where there's the the initial cost of the engine but like the rebuilds and maintenance is where a lot of the the oems make their money with the knowledge that it costs you know hundreds of millions or like billions of dollars to kind of do like a ground up rebuild and like certification for a new like vehicle um how are you guys going about that yeah so one of the reasons that it is so expensive to get like build a new vehicle and certify it is because there are people on board and so like i think one of the realizations for us was like if we want to optimize like cost per flight ton mile like the thing to do is take the pilot out and if you take the pilot out you get rid of the cockpit and the windows and all the life support systems and like a ton of weight in space that you weren't using for anything effective and then you could you're like airframe can be built differently you're not beholden to the same standards yeah so so like because of that like because you weigh less your engines can be smaller they can be cheaper and so all around there's like cost savings in getting rid of that pilot.

6:23And it also helps massively look like the certification process. Yeah. Does it go down? Is most of the certification process basically making sure the human is not going to die in the plane? The certification process exists to make sure that like these vehicles are being like safely operated. And so ideally when there's people on board, you want to protect the lives of the people, but you also really care about like the people that you're flying over and like those populated areas. And so the like the FAA does its job great when And they're like ensuring that our skies are safe. When you're kind of thinking forward and you're saying you want to minimize the number of days in between now and when you're actually like shipping cargo.

6:59How are you thinking about making that plan if it's going to take, like, I imagine like over a year, multiple years, maybe to actually have the first plane in the air delivering stuff? Yeah, we're actually planning on having our first plane in the air mid next year. So we're in a full-on sprint right now to build both Heron and Egret, Heron being our seaplane platform and Egret being our landplane platform and getting the first test flights next summer. And the sprint towards getting commercial operations after that is getting certification as quickly as possible. And we'll first be able to fly in areas that have like low population.

7:38um we have areas where we'll be able to like test immediately and then as we get like flight hours uh we will work like towards certification there's a pretty clear path that way you said that you're like sprinting towards that how are you kind of spending your time and what are you focusing on right now we are in the middle of manufacturing of the planes and so is that that massive shell that i saw yeah yeah what does that look like it's like building the wing building the fuselage doing carbon fiber layup and like i think like one of the interesting things about like the way that we do our manufacturing process like we are incredibly vertically integrated and we do most of it in-house composites are like absolute magic um and like the they've really like matured as technology over the past like decade and they're becoming more and more prevalent in uh aerospace um what's cool is like composites are super light um super strong in a marine environment they don't have corrosion which is like a huge problem that like seaplanes experience it's like the same situation as you know the salt uh water where like ulysses has to design their vehicle so that it's not going to get damaged by seawater yeah same situation yeah like salt water corrosion is like a big problem if you put like any metal in the water it's just like historically what seaplanes experience and then also you could do like the like mathematically optimal design for your hull for your wings because of the way that you make molds and you just like lay the carbon fiber into it and so you can preserve like the perfect like optimal shape um and the like manufacturing process for us ends up being like a lot closer to that of like composite boat manufacturing than exquisite like aerospace manufacturing like we're not building like f-35s or f-22s where these like take like years and like like hundreds of people to thousands of people like across like dozens of states making like parts like we're able to like do all the under one roof um and like minimize our party count significantly by like going like composite carbon fiber i think the 747 or boeing at least has like 120 000 different suppliers how many like parts are you able to kind of eliminate just by doing it with a with a model where it doesn't have a human and you're kind of like trying to cast or not not cast but basically form the entire shell in one go it's about like a magnitude reduction in parts which is pretty nuts let's go through the like iteration process on how you just built uh the first the first few iterations and then i think this was like the first guy that really flew right yeah yeah so we built um off the river after we started the company we built like a first prototype this was like a initial like ground effect vehicle seaplane design with a boxwing design that like was basically optimized to fly very close to the water but we quickly realized that like flying outside of like a very small envelope uh you lose most of your controllability and one time we were like trying to figure out where we can actually test this um and so we went out to uh the lake at golden gate park at 1 a.m because that's when there would be no one there and this is like an rc test boat lake that's like been approved for like testing like little RC boats um and so so we put our plane in the water and we have the the guys from Starship Sean and Hugo were there with us and we do a couple test flights we like take off we're like flying very close to the water and we try to go like up higher and lose control and like thing flips and it starts drowning immediately and I just like strip completely like run into the water like swim like 100 meters like drag it back but like this is the nastiest lake ever there's like like the the floor of the lake was like a foot of like duck poop amazing i thought i was going to catch some disease but yeah like shortly after then we went back to the drawing board and we're like okay here are like design parameters here's what we want to be able to do like let's just redesign from the ground up um and that's what like seagull is and so seagull took us about six months from like start of design to our first test flight which I think was like a very quick turnaround with three and a half engineers I'm happy yeah so yeah that was cool and then yeah we did our first test flight like March what was the goal for that first test flight or are you trying to achieve we're trying to achieve flight like yeah so so like getting up and off of the water was like entire girl goal the first test flight and then In subsequent test flights, we validated our payload and our range and our autonomous controls and what sat length looked like.

12:15And today, Siegel still serves as a testbed platform for our avionics and our controls algorithms. And so even as we're in the middle of building our first prototypes of Heron and Egret, we're able to test a lot of our designs on Siegel. Interesting. So you're able to kind of like test all the parts that you're going to probably put onto the next platform without actually having the platform ready. Yeah. A lot of the software side of what we're building out can get tested on Segal. Are you glad that you did that before you tried to go straight into the cargo market? So much. I think like even from the get go, like we knew that Segal was a core scale prototype.

12:54But I think that there were a ton of learnings across the board. like even like insofar as like how do we do a carbon fiber layup like how do we actually run an aircraft program like from clean sheet design to manufacturing and there's a lot of things that we did right and a lot of things that like we learned how to do better um but yeah no i i think it would be really challenging for us to just go like right from the rip to to 250 foot planes Yeah, yeah. Tell me about what went wrong. I think like the design for manufacturability is like a lesson that like is incredibly important because there are like techniques that are feasible to do for like a one-off prototype that like would be a massive pain in the butt to do like when we're like pumping out like hundreds of planes.

13:41and so that's been a really important learning I learned that I am not like the the world's best avionics engineer like thank God our team has now expanded to have people who like are incredibly excellent at what they do do you have any other really good stories of like extreme scrappiness like you know going out to the lake at 1 a.m. yeah our our test pilot this is guy Rick who we found on a forum and so we were looking for someone to like test fly our plane uh for the first time and so the the very first test flight was like with like rc controls so we wanted to make sure that like all of our control services were like functioning as properly like the aerodynamics the hydrodynamics were working and so we found this guy who ran like north california's like largest rc tests like club um and they just like they love flying like rc planes and so he like flies people's like massive like rc prototypes uh for the first time and so they like called him over like hey like do you want to like fly your sea planes he was like that is the largest like sea plane drone i've ever seen but yeah no i'd love to do it and so like we met up with him we handed them the controls like just like trust that he was not gonna like crash and he did excellent he did excellent yeah yeah let's say that everything goes right and next year uh your first version of the actual cargo plane is flying around how are you going to go from that to actually like shipping real cargo in the plane yeah so um i think there's a bit like of a crawl walk run on both like manufacturing and like test and development and so when we test fly our vehicles for the first time we are going to uh have a bunch of learnings about like how to like optimize their flight um like continue to iterate our like avionics and controls um and then as as we're like talking to customers and our partners uh we want to be able to like deliver to them as quickly as possible and so then it's like we're we have 25 000 square feet in san francisco and it's a good amount of space to to build like the first ones barely um but not to stand up like full manufacturing and so we're we're gonna like quickly build our first like factory where we'll do like initial rate production and then uh after that it's like a large factory to to be pumping out like tens and dozens of these uh like on a monthly basis in like a slightly different world if you were teleported back and you had to work at uh on some like plane program from anywhere from like 20th century what would that be i think that the planes like immediately after like the wright brothers planes uh like terribly interesting because this was a moment like we we knew flight was achievable we knew that like if we have an airfoil and we like produce some thrust so we can get up off the air like not much else was known about like how do we like build like great planes and I think that like wartime is a like a forcing function for development to like be accelerated and there's like very specific like things that we need to optimize for and so like the first planes that were flying in World Order One would have been incredibly interesting to be working on I'd imagine that you you were able to get something improved and actually in the air much easier during war yeah I don't even know what their approvals looked like I think it was like all right who wants who wants to pilot this thing and be like all right cool like I'll go yeah like at the beginning at the beginning of the conflict like being a world war one there weren't really that many like like fighter planes flying but by the end like they like had quickly ramped up manufacturing production or like tons of pilots like up in the skies yeah do you know how that happened like I'd imagine that you probably want to take learnings from like the initial like high ramp it maybe even during World War one and two where you just like started throwing like thousands and thousands of planes into the air from basically zero prior to that.

17:50And I imagine that you'd want to kind of like copy that sort of ramp if you're able to with Poseidon. Yeah, I think there's like, like specifically like industrial capacity during like World War II, like a super interesting example to look at where going into that, we didn't have like industrial capacity in the way that we needed. um and so like factories that like built cars and like like home appliances like quickly like took the the like the same like labor and workforce um and applied it to like building like planes and turning out like bombers and fighter jets and that was like actually like it was like a huge lift but they were able to achieve in like very little time um but i think there's like a clear roadmap to like scaling production and the way that we're like designing and building our planes it's like like they're very much designed for being able to like build many of these as as cheap of a price as possible yeah we're building like the cargo truck for the skies it's like the like good cheap reliable like f-150 uh for like moving things around in the sky how does a typical week look like for you right now um i think like time split between like like building engineering um and like like developing like partnerships businesses like we were like um like that is like dual use and so we have uh our like defense federal market as well as like a commercial market and it's great about that it's like we our vehicles like are like our platforms like applicable between uh like both markets um but like each of those have like very different go-to-market strategies and like very different challenges they have to face yeah yeah is the like defense market a little bit easier to get something I'd imagine their approval process is a little bit simpler than the commercial market I like I don't know if I would say that like in called like pre like defense procurement easy by any means but they're yeah yeah exactly but there are like advantages and disadvantages to like operating in each market like being dual use is great because you can get like the best of both worlds in a way that like it's very hard to sell something commercially that doesn't exist and isn't ready to like commercially operate um but the dow does a lot of funding of r &d and so they will like fund programs that aren't at like tRL nine um so like the tRL scale is like from one to nine like how ready is and like six being like a prototype and then like seven being like tested and like as you mature towards that that's like a product that's ready to be like commercialized um and so we're able to get initial traction uh and testing on that side and then you can go to the commercial side uh and like having the commercial business line uh helps bridge like what is like the value of death where there's uh in between the the like resources that you can get for like initial like r &d and testing and like actual programs and like being implemented at the end of the day is like a decent chunk of like time and resources and companies that are just like purely defense are often going to struggle with like how do you like bridge that gap and you just need like resources and so having a like a consistently growing like business line that's the commercial helps with that.

21:27I'd imagine this is a little bit similar to kind of like a drone startup. There's a lot of regulation in the United States around drones. But with Zipline, they just like went to Africa and their first like 40 million miles or something or flight miles were done in Africa. Are you thinking about something similar to that where you're going outside of the US to try to get the first planes going faster or are you going to just try and mainly stick to the u.s we're very optimistic that like we'll be able to like begin operating commercially in the u.s and so i think that about a decade ago um everyone started like flying the like the dgi drones and it was it was like crazy because like we had these things up in our air and there were like no regulation for like what was next to airports and stuff yeah like absolutely crazy um and so the fa who's who's been tasked with like regulating your skies uh passes part 107 which regulates drones um so like small drones so like all your all your dji's like 50 pounds less um and since then the regulation for like large drones like beyond visual line of sight like hasn't been extremely clear and so i think there's like there's like different groups like group one group two like group two is like 50 pounds or less uh and then you you get all the way to like group five um and like poseidon's planes are well into like the group five range uh and so like everything like past that it's just like all all one one category um and the established path there is you you get a bunch of waivers for you just like get around the rules sort of thing yeah or just like like you get explicit permission from the fa specifically for what you're building um but from past an executive order that pushed the fa recently to publish language for part 108 which will come uh become law early next year and that relates drones larger than like that group two size uh beyond visual line of sites and so it's a clear like framework for uh getting like large cargo drones abrupt and so we're very optimistic that there's gonna be like a clear regulatory path in a way that there hasn't been for a very long time so is this one of those things that like literally wasn't possible even like a couple years ago from like a regulatory like would it just have been impossible to overcome that kind of challenge as a startup not impossible but very hard and like we've seen that with like a lot of the like aviation startups that have been like struggling with that for a very long time um like even a year ago we didn't know that like this was going to happen so incredibly optimistic so on uh egret talk about basically how you kind of started working on that and then what what you're doing now to kind of get that up and going by you know mid next year yeah um the the cool thing between like heron and egret is that they they share a lot of the same features between the two um and like i think the the naming convention is also little cheeky because like a heron and egret are like the same exact like species of birds but they're like two different names uh form they like live in two different environments they look slightly different um and like much the same way a lot of the engineering between the two platforms is transferable so the wing the tail avionics uh our engines between platforms are the same like what what is the the major difference between the two platforms is the fuselage and so like because of the way that we're designing it's like when we came into like design like there weren't like any like rules of like oh it needs to look a certain way it's just like if a box with wings was the cheapest way to move something from point a to point b we would be building box with wings uh and so like these platforms are like what we see as like the cheapest way to be moving air cargo so for like the cargo that's shipped currently in the united states like you're talking about it's extremely efficient you can get you know pretty much uh you know your toothbrush or something delivered within a couple hours or if not the next morning for basically free um how are you like thinking or how much cheaper is the platform that you're developing going to be for like cost per you know mile yeah for a pound yeah so like looking at cost per flight ton mile um would be like the the metric here and so like right now a lot of the like air carton logistics in the united states like hub and spoke so like all like order something and it gets shipped to a hub that gets then flown to like another hub on the like other end of the united states and then like takes like a regional air cargo flight to its final destination um and so those larger planes are like like wide bodies and narrow bodies but the the planes that are flying the the middle mile are these regional air cargo planes and they're like operated under like part 135 airlines um that have like as little as like a couple planes to like a couple hundred planes um and so like a lot of your like fedex packages your ups your amazon your dhl uh gets moved on these planes and so the main workhorse of like regional air cargo is the cessna caravan um is this another one of those planes that just hasn't innovated at all since you know last 50 years yeah yeah it's been like certified over like nothing like 40 years ago like like the caravans that were flying they're like very very old and yeah so the the caravan costs about like twelve hundred dollars per flight hour to operate between I'd say the biggest like chunks if we're gonna break them down in a three is like your fuel costs your maintenance and like maintenance is like both your airframe and every single flat hour you fly you have your like block engine maintenance um and then your like crew costs so that comes out to like 1100 to 1200 per flight hour and how does that actually break down in between those three things uh roughly about a third each um depending slightly on like what market and what area you're flying in they like fluctuate so some areas guess slightly higher some some areas like labor's like a higher percentage you can take out like a third of the cost just by deleting the humans from inside the plane yeah so so not having humans on board like cutting your fuel burn by like more than half uh carrying significantly more like increases the probability of each flight um and like maintenance uh is significantly lower and so a lot of these cargo planes that they're flying weren't originally designed as cargo planes they were designed as passenger planes or initially operated as passenger planes retrofitted yeah and so as like like after they're flown a bunch um they're not as nice for cargo or for passenger planes anymore and so they they tear out all the seats and they're like okay cool we're gonna move boxes in this now and so these aren't platforms that are like optimal for cargo and so like what one of the things that we see is like that like usually like these planes have like max payloads but a lot of the times what will happen is uh the density of cargo is lighter than like the density of like the cargo holds available um so you'll like what's called like volume out before you like max out your weight and so like you could carry more there's just not enough space and so like one of the important like design like decisions here is like for like the amount of cargo that you're like capable of carrying like how much space do you need and that comes at around like like five to six pounds per cubic foot is is your optimal for like like packages that get moved by amazon like uh and like for like most boxes or most packages yeah it averages out to roughly there um obviously some things are incredibly heavy and some things are very light you're shipping a sauna or something yeah and so um like these these these are platforms that just like weren't like optimal but like because they they get bought like these are this is what this is what's available like this is what people have been flying um and like i think comparably like we are significantly cheaper for a couple reasons so like one is like we talked about i was like we don't have the pilot on board um so initially we'll have a remote pilot who's able to like oversee not just one plane but like a few planes at a time and like moving towards like full autonomy where like that pilot is like out of the loop entirely but also since they're not there um can they just be like remotely controlled yeah anywhere in the world um and like so if needed like someone can like take over controls um and so like getting rid of the pilot all the way also like makes it like more efficient and like we can reduce the fuel burn through like modern like construction techniques um like optimized design and not having like like all of like the human rated stuff on board uh it's about half um of what these planes are flying and then the third factor here of like reducing costs is like significantly reducing your maintenance costs and so that looks like a having things that are like like a lot less parts means a lot like cheaper maintenance um a few things break yeah a few things break uh like look at a tesla like tesla maintenance is like way lower because they've been able to consolidate like a ton of complexity into like some like very like well-designed like simple things and having like engines that are cheaper also like significantly reduce your like costs on your engine maintenance platform and so like all in we're looking at like a massive decrease in like cost per flight hour uh at around four to five hundred dollars per flight hour compared to like a cessna caravans like eleven or twelve hundred dollars for hard tech startups uh one of the biggest things that you kind of have to think about is growing into your factory space and And sometimes you just weigh over, you know, you book, buy something that's much bigger or rent something that's much bigger than maybe your current like capacity and what you, how many employees you have and stuff to fill it.

31:18You said that you did have had five different warehouses or five different locations. You know, how did you go from like starting in a garage to being in this like 25 ,000 square foot place? Yeah. Yeah. Like immediately when we started, like we started working out of our garage in Foster City. So like you're like Silicon Valley, like garage startup. um and like quickly quickly realized that like we're out of space and like the the like the theme is like like one of Poseidons like always existential problems like we are running out of space and so we moved to Berlin game and we got like this little like 1400 square foot warehouse and we're like okay cool like this feels like a ton of space like we're gonna be good um in a couple months into working there we started like fill it up uh and then we found like just like a ton of mold um and we were like forced to move out so then we like moved back into the garage and at this point like the amount of like things that we've acquired like like posiden's like good at two things i think um building planes and like acquiring shit um and we've just acquired so much shit uh and so like garage completely full we're like okay we can't get any work done and so like just started looking around like warehouses around we found like like 3 500 square feet in potrero in san francisco um and so we moved there uh and that's actually like where at the time like our warehouse shared a wall with a mirrored warehouse right next to it and like a month and a half into us moving in uh this irish kid shows up and then so like the ulysses guys like moved in next door and that was a ton of fun um but like as we grew like they also grew like we like ran out of space there and so we're like okay cool like let's let's get something like with enough space to like build the like the large plants that we are going to be building at this point we had the designs for heron and so started looking around like we found um a like 15 000 square foot warehouse like okay cool this will be good and so we moved in there at like december of 24 and we've been there since um but like a month ago we realized like we need even more space and so i had to like go to where we are now and like convince our neighbors to like move out six months early so we can take over their lease um and so we're just gonna keep gobbling up until i think we're like just gonna take the rest of this block um and like hopefully this will be good enough for the next like year um yeah and then and then we'll start like hunting for real estate again.

33:47Yeah, I remember you mentioning when I first like did the tour, it was probably a few months ago now, but you basically mentioned the plane won't even fit like going out the door. And so you have to have like, you may have to like smash through a wall or something to make a bigger door. Yeah, like we have enough space that we can get like a double wide like truck in, but the plane is like 50 feet long, 50 feet wide. Like we do not have a space that we don't have hangar doors here. And so like we'll do, we'll do like assemble in here test subsystems but like when we want to like move it out and go test we're gonna have to like take the wing apart and like take the the fuselage separately and like ship them separately which is also like an interesting like design requirement for being able to like move things is like you don't want to like like have like them like permanently attached so like you could you could move things around and ship them and so we could like fit in a container box and ship like that, which is, I think, pretty cool.

34:43I know that with automotive and Tesla, I think Tesla is the first automotive company that hasn't gone bankrupt since, I think, Chrysler and Ford and a few other. Actually, I think they've gone bankrupt too now in GM. But very few automotive companies have actually succeeded. And by succeeded, for me, it's like, do you have a positive gross margin on your product? Like, one, that. And then also, like are you actually making money or not um has this been a similar situation in the aviation industry where any like aviation startup is just incredibly hard to get off the ground i i think so and there's like a bunch of challenges because it like depends on what market you're trying to sell into um and so i i think like i mean everyone loves to like talk about spacex but like one of the things that like spacex i think does very well is like it's like a full stack like deep tech um started where like they like are not only build the engines but like instead of like just like selling the engines like or like the the rockets to someone else to like whoever else like nasa or like ula or whatever like they're also the service provider um and so they like capitalize on like that entire value stack and so as launch has been getting like cheaper and cheaper for them um the like the price of launch actually hasn't gone down like significantly what's actually like increased is like their margins are getting bigger and bigger and like that is why they've been able to like capture that value stack um and so like i think that informs like a lot of the ways that like i think about like poseidon as we're building out the business it's like i'm i'm not interested in just like building like some tech i i like you don't want to build a plane and then sell it you want to like operate it like we'll like likely sell planes at some point but like i think that the the like the market opportunity here is like to disrupt the way like that cargo operates today um not just disrupt like like aircraft manufacturing what other aviation startups have like been tried over the past 50 years I think a lot of like the aviation startups and like recent years have taken some sort of like technology or like esoteric whatever and like tried to cram that into like like a plane design or like whatever else like like there's been a surge of like EV toll companies it's like like electric vertical takeoff and landing like there's been so many of them and like a lot of them have gone public um but like they're they're not yet like flying routes and so there's been a lot of like companies that like are designed like around like one thing so like electric or like like hydrogen propulsion or something of that sort um and then you try to like retcon that into like a business case um and so like i think like the way that we're looking about it like very differently uh is we are first and foremost like trying to solve cost per flight ton mile and then that informs all of our like design decisions and like the types of how you decide what to work on like like deciding like what size plane to build um isn't just like throwing like darts at a dartboard and being like okay like 50 foot like two-ton payload um i think it like required for us like seeing like what like size like payloads are being like delivered today if we unlock like a significantly lower like cost curve what like markets do we unlock additionally and so like that looks like not just doing hub and spoke but also like point to point so you're flying like directly from your like from where the person's sending it to like the final destination instead of having it go on like a full loop around to a bunch of like other random like hub cities is that also partially enabled by having a much lower cost vehicle because if you have a much lower cost plane suddenly you and it costs less to actually operate maybe you can fly a lot more routes than most planes can yeah yeah exactly so like the the the factor of like the the cost of your plane at the end of the day ends up being like less of a factor than like your operational cost um because over the life done the vehicle your like acquisition costs end up like being dwarfed by the amount of the money that you pay to like actually fly every single hour um so i think that's what we see as like the the cost like it does it is the case that for us like these planes aren't like going to be like exceptionally more expensive by any means to to build produce and be like manufacture um but like the what we've been optimizing is that like operational cost and so with a lower operational cost not only like are we incredibly competitive with the planes that are flying today um we're competitive with planes that are like significantly bigger than us that are like flying routes that are short so like going like miami to like the bahamas or like puerto rico that are being flown on like narrow body jets like 767s um a lot of those planes like aren't being like filled to the brim right now so like it actually makes sense like to fly a couple of our planes instead of like a like a 40 full like 767 and also there's a lot of routes that are being moved on like trucks or cargo vans that like at our price point like we're able to compete with them so the the market like of like air cargo itself is huge but like i think we're starting to like unlock like markets that like weren't previously accessible for air cargo at like the current cost curve jeff bezels when he initially started amazon he was trying to think about what things won't change over the next you know 10 20 30 years and the things were basically we're going to want uh wider selection yeah that's not going to change people won't want less stuff we're going to want faster delivery we no one's going to want it like in a week if they can get it in two days.

40:16And we're also going to want cheaper, like lower prices. Yes. And for this, instead of, you know, you're taking and you're saying, here's this idea of like a hydrogen powered plane. And you're trying to like, just make this idea a reality fit the market. Yeah. Instead of that, you're basically saying, here's this obvious problem, which is just transferring, you know, basically mass from one place to another, and just lowering the cost of that, because that's clearly a valuable thing. Yeah. How did you think about that? yeah like i i think like the like what's not going to change that we are going to need to keep moving things around the world uh and like that that's been like true since like thousands of years ago like we had like the silk road was developed to move like spices and goods from like the far east like back to europe um it's like i think like trade and logistics have been like existentially important like humanity like throughout our existence like wars have been like fought won and lost by like how reliable and strong is your like logistics like network um like napoleon's expedition into russia uh lost because he couldn't like maintain supply chains like the union won the civil war because our like infrastructure for for moving stuff and like our train networks were superior to the south's um like we will like always want to like move stuff and like e-commerce is getting like bigger and bigger and like yeah like maybe it's not like optimal that like we're buying like a bunch of crap from timo um but like the the reality is like like we produce a lot of stuff like as the united states and we export them uh and like a lot of our like industrial supply chain is like tied up in europe and europe is like also an industrial powerhouse in terms like production like roughly equivalent to ours um like if i buy like a camera um and it has a lens that lens is probably coming from like the best like lens manufacturer zeiss in germany um and so i think like the the amount of like things that we produce hopefully is going to keep going up um and like in a world of a balance uh in a world of abundance like we there is more um that gets like built um and so like as we're building more like we're we'll need to like move things more and so like if things are moving like what do we want we want to be able to carry more uh we want to be able to be more flexible with what we're carrying and when and how and we want it to be cheaper and so part of what's interesting with sea land markets we're able to unlock capacity in regions where um you like historically weren't able to get like air cargo in as easily and they've been like relinquished to like boats that come maybe like once a week and are incredibly slow and so we're able to like operate in and out of docks um and like using existing infrastructure like move things there and like being able to do like ship to shore for like fishing supplies and like like to cruise ships and uh one of the big markets like is offshore oil where they're flying either like these like very expensive helicopters that cost like tens of thousands of dollars for flight hour or like boats that take forever uh thousands per flight hour helicopters are crazy expensive some of the most expensive helicopters like that we use in the military right now are like $40 ,000 per flight hour.

43:32And why are they so expensive? Like the platforms are incredibly expensive like the maintenance costs are crazy like the the man trip and like man train and equip portion of like like helicopter platforms like astronomical. You can leave a boat like in in the water and like not burn fuel but like every hour like a plane or a helicopter's in there like you're burning fuel. You're just like the the dollar ticker just like keeps running up um i love the videos of like like you see a fighter jet take off and like bottom right of the screen is like how much cost of yeah cost of fuel like how much fuel we just spent um and that thing just like runs up at like some crazy rate yeah we love we love big planes in america they're like beautiful exquisite platforms i love i love the the things we build are you gonna try to partner with another like imagine partnering with amazon or one of these massive shippers to start out and just basically build a relationship with one of those players ideally that like ships all over the place and they just get a few routes really successful or are you going to try and spin up the entire thing from scratch yeah i think there's like a bunch of ways that like we're like parallel tracking um down this and so we're talking to the the large operators like fedex and ups uh and then also like the smaller operators that are flying these like regional air cargo planes right now that we're going to be ostensibly making it relevant in the next couple years um and are people like excited to go embrace a new a new platform or are they trying even though it may be slightly suboptimal and costs way more are they trying to basically do the thing that they already know works even if it's like a 40 year old plane yeah i think i think what was incredibly surprising to me was the the state of like regional air cargo um as it is uh today i have the opportunity to go to the regional air cargo like convention that was happening happens like once a year and so there's a ton of these operators that are just like heads down locked in in their operation and they like come up for air once a year to go to racco which is like they're they're big conferences so it's like in a like small hotel like double double tree in Scottsdale and they they all hang out and so talking to all these folks made it very clear to me like the problems that the industry is facing like at a large level and so like not only are like these fleets on average like 35 40 years old and a lot of them the planes are reaching their end of life like some of these planes like once they reach a certain amount of hours that have been flown like they legally cannot fly anymore like you can't like do repairs on them it's just like legally not allowed and it's because the planes don't work or is it just like some regulation they never got approved for like repairs um amazing and then like on the other side like like these like operators like have a lot of problems with their pilots like it's not like oh we want to protect our pilots um like there's been a massive pilot shortage in the past couple years and so pilot salaries have gone up and like these pilots who get their licenses um they'll fly like for like regional air cargo lines for a little bit but like once you get enough hours you're allowed to go and fly like bigger planes for like the bigger airlines and that's also a lot more lucrative and so with the shortage there there's like a lot of flights that like get missed and when you miss a flight you have to pay like a massive fee that you incur another like big problem is like by 2035 half the pilots that are eligible to fly are going to be forced retired because as they age out um are they legally not allowed to fly anymore yes yeah once you reach a certain age like you're legally not allowed to fly anymore and so like by 2035 like we're gonna have like the the pilot shortage is gonna be like massively exacerbated um whereas there have been like significantly more of these like regional air cargo lines uh they've been like consolidating a lot of them are like barely profitable or like no longer profitable and like when they stop being profitable like they sell their airline um and like at the top level they're getting squeezed by like fedex and ups so like fedex and ups at like any point what they want is cheaper cost per flight ton mile like they will like switch over to whoever will provide them like the cheapest like service option for moving their packages um and so they're these operators aren't operating with much margin which puts them in like a really hard place is this is this also something where because you have a smaller platform you can kind of and it doesn't require humans and stuff are you able to kind of land in places that aren't normally landable and maybe that i know with uh airports right now if a airline has access to a certain terminal or something that's like a basically guaranteed monopoly in some cases uh is this kind of similar in cargo where you have access to a certain terminal and you can just drop off your packages and if you don't have access to that then it's like lockout um not like entirely the case but like well one of the designs that we have is um we are optimizing for like being able to land on like regular runways and also like degraded runways uh and so like places where it's not the most optimal so like a lot of the runways in alaska are like not paved uh it's just gravel and so you can't just like fly like any any like random like jet into there um you need something that's been like bad things would happen yeah you want to be like a little bit more ruggedized um and i think that there's like the the design of an airport is like super interesting right now because like you have like your basic airport like has like your runways for your planes to be able to take off you have your hangers where to store the planes you have like your air traffic control and then you have like your terminals uh for like where the people are as they wait and they check in they go through tsa um but if you're to design an airport for like unmanned like cargo plane operations you would be able to design it super like differently so you'd be able to have like shorter runways um basically like runaway with like warehouse where like like delivery trucks were able to like drive in drop out of the packages and then leave i think like in a not too distant future um it would be super interesting for us to start looking at like building airports yeah yeah building airports like building and owning like our own like network of airports where we do like air cargo out of interesting yeah i've not heard of any other company well actually i think amazon's building their own like airports yeah they are yeah yeah okay are they the only company doing it as far as i mean there's there's like pe firms that like own random airports but like that building their own yeah i think i think once you own like i think it only takes like a couple airports to get to like the top 10 owner of airports um so it's it's really within reach um and then like okay now we're getting a little out of here but like like that like neo recently launched and so there there's been an influx of these like humanoid robots where they're they're supposed to be able to do like tasks in the house incredibly well but a lot of these demos have been like taking a box and like putting a box over there it's like not incredibly useful like everywhere but like like for me that's super useful because like still like we still need a human to be able to like take the box off the ups truck and put it into our plane um even if we don't have a human like flying the plane and so if we can get a humanoid robot to like load the planes for us i think that's super interesting um and then like in in that case like a little bit like there are places where you'll you'll fly into like a remote village and like it might be like the middle of the night like 3 a.m and instead of having like someone have to be like come out and like you you pay someone to be up in the middle of the night to like unload the plane like you have a little humanoid who like sits in the plane and he just hops out and he takes all the packages like puts them on to the little like dolly that's next to the plane and then jumps back in plugs himself in and like then then you take back off um so i do have a pre-order in for the neo robot how how fast do you think you're going to be going from actually shipping packages to implementing like a neo in your own system the moment we get our hands on it like we'll we'll try it out we'll see if it works like if the tech is there we'll mess around with it if it's not we'll wait um well i'd imagine even with teleoperation if you had a single person where instead of them being in the plane or being at the airport unpacking cargo and repacking cargo i'd imagine you could just have one person that controls a whole fleet of neos and basically as the plane lands it you know takes 30 minutes or something to unpack a plane an hour to unpack a pain plane and then they juice remote operate into another neo in another airport or place yeah to unpack another plane yeah yeah exactly and so like the the question here is like how like what like how much can they lift I think this is gonna be super interesting when they say it was like over 100 pounds yeah yes and so that I get to like the majority of like your packages out of the way there's some like really like bulky size ones so I imagine like for the first few you're gonna probably like the vast majority of packages are like under your under 60 pounds which means that like for the most for the vast majority of the packages that you want to start shipping at the beginning they're totally doable yeah I think that could be really fun and so like yeah like I think like what like it's fun to like think about this but like like genuinely like rethinking from like first principles like the way that like like the logistics networks is run and like there's been like a ton of this like technology that's really matured over the past like decade where like things that weren't possible or like that would be sci-fi are now possible today yeah so cost is just kind of being taken out very quickly yes yeah Yeah.

53:12Interesting. Okay. All right. Final question. What are you most excited about? Like right now, what I'm most excited about is like the absolute sprint that we have to get our planes like in the water and in the air like as quickly as possible. I remember like the first time like Seagull Flu that was like, like we all cried. The best feeling. It was crazy. It was like, like the, like, I don't know, like there are like very few times of it and like that, like that much joy and like excitement of like seeing something like that, like, was first just like an idea in your head um and like you like we like made the designs and we put that for into building and it's like and it flies is like absolutely crazy um and so like i'm imagining that like it'll be that times a hundred um when we see like these giant platforms fly um and like it's it's awesome because like our like really really love our team uh like as we've grown it's on like the people that like have joined us in this mission like incredibly excellent like both like like engineers and like what they do but like also like excellent people and so like being able to like share like like the massive amount of work that it takes and like that culminating in like a test flight uh that like works is crazy and then after that like the next like we celebrate and the next day it's like back to work back to the grind back to the grind like now we got to make a lot of planes