#225 Blake Scholl - Founder & CEO of Boom Supersonic

28:22Turns out this is a software solution. You just need today's weather data and an algorithm, and it tells you what speed and altitude to fly. And then there's no boom. No kidding. It's actually really simple. Wow. We can talk about why people have made it out to be a harder problem than it is. Let's do it. I think there is a, so like NASA, for example, has been working on sonic boom suppression for decades. And they've got this R &D airplane called the X-59. They've been working on it for longer than boom has existed as a company. And it hasn't flown yet. And they're going about this with completely different physics.

29:02It's this very long, skinny airplane, which I think is part of why it hasn't flown yet. It's really hard to make that work. and the idea is if you stretch the airplane out, it kind of spreads the boom out across more time and so when you hear it, it's quieter. Oh, good. And that thing can go up to Mach 1.4. Boomless tops out at about Mach 1.3 so they can go very slightly faster. But that's hard mode. Well, okay, well, why do it on hard mode? Well, if it's not really hard, I don't think you can justify the research program. So I think there is this dynamic around some of these R &D type efforts where the incentive for the people working on them is to make the challenge sufficiently hard that it justifies the program.

29:48Interesting. I mean, you've had, I mean, just to start that company, I mean, you're going up against Boeing. You have the regulations, the speed regulations. What was the speed regulation? It says, thou shalt not exceed Mach 1, the speed of sound. I mean. It's a DOM regulation. You've got some hurdles. And you have no background in aviation or aerospace. And, I mean, how did you, when you, as the founder of the company, I mean, how did you, those are some big, those are some major hurdles to get over. Right? Well, I remember sitting in my basement thinking, okay, take my own ego out of this. Just imagine it's the year 2050.

30:37And I'm retired and I'm sitting on the beach sipping Mai Tais. And I'm reading aviation history. How do I think it goes? Do I think after 150 years of not doing supersonic Boeing or Airbus finally do it? No, of course not. Like, history never goes that way. The big guys never suddenly get enlightened. Okay. Well, do I think we're still going subsonic? Jeez, I hope not. Okay. So if we're not going subsonic and Boeing and Airbus didn't do it, how would it happen? And I just started imagining how that history would go, you know, without me being part of it. Okay, it had to be an effort from outside the industry.

31:20Nobody who had spent their careers at Boeing or Airbus would ever do it because they'd have learned all the reasons why it's impossible. It'd have to be somebody from outside the industry. And what would the attributes of that effort have to look like? And what would the leaders of that effort have to look like? Well, you'd have to be incredibly passionate about the mission because it'd be long and hard. And if you didn't care about it and you were sane, you'd give up. So mission passion, mission orientation would matter. being able to tell the story of why supersonic would matter would be really important because that would be the only way you could get a dream team together.

31:55And this would need a dream team. And so the ability to storytell, the ability to be persuasive, the ability to be a minnow that gets sharks to come swim with you, the startup would have to go get these airlines that are used to buying Boeing and Airbus airplanes to go buy airplanes from a startup instead. It would require this incredible power of persuasion, of perseverance. And so I put that aside and I looked in the mirror and I said, do I look like the CEO for this? And the answer was not at all. I didn't know anything about the industry. I don't think I could have sold you a dollar bill for 50 cents.

32:39And so I said, okay, well, and a lot of these things I was really insecure about. I was insecure about networking. I was insecure about sales. And I asked myself, well, what mattered more, my insecurity or my passion for this idea? And I said, okay, Blake, if you want to actually do this, you have to become that person. And I have to be willing to reinvent myself. And I have to do that continuously along the way. And so I sort of set out to become what my idea was of the right kind of leader for it. Gotcha. Gotcha. Gotcha. Let's talk about, so it sounds like Concord was the main inspiration, correct?

33:21Well, it was an existence proof, right? Like in some ways, I think it requires way more courage to go off and create something of a category that's never existed before. And Concord existed. In fact, it was done in the 1960s. It just wasn't done in a way that made it make any sense. Nobody could afford to fly on it. So it was sort of dead on arrival. So this goes all the way back to the 60s? Concorde was established as a joint venture between the French and British governments by treaty in 1962. Wow. It first flew in 1969 within months of the moon landing. Wow. Who was using it? So British Airways and Air France were the only two airlines that that really operated it for any length of time.

34:09And the tickets were adjusted for inflation north of$20 ,000. So this was really for the royalty and rock stars who could drop a whole lot of coin to go somewhere really fast. It was not practical the way it was done then. How long did it run for? 27 years. 27 years? Yeah, shut down in 2003, really with no plan to replace it. Why was it shut down? So the proximal cause was it was just too expensive. At this point, the successor entity of the companies that had made it was Airbus. And the market was tiny. It had always been tiny for Concorde. And they were having to make spare parts and whatnot.

34:54And Air France wasn't making any money flying it. And so the story I've heard is that Air France and Airbus kind of got together and said, let's just stop doing spare parts for this. And then the British will have to stop flying it too. And it'll force the whole fleet down. So that happened. It was, I don't know if the conspiracy theory is exactly true, but I think the reality was it died. It was stillborn. This was an airplane with a hundred seats on it. Mind you, a hundred uncomfortable seats. Like you could think they were out of back of Ryanair or something. Not a comfortable airplane,$20 ,000 ticket, 100 seats to fill.

35:32That just doesn't work. You can't find 100 people who want to drop 20 grand to go somewhere all at the same time. That's why they only ever had 14. Interesting. So 100 seats,$20 ,000 a ticket. So it was actually the company that deep-sixed it, wasn't the regulations. I think it was not the company. The French and British governments specced it. So I think this is a big piece of kind of what went wrong in aerospace in the 1960s. So one of my controversial opinions is that Concorde killed supersonic flight. It never should have existed. And Apollo killed space exploration. And it also should not have gone to the moon in 1969.

36:21And I loved Concorde and I loved Apollo. But I don't think they helped us. And if that seems like a crazy thing, just notice it's 2025 and we can't fly supersonic and we can't land on the moon. So these things that we were told in the 1960s were the harbingers of great progress didn't pan out the way it was predicted. So why? And I think the answer is that for the first 50 years, you know, from the Wright brothers forward, innovation in aerospace was commercially driven. It was, you're building a commercial airplane that passengers got to be able to afford to fly on, that airlines won't operate profitably.

37:01You know, nobody built a machine unless they at least believed it was going to make economic sense. And then if you're building military machines, they had to make sense for that mission. And so there was a commercial hand saying it's got to make sense, or there's a military hand saying it's got to make sense. But either way, something's keeping us grounded. And in the 60s, we pivoted to Cold War era national prestige as the motivation. And so there was a Soviet project to create a supersonic airliner. There was a European project to create a supersonic airliner. And there was an American project to create a supersonic airliner called the SST.

37:37And in all three cases, they were government funded and they were government specced. And the result was everybody was building products that show technological superiority, not products that made any commercial sense. So Concorde and the Soviet airplane were very similar. The American airplane was going to be 300 seats in Mach 3. So it made even less economic sense than Concorde did. and then what happened is the American so Congress pulled the plug appropriately on the American supersonic airplane Concorde and Concordski were still coming and now all of a sudden it was not obvious back then just how economically dead on arrival Concorde was going to be and so then America responded trying to protect Boeing by banning supersonic flight over land.

38:31That's what it was. That's what it was. This was to protect Boeing. This was protectionism. It was as long as Boeing's building a supersonic airplane, it was all fine. That project gets canceled and all of a sudden we can't have that sonic stuff. It's terrible. And I think the real tell was if it had been about sonic boom being bad, it would have been a noise limit, not a speed limit. Literally, it banned supersonic flight in the US. Why would the government be protecting Boeing? Regulatory capture?

39:10I mean, that happens all the time, right? I think an enormous amount of the regulations that we have in any industry today are there to protect the incumbents. So what, they set up a lobbying, they lobbied to put a speed limit in place so that they could have no competitors, even knowing that they had no ambition to become a competitor in supersonic? I mean, I don't know exactly how it went, so I'm speculating a bit. But we had European and Russian government-funded projects to build a supersonic airliner. The U.S. taxpayer funding and Boeing to do the same thing had just been pulled. and so I could imagine Boeing saying, hey that's unfair you've got to protect me from that if you're not going to subsidize me the way the other guys were subsidized, then at least block them so they can't do anything here and then there was the public story was all about how bad these airplanes were going to be noise wise and environmentally a thing I've come to believe is every bad regulation tends to have a moral cover story that's believable You know, like, oh, you know, we can't, you know, disturb sleeping babies and break windows.

40:21And then there's a real motivation, which is Boeing doesn't want to compete with Concord, which they would never say out loud. They can only say the other stuff. And so it's plausible sounding, but there's a more sinister actual motivation. And you've been in business for 10 years. A little more than 10. 11? 11 years? It'll be 11 in September. Yeah. So 11 years. And just in the past 115 days, you were able to get that banned. So, I mean, how did you get around that for the first 10 years? Well, we had a business plan that didn't need it. As it turns out, there are about 600 routes around the planet that are primarily trans-oceanic.

41:09you know not just New York London by Miami to Madrid and Seattle to Tokyo and LA to Sydney where most of the fly-ins over water where there is no speed limit okay right and so our our basic idea was well Concorde missed on cost and it missed on comfort so we got to solve those problems but I got to make the seats nicer and we got to get the cost down to the point that more people can afford to fly it and and today I mean there's really nice flatbed seats at the front of the airplane in business or first class for international flights, right? And people pay top dollar, five, 10, 15, sometimes 20 grand to be up there.

41:46And the whole premise is I hate the flight as long, give me a flying bed so I can sleep through it. But of course, if you make the flight twice as fast, you don't need the bed anymore. The experience could be more like flying first class domestically. And so the basic idea was, can we improve upon the efficiency of Concorde enough that people would be able to trade a flying bed for a supersonic seat instead and sleep at home, not on the airplane. And to do that, you need a remarkably small improvement versus Concord. Like the math closes at less than 10 % improvement versus 1960s technology. Now, we've actually, we found a lot more than 10%.

42:31We put all the extra into making the seats nicer and the airplane more comfortable. But that was the basic idea. And if you just run the math, which for some reason, I think I was just the first person who actually ran the math. There was plenty of business in 2010s, 2020s, 2030s kind of travel demand in business class on these international routes if you can make the fare similar to what people were already paying, not stratospheric like Concord. So that was the original plan. We didn't need to solve sonic boom. We thought we'd do that in version two. But it turned out it was easier than anybody said.

43:06And so my experience getting that changed was, so on February 10th, we did our second supersonic flight on XB-1, and we announced Boomless Cruise. And that night I flew to DC on this horrific flight that should have been supersonic. And by the time I landed in DC, I had an invitation to the West Wing. And so we started our lobby campaign that day. And I tweeted about boomless crews and Elon had responded and said, yeah, we should get rid of dumb regulations like this. So we had a bunch of people who were supporting it. And so I spent time in the White House. I spent time with Congress. I spent time with the FAA.

43:55And I basically said, look, if we were proposing to make sonic booms, we'd have to have an argument about are they too loud or not? and reasonable people might differ on how loud is too loud and how quiet is quiet enough. But we can do this in a way that there is no audible sonic boom. So there's nothing to disagree about. How was that received? Universally, people were excited. So there was a bipartisan bill that got introduced in the House and in the Senate called the Supersonic Aviation Modernization Act. They basically said, hey, FAA, go rewrite your rules so that if you, so you can fly supersonic without a boom, you're allowed.

44:34And, and so that, that got introduced very quickly. Senator Budd introduced it in the, in the Senate and Representative Troy Nels introduced it in the house. We had bipartisan support on the house. And, you know, and then, you know, meanwhile, you know, I think the president looked at it and he's, he loved Concord. There's this beautiful video clip of him talking about how it was the most beautiful airplane ever and never really should have gone away. And he said, well, I can do it faster than Congress. I'm going to do an executive order. And so he did. Nice. Nice. But how do you, I mean, how do you see your company fitting into the world?

45:19I mean, is this going to be, we kind of talked about it, I think, downstairs. I don't think it was on here yet. But, you know, is this going to be CONUS? Is it going to be just overseas flights? Yeah, well, I think the— Who's going to be able to afford it? All this stuff. Well, let's start with the vision, and we can work backwards to how we get there. Okay. I want to replace Subsonic with Supersonic for every passenger on every route, at least every long route. You know, for the president, all the way down to families. What's a long route? Anything that's, you know, more than three or four hours today.

45:54Okay. You can kind of argue where the threshold is, where the speed really makes a big difference. I mean, I haven't found anything in the world. I don't think I would be better off faster. I think everything's better faster. But for flights, you know, over three or four hours, you can argue cutting in half is meaningful. So, you know, ultimately, if we want to enable more people to go more places more often, we need the flights to be faster. We need to delete, you know, the terrible hassle and inconvenience that is air travel today. And we need to get the cost down as much as we can so that cost isn't a barrier to actually going.

46:29So that's the ultimate goal, to confine subsonic jets to the airplane boneyards, put them in museums where they belong. But it'll take a few iterations to get there. So Overture, which is this airplane, the first one, first commercial airplane, starts all business class. So you can kind of think of, for people who know the Tesla story, our XB1 supersonic demonstrator, it's kind of like the Tesla Roadster. Proved you can do it. Okay. Not, you know, the airplane was really just for a test pilot. Proved we could do it. Proved the technology was there. Okay, the first product is kind of like the Model S.

47:08A lot of people can afford to drive a Model S, but not everybody. And then we take everything we learn from that airplane and we'll build a second generation larger airplane that's even more affordable. And we'll probably take two or three kind of iteration cycles to the point where anybody who wants to fly supersonic will be able to afford to fly supersonic. No kidding. And how many passengers do you think it'll hold? Ultimately, there's going to be a whole family of airplanes. The way you make commercial airliner economics work is you need to size the airplane for the market it flies on. So you want bigger airplanes to support city pairs that have more traffic.

47:45You want smaller airplanes to be able to fly between city pairs that have less traffic. So there'll probably be a whole family of airplanes of different sizes. There's no upper limit to scaling. There is a slight advantage in smaller airplanes because they can work economically on more direct flights. Nobody wants to go to a hub and change airplanes, right? But if you can make an efficient long-range airplane with a smaller number of seats on it, then you can connect more cities directly. And that's an added speed benefit. So there's going to be a whole family of airplanes here. Gotcha. Gotcha.

48:21And when do you think these will be implemented? Our goal is to have the first overture roll out in a little over two years in 2027. Wow. Fly in 28. Our goal is to be certified in 29 and, you know, hand them over to airlines in 30. So five years is the goal. Will you be your own airline or will you sell to the airlines? No, we'll sell. We have sold to airlines. So United was first to announce that they'd put an order in with a non-refundable deposit. American Airlines did the same thing. Japan Airlines was the first to do a pre-order. And I think ultimately every international airline is going to need to have this because it's what their passengers want.

49:03So if you don't have it, you're going to be left behind. What about infrastructure as far as airports? Are they going to need longer runways? Is there only certain airports that can handle a jet like that? I mean, what are some of those kind of hurdles if there are any? Yeah, we've worked real hard to make sure there aren't any. So any airport that can handle a Boeing 777 can handle an Overture jet. So it works with existing runways, existing jetways, existing terminals. It can run on sustainable fuel, but it can also run on today's fuels. So this drops right into the air travel ecosystem that exists today in a way that Concorde didn't.

49:43Concorde needed an extra long runway and you had to, it came in really fast. And so it was disruptive for air traffic control. We've been able to solve all those problems. Really? What about the pilots? Do you need specific pilots? Like any airplane, you got to learn to fly it. But it'll be like going from a Boeing to an Airbus as far as pilot training. In fact, probably a little bit easier. This is the first brand new airliner cockpit in about 40 years. Wow. And so if you come out to Denver - 40 years? It's been 40 years since anyone did a brand new airliner cockpit versus they take the last one and they tweak it.

50:19And so we get to do a fundamental rethink. And if you come out to Denver, we've got to get you to fly it. Because we've got a flight simulator and it's so much easier to fly than a Boeing Air Airbus. It's like going from a BlackBerry to an iPhone. No kidding. Like we got rid of all the knobs and switches and buttons, except a handful that are really important for safety. and everything else is a big touchscreen. And it's really nice. And so you don't need to be some hot shit military pilot to fly this thing. It's a little scary to say it, but we're designing it for the worst pilot. Just like there's a worst doctor, there's a worst lawyer, there's also a worst airline pilot.

51:03And we want to design this such that the average pilot it can succeed. What will the experience be like for the passengers? You'd mentioned it's all, you'd mentioned, I don't know if you were talking about pricing or is it going to be, is it going to look like business class? So pricing wise, it'll be like what people pay in business class today. Okay. You know, within, you know, nominal fare, I think$5 ,000 round trip will be very profitable on this airplane. I know that's not for everybody, but that's a pretty good business class price. Is that from, is that CONUS? Is that O-CONUS? A round trip across the Atlantic would be about five.

51:42A CONUS round trip could be less than that. Okay. But on board the airplane, we wanted... So years before I started Boom, I'd get on a commercial airplane, I'd look around, and I'd think, man, what if this thing was designed by Steve Jobs and Johnny Ive? And just notice the number of seams and gaps from the outside of the airplane to the inside of a window. Notice, I mean, I'll say something, you can't unsee it once you've heard this. If you look at the underside of the overhead bin in the window seat on every commercial airplane, you'll notice there's this little brown splotch in every row. Why?

52:26It's because when people stand up, they bump their head, and their hair schmutz gets on the underside of the bin. And you just look all through these things. they're so thoughtlessly designed um and the the airplane's made by one company and the interior is made by another company and they're kind of just smushed together and so we we said we're going to design the airplane and the interior together um and we hired some great designers uh we were very careful to pick ones that had never done an airplane before but we wanted some fresh thinking and we've got something we haven't revealed yet but it's uh i'm pretty excited about it and it's It's something that would not be possible if we hadn't designed the airplane and the engine together, and if we hadn't designed the airplane and the interior together.

53:13Both of those were big unlocks for the kind of cabin we were able to create. When's that getting revealed? Maybe next year. I don't know. We haven't decided yet. Nice. I could show you off the record if you come to Denver. We can let you walk through our passenger experience lab, put on some VR goggles, and see it. I think people are pretty excited for it. And so how fast are planes flying today? Let's do miles per hour. Yeah, well, let's see. So I think of these things in terms of percentages of speed of sound, which is 75 to 85 % of the speed of sound today on a Boeing or Airbus. If you've got a high-end private jet, you can go a little bit faster.

53:50And then Overture will do 1.7 Mach, so twice as fast. What is that ground speed? Around 1 ,200-ish. It varies with temperature a little bit. so it's substantially faster. Do you feel that when you're in the jet? No.

54:10The one thing you'll notice when you go supersonic is it's slightly smoother and you'll be at a higher altitude so you're above more of the weather. So no nothing. It's completely uneventful. On Concorde, they had a big screen that would show you the speed and whenever it went through one, they'd celebrate and bring around champagne, make a big deal out of it, because otherwise you wouldn't notice. No kidding. The day I'm looking forward to, I'm sure we'll do that too. The day I'm looking forward to is when the passengers say, would you stop with that? I just want to get back to my movie or my book or my email.

54:49You know, I want to make a supersonic flight boring, but at first we'll make it exciting. Are any airports, I mean, is there any airports that are giving you guys, or maybe we're not there yet, but are they going to give you pushback about landing, taking off from? I don't think so. I mean, we've committed that it's not going to be louder than today's airplanes. And we've committed it doesn't require infrastructure upgrades. And so for the most part, you know, we get calls from airports saying, hey, would you tell us what we need to do because we want to welcome your airplane? And our answer is sit back, relax.

55:24You don't have to do anything. It just works. Now, of course, I mean, I'd love to redesign airports, but we don't need to. Not for supersonic anyway. Some of them need that. But, well, how is, I mean, how are your competitors handling this, like Boeing and Airbus? I mean, they fly all over the place all the time for work. and I mean the planes are legitimately falling apart. One of my recent flights, the damn overhead luggage bin like fell off in the middle of the luggage. You know, if you fly, you know what I'm talking about. They're all outdated. Planes are falling out of the sky. And, you know, in recent history, I mean, it's just crash after crash after crash and things catching on fire.

56:16things falling apart i mean they're not innovating at it almost seems like they are purposely not innovating it's just let's just reuse this old shit over and over until it falls out of the sky i think there's some truth to that and then you come around with this well let me first paint a sympathetic picture here wright brothers forward to the first jets every Every generation of airplanes was faster than the one that came before it. That was the primary vector of innovation. And then, you know, 1973, we outlaw increases in speed. So where does that leave Boeing? I mean, yes, in some ways it was an own goal, but let's be sympathetic for a moment.

57:05All they can do is improve the design they've already got, just iteratively tweak it, right? So if you look at Boeing's latest jetliner and you squint and you're not an aerospace engineer, it looks just like their first one. It's a tube and wing transonic airplane. Now think about what that does to kids and what industry they want to work in. I think there's a whole generation or two that did not go into aviation because the door was closed to innovation. And heck, I was one of them. I'm not, that did not even cross, that's a damn good point. I mean, why is Boeing, you know, literally falling apart?

57:43There are multiple threads to that story. But one of them is when the door is shut to the most exciting innovation, you can't attract the most talented people. They literally go to other industries. That's a damn good point. I didn't think about that. So are you getting any pushback? From Boeing or Airbus? Well, they've got their own problems to solve. I mean, Boeing, so neither Boeing nor Airbus has built an all-new airliner since 2004. 2004, Boeing and Airbus launched the 787 and the A350. And since then, they have not done any all-new products. All they've done is take their existing things and tweak them.

58:28Airbus has been largely successful at that. Boeing has been, you know, 737 MAX. It's been a famous disaster. and so they've really just Boeing especially just gotten hollowed out and I hope I hope they can fix the company Boeing's the only US maker of airliners there are only two in the world there's Boeing and Airbus that's it and Boeing is like trying to get out of a self-destructive tailspin you know they're not doing new products they're trying to competently produce the products they already have and it's not a good situation. Is this like the days of McDonnell Douglas when Boeing acquired them?

59:12Yeah, I think that's part of the story too.

59:18There was a sort of GE mindset that made its way to Boeing through McDonnell Douglas that was kind of the Jack Welch playbook. The way you succeed in business is to know what Wall Street thinks you're going to do next quarter and beat it by a nickel. And if you do that successfully through whatever machinations, you can make the stock price go up and to the right. And it works great until the day it doesn't. And the way you do that is by cutting a lot of long-term stuff. And so the way Boeing ended up getting run was quarter to quarter. a lot of people say they got too focused on money and so they didn't care about safety.

1:00:03And I don't think that's quite true. If you look at the results of their lack of focus on safety, it was the biggest financial disaster they'd ever had. They didn't pay off financially. The problem was their financial focus was short range, not long range. So Phil Condit left in 2004. I think he was the last good CEO over there. I'm fortunate to have him on our board now. and after that you know we had people like jim mcnerney who explicitly said hey no more moonshots and they meant no more new products and i remember hearing that at the time and i was in my 20s living in seattle actually i was living in a building called concord maybe this is my day he's serious i can't make this up uh a little condo in downtown seattle a building called concord no e uh but i I remember reading that from Jim McNerney and thinking, what the heck, dude?

1:00:56You used to be in the literal moonshot business. And now you've just decided to give up. And by the way, if you can't attract young people before, now you definitely can't attract young people. And if you go 15, 20 years without developing a new product, you don't have anybody left who knows how to do it. And so the whole thing just devolves. So at this point, by the way, we didn't mention how this is important to the country. Boeing's the number one U.S. exporter. And as you know, we've got a huge problem. We don't make things here anymore. Airplane's one of the last things we still do. And we're fumbling that.

1:01:39It's a huge problem. Yeah. Where's Airbus out of? Toulouse, France. They're spread out all over Europe. You know, Airbus is like approximately the European government. Gotcha. Gotcha. Well, Blake, let's take a quick break, and then when we come back, we'll get into some more stuff.

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1:03:45All right, Blake, we're back from the break here. And something that I wanted to cover earlier, but I missed it, is lack of traditional credentials was both a hurdle and an advantage. And so I wanted to kind of get your thoughts on how that, I mean, I can see how it would be a hurdle. But I'd like to hear you talk about how it has been a hurdle. Yeah. I didn't walk in with any credentials in aerospace at all. I mean, I had my pilot's license, and that was about as close as I got. I remember the early days when I was recruiting, I'd fly down to Hawthorne where SpaceX was to try and recruit out of SpaceX.

1:04:29We'd fly down to Mojave, California to recruit out of. Scaled composites. And I'd fly my little airplane I could fly myself. and that was like the only cred I had showing up to these meetings. And I remember talking to people and they were all, there was sort of this pattern of like internet guys that want to go start airplane companies. And all the airplane guys were used to hearing pitches from internet guys. It didn't make any sense. And in fact, they had a term for it. People would say, oh, that's fruitcake.

1:05:03and I remember when I first met with the guy who ultimately became our first chief engineer and I sat down I think we ended up meeting at the the subway at SFO airport because he happened to be flying through SFO and I was like great I'll come over and I sat down with him and he's eating a sandwich and I showed him the spreadsheet model of the airplane and the sizing calculations I'd learned how to do out of a textbook. And he looked at it and he said, no, I didn't think you'd be this far along. And then our next conversation, he's like, man, I've been pitched a lot of ideas by internet guys, but this would actually make sense.

1:05:43So, you know, there's no, my experience has been, there's no substitute for actually knowing what I'm talking about, actually doing the work. You know, like I'd pick up, it was one of the things that I realized would have to be true about myself is I would have to be technically deep in order to know what I was doing, make the right decisions, to be able to pick the right people and have them want to follow me. If I didn't know what I was talking about, if I was just some business guy, the great people don't want to work for bosses that don't know what they're doing. So I had to learn it. And by the way, it's fun.

1:06:17So, you know, so I bought every aerospace textbook that was used for teaching at the top universities. And I quickly found I couldn't understand them. And so I went back and did remedial calculus and remedial physics on Khan Academy. I didn't remember anything. I hadn't had any since high school. And I just made my way through it over the course of about a year. And so I think in some ways, walking in not knowing anything is a disadvantage, but I think it's actually mostly an advantage because I didn't want to spend a decade of my life going and getting a new degree and then going to work at Boeing or something and trying to learn it that way.

1:07:05I didn't want to spend that kind of time. I didn't have that kind of time. So I had to go really focus myself on first principles. And I wanted to understand the fundamentals. And it turns out that focus is incredibly powerful. For example, when I predict the performance of an airplane, there are really only four numbers that matter. There's aerodynamic efficiency, which is the lift to drag ratio. For every pound of airplane I hold up with my wings, how many pounds of drag do I incur? That's aerodynamic efficiency, one number. There's engine efficiency, something called thrust-specific fuel consumption.

1:07:46Pounds of thrust, or sorry, pounds of fuel per pounds of thrust per hour. How much fuel does it take to create a pound of thrust and sustain it for an hour?

1:07:58Structural efficiency, what percentage of my overall airplane weight is the empty weight of the airplane versus fuel versus people and cargo and payload? And then last is speed, Mach number. And so if you have those four numbers and you've got the correct assumptions, you can set up a mission profile for an airplane and predict the entire performance of it. And so you don't have to know. So, okay, and Concord's numbers were all published. How much better than Concord could we do? So all of that thinking it through from first principles mattered. Or I think I mentioned earlier that one of the other ideas I looked at and didn't do was an airline.

1:08:41And truth be told, I didn't actually have the courage to go double-click on supersonic first. I thought, oh, there's no way. There's no way. But maybe an airline. And so I built all the financial models for how an airline worked. And that turned out to be really useful because I understood airline economics. And when you go model out airline economics, the first thing you learn is the fill rate on the seats really matters. A seat that flies empty just adds cost. But filling that seat versus it being empty is like free revenue. So the fill rate, they call it load factor. That really mattered. And my point in all of this was because I had to go learn it in approximately a year, I had to focus on basic truths.

1:09:22But it turns out focusing on basic truths, focusing on first principles is what helped me see what other people had missed. you mentioned something a little earlier too that that resonated me i think we were talking about the interior of the airplane and you didn't want to you didn't want to hire the traditional designers of the basically that design the traditional commercial air transportation and that just it registered with me because i'm in entertainment you know i found myself in entertainment, hate entertainment, the industry. And I had gotten involved with managers and agents and all this other shit, and it wasn't really working for me.

1:10:06And what I've realized is everybody, there seems to be a roadmap, and everybody follows the exact same roadmap. You gotta come out with this type of a product. You gotta do this, all these different things. And when I started this, I looked at podcasts And I was like, okay, this is what everybody's doing. How can I make what I'm doing as different as I possibly can and create a better experience? I think I've done that. And then, like I said, I got involved with entertainment. Very unimpressive industry by my standards. And so when I started to scale out the company, which actually was just about six months ago, to find somebody to run it, I looked, if entertainment was on your resume, it went right in the trash.

1:10:55And so I hired my COO, Eric. He was in the energy sector. And my main point to him was, do not look at the entertainment podcast roadmap. I don't want to do that. I want to do shit that I think is cool, that I like, that I want to do, start new businesses. I don't want this mold. Very wise. That's the direction that we're heading in now. We have a lot of different products that are going to be rolling out later this year that have nothing to do with podcasting. Some of it has to do with tech. I'm really excited about it. But I guess what I'm getting at is none of that would have happened had I done the typical roadmap, in-the-box, entertainment, podcast-type thinking.

1:11:41Right. And so when you mentioned that about the interior of the planes, it was like, good job, Sean. You're doing it right. I think so. I mean, you could do it the other way and you end up like everybody else. That's, yeah. But the world doesn't need more of what the world's already got. The world needs more of what you, and I mean you, Sean, or you, me, or you, anybody, can uniquely bring. So, I don't know, throw out the roadmap. Be focused on facts and be focused on what, you know, like, like, Elon said something years ago that one of his principles was he wouldn't work on anything unless he thought it wouldn't happen without him.

1:12:21And there's, you could look at that and say, what an arrogant asset. But I think there's actually real wisdom in that. Like what is your unique opportunity to contribute that otherwise wouldn't happen in the world? And focus on that. That's your differentiation. and don't follow the well-worn path unless you want to be a cog. Did you adopt that from inception? Oh, yeah. Yeah, I remember feeling very inspired by that. And it seems a little weird to say it, but I think it's actually true. Nobody else was doing supersonic flight before boom. I've been working on it for almost 11 years. Still nobody else is doing it.

1:13:01And I would like to believe that at some point it would have happened without me and without boom but it's not obvious that it would have wow still nobody else is doing this no there are a couple people working on hyper well yeah we'll get into later china announced it right after we broke the sonic oh go figure right go figure so uh so even you know we inspired you for the chinese but uh no there's some companies working on hypersonic weapons where their their story is they want to build a hypersonic airliner but I think they're just defense companies who were started in an era when defense was not socially acceptable and so they had to say that it was a commercial product when really it wasn't maybe they'll make it commercial someday but no, nobody else is actually building a supersonic airliner we are the only private company ever to have built and flown a supersonic jet it's only been governments before this was like rockets before SpaceX, nobody done it outside of government.

1:14:01Never had there been a civilian supersonic jet made in America. So there's a lot of first in here. What do you think it is within the last decade? I mean, it's just, what am I trying to say here? I guess what I'm trying to say is, I've been doing a lot of, like I mentioned, I've been doing a lot of tech interviews, a lot of, especially defense tech. And I told you, you know through here you know i was in the seal teams contractor for the cia for the cia did not see a tremendous amount of innovation you know in in defense tech and then let's talk about the last 10 years though you have all these other companies innovators just seem to be showing up nowadays when when when you didn't hear about all you didn't hear about palantir and you just interviewed this guy the other day who's making mini nuclear reactors.

1:14:59We got a guy, you know, Rainmaker, cloud seeding. I mean, there's just so many impressive young innovators that are coming to the table now. What do you think yourself? I mean, you're another one of them. And what is it about the past decade or so that has motivated tech innovators to start innovating. I can tell my story of it, and I think there's a really interesting perspective that also looks back from World War II to today and what the arc of that has been. But for me, so I'm 44. you know I I was you know I watched the Berlin Wall fall I kind of grew up as an adolescent being told that the world was safe they were kind of the post war era and and so it was like we were like the post defense era was my assumption growing up and then 9-11 happened and then russia invaded ukraine and then we've watched china which was trending free and capitalist kind of get recaptured by the ccp and for me the the turning point was really uh russia and ukraine where i was like wait a minute like the world is not nearly as safe as I thought it was.

1:16:34And we've let the bad countries, and I think it's important that we say there is such a thing as a bad country, get powerful. And so we've got to do something about that. And had I been, I don't know, five years later in starting Boom, maybe Boom would have been a different company. but you know fortunately they're really great people working on defense tech now and it's become I think I think there are at least a couple threads recently that played together here one is it's become socially acceptable to do a defense company it's become more clear that we need defense tech and then frankly I think we've got a resurgence of a belief in America which we lost for a good long while it was not fashionable to like this country Mm-hmm.

1:17:26And so I think that interplays with, well, maybe we shouldn't be so proud. Like, there's a whole period of time and there's still pockets of our culture that are not proud to be American. Yeah. And if you're not proud to be American, you're not going to go build weapons to defend the country. Yeah. Yeah. I mean, even, I mean, you have all the new, I mean, Palmer Luckey, Dino Mavrucas was Saronic. I mean, and you know, the other thing that I'm noticing is everybody, all of these next generation innovators are bringing all the manufacturing, including yourself, back to the United States. I mean, I'm pretty sure Andruro's doing that.

1:18:03Cerronex doing that. Every single innovator that I've talked to is manufacturing in the U.S. that I know of, that I know of, as far as I know. Yeah, I think it's really important too. And so how is that happening? because shit, it seemed like four years ago, nobody would talk about that. It was all going to China. Right. Well, maybe it makes sense to start with how we lost it. And I heard a story recently that was eye-opening for me. We were out shopping for jet engine parts. We're making our own jet engine. It turns out it's really important to do it that way. And so we're shopping for turbine blades.

1:18:48And we're meeting with some of the high-tech manufacturers of turbine blades. And I said, well, how long does it take to get one if I gave you the design today? They said 18 months. Why does it take 18 months? Well, nine of that is just to do the tools, the high-precision industrial molds. Does it take nine months to make a mold? Like, what is somebody doing for nine months? Well, actually, no. Most of that time is you're waiting for your turn with the tool guy. Okay, why is that? Well, we only have a couple of tool guys left in the country that know how to do that. Okay, how'd that happen? And then the guys across the table smiled and said, we've got a story for you.

1:19:30Started with Chinese pirating of Western CAD software. And this is the high-end software that you use to design stuff on a computer. And of course, there's no respect for intellectual property in China. And so they'd rip off the software. And this software is, don't think this is like a$100 copy of Windows. This is tens of thousands of dollars per engineer for this high-end custom software. You need to do these things. And so if you take out multiple tens of thousands of dollars per engineer in cost, forget that there's a labor cost discrepancy. Just that alone means it's going to be cheaper to do the work in China than it is in the U.S.

1:20:13Because we pay for the software here. They don't pay for it there. Okay, now anybody who wants to save some money is going to ship their tool work to China. And if your competitor ships their tool work to China and you don't ship your tool work to China, now you start losing contracts because you're not commercially competitive. And so it sort of starts this giant like sucking of talent out of tool and dye design into China.

1:20:41And that only accelerates with labor cost differences, et cetera, et cetera. And at the same time, I don't know why, but we told ourselves in America that manufacturing isn't important or isn't sexy. And it was like somehow okay to be we don't make things. And the most plausible way I can think of this is imagine China wasn't communist. Imagine China was just like another state. Okay, would it matter if in the US all the manufacturing moved to California and in Tennessee we do software? That would be just fine. Law compared advantage. Some of that stuff should happen. The problem is, and I think there was a period of time where this was less obvious.

1:21:27of course, is way more obvious now is that China's not a free country. And fundamentally, I think that not free countries are a threat to free countries. And so it became very dangerous that that stuff left.

1:21:43And then we've done, so there's that whole side of it. And then America, we've done as much, I think we've probably done more damage to ourselves than China did to us. How so? We made it really difficult to build here. So the speed limit we talked about before is probably one of the biggest examples of that. That's the biggest regulatory own goal in history. We banned innovation in airplanes, and then 50 years later, we're surprised we can't competently make them anymore. Like, that shouldn't surprise anybody. Well, that's the other thing that every single innovator I've brought in here says is the biggest hurdle they have to deal with is the bureaucracy with the government.

1:22:22It is. In one way or another. That's right. I mean, there is a way to – so we have found great ways to work with FAA. Like we never had a regulatory delay on XB1. And we made it teamwork. We found a way to work on the system. We made friends with the people there. There are a lot of good people at FAA. But fundamentally, a whole lot of the system we have is really broken. So I'll give you another story. So we built a factory in North Carolina, 180 ,000 square foot factory, first supersonic airliner factory in America. It took longer to get the building permit than it took to build the factory.

1:22:57It took 18 months to get the building permit. Okay, well, why? Well, we had to get an environmental approval on the noise that would be made by the airplane after we manufactured it. Wait, can you say that again? It doesn't make any sense. We had to get approval for how much noise our airplanes were going to make after they were built in order to build the factory. This makes no sense. Where does this shit even come from? Is that like a written law? It is a – so there's something called NEPA, which is the National Environmental Policy Act. That was, I think, probably one of the worst laws ever.

1:23:41and it requires environmental studies, pre-approval of anything that has federal jurisdiction. Our factory was on an airport, so there was federal jurisdiction. So the FAA administered it and the FAA had a rule that basically said, well, we don't want you to be able to build anything and later on be able to increase your footprint. So anything you might ultimately do in a facility has to be approved in the day you build the facility. is to just pull on that thread. And all of a sudden, we're doing noise studies on an airplane we haven't designed yet, let alone built yet, where our pledge has been it's not going to be any louder.

1:24:20Wow. And I tell my business friends about this, and I complain about this 18-month process. And some of them say, are you kidding, dude? That's good. You had only 18 months? Like, mine was years or decades. And I think the whole way we do permitting and the whole way we do regulations broken. Do you see that changing? I mean, this is just, it just makes me wonder how many more innovators are out there and how much farther ahead we would be or could be, you know, if these regulations weren't there. I mean, it's throwing our country behind. It is. I hope that more people talk about it. Because there's also a dynamic where if you're regulated by some entity, you need to cooperate with that entity in order to actually get stuff done.

1:25:20And then all the pressure is, well, definitely don't say anything bad. Because maybe that would sour a relationship. Like my policy people always say, can't say anything bad about the entities that have jurisdiction over us. But I think we just need to talk about it. I think the system is fundamentally mistaken. I mean, so to move forward with anything as humans, we have to take some risk. So we have to decide what are good risks and what are bad risks. And the way we have set the system up today is we have monopolized centrally risk decisions. So everybody wants clean air and clean water and food that's safe and drugs that work and airplanes that don't crash, right?

1:26:08Like, obviously. And, okay, but we have to take some risks. So who gets to decide? Well, if it's related to environment, there's a monopoly called EPA that has that decision. There's related to airplanes. There's a monopoly called FAA that has that decision. If we're talking food or drugs, there's a monopoly called the FDA that has that jurisdiction. and if they ever approve anything that doesn't work, they're in big trouble. And by the way, it happens. FAA approved the 737 MAX. FDA famously approved thalidomide. And so when they let one thing through that maybe wasn't so good, now they're in real trouble.

1:26:48If they hold up something that is good, kind of nobody notices. And so it creates this asymmetric bias towards conservatism. And this is not anything about anybody at any of these agencies. There are many great people at these agencies trying to do good work. But fundamentally, the incentives are all tilted. And we've monopolized risk decisions. And so put that aside at one point. The other point is that in many cases, we have to ask for permission before we can go do things. Like imagine we drive to work the way we build factories or airplanes. Well, we have to get permission every day and show our plan.

1:27:29And, okay, you know, on this stretch of road, you know, what speed are you going to drive? Okay, it's under the speed limit. All right, you can go. Versus what we actually do is go drive. And if you break the rules, we enforce the rules. And so the whole notion of permitting, I think, needs to be rethought.

1:27:46It's a good point. It's a damn good point. And, you know, when you, so do you see this, how fast do you see this changing throughout this administration? Because it seems like everybody that I talk to is, they seem really positive. Yeah, I am, it's gone much better than I thought it would. On, right after the election, I forced myself to sit down, you know, everyone was spouting opinions, right? And some people are just going to be glorious. Some people say, you know, we're headed into dictatorship. and I thought, okay, I'm going to force myself to write down what I really think. I'm going to make four predictions and then I'm going to put them down, put a date on them, and I'll come back and I'll see what I was right about, what I was wrong about, and I'll try to learn from where I was wrong.

1:28:31I got going. I ended up writing about 40 predictions. I was like, well, I'll write enough. I'm guaranteed some of these are wrong and I'll get to learn about it. One thing I wrote down was there will be deregulation, but it won't be that significant. boy, I was wrong. Now, are we doing everything that I wish we would do? Probably not. But, heck, we repealed the supersonic flight ban. And if you look at what's - In 115 days. 115 days, right? And that's not even the most significant thing. I mean, it's most significant for supersonic flight and for me, but if you look at what's happening out of energy, it's even more exciting.

1:29:12Chris Wright, who I think is just, you know, One of the most amazing leaders we have in D.C. now, our energy secretary, worked with the president to get an executive order that basically zero baselines regulation. And so if you don't renew a regulation, it automatically goes away. Nice. That's huge. Nice. Right? And we haven't even started to see that play out. These things take a little while to be implemented. And then once they get implemented, industry has to respond. and then the building has to actually happen. So it takes a little while, but I think there is a, I don't know if it's a year or three years, there is a big boom of a good kind about to happen from a lot of that unleashing that has just barely started.

1:30:02What do you, I mean, what do you think that looks like by the end of this term? I don't know if I'm smart enough to predict timescales. It's much easier to predict the distant future that it is to predict the near future. I'll tell you what my hope is. My hope is there's enough actual positive results that people can understand it, get behind it, and not reverse it. But time's of the essence. And I think that's one of my other hopes is that this pattern of I do one term, then i go away and i come back and i do another term i know that wasn't the plan it might actually be a really good idea because you know in the in the time away um trump got to rebuild his team he got to reflect on everything he learned in his first term what worked what hadn't worked uh got to plan and then they hit the ground running because four years is going to go by like that.

1:31:10And there's a bunch of entrenched resistance to change in Washington. And so the more you can just have good muzzle velocity right out of the gate, the more they can get done in four years. That's another, I would have never thought of that. Do you think we'll start seeing more of that? I don't know. I mean, I think it takes a very special leader to say, I'm going to run for president, I'm going to win, and then I'm going to walk out of the White House voluntarily after four years, but I'll be back. That's an interesting concept. Right? I'd like to see somebody else do it. I would too. On purpose.

1:31:53That's something I would have never thought of. It's very hard to... I mean, my experience before founding Boom was I would go take on some job or some mission, and I would be 150 % consumed by it. And then when I would, you know, finally after years change, I would go through this intense period of learning as I reflected back on the experience I had had. And then I would be a step level beyond in the next thing I did. And when I started Boom, one of the things I told myself was I don't get to do that that way anymore. I'm here on day one. I have to be up here. And if I have to step away from the job to learn, I'm never going to get there.

1:32:45By definition, it was mission failure. I have to figure out how to learn on the job. And I'm still learning how to learn on the job. But I think that if you look at an administration that goes for eight years, boy, that's on-the-job learning in what's got to be one of the most difficult environments to do it. Yeah, yeah. Let's talk about, I mean, Boom seems, it almost seems like a David versus Goliath story. I mean, you're going up against Boeing and Airbus. I mean, at the beginning when Elon started SpaceX, we got laughed out everywhere. Now he can successfully launch every single day of the week if he wanted to.

1:33:26I mean, how is this working for you? I mean, like I had said, you're an outsider from the industry. You have 130 orders. I think there's a lot of speculation if a company of your size is going to be able to do those deliverables in the amount of time allotted. And so what do you have to say about that? I mean, it's David and Goliath, but Goliath is like asleep. So I think it's a little bit different for SpaceX in that they went into space launch, which is a commodity market, with a big entrenched player. And it was sort of head-to-head competition with an entrenched player that was very powerful.

1:34:11And we made a different decision. We went to go do something that nobody was doing. And at some point, will we see a competitive response? probably but you know i think the thing i tell the team every day is you know boom will not die of murder we're much more likely to die of suicide meaning we just fail to execute you know we don't get out of our own way um and so we try to we try to self i try to get the team to self-start actually without a lot of external competitive pressure uh and then just passion for mission ends up being super important. And there's still no guarantee of success. Statistically, we're probably something like 90 % likely to fail, just because it's what happens with most businesses.

1:35:00But there's no reason we can't succeed. And if we get the right people and we give it our all, either we succeed or it's because we fumbled the ball ourselves.

1:35:14let's talk about your actually how long is it going to take to make these planes from start to finish how fast can you make them yeah I mean from where we are today our goal is to be in airline service in under five years regular in airline service but if you mean how long does it physically take to make an airplane that's one area where we're putting a lot of energy into making it better the aerospace supply chain we have in the US, it's actually one of the few manufacturing bases that still exists in this country. A lot of consumer goods have left for Asia, textiles, electronics, et cetera. But aerospace has stayed here in part because there's a defense element to it.

1:36:03And we have not let the defense pieces go to China. But what we have done is let them get really, for lack of a better word, stupid.

1:36:23So, for example, we go source some part out of the traditional aerospace supply chain. And they say, okay, great, you can get your part in six months. What? Six months? Why does it take six months? Elon has this thing he calls the idiot index, which is like how much does something cost as a finished part divided by the raw materials cost. And we have this thing I think is actually far more important called the slacker index. And the slacker index is how long it takes to get something divided by how much time it actually takes to make it. And I'll give you a story. We were ordering some of these turbine blades for our first prototype engine.

1:37:02And it cost a million dollars for one engine's worth of blades. And it was going to take 180 days to get them. And you saw 3D printed parts. I was like, okay, how long does it take to actually print a part? Well, about 24 hours. Okay, what are we doing the other 179 days? And so we ended up saying, we're just going to buy all the production equipment ourselves. Turns out it was an inventory. We could get it in a couple of weeks and we could just print the parts. And for the price of two engines worth of parts, we could buy the machine and make them ourselves. Wow. But the whole supply chain is messed up like that.

1:37:41Like you find that you order some part and it's got one process step in South Carolina. Then it goes on a truck to Wisconsin and they do some other process step. But then it goes to California and then it goes back to South Carolina and then to California a second time. Holy shit. And like, this is, you know, at first I was like, what is going on? Is this just like stupid? And by the way, I think one of the principles I've learned along the way about how to learn is whenever I see something that looks stupid, you know, it's easy to just like, you know, be smug and say, what an idiot did that? And sometimes it actually is stupidity.

1:38:23But sometimes I find if I ask the question, well, what would have to be going on for this to be smart or necessary? What might somebody who's close to this know that I don't know? And I find that when I ask that question, I can often end up with some interesting discoveries. So in the case of the supply chain thing and these parts ping-ponging around the country, I mean, I could have said, you know, I could have laughed and shrugged it off and said, how stupid. But instead, I got curious about it. And what I realized was this is an artifact of how defense procurement works. So, post-Cold War, and a certain sense post-World War II, we have not had a big urgent need for military stuff.

1:39:06We've wanted to keep alive a defense industrial base. So, all the defense primes say we need to. We talk about whether we really need to. And who controls the spending? Well, Congress does. How do you get the votes in Congress for your stuff? Well, do it in the right congressional districts. And so the lack of urgency for defense procurement combined with how Congress fundamentally operates has resulted in there being one factory in every congressional district in order to get these big programs authorized. And so you end up with a supply chain where you've got all these little mom and pop mini factories and you've got these parts ping pong on their way around the country and it's incredibly inefficient.

1:39:50So we should blow all that up metaphorically and fix it. Right now, get up to 15 % off select storage solutions. Put heavy-duty HDX totes to good use, protecting what's important to you. The solid, impact-resistant design prevents cracking, and the clear base and sides make items easy to find even when the totes are stacked. Find select shelving and tote storage up to 15 % off at the Home Depot to organize every room in your home, from your garage to your attic. Visit homedepot.com, how doers get more done. Listen to the heartbeat Chevy is called the heartbeat of America for a reason. With SUVs made to move with your rhythm.

1:40:32The versatile Equinox tackles your entire day. The spacious Traverse fits your crew and your whole weekend. And tracks bring style with value you can count on. All infused with tech that has your back. So your drive always hits the right chord. Chevrolet. Together let's drive. How did you do that? So for being a commercial-first company, we don't need to go past some big thing that requires unanimous out of Congress. Let's just go build efficient stuff. And so we are ultimately—so we're building a new R &D center in Denver. And when we're completely done with that, every kind of part on the airplane will be able to be made in one roof.

1:41:18Wow. And for our engines, it will ultimately be a facility that's like raw materials on one side of the building and jet engines out the other side. And you can massively improve time and massively improve cost just by putting all the production processes in one physical place. It doesn't require some like we invented a new kind of metal. It's just put it all in one building. And already that makes a huge difference. Where are your manufacturing facilities? least? So we've got, our headquarters are in Denver. So engineering is there and our sort of R &D scale manufacturing is in Denver. We've got a engine test site near Denver International.

1:41:59We're going to be able to run all these engines. We like controlling our own manufacturing, our own engineering, our own test. So we don't have to get anybody's permission to go do anything. And then in North Carolina is where we're doing this at scale. So we have a 108 ,000 foot facility where we're going to assemble the first engines and where we're going to assemble the Overture airliner. And we've got a 62-acre campus there that when we build that out, we'll be able to do 100 airplanes a year. Wow. When do the 130 jets do? As soon as we can deliver them. Okay. Yeah. If we had them in a warehouse today, the airlines would be asking for more after that.

1:42:39And so it's as soon as we can get them done. And, you know, my goal is to get production ramping starting five years from now when we prove the airplane is ready. And then we'll scale it as quickly as we can, you know, to be at full rate. Hopefully, you know, cranking on 100 jets, you know, well within a decade from now. When I say that, it kills me to say it's going to take a decade. We'll do this as fast as we possibly can. Do you see this taking over all commercial travel in the future? Anything that's a sufficiently long distance, I think so. I think I'm very bullish about the next 10 years of flight.

1:43:18I think for shorter range flights, there's a lot of work happening for vertical takeoff and landing. Companies like Joby and Archer. I think there's going to be also some good work on sort of hybrid electric, mid-range aircraft. Think things like LA, San Francisco. LA, San Francisco, you're not going to fly that supersonic. but what you might do is have a neighborhood vertiport where you can get on an airplane that can take off and fly you right to the right neighborhood, you go into an LA and you save all the ground time and you're subsonic in the air, but you get this big speed up. So I think there's things like that that will cover short range.

1:44:01And then long range, it should be supersonic, ultimately for everybody. How long does it take to get up to supersonic speed? 15, 20 minutes on a typical flight. How much to slow it down? Oh, similar. Those are challenges? Not really. We did look at the first iteration of the design, it actually couldn't slow down fast enough. It was too slippery. And so we did end up putting speed brakes on the design. So you don't just kind of glide in forever. man i can't wait to be on one oh it's gonna be so much fun have you been on one yet um so i have i have gone supersonic uh but in a fighter trainer so i i got to fly along with our test pilots when they were training to fly our xb-1 airplane so i i was in back seat of a of a t-38 uh with our chief test pilot we took off out of mojave and uh you know he gets it off out of the off the runway and he says okay blake your airplane i'm like oh okay my controls and we're we're climbing out towards the the supersonic corridor and he's like blake you got to increase your climb rate so you're going to go supersonic before you're in the test space if you don't if you don't kind of pull back a little bit so we did and uh yeah and then uh turned around and you know went i think mach 1.18 down the corridor that was that was fun i got a picture of the mach meter to prove it.

1:45:28And that was, uh, it was probably one of the most exciting flights of my life. By the way, you could, can't tell when you're going supersonic, wouldn't, wouldn't have noticed it very smooth. But then we did, uh, uh, then we did, uh, two barrel rolls, uh, uh, three aileron rolls, a couple loops. Damn. Yeah. Those were noticeable. You think you'll fly your jet? Oh, definitely. Yeah. One of my personal goals is to be qualified to fly it by the time it's ready to fly. Wow. That's going to require some work, but I'm up for it. How about your ethos in your company and who you're looking to hire and how you've built your team out?

1:46:06Yeah. We've been through a few iterations on how we do the team. And I've come to the conclusion that the debate was, do you hire young people who are bold and smart and work hard, but are inexperienced, or do you hire been there, done that before professionals? And initially, we sort of oscillated between those two. The early team was the people that I could convince to join a supersonic jet company headquartered in my basement. So definitionally, they had to be kind of bold. And nobody big and good was going to work in my basement. And then we made a bunch of kind of first-timer mistakes. And then we made this other mistake of saying, well, let's go hire a bunch of experienced people.

1:46:59And we started bringing people in from big companies that thought they knew how to do this. And then we went through a period of time where we looked way too much like a big company, not enough like a startup. And where I landed on this, I think we finally cracked it. It's something I call the talent distillery. So what's that? Well, we get a bunch of young spirits. People just a few years into their career or right out of school, smart, driven, hardworking, innovative, passionate. And we get just a little bit of, I call it the oak. The people a bit of gray hair to kind of help contain them a little bit.

1:47:39And the magic happens when you've got way more spirits than you've got oak. and there's a little bit of an interplay between the spirits and the oak. The spirits make the oak better and the oak infuses a little bit in the spirits. And that turns out to work very well. So I can tell a story about this. Like we did the landing gear on our XB1 with a team of great engineers that had never done a landing gear before. And they were bold enough and passionate enough that they were willing to take that on. And it turned out that we made a bunch of, but made a bunch of mistakes. We kind of, we got into this thing and we're having trouble making it work.

1:48:19And it's a very unique landing gear because it's a very unique airplane. The most similar thing out there is an F-16. And so we said, okay, well, we got to go find some F-16 landing gear engineers. I don't care if we have to pull them out of retirement. We got to just get them on the phone and ask them how they did it. And so we called up a friend at the Air Force and they said, all right, we're on it. 24 hours later, we were actually in the phone with F-16 landing gear engineers. Wow. And they said, well, did you put double pistons in your shock absorber or did you just put one? And we slapped our forehead and said, double pistons, I don't know how long it would have taken us to figure that out.

1:48:56And the lesson I learned from that was it's totally okay to have a team of great young people who are driven running at something, but they should call somebody experienced along the way. and just ask for feedback. And they don't even have to take it. Just have to ask for it. And so that's been our new rule, is totally unafraid to deploy inexperienced, high-aptitude talent. But the rule is phone somebody with some gray hair. Don't have to listen. Just make the phone call. Nice. How many employees do you have now? 115. 115 employees. We did XB1 with 50 people. 50 people? Yeah. Yeah, SpaceX, when they went into orbit, were 500.

1:49:47And we broke the sound barrier with 50. I am a big believer in small teams. And so - How do you keep it so small? For a little while, I didn't. We ended up having to go through a cycle where I actually cut the company in half, which was very painful. But we get more done now with half the people than we got with a team twice as big. Right. And so my rule now is anything that does not complain about being understaffed is overstaffed. And we hire very reluctantly and very deliberately. And only when we've exhausted all other options do we grow the team. So we can't do this with software. We can't do this with AI.

1:50:27We can't just find a more clever way to do it. We can't find a way not to have to do it. Okay, then we'll hire. And we do it very, very deliberately. How has AI helped your business? Oh, software and AI are going to be a huge part of the success story. So one of the things that makes hardware companies traditionally harder to do is the development cycles are longer, the iteration cycles are longer, it's harder to make changes, it's harder to iterate. And so we do everything we can to make hardware development look more like software development. And so we've got a huge investment in digital engineering.

1:51:04And the way we do that is we hire great software engineers that are incredibly curious about airplanes. They don't have to know anything about them. They just have to think it's cool. And then we have them sit with the hardware people, and they look over the shoulders of the hardware people, learn from them, and learn how to automate the work that they're doing. And so we have, I think, the best airplane design tools ever made in software, and they keep getting better. And what we find is, oh, now we can like put, you know, if we put new assumptions in about engine performance or aerodynamics or something, we can press a button and the rest of the airplane gets automatically redesigned.

1:51:41So, and that's all the power of software. And now AI just takes that a whole step further. There's an old joke in the industry that for every pound of airplane, there's a pound of paperwork. You know what AI is really good at? Going through paperwork. Filling out paperwork. And not only does that allow the team to be much smaller than it otherwise would have to be, it makes the jobs a lot more fun. The kind of engineer that is happy spending two months filling out paperwork is not the same kind of engineer that really wants to invent the future. So by having AI do the really boring work, we can thereby increase the caliber of the kind of people that want to come join the company.

1:52:29And so all of this gets compounded returns. The smaller a team, the easier it is to keep the talent bar high. The number one thing great people want is to work with other great people. So therefore, it's easier to attract and retain great people. We have AI do the bullshit, and then the people are doing the most exciting work, which means we can attract and retain better people. This flywheel starts to spin. It's a really important talent engine. And this is one of my biggest focuses, is really building the talent engine. And we're doing a bunch of unconventional stuff. Like we actually put an engineer in charge of recruiting.

1:53:07Really? It was this guy that we hired. He'd been a SpaceX manufacturing engineer. He'd been something like a six-year boom vet, had done a whole bunch of work on XB1. He built the flight sim for Overture. He was building the engine test facility. And I took a walk with him about two, three months ago. And I said, Nate, I'm going to ask you to do something different. And you're going to think I'm crazy. I'm going to ask you to run HR.

1:53:39And he's like, you're right. I didn't think that was the conversation we were going to have. And we talked about it and I was like, look, I want an engineering mindset applied to thinking analytically about the kinds of people we select, how we select them, how we train them, how we onboard them. And think about this. And if you're willing to try it, just try it for a year. And then if you don't like it, I'll let you go back to any other job you want. But he's like three months into it now, and he's loving it, and it's going so well. Good, good. Let's talk about China. China. So you had mentioned China announced that they were doing supersonic flight right after you came out.

1:54:24So where are they in the process? The good news is we're ahead, and if we stay out of our own way, we're going to stay ahead. Man, this is the first time I've heard we're ahead. This is great news. Airplanes are one of the few areas where we're still ahead in the U.S., but we got to be careful. So China right now is shipping a 737 clone. We don't know that in America because we won't import it here. But elsewhere, that's going to happen. They are working on a Boeing 787 clone. And earlier this year, they announced the one after that's going to be a supersonic airplane. And when they did the announcement, so I think what happened was they saw what we'd done at Boom, and they said, we got to play.

1:55:17And they found some research paper and then labeled it with a product number and put that out as a press release. They put it in the South China Morning Post, which is that's where the CCP puts things that they want to be noticed in the West. And so the airplane's a cartoon. Like, if you know anything about supersonic airplanes, you know this is not credible. But I think the tell was they gave it a product number that was the next product number in the Comac roadmap. Comac is the Chinese Boeing. So I think they're dead serious about it. But we're ahead. How do you know you're ahead? We've actually built and flown an airplane.

1:55:54And they've got a cartoon rendering. You don't think they're just, that's a disguise?

1:56:04We haven't seen an airplane fly yet. Okay. Now, they've got fighter jets. And fighter jets and supersonic airliners are not the same. But they're things you can cross-learn. I think we have to take this incredibly seriously. I don't think we can rest on our laurels. I think absent the action to repeal the supersonic ban in the U.S., aviation was going to go to China just like everything else has. This is like watching a slow-motion plane crash. Boeing hasn't built a new airplane in 20 years. They can't, you know, some days they can't competently produce the ones they've already designed. China's moving forward as fast as they can.

1:56:39That's not going to end well. We have to invent and build the next generation of airplanes here or else we know how this ends. It ends just like it does for every other kind of manufacturing. I'm still trying to wrap my head. Why do you think Airbus and Boeing have not jumped into this race to compete with you? Oh. I mean, with the amount of funding that they have and the legacy companies like that, I mean, why wouldn't they? So it has to do with most businesses are unwilling to disrupt themselves. They have to change their business model to compete. Let me explain why that is. So a typical international airliner today, a wide body, you know, the twin aisles.

1:57:22Let's say they got 200 or 300 seats on them. about 20 % of the seats at the front of the airplane are business and first class. But those seats represent roughly 80 % of the profits. All the money's in the front part of the airplane. Now, supersonic, with the technology that we have right now, we can't build a supersonic jumbo jet, 300-seat supersonic jet, that can support economy fares. We only have the technology right now. this will change, but right now today, we only have the technology to do it for about a business class fare. Okay, if you take the business class seats out of a Boeing or Airbus airplane and put it in another airplane, the big airplane just lost 80 % of its value.

1:58:12Right? So in order to build the supersonic future, you have to be willing to disrupt the subsonic widebody. And that's not something that big companies are generally willing to do. It's a very - Did you say 80 % of the profit is in the first 20 seats? it's roughly 80 % in the front 20 % of seats, rough numbers. This is why if you fly business class, you know, you've got this outstanding wine list and you've got these fancy lounges and all these other perks. Why? Because that's where all the money is. On a per flight basis, depending on very route to route, market to market, but roughly 80 % on a per flight basis.

1:58:57And if you look at it on a per customer basis, it's even more significant because the people who fly long haul international and premium class are almost all the profit for international airlines. Again, that's why you see all those perks and why we get all the status. And if you're global services, you get on first. And so if you move that into a separate airplane, you have to rethink a bit of the economics. And very few companies are willing to disrupt their own business. I mean, really, I think it It takes, I think it takes a founder-led company in most cases. Like Steve Jobs is willing to destroy the iPod business in order to create the iPhone business.

1:59:41I mean, it just seems like they would have to do it. Otherwise, they're going to go extinct. I mean, if you come out with this in a year or 10 years or whatever, then that's where I'm going. Remember, there's a duopoly here. You'd be right in a normally competitive market with lots of players. But with Boeing and Airbus, they're only two. And so you get duopoly-type behavior. One only moves when the other one moves. Like, why did Boeing do the 737 MAX? It's because Airbus did the A320neo. Why did Airbus do the A350? Well, it was a carbon copy, literally, of the 787. And so if one moves, the other one kind of copies that move.

2:00:27And for the most part, they're in a steering competition, nobody wanting to blink. And so the right now dynamic is Boeing's got to get healthy. They're in trouble. They can't do a new airplane. They've pledged they're not going to do a new airplane. What is Airbus's motivation? Well, Boeing's down and out. I should steal market share. So Airbus is trying to ramp production of their airplanes faster than Boeing can get people to trust them again. So that's that game. And nobody's incentivized to go build a supersonic jet. If you're a public market investor in Boeing or Airbus, and imagine Airbus says, we're going to go do supersonic instead of trying to eat Boeing's lunch while Boeing's down and out.

2:01:07Your investors say you're stupid. Pretty soon an activist gets on your board and you're fired as CEO. Reciprocally, if Boeing right now says, I'm going to go build a supersonic jet, I think everyone's going to say, what are you talking about dude maybe you should figure out how to put the screws in the ones you make now so so neither of them is really in a position to do it it has to come from a new entrant do you think they'll carbon copy or they'll probably they'll probably try to buy us first and then they'll try to compete i mean i welcome that it's i'm shocked you know a decade into this that we don't have competition at some point that will change

2:01:46Wow I don't know why It's just so hard for me To wrap my head around You're the only You're the only one doing this It's hard for me To wrap my head around it too But I think I think it comes down to You know What people call The innovator's dilemma In business That the big guys Don't want to disrupt themselves And there are only two of them So they don't think They're going to be Competitively forced to On one hand On the other hand All the conventional wisdom 10 years ago was it was impossible to start an airplane company. The last new commercial airplane company before boom, 1921, Douglas Aircraft, it had been a century.

2:02:27And there are all these reasons why it's capital intensive, takes a while, highly regulated, blah, blah, blah, blah, blah. There are all these reasons you could, theoretically, it's hard. And for whatever reason, we were just crazy enough to go do it anyway. And then we got far enough along that I don't think it makes any sense for someone to start another company right now to compete with us. Like, okay, boom's 10 years ahead and counting. So unless you've got a very different idea about how to go about this, it doesn't make sense to compete with us. On the other hand, you know, we did just get supersonic flight legalized.

2:03:05So that opens up. when you can't fly a supersonic over Konus there is basically no market for a supersonic private jet but now that you can there is so I will be disappointed if nobody else does that you think you'll get into private jets? if nobody else does it we will because it should exist but my hope is somebody else gets there before we do but you got a lot of guys waiting for that to happen yeah well we the president opened the doors to that by legalizing supersonic flight over land. That market is wide open. I don't know anybody with a Gulfstream that wouldn't want to upgrade. Somebody should do that.

2:03:50If they wanted to, we'd sell them engines. And then, I mean, but even, it just, I still can't 100 % wrap my head around it Because of whatever you said, 80 % of the revenues in the first 20 % of the seats. I mean, those seats are going there. Those customers are going to go to you. And so what do those companies look like when this is online and this is becoming mass produced? I think it ends up being a gradual transition. Even with 130 jets, I mean, you're going to book out. Oh, yeah. Whoever buys those is going to book out like that. Absolutely. I think 130 is not nearly enough. If people who fly first-year business today on a route where supersonic is going to be meaningfully faster and where the airlines can operate profitably, airlines are going to need 1 ,400 of these jets.

2:04:56And that's not assuming people fly more and flights are faster. But for me, I'm going to go to London more when it's half the time. I'm going to go to Tokyo more when it's half the time. So probably 1 ,400 is a low number. Probably it's going to be way more than that. Does that make Boeing – I mean, there are companies that do do this. I mean, I think Spirit Airlines, they have no business, correct? Southwest, they have no business. Yeah, I think there can be – So does that mean all the airlines? I think there will be a middle period where premium goes supersonic and subsonic is about low cost.

2:05:35And that'll be sort of a middle period. And then the cost of supersonic is going to come down and more and more people are going to say it's worth it. And then there's an economic effect that I think is widely underappreciated. We call it the speed dividend. When you go faster, your main cost challenge is just the energy consumption. And so you work really hard to make the airplane as energy efficient, as fuel efficient as it can be. But most of the other costs of flying are proportional to time, not distance. So how many pilots do I need? Well, if the flight's twice as fast, I need half as many pilots.

2:06:12If the flight's twice as fast, I need half as many airplanes. Or to look at it more positively, I can get twice the flights out of the same airplanes and crew. I didn't even think of that either. Right? So if you could fly to Hawaii today on a propeller plane that is more efficient than today's jets, but nobody does it because economically it would be more expensive because it takes all that extra time.

2:06:38So, you know, the overture, when we have another overture, if we look at overture relative to Concorde, and we imagine another step beyond overture of a similar size, we can do economy, supersonic. And it requires, that's going to require a lot of invention. It's going to require a second generation powertrain. And boy, I get my juices flowing about that. Because one of the most surprising thing about this airplane, and I think why it's just barely possible for a startup to pull this off, is it doesn't actually have any fundamentally new technology. This is made out of the same stuff as a 787.

2:07:16It's like we took a 787, we shrank it down, we made it long and skinny, we put twice as many engines. That's it. It's a lot of new engineering, but it's not any new science and it's not any new technology. It's proven stuff. And we did it that way because we wanted to keep the hurdle for version one as low as it possibly could be. For version two, we're willing to say, hey, let's try five new things. And one of those is going to be a radically new powertrain that will allow us to go much faster, will also be much quieter. Well, let me ask you this. I'm just curious. Why would you want to go to economy if 80 % of the profits on the first 20 % of the seating?

2:08:00Why would you want to open yourself up to economy as a business? Yeah. I think it just should exist. And part of it goes back to that mission, and it goes back to why I started the company.

2:08:13Like, I think about where I was a decade ago when my kids had a grandfather in Hong Kong that they couldn't see. And, you know, we didn't have the money to go drop on business class. You know, we went to Hong Kong maybe two or three times, you know, in the back of the bus. so supersonic would not have been the cards for us and and i want you know i want every family every kid in that situation to be able to benefit from us i want to get there wow that's admirable well thank you i think also you can build a great business because i think there is a bizarre dynamic in economy today like if you look at the you know the the strata of air travel there's economy um and then there's business and business is like many times more expensive than economy And there's sort of a little bit of premium economy emerging in the middle, but mostly the middle is empty.

2:09:05And I think their market dynamics, like people in the airline industry keep talking about like, oh, people won't pay for a better experience. And I think for the most part, that's not true. I don't think people have found a way to deliver and market the experience that they will pay more for. Like remember when the first iPhone came out, people laughed. They're like, a$400 phone? You know, unsubsidized, no one's going to buy that. Well, no, fast forward, now it's$1 ,500 for an iPhone, and everybody does it. And it's worth it. And, you know, people aren't willing to pay more for better unless you find a way to actually show them a better thing they're willing to pay for.

2:09:46And I think the whole travel experience today is terrible. It's horrific. It's terrible. It's horrific. And I'm with you. I mean, if you line up a United, American, Southwest, Emirates, Qatar Airways, 110 % of going with Emirates are Qatar Airways. Right. So it's a night and day experience. Because it's a better experience. It's a better experience. But even in those airlines, there's still so much that could be better about the end-to-end travel experience. So I think there's a lot of room to reinvent the whole thing end to end and to create a, you know, maybe it bottoms out at 20 % more expensive than economy is today, but it's 10 times better.

2:10:41It's faster. It's more comfortable. You're actually cared for. The way baggage works needs to be completely rethought. The way you get through an airport needs to be completely rethought. And I think there's something in there that will be affordable, that people will be willing to pay for that is a supersonic experience that is also way more profitable than economy is today. So one, I want to make this available to everybody. But two, I also think you can build a great business doing that. You know, there wasn't a lot of money and phones before the iPhone. And Apple found a way to build a product people were willing to pay a lot more for and built a great business doing that.

2:11:22And it's not been done in air travel. And for some reason, people think it's impossible. But if you go look at the comparison to, say, other parts of travel, like hotels, there's a zillion different strata of hotels. And Motel 6 is not the mass market leader. People pay more for a better meal. They pay more for a better hotel room. But it doesn't happen in air travel. Why? I think those are solvable problems. What are some of the lessons you've learned through fighting some of the setbacks that you faced?

2:11:59Most importantly, don't give up. And I remember the day that we flew XB-1 Supersonic. I stood with the team on the tarmac outside the airplane. And I said, guys, we're here today because a hell of a lot of not giving up. when reasonable people would have given up. And in fact, a whole bunch of reasonable people did give up along the way. And we're here because we kept fighting through the setbacks because we didn't let ourselves lose faith. And for Overture to exist, it's going to take a heck of a lot more not giving up. And so that's, I mean, for me personally, there have been, this company has a near-death experience, it seems like, almost every year.

2:12:55Something happens, and it's like the startup equivalent of a cancer diagnosis. And it's like, you know, like when, you know, we lost our way for a little while, and we were trying to outsource an engine. And it ultimately, you know, we were working with Rolls-Royce, and it became clear that it just wasn't going to get there. And we started working on our own engine. And we were sort of baking that plan. It wasn't fully baked yet. We weren't ready to talk about it publicly. And then American Airlines followed United and they signed up for up to 60 of these airplanes. And on paper, we were still working with Rolls-Royce.

2:13:40Rolls and Boom knew that we were going to part ways. And then Rolls freaked out and ran to the press and told them they didn't think there was a supersonic market. and they weren't going to be involved. And then to the world, suddenly boom went from high-flying, you know, United is ordering, Americans are ordering, Japan Airlines is ordering, to like, ha-ha, they don't have an engine. And instantly, no supplier wanted to work with us. Instantly, we were trashing the press. You know, I was personally called a fraud. We were unfundable. And I remember thinking, if we don't find our way out of this, we're toast.

2:14:22And I remember listening to a talk that Brian Chesky, the founding CEO of Airbnb, gave about how he led Airbnb through the crisis that was COVID. And what he said is when you're in a crisis, you need to become more of who you deeply are and always needed to be. Go back to who you really are. I remember hearing that and thinking, we're going to go all in on our own engines. It's what we always should have done. We'd already sort of started down that path, and then we doubled down on it, and we clawed our way back. And if I think about why we were able to claw our way back, it's because I, you know, and the team at Boom, believed that this should exist, and it was worth not giving up on.

2:15:19So, you know, for a while, XB1, we called it the Mojave Honey Badger. It was just like, we're not going to, stuff happens, we keep going. Can't stop us. I love that. I love that. It seems like you have just brought everything in-house along the journey. And, man, it just seems to be the way to do it.

2:15:47We've learned some principles about this, and we're actually in the process of writing them down and trying to get really clear on the principles. Elon talks about the best part is no part. It's true, but there's a whole hierarchy. The best part is no part. The next best part is a completely off-the-shelf commercially available part. It's already designed and built, easily available. The next best part after that, if it's custom, is the one that we design and build ourselves. The worst part is one where we design and we outsource engineering and manufacturing. On XB1, we had a whole spectrum. You could find every supply chain strategy somewhere on that airplane.

2:16:28The wheels and brakes were off the shelf. We had the option of an off-the-shelf, what's called a flutter test system. And we screwed up and we had a supplier build something custom instead. That was a disaster. We had to go rescue them. And we had parts also that we designed and built ourselves or that we designed and then we worked hand in hand with a great supplier to build it. And the outsourced engineering only worked once. And again, it goes back to this idea of, you know, get curious about the why. So I was like, okay, well, what was the one case where it worked? What was the drag chute?

2:17:03And the drag chute is like the parachute that goes in the back of the airplane. It's like the e-brake. You never plan to use it, but it's there for backups. We outsourced that, and that went just fine. Well, why? Well, we knew on day one exactly what it needed to be. We could spec it, and the specs never needed to change. Oh, that's why the outsourcing was okay. Because if you can spec it, and your spec doesn't change, you can give a package to a supplier. They can give you a firm fixed-price bid. They can commit to it, and they get it done. But anything that needs to evolve, anything that needs to be innovative on, anything where the specs are going to change as you go through development is very hard to do across company boundaries.

2:17:48So it's not just that like, oh, vertical integration is good, outsourcing is bad. It's more complicated than that. It is anything where innovation is going to need to happen, where things are going to evolve. those things need to be under a single umbrella that has high bandwidth communication and high ability to change. So like think even of like how the contracting works. There's really only kind of two contract models that have been invented so far. There's firm fixed price, meaning like, you know, I want to go buy this. You tell me what it's going to cost. And that's the firm bid. And then, by the way, or there's time and materials, meaning like, you know, how much time did you spend on it?

2:18:33What did you spend? And you mark it up X percent and I buy it. Okay, well, you can't do firm fixed price on something where the spec is going to change. So now you're in this kind of time and materials world. But if you're in a time and materials contract, the supplier's incentive is to maximize time and maximize materials. They make more money by sucking. And so you're kind of counting on their good reputation and their being good humans to work well. So if the specs are going to evolve, it's much better not to outsource. If the specs are not going to evolve and you're really sure of that, then it can be okay to outsource.

2:19:11Man, you know, I mean, it seems like a lot of these newer companies are doing their own manufacturing. What do you think that – I mean, I don't know any of the other companies that are doing this. So what does that look like in the future? I mean, the supply chain. Yeah. Is everything – is every company going to start going in-house? Well, I think we have to re-industrialize America. And if America was already a thriving manufacturing country, the way we were before World War II, a lot of the answers would be different. But instead, what we are is we are very calcified, very inefficient on most of that in the US.

2:20:00And we've got a much more efficient competitor in China. Okay, so what do we need to do as a country? we could try to bring back exactly what left. I think that's really hard to do. Instead, I think we need to invent and build the next generation. We need to leapfrog. So what does that look like for manufacturing? I think it is, well, let's take the example of tooling. Like we were saying before,

2:20:28tool and dye design, by and large, went to Asia. Like, you know, you go to China, you throw a baseball, you're going to hit a tool guy. In the U.S., they're few and far between. Okay, so we could try to rebuild tooling engineering in the U.S., and we probably need to do a little bit of that. But most of what we need to do is try to manufacture in a very tool-light way. We need to invent software-driven manufacturing. And so a big part of what we're doing at Boom is we say, how do we do digital manufacturing such that we don't need the tools? so that those jet engine blades that take 18 months to get where nine months is tool design we're working on how do we 3d print a tool in 24 hours just delete that part of the process and we can turn nine months into 24 hours yeah and by the way and that and the second order effects of that are amazing because if it takes nine months to go build a tool or even in a good scenario three months uh and then you can get a part out well if you tell an engineer okay go to design a part, but by the way, if you need to change it, it's going to set us back by months.

2:21:32Now they spend a lot of time wringing their hands, got to make sure it's right, I don't want to cause a setback. So they tend to be very conservative. They tend to spend a lot of time analyzing and double checking. But if I can digitally manufacture, if I can change the design in software overnight, then I don't spend, all the engineering conservatism can stop. We can be more aggressive. We can go try things that might not work. The pace of iteration speeds way up. The behavior of the engineers completely changes. So if we can go away from a very tool-heavy manufacturing approach to a tool-light manufacturing approach, it ricochets back into how we design an engineer.

2:22:14And those cycles become much faster, and we can iterate much faster. And so I think this is how the U.S. wins in manufacturing. We need to invent the next wave of manufacturing here in a way that plays to our strengths, and play to having the best minds in the world. Maybe we don't have the lowest labor cost, so we're going to invest in automation. We're going to have robots building these things, and they'll be following software instructions. That means we can iterate way faster. I get excited about this because now we can run circles around China, and we don't need a billion people to do it.

2:22:51Love the way you think. love it well Blake we're wrapping up the interview so I just want to ask what advice do you have for future innovators like yourself

2:23:03work on something that you'd be proud to fail at I think of when I took my my daughter turned 10 my oldest daughter she's 12 now she turned 10 I took her out to ice cream and it was one of those sort of like low moments in boom history where I didn't know how we're going to get through some challenges I was I was worried we'd run out of money before we ever flew an airplane and um I'm driving her back from the ice cream shop and I said uh Ada you know what would you think and by the way to her this is all her dad has been doing her entire life has been saying he's gonna build supersonic jets I said Ada what would you think if it didn't work in our even our test airplane never flew.

2:23:51And she said, I'd be proud of you for trying.

2:23:56And boy, it hit me right here. And she's a 10-year-old. She's not making that up. She means that. Can't fake it at that age. And so it's my wish for every entrepreneur and really everybody. For me, if you went back to me when I was like five or seven years old and you said, Blake, you're going to get to build supersonic jets. My reaction would have been like, no way. You're kidding. I get to do that? I'd have just been tickled pink. And so my put is, go work on the thing that your five-year-old self would have been dazzled by. And for me, that's supersonic jets, but I think we've all got our version of that.

2:24:39Go do the thing your five-year-old self would have been tickled pink by. do something that you love so much that you'd be okay having failed at it. And if you do both of those things, there is actually no losing. Man, I love that advice. Thank you. And man, what a moment with your 10-year-old. She's pretty cool. Wow. Well, Blake, thank you for coming. I wish you the best of luck. And selfishly, I cannot wait to get on one of those jets. So please hurry up. All right, I'm on it. Thank you so much. All right, thank you, Sean.

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