The Groupon PM Who Built A Supersonic Jet: "I Couldn't Find The Reason It Was A Bad Idea" | Blake Scholl

0:00Hi, everyone. Welcome to another episode of Truth Works. I'm your host, Jessica Neal, and I'm here with my co-host, Peter Clarke. Hey, Pete. What's up?

0:09Peter Clarke:Hey, Jessica. How are you? Doing well? I'm good. I'm excited about our guest today. Absolutely. Same. Yeah, yeah. And I'll just do a brief introduction of our guests. But the reason why I'm excited is that our guest is someone who really like looked at an industry that most people had kind of written off and asked a simple question of like, what if everybody's wrong? And he leaped in and started doing the most fascinating things that we're going to unpack today. But I have the CEO and founder of Boom Supersonic. And his name is Blake Scholl. He's here today. And welcome to the show, Blake. I'm so excited to have you.

0:50Jessica, thank you for having me. I'm excited for this, too. Yeah. So, OK. Tell us. OK. I mean. Where to start? Tell us. Like, I mean, what are you doing? Yeah. So for anybody who doesn't know the boom story, our goal was to kind of pick up where Concord left off to bring back supersonic passenger travel, but this way to do it in a way that is mainstream and sticks around. And, you know, really want to get to a point where we have to convince kids that we didn't always have really fast, comfortable, convenient flights. So that's the big, hairy, audacious goal. Along the way, Boom became the first company to have built a supersonic jet outside of government or military.

1:38And it demonstrated that we could actually solve Sonic Boom, make it go away entirely. And then along the way, found that we could take some of our supersonic technology and use it to power AI data centers on the ground and thereby kind of financially bootstrap the thing that is otherwise very difficult to financially bootstrap. So that's the TLDR. My God, where do we even start?

2:02Peter Clarke:Well, we probably start with a whole generation of people who have no idea about supersonic air travel or the sonic boom is a problem. But I mean, if you haven't watched the right stuff or seen Chuck Yeager or any of those things. How did you stumble upon this? Yeah, so I don't have the resume for this. In fact, I dashed off something on my LinkedIn 10 years ago. So my last job was as a product manager at Groupon. And I think I wrote something like, there's nothing like working on internet coupons to make you yearn to work on something you love. And I wrote that and moved on and forgot about it.

2:37And then last year when XB1, our airplane, broke the sound barrier, all of a sudden my LinkedIn went viral on Twitter. And everyone's like, oh, Groupon PM could build a supersonic jet. But the real so the real origin story, you know, I grew up loving airplanes. I remember being jealous of my high school friends who got flying lessons. I managed to start to learn to fly myself in college when I was a tech intern in 2000. But there was kind of nothing exciting happening in aviation. You know, Boeing was serving warmed over versions of the same airplanes I've been building since the 1950s. And I wanted to go work on things that were new and exciting.

3:13So I ended up starting my career at Amazon. I got in like two weeks before the dot-com hiring freeze. And it was an exciting place, exciting time. And kind of had a first career in tech at Amazon. I was pretty successful there. And it was part of two startups that basically weren't successful. One where I was first employee and one where I was founder. And I had kind of started by working on what my resume said I should work on. Like I'm like, okay, I know e-commerce from Amazon. This other startup where I'd been first employee was one of the very first mobile companies. actually pre-iPhone. And I was like, oh, if I know mobile and e-commerce, I should work on mobile e-commerce.

3:50And so that company built a high volume of exquisitely well-crafted software that was absolutely meaningless. And I would wake up in the morning and think like, oh dear, I'm going to crash this company. I'm going to lose all of the investors' money. I'm never going to have a job again. I was probably clinically depressed. And so my escape fantasy was just find a way to give everybody their money back and rest a little bit. And this was like 2012, and we ended up getting Aqua hired to Groupon. And so the investors made a little bit of money. I went back and changed the liquidation preference so that the investors would actually get a return.

4:28And then for me, I got my escape fantasy, and I got to putter around at Groupon, which was a crazy place in a bunch of ways, and really reflect on the journey. And my reflection was I wanted to found again, but I hated those days where I wished I hadn't started. And I wanted to optimize for two days, the worst day and the best day. And I wanted the worst day to be worth it. And I wanted the best day to be incredible for me personally. And so it took a little while of soul searching to really figure this out. But I decided to organize all of my ideas by how happy I would be if they worked. And leave aside everything else.

5:06Like, is it possible? Am I qualified? Like, nothing else matters. Just like, I love that. How good is the fantasy? Yeah. And so I had had a lifetime goal of breaking the sound barrier since my mid-20s. I'd gone to the Seattle Museum of Flight. Me too. Yeah. We all should, actually. Yeah. Right? I got to the Seattle Museum of Flight where they had a retired SR-71 Blackbird, and I think it's the most amazing military airplane ever made. And they had retired Concorde, which I think is the most amazing commercial airliner ever made. And it was bizarre because there's nothing better in the skies. And, you know, and coming from the tech world, it's like a given that things get better.

5:47But somehow, somehow we'd reached an apex in the 60s and slid backwards in flight in really meaningful ways. And so that day I put a Google News alert on supersonic jet. And I was like, great, I want to be first to buy a ticket. And it had sat there for 10 years with kind of nobody doing anything. And me not having done anything except get my pilot's license. And so I was like, okay, it would be, it's a very like heady thing to even consider doing this. But I don't want to be, I don't want to be 80 and like looking backwards and wondering what if I tried. Yeah. So I was like, okay, I need to find out for myself why this is a bad idea because no one's doing it.

6:22So surely it's a bad idea. That's what everyone tells you in the Valley, right? Like if your idea is any good, there's another team on it. Right. And there was zero teams on supersonic. So it was, you know, it seemed like the conventional wisdom said it had to be a bad idea. But I just wanted to understand that for myself. And the long story short, I couldn't find the reason it was a bad idea. And I spent about a year just kind of teaching myself aerospace, like reading textbooks. I did remedial calculus and physics because I hadn't had any since high school. I started building a spreadsheet model of the airplane and a spreadsheet model of the market.

6:51And there was sort of a key moment in the middle of 2014 when I took it all to a professor at Stanford who had done some supersonics research. which I'm like, this can't be right. Like my assumptions are going to be wrong or maybe I like got the equations wrong or something because this can't be, you know, the spreadsheet says we should all be flying supersonic, but we aren't. And I was like, did you check my math? And he was like, no, man, your assumptions are probably conservative. You should be more aggressive. This all checks out. And I remember leaving his office in this, like what felt like a drunken stupor.

7:21So how in the world am I the human within possession of the spreadsheet with the formula for a supersonic passenger renaissance. And yet, like, I couldn't just leave it. And so I did a lot of soul searching on this because I'm like, man, even telling my friends I'm going to do this is really weird. Yeah, they must be, like, you're crazy. Yeah. People, you know, I mean, one guy told me to call him back when I had something less pie in the sky. I could just, you know, I mentioned this at like a dinner party and you just watch the eyes roll back. Like, nobody believed in it. And one guy actually told me to go for it.

7:54And then 10 years later, he was interviewing me on his podcast. And I was like, man, thank you for being the first believer. And he's like, no, man, I thought you were crazy. I just, you were so passionate. I couldn't tell you no. So actually, who was that guy? That was Avichel Garg, who runs Electric Capital now. Avichel, I think I gave Avichel his first job when we were both in high school. He's a great dude. Totally great dude. But I think, I mean, I think, you know, probably he was right. Because like when you are so passionate about something, I mean, you know, that's a big deal.

8:25Peter Clarke:Yeah, so I think that's one of the biggest lessons learned. Yeah. You know, I thought I should work on what my resume said I should work on. And the reality is knowledge and skills are way more changeable than passion. And I can't change what I love, really, but I can change what I know how to do. And picking a target that mattered to me more than my insecurities enabled me to go off and kind of build in my self-capabilities I didn't. didn't think I necessarily had. I remember thinking about, so the spreadsheet works, like it seems like we should be doing this, like should be flying supersonic.

9:04Peter Clarke:So what did you discover was the thing that kept everyone from doing it? Yeah, I think it took me many years to really understand all the layers of the onion. The outer layer was pretty easy to see. A ticket on Concord would cost about$20 ,000 in today's money. The seats were pretty small and uncomfortable And it was the 1970s where you would find about 40 seats in first class on a 747. And here's this 100 seat airplane with a much higher fare. And the airline economics 101 is if you don't fill the seats to some good level, you can't make any money. And so this thing was flying around mostly empty.

9:39And it just fundamentally made no sense. You can't fill 100 seats at$20 ,000 each in the 70s just to go fast. Right. So it was a down the middle, just the economics never made any sense. And OK, so but why were the fares so high? It was built out of 1970s technology and it was a gas guzzler. And the very first question I asked was, how much would you have to be conquered by on fuel economy to match the economics of a flatbed in business class? Because the idea is like nobody needs a flatbed if the flight isn't overnight and it's fast, right? So you could increase passenger density by just speeding the flights up.

10:16And the answer was between 10 % and 30 % fuel economy improvement versus like 1960s tech would get you there. And I was like, well, that doesn't sound impossible. Like it's, you know, 50 years have gone by. And the 787 was like 20, 25 % better than the 777, which was similarly better than the 767. Like, can we really not find 30 %? You know, of course, I didn't know what I was doing, but it seemed feasible. And then there's kind of a deeper, you know, since we're talking about talent, I think this is a really interesting story. The last commercial airplane company before boom, founded by an entrepreneur, was Douglas Aircraft in 1921.

10:54And the retirement of the last founder corresponds exactly to the last speed up we had in air travel. Like the first, yeah, the first jetliner, which was not successful, but it was first, was the de Havilland comet produced by de Havilland while de Havilland himself still ran the company. But in the 60s, all the founders retired and there were no new companies. There were no founders. And we kind of went from a commercially driven model of innovation to a national prestige driven model of innovation. So, you know, we all remember Apollo and the space race. What's forgotten is there was also a supersonic race with the same players.

11:31The Soviets were building a supersonic passenger jet. The Europeans, so France and Britain, banded together as nations to build Concord. And in the same speech that JFK announced to Apollo, we also talked about an American supersonic competitor. And so we had these sort of government specced national for streets glory projects that were unhinged from commercial thought. And so we built what we ended up doing, I think, both Apollo and Concord is building tech demos. I mean, the moon landing was obviously a tech demo. It was like history's greatest tech demo, but it was a tech demo. We can't go back.

12:03And Concord was really a tech demo. It was dressed up as commercial, but it was really a tech demo. But then it was like a state tech demo. So there's geopolitics. So then the next thing that happened is in 1973, after the American supersonic airplane is canceled, we go block supersonic and we put in place a speed limit. So if you look again from the Wright brothers through the first jetliner, the primary vector of innovation in flight is speed. It's the whole point of an airplane. No one gets on an airplane for any reason other than it's faster than the alternative. It's literally what the whole thing is about.

12:34And then and then so the primary vector of innovation is banned. And then the knock on effects happen over the next half a century, which I think there's a whole generation of young people that did not go into aerospace because nothing was happening. And I was one of them. And and, you know, and now now kind of building boom. The biggest challenge in building this company is there is a missing generation of talent that didn't even go into this industry. I think what we get inspired by as kids really matters. And, you know, those of us who have the go build new things, you know, virus run to where we can do it.

13:08And that wasn't Boeing and it wasn't Lockheed. Right. And the commercial world's innovation was banned. In the defense world, we ran out of enemies. Why did they ban, make a ban on speed? Like what was the reason? It was about sonic boom. Okay. Because it was too loud. That was the claim. Yeah. But it's banning sonic boom because of noise is like banning rock music because it's too loud. There's a volume knob, guys. Right. And in fact, you can turn it all the way off. And so the real thing was, this was protectionism, right? It was not yet obvious. So Concord didn't carry its first passenger until 1976.

13:46The ban happened in 1973. And it was, with the benefit of hindsight, I think we all know that it was economically dead on arrival, but it wasn't really obvious. And so there was a threat. And I think this is a pattern that we see in bad regulation everywhere. There's always a moral cover story, right? Like we must protect the public from sonic booms. You know, just like today, we must protect the public from AI data centers that are drinking all the water, right? There's always a moral cover story. And then there's the bullshit actual reason that no one wants to say out loud. And the bullshit actual reason was protecting Boeing.

14:20right yep right yeah and i and i think if you like rip the the lid off of the ai politics today i think you'll find the exact same thing i'm sure i'm sure how much of that played into the name i mean you called it boom one was that we actually didn't so i thought this sonic boom would probably be technically and politically intractable and uh but i you know but the the spreadsheet said you didn't have to solve it to have a business that the longest and most painful flights are the international ones you know so east coast to europe west coast to asia right like you know la sydney like man who wants to go to sydney it takes 16 hours yeah and and those routes are primarily over water where sonic boom is not banned it's only banned over land uh i'm sorry not sonic boom is banned but is it sonic booms um it was it was high speed that was speed right uh so you could You could just fly where the regulations didn't apply.

15:16And the math said that was a$100 billion market. So you didn't have to do it. And then we kind of found that we solved sonic boom by accident along the way without really trying. And that it was way more politically feasible to change the regulation than we anticipated. So it was 115 days from breaking the sound barrier to an executive order repealing the 1973 ban. And then Congress got on the bandwagon as well. And the Supersonic Aviation Modernization Act got through the House unanimously, unanimously. And I think it's supposed to get out of Senate Commerce next week. But already the FAA has issued the new regulations that basically say, fly as fast as you want so long as there's no boom.

15:59Wow. Love it. Okay. Okay, I have a selfish question because I have to fly a lot for work. And I fly all over the world. And I definitely would like it to be shorter. But I am not a great flyer. I'm pretty nervous, especially if there's any type of turbulence. And I know it's just waves in the air and I need to learn whatever. I know all the logic behind it, but I lose all logic when the shaking starts and I will cry. And so is it safer, this type of flying, or is it the same? Or how should I think about it? Also, because there hasn't been a lot of innovation and I see that, you see that as a consumer of flying, right?

16:53Like you see these old planes that have been flying around for like, I don't know how long. And so I always just get very nervous. Should I be more nervous on your plane or less nervous? I think, I mean, you know the data on this. And the data says that flying is by far the safest way to travel. The most dangerous part is driving to the airport by far. You're more likely to get killed on the road to the airport than you are flying. And yet a lot of people have exactly the same experience that you have. And I think part of it's because we perceive control in driving that we don't perceive in flying.

17:32The other thing is because airplanes are so safe, any incident is thereby newsworthy. If we reported on every auto fatality, it is the equivalent of a 737 fully loaded, crashing every 48 hours in which everyone dies. Those are auto fatalities in the U.S. Like it's like a bloodbath in the roads and no one talks about it. Right. And then instead we've got this, like, you know, people who go flying, everyone wishes you a safe flight. And I keep telling people, like, stop that. Because all you're doing is scaring everybody by the safety, which is the non-issue, into focus. I wish people a comfortable flight because that's a much greater risk that you won't have a good flight.

18:11But you're going to have a safe one. And supersonic, you know, aviation is almost perfectly safe today. And, you know, we've got some things on the airplane that I think improve the safety bar. But, you know, if we just match the safety record of the 787, you know, that would be great. And there's been one, you know, only one fatal accident on the 787, which is when some pilots turned the engines off. So it was really a murder-suicide. Right. And if you look across the last couple of decades, a big percentage of aviation fatalities have actually been intentional. Right. Right.

18:43Peter Clarke:Or operator error. Yeah. Which is depressing. But, okay, how about the, okay, because weather, I mean, I've just been in like massive flooding in Texas the last few days, and weather is increasingly getting worse across the planet. If you're flying at your speed, and I'm guessing maybe a little higher, is there less of that? Yeah, I'm not sure whether it's actually getting worse, but the good news is supersonic flights are higher and weather is mostly a lower atmospheric phenomenon. So, you know, a lot of turbulence you get today, you know, in and around clouds and thunderstorms. And usually thunderstorm clouds top out at around 45 ,000 feet.

19:29So in a subsonic flight where you're in the kind of mid-30s to low 40s, you're either through it or like around it. and supersonic will be up at 60. So you'll be able to look out the window and see the thunderstorm from the top down. It'll actually be a pretty cool view. Okay. And very occasionally you'll get storms that reach that high, but it's pretty rare. So it should be a smoother ride. The sky is a deeper blue. And if the earth is curved, you'll be able to see it. Oh, wow. So we're going to do a flat earther's flight and just see if we can settle it. Do it.

20:05Peter Clarke:Well, there you go, though, Jessica. No turbulence, you know. Okay. Three times as fast. I mean, it's going to be great. I'm convinced now. I will try it, Blake. I will trust you. Pete and I will. You'll have the same kind of experience in and around an airport. You know, bumpy landings will still be a thing. Right. But the other thing I think about flying is we've turned, I mean, I think this should just be the most amazing experience any of us have as humans. Like, you know, we go hundreds of miles per hour and what we call a bird's eye view, but it's really a human's eye view because no bird flies that high.

20:37And it's this incredible experience to see the planet as well as to look down and see, you know, everything that humanity has built, you know, aboard one of the most complex technical achievements. And yet we've turned it into an experience that most people dread. And there's a lot in that, you know, but the adjective that the boom design team focuses on for designing the airplane is tranquility. Like we want this to be an oasis from the moment, you know, we can't change the airport, at least not initially. I'd love to. Yeah. But it's not the focus. But from the moment you step on board the airplane, it's different.

21:08And, you know, and years before I started Boom, just as like a thought exercise, I would like get on an airplane. I would ask myself, what would this thing be like if Steve Jobs and Johnny Ive had something to do with it? Right. And, you know, what if the people that designed this thing actually cared? And then once you take that mindset, you just start to see things that are there in the experience that affect us all emotionally, but aren't always there consciously. For example, just the number of seams and gaps and visual clutter or the PA system that's somehow never the right volume. Or I apologize for what I'm about to say.

21:41If you, any like not brand new airliner, if you look at the underside of the overhead bins in the window seat, you will notice that there's a dark splotch. in every row. And that's because when people stand up and they bump their heads on the underside of the overhead bins and their head schmutz gets transferred and the airlines never clean it. Yeah, I know. It's great, right? You can't unsee this. Yeah. And so all those things are there and we don't always consciously notice it, but it affects us emotionally. And so we are sweating the details. And I'm just trying to Think about what are all the things that people hate most about air travel besides how long it takes.

22:23And any of those we can solve through the airplane, we're going to solve through the airplane. And I think when we reveal the interior, a lot of people are just going to drool. It's going to be wildly different in some big, obvious ways. And also, it's going to be wildly different in a thousand subtle ways that will be very hard for non-designers to consciously identify, but will be their part of the experience. this is like one of my favorite things about building boom is it's like it's like extreme left brain and extreme right brain simultaneously yeah i can go from a meeting where we are like talking about the contours of the window treatments and how we adjust that to make the environment visually cleaner and then the next you know then the next meeting is like you know aerodynamics optimization or how we inertially weld a drive shaft in a turbine it's it's like extreme uh extremely advanced technically and extremely advanced aesthetically

23:14Peter Clarke:all at the same time i did a master's at cmu but i spent four years at boeing uh and before that i was a designer right which so but being at boeing anyways yeah just uh like you look at the things that are being done and you realize it's a lot of i guess a design in isolation right it's very much spreadsheet mechanics it's you know could we do something better yes but like the trade-offs in cost or it doesn't, you know, like the ROI on that doesn't matter. Um, you know, I mean, yeah, my time at Boeing was, um, mostly driven by Ryanair, you know, at the time, which was notoriously just like, like how do you make this as cheap as possible?

23:53Peter Clarke:And it was like a lot of interesting decisions got made there. Uh, yeah. And there's this like widespread mythology in aviation that it's all about cost and that the cheapest ticket wins. And for one, it's just not even true. But two, it's bizarre. Like in every other experiential thing in the world, there's a spectrum of experiences at a spectrum of price points. And people prefer restaurants where they're treated better. People prefer hotels where they're treated better. And there's a whole spectrum from Motel 6 to the Four Seasons. And by the way, Motel 6 is not the volume leader. nor the profitability leader.