Dan Wright, CEO Armada | Trae Stephens Next Big Bet

0:00Dan, thank you for joining us. Thanks for having me. Good to see you, Molly. Great to see you as well. To start off, our motto was founded in 2022. You're barely two years old. And the founding of the company involved some pretty key figures in Silicon Valley. Number one, we have Trey Stevens of Founders Fund and Anderil. And number two, we have Christian Garrett and the team at 137 Ventures. So I have to ask, how did you guys get together? It actually started as more of a friend conversation where we were talking about things that were changing in the world, specifically a few macro trends. One is Starlink rapidly bringing connectivity to all these remote, austere locations.

0:40The second is just the explosion of IoT with the cost of cameras, sensors, drones and robots going down 10x in the last five years. And then the third is in the wake of ChatGPT, everybody trying to figure out how do I use large language, multimodal and predictive AI models in operations as opposed to just for customers port or for coding. And Armada just seemed like inevitable, like we needed to have infrastructure in these remote locations to enable that and to sort of complete the rest of the compute stack, along with, you know, Starlink and the other satellite ASPs that are bringing the connectivity to all these remote parts of the world.

1:28so how did trey and christian help set the early foundation of all of this so trey and i have been friends for a really long time and we just were kind of kicking this around as an idea of something sort of that the world needed that um it didn't have yet trey at the time was writing his article which I would highly recommend called Choose Good Quests. And as I was thinking about my next thing, Armada seemed to both of us like a good quest. It was something that was worth spending a lot of time on and trying to make work. And, you know, if the company succeeds, the world's going to be a lot better place for it.

2:06And so we both got just sort of captivated by the idea, inspired by the idea, decided to work on it together. Trey led our seed round along with Lux and Shield. And then Christian and also Justin Fishner-Wolfson and Alex Jacobson from 137 were really important as well. They helped us to really think through, you know, what are the partnerships that we're going to need to make it work? Actually, like worked on a financial model with us early days, worked on kind of an early deck that we were doing to sort of iterate on the concept. And then, you know, also helped us to meet some of the right people at Starlink to enable that partnership, which has been a great partnership for us.

2:48So they've both been extremely critical from the earliest stages of the company. You've managed to recruit top 1 % talent. You led AppDynamics and DataRobot. Your COO, John Runyon, led Okta through the IPO. And your CTO, Pradeep Nair, was VP of Microsoft Azure. How did this team form and what was your recruiting strategy for them? The unique thing about Armada is that the mission is so big. The mission is to bridge the digital divide. And when I started to talk to John and to Pradeep and to others that we brought in the company, they were just inspired by the mission of the company the same way that I was and saw that there was a real need and nobody else is doing it.

3:31That's one thing that we talked about from the beginning, the three of us, is that the problems that exist at the edge, whether you're talking about the public sector where you've got remote battlefields, where you have to make split-second life-or-death decisions, or you're talking about responding to hurricanes or to avalanches like we were doing with the state of Alaska, or you're talking in the private sector about oil and gas companies that have oil rigs in the middle of the Gulf of Mexico or the middle of rural parts of Canada. or Kazakhstan, where they don't have any infrastructure and all this data is sort of trapped and you can prevent accidents that cause people getting hurt or even dying.

4:09You can prevent oil spills in the middle of the ocean. And the same thing's true in mining and manufacturing and logistics, whether you're talking about trains or maritime companies. And so we all just saw that there was this massive need and nobody else was going to be able to do it and felt like we needed to do it. And I think that's a special thing about our company. Everybody that joins is really committed to the mission and we've been able to get some of the best talent as a result of that. It's excellent. It's really fun to watch. Before we go too deep, we need to talk about the product.

4:39The product is extensive. It's a full stack edge computing platform. It includes three products, Connect, Edge, and Ops AI. So what are each of these products and how do they work together? Yeah. So we are building full stack, which is another thing that's a little different about Armada. And we have a platform, which we call Commander. Everything is in the Armada theme. So you'll spot a common theme throughout all of our products. The first product is called Connect. And Connect is a SaaS product that allows us to connect into all the different data sources that our customers are using, all the different IoT devices, as well as any connectivity that they're using.

5:21So we can plug into obviously Starlink, but also other satellite connectivity that they might be using. We can plug into any cameras, sensors, drones, robots that they're using. And then what we get is a lot of data about how much data are they producing in what locations. And then the second product is a natural extension to that, which is called Edge. And it's the same exact platform, same exact user interface, but it also includes these modular, ruggedized mobile data centers, which are sort of indescribably cool until you see them. And they're called galleons. And that's really when I think customers can see just insane amounts of value because you can process all that data that's trapped at the edge, it's being generated at the edge much more efficiently.

6:10you can actually do it at significantly lower cost. When you look at the total cost, you also have lower latency, more security. And also a lot of these companies have data sovereignty concerns. And so it meets all those needs. And then each one of those is like a node in your own distributed cloud for the edge. And you can send any metadata back to any cloud, any public cloud you would like, or to another data center. And so we are sort of one-stop shopping for the edge. And then, you know, obviously the cloud is going to continue to be critical for everything else. And then the third product is Ops AI.

6:47And Ops AI is really unique in this sense. We're taking all of that data, largely unstructured data that's being generated from all those different data sources. We're training models in the cloud, and you can actually run Ops AI in the cloud, these different applications. Like there's one that we actually just launched last week called Ops Safety that people are quite excited about, where we're doing real-time monitoring for safety for industrials, but also for public safety and different applications in the public sector. And you can take that, you can train it in the cloud, but then what's really different about us is you can run it at the edge.

7:21And so that solves all those problems that I was talking about, where you're getting real-time intelligence to make better operational decisions, and it's much more cost-effective than trying to run that in other ways. And so it's a really good solution. And there's also a marketplace. It's again, one-stop shopping for the edge. So you can buy connectivity, you can buy Starlink directly from us, both the terminals and the plans, but you can also buy cameras and sensors and drones and then different first-party and third-party software and AI applications that you want to use at the edge. Certainly full stack.

7:52That's a lot. We're not bored. We have quite a bit to build. I can't imagine you'll be bored with that much work. On the Galleon, the Galleon sounds awesome. I know it's incredibly comprehensive. Some would say bulletproof, some would say particle proof. Maybe, probably it's both. What kind of factors do you have to consider for building the Galleon and making sure that it can withstand these very sensitive environments on remote locations? Yeah, we knew from day one that these were going to the most hostile environments in the world. They needed to be able to stand up in the hottest deserts and in Antarctica, if the situation calls for it, as well as the middle of the ocean.

8:32And they also need to be able to move around. And that's something that's different because the mobility is a huge feature for a lot of these different use cases. And so we have built them to, one, they're designed to just sort of work, be plug and play anywhere in the world. If you have power that's available, we can use any power source. We can put them on most every surface. They can move around as needed. You can keep them permanently mobile if you want. And then they're designed to hold up for decades with very little maintenance because the people that exist, the people that are working on the oil rigs in the mines, on the battlefields, they are not IT people and they don't want to be IT people.

9:16They want to just do their job and use their data to do their job better. Right. And so that's what we're enabling and delivering at the edge. And we have designed it also for massive scale. One thing that we really focused on in building our team is we have best in class talent at every layer of the stack, like top one percent talent from hardware to software to AI. And that talent also has operated at massive scale. And so every component that we use is something that we know can scale to not just 10 or hundreds of galleons, but thousands or tens of thousands of galleons, which is what we're going to need in order to fulfill our mission and actually build the cloud for the edge.

9:58Wow. I'm quite curious about the marketplace because that sounds like a lot of bells and whistles, but it also sounds pretty instrumental to the total package. So what kind of role does that play in terms of the stack? Yeah, it's funny. I remember talking to some of my VC friends and they're like, you're building a marketplace from day one. Nobody does that. And nobody also builds their platform to be ISO and SOC certified out of the gate, but we did that too. And the reason is we knew that both those things were going to be really, really important for the customers that we're dealing with. What the market told us from the very beginning is that it wants this one-stop shop for the edge and nobody else is doing it.

10:39And also, you know, my CTO, Pradeep Nair, our founding CTO, he was one of the critical, like founding engineers that built Azure at Microsoft. So he had seen this play out with Azure, that, you know, the marketplace was critical to its growth where people could use the cloud for a lot of different use cases, a lot of different applications. And they knew that if they went to the marketplace, they could find everything that they would want to use. Well, we need to do the same thing for the edge. You know, it's very similar. And so we do that as really important. We are constantly on the lookout for marketplace partners.

11:15You know, with ops safety, we built our own, you know, application for this critical safety use case at the edge, but as much as possible, we're looking to partner. And the analogy I draw for people is Apple with the iPhone. When the iPhone first came out, Apple delivered some applications itself to show what's possible once you put this thing in people's hands. But then what they did is they opened up this ecosystem where everybody's developing their own applications for consumers. And the way that I see the world, we're doing the same thing for all these organizations that are looking to solve problems at the edge.

11:54And we want to be that one-stop shop where they can come to solve all those problems, but we're going to have to do it through partners. And so we're always looking for the latest and greatest, you know, drone or sensor company where we can help with distribution through our marketplace, make that available for customers. And then it automatically shows up in our fleet map, which is the front page to commander our operating system and kind of the UI. But we're also looking for the latest hot AI application company that wants to build apps on top of our stack to solve these important problems at the edge.

12:29Of course, we need more AI. And given there is a lot of AI, I'm really interested to know why you guys decided to build out your own application with ops safety and not work with someone on that. Are you going to be building more custom ones? We have the same strategy with every AI application, which is we look on the market and we say, if the problem is important enough, right? If it's coming up from customers and they're like, this is not a nice to have, this is critical. We look on the market and we say, is anybody else doing this? Like, who can we partner with? Because the last thing we want to do is reinvent the wheel.

13:02We want to scale. And so we're going to partner as much as possible. But if the problem is big enough and nobody's built a solution for it, that we can just integrate and run on top of our platform, then it's like, we have to build it because we have to solve the problem. And so, you know, that's the way that we're approaching it. We're always looking to partner first, but if the problem is big enough and nobody else is solving it, we have the team to do it ourselves. So why is no one else solving it? I mean, edge computing is not new and large traditional data providers have been around for quite some time.

13:31So why is there such a white space? There's always been a blocker to AI at the edge, which is the infra, the infrastructure. And so I think a lot of people never even really thought about these problems or how they could solve them with the data that's trapped at the edge. But once you have the infrastructure there, it's actually amazing. Suddenly you start thinking about thousands of use cases. And as much as possible, we're looking to partner with companies that want to go after those use cases. So if you are an innovative tech company that wants to work with us, please reach out. But sometimes we have to do it ourselves.

14:03And I think it will kind of evolve like the iPhone did with Apple, which is once you start to show what's possible and like the big problems that can be solved now that this infrastructure is at the edge, suddenly everybody's going to be popping up, all these developers wanting to build on top of our stack and solve more problems for customers. Right. And not only is your product strategy incredibly ambitious and aggressive, I would say, for not even being two years old, but your go-to-market strategy is pretty impressive at your stage as well. Could you share more about how many countries you're currently in and what the strategy is there for growth?

14:38Yeah, we're expanding fast that way. So we're now into it. It's approaching 50 countries, but we have like a very clear strategy, which is, you know, we're sort of following Starlink's growth, right? Wherever Starlink goes, that means that suddenly it's a new world of possibilities. All those macro trends that I talked about are taking hold. And so we need to go there to complete the rest of the compute stack, solve these problems. So I think for us, we always knew that we were going to be a global company. You know, the mission of the company, again, is to bridge the digital divide. And that is not a one area problem.

15:13That is a world problem. And so we're going to cover the entire world at some point. The way that we are approaching things is interesting. We talk a lot about the remote edge being where we focus. And the remote edge is everything that is beyond, you know, public 5G and 4G networks, everything that's beyond the current cloud networks, where now there's connectivity via Starlink or otherwise, and we can complete the rest of the compute stack. And that happens to be about 70 % of the world. And it happens to be where a lot of the data is. And Gartner says by 2025, 75 % of all data is gonna be generated at the edge.

15:50So that's a massive opportunity. But for us to really establish ourselves as the company for the edge, which is our aspiration, we're gonna have to be a global company. Makes sense. That is a lot of data. Hey, we'll get right back to the conversation after a word from our sponsor. Sorcery is brought to you by Archer. I'm genuinely amazed at what Archer has been able to accomplish. Archer's goal is to transform urban travel, replacing 60 to 90 minute car commutes with estimated 10 to 20 minute electric air taxi flights. They are safe, sustainable, low noise, and cost competitive with ground transportation.

16:26Archer's Midnight is a piloted four passenger aircraft designed to perform rapid back-to-back flights with minimal charge time between flights. Learn more about how Archer is set to open up a new world of opportunity for passengers by providing safe and efficient access to people, places, and events across the communities they live. Visit archer.com. And so who's the team behind your go-to-market strategy? Because I can only assume you have to really get in the weeds there and have some one percenters. Yeah, we have a really amazing team that's joined the company. I kind of wake up every day super fired up about the mission of the company and then just like the team that is gathered around the mission.

17:06It's like the Avengers for the edge. It's pretty cool. And on the go-to-market side, we have a bunch of top talent. One example of this is Chris Vasquez, who was like employee number. Chris, don't get mad at me. I think you were employee number four at the company. He actually was at SpaceX for a decade before he joined us. He leads customer experience for us, makes sure that every customer that joins has like a white glove, beautiful experience that make someone want to do more with us. And we also have great go-to-market talent. We have Nordin, who joined us actually fairly recently to run international go-to-market out of Dubai.

17:42I worked with Nordin at DataRobot, my previous company, and he's truly world-class. And then Vlada Barlow, who joined us really early on, is like a force of nature. She's really been critical for all the high-impact work that we're doing in the public sector. And she also runs some of our most strategic opportunities at the company, just to name a couple of people. But we really focused on setting the bar extremely high for everybody that we bring into the company. I'm a big believer that it's not about the amount of people, it's about the quality of people that you have and how bought in they are to the mission.

18:15And if you get the right team that's top 1 % and really inspired by the mission, and then we all work extremely hard together, we're going to be successful. The bar is certainly high. That's an exceptional team. Given that you are going after public and private sectors, how does the pitch change? Yeah, great question. The products are the same. So that was a really important part of our strategy is we do not want to build bespoke solutions that only apply to like one customer. We don't do that. And as much as possible, we would try to make sure that we're focusing on industries or in the public sector areas where we can sell customers a few different products, all of our products, right?

18:53and solve multiple problems because that's how you can build a really, really big company that stands the test of time. And, you know, in terms of how we position that we do, you know, sort of package it by the person or the industry that we're talking to. And so we do tailor our messaging, whether we're talking to a manufacturing company or a logistics company or an energy company, it is a little bit different, but the underlying technology is pretty much the same. So as an example, I mentioned that we do work with large energy companies, like some of the largest in the world. And so think about oil and gas companies that might have oil rigs in the middle of the Gulf of Mexico.

19:34They might have them in some remote desert, you know, in the North Sea, and they've never had infrastructure to be able to do things like automated drilling, 24-7 monitoring for safety or for emissions issues. And, you know, if you take like a scenario where there's a rig in the middle of the ocean, literally today they have to have helicopters fly out and survey it twice a day. They have very manual reports that they have to create for every single rig called well reports. And all of this is happening in a way that frankly feels like it has to be updated. Like you have to automate some of these things.

20:12And when you do that, it's way more efficient. You avoid sort of, they call them non-production days where the rigs shut down when something bad happens, which can impact literally billions of dollars and save people's lives. And so what we do is we enable all of these different applications. And I say, this is where it's a little bit different by industry. There are especially third-party applications, like for example, the ones that Halliburton builds with its landmark suite of applications for automated drilling, where we're not building it, Halliburton's building it, but we're enabling it through our infrastructure and through our platform.

20:48to run in these remote locations. And so we talk about it together and you'll see the same thing with the partners that we have in mining and in manufacturing and in logistics and then also in the public sector as well. Would you say that you're one of the first partners for these legacy industries to actually start activating their data and using AI? Have they been trying? Have they been looking at other things? What is the progression been like for them and their discovery or at least like approach into getting into more AI? Yeah, one reason why I knew that we were onto something with Armada is that when I was talking to companies that I'd worked with at my previous companies that I built, I was hearing from them that they actually were trying to do this themselves and they were running into like massive scale issues and they'd have some servers in a closet somewhere, they'd be throwing some GPUs over there and then they were trying to like be IT people but that's not their thing, right?

21:45They don't wanna be IT people, They want to be, you know, people that are solving a problem that are, you know, producing energy that we all depend on, that are producing raw minerals, that are producing, you know, products that we love or that are saving lives, you know, from firefighters to first responders to people, you know, to soldiers. Right. So we don't want them to have to be IT people. And we're helping them kind of take away all that complexity and giving them a scalable solution that they can just use. And it just works when they need it to. And what was really interesting to me when I looked into this is that there really was no company that was doing anything like this.

22:24And when I was talking to Trey about it, he said, yeah, that's a good sign. Because usually the best companies are ones where there is no real competitor. If you're trying to copy what somebody else is doing, you're already losing. If you're doing something that nobody else is doing and everybody's going to have to try to copy you, then you're in the right spot. I think you're in the right spot. I know that you also have some critical key partnerships very early on in the company, like Skydio and Starlink, Halliburton. How have these fortified Armada's flywheel and moat? What role do they play and what would the dream partnerships be?

22:59Yeah, I mean, with these industries that we're dealing with, these are like the industries that form the backbone of the economy. And so they're not new, right? Like if you take Halliburton, for example, they've been at it for over 100 years and they're used widely by many of the top energy companies in the world. And the same is true with a lot of our other partners. And so for us to build the relationships that they already have with all of those companies, it would take us decades. But I really believe that like the company in this space that's going to be the market leader for generations to come is going to establish itself in the next few years.

23:36And so we have to partner. We have to partner to speed that up. And then the way I look at these partnerships is each one of them becomes a moat. You know, each one of them gives us an advantage versus anybody else who would try to do this in the future. And so it's been a key part of our strategy from the very beginning. They can help us with distribution. They can help us solve more problems for customers. And then it's also, you know, a moat that we can use to have sustainable growth over the long term. We love flywheels and moats. I'm sure many are interested in how you're building up the galleon with racks in a very resource, quote unquote, resource constrained environment.

24:12Did you pull an Elon Musk and get a super cluster in 19 days? How have you been able to source your GPUs and build up the racks? I mean, nobody's Elon. No, but we are very focused on being able to scale up extremely quickly. Like, I think that is part of our value proposition. There's kind of this AI gold rush that's going on around the world. And the one advantage of doing these like modular mobile data centers is that you can get to the point where you have continuous manufacturing lines in different parts of the world. And then you can also park them. You don't have to necessarily deal with years of construction and permits.

24:53And so you can scale up that infrastructure. Our goal is to be able to go from order to delivery in 60 days anywhere in the world. That's what we're trying to do. And so the way that we've done that is through partnerships. We have partnerships with all the GPU providers. We have partnerships with all the CPU providers. We have partnerships with everybody who provides every component that we have in these galleons. And that is what's going to enable us to scale. Again, it would be one thing if we were just trying to build a company that would serve like one market, but that is not the company that we set out to build and that's not our strategy.