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Blake Scholl is the founder of Boom Supersonic, the first private company to build supersonic jets. In October, they rolled out the XB-1, history's first independently developed Mach 2.2 airliner. One week prior to the event, Blake shared stories with Daniel and the Pioneer winners community about the origins and future of Boom.

Hear the story of how they secured early partnerships with companies like the Virgin Group and Rolls Royce with nothing more than a thirty-page Google Doc.

Pioneer Podcast - Episode #1

The Start of Boom

Daniel: Now, at what altitude are you right now?

Blake: 5,280. I'm in Denver. Or technically 5,820, because we're in Centennial.

DG: It feels like based on your background you could be at 52,000.

BS: Yeah, this is a little more interesting than the plain white wall behind me.

DG: How high will the plane fly when it's fully built?

BS: Yeah, up to 60,000 feet.

DG: Is there a curvature at 60,000?

BS: There is, yeah. So, the sky's a deeper blue, and you can see the curvature of the earth. That's why we've got to put big windows in the airplane.

DG: Wow. Will these be the biggest windows on any aircraft?

BS: I don't know if they'll be the biggest. There are weight and performance challenges with making really big windows, but they will certainly be the largest supersonic windows ever done.

DG: Right. That's interesting. Well, thanks for taking the time to chat. I thought it would be fun. You have such a unique company and such a unique story. I guess we should start with the beginning. You were, I think, running growth marketing at Amazon?

BS: Sort of. I joined Amazon as a software engineer in 2001 when my parents thought it was a bookstore, and they were like, "We got you this computer science degree. Why are you working at a bookstore?" And then the really cool thing I ended up doing at Amazon was Amazon's very first ad buy from Google, and we ended up building out the automated system. This all sounds very normal now, but this was like 2002, 2003. Built out an automated system to do basically paid customer acquisition on the internet, and that turned into a $300 million P&L by the time I was 24. So, very lucky to have that experience early in my career.

DG: So, you worked at Amazon, and then you started a company called Kima Labs, which was acquired by Groupon, and then you started building the next Concorde. So, how did you learn to build airplanes? At what point at Amazon or Kima did you study that?

BS: Yeah. It's a little bit of a non sequitur in my career. A thing I believe deeply is that passion and vision trump knowledge and experience, and if you've found something you really love that you want to make real, that you can learn. The story for aviation for me goes back to childhood. I've loved airplanes since I was a kid, and I've been flying small aircraft for fun since I was in college. Throughout my 20s, I had this thought that one day I would like my passion for flight and my career to have some kind of intersection. I started reading books on aerodynamics, and I started reading airline annual financial reports to understand the industry.

BS: And then in 2007, when I was working at one of the first iPhone app companies in Seattle, I put a Google alert on supersonic jet, and wanted to be first to know when I could go buy a ticket and go Mach 2. And for the better part of a decade, it was just crickets. There was no credible effort to do anything that would pick up from where Concorde had left off, and take supersonic flight to a more mainstream level.

BS: Fast forward nearly a decade, after having spent a couple of years at Groupon, I can tell you, there's nothing like working on internet coupons to make you yearn to work on something you really love, that's going to matter to the world. And so, I thought, well, let me look at all of my startup ideas in descending order of how awesome it would be if they worked, and leave me to decide basically everything else. And so, I thought I would work down that list, and I would end up working on number three or number four, but as luck has it, I'm still working on number one.

BS: And it was this experience of, okay, let me get two weeks into the research, and I'll understand why no one else is doing it, but instead found a whole bunch of stale, conventional wisdom that didn't stand up to a simple three-line spreadsheet you could build with inputs that were published on Wikipedia, that people thought that you had to charge a huge premium for speed. People thought you had to solve the sonic boom problem to have a viable product. People thought you either have to be a tiny supersonic private jet for the ultra wealthy, which we didn't have the technology for, or it had to be a 300-seat supersonic jumbo which we also didn't have the technology for.

BS: And it turns out, none of that's true. And so, once I started to realize that this space was more open than it looked, I got really serious about learning. Did the Khan Academy physics class, because I hadn't had any physics since high school, and took an airplane design class, and read textbooks, and then started meeting people to test ideas against people who knew a heck of a lot more about airplanes than I did.

DG: And so, you started the company in 2014, is that right?

BS: That's right. Yeah, we turn six in about a month.

Early Fundraising & Virgin Galactic

DG: Congratulations. So you started the company in 2014. How do you convince anyone to give you money to build a supersonic airplane with the background that you had?

BS: With great effort. It was very difficult to get the first money together. My first company had made money for its investors, and some people were happy with it, and they said, "Blake, we'll invest in everything you ever do." And I called them back and told them what I was doing, and about half of them said yes and half of them said, "We said anything, but we didn't think you'd go do something that crazy." And so, I think the smallest check I ever took was $500, and we raised, by the end of '15, we had raised about $700k, a good piece of which I had to put in myself. And then we did Y Combinator and some important things happened while we were in YC, most important that we got a deal together with The Virgin Group to pre-order 10 aircraft, for $2 billion, and that significantly changed the credibility and the investability of the company.

BS: And so, we kept finding ways to convince people that we were real, and then you would basically raise some money, go accomplish something important, and then raise some more money and accomplish something else important, lather, rinse, and repeat, and eventually we got a supersonic jet.

DG: What was your first significant investor?

BS: First investor was John Paulson, and he and my CTO and I had gone out to dinner, and we were talking about this, and this was like early to mid 2015, and John said, "Well, I'll write you a check tonight if you'll just promise me I'm first." And, I didn't have to think too long and hard about that one.

DG: And what do you think John saw in you?

BS: I think he saw an idea that he really wanted to be real, and a fairly pragmatic plan to actually make it happen. Not a boil the ocean plan, but a one foot in front of the other, here's why this isn't just a dream, but here's why this could actually work. And then another thing I've heard, I don't want to put words in John's mouth on this, but a thing I've heard from other investors is, who put money in at that timeframe, were they thought Boom had about a 1% chance of success, but they saw in me someone who would never stop, and was incredibly passionate about it, and would run through whatever wall was required to get it done. And I think that inspired some belief.

BS: I also remember the Paul Graham pitch. He invested on Demo Day. And his view was, "So, when you guys succeed at this, you'll be worth something like three times Boeing because you're going to be so much more efficient than Boeing." At the time, that was like $200 billion. "And if you have even a 1% chance of accomplishing that, that means the company's worth $2 billion right now, and you're selling me shares for $20 million, and therefore this is the best investment I've ever made." I was like, "That's great. Can I quote you on that, Paul?"

DG: And so, where was this dinner with John?

BS: Somewhere in San Francisco. I wish I could remember exactly where it was, but I had met John through a friend, and he and I had talked on and off before he was ready to go throw his first little bit in there with us.

DG: And then, how did you manage to get in... So, in 2016, you signed an agreement with Virgin. How did you manage to get that?

BS: Well, that's a check of a story. So, we were going through YC, and they told us a few weeks into the program that you better show up on Demo Day with sales or your goose is cooked. And so, I thought, well, crap, I've got eight weeks, and my sales pipeline is like Delta, Lufthansa, United. I'll be lucky to close any of these guys in eight years, let alone in eight weeks. And so, I thought, well, there really are only two things that could work. We could go after a startup, maybe someone who was doing or had done all business class, some sonics, since our airplanes are all business class supersonic, or we could go after Virgin, because Richard is known to have... He tried to buy Concordes when they were retired. He's known to have an interest in high-speed flight, and he's just crazy enough that maybe he would do something.

BS: And so, we went after both of those paths in parallel, and up until literally the day before Demo Day, all we had was an LOI from a startup airline. And I remember doing the practice pitch with Michael Seibel, and he was like, "Blake, you sound like you're completely full of shit. You have anything that's real? This airplane doesn't sound real. Your LOI is from a startup. That's not real. Show me something that makes me think you're anything other than just hot air here." One thing we learned from that is be really concrete in the pitch. The final Demo Day pitch was, "Here's the engine, here's the hangar that we're going to build the airplane in, here's the leaning edge of the wing," and just make it super, super concrete and tangible because it does sound like, "Today we have an airplane in the hangar," but back then it was little bits and pieces, and a lot of computer renderings, and people didn't believe it.

BS: But the Virgin story, so we had started dating Virgin actually a little bit before YC, and some of my team knew some of their team, so we could walk into Virgin Galactic and say, hey... Instead of saying, "Hey, how are you? Do you think you can build supersonic jets?" They'd be like, "Hey, Joe, good to see you. How have you been?" So, we walked in with a little bit of credibility, but they were looking for how could they extract the most value from Boom in exchange for supporting us with Richard. And so, we realized we needed another path to Richard. And this was February of 2016. One of our advisors was the astronaut Mark Kelly, who was personal friends with Richard Branson, and in that month, Virgin Galactic was rolling out their new spaceship.

BS: And so, what we found was, we could write emails from Mark Kelly to Richard Branson, and he would send them, sort of classic intro ghost writing kind of technique. We basically got a note into Richard that said, "Hey, the Boom guys are going to be in Mojave for the space ship rollout. You should really meet with them while you're there," and then we emailed our friends at Virgin Galactic and were like, "Hey, we're going to see Richard. Can we come to the rollout event?" And so, we ended up crashing the rollout. I never actually got my name on the invite list, but we got our 15 minutes with Richard Branson. And, he looked at this, and we had a little wooden model of the airplane that we had painted up in Virgin colors, that we very reluctantly gave him as a gift because we put so much energy into building this one little handmade model.

BS: And he looked at us, he said, "Well, this is brilliant. I love what you're doing. But I'm already up to here with Virgin Galactic. I can't do two of these things." And we said, "Well, that's okay. We're not asking you to invest in the company. We're asking if when the airplane is delivered whether you'd like to have the first few with a Virgin logo on the tail." And I said, "Look, if you're willing to raise your hand as an early customer, I'll go get all the capital I need somewhere else." And it turned out that was the angle that worked, and we agreed to do a little bit of manufacturing and test work with Virgin Galactic, and that helped align interest over there.

BS: And then it was literally the day before Demo Day that we got the email from Virgin that said, "Okay, we're in, and you can announce it." In that moment, we went from what I felt could be the biggest losers of Demo Day, these yahoos think they can build supersonic jets, and nobody even wants them, to this baby little startup just signed a $2 billion deal at Virgin, which made Demo Day go fairly well. In fact, I can tell the story of that week, because it was a bit of a rollercoaster ride. We had been in stealth mode at that point, and we planned to come out of stealth mode the week of Demo Day, and we had done an exclusive with Ashlee Vance at Bloomberg for the launch story. If you don't know Ashlee, he's a great guy. He's the guy who wrote the biography of Elon Musk. And so, we thought, this will be perfect, Ashlee will write a very flattering story, and then we'll be the SpaceX of airplanes. It'll be great.

BS: And so, we invited Ashlee out to our hangar in Denver, and we had zero self-awareness about just how fanciful we looked at the time. The only thing we had in the hangar was a couple cardboard mock-ups. And so, we let Ashlee's team take pictures of me climbing in on the cardboard mock-up. And then the story ran, was actually a very nice story, but the editor got a hold of it, and ran it with the headline image of me climbing into a cardboard mock-up of an airplane, and the whole thing ran under the headline of This Colorado Company Thinks it Can Build Supersonic Jets, and that came out on Monday, and it was just cringe worthy. And then Tuesday, we got the Virgin email. On Tuesday night, I stayed up super late doing press interviews, and Wednesday, we relaunched the company, and then all of a sudden it was like this other, "Oh, this is actually credible because Virgin's with it."

BS: And I remember the Monday story ended up on Hacker news, and it was... You should never read the comments, but I read the comments. And, it was like, "Ha ha, what a stupid company. What idiot runs marketing there? Why would they name an airplane company Boom? And, don't these yahoos know that airplanes aren't made out of cardboard?"

DG: Oh, you know all of the commenters on Hackers News are of course highly qualified pilots themselves, manufacturing F-16s, F-22s, F-35s, and incredibly qualified to critique someone's attempt to build a better airplane, but go ahead.

BS: Yeah, yeah. No kidding. But Wednesday, the Tech Crunch story on the Virgin relationship ended back on Hacker News, and my favorite comment, and this one was worth reading, was, "Monday: Ha Ha, what a stupid company. Wednesday: Oh, shit." And then there were these Twitter threads about, "This is the way to launch a company. It's called the one, two punch." And, "What brilliant people must work in marketing at Boom to have planned this."

DG: Right.

BS: And I was just like, well, you take your luck.

The Plane

DG: Very true. So, tell us a little bit just about what it's going to be like to fly on this thing. First off, is there going to be wifi onboard?

BS: Yes. Super fast wifi.

DG: Is there internet at that height?

BS: Yeah. Well, you're actually closer to the satellites. So it's slightly better. And in fact, you've got only 64 other passengers to share the internet with, so it's going to be a lot faster. One of the things you see with tech on other airplanes... We've all had that experience of you get onboard an airplane and it's clear the inflight entertainment system was designed 10 years ago, and the reason is, so airplanes are long design cycles, going from locking down the size and shape of the airplane to carrying the first passengers. For us, it'll be about an eight-year process on Overture. We'll freeze the design end of next year, and we'll carry passengers in 2029. And so, it's a super long design cycle. What a lot of companies do, and you see this in the auto world, you see a lot of old hardware companies, as they put software in tech on the same design cycle as fuselage and engines. And the result is, by the time something's delivered, it's already obsolete.

BS: And so, we're deliberately making the airplane modular such that things that can be on shorter design cycles are on shorter design cycles. And so, the wifi system and the inflight entertainment system, we won't decide for a very long time what those even are. We'll leave space and power for them and whatnot, and then we'll go put the latest stuff onboard such that when we hand an airplane to the airlines, it's got the best stuff you can get.

DG: And so, how large will the seats be? The Concorde famously was actually pretty uncomfortable to sit in, but I guess people endured for the certain duration of the flight. Is the Boom strategy similar on the inside, or is it different?

BS: No, it's different. So, it's an all business class kind of setup. And, so relative to the Concorde, there's been such a huge improvement to what you can do efficiency-wise that you spend most of that just on making the tickets cheaper. So, a ticket on Concorde was $20,000, which is not for very many people, not a large market. We'll be able to get that down by about 75%. And then you still have some budget left over to basically make the interior nicer. And so, it'll be a business class style seat, it'll be one of the widest seats out there, a big window, a 25-inch screen in front of you that you can dock your laptop into, and actually work on a big screen if you'd like. The seat reclines. It's got five positions. The one thing it doesn't do is lie flat, because when the flight is three and a half hours instead of seven or eight, you don't need to sleep on an airplane. You can sleep in a real bed before you have to get onboard.

DG: Right. And what speed will Boom fly at?

BS: We think about it in terms of the flight times more so than the miles per hour. So, New York to London will be three and a half hours instead of six and a half or seven, wheels up to wheels down. That means you can leave in the morning, make a late afternoon or dinner meeting in London, and then catch an evening flight back, and you arrive in New York in time to tuck your kids into bed that same day. Or, across the Pacific, today, let's say you've got a Monday morning meeting in Tokyo. Today you have to leave on Saturday. You get there end of day Sunday Tokyo time, you try to sleep in a hotel room, you wake up the next morning, you try not to sleep in your meeting, and by the time you're back home, the whole thing has taken a minimum of three calendar days. And you better not make any other decisions that week because you're so messed up from the jet lag and the flying that you shouldn't trust your brain.

BS: And what you can do when you double the speed of the flights is you actually save entire calendar days. So, instead of leaving Saturday, you leave Sunday. You sleep in the best flat bed seat there is, which is the one at home. You leave Sunday morning. You arrive Sunday afternoon, say, San Francisco time, which is Monday morning Tokyo time. So, you're awake, they're awake. You can do a whole day of meetings, schedule an overnight flight back, and you're at home in 24 hours after you left and there's no jet lag because you never had to transition time zones. So, it's a lot faster.

DG: Will you be able to fly in the near term over the Continental US or is that not possible?

BS: Not supersonic. One of the insane things that's a political fallout of Concorde is we literally have a speed limit overland in the US. The regulations say thou shalt not exceed Mach 1. And extensively, that's about noise. If it were really about noise, it would've been a noise limit, not a speed limit. The history of this was Concorde was a European project. This was the height of the Cold War, so Concorde was established by treaty in 1962 between the French and British governments. It's amazing the thing ever flew because they wrote all the documentation in French and in English. They built two factories for the price of four because they couldn't decide where to build it.

BS: But to cut to the chase, the Americans didn't have supersonic, the Europeans did, so we said we can't have any of that sonic stuff. So, we're starting out focusing on routes that are mostly over water. That's actually where most of the opportunity is, because those are where the flights are longest and you get the most benefit from speedup. And then in the second generation, we'll fly overland. In a world where you can get from San Francisco to Tokyo faster than you can get from San Francisco to Washington, DC, the entire California congressional delegation will beat down the walls of the FAA to get the regulations changed.

DG: And so, are you going to fly it at .999, or are you going to wait for a regulation change?

BS: So, overland we will fly at .94, which turns out to be the... that compares to .85 on the fastest commercial aircraft today, and .78 on the typical aircraft you'd actually fly transcontinental today.

DG: Right.

BS: And at .94 turns out is the fastest you can fly subsonic without risking accidentally going supersonic when there's a gust of wind.

DG: Interesting. Spontaneous combustion there. So, you yourself have a pilot's rating. You're instrument rated, I believe, right?

BS: Right.

DG: Are you going to be flying the Boom aircraft?

BS: How could I not? So, XB-1, the answer sadly is now. It's a single-seat airplane, and our test pilots are incredibly credentialed. Our chief test pilot did 200 carrier landings, many at night, in an F-18. Was an F-18 test pilot. They were one of the first flights, the Virgin 2 F-18. Our other test pilots an F-22 test pilot. And so, I think they might let me taxi it around on the ground, but I don't think they're going to let me fly it. But Overture will be like any... In principle, it will be more difficult to fly than a Boeing or AirBoss, and I can't imagine not getting my turn at the controls.

DG: Will there be a flight simulator... FS2020 is coming out. Is there going to be a Boom muddle for FS2020?

BS: Let's just say that's a really interesting idea.

Overture vs Concorde

DG: Okay. Great. We're excited. I grew up playing a lot of FS. Excited if there was a Boom. So, when is the Baby Boom going to fly, and then when is the real Boom going to fly?

BS: So, if you walk out into the hangar today, what you see is an airplane that is literally nine business days away from complete. It's right up against the finish line. The landing gear just went in, the engines went in. I think they're putting the canopy on the cockpit later today. And, then it goes to the paint shop, and we'll reveal the XB-1 on its own wheels on October 7th. And so, I'll plug this for a second. If you go to boomsupersonic.com/xb-1, you can sign up for the rollout event and be amongst the first to see it.

BS: And so, that'll rollout in October. And after that, we go into ground testing. And so, you want to debug everything you can on the ground before you go fly it. Of course, if software crashes, it's annoying. If an airplane crashes, people get hurt. So, you shake out all the bugs you can on the ground. We'll be Mach 2 by the end of next year in the air, and then Overture is about five years behind XB-1. So, Overture will rollout in 2025. It'll be in flight testing in '26. Typically, supersonic aircraft require about two years of flight test to certify with the regulators. We're expecting more like four on Overture just because it's more complex and I think the safety bar is going to go up, on the heels of 737 MAX debacle. So, first passengers by the end of the decade, and in the early 2030s, we'll be building these things as fast as we can, getting them out there for people to fly on.

DG: And so, the Concorde took the combined effort of the two largest... Well, two of the largest European economies, billions and billions of dollars, maybe small fractions of GDP. Will Boom need a similar amount of capex investment, and if not, why basically?

BS: So, fortunately, the answer is no. It turns out when you have unlimited government financing, you tend to use it.

DG: Right.

BS: And so, Apollo and Concorde really share that same historical narrative. Both 1960s, both Cold War era glory projects, where the goal was to show that you could do something technologically impressive with the entire resources of a country. And you can, but it turns out that when you do that, it's a bridge to nowhere. Today, if you want a Lunar Lander or a supersonic airliner you've got to go to a museum rather than look up in the skies.

BS: And so, they had no economic constraints. In my view, that was a bad thing, because they didn't have to build a sustainable economic model. They didn't have to learn how to operate with limited resources. And so, 50 years later, one, we get to stand on their shoulders. We also get to leverage a lot of what's been developed elsewhere in the industry. And this turns it into an engineering and safety testing effort, not an invent new technology from scratch effort.

BS: And so, we estimate we're going to need about three quarters of a billion in equity before IPO, which it's a lot of money, but it's an obtainable amount of money, and we deliberately structure our technical and commercial milestones relative to our financing milestones so we can get the valuation of the company up and get access to the capital we need without diluting out everybody. So, my goal there is to make John Paulson very happy on the day of IPO.

DG: Are you going to let John Paulson fly Boom, or are you going to deny his request?

BS: Yes, we're going to be huge jerks about that. That's how we like to roll.

DG: Very interesting. And so, Overture is the proper aircraft, or is that still a scale model compared to what the proper is?

BS: No, Overture's full-scale.

DG: Full-scale.

BS: It's the first full-scale airplane. So, that's what you see behind me here. It's 65 to 88 seats, depending on how close you put them together. And, that's our first airplane. What happens after Overture is actually pretty interesting. If you look back at history, so you and I, and I imagine most of the people who are watching now, are too young to have lived through a speedup. So, the last time we did was the late 1950s, early 1960s, when we went from props to jets. And what happened then was, for example, the 16-hour flight from San Francisco to Honolulu turned into a six or seven hour flight that it is today. You might think, "Oh, people would spend less time on airplanes," but they actually spent more time on airplanes because it was more worth going places, and places were more accessible. Travel to Hawaii went up sixfold in the first 10 years of the jet age.

BS: And so, if we see the same thing happen with supersonic, which I think we will, we're going to find that when Sydney is eight hours away, not 16 hours away, we might choose to go down under more often. And so, I think you'll see an explosion in travel just as that time barrier... It's not the speed barrier that matters. It's the time barrier. Break the time barrier, there's going to be more travel. And then what we'll find is this 65 seater is way too small, and we'll need to build a second generation aircraft that is larger. And it turns out, when you go larger, this is true subsonic, but it's even more true supersonic, you can make the aircraft significantly more efficient.

BS: And so, think of it as still two pilots but more passengers. Think of it as the volume of the aircraft is cubic with its dimension, but the surface area is only quadratic, which means as you go bigger, there's more skin friction drag per passenger. Moreover, there are some other things aerodynamically that don't work on a smaller airplane but they work in a big airplane. And so, that lets' you build a second generation aircraft that's larger, therefore it's more efficient, therefore it can have more range, higher speed, and lower fares, all of which is going to translate into more people flying, which will translate into a third generation aircraft that's larger and more efficient and so forth.

BS: So, you kick off this virtuous cycle that we haven't had for half a century in aviation, where economy beget speedups. And so, we'll see Overture 2 and Overture 3 be larger, they'll be more efficient, there will be more new technology on them. And I think within our lifetimes, we're going to find that the cheapest fare is the fastest fare, and if that sounds just impossibly good to believe, too good to believe, remember that the propeller flights to Hawaii don't exist anymore. That's because the same thing already happened.

DG: Yes. Very interesting. And on the topic of aerodynamics, the Concorde obviously was famous for its crooked nose. Why do away with that design? What did they get wrong there?

BS: Yeah. Well, so, do you know they had the droop nose?

DG: I assume it was because it was only sufficiently aerodynamic at high speed or something?

BS: Not exactly. You do actually want the pointy high nose for high speed, but the reason they had to lower it was so the pilots could see the runway to land.

DG: I see.

BS: They literally couldn't see over the nose of the aircraft, which was too long and pointy. And XB-1 and Overture also have long, pointy noises. But today, we have this amazing thing called a camera, and a retina display, and this is what we're doing in XB-1. Literally the top half of the pilot's primary display has this camera toggle button you can hit, and it flips over and you get all your flight controls overlayed on top of what is a virtual window through the nose of the airplane. So, you get better runway visibility than you get with a traditional subsonic cockpit, and you don't have all the complexity and failure modes and weight of this moving nose mechanism.

BS: So, it saves a bunch of weight off the aircraft, and weight is evil on airplanes. Whenever the airplane gets heavier, it needs more thrust to hold it up. That means it needs more gas. The gas weighs something. Then the wings have to get bigger and the engines have to get bigger, and it becomes this vicious cycle. One pound of additional empty weight translates into roughly three pounds of total airplane weight, just because you have to carry more fuel. It's really, really bad. And so, anything you can do to get weight out of the airplane really helps you. And so, we'll wave goodbye to the droop nose.

DG: Good rhinoplasty upgrade.

BS: But it turns out the nose design's really important. It's essential to the whole airplane working. So, the way a traditional airplane flies is you've got these sort of teardrop shaped wings, and that shape serves to accelerate the air over the wing relative to the air under the wing. You get a pressure delta, therefore lift, and you can land with the nose just up a little bit. But a delta wing aircraft, if you look at the wing area, there's a lot less wing area than there is in a subsonic aircraft. It's a teeny, tiny, unbelievably small wing, and that works in supersonic speeds because you're going so fast, you've got a lot of airflow over the thing.

BS: But in subsonic speed, the physics are actually completely different. You come in with the nose high, and you're in what's called vortex lift. So, the nose plus the leaning edge of the wing generates this swirling airflow, and again, Bernoulli's principle kicks in, that the higher velocity swirling air generates a lower pressure region. That generates low pressure above the wing relative to below the wing, and the delta pressure gives you lift. Well, what's interesting is those vortices can really mess with you if you don't get them exactly right.

BS: And so, there's a vortex that comes off the nose of the airplane, again, sort of a lower pressure region. And I'm pretty sure we've all seen those YouTube videos where it's like airplanes landing sideways and crosswinds, part of the testing, and so you have to worry about those cases. And what we found is one of the hardest things to get right aerodynamically was that nose vortex would go... So, that low pressure region would go across the fuselage of the airplane, and then it would sit next to the vertical tail, when you're crabbed into the wind, and what your tail is supposed to do is have a high pressure region there that's going to cause the tail to weather vein the whole airplane to get it straight again.

BS: But with the low pressure region in the wrong place, when you go sideways a little bit, it would want to go swap ends on you. And so, it's what we call in aviation not a good day. And so, we had to do... You were talking about rhinoplasty. We went through... We called it giving the airplane a nose job. We went through many iterations of nose, and if you look at the XB-1 nose, it's subtle, but the whole thing is flattened a little bit, it's tapered in a really complex way. It's that nose vortex had to be just right.

Rolls Royce Partnership

DG: Beautiful. Beautiful. Now, on the topic of speed, obviously something that strikes me as something that matters for your project is the engine of the airplane itself. I believe you guys somehow managed to convince Rolls Royce to build for you. How did that happen?

BS: Yeah, so this was a breakthrough moment that happened just a few weeks ago, where we got Rolls Royce to speak publicly that they're working on an engine design for Overture, which is huge, because without an engine, airplanes don't really fly. It becomes a very expensive glider.

DG: A Fred Flintstone aircraft.

BS: Right. Exactly. I'll tell you the story of this. It's one of the things that I'm most proud of, and it literally went back five years. So, we knew... I think I had my first fall with Rolls Royce before I had actually onboarded the first employee, which literally me and a couple advisors and Rolls Royce started to talk about engines. We knew it would be the long pole in the tent. And, if you look at that relationship over five years, there were a couple of key inflection points where we were able to really move it forward, and I can tell some of those stories because, I don't know, I think they're just fun stories. One was around the time we were raising our Series A, and so at this point, we had raised a few million dollars in seed funding, but not enough to build an airplane or do anything interesting. Our secret fear was that this company would come and go without ever having built anything real.

BS: And so, we were like, "Well, how do we raise $30-odd million to go build a supersonic jet? And we had potential investors, and the smart ones were asking questions like, "Who's going to build the engine?" We were able to get phone calls with Rolls Royce, and of course they would say, "Who in the world is investing in this company?" And they all wanted to talk to each other. And so, what we ended up doing was we threw a big party. We built a full mock-up of XB-1 out of styrofoam and hard coat. We basically bet the company on it. We spent a non-trivial percentage of all the money we had in the bank to go build this mock-up and throw a party. And we invited everyone we could think of. So, we invited Rolls Royce and GE, and we invited all the airlines we could get to come, and we invited prospective investors, and we invited half a dozen former Concorde pilots and engineers that we could find, because we were like, how can we add maximum credibility to this unveiling of a paperweight?

BS: And so, we threw a big party, and we very proudly said, "This is XB-1 in mock-up form," and people were excited by it. And then the next day we used for Biz Dev, and so we had prospective Series A investors, and we had Rolls Royce, and we took a deep breath and we said, "Okay, Rolls, would you be able to do us a solid and meet with some of these investors and tell them why you like Boom, why you flew across the pond to have this conversation?" And then we went to the investors and we said, "Well, we understand you like to add value. Can you show that to us by telling Rolls Royce why you think this is a really interesting company to fund?" And then we held our breath and we put them in a conference room together and basically watched as they closed each other.

BS: And that really accelerated... It made our Series A happen, and it really accelerated engagement we have with Rolls. And then, so that's inflection point number one. That got us to the point of a little bit of technical work and regular quarterly meetings. Did not get us an engine. And we were trying to figure out how to get to the next piece of it, and the next inflection point was in early 2018, and our technical contact over at Rolls invited me to give the Royal Aeronautical Society Jeff Wild lecture, which is this... It's a real honor to do this. Usually, it's like the head of Gulfstream of somebody really impressive that gets to give this talk. And it's ostensibly at the Royal Aeronautical Society at Darby, but it's actually hosted at Rolls Royce. And in reality, the audience is 300 Rolls Royce employees and like five people from the public.

BS: And so, I thought, "Well, ha, this is my chance to pitch to 300 Rolls Royce employees all in one go. And my thought was, "Let me see if I can inspire them such that if for some reason they don't want to do this with us, they will then have a morale problem on their hands." And so, I got up and I told the Boom story, and I talked about how small numbers of people can change the world if they're willing to be seen as crazy, and it went over fairly well, and then that night, I had dinner with the head of strategy of the company. He was kind of the key decision maker on what new things they'll go do. And, it was this very traditional business dinner, like you'd expect.

BS: And at the end of it, I said, "Well, let's go for a walk," and he's like, "What?" I said, "Let's get outside, let's go for a walk," and all of a sudden... There's something magical about walking meetings, and something magical about walking biz dev. All of a sudden, people get way more candid, and they ask you the questions that they really have on their mind. I remember he asked me, "What do you really want from Rolls Royce? Do you want us to put out a press release so you can fundraise? Do you want us to invest in your company? What do you want us to do?" And I said, "Well, I've heard your in the jet engine business, and I'd love for you to build us some jet engines. And this was a, "Oh," moment for them, because they realized that we were dead serious about actually doing this, not just looking to build something cute that Boeing would buy.

BS: And after that, again, the engagement went through a step change, and then it got to a point where we would regularly get our engineering teams and regularly get our business teams together, and we got to a point where they had confidence in us on the business side and confidence in us on the technology side, that they knew they actually had an engine design that would work. And, then we were able to get that across the finish line for announcement, like I said, just a couple of weeks ago.

DG: It strikes me that if there's one lesson here, it's that Blake getting dinner is a great idea. It seems like it worked with John, it seems like it worked with Rolls Royce.

BS: Right. So, it turns out the secret to success is eat.

DG: Yeah, exactly. What are you putting in their drinks?

BS: We're being tongue-in-cheek about it, but there's a real point there. People get very guarded in conference rooms, but informal settings brings out people's humanity. And this is one of the reasons why Zoom is never going to replace travel.

DG: Yes.

BS: Is, you lose all the informal interaction, and you lose something like half of the actual communication content. And so, getting people in informal environments, making it disarming, inspiring candor, being candid yourself, is really important for making some of these key things happen.

DG: When inflight entertainment started in maybe 2006, '07, '08, there was a flurry of activity around letting people in airplane message each other. Is Boom going to have IRC on the airplane?

BS: Are we going to have IRC on the airplane... I have no idea.

DG: What will the food service be just over three hours? Are you guys just going to serve coffee, or is there a quick caviar service planned?

BS: So, it's up to the airlines, obviously. We're putting good galleys in there where they can go do whatever they want to do. But it's an interesting contrast between what Overture will be and what Concorde was. So, on Concorde, they had a gigantic mock meter, a huge screen in the front of the airplane, and I went through one. But the captain would get on the PA and congratulate everyone for being supersonic, and they'd come around with champagne and caviar, and the whole airplane would have a toast. I imagine the first few Overture flights will probably be like that, but I'm looking forward to the day when passengers find that annoying.

DG: Right.

BS: It's commonplace, and they just want to get back to their book or their movie or whatever work they were doing. And, when supersonic is unexciting, then we know we've won.

Vertical Integration & Colorado

DG: Yeah. One thing I'm curious to hear you just expand on is I imagine before you started signing contracts with airlines, the idea of vertical integrating must've come about quite a bit. I imagine also investors were interested in it. How did you think about potentially doing that, being the first, I guess, manufacturer to also be the airline, and why did you decide not to go down that path?

BS: Yeah. It was actually... So, when I told the origin story of Boom earlier, I skipped a step. The truth was, I didn't have the courage to look at supersonic in the first go. But I could embrace the idea of building an airline. So, the first week or two in aviation was modeling out what would be the best airline you could build with today's airplanes. And I got down path with that. I concluded there was just no durable differentiation. If you're building off of somebody else's airplane, ultimately your competitors could just go copy whatever your innovative service concept was, or they'd throw their regulators at you and hamstring your ability to be streamline.

BS: So, I thought, okay, well, this model actually needs a better airplane to succeed. And so, we got our start planning to be vertically integrated, airline and airplane. And it turns out that while it's a very exciting idea, because there are innovations you can deliver when you simultaneously control airplane, airline operation, and airport, if you want to just call out things for 30 seconds, about baggage handling could be better, if you started from a clean sheet of paper, you could change all those things. You could imagine things a lot better than the crazy baggage system we have today.

BS: But the challenge turns out to be that it's much, much harder to bootstrap the business. Investors want to know that you've got product market fit, the customers really want it. And you can't pre-sell tickets to flying public 15 years out. Moreover, suppliers don't buy it. You have to convince the Rolls Royces of the world that this is real, and having airlines is part of how you do that. And then there are a lot of other challenges. Airlines are a hard business in their own right, and we got convinced, let's do one hard thing at a time. Supersonic jets, that's hard enough. You don't have to go build a global network as well.

BS: And the airline industry is also... it's very Balkanized. We have a small number of airlines at each major geography. We don't really have a global airline. And the reason for that is that aviation's tied up with national prestige around the globe, and so you have countries who have their flag carriers, and if you want to go, for example, set up shop with your own airline in Dubai, my expectation is the government would say, "Well, that's very nice, but we already have that. It's called Emirates."

DG: Yes.

BS: And so, in practice, you would end up with all these market entry challenges. And so, you want to partner with great airlines, for a bunch of reasons.

DG: You mentioned earlier on you had a whole list of ideas you were contemplating before you chose Boom. What do you think is the Boom of today? What would you be working on if not Boom?

BS: Yeah, great question. I have this deep belief that there are more interesting and important problems in the world than people to go work on them, or at least people choosing to work on them. You tend to get told in Silicon Valley that if you have a good idea, there are half a dozen high quality teams already working on it, and it felt like a lot of large numbers of by standing startups. I think it's just not true. I don't think it's true in tech. It's definitely not true outside of tech. Some of the most important problems are sitting in plain view just waiting for someone to lock onto them. Like the morass that is air transportation today. We all experience it. But prior to Boom, no one was really working on it.

BS: And I think there are many other things that are like that. I'll give a couple of my pet favorite ones that I wish maybe someone on this call will go tackle. And we've all that experience where we're sitting at a traffic light, waiting to go, and there's actually on one in the intersection because the right's in the wrong state. And if we have any hope in ability of autonomous vehicles, couldn't we at least build smart traffic lights, where each intersection would network to the one over, and they would know when the cars are coming, and if someone's about to run the light, they actually wouldn't turn the other one green so there couldn't be a crash?

BS: And I think you could actually save a lot of time on the ground, and there are other things that are like that. A while ago, I was like, okay, whenever I'm stuck in traffic, I have to think about how to make traffic better. There are things like that, that are just massive problems hiding in plain sight, where there's just an opportunity for a huge breakthrough. It doesn't have to be technologically sophisticated. It just has to be locked onto the right problem.

DG: I like that. How would you pitch that? Something like, jaywalking as a service, or running red lights.

BS: Yeah. There's a killer model in this that actually makes it a multi-billion-dollar business, but I'll keep that to myself for right now.

DG: Well, people can find you and reach out to you, and maybe you can give them that secret, the cheat code. Very interesting. Okay. One question we got from someone listening that I thought was interesting is, you're in Denver, obviously. Why are you in Denver? Is it because of marijuana? Are there other reasons, altitude?

BS: So, when I first told my friends... I remember first posting on Facebook that I'm moving to Colorado to start a new company that would be better in Colorado. Everyone was like, "Oh, you're going into marijuana." And I was like, "No, no, no, guys, it's a different kind of getting high."

DG: Oh, man, I was going to make that joke. Great. Well done.

BS: So, the reality is, aviation is very spread out relative to tech. It was clear from day one that a necessary ingredient in the success story, which by the way, I think it's really helpful to go imagine your success story with somebody else doing it, think about what that history's going to go like, and then that becomes your strategic plan, but we can come back to that if it's interesting. But so, it was very clear that we have to have a dream team, and you have to go collect all those humans in one place because they're very spread out today. And, then, so, it becomes, well, where is the best place to go collect great people? And where do you have a sufficiently low cost of living, sufficiently low cost of real estate that the whole thing is financially more attractable?

BS: And I collected the first half a dozen people to be the first couple employees in the company, and at the time, I thought the right answer was going to be Long Beach. We were going to go buy the Boeing C-17 plant they were shutting down, kind of the way Tesla bought the NUMMI plant that GM and Toyota had shut down. And it turns out that everyone who wants to live in Long Beach already lives in Long Beach, and you say, "How do you want to move to Long Beach and work on supersonic jets?" And you can just see the energy drain out of their faces.

BS: And we said, "Well, okay, well, where would you move to work on this?" And people were like, "How about Denver?" And it turns out that people love Colorado. Cost of living is reasonable. If you come from San Francisco, it feels free. You've got mountains. You've got all kinds of outdoors things. You've got great schools. This was important to us. You've got good experiences for a large range of demographics, whether you're single and you want a singles scene, or you've got kids and you care about schools, or you'd rather be out in a rural environment and have more land. All of that is possible within 30 minutes of Boom's headquarters.

BS: And so, if you're optimizing for talent, and your talent starts out diffuse, you pick a place where the talent will be happy to concentrate.

DG: Right. That's very interesting, and it does seem like you timed this a little bit early. As you know, there's a large exodus, reported exodus. We'll see what actually happens. So far, I think it's more of a retirement plan. But, there's a purported exodus from some of the coastal states.

BS: Everyone always declares if X happens, I'm moving to Canada, or I'm moving out of California, or whatever. Then the reality of it often seems to be very muted.

DG: And just like the body overreacting to COVID with a cytokine storm, there's a bit of a societal one, and...

BS: Well put.


DG: Blake, this is really cool. I do think you are building one of the most inspiring startups of the decade. I cannot wait to use it. I do not want to fly it, but I would love to see it in Flight Simulator, so do let us know if you can make that happen. I think this is pretty inspiring. We have a lot of people at Pioneer who are working... A lot of people are working on very attractable problems, where you can demonstrate progress early on. Others are working on slightly more moonshot-y things, and I find that in the moonshot world, you have earnest moonshot people that are very excited about pragmatic approaches like you were, counter positioned against status-seeking moonshot people who are very interested in working on something big because it will attract attention from people they admire. And, I think it's very important to have people like you to counter balance against the black hole of those other TED-talker status maximizers. So-

BS: Very kind of you.

DG: I appreciate... Yeah, doers plus moonshot I think is a good combo.

BS: It's a good combination. There is something special about picking something that inspires other people.

DG: Yes.

BS: In my experience, the best way to do that is pick something that inspires yourself, because then you become contagious about it. And, when you're in that mode, you can collect great people who will want to go help you make it happen. I think that's how you make a moonshot actually happen, is you have to collect the talent.

DG: The bat signal.

BS: Yeah, the bat signal.

DG: The founder raises the bat signal. In many ways, that's maybe their only job.

BS: It's pretty true.

DG: Well, thanks again, and I do hope we get a chance to meet soon, and maybe I'll see you at the unveiling. I don't know.

BS: Well, that would be great. We have a flight simulator here that you can fly.

DG: Great. Great.

BS: So, we'll be happy to host you out here in Denver, let you push forward on the throttle.

DG: Would be great to ascend to heights in Denver of all kinds. All right.

BS: All right. Thank you, DG.

DG: Thank you again.

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