Joyce Haven (00:00:00):
Okay. I think that I’m going to just go ahead and kick this off. And just a reminder, I’m recording this. So we can publish later. As mentioned I just want to be, wanna be really transparent about that. So to kick us off, Aerospace is slated to grow to over 430 billion in value in the next 3 years. Most media seems to pay attention to either super big personalities in the space sector or on the flip side they they kind of pay attention to big names in the airline industry. But there are a number of rising, smaller, very nimble players that are up and coming in aerospace and at Runway, we’re fortunate enough to have two of these companies as members. I’ve invited them here today to talk about how the industry is growing and changing.

I’ve also invited Emeline Paat Dahlstrom, the founder of Space Base in New Zealand. It’s a hub that’s dedicated to expanding the business of space and creating a thriving ecosystem around space industries. So I’m going to have each of you tell us about your companies and about what you do. And I’m going to start off with Bill Bruner, who is heading up New Frontier Aerospace.

Bill Bruner (00:01:24):
Thank you so much. And thanks for having me on this pioneering I almost said podcast but Twitter Space. I’m Bill Bruner and I am CEO and co-founder of new frontier aerospace, we’re an equity-funded start-up manufacturing, advanced net carbon-negative hypersonic aircraft for commercial and defense applications.

Our aircraft are intended to transport passengers or urgent cargo up to 10 times faster than today’s commercial airliners. So our tagline is 2 hours to anywhere on earth flying at a cruising altitude of about 160,000 feet, which is not space. So, people say, well, you’re flying a rocket-powered vehicle. This must be space. It’s not, we’re just a really fast high airliner. And we take off vertically and land vertically sort of like the reusable rockets you’ve seen on, on TV.

Bill Bruner (00:02:34):
But again, we’re not going to, or from space. So what we’re doing is slower and easier than what they are doing. And so we, that enables us to operate from existing hella ports, Verta, ports, and airportsfueled with liquid natural gas sourced from bio sources instead of kerosene. So the aircraft emits less CO2 than conventional aircraft. And our fuel pathway is net carbon negative, which significantly reduces greenhouse gas emissions from agricultural landfills, municipal waste, and other bio based sources from, where we get our fuel from. So we’re going to re revolutionize air travel in the coming decade. We’re hoping to carve out a share of what Morgan Stanley says is going to be an $800 billion hypersonic point to point marketplace. So I could go on for hours, but I won’t.

Joyce Haven (00:03:33):
Fantastic. Thank you so much, Bill. I also would love to hear from Jon Gibbs at Savion Aerospace. Tell us what you are doing and what you’re excited about right now.

Jon Gibbs (00:03:48):
Great. Thanks. So Savion Aerospace is a team of about six. We are basically developing and selling, a private jet mile, very similar to an airline mile. The private jet mile is a travel credit you can use for flights on private jets. The difference is that it’s a distance based credit. So no matter what you pay for each mile, you get to fly essentially one nautical mile. You can buy a series of credits for a trip. We’re fulfilling those miles today with existing private aircraft as a broker, we don’t operate them, but our plan is to use the revenue to generate what we call eco miles, which are powered by what is described as LNG, which is, you know, really the optimal green and energy dense fuel for aviation.

Jon Gibbs (00:04:34):
And we are developing our own aircraft called the Savion jet and our own remote operations. So all the planes are flown remotely. So those eco miles that are flown remotely with our Savion jet using LNG will be about half the cost, if not a third of the cost of present day private jet miles. So the goal is to get those eco miles down to the cost of flying on a commercial aircraft and if we do that there will be a much, much stronger market incentive to switch to a greater, more sustainable fuel than, you know, just the regulations could ever achieve. So that’s what we’re about and happy to be on this Twitter Space.

Joyce Haven (00:05:18):
Thank you. And Emeline, tell us us about what you’re doing all the way down in New Zealand.

Emeline Paat-Dahlstrom (00:05:25):
Yeah. Again, thanks so much for, for having me. So yeah, I’m Emeline Paat Dahlstrom and I’m the CEO and co-founder of Space Base and maybe just a little bit more of my background, which sort of leads to my motivation for, for creating the company is that I’m originally from the Philippines, lived all over the place, Canada, Europe. And then I immigrated to the US about 25 years ago, split between Washington DC and Silicon Valley. My background’s in Physics and space science, but I really worked more on program development, operations and management over about three decades working on space startup companies ranging from space tourism with space adventures, to building and designing lunar landers and rovers with Odyssey Moon and Moon Express, Cirrus robotics. I’ve also been involved with a space in tech educational institutions where Joyce and I worked with Singularity University and also maintains a network with the International Space University. About five years ago.

Emeline Paat-Dahlstrom (00:06:29):
About five years ago I founded Space Base with my husband and moved there and really with Space Base, it’s a purpose-driven consultancy focus on the democratization of space. What does that really mean? Basically, we’re built on the premise that, you know, the future of humanity is tied to our outward migration off-planet and basically leveraging space to solve problems on earth. And if you actually believe this premise you know, we should not leave anybody behind. So our really main goal is to make sure that there’s this democratization of space where everybody has equal opportunity for leveraging the space industry and being part of the space economy today. So we capitalize on space ecosystems as a service. And so for the last five years, we’ve been prototyping here in New Zealand and catalyzing the space ecosystem through education, innovation, and community building. We’ve run like a hundred educational presentations and training programs to run regional space challenges.

Emeline Paat-Dahlstrom (00:07:45):
And also we’ve run two online space incubators as well. And we also basically consult and help, you know, strategize with governments and influence national and regional directions. And we tend to think that with the last five years, our impact has now been moving through the thriving and growing space ecosystem that is New Zealand right now. And so that experience basically we want to share to the rest of the world. So we’re building a playbook for building space industries, where normally it doesn’t exist. And we’re expanding our influence around the world. So I think I’ll, yeah, I’ll just end there.

Joyce Haven (00:08:34):
Thank you. That’s great. I am always excited to hear what everybody’s doing and working on, and every time I come across particularly aerospace startups I’m always very fascinated because it seems, like you talked about the democratization of space. You know, it seems like flight, in general, was for a very long time something that only large industries or nation-states could do. And now to have startups actively in both aviation and in space is just, is just still kind of amazing to me. So I think this is fantastic.

Emeline Paat-Dahlstrom (00:09:22):
Yeah, just to add to that as well. And I can, I think the, the main reason leading to that is really kind of the, the exponential technologies that are happening today where about five to 10 years ago, they did not exist which then democratize basically, and demonetize a lot of the, the technologies that most of it is now off the shelf.

Joyce Haven (00:09:46):
Yeah. I remember the first time I saw you know, I think the first time was with you, Em, the first time I saw actual cell phones in a satellite that there were, you know, that you just shove a cell phone in a satellite as a sensor and that was just kind of amazing to me.

Joyce Haven (00:10:03):
So with that, I’m going to jump in and I’m going to start with some questions. And we could just bounce around. The point is to have a really great discussion. And so the, the journey is a little bit more important than the destination or getting through all of the questions. So with that, I’m going to kick off and talk about green technology in particular. So flight of all kinds has traditionally taken a lot of resources and it can be a heavy polluter and things are changing. I know this. And so what kinds of eco-friendly and green tech innovations are you seeing and working with?

I’m going to kick this off by kind of throwing the ball here to Jon, because I know I know both he and Bill are doing things in that space. So I’ll start with you, Jon. What are you seeing as far as green tech? What are you doing and what might the future hold there?

Jon Gibbs (00:11:06):
Yeah, I think so. So I would say there’s two things and I’ll let, they’ll take the second one. So the two things that I think are there’s actually a financial innovation that’s taking place that’s really important. And also the ability to, I call them consumption devices, but basically the big, the ability to create vehicles that consume something other than a crude oil.

So on the financial side, you know, we are trying to be one of the innovators there, but the issue is the problem is that most of the capital that you need, that you talked about, is very low risk capital. So it’s tied up in debt markets. So you have to have some sort of collateral or things like that. So on at least one of the things that we’re trying is this travel credit, where it goes directly to the consumer, and then you can use revenue for that.

Jon Gibbs (00:11:57):
So that would basically let all the innovators skip over the supply chain for capital and for the low-risk capital at the scale that they need. And I don’t think, I think all the technology that we need you know, at least has been somewhat demonstrated there’s no nuclear fission type of problem.

But again, the current capital structure that, kind of came into place when jets were made, which was basically to lease everything you have a mortgage on a house doesn’t really, isn’t really designed to support innovation. And so we’re trying to do the financial part of that, but I’ll let Bill talk about kind of the consumption of greener fuels on the technology side, where the capital would actually fund.

Joyce Haven (00:12:46):
Okay, great.

Bill Bruner (00:12:48):
Thanks for teeing that up. Jon so first of all, I will say in all, in all honesty that I’m writing a lot on the coattails of what Jon has been doing for 20 years, which is to try to move the needle on convincing the status quo that there are lower carbon alternatives that they are technically been proven and that the fuel pathway for, you know, sort of producing those fuels actually is net carbon negative. But that argument has not been compelling for many of the reasons that he just said, which is the risk aversion of the current capital structure in air transportation.

So what we are trying to do is leverage the fact that the world is changing, and there’s an enormous amount of pressure on the airline industry, even though it’s sort of resisting that change to do something about the billion tons of greenhouse gases, that current airliners dump into the atmosphere every year.

Bill Bruner (00:14:01):
And, you know, the consumer and governments around the world are starting to say that’s not acceptable. And the industry is moving very, very slowly. I mean, their targets I think are 2030 and all of that stuff, but that generally involves transitioning to something called synthetic aviation fuel, which it’s cleaner to make, but it still generates the same amount of tailpipe emissions just about as today’s hydrocarbon-based or fossil-based fuel. And so it’s, it doesn’t really get them to where they say they want to go. The real answer we think is a fuel that burns cleaner and is sourced cleaner.

Bill Bruner (00:15:03):
So there’s a lot of attention being paid to hydrogen, which has pretty much zero tailpipe emissions. However, most of it’s made today from non-renewable sources. And so the overall fuel pathway for hydrogen, which is not very dense and therefore it makes the design problem for airliners challenging because of the huge cryogenic tanks, our tanks are cryogenic, but they’re not as big. So we’re in the sweet spot. It’s a net carbon negative to make liquid natural gas and it burns cleaner than current hydrocarbon fuels.

And so I guess you can say I’m an evangelist now for this. So you know, it’s just right now, not too hot, not too cold, right? So we, we think it’s actually the sort of the perfect fuel for our propulsion system, which is not jets, which is another story in that.

Bill Bruner (00:16:06):
We can go faster than jets without a lot of the inlet heating and combustion instability and unstarts that they have when they go faster than Mach 6, 7, 8, 9. So that’s our argument for sustainability, that we believe, and our numbers suggest, that if we replaced all of the jet fuel that was burned today with our vehicles, air transportation would end up sucking greenhouse gases out of the system rather than contributing them. It’s a wild, that’s a wild statement to make, but we’ve had that verified by various folks. The numbers do check out.

Joyce Haven (00:16:52):
Great. Thank you so much. I wanna, I’m going to pitch this question to Emeline too regarding space, but before I do that, I wanna ask both of you really fast, you know, how does this compare cost-wise with traditional aviation?

Bill Bruner (00:17:15):
Jon? You wanna go first?

Jon Gibbs (00:17:17):
Do you mean the cost of bringing something to market or well…?

Joyce Haven (00:17:25):
The cost, yes. So yes, the cost of bringing something market, but also what the cost to the consumer is going to be roughly, and also fuel costs. Overall. Obviously, those are probably going to ultimately be lower once the infrastructure is in place is my guess?

Jon Gibbs (00:17:42):
Okay. I’ll so cost to the, bring it to market and cost to the consumer. So the cost to bring the smallest commercial aircraft to market. And I would say Bill and I are, are in a way, both going after the same market, which is you buying a seat on a plane to go somewhere on an airline to go somewhere. So the cost to bringing the smallest, one of those to market, which is usually a turbo prop is about $2 billion, right? And the largest venture capital deal, I think was like for a satellite constellation for about 1.3 billion.

So there was already a billion-dollar gap, or really between what venture capital can do and what it takes to actually even get to market in the first place. So the second financial innovation, which I didn’t mention was called the SPAC and the SPACs have kind of been filling that gap.

Jon Gibbs (00:18:29):
So once you’ve got like the high-risk capital, the venture capital do the prototyping, that SPAC is kind of the space between the low-risk private equity, you know, debt-based capital and the venture capital that, that gets you all the way there. So you can SPAC for, I think the biggest ones so far has been Joby at a billion dollars. So if you, the smallest possible plane, you can start with venture capital and potentially SPAC and get there.

So that’s good news. The cost of operating, let’s say an LNG vehicle and this is really why I got into it, you know and it has nothing to do with anything technical about LNG, but the cost of an LNG vehicle is about 70 to 50% cheaper than the cost of, operating the cost of a regular vehicle. And that’s just because you know, Jet A for private aviation is about five bucks a gallon, you know Jet A for an airline’s two to three bucks a gallon, and LNG is about a dollar, a gallon equivalent.

So it’s more about picking the, instead of trying to engineer new physics, like a lot of people do you just pick the commodity that works the best for your business gives you the best unit economics, and don’t worry about the physics.

Bill Bruner (00:19:42):
So that’s a great, great, great answer. And so, so it’s the bottom line is that the fuel is cheaper. I mean it’s cleaner and it’s cheaper. And it’s very difficult for me to understand why we haven’t, why we didn’t, transition to it 20 years ago, but we haven’t had the confluence of forces of people wanting more sustainable fuels. The cost of hydrocarbons has gone through the roof lately. And the fact that you know, there’s just a lot of tailwinds for what we’re trying to do.

But there’s another side of this equation and that is, we’re not building jets. Jets are extremely expensive and complex to manufacture and to operate. I’ve flown ’em. I flew jets for a living when I was in the Air Force and, you know, they throw turbine blades all the time.

Bill Bruner (00:20:38):
They’re very complex and the faster you go, the hotter the inlet air gets. And that becomes a very, very difficult engineering problem, which is why the scramjet, the mach 25s, scramjet is spent or mach whatever 10 plus scramjet has been sort of the holy grail of jet propulsion for the last 50 years, right? So we sort of cut the gordian not on that by saying we’re going to stop doing the air inlet, and we’re going to use the relatively inefficient rocket, but we’re going to use it with an efficient flight path.

It’s called boost glide or boost cruise, and it comes from defense, but we’re going to use it for civilian applications. And it’s a very efficient trajectory. So we’re going to combine this efficient trajectory with cheaper to manufacture rockets, which are essentially just big tanks full of fuel and an engine with a spark plug in it, right?

Bill Bruner (00:21:39):
The turbo machinery’s complex. And when you’re trying to go to orbit, it’s a very, very tough thing to do because you’re operating at the edge of the physics and engineering of a can of metal with hot fuel in it. But we’re not doing that. We’re doing something that’s a lot less stressful and a lot easier to do from an engineering perspective.

So our estimates are that our vehicles will be about 25% of the development cost of your typical 2 billion dollar jet development program, maybe less. And our fuel is, what is it, Jon 25%, 50% of the cost of Jet A? Yeah.

Jon Gibbs (00:22:21):
Right in that range. Yeah. Depending on the day of the week.

Bill Bruner (00:22:24):
Right? So our fuel is cheaper. Our vehicle to development cost is cheaper, and we believe that we can deliver a two hour flight from New York to Tokyo for the same price that people are paying for first class today for 13 hours of sitting in a tube with your closest friends. Go ahead.

Jon Gibbs (00:22:45):
Let me just add one more thing in terms of like the startup cost. So the total cost to get to market, I would say, yeah. You know, between, I would say 300 million for the very smallest vehicle up to a couple billion or so but what the entrepreneur’s job is, is to get the prototype done because once that’s done the traditional capital or the SPAC capital can take over.

So really the cost to market is the cost of the prototype or the cost that you would be responsible for. If you wanted to make sure this new, you know, widget, it got to market. And the cost of a prototype, you know, is between I would say for something carrying a person, you know, as low as 20 to $25 million even lower, if you’re clever, all the way up to maybe I think at the high end, you know, we’ve seen Boom spending closer to a hundred million dollars for that first unit.

Jon Gibbs (00:23:37):
So 25 million dollars to a hundred million dollars are all venture fundable you know things and you’ve got to be diligent about having the right milestones and the matching the cost of each milestone with the venture capital, and also making sure that you’ve got robust demand, meaning someone’s prepaying you for what you’re doing. And if you can have those two things you can, go get the cost to prototype from venture capital.

And again, because of this financial innovation of the SPAC and scarcity and excitement you know, you can easily, several companies have, I would say at least 10, have been able to SPAC successfully or get private equity you know, a level of investment of the 300 to billion dollars that they need after they do that 25 million dollar prototype.

Joyce Haven (00:24:32):
Okay. That’s wow. Okay. So big differences here. Definitely. Emeline, what are you seeing for space as far as more eco-friendly approaches, people trying to think in terms of fuel or the ways that they’re doing things?

Emeline Paat-Dahlstrom (00:24:54):
Yeah. So just focusing on, mainly on the space side of aerospace, which is above the Kármán line. So reusability used to be the holy grail. I mean, that didn’t exist even like five years ago. The analogy, it used to be, that if you’re launching a rocket, it’s just like you’re building a plane. And then at the end of that trip you’re basically throwing it away which is of course not sustainable.

But now with SpaceX, Blue Origin and in even smaller companies like Rocket Lab that’s definitely something that is the trend. And, and I think going forward those companies that are working on rockets today, if they’re not going towards that trend they’re probably going to lose the game. So that’s sort of like wanting this for one with that.

Emeline Paat-Dahlstrom (00:25:48):
Of course it lowers the cost as well for launch. The second level to that is that there are also now companies that are also doing full reusability. So basically satellite delivery that are like space planes.

So again, I’m always talking about startups in New Zealand, because I’m here. So there’s one, for example, one company here called Dawn Aerospace and they’re working on a space plane for satellite delivery and, it’s actually horizontal take-off, horizontal landing. So they can actually fly from any airport if, if they’re successful. And they’re also using non-toxic propellant for their propulsion. And that’s, again, that’s sort of like a trend as well. That’s happening now. And I think the Virgin group is also looking at that for their rockets.

Emeline Paat-Dahlstrom (00:26:49):
The other thing as well, is the on orbit satellite propulsion or satellite propulsion there’s no companies again that are looking at alternatives to the traditional chemical toxic. And so non-toxic propellants are being developed. Dawn Aerospace has also that part of their business line is doing that.

There’s another company here called Zeno Aerospace that leverages basically magnetic force, so leveraging just earth magnetic field to create electric propulsion. So essentially no propellant and then there are other ones that are looking at ion thrusters and so forth. So there’s definitely, I think a trend that’s happening also in the space sector towards greener kind of solutions.

Joyce Haven (00:27:51):
And do you see do you see that those companies in those rising technologies are going to change the landscape as far as the cost of the vehicle is concerned and in a similar way to what’s happening with aviation?

Emeline Paat-Dahlstrom (00:28:15):
Yeah, absolutely. Like, as I said with reusability the production and the cost goes down and so that’s sort of like where everybody’s is going towards. And I think, and just in a sense, I think the whole world is really looking at greener solutions to the challenges that we have right now. I think everybody is definitely working in those, in that direction while it might be a lot more inexpensive in the beginning. But I think that then changes over time when it gets commoditized.

Joyce Haven (00:28:59):
Great. Thank you. The next question I’ve got up has to do with, so during the gold rush in California it wasn’t the folks who were necessarily the miners that were out in the field, looking for gold that were really profiting. It was the folks who were selling the picks and the shovels and the pans and operating mercantiles and things of that nature.

So in aerospace, what are some of the support businesses that are showing signs of being those shovels or pickaxes for this boom and and also maybe more importantly, where are there gaps, where are there things that maybe, you know, would be great for somebody to pursue as a startup to be a support business and Emeline, I’m going to kick it off to you and then move over to Bill and Jon on this one.

Emeline Paat-Dahlstrom (00:29:59):
Yeah. I really like this question because there’s just so many things happening right now. Even from last year and again I’m still looking at the space of aerospace. Last year there’s just so much commercial activity that happened. You know, there’s no companies are working on commercial space stations, outposts there’s a lot more private space flights that happened last year.

In fact, if you think of like space tourism the sum total of the number of private citizens who flew last year basically trumps, all of the private citizens, the total number of private citizens before that. And so there’s definitely a lot of things that are happening on the commercial side. And so as you said, there’s basically a lot more to just launch in the destination.

Emeline Paat-Dahlstrom (00:31:03):
And so everything around that supply chain is needed. And so there’s, you know, from logistics to operations to life support systems. Life support systems, for example, right now it seems that there’s a shortage even in space suits on the ISS. And that’s something that is moving along in terms of research and development, but it’s not top of mind in the past, but now that there’s going to be more people going up there’s those kinds of niche markets that are now becoming really interesting because of that. The other thing is now that we’re looking at sort of more initiatives to actually work and live in space for a longer period of time food production in space is another thing.

Emeline Paat-Dahlstrom (00:32:00):
I mean, it’s a critical thing that we all will be needing. And so therefore that’s another niche market that people should be looking at. So another thing that I’m sort of working on aside from Space Base is I’m also part of the team Ceres Robotics. Ceres Robotics is one of the NASA CLPS companies that are basically suppliers for lunar landers and robots to the moon.

And so another market that’s the trend is also not just lunar earth sorry, LEO or Low Earth Orbit, but also lunar markets that’s probably going to come up in the next five, 10 or 15 years. And so right now there’s companies that are of course working on launch, which we use like SpaceX, Blue Origin, and all of the traditional companies like Lockheed.

And then there’s the landing part as well, which now NASA is definitely driving with their their initiatives for the commercial payload services, but then there’s also surface operations. And so once we land our longevity is determined in being able to have, as you said, those picks and axes and shovels on the surface. And those are critical for long term settlement. And that’s again, another sort of market that I think new companies are looking at.

Joyce Haven (00:33:46):
Great. Thank you. So Jon, for you, are there are there gaps? Do you think are there things you’re excited about or other companies that you’re working with either as vendors or support companies that you wish existed? I’d love to hear about this.

Jon Gibbs (00:34:13):
Yeah, so I guess I have three answers. This is also my favorite question too. So I guess in our particular market segment, which I would say short to medium and even long-range air travel the startup people have done that have been, the picks and shovels. I think magnets is a great one. They’ve done electric motors for a lot of other startups. I think that you should look inward if you’re listening to this podcast.

So it just coincidentally happens that aerospace is in a cycle where vertical integration makes sense. So SpaceX is the most famous one. They’re about 80% regular integrated rocket lab and a MLSEC of the woods is also very Berkeley integrated and they were able to differentiate with the things they built in-house. And then on the kind of the fixed wing, well not fixed wing, but on the aircraft side Joby is also one of those has gotten ahead of the game by being rightly integrated.

Jon Gibbs (00:35:11):
Now it could be completely the opposite case, like in something like food services where like selling, selling in a grocery store is makes far more sense than like trying to send food to someone’s house. And I think NUS was a company that did that tried both, and the prices were like a third of the cost when they sold through grocery stores.

So the last thing I think though is kind of demand aggregations and that’s so point of sale. So Blade has gone public during the pandemic. Surf Air has done great. They acquired another company called Blackbird. So all of those were selling private jet flights and they’ve gotten so popular even before the pandemic, but, but even more so during the pandemic that they’re now, you know, developing their own airplanes.

And I think also Airly in Australia, so point of sale, and I think probably just unit propulsion has been the picks and axes for our particular segment.

Joyce Haven (00:36:11):
Great. Thank you. And Bill, did you have anything to add?

Bill Bruner (00:36:14):
Yeah, I would say that I’m in a completely different industry ,then maybe someday when we’re at Mach 25 we’ll do space, but for right now, all we really care about is getting people in cargo from place to place on earth. And that’s going to be hundreds of flights per day, not like six and so, and millions of passengers, passenger miles per year. And so this, but it’s going to be different than the current subsonic air transportation infrastructure.

So what we’re going to need is sort of an AI based or a highly computer intensive air traffic control system. Much of it that integrates auto unmanned and piloted vehicle, we are going to need advanced manufacturing that can turn these vehicles out at a high rate of speed. Relativity is doing that on the space side. We believe that the hypersonic vehicles of the type that we are discussing will be additively manufactured.

Bill Bruner (00:37:17):
And so if I were looking to support this future, I would get into advanced materials, additive manufacturing, artificial intelligence for the software control of, automated control of these types of vehicles. And I would all also be thinking about how do you, you know, logistics is going to change.

You know, one of our early markets is probably going to be human transplant organs. Because currently they’re sourced from within 400 miles of where the donor lives, you, the donor, the recipient for hearts and lungs have to be within half an hour of one another, or sorry, four hours of one another. Otherwise the organ expires, we’re going to turn, we’re going to create a global transplant organ marketplace that currently does not exist. Right?

And so all of these, you know, we think that there are going to be people take day trips to Tokyo or to Beijing, to do business and then return home so that there are going to be a lot less, there’s going to be a lot less need for hotels and those sorts of things, but a lot more need for you know, sort of food service that can provide food at any time of the day or the night or night, because people’s rhythms are going to be way different than they are today.
Bill Bruner (00:38:52):
So anyway, those are what the, the sorts of changes that we see from sort of be anywhere any within two hours. Transportation.

Joyce Haven (00:39:03):
Thank you. Great answers. I loved hearing all of this. That was my favorite question to write too. Just so you guys know. I wanted to talk a little bit, we talked or Jon specifically spoke to sort of venture related activities and fundraising. And so every sector has its own challenges with that. And I would expect that for both sides of this you guys who are working with earth based flight, as well as space on Emeline’s side.

And I did by the way, intentionally try to cover both things because I wanted to see sort of some of the commonalities as well as some of the differences that were going on in aerospace. So tell me a little bit about how different VC and CVC and sort of working within fundraising is for you guys.

Bill Bruner (00:40:15):
Okay. I’ll start. So as everybody in the sort of startup ecosystem knows that it’s more difficult to raise capital for a hardware startup than for software, because the ROIs are a lot higher when you don’t have to invest in sort of prototyping expensive hardware, it’s much easier. Write a few lines of code, put it out there to get users, put it in, in beta, early beta, late beta, and start generating revenue and clicks and eyeballs and all that stuff. So everybody knows that, right? Hardware’s hard. But when your hardware ask is we’re hundreds of millions of dollars or 25 million to get to a prototype. That’s a very, very challenging or very, very heavy lift, especially when you, and I don’t mean for this to be sort of a, you don’t have to imagine violins in the background.

I’m not, this out a tail of woe I’m just trying to lay out what the environment is. But if you’re flying a rocket-powered vehicle, it behaves like an airplane, but it’s propelled by a rocket. People automatically think it’s space. It’s why I’m sensitive about this. And they go, well, why don’t you go see the space VCs? Well, you go see the space VCs. I go, it doesn’t go to orbit. We’re not interested. Go see the air VCs and the air VCs go well, it’s propelled by a rocket. I don’t understand that.

Bill Bruner (00:41:48):
So, so the challenge sometimes is when you’re trying to do something that is sort of orthogonal to the way things are done today, it doesn’t fit into the categories. And, and venture capital is very sort of stove piped. You know, there are healthcare people, there are software people, software as a service people. There’s a sustainable group of venture capitalists. And so where do the rocket-powered hypersonic airplanes fit?

Joyce Haven (00:42:24):
Right. Right. Everybody has their own thesis. You know, every firm seems to have a specific thesis. And it absolutely is true that if you don’t fall neatly into whatever the thesis category is, it can be a challenge to interact sometimes.

Bill Bruner (00:42:44):
We’re having fun. We’re having fun though. And, you know, people are learning along with us that there are opportunities it’s going to be a big marketplace and we have to, and biggest opportunities are where people don’t expect him to be. Right. And so that’s, that’s our story. We’re sticking to it.

Joyce Haven (00:43:01):
Exactly. That’s great. Thank you. And either Emeline or Jon, did you have anything to add on this?

Jon Gibbs (00:43:08):
Yeah, we also have, oh, Emeline, did you wanna go ahead?

Joyce Haven (00:43:12):
No, go, go ahead first.

Jon Gibbs (00:43:13):
Oh, I was going to say, we also like, they’ll have many scars. I stopped listening to what the VCs and CVCs were saying, and just look at the data of what they’re picking and investing in. And I think there’s probably two, two or three things that cause VCs to move.

And it’s difficult because you just don’t know what the goal post is. Right. And if you knew what the right goal post is, as an engineer, you’d probably hit it. But I think, so I think as a founder, you should be talking to at least a hundred people every round. So, you know, people close roughly one in a hundred investments. So just start out with that.

The second thing is you’ve gotta establish some sort of cash flow. It doesn’t need to be for your product, but you either need to have a customer that wants what you’re doing enough to prepay you.

Jon Gibbs (00:43:59):
And that deposit of cash is almost like that’s like a user, like Bill talking for the software industry, but that user might spend oodles of more money on your hardware. So you do have the little bit of an advantage there.

So, you’ve gotta have either a customer that’s willing to prepay for what you’ve got, or you’ve gotta establish some sort of cash flow by doing something small in the same part of the supply chain, which is sort of what we we’ve moved to, but basically the investors, the VCs and the CVCs respect cashflow, I think that the difference between VCs and CVCs is that the CVCs are looking for you know, it’s almost more like dating. Like you have to just have a match with what they’re trying to do.

Jon Gibbs (00:44:46):
You know, so, so just talk to as many as possible and if you do match, it can be great. And you know, those conversations can go well, but it’s, it’s very stove piped the way that Bill said it, I think with VCs, they’re more, so they want to be the first to the new gold mine. Right? And so you’ve gotta convince them that no one’s even seen this yet, but you also need that cash flow to make them feel comfortable. Right? And so you can be more broadly minded and all of those things.

And like I said you know, I guess the strange thing with us is that we got more traction with VCs when we had demand or a high central demand. So some pre-orders than we do it after we flew our first, you know, prototype or, or slip sale prototype.

Jon Gibbs (00:45:37):
And that would be the opposite in most other things like academia or other industries. Right? So but yeah, you, you’ve got to, I guess, establish cashflow and have a big enough fishing net to do it. And that just really means at the end of the day, you know, you just step in, find enough cash, and be clever enough to have enough time.

The last thing I think for, especially for aerospace, that helps out quite a bit is if you can get some sort of government grants or funding or municipal grants or funding. That’s really a valuable proof point for a lot of VCs. And then they’ll often, what we’re seeing in our, I guess, in our segments too, is that they often piggyback on that kind of grant funding and and they’re willing to take more risk than they otherwise would’ve if there weren’t that type of funding.

So, you know, that grant funding is also cash flow, right? That’s non dilutive. So expect nice handshakes, but don’t expect a check until you can establish those things. And so yeah, I’ll stop there.

Bill Bruner (00:46:45):
I just wanna say I agree a hundred percent and our government contract has been sort of very, very helpful in in starting conversations. So it’s good stuff.

Joyce Haven (00:46:56):
Right, Emeline.

Emeline Paat-Dahlstrom (00:46:58):
Yeah. Yeah. I totally agree also 100%. I think you’ve, you’ve covered all, all of it. The maybe just to say that I think the added complication as well for pure space is that also the market is speculative and there’s really no immediate thousands of consumers to serve. And so that really is, I think the hardest part is convincing, even space VCs.

Today there’s like two categories, one that are looking at Low Earth Orbit, which of course is now pretty hot, but then if you’re trying to raise for beyond earth orbit, then that’s a whole different ballgame as well, which is sort of some of the, the companies that we’re helping raise funding for. And yeah also to emphasize that grants and government funding certainly for, for space initiatives, it’s the first thing to, to go to and find funding.

Emeline Paat-Dahlstrom (00:48:02):
And once you’ve established your capabilities there, then I think the VCs actually start looking at you, the other thing to note is that again, just on a general trend, it is really interesting, to see that even just within the last three years, it used to be that there were no specific space VCs. But somehow that is changing. And even with the trend today, and even with COVID, the amount of investment that is being put into actual space startups is growing even with the pandemic. So, which is really a great thing to see.

Joyce Haven (00:48:51):
Great. Thank you. Yeah. Emeline, I wanted to follow on, I think that you, because you are a consultancy, do you end up being a consultant for VCs that are interested in investing in space?

Emeline Paat-Dahlstrom (00:49:12):
Yeah, so far we’ve done basically technical due diligences for space VCs, for VCs in general. And that’s why I was saying that the trend now is that even traditional VCs and even traditional funding institutions, like banks are beginning to really be interested. And so we end up kind of briefing them on the trends and the opportunities that are happening in the industry. So that’s one thing, but then also I’m connected with other startups where we are actually in the middle of fundraising.

Joyce Haven (00:49:51):
Great. Thank you. I’ve got a couple more questions. I know we’re closing in on, 5:30. I think we might run over a little bit, but I’m hopeful that we’ll keep it in there. Emeline, I wanted to ask you, you’re currently working out of New Zealand. Hugely proactive country with regard to supporting space businesses and globally, where are you seeing those kinds of strong national support for space industries?

And actually I’m going to ask this of obviously of, Jon and Bill as well in terms of aviation, where they feel that other countries outside of the United States which is, you know, traditionally been a pretty strong aviation country where are you seeing that? So I’ll start with you. And then I will pass it on to Jon and Bill.

Emeline Paat-Dahlstrom (00:50:51):
Yeah. It’s another great question. Basically I guess the preface, I think a progressive government that supports kind of space industry initiatives within a country is an important, like a key element for having like a sustainable space ecosystem.

And so I think that’s what happened in New Zealand. The New Zealand Space Agency basically was created out of a business need which is very different from how the traditional space agencies were created in the past kind of because of some national initiatives and so forth. And so they’re very commercially and business proactive. And we’re seeing that in other countries as well, so also for example, Luxembourg which is an interesting country with not much general resources, but they have the funding.

Emeline Paat-Dahlstrom (00:51:59):
And so about maybe, I guess, like 10 years ago now, they just decided that they wanted to go after basically resource mining. And so today they put all of their effort in, and that has also attracted several, or most of the startup companies that are looking at resource mining.

And so today in the space community, if you talk about asteroid mining, or resource mining, you think of Luxembourg, so they kind of created their own pathway for that. And so there’s now other countries that are starting to be interested in different areas. And so for example, Australia is another country that right now if you look at their ecosystem, there’s a lot of money being poured from the government into the sector to capitalize industries, through grants and targeted initiatives.

Emeline Paat-Dahlstrom (00:52:59):
And then they’re collaborating with big players as well, like NASA and ISA. The other interesting thing as an example, is that, so I’m, I’m Filipino or at least I’m still a Filipino citizen. The, the Philippine Space Agency was created only last year, but just looking at what they’ve been doing in basically creating initiatives for collaboration with other countries and doing some initiatives in scholarships and education, also it looks like they’re doing the right thing for a small country to start leveraging their inherent assets.

And then also learning from other countries that have already the technology like Japan where they’ve collaborated with their first two Diwata satellites. So, so for sure it’s not only, I think space faring nations, but there’s now emerging countries in all parts of the world. And in Asia Pacific that are now thinking that the industry is the next future trillion dollar industry.

Joyce Haven (00:54:30):
Great, thank you. Bill. So in, in aviation, do you see do you see particular countries that are sort of supporting up-and-coming players more than others?

Bill Bruner (00:54:49):
So what I would say is because of the military applications of hypersonic vehicles that it’s not quite as international as the, as the space development. So for example, we have a contract that with the government that essentially, you know, makes us an ITAR technology, right? So we’ll have to work that out as we proceed down the road, but there are other countries that are doing things that are very, very similar to what we are doing. There’s a company called Beijing Lingkong Tianxing that has a very similar technology to ours. It’s not quite as efficient, we don’t think in terms of the boost glide profile, but also it’s also vertical, vertical, just like us. It’s also rocket power just like us.

Bill Bruner (00:56:01):
And they because the government supports the sort of quasi-private companies they’ve raised more money than we have and are arguably on track to fly first. In Europe, there’s a company called Destinus operating out of Switzerland that has runway to runway approach to rocket powered point to point transport non-space.

So there are several places around the world where people are doing very, very similar things to what we are doing. I would say the United States, the People’s Republic and Europe are the main hubs of activity. Smaller countries, because this for this is a sort of highly capital intensive.

Of course I would’ve said that about space launch 30 years ago, and Rocket Lab sort of turned that on its head. But in general, it’s going to be larger leading sort of you know, countries with big GDPs that are going to be able to afford to develop these kinds of vehicles.

Joyce Haven (00:57:18):
Okay. Thank you. And Jon, I know, I think you’re going to have something to say about this, so I’m hopeful you will.

Jon Gibbs (00:57:25):
Yeah. I mean, we are in the process of moving to Australia, not from the government’s initiative, but from a private firm there. So obviously we are going to say Australia, but I think you know, like Emeline, said there are a lot of for-profit activities for space. So I would even point to, I think Nigeria has a space agency that launched a satellite to help with agricultural imaging.

I think that the United Arab Emirates recently launched a satellite and has kind of a space agency. We were involved in an initiative to try to establish something aviation related in the middle east as well. And I think, you know, just from the aviation side, I can say definitely Turkey, Taiwan, South Korea, Pakistan all of them had a national need for either defense or for some kind of, Brazil as well.

Jon Gibbs (00:58:28):
And they established them there, but there were varying degrees of public/private partnerships. So in some cases, these are just public entities. And the thing that they produce is essentially a public utility. So that might be agricultural imaging, or it might be a fighter jet.

And there’s others where the United States is almost, you know, exclusively private, right, where everything that is funded is from a private company, but funded by public entity. And then there’s some, you know in between. But, yeah, I think in terms of small countries and large countries in terms of GDB per person, the smaller ones tend to be more, you know, there’s a, there’s a real economic need for something that has to do with aerospace.

Jon Gibbs (00:59:18):
And larger ones, it tends to be more national security related. And then the clever ones tend to develop an export market. I think the Pakistan aeronautical center is profitable and they export training aircraft to other countries and they make their country’s own fighter jets. They don’t have to import them. So, yeah, it varies.

And I think if you have the expat bug, you should investigate and participate in any of those, I personally was in Germany for four years as part of their aerospace laboratory. And that was a great experience. So yeah, I would say it’s more impressive than you might expect.

Bill Bruner (00:59:57):
Right? Yeah. And I have to add Germany to the list because I think DLR has had a rocket plane idea for like decades out of Sanger. Were you at DLR? Jon?

Jon Gibbs (01:00:07):
Yes, I was at DLR. That’s right. Yeah.

Bill Bruner (01:00:09):
Right.

Joyce Haven (01:00:11):
Great. Thank you. I have one more question. Can you guys stay on for just one more? Yep. Sure. Great. Thank you. So in my experience space startups are super passionate and mission driven. I’ve never heard anybody, you don’t ask a person, “what did you want to do when you were five?” And they’re like, “oh, I wanted to write a dating app.” Nobody says that, but with either space or flight you get people who are, you know, “since I was five, I’ve always wanted to do this.” And it seems to really, really create founders I think, or find founders, that that do have that passion and have that extra, extra piece of drive and usually a lot of grit.

So is this true for each of you? How does that help fuel your decision making process for your business, if that’s the case? And then this is actually the super, the part that I’m very interested in is has it ever created a blind spot or impeded your project and how did you work through that? So I’m going to start with Bill.

Bill Bruner (01:01:30):
This, this is a great question, and I’m going to try my best to not talk for an hour. So I always wanted to fly jets when I was a kid. I wanted to be astronaut right? So I go off and join the Air Force. I go to flight training at Mather and I’m in the right seat of an F-111 flying supersonic attack plane. I have a science degree, but I didn’t have enough engineering to get into test pilot as a navigator. I’d be a, I guess a flight test engineer. So I proceeded with a military career retired, blah, blah, blah, and got to work at NASA for a while. So I didn’t get to fly the space shuttle. I got to sort of sell it to Congress, which was, and go to a lot of launches.

Bill Bruner (01:02:30):
But I always thought that, you know, especially after I saw the, the DOD reusable rocket Delta Clipper fly in the 90’s, my co-founder is, was the program manager for that, that rockets could be a whole lot more like airplanes. We could use ’em over and over again. That they could be operable. That the engines should not be single use and thrown away.

That anyway, Elon and Blue[Horizons] have capitalized on that. And they’ve commercialized these technologies that DOD developed back in the 90’s. But no one to the best of my knowledge has really focused on what we’re focusing on, which is to turn these vehicles that we’re, that are right now thought of, or considered exclusively for space launch into transportation for folks here on earth now. So it has been something that’s been a passion for, for my pretty much my whole life, of rocket travel for ordinary folks and not just a select group of, you know, to 20 or 30 government employees that are picked every three or four years.

Bill Bruner (01:03:44):
And so that has been my passion pretty much my whole life has, does that create blind spots? Probably I you know, we started this company with point to point drones thinking that we could, because of the UAV or UAS revolution, we could build vehicles that did what the big vehicles that we’ve always dreamt of, you know, point to point rocket ships. We could do that with electric power drones, and there’s still maybe a market for that.

And our blind spot or my blind spot may be that we’re so focused on this point solution that leads to tail sitting rocket ships that we may be bypassing other technical approaches or revenue generating approaches that that could help to support the longer term vision. Don’t know, we’ll see over time, but that’s my story. We are passionate. We, the whole company pretty much buys into this vision and we are committed to this thing even though so far we’re just about to raise our first seed and we believe we’re just getting our legs under us and shifting into the next year. But we are committed and we’re not going to give up.

Joyce Haven (01:05:11):
Great. Thank you, Emeline. I know a little bit about you, I’ve got spoilers on what you’re going to say. So go ahead and tell us all about these.

Emeline Paat-Dahlstrom (01:05:26):
Well, yeah, very, very similar. Basically I’ve been passionate about space since I was a kid, but it took me 40 years to really understand what my role is or what my purpose is, and this stems from again. I mentioned that I’m from the Philippines. I came from a developing world, but at the same time, I was given all of the opportunities of going to the US and working there and being in the space industry. But I shouldn’t be the odd one out.

So I’m very passionate to the fact that I think everybody should have this opportunity that I’ve had. And which is why the democratization of space for me is the most important thing to be able to get other countries to share this future that we’re looking at everybody wants to start Trek universe.

Emeline Paat-Dahlstrom (01:06:23):
And so that’s sort of been my guiding light with everything that I do. Now, you talk about blind spots. Absolutely. I mean, I probably basically yes, shunned a lot of revenue generating potentials and opportunities, but at the same time, because I’m focused on this, I moved from a very cushy world to focusing on the developing world and seeing how we could actually alleviate all of this gap between the space faring nations and not.

So, again probably that’s easier to stop there because I can go on for a long period of time, but I am definitely yes, very passionate about what we’re doing. And I don’t know if it’s also evident from what I said, so we’re actually a social enterprise, so the constitution basically is charitable. And which also is another problem for me fundraising, because I can’t really go to VCs, but I’m not a nonprofit. And so therefore can’t really go to philanthropic organizations directly.

So there’s a lot of things that are ingrained in how it’s set up, but it’s just because it’s being driven by this particular passion.

Joyce Haven (01:08:03):
Great. It would be similar to a B Corp in the United States.

Emeline Paat-Dahlstrom (01:08:06):
Correct.

Joyce Haven (01:08:08):
Got it. Thank you. Okay, Jon, I know you also, I remember you speaking about about having a love for flight early on. I think when I first, when you first became a member. So I’m relatively sure you’re also going to tell me that you are passionate and mission driven.

Jon Gibbs (01:08:31):
Yeah. I my story isn’t too different from Emeline’s and Bill’s. So I had a lot of aviation at a young age as well, probably five or six, you know, I think it was, I think a fighter pilot came in for career day. I thought he was really interesting. And I remember you know, visiting my extended family on an airplane for over the holidays when I was little.

So I think those two things were maybe what sparked it. And it took me a long time to figure out what I was good at. So I was in ROTC in college for a semester, but it only lasted a semester. But you know, I didn’t really kind of hit my stride. Until maybe grad school and and that was after I had worked at Boeing. So there’s that part, I think on the mission part, you know, for me at Boeing we were, I was there at a time when, you know, the oil speculation was running rampant and it was causing a lot of airlines to go bankrupt and that’s like your livelihood at Boeing.

Jon Gibbs (01:09:27):
Right? And then, you know you see other people who depend on the oil, you know, like truck drivers, not even able to make the delivery. So to me, it just kind of felt like the US was like of a Banana Republic or really more so the US aviation industry was in effect a Banana Republic in that you’re depending on a commodity you don’t control.

And so the energy security angle is kind of what got me interested, but as I kind of learned in grad school, like the graduate about the bigger picture, you know, you know, I just stayed hooked, but for additional reasons, for like the environment and just really the economic management, or rather mismanagement that I saw with all these and the consequences of all of that, you know, that I saw.

Jon Gibbs (01:10:15):
So as far blinders, you know, you have sure, it makes for blinders, but the truth is an entrepreneur needs blinders because if any of us knew how long and how hard this would be, you know in the beginning, it’s likely that we may not have attempted it, but at the end of the day, or end of every day, you know, something good or something bad happens, and the mission has to be more important to you than, you know, like a better lifestyle that you could obtain if you gave up and did something else.

And so if you can make that decision every single day, no matter how bad things get then yeah. You’ll stick with it and you’ll adapt and you’ll function. But so that’s a good blind spot. The bad blind spot is if you know, you’re like one plus one is four and you refuse to acknowledge that’s two, right? So you have to be able to be humble enough to you know, do trial and error, talk to customers. I mean, you know, I think our businesses have pivoted several times, especially at this stage. And so that’s a blind spot you don’t want to have, but you do want to have the, the fun that lets you keep going every day. So yeah, it’s not black and white, I would say it’s, it’s a gray area type of thing.

Joyce Haven (01:11:29):
Great. Thank you. I’ve two things that I think I’ve come away with today, one is that there are a lot of other, I think people come either are drawn to aerospace, you know, because either they wanted to be an astronaut when they were a kid, or like you said, Jon, they wanted to be a fighter pilot. Bill, you managed to succeed at doing that. And they may come to it from that angle, but that there are actually a lot of other things that you can do within the industry. You know, how do you let kids and young people know what you know, what you can do, and what’s possible ,and know, turn it from a sort of single-minded goal into something a lot richer and deeper with a lot more opportunities.

Joyce Haven (01:12:19):
So there was that. And also, I just want say after talking to all of you about all the things that are happening with various kinds of flight, both space and non space flight flight that Bill, you mentioned the need for an AI driven air traffic control. And I just, that seems like a no brainer unicorn to me at this point. I hope somebody grabs that and runs with it as if they’re not already that’s what I’m hoping for anyway.

I want to thank you all for joining us. It was a great discussion today. I learned a lot. We have a blog post coming out in a few days on up and coming aerospace startups. And please keep your eye out for it here on Twitter and on our LinkedIn page. And you can also subscribe to our blog on our website at Runway.is. So thank you guys again.

Bill Bruner (01:13:18):
Awesome. And a plug for me for our website is nfaero.com N F A E R O.com. There’s a video on there. We can check us out and on Twitter, we’re @aerospacenew.

Joyce Haven (01:13:31):
Great, thanks. And Emeline what’s, what are your Twitter handles? All of, of the social media things?

Emeline Paat-Dahlstrom (01:13:37):
Yeah, thanks so much again for having me and yeah, the website is spacebase.co I also do a podcast. That’s spacebase.buzzsprout.com and then the Twitter handle is @spacebaseNZ And then also on Facebook as well as on LinkedIn.

Joyce Haven (01:13:55):
Jon

Jon Gibbs (01:13:58):
flysavion.com Is the best place to reach us. There’s a contact form there. There’s also a place to sign up for our newsletter. I believe if you’re interested in our consumer upcoming consumer product. Other than that, I would say, follow me on LinkedIn. We had someone doing the socials, but I’m not so great at it. So until further notice just join our newsletter. It would probably be the best way to stay in touch or just, just send me an email. Yeah.
Joyce HavenJOyce Havenjoyce (01:14:29):
Thank you.