Cheeky Pint - Zipline CEO Keller Cliffton on air-dropping blood to Rwandan hospitals and getting to 50,000 aircraft per year

Episode Date: September 10, 2025

Keller Cliffton joins John Collison to talk about Zipline’s journey to 115 million miles flown, the lost art of American airplanes, building 50k drones a year in California, getting to 99.9% reliability, and US vs. Chinese manufacturing. Books referenced:The Right Stuff by Tom WolfeSkunk Works by Ben RichApple in China by Patrick McGeeTimestamps(00:00) Intro(00:45) 115 million miles flown(04:10) Why drone delivery took so long(07:38) Getting started in Rwanda(13:31) 51% reduction in maternal mortality(15:33) Access vs. waste(21:45) Scaling globally(24:05) Zipline’s Platform 1 (25:50) The Right Stuff(27:22) Drone design and safety(30:12) Getting to 99.9% reliability(34:39) Multimodal logistics(38:15) Zipline’s Platform 2(44:03) US drone regs and the FAA(48:02) Progress and stagnation in US aviation(51:30) If Keller ran the FAA(54:24) 30% WoW growth in Texas(58:25) Why Texas and not California?(01:00:28) Building 50k drones in California(01:06:18) US vs. Chinese manufacturing(01:11:30) Advice for hardtech founders

In how many countries today do you run your medical logistics network? Uh, eight. Why is that not 80? You sound like our board, John. You're really putting the pressure on. And then we walk out the back of the warehouse and it's just a field of boxes as far as the eye can see. And I was like, what is this? And they're like, that's all the medicine that expired last year. What is Guinness? Guinness is Stoutes. Irish people would not call it beer.

They don't know what the difference between stoutes and beer is? Keller Clifton is the co-founder and CEO of Zipline, the drone delivery company. They started out with medical deliveries in Rwanda, but they're now expanding in many countries, including the United States, and have completed more than a million autonomous flights. Cheers. Cool. Cheers. Okay, I'm very excited to talk about Zipline. So, you previously, you were a professional rock climber. You studied biochemistry and computer science in Harvard. You had a previous robotics startup. But then in 2014, you started Zipline. Most people who do know Zipline probably know you for the medical deliveries in Rwanda and broader in Africa. You now also have operations. You just announced Chipotle and burrito deliveries in the United States.

And you have delivery takes place every minute and you have 100 million miles flown. Is that a good? I think like 110 or 120 now, yeah. Okay, yeah. So is that the good potted Zipline summary? How would you add? What would I add? I mean, you know, when we were starting to build Zipline in 2013, 2014, our backgrounds were in robotics and automation

and software, and it really seemed to us like it should be possible to build an automated logistic system for Earth. When it comes to robotics, you really want boring and repetitive. That's ideal, you know, like constrained problems, boring and repetitive. And logistics is about as boring and repetitive as it gets. But like, it's this underlying infrastructure that affects everything in the world. It affects how people get access to health care. It affects. like how people even choose where they live. It affects how much time people get with their families versus having to spend time driving around and buying things.

And so, yeah, it was, you know, the idea was simple. The execution has turned out to be a bit more complicated than we were expecting. Yes, and you've made the point that, like, what does a UPS truck weigh, like, you know, five or six thousand pounds? Yeah, yeah, yeah. It's like we've taken for granted that we just have these, like,

massive vehicles trundling around our suburban streets is the best answer for delivering things, and it's obvious it couldn't be improved from there. I think the best way to think about that is that when you're batch processing things and delivery things over the course of a day, that works pretty well. You can load tons of packages into a car, and then the car, you know, the truck over time can deliver things slowly to lots of homes. But obviously the thing we've seen over the last five or seven years is the rise of instant delivery.

There are now five and a half billion instant deliveries happening every year just in the U.S. And this is where we're using a 4,000-pound gas combustion vehicle driven by a human sitting in the front, moving the steering wheel back and forth to deliver something to your home that weighs on average five pounds. So actually, you do not have to be a physicist to realize this is a really weird way. A bit over-engineered, yeah.

Or under-engineered, depending on how you think about it. But like, this is, you know, this is, it creates traffic in our neighborhoods, it creates pollution in our neighborhoods, it creates safety issues in our neighborhoods. It's phenomenally, expensive, actually, and it's pretty slow. And obviously, competing vision is the sidewalk robots that some people are pursuing,

but I presume you think for many of these applications are just too slow, and you actually can't fit that many of them before they start clogging up sidewalks. Is that basically the argument you make? My personal opinion is that we should be giving space back to humans, not taking space away from humans. So, you know, we have already, I mean, I grew up, maybe you grew up, you know, we played in the streets, like we played street hockey. I wouldn't really let my kids go play street hockey today.

So something is mentally changed where that doesn't seem like as safe as space anymore. Sidewalks maybe are like the last place that are meant to be for humans. The idea that, okay, now the robots are going to take those over to. And like humans are going to have to jump out of the way as these sidewalk robots go back and forth. It doesn't make a lot of sense to me. Why has the drone delivery vision taken so long where, you know, people were talking about tachocopter on Hacker News in 2012. The big Amazon announcement was what year?

2013. And so everyone has felt like it's just around the corner for well longer than a decade now. Is it, you know, the FA beyond visual line of sight rules? Is it like the tech was surprisingly hard? Just why is this happening now? You guys just announced Chipotle, breeder deliveries. Why is that happening in 2025 and not 2015? I think, you know, it's similar to the question of why do we not have autonomous cars when, you know, certain leaders were saying, oh, it's right around the corner in 2015 or 2016. I think that with any advanced technology, there's always, what do they call it, like the trough of disillusionment curve. It's kind of you have like the early hype, people realize something should be possible, it's really exciting, and then it goes completely craters because people realize it's really hard. And then everybody basically is like,

well, that was a stupid idea. It's never going to work. And when people say it's a stupid idea, it's never going to work, that's when the actual hard work begins. And then there's like a decade of building all of the fundamental underlying infrastructure and technology that's required to actually make something work in the real world. And work in the real world is kind of like an easy way of putting it. But the reality is whether you're talking about autonomous cars or autonomous aircraft, you have to figure out not just safety

and reliability, you have to figure out regulatory, you have to figure out manufacturing and maintenance and supply chain, all of the software systems that are required to run behind the hardware to really make it reliable. And then you also need a good customer experience on top of all that. And then ideally, you also have to make the unit economics work. So the classic thing of producing convincing demo in hardware is relatively easy, but then getting something actually useful operationally is where the last 10% of the work is another, you know, 2x or 3x from there. I think, I mean,

Elon, I remember watching him for 10 years say again and again, because people would always say, like, oh, Ford's going to do what you do. You know, GM is just going to do it and, like, crush you, and he just kept saying, like, prototypes are easy, production is hard. Prototypes are easy production is hard. I think it's deeply true in hardware. It's very easy for people to, and we've seen it again and again and again, right? Like, specifically with drone delivery, someone will buy a quadcopter off the shelf, duct tape a snickers bar to the bottom of it, manually pilot it, like when the weather is good,

two miles land it. It's like, we just did drone delivery and then get a journalist to cover that. But the reality is that what customers really want, is teleportation. Right. And they don't care at all about drones. Yes. This is kind of a counterintuitive thing

that we've learned. It's like when we're working with all these ministries of health or these governments or big companies like Walmart or big hospital systems in the U.S. like Leavoon Clinic or many others, they all want to be able to just

teleport things directly to patients or directly to a customer's home in a way that either saves a life or like transforms a customer experience. You know, we could be using whatever. They don't want to, They're not interested in drones. They don't care about drones.

They don't want to deal with any of that complexity. All they want to know is something goes from point to point B fast enough to solve a real problem. And so I think that a lot of the technology kind of sits behind a curtain in order to enable a customer experience that is just like jaw dropping and changes the way people live their lives. So DemoZ production is hard.

You got started in production and really ramped up in Rwanda. How did that come about? where, you know, people, I can understand, maybe you might want to go outside the U.S. for a more favorable regulatory environment, but most people would go to Mexico or Canada, you know. How did you get to Rwanda? And maybe you can tell the story of scaling up operations there.

Yeah, hard to frame. I mean, I think that when we were starting to build Zipline in 2013, we spent about two years building the initial version of the technology. And everybody told us this was a stupid idea. Everybody told us there was no way it was going to work. Was it hard to get funding for? Oh, incredibly difficult. Like, I remember, I mean, we were begging people to invest, you know, $250,000 in the company.

Who did, what was the first big break in terms of who invested? Sequoia led our series A and took this bet on us. This was actually before we started building Zipline, though. Oh, wow. Yeah. Well, it's for your previous time. Yeah. Well, same company, actually.

Oh, but it pivoted. I didn't know that. Yeah. Most people don't. And then, you know, as we were starting to build Zipline, I just think there was so much, skepticism. I mean, it's like such a crazy idea. Like, what do you know it about aviation? Nothing. What do you know about health care? Nothing. What do you know about operating in Africa? Nothing. Okay, well, like, let's stay in touch.

Operating in Africa. Yeah, let's stay in touch, you know. Like smile and nod. Yeah, exactly. I think that, you know, our intuition was like we needed a country that was as desperate as we were desperate as a startup. Maybe that sounds bad. But it's like a threshold question. Why didn't you start operating the United States? Ditchis wasn't a regulatory pathway to do something. Okay, just the ban on drones. Totally impossible to do it in the U.S. And also, we really wanted to find, you know,

we had this instinct that to convince a country to do this at scale, we needed to focus on life-saving use cases. And so we really wanted to find a national health care system rather than like a fragmented private one like you have in the U.S. So we were looking for a national health care system, healthcare challenges that we felt we could really clearly solve, and a country that would be entrepreneurial and fast-moving alongside us. And so that to us had us looking at countries in East Africa. We were also talking

to countries in Latin America. And interestingly, I remember this meeting with the Minister of Health of Rwanda. I mean, we were beyond clueless. Like it's just like, you know, 24-year-old like showing up in East Africa. Like we build robots. We think that this could work. And I remember this meeting with her where I was saying, hey, we'll deliver, you know, blood and vaccines and cancer products and all these different things, we could do it all instantly in a way that would be transformative and reduce waste and save lives. And remember she looked at me and just said, Keller, shut up, just do blood. And as she was explaining to me, you know, 50% of blood transfusions are going toward moms with post-prone or hemorrhaging, 30% are going toward kids under the age of five.

And it is a super hard problem from a logistics perspective. Because you have packed red blood cells, platelets, plasma, cryoporcipitants, all these different types of each, A, B, A, A, and O. They have all different storage requirements and show. self-lives. Platelets only last six days, for example, when you get them out of a donor interpatient. So they gave us 21 hospitals, and they said, just do blood, and that's what we did for the entire first year. It was a disaster, by the way. Why? Because we had no idea what we were doing. You know, I think apropos of the flag behind us, so we didn't know how to integrate with a national health care system. We didn't know how to integrate with this Ovaliation Authority,

and we definitely didn't know how to build, like, an aerospace grade product that was reliable yet. So we launched and we were pulling constant all-nighters. We were flying back and forth between the U.S. and Africa. We had the entire Rwanda team hired, and the system only served one hospital for the first nine months reliably. And we were just trying everything we could do to make the system work reliably for that one hospital. Why Rwanda, out of all the sub-Saharan African countries you could have picked? You know, we can answer that question now because we have a much better understanding. The reality is then we weren't smart enough. We just got lucky. The answer now is like Rwanda really is kind of like the Singapore of Africa. It has like a very technocratic leader

with a very technocratic leadership team where they're taking really smart bets on technology and moving quickly and it's a very, very entrepreneurial country. It's got a much stronger civil service, yeah. Super strong civil service. Like I can't even describe to you. I mean, many times I would be on calls with like a minister or a chief of staff at like nine o'clock on a second. 11 p.m. on a Saturday, I mean, moving lightning fast. So that's kind of what I mean. You know, there are many countries that are moving very fast because they know that the only way they're going to get ahead is by being aggressive and entrepreneurial and making bets. So it was messy at first. When did you crack operations in Rwanda? And you felt like,

wow, this is really working. So after nine months of like all-nighters, total desperation, everything that could break, did break. It started working reliably for that one hospital, which was called Cub Guy Hospital. By the way, that hospital was only like five miles away. So it was like we were doing the easiest possible thing and failing at it. It didn't feel great for nine months. But like when did Zipland get to the point where Rwanda would definitely not let you rip it out? Because they're like, oh, we rely on this, you know?

So after nine months, started working well for that hospital, and then we rapidly added the other 20s. So we were actually serving all 21 hospitals in the contract by the end of the first year. And then they asked us to expand to 50 hospitals, and then 200 and then 500. Then we went from delivering blood to vaccines, cancer products, infusions, transfusions. Today we're like the sole distributor of 500 plus health products in the public health care supply chain. And then we started expanding outside Rwanda. Today we served 5,000 hospitals and health facilities. It's become, yeah, like the largest commercial autonomous system on Earth.

If this model makes total sense, which I think what you're saying makes sense, there are various healthcare products where you may need them anywhere. you can't predict where you're going to need them and you need to get them in a time-critical fashion. Why haven't other countries followed? I mean, you're starting to do this in other countries, but why, as of 2020, was every country not beating down a path to your door saying, oh, yeah, we'll take 10 zipline systems, you know, for our health service.

It's kind of interesting, given that all countries' health care needs are kind of the same, because a lot of national health care systems, you would think more people would want to replicate the system. Yeah, I mean, I would say they kind of were, because it's starting in 2020. So it took us like, you know, three years to stabilize and grow it in Rwanda. And then it was also very helpful. We had a number of big academic institutions come in and want to do studies. So, like, University of Pennsylvania came in and did this big study across all the hospitals we serve

and showed a 51% reduction in maternal mortality. This is, like, you know, pretty profound thing. Very causal. I mean, you know, they have their control group and their non-control group. There are, like, interesting different reasons for it. It's a lot of it is around blood availability. but also part of it is just that like increased trust in the health system. More moms give birth than hospitals when they know that the hospital is going to have access to the products they need.

By the way, you know, when we were starting to build Zip Line, we were told this was such a stupid idea. But if we had known we were going to get a 5% reduction in maternal mortality, we would have told you hell yes. Yeah, yeah, yeah. This is like completely worth. Victory condition. Yeah. So like the idea of a 51% reduction is, you know, it's something, don't listen to the experts. I guess is like a good, good takeaway.

And so, you know, from there, I mean, we also got like these additional studies showing, you know, 70% reduction in vaccine waste, 32 percentage point decrease in zero-dose children. So these are kids who never get vaccinated. And so we actually did see, you know, Zipline then launched in Nigeria and Cote d'Ivoire and Ghana and Kenya, started launching a lot of different countries in around 2020. The system started to scale very fast. Have you seen any induced demand when healthcare systems have Zipline available to them? So, you know, you can imagine we can fulfill existing needs better.

We need blood for a surgical procedure and we don't have it. And, you know, now it's a blind we have it. But have you seen healthcare systems start to do things that they weren't previously doing because they have this cool logistic system available to them? For sure. I mean, that's like the main thing that we are observing happening. I think there's a lot going on that's all, that's all pretty interesting, and maybe we didn't anticipate all of it.

I would say one big thing to realize is like with the health system, you're typically balancing access against waste. So if you want to make access really high, you send a ton of medicine out to the last mile, and then access gets better, but now you start throwing tons of stuff out, because all this stuff has shelf lives. And a lot of it is very expensive and cold chain dependent.

If you want to reduce waste, you keep more stuff centralized, but now you have more people dying when they can't get access to the thing that they need. So one of the really crazy things with Zipline was, you know, we were able to show that by keeping things centralized and turning the entire logistics system over to a just-in-time system, you can actually move both up simultaneously. That's a big idea. Another idea is what you're saying,

which is like the induced demand, you make it possible to vaccinate kids, for example, at a different layer of the healthcare system. In Rwanda, we now serve, I think it's like 400 or 500 health posts in the country. And so these are like the layer below, low primary care facilities. It means that kids can get vaccinated way closer to where they live. More kids get vaccinated because it's just more convenient. The last interesting thing that we see is, and this kind of on the opposite side of induced demand, is actually when you had a

logistic system that wasn't very reliable, you actually had a lot of systems that started to exhibit hoarding behavior. It's kind of weird. But basically what would happen is that there was never enough blood to go around. And these health systems would have to place their order for blood every quarter. So they would over order. They over order because they know they're going to be cut back. And so they would order twice what they needed on the assumption that the government's going to send them half of what they actually asked for. And then that's just like a brinksmanship kind of thing. The numbers get bigger and bigger and you lose like all signal in the system. And so the really cool thing that we've seen is actually a lot of the demands have gone down because they're actually

confident that they're going to get exactly what they're asking for. Yeah, it's a just in time framework but for health care system. Yeah. What is the business of what you're doing in Africa? Are you paid by the healthcare system? Is this NGO funded? How does the business side of things work? Ten years of, you know, building the infrastructure in Africa.

We always felt really strongly that, you know, we wanted this to be sustainable and we wanted to be led by the countries. There's a lot of work that gets done in Africa by NGOs. You know, they're funded by the U.S. or by the international organizations. And I think what's kind of most amazing about Zipline is it's been entirely country-led and entirely country, almost entirely, country funded. So we sign contracts directly with the ministries of health, the governments themselves, and then we help those governments save lives and save money.

So typically we can, for any given ministry of health or health system, we can save millions of dollars, plus you can show extraordinary like health care impact. And that makes it a pretty easy decision for any country. Yeah, it's one of these amazing, better, faster, cheaper, tech use cases or tech value props where you go to a health ministry and you say, we'll give you a better logistic system that delivers stuff faster and is cheaper than how you're currently moving things around. And I presume that's kind of hard to pass up. Running a health care system is expensive. Yeah, running health care. But yeah, exactly. Like these products are super expensive. You know, whether it's vaccine or

cancer products, they're all cold chain dependent, short shelf life, very expensive. And there is phenomenal waste. It's mind blowing. Like I remember, one of the things that actually kind of inspired us, like on one of my first visits ever, and I won't name the country, it wasn't Rwanda. We went to this U.S. aid-funded medical product warehouse distribution warehouse, and we were going inside, and you can tell, it's like, whoa, these systems are like not good. By the way, like all, you know, donor funded, and it's just there's a separation from the customer. I think is the way to think about it. But we were like in the warehouse. It's like kind of a disaster. It doesn't look like things are going well. And then we walk out the back of the warehouse.

And it's just a field of boxes as far as the eye can see. And by the way, it all says, you know, from the American people on it. And I was like, what is this? And they're like, oh, don't know, don't worry about that. Don't worry about that. It's like, no, really, like, what the heck? It was like vast scale. And they're like, that's all the medicine that expired last year.

And so I think we had this kind of like aha moment. It's like, whoa, you know. And the crazy thing is that was happening in a country that was having massive shortages and like health care outcomes where people go. going to get access to these products. You could kind of like see the two points to just connect with the line. So what's the lesson, the generalized lesson here,

is it that existing aid supply chains are pretty inefficient right now and there's a lot of improvement possible? I think maybe one big generalized takeaway is that logistics is so boring and so in the background, we never think about it. If you're living in, I don't know, the Bay Area, you're ordering stuff on Amazon,

you have it delivered to you 30 minutes later, or an hour later or whatever it is. Like, it's kind of like running water. You don't really appreciate it until you don't have it. Yes. And there are parts of the world that have crappy access to logistics. And then there is about like five or six billion people on Earth who have no access to logistics. And I think that is maybe like the big realization.

It's that like maybe we think of it as something that's just ubiquitous or like something you don't worry about. But like the reality is that if you don't have like that strong layer of logistics, everything else is it phenomenally difficult. expensive to do. So you mentioned, like, the public health care institutions, like, they're all building verticalized supply chains in these countries. And it's many different supply chains. It'll be a different supply chain for AIDS drugs, different supply chain for, you know, maternal mortality, different supply chain for kids or, you know, neglected tropical diseases. And those systems don't run very efficiently. In how many countries today do you run your medical logistics network? eight. Why is that not 80 again? It just feels like something every, every healthcare system should want.

And it's pretty proven at this stage where it's been working well in Rwanda and other places for several years. You're, you sound like our board, John. You're like putting the pressure on. What are our revenue growth numbers and why are we not growing faster? Exactly. You know, I think that there are a few things. I mean, one is that like we've always been pretty clear that it's one thing to save the lives of the people you're delivering to. But It's really important that we be safe for the people who are flying over. Zipline now has about 120 million commercial autonomous miles and zero safety incidents. And that's definitely hard to do.

That has come from, I think, the company being very just focused and like step by step, doing things in the right way, testing, validating, and making sure never to get over our skis. But the laws of aerodynamics are not different in Rwanda versus Algeria versus the UK. So that's part of it. But then also it's kind of like, you know, I don't know, sometimes, we talk about internally as like a pig traveling through a snake. You know, it's kind of all about bottlenecks. Scaling up hardware, I mean, we were really only ready for a lot of scale. I would say, you know, 2020 was when we started expanding into new countries. We then went from one to eight

countries, went from like 100 health facilities to 5,000 today. So the system has been scaling very, very fast. The other thing that did happen is that like 2022, when you see interest rate spike in the U.S., It's like, oh, man, that's really inconvenient and annoying to us in the U.S. In Africa, it creates like economic Armageddon. And it just feels like if you're running a medical system, what you're describing about having, like, I view you as not being in the drone business, but in this line of business,

you are in the medical inventory management business, and you just have a much better inventory management solution because you're able to do this just in time stuff, and there are a few medical systems that don't want that. I just think it's becoming more and more clear that, like, this is the infrastructure of the future. This is like a smart thing for countries to be investing in. And so, you know, there is a lot that's going on even just this year that is leading to, like, massive growth, both in terms of, like, within countries, us adding new distribution centers and us adding new medical products and then also adding new countries to the list.

This medical logistics system we're describing is based on your platform one aircraft. And the way the system works, as I understand it, is you have a fixed-wing battery-powered drone that is launched off a catapult. to you schoomf it off the kettle. And then it flies from a distribution center, flies to the hospital, it drops the payload with a parachute attached, and they go grab it. And then the drone returns home, and I presume it just lands in the grass,

and you take it and plug it back in. That's roughly how Platform One works, right? Yeah, it doesn't land in the grass. I mean, we actually use something that is kind of inspired by aircraft carriers. Oh, you catch it? Yeah, we actually catch it out of the air. Looks kind of crazy.

Or it's like the thing in Batman, you know, where they're recovering the... What thing from Batman? You mean the Skyhook from Mission Impossible? Yeah, there's also a skyhook in about. Sometimes people think skyhook. You know, it basically, like, the vehicle is flying by at about 100 kilometers an hour, and we can snatch it out.

Oh, I've seen it out. Yeah, yeah, yeah. Called the Snapcatch. Big pole, yeah. Big poles. And, yeah. It's like something out of a cartoon. Every time you see it, yeah, it really does look kind of cartoonish.

Yeah, it does look weird. And every time you see it, you're kind of like, hallelujah, you know, like it's amazing that work. But now it works a thousand times a day. Yeah, we got away with another one. But the cool thing about, you know, autonomous systems is that, like, you know, we're using guidance navigation control algorithms that are hyper precise. When you take the human out of it, you can actually achieve levels. Not that we want to take human pilots out. I know. I realize I was

sitting with a talented pilot. But robots are really good at flying vehicles. And so actually, you can achieve levels of precision that seem like very counterintuitive. Like the aircraft has a one centimeter tail hook on the back of it. And we reliably catch that one centimeter tail hook every single time as a vehicle is coming by. When you say robots are better pilots, I take no offense with that. Have you heard the right stuff by Tom Wolfe? I haven't, actually.

I really enjoyed. Tom Wolfe, fabulous writer. All this stuff would recommend. And certainly the right stuff, maybe for listeners of this podcast, is on the history of the Mercury space program, so before the Apollo program, the initial space program.

But they describe how when they were making the spacecraft, their initial plan that was like totally obvious to them was they would make them autonomous. And this was back in the 60s, but it was still kind of patently obvious to them that they would make them autonomous. And they faced rebellion from all the shit hot Air Force fighter jocks that they had recruited astronauts for the program.

Well, they just didn't want to be passive passengers. You know, we send monkeys up to space and monkeys don't do anything. We're no better than monkeys just sitting there. Sit there and hope you survive. So they added manual controls for the spacecraft like afterwards in the design. Right.

Because the pilots, like... The controls weren't connected to anything, but they could at least, like, it's like in an elevator, right? You can, like, push the close button. Exactly. But it was very funny. And so, anyway, that was back in the 60s. And so, yeah, totally, yeah.

But a slightly more serious, you know, note on that, which is that, like, today, the majority, I think you probably well know, the majority of aircraft, you know, airplane crashes are caused directly by humans. Yeah. It's actually a bit sobering. I mean, but also I think it's just a sign

that the safety of these systems has progressed so dramatically, that at this point, the last unsafe thing in the cockpit is the human themselves. So I have some question from the tech and safety and how you do things. How do you avoid birds? We don't. Birds avoid us. Okay. Yeah.

Turns out like birds have pretty pretty good detect and avoid systems of their own, and so they hear us coming. How fast are you flying? About 100 kilometers an hour. So we're very much smaller than airplanes. We're not like sucking birds into nacelles in the same way that a jet would. How do you avoid airplane? So we avoid airplanes by, basically it's like a multi-layer de-confliction strategy.

First of all, we're flying below the commercial aviation floor. So, you know, in the U.S., that's about 400 or 500 feet. So we're never conflicting with like the kinds of normal airplanes that, you know, people who are listening, would ever be flying in. We are also then on ADSB. So we're receiving ADSB. So as long as something is squawking on ADSB, we know it's there and can avoid it. We also then have cameras on board.

And then we also do things like no TAM, so old term, but notice to Airmen basically telling people when we're operating in certain places. So, like, all of these layers together combine to get us a safety profile that is super obvious that the FAA can approve. Super cool. And then can you tell if a battery is gone on fire? So the cool thing about the way the aircraft is designed is that, like, you know, there are 43 major sub-assemblies on the aircraft. Every one of those sub-assemblies is designed from scratch by ziplines. So it's super, you know, vertical integration. And we really take inspiration from the way that planes are designed.

Like, we'll look at the way of flight compute on a, you know, Boeing 7-8-7 is designed. And they're, of course, using like multi-million dollar, like 20-year-old components. We can talk about why that's so screwed up in a sec if you want. But like the architecture is usually fundamentally sound. And then what we'll usually do is like just use cell phone components to build that architecture in a way that's about 1,000th of the cost. but just as safe. And so you're kind of using a lot of those aerospace paradigms

of like being able to fail over and building redundancy into every flight critical system. So the aircraft, we have redundant nodes of the battery. One node can fail, the vehicle can still fly itself home. We have redundant flight compute architecture. So you can have a flight compute fail, you can fail over to the second flight computer and fly home. You can actually reach into the aircraft while it's flying

and cut any wire with scissors. The plane will still fly itself home. Because it's wired redundantly. Redundant can bus. So basically we're passing, redundant can bus on the aircraft means that we're not, you know, you can lose any wire.

We also have redundant control services. Did you actually you're paranoid about mid-air things or like mid-hour collisions or because just as a general redundancy strategy? General redundancy. I mean, like, you're not actually worried about someone reaching into the airplane with scissors usually. That would be a hard thing to pull off.

But what you are worried about is like vibration and connectors shaking loose. That's like a core. failure mode for aircraft. So going back to the operations in, like we're talking about these Platform 1 operations that you're doing in Africa and the medical logistics use case, what we described sounds pretty simple, but as you say, demos are easy, engineering is or production is hard. What was hard about getting, you know, from 90% reliability to 99.9% reliability? Like concretely. Yeah, very concretely. What kind of stuff were you solving?

I think that with hardware, like, everything that can go wrong does go wrong. You know, like, at first you have to get, like, a design that works and makes sense. And I would say... So you have earlier design iterations that were wrong in subtle ways. We did unbelievable, or not subtle ways. Like, in retrospect, you're like, wow, we're like complete idiots. How were the silly, early design? Yeah, one really good example with Platform 1 was, you know, when the aircraft would land,

we would swap the battery. The advantage of swapping the battery was we could then have the aircraft back on the launcher and back in the air three minutes later. We put the GPS on the flight computer, which would seem to make sense as a place for GPS. But I have to reacquire GPS every single time. So see, you're like smarter than we were, basically. So the problem was that you have, you know, you get an order

and it's like, wow, there's an emergency. Like a patient needs this, you know, blood transfusion. And so every second counts. So we immediately grab the aircraft. We put the battery in. Give me a minute. It plugs in, the GPS turns on. And now the GPS is going to take 20 minutes

to acquire all the satellites necessary for the vehicle to pass pre-flight and long. And so we realized how stupid this was and immediately iterated and put the GPS on the battery itself. So this didn't make sense from a bomb cost perspective because now you need two GPS units for every aircraft that's flying because one is sitting on the battery charger. But it really makes up for it because you just like doubled your cycle time on the aircraft. So there are a million examples. I mean another example, this stuff is so unfancy. It's almost like embarrassing to describe.

But like when we initially launched Platform 1, the aircraft had 43 different kinds of fasteners on it. Turns out that is extraordinarily difficult to keep 43 fasteners in stock at all these different distribution centers where you're doing constant maintenance actions on them. So the next version of the aircraft had two total kinds of fasteners on the entire aircraft. So a lot of this is like it's not fancy. But it's hard to learn without, you just kind of like learn by doing. Is there a component that's been really annoying? Like if you could wave a magic wand and get a better version of some component, what would you ask for a better version? I mean, every component. We have iterated on many, many times. I would say like today, probably more than anything, is like servos. And in fact, Ziplein went and designed its own servo from scratch. You know, we also ended up going and designing, you know, almost every component of the aircraft. It was just kind of a matter of like when it made sense to do it. But over time, almost every component of the aircraft, every major subassembly has been designed completely from scratch.

Why do servos frustrates you? Servos for context are actuators, basically, things that turn electrical power in. and mechanical movement? I think servos are hard just because there was no industry. I think, the way to think about, you know, people think about drones. And they're like, oh yeah, it's like a drone. But the reality is you have, you know,

an $1,000 quadcopter that will, like, take pictures and fly for 20 minutes, and the reliability and safety of it really doesn't matter at all. And then you have a $50 million dollar predator aircraft, which is actually surprisingly also very unreliable.

Like, Predator, you know, famous I read this statistic, which is like, 50% of U.S. military drones have crashed due to operator error. Oh, my God. You read these stories, they're like, they didn't realize they were flying upside down. It's like crazier than you think. The DJI inbuilt collision avoidance is now much better.

Not working. I don't know. The new ones will. Yeah. I think that the reality is those are two different sides of the spectrum. And what Zipline really needed was like we think a lot about automotive grade, which is actually almost think of it like a sacred area of like, cost and quality. Because automotive grade is super, it's generally very low cost and very, very high

quality and reliability. And that's really where servos are. Like you can get servos that are totally crappy that you'd like use in consumer, I don't know, like toys. And then you can get like extremely expensive servos designed in Germany and they cost $1,000 each and they're way over-engineered. But what we needed was something that was like extremely cost effective and it would last for like a million cycles and that doesn't exist in the world. And so you're now producing your own service? So we designed it completely from scratch and now that's what we use in Popform 2.

That's fine. Will you end up just selling drones for other applications? Like right now you are a, you know, did you know Boeing and United used to be the same company? Like it was full vertical, vertically integrated aviation where, yeah. Wow, I feel like I'm embarrassed. The airframer and the airline, yeah, and then they were split up

in that, like there was a big antitrust. I mean, antitrust was emerging as a domain kind of at the time. And as part of that they were forced to split it up. Anyway, you are the Boeing and United, right? You know, you provide the service and you produce the aircraft. Might you ever just sell the aircraft?

I don't think so. For, like, a number of reasons. I mean, I think the most important one is kind of what I was alluding to before, which is none of our customers care about drones. Like, if we were out there trying to sell drone, I mean, it just is not solving the problem that people actually care about.

Like Walmart, Cleveland Clinic, the government of Rwanda, none of these customers want to be, like, managing a fleet of autonomous aircraft. Oh, no, I don't think you'd sell the drones to your current customers. I think to be new customers where maybe I want to build a crop dusting service and your drones would be the best for doing crop dusting. And so I buy your drones and they have all the safety equipment and the high quality servos and things like that.

But you're not currently in the crop dusting market. Yeah, I mean, the second reason I was going to say is I just don't think selling hardware in that way is a very good business. But I also think the third thing to consider is that like it's a bit like asking someone it's like, oh, you know, Jeff Bezos, like early days of the internet. Are you also going to like build other internet businesses? You know, it's like the internet is just a technology platform. And Amazon was building, obviously, you know, a new kind of retail company. And I think that, you know, drones are a technology platform. Zipline is a logistics company.

Like, we are really focused on building automated logistics for Earth in a way that you want to build the first logistics system that serves all people equally. Like, we would happily use any different kinds of technology. Like, if someone invents teleportation tomorrow, we'll switch to that because that would be better. Your logistics platform, I just, the big unsolved space was drawn. Will you ever do a modality that is NOS drones? Very possibly. What would that be? We have lots of ideas.

Have a few more sips. Yeah, exactly. I think that ultimately, if you really want to be a new kind of logistics provider, you probably have to be even more integrated. Certain things are not going to go via the air. Certain things are going to go via the ground. So there's definitely a world. Yeah, you should be multimodal.

UPS is multimodal. Perhaps Zipline should be multimodal. Keller is describing here how Zipline got its start in Africa, but they're now up and running with drone deliveries in the United States. And this is a technology pattern you see again and again. Drone delivery, mobile payments, WhatsApp, QR codes.

These are all technologies that started in emerging markets first. And it's going to be the same with Stablecoins. So here at Stripe, we're all in on Stablecoins. We recently acquired Bridge, the leading Stablecoin orchestration platform, and Privy, the best crypto wallet infrastructure. structure. We're already seeing a ton of stablecoin adoption, especially with companies that

want to build cross-border financial products. We're working with companies like Ramp to build a global stablecoin-backed spend card, SpaceX for global treasury management, and Shopify to enable payments on Shopify stores from every country. And then break out startups like chipper cash and dollar app, they're offering dollar access to people in Africa and Latin America. But we don't think stable coins are going to stop there. Stable coins are a programmable, low-cost, high-throughput financial system that will have applications everywhere. I know from my experience, when I talk to CEOs, they're all interest in the applications of stablecoins. Stablecoin supply is up 50% in the past year alone. They're definitely not a flash in the pan.

So if you're a company building with stable coins or you're just thinking about your strategy there, come talk to strike. We have been describing Platform 1, which is like we said, fixed wing, catapult launched, skyhook recovered, operating for the last decade in Rwanda. you now have just launched Platform 2, which is vertical takeoff and landing looks more like a traditional multi-rotor drone that people might picture when they hear a drone. There's also a wing?

Yeah, it's a hybrid. Okay, so it's a, I forget what you call these, but yeah, there's wing and there's... Vertical takeoff and landing, so V-Tol. Yeah, V-Tal, fixed-wing thingy. And you are using this for deliveries in suburban America. Many questions on this. First off, why construct a whole new modality?

Like, it seems to me that what you were doing with the precision airstrikes of little packages under power sheets would also work for my burrito. So why not do Platform 1 with my burrito? I mean, in fact, it did. The crazy thing is that when we initially started building Zipline, we kind of thought, oh, we're going to have to build this very fancy, complex technology. It'll have to be a vertical takeoff and landing fixed-wing vehicle.

We have to be able to deliver things very precisely and gently. And then when we were talking to all these early customers, we realized, and this is the power of just going and talking to customers directly, they only cared about cost and speed. Basically, they wanted to cover maximum range, they wanted to be fast, and they wanted to be really cheap. And so we kind of ended up thinking, like, hey, perhaps we should just design this very simple fixed-wing system

that would be, to a certain degree, very unfancy. Like, when you see the way we're delivering there, it's just like this, you know, cardboard box with a, wax paper parachute, it is amazing to me that that system worked that well and scaled for 10 years to like 5,000 hospitals and health facilities and became the largest commercial autonomous system on Earth. You know, when we say 100 million commercial autonomous models, I don't think people fully get, like that's going to the moon and back 200 times.

Yeah, and I presume I don't know, I always find comparisons of to the moon and back really not that helpful. Not that helpful. Here's another. No one knows how far where the moon is. I presume your average shortage is order of. 100 miles in Africa, and so you're basically talking a million flights. Like, I think...

It's like 1.5 million. Yeah, 1.5 million flights. So I think that's a pretty good number. But... So anyway, not to, not to, you know, digress. But it's kind of amazing to me that Platform 1 scaled as far as it did with this delivery experience was like super unfancy. And ultimately, as we were scaling that like crazy through 2020 and 2021,

there were all these big customers in the U.S. who all were kind of saying, hey, like, we want teleportation. We would use that here in the U.S. And so I think that this was kind of our realization that, like, it was time to expand, basically, and say, okay, if we were going to build a product that can deliver directly to homes, what does that need to look like?

And the design considerations for that are pretty different. You know, in our opinions, we need to integrate really well with, like, existing buildings, going to build distribution centers like we did with Platform 1. We had to be able to basically, you know, plug into the side of any existing hospital or primary care facility or warehouse or even restaurant. And then from there, you need to be able to deliver two homes in a way that was fully automated,

zero emission, you know, 10 times as fast. And most importantly, we want it to be silent. Because we think that, like, people, this is kind of an important thing. I think sometimes people think drone delivery, oh, my God, it's going to be so annoying. You know, this like nonstop buzzing of drones, because that is how people experience drones today. But the reality is that it doesn't have to be that way. You can design systems that are actually way, way quieter than receiving a delivery via a car. The crazy thing, sorry, that I forgot to mention my description of Platform 2 is that the drone

does not come, the aircraft does not come anywhere near your house. It sits up at 300 feet above your house and then long lines the payloads down to you in a little droid thingy and that drops it off. But as a result, the drone is hovering 300 feet above you. I presume it's just inaudible. Yeah, it's nearly inaudible. It looks crazy. I was talking to an investor. I was talking to an I was talking to an investor the other day. He wrote us this nice email and he said, hey, we really want to meet you because we think Ziplin has built like a fundamentally jaw-dropping consumer experience. I do think when people come and see it for the first time, it's pretty wild. Because you just never really experienced something like zipping down to you from like a football field above your head.

It's kind of science fiction. It's kind of science fiction. But the advantage is that droid that you described, the little robot on the end, is actually controlling its position in X and Y axis. So this is really important because like it's often windy, it's going to be blowing, you have different environmental conditions you're trying to control for, and we want to be able to deliver with like dinner plate level accuracy to any home. And so this enables us, even when the wind is blowing really, really hard, this enables us to like very reliably, safely and precisely deliver something even in a very, very tight area. Okay, so the reason that you need to develop a platform to for suburban deliveries in the United States was one, the place you're delivering from the Chipotle, you probably can't. fit a catapult there, or at least not in everyone. I'm pretty sure you can't. And some of them you could, but it's a parking lot. You know, but not reliably.

And then for the target, again, it might be accurate enough, but the new system is definitely accurate enough. Yeah. I mean, in fact, like the very first Walmart store that we ever integrated, we actually integrated with Platform 1. And that was even more shocking to me. The customers loved, like, basically having, like, their stuff bombard them, you know, like from 30 feet up.

I mean, it's like, honestly crazy. I think that was like the clearest signal to me of like, man, if people were willing to put up, put up with that delivery experience to get something delivered autonomously, like wait until they see platform too. So the reason that we haven't had drone delivering the United States for a long time is the FAA did not provide any rulemaking on beyond visual limouside operations. And, you know, they're your regulator, so you probably can criticize them in public. I'll criticize them for you.

I think, you know, the FAA was slow. and roundly criticized for being slow in not having any commercial drone framework. So it's the old Part 107 stuff for hobby drone operators, and line of sight is the test where it has to be a light drone less than 55 pounds

and you have to be like they're controlling it through remote control, which obviously is not viable for commercial drone operations. So for the longest time, they sat on commercial drone operations and didn't do anything. Just now in the last month,

we've seen Sean Duffy, the Secretary of Transportation and acting head of the FAA, announced new Part 108, Beyond Visual Line of Site, commercial drone rules, or at least the notice of proposed rulemaking. What do you think of the current FAA and the rules they're proposing? Yeah, I mean, first of all, you know, Part 108 is kind of like codifying something that has already been happening over the last three to four years, which is I think that about four years ago on an ad hoc basis and like via exemptions.

Yeah. Which is that about four years ago, Zipline started seeing. regulatory approval in the US. We were able to go to the FAA and say, hey, we have 100 million commercial autonomous miles and zero safety incidents. We think at this point you have the data you need, and they agreed. And so very much to their credit,

like this is what really unlocked, like ziplines starting to scale aggressively in the US. And we've done that via exemptions. There are things called like 44-807, which is a different process rather than getting an aircraft type certified. If you really want to talk about, you know, something that's broken, we could talk about type certification.

Of drones or aircraft? Both. Yeah, I mean, so far... Do you see the mosaic stuff? I'm not an expert on mosaic. It's amazing. They fix part 23. That is really cool.

Certification by making part 22 much bigger. The type certification has been, you know, this interesting, like, blocker, which is if you wanted to operate commercially in the U.S., you couldn't operate under 107. Or if you wanted to operate commercially beyond visualized site, you had to operate under Part 135. I fear that we're getting, like, you know, we're really in the wheeze now. But, like, you know, I guess the main point here is that, like,

you needed to get an aircraft type certified. And this is kind of the definition of a very painful regulatory process. It takes five to ten years to get aircraft type certified. And it's really based on this idea of like a regulator is going to look at every component of the aircraft and like independently verify that that component is meeting certain standards that were set by the regulator. That might, you know, I mean, imagine trying to do that in a world where like every year you have a radically new and better version of the technology. Yeah, you guys are doing like progressive hardware development. and like constantly figuring out that, you know,

two fasteneries is better than 43 and other such innovations. You just have really, really fast iteration. And so in a world where type certification takes five to ten years, you're dead on arrival. And that's kind of what we saw for like five or ten years. None of this innovation happened in the US. I think the good news is that in like 2020, the FAA kind of like woke up to this.

They realized like, hey, this is going to become one of the most important industries in the world. The US needs to be a frontrunner here. We cannot be a laggard. And the FAA actually started to move super fast. I mean, the FAA's been, you know, I know you think maybe I'm just saying this, but like, the FAA's actually been a great partner. Like, there are so many people there who want to win and who want to see the U.S. win.

I think the FAA is full of awesome people trying really hard. I think the rulemaking has been slow. And I think exemptions and waivers are not a substitute for a good regulatory framework. Yeah. Well, there you go. I mean, 108 really is, like, I think, you know, there have been these exemptions made that luckily enabled ziplined, like, invest aggressively in the U.S. over the last four years and experience pretty explosive exponential growth, which we can talk about.

But, like, you know, 108, it is cool to see that now be codified. That is just the beginning of a process, right? Because now the FAA has nine months to, like, actually operationalize and execute based on that rulemaking. And we'll see how that goes. But I think it's, like, it's super important. I mean, I think you and I probably both have grown up reading about, like, the SR-71 program, or a lot of these programs, like, to design airplanes.

I mean, there was a world where, like, the U.S. was iterating incredibly fast in aviation in aerospace. And we've largely lost that. Like, our grandparents got to grow up in a world where they could fly on supersonic jets. We can't. You know, I think people have this sense that, like, the world moves inexorably forward. It doesn't. Didn't you have a tweet about this? Maybe, like, you know, I think about it every day. Like, actually, no, sometimes we literally move backwards. Yes, yes.

And in aviation, like, what plane did you learn to fly on? I learned to fly an assassin, 152. And how old was that aircraft? Yeah, it was from the 1970s, I want to say. What the hell? No, I was actually just ogling the Carbon Cub UL, which uses a new ROTACs engine. So there's this awesome new engine technology out of Germany, this company, ROTACs, that makes them there. And it hasn't been in the U.S. certified market because it hasn't been worthwhile to go get the engine certified.

And now they're selling it in the LSA regime because exactly it is possible there. And so I think we're just going to see this wave of interesting news. Because the kind of pent-up technologies that haven't been certified yet, such as Ro-Tex engines, which are better in every way. Have we lost, like, 98% of the audience now by talking about 108 and 135? I guess, but just to share... No, but it's specific. To share one thing, like, to try and make it even more general interest,

like, what really inspires me, you know, is you think about, like, skunk works, right? And, like, the teams that built a lot of them... It's the Lockheed Martin factory that made, or kind of group, tiny group, that made... all the fun new style aircraft at F-104 and stuff with them. SR-71, even more famously like the U-2. The U-2. Yeah, exactly.

U-2. And they didn't make the F-104, they made the F-11, sorry. Yeah, and just to give like a specific example, a couple examples. One, like the first modern passenger aircraft that was ever built, the DC-3. I think I'm going to get everything right. Like, DC3 was built originally.

The entire design cost for that aircraft was like $2.5 or $3 million. So even when you convert into today's dollars, That's like $75 million to design a passenger airliner. The $787 cost $32 billion to develop. Oh, yeah, DC3 was like napkin sketch to finish aircraft, I think, in two years. Yep. You know, the 787 took 20, 25 years, $32 billion.

It's literally become 500 times as expensive to build an airplane as it was for our grandparents. And I think the crazy thing is you're going to be like, oh, well, it's like that 787 is a much more complicated airplane. Yeah, the iPhone is also much more complicated than it was five years ago. So if you think about the causes, I think there's a great point that the 787 certification process is so much more tortuous than the DC3. If you think about why that is, I think there is a few obvious things you could point to. One is, and the one people would point all the time is we have much less tolerance for unsafety than we use to. The second is the certification approaches are much more prescriptive, and so they require that you do specific things to prove how you're going to. meet various tests and stuff like that.

And then maybe you could say that just the paper turnaround times have gotten slower and, you know, there's a lot of back and forth. If you could wave a magic wand to fix aircraft certification, either across drones or manned aircraft, again, you're putting chart at the FAA. What would you actually do? I think the answer is actually really obvious. And the good news is I think this is largely like already happening, which is that we need to move away from like prescriptive regulatory.

that are like, okay, now show me the, you know, life support system for the pilot. Should we lose, you know, whatever atmospheric pressure in the cabin? It's like, it's a drone. There is no pilot. And then the FAA looks at you like, I don't know. Like, we can't move forward, you know? Like, I think there are a lot of things are just, you have all these prescriptive rules about, like, how we're going to. You need performance-based.

You need performance-based. So basically, everything needs to transition to a world where, like, the FAA is setting a statistical level of safety. and from there, like, any company can, you know, basically self-certify against that level of safety. You can imagine different ways of, like, what kind of data you might have to provide to prove that you're meeting that level of safety. But, like, there are a lot of different ways to build something that's safe. And what you want is, like, engineering innovation. You want people trying new things.

If you try something new, and it's an amazing innovation, it's suddenly, like, blowing it out of the water. Like, with a prescriptive, absolute regulatory framework, you lose all of that. Yeah. Because it's basically like the FAA is just looking to make sure every subsystem that's like the way we've been designing airplanes for 100 years. The subsystem by subsystem stuff is crazy rather than performance based. It's really painful. Yeah. So anyway, I know this might be like a little like inside, whatever, you know, shop talk or whatever.

But I think that it's really important. Like, and I also think you can probably see similar versions of this battle playing out in many different parts of like the U.S. government. when you look at the way we build nuclear power plants. We created, what is it called? The Nuclear Regulatory Commission. Nuclear Regulatory Commission started in, I think, like, 1978. The Commission has started to ensure that power plants are safe. And since then, we've built zero power plants, I think.

Or is it like one? I think it's zero. Yeah, yeah, yeah. It's definitely the rates slow down. The Commission achieved its goal, though. Yeah. Because we built zero. And that's, that's like painful, you know, as an American.

It's like, ah, like, that's... You're describing failure to engage with trade-off space in an intellectually honest way, where there's a trade-off between safety and cost, and you just have to actually address those questions, and you know, the trade-off can speed and safety these things. And the cool thing in aviation is that, like, there's now 50 years of pent-up technology

that has totally not been put to work at all. It's actually very similar. I think it's why SpaceX is like this, you know, enormous success. Like, because they're like, oh, yeah, we'll just actually use modern microcontrollers. Yes, yes, yeah. Or modern semiconductors. Whereas, like, you know, ULA was building on a semiconductor, you know,

architecture that I think was like 30 years old. Yeah. Because they just didn't want to certify a new flight computer. And so you've launched in Texas now, just Texas? In the United States? Well, we launched originally in Bentonville, and now we're expanding in Dallas. Okay, so you're expanding in Dallas and delivering for people like Walmart and Chipotle. And where else should people be ordering from in Dallas?

I mean, you can just go to the Zipline app. Okay. So, yeah, and we have all the different storefronts on there. You go to Zipline. But those are some of the biggest ones. Yep, those are the biggest. And, I mean, you know, to give a sense, right now we're launching... Yeah, give me your explosive growth stats.

I mean, it's kind of crazy. It's really only the last three months, but we're now launching a Walmart super center every week. You know, those stores are ramping extraordinarily fast. I mean, I don't know exactly how much I'm allowed to share. It's probably more for Walmart to share. I mean, order of magnitude, you know, it is... The service is becoming quite low. large relative to the way that people receive.

That is all that. Like, how many drones do you're flying in the Dallas area? Yeah. So every, you know, right now we are integrated with about 10 Walmarts and we're launching one a week. And each aircraft, each, each Walmart will have somewhere between like eight and 20 zips flying from it. Okay. So you have hundreds of drones now delivering in the Dallas area. Serving, you know, and I mean, the crazy thing is the service. And each drone can do hundreds of deliveries a day?

Like, I think each year, yeah, high tens is the way to think about it. So the capacity for a thousand-ish thousands of deliveries per day. And that's growing rapidly. We're actually expecting to get to 10,000 deliveries a day in Dallas. Like that's actually the company's goal. We're moving as fast as we can toward that. Looking at the statistics, the service has been growing 25 to 30 percent week over week for the last three months. And the interesting thing, the last couple things.

I mean, really it's only the last three months that like, because we only launched in Dallas on April 1st or April 4th. thing. So seeing it grow like that, the crazy thing is that about a month ago, we were starting to have all these capacity issues because it's like we can't do as many deliveries. It's growing really fast. So we decided to turn off all the marketing. We turned off the in-app notifications. We turned off the field service marketing. Basically, all the demand generation marketing we're not doing. And the service just like, you know, I mean, we hit new records. Because it's just a much better product. Yeah. Saturday we hit a new record, like all-time daily delivery record and then on like two days ago and then yesterday we blew that record out of the water

by 20% it's crazy so I think that um you know a couple takeaways like one is that is amazing how quickly science fiction becomes entitlement yeah like you know we see this with waymo and it's exactly like waymo where people get in and they're like oh my god it's on the car insane and then three minutes later they're like scrolling on instagram you know and I mean when you go to Dallas what's the version of that in Dallas I think the version in Dallas is the version of But for the first day that we launch a new Walmart, you'll see people kind of like on the hoods of their cars just like watching the service. You know, like people are kind of taking note. And then three days later, people are just totally going about their normal lives.

Do not care. You've got this like installation of autonomous aircraft that are just coming and going nonstop at crazy volume. You know, I think the other example is like, I mean, I visited a 78-year-old grandma who's ordered 340 times from Zipline over the last year. She's been like the county. I was going to ask her you're seeing induced demand. This is induced to man. Where people are ordering more stuff. It's crazy.

Like she's been, I think, the county clerk for 40 years straight. And, you know, she's just showing me. She's like, oh, yeah, like, let's place an order right now. And she's like, like, around on her iPhone, you know, putting everything into her basket. It's like, double click the side of the phone, face ID, Apple Pay. She's like, it's on its way. It'll be here at eight minutes, you know? She's 78.

She's, 78. And she's, like, totally living in the future. And, you know, you talked to, like, moms who are like, oh, yeah, this, you know, buys me back, like, three or four hours a week. I can just be with my kids or take care of the family rather than be out in a car trying to shop or get something. So I think a lot of families we're seeing now ordering like three to four times a week on average where they'll do like a big grocery run once a week. And then they can do three to four. Sometimes they talk about them as like top up visits.

It's like if you don't know what you're making for dinner or are you like something unexpected or you have people over, you just get everything you need delivered autonomously. Why can we not have this in California? Why are you in Texas and not California? Because, like, I would have thought from a regulatory point of view, this federal preemption of the airspace, and so I would have thought all places are equal. Why is Texas a more hospitable environment for this than California? I could ask the same question about Rwanda. I mean, I think that, you know, Zipline has probably been... But Rwanda had a different regulatory framework, like drones were banned in the U.S., whereas drones aren't banned in California.

No. However, you know, a lot of what we do is still about a partnership with, like, the community and the government. I see. You need a permit for the base or whatever. Yep, exactly. We're still permitting. ground infrastructure, for example. It's a bit like, you know, Tesla building supercharger infrastructure in the U.S. So who do I need to write a letter to? Is it by mayor? Is it by, you know,

a local representative? Yeah, we're working on it. But to be honest, like, as someone who lives in the Bay Area, and so like 100% feels your pain, it's like, why is this not like serving my house right now? Like, the vast majority of technology has first focused on serving like, you know, whatever, the elite cities on the coast of the United States. I actually think it's okay. Yeah. That for once, like, technology is kind of going. This works better in a low density area? It's going the opposite. Well, it's actually, I mean, Dallas is a very high density.

Like, I mean, it's not Manhattan, but it's probably denser than San Francisco. I wouldn't say it's as much about density. It is a lot about, like, you know, we typically want to launch somewhere where people are freaking psyched to have us. And where there isn't, you know, I do think there's a little bit of a flavor. I mean, you had Kyle on here, right? And, like, seeing what crews went through in San Francisco with the coning of the cars. Yeah. Our war on electric scooters here in San Francisco.

Hey, like. But we've a new mayor. I'm not judging. I know. He's doing awesome. I think that, look, I just think that sometimes cities might, you know, if they just assume that they're always going to have the best technology and like they don't have to, you know, do anything about it. Or I don't know. I think that there are a lot of cities and states out there that like are 100 percent like aggressively courting, you know, infrastructure, new solutions. They want high paying jobs and they're like unapologetically excited about new technology. So you're going to go to the cities that want you first, and then you can get around to the cities that are more ambivalent. I think what's going to happen is that at some point, you know, again, there are like certain cities that are just extremely forward-leaning. Like an example, I brought one of our board members from San Francisco, you know, leads one of the biggest funds in the world here in San Francisco, to Dallas. And he was like looking at what we're doing. And his, I mean, I could see the smoke coming out of his ears.

He was like, oh my God, you guys are just doing things. You know, we went to a site where we were building charging infrastructure, and we had literally broken ground three days previously. There was a huge hole in the ground. And he was like, so when is this going to be online? And I was like, it's going to be online in 15 days before the board meeting. We had a board meeting in 17 days. And he was like, that's insane.

It is not going to be ready for the board meeting. What are you talking about? And it was actually ready like five days before the board meeting. Basically, different kinds of cities have different requirements. And like there are places in the U.S. where you can get things done super, super fast. Yeah. We are here in South San Francisco just down the road

from your aircraft manufacturing facility. Tell me about that. You know, how do you build them? How many are you building? How many will you build? The most important thing is the speed of engineering iteration. I think you'll appreciate this. You know, that's something I think that's been

very well-understood concept in software companies. Not so well in hardware. Way harder to do in hardware. And so the way to do that is full vertical integration and then having engineering practically on top of manufacturing. So that as you're rolling hardware changes through onto the line,

you have the engineers who design those changes, working with manufacturing engineers, and then working with the people on the line itself to figure out how to make that work and get it into production. And so even though it seems like a bit of a weird thing to say, like, yeah, we're producing all these aircraft here in South San Francisco,

the value of us being fully integrated in that way, what it does for the speed at which the line can iterate and evolve the product, is way more valuable than like, oh, it's more expensive to hire someone in South San Francisco than it is in Nevada or something like that. So it's an easy trade. So yeah, this facility, we just expanded

to 160,000 square feet. It'll be capable of building around 50,000 aircraft a year at scale, which should get us to, like, near national scale in the United States. 50,000 aircraft a year. And how many aircraft will, like, a medium-sized city require, this is important? I think it's like around a thousand. It depends on the city. Yeah, yeah, yeah.

Cities come in a lot of different shapes and sizes. Yeah. Okay, yeah. So 50,000 years really a lot. Compare it. You know, again, it depends what you're comparing to. If you're comparing to iPhones, not really. But if you're comparing to, like, airplanes, then, like, yeah, really a lot.

Like compared to the Cessna. Yeah, exactly. You learn to fly in. Yeah. Okay. And so you'll be able to, in your current production facility in South San Francisco, produce 50,000 drugs a year. Yeah.

Three shifts, 24-7 operations. We already operate our test sites 24-7. What do you do with the test sites? What do you test? Yeah, I think, you know, when people come visit the test sites, I think that's one of the things about Zipline that is most mind-blowing to people, and I think it's just it doesn't really look like

anything people have seen before. You know, people often ask us, they're like, wow, 120 million commercial autonomous miles and zero safety incidents. Why don't other people do that? I mean, it turns out that, you know, designing something that's safe is hard. You have to think very...

Reusable rocket. That's a good idea. Yeah. Exactly. It's like, yeah, everybody should just do it. It turns out some of these things are hard to do. And I think the way you do it is it's all just like, you know, none of this is fancy. It's just practical problem solving. And so for us, it was like having three major layers of, you know, testing and validation.

So the first layer is like software testing. We do a huge amount of testing, you know, at 10 or 100 times real-time speed to, like, test all the different software systems that we are constantly iterating. and there's 10 times as much software as there is hardware. So it's like the airplane avoidance you're describing. It's like you input a signal of like, oh, you're near an airplane and check that it avoids the airplane in a quick fashion. Autonomy, computer vision, you know, guidance navigation controls, communications architecture, all the back-end cloud services.

Like these can all be, you know, you can do a huge amount of software testing. Because I think the other major way to think about what is the problem we're trying to solve. Do you know how long it takes Boeing to do a software update? Do you want to guess? Do you want to guess? No. You don't want to guess? Come on, guess, guess.

Like, from when to when? For example, from when they realize that their planes are falling out of the air and killing people to when they can then have the software update out, and so the airplanes back in the air. I mean, that was order of a year? Three years. Oh, that was that long? Yeah. Again, this is part of the problem of how the FAA regulate software with those kinds of aircraft.

But, you know, Zipline right now is doing a full new version, like we're releasing new software to the entire global fleet every 30 days. And so validating that, you know, basically it might be, you know, 50 to 100 bug fixes, maybe, you know, 20 to 50 performance improvements, and then like five to 20 major feature additions or upgrades. And that gets validated through the software testing layer, then it gets validated through Hiddle, which is hardware in the loop testing. It's basically like all of the avionics of the aircraft assembled on shelves that are kind of like

the brain of the aircraft connected to the matrix. They're all operating in simulation. We can detect like 95% of what's going to go wrong on an aircraft. We can detect in Hiddle. Before we then go to the final layer, which is the test sites. The test sites have hundreds of aircraft operating 24-7, so they never stop. Even, you know, Saturday at like 3 a.m., you could go to the test site and you'll see, like, the aircraft are just there, and there are humans overseeing them.

You're describing your build, manufacture, testing, infrastructure in the United States. one of the top discussed topics right now is American dynamism, the re-emergence of American manufacturing. And when people talk in D.C. about the importance of American manufacturing and the criticality of the supply chain in the United States, you know, the example they often point to as a supply chain that we have outsourced is obviously drones, where there is not as serious, as serious. I think you're going to say it's semiconductors. Oh, well.

The semiconductors is like even more scary. Samis we've talked about a lot. Yeah, yeah, true, for sure. But, you know, there's headlines about Intel and everything. But we also talked a lot about drones and just how much more scaled up the Chinese drone industry is than the U.S. drone industry. People also talk about the fact that it's not competitive to manufacture in the United States anymore because supply chain. I don't know, do you read the Apple in China book? It's like a pretty good...

I've heard of it. I haven't read it yet. It's great. It's like a good history of Apple's manufacturing in China. And they describe kind of the emergence of it. But in particular, you know, people sometimes thought of China as just low wage, whereas the book correctly describes just how much agility there was in adapting supply chains and being able to manufacture it there.

And so you are a company manufacturing at scale in the United States. What do you think of this topic? Yeah, to put a finer point on it in a week, China makes more drones than the U.S. makes in a year. That is a finer point. So, you know, it's a little spooky. And obviously, you know, you don't have to be like a deep student of global events to understand that like, wow, I mean, this technology is clearly kind of like remaking not just industries, but remaking warfare. Yeah, and people watch the war in Ukraine where it is now all drone determined from airspace. It's like 100% like everything is attritable and like you wouldn't want humans on the battlefield at all.

And I think that I think this is like a good news, bad news thing. So the bad news is like, yeah, it's true. you know, China has like massive manufacturing advantages and massive scale in this area that the U.S. does not currently have. But that is mainly for like, you know, plastic quadcopters that cost $1,000. Like, it's definitely a different class of aircraft. When you look at like where this is all going, the systems that are really going to matter, whether it's like military or logistics, they aren't like $1,000 quadcopters.

They are more complicated technologies. They require really strong integration of like, you know, software. AI solutions with the hardware itself. And again, the hardware is only like 10% of the complexity of the overall solution. So in those areas, the U.S. is actually leading. You know, the U.S. is leading both in terms of, I think, drone delivery and logistics,

but also, you know, leading on the software side. That's right. Those areas being... I would say, like, more advanced hardware software integrations that are required for, like, really good products for military and really good products for logistics. Okay.

When we're talking about the 50X, that's like because you have DJI in China. Or like, you know, they're building tens of thousands for like drone light shows, those kinds of things. That is not necessarily the battlefield that is going to determine, you know, who really like is the frontrunner in the industry that matters the most. And so I think that it's too early to say. I think, you know, China has obvious advantages and that like they have massive manufacturing scale. You mentioned the Apple's supply chain book. that is a huge reason. The fact that Apple outsource so much of that manufacturing

and so much of that knowledge and expertise is now in Shenzhen. Like now Shenzhen's ability to build phone-adjacent products, which I think you could definitely describe drones, even cars. You could describe as phone adjacent now. As Tesla has one tell you. Yeah, or Tesla I could attest.

You know, it's actually those supply chains that make it possible to then, like, branch out and build a lot of these other products way faster. So that's the advantage that China has. The advantage of the U.S. has like a lead in AI, a lead in more advanced hardware and software integrations. I don't know who's going to win. Yeah. The point the book makes is that Apple's direct investment in China is much larger,

even in inflation-in-just-ter terms, than the Marshall Plan in your apparel. It's insane. It's just kind of a huge investment in manufacturing capability. I was thinking about that on the way here. How that's going to look, you know, with the benefit of hindsight. Corporations sometimes make, like, the easy short-term to say. to maximize profit instead of like the more strategic decision of like how do we set ourselves up for long-term success and it really does not seem like it would be that hard to you know ensure like to achieve some of the company goals that a company like apple wanted to achieve but also ensure that you

you know maintained like manufacturing dominance and kept it at home or at least ensure that you kept that as a strategic option like the fact that we're now in a position where we don't have the ability to build our own smartphones, period. And where, you know, depending on what happens with Taiwan, we may not have the ability to even build modern computers. It's spooky. Last question. You're one of the success stories that people hold up in hard tech where you've built a product that is a successful business line. You've found a good way to start that wasn't too capital consumptive. You were able to get like a real product out there in the field and refine it from there. And now you have a product that people love in several countries.

What advice would you have for hard tech founders starting out today? It certainly seems to me like the whole American dynamism, what do you call it, paradigm that we kind of see, I think it's making things easier. When I moved to the Bay Area in 2013 with the goal of kind of building Zipline, the most exciting company in the entire, in all of Silicon Valley, probably in the entire U.S., was a company doing file sharing. It was Dropbox. They had the best engineers,

the best growth story, the most ambitious vision, and it was, I think, at that time, like a $5 billion company which was like more money that I could possibly imagine, right? And that was like the pinnacle of what you could achieve

in terms of building a startup in Silicon Valley. And so it's interesting to think that in just 12 years, like the scope and scale of human ambition has radically increased.

Yes. increased. I mean, whether it's Tesla or SpaceX or Stripe or, you know, Open AI or, you know, Brian Armstrong was on here, right? He's like working on New Limit. They're trying to make humans immortal. And a lot of these ideas are like working and scaling. There are people building nuclear fusion power plants. I think that's like kind of probably underappreciated just how much change has happened in just 12 years. And I think that, you know, I guess to answer the question my biggest advice is that I think especially when it comes to hard tech, like the whole challenge is just designing something like incredibly simple and getting it into the real world quickly and learning by doing. It's very easy to be in a bunker or an R&D lab building cool technology really hard to like force yourself into the real world and then learn by doing. I think that that like Zipline, you know, we never thought we were the smartest team. We never thought we were certainly not the best funded team. But we always had this like deep conviction that

we were the most practical team. And we had this mission that really inspired us, we knew exactly what we needed to do. It was like delivered those 21 hospitals. And we forced ourselves to launch something that to even our own eyes, we were quite embarrassed. It's like, oh my God, like, is that going to, I mean, are people going to put up with that delivery experience? And it turned out that like even that very simple version of the product scaled very fast. And so I think that it sounds obvious when you say it. And yet it's extremely rare, especially in hard tech companies. Keller, thanks for coming by. Yeah, thanks, John.