This Week in Startups - ByteDance limits daily app time for kids in China + Next Unicorns: Orbital Insight’s Kevin O’Brien | E1286

Episode Date: September 20, 2021

In news, Jason covers Bytedance's decision to institute a 40 minute limit for kids on Douyin, the Chinese version of TikTok (1:56) and hits on the real estate situation in SF and implications for the startup community (15:02). Then, Orbital Insight's CEO Kevin O'Brien joins for the next installment of our Next Unicorns series (21:38) discussing how to make sense of billions of satellite images and pieces of sensor data to form a comprehensive view of the world.

Okay, everybody, we've got an amazing show for you today. For the latest installment of our next Unicorn series, we have Kevin O'Brien, the CEO of Orbital Insight. It's an amazing discussion where we talk about exactly what AI and computer visualization and the ability to study images is going to have on many different industries, because, let's face it, we have satellite data, but a human can't possibly go through all of it. You need AI, you need computer visualizations to make sense of all that data. And it's a wide-ranging discussion from human rights to technology to transportation. Satellite data is really, really fascinating to me.

But first up, we're going to talk about Bytance, the owner of TikTok, putting limits on their version of TikTok in China so that they can protect their children. And we're going to look at the research around kids and online and how damaging it can be. And this is all in the face of Facebook and Instagram, just doing a horrible job protecting our children. And finally, I'll talk about the exodus out of San Francisco and what we're seeing in people putting their houses up for sale. We're at the highest level in a decade, over a decade, in terms of inventory. In other words, the crash in San Francisco is very real and it's continuing. Stick with us. It's a great episode.

Season three of the next unicorns is brought to you by LinkedIn Jobs. A business is only as strong as its people and every hire matters. Post your first job for free at LinkedIn.com slash unicorn. And Odo is a fully customizable and fully integrated suite of business apps that lets you build and scale your stack as you build and scale your business. Your first app is free forever and right now Odo is offering $1,000 off your first implementation pack at Odu.com slash twist. That's ODO.com slash twist. Hey everybody, we've got a big newsday for you. First up, Bight Dance is rolling out a 40-minute per-day time limit for kids under the age of 14 on their version of TikTok.

Bight-Dance, of course, produces TikTok in the United States, and the Chinese version is called Du Yin, and they will limit children under 14 from using the app to 40 minutes a day, according to the BBC. The BBC article notes that Du Yin has created a youth mode, which will apply to real-name users under the age of 14. Here's how it will work. Kids can only use it for 40 minutes a day. Kids won't be able to access the platform between 10 p.m. and 6 a.m., effectively, you know, stopping kids from showing up at school, really tired. And then youth mode will include new educational contents such as science experiments in museum exhibition. So let's take a pause for there and think about what China is doing. They're having a free-for-all with TikTok in the United States. I believe TikTok in the United States is a sci-ops. Like it is a psychological operation. Now, I sound like a

conspiracy there is, I know. But if the Chinese are willing to put millions of Uyghurs in jail, and they're willing to shut down companies, and they're willing to take over Hong Kong and threatening to take over Taiwan, these are a serious group of strategic thinkers from the top down who are now saying, this is how our country is going to run. This is how an authoritarian country runs. The people at the top make a decision, typically one person, sometimes a group of people, and then everybody obeys those rules. And so for them to say, you know what, kids should get a good night's sleep. And kids should be exposed to science and museum exhibitions. This tells you something about how they're thinking about their kids. They're thinking about their kids as their future

resource. And here in America, if you may have seen this Wall Street Journal article, the Wall Street Journal did a study where they put, they created kid accounts, they typed in one search term like only fans or whatever, and then watched how crazy all of this content got into all kinds of deep, dark edge cases of sexuality. And I think that TikTok is really trying to damage the United States, both culturally and psychologically and with kids. And I think we should ban TikTok. Period. End of story. There's no reason for a Chinese authoritarian country, which controls their companies. And when I said that six months ago, a year ago, people thought I was crazy. Oh, we don't have any evidence that China controls companies. We don't have any evidence of them

having the data. I mean, this is something that Teller Lerrin said. We don't have any evidence. of that. And she works for the New York Times. I mean, she covers social media for the New York Times. She's not like a China expert. And here we are. China's literally taking over every company. And what they're doing is, I think, they've taken over all the private companies in China, and they have all their data. And they've done it explicitly. So anyway, these rules come after China ban kids under 18 from playing video games during the week and gave them limited hours on the weekend of just three hours, which we covered on the all-in episode 45. David Freedberg mentioned on that episode that all of the CCP major decisions are based on data, research, and forcing

the outcomes they want. So, they're basically banning TikTok for people in their country, but they're more than willing for us to use it. Let's stop for a second and think, where might China be getting this research from? Why might they be making these decisions to not let their kids play unlimited video games and use social media. Well, North American researchers have found that there is a link between children and screen time, and it's not good. According to a May 2021 study by Rutgers University Center of Gambling Studies, middle school-aged children, I'm quoting here, who use the internet social media or video games recreationally for more than an hour a day during the school week, have

significantly lower grades and test scores. Okay. They use the internet. social media video games for more than one hour a day during the school week, they have significantly lower grades and test scores. Now, is it that the people who are doing poorly in school then go use the internet more, or is it that the internet is making them do more poorly in school, that whole cause versus correlation? I'm not sure if we really even have to debate this.

We all know that if you're spending your time playing video games, you're just going to run out of attention and energy. If you're spending your time on social media, you're not going to be able to do other things. That's why I took a Twitter break. I came back a little bit on the margins, but I'm going to start the Twitter break again shortly because it does suck the life out of you.

It sucks all the cycles out of your CPU. Here's another quote from the Rutgers press release. Researchers say, The findings give parents and children a moderate threshold for using entertainment-related technology no more than one hour daily on school days and four hours on weekends. Okay.

In comparison to Rutgers recommended threshold, the CCP is now only allowing 40 minutes per day of TikTok. and that's the child-proof version, for kids under 14, and only three hours of video games on the weekend. No video games on weeknights for kids under 18. In other words, they're basically doing exactly what Rutgers research team, maybe even taking it a little bit further.

And then at the same time, we've got Facebook and Instagram doing studies, finding out that young girls are suicidal, depressed, and anxious because of Instagram, And they're telling the researchers that explicitly. And we're sitting here not making any changes. We need to look at all of these tools and say kids under 16, 17, 18, whatever age we choose here in America, need to stop using these tools.

And they need to use versions of them that have been modified. So if you compare China who's dealt with this and how the U.S. is dealing with this is just a staggering difference. Let's imagine, just as a thinking piece, imagine. Imagine the people making TikTok in China did what Instagram did. They found a study that one of three teenage girls had worse feelings about their body image issues after using Instagram.

Imagine like the Chinese caught those CEOs. They caught Zuckerberg without information. Or Mousari. They would be in jail. They'd be reeducated. They would lose all their personal wealth. And this was internal research, by the way, from Instagram.

Like, they commissioned it. It wasn't like some outside. This was their own research. And as a response to the Wall Street Journal reporting on Instagram, the Senate subcommittee for super protection has requested a probe into Facebook for more information. That's going to take six months, maybe a year. There's going to be a bunch of hand-wringing and nothing will get done. This is the key difference of living in a democracy versus an authoritarian country.

But we should look at the authoritarian countries and say, why are they doing that? I believe the reason they're doing it, because they want to have their next generation be more effective than our next generation. At technology, their careers, the companies they build, the military they build. It's really that simple, folks. Now, another study that is worth noting in July of 2019, the University of Montreal, published a study that measured the impact of four different types of screen time on self-esteem and depression in over 3,800 adolescents.

The four types of screen time, social media, video games, television, computer usage. The study found that lower levels of self-esteem were associated with more severe symptoms of depression. Okay, that makes sense. If you feel bad about yourself, you could start feeling depressed. The study also found that increased time spent on social media, watching TV, playing video games,

and using the computer all resulted in a decline in self-esteem. You have it right there. I mean, the connections are very clear. This stuff should not be used in a free kind of way. People should not be able to use it unrestricted. Okay, now back to the BBC article, this CCP crackdown on TikTok, Duyan started back in 2018 when China is regulated started seeking ways to limit children's time online due to rising cases of adolescent near-sightedness.

That's fascinating. Too much time on your phone affecting your vision. And according to the BBC article, Duyan and Arrival Chinese social media platform began testing, quote, anti-addiction measures. This include testing child locks and experimenting with limiting the amount of time children spent on these platforms, both of which now exist in the Duyan app. data noted in the BBC article originally sourced from the agency We Are Social indicates that Chinese citizens spend over five hours a day online, including two hours on social media. So I think what we're going to come to is, you know, you remember Apple started tracking your screen time? That was maybe three or four years ago,

and they started giving your reporting. That was to let people know how much time they're spending online and the consumption patterns. Now that we have that, now that we have all this data, now that we see what China is doing, these companies, and Facebook specifically, are going to need to take the lead on this. They, if they are not absolutely held accountable,

they are so deranged at Facebook that they were floating the idea of creating Instagram for kids. Like in the face of everything I've just said, how insane and deranged, selfish and greedy, must Zuckerberg, Mossari, and the whole crew over there be that they would actually have the audacity to suggest kids under 13 be, using these tools. That's how selfish, self-centered, and greedy the crew over there is.

They're doing it for the money, and it's disgusting, and they should be ashamed of themselves. What they need to do is they need to put a time limit on Instagram, Facebook, and all these tools. And what I would suggest is they put a counter in the top right in corner. When you hit 30 minutes, it should flash. You've been on for 30 minutes. Would you like to take a pause? Press here. Yes, and we will turn off your access for 12 hours. that's it. Every 30 minutes on a platform, it just tells you that.

And you get to select in and say, yes, don't let me use this for 12 hours, whatever it is. And if somebody is using it for longer than an hour, or maybe two hours, and they're in that kid group, yeah, turn it off.

And if it's 10 p.m. where they am, sure, turn it off for eight hours. Why not? I think if you know this is really bad for you, starting to put tools into Instagram, telling people how often they're using it would be the next logical step. Will you do that Instagram?

If you know that this is affecting, young girls in such a harmful way Mosari, why don't you agree to put just a simple timer in there that gives people the feedback for how long they're using it? Why wouldn't you do that, Masari? If you care so much. Yeah, I don't hear anything. Crickets, right?

They will never do it. They're too greedy. Mossari is too greedy. Zuckerberg is too greedy. It's not enough to be worth tens of billions of dollars. They need to get that extra billion or two. I mean, it literally is about money for them. That's my feeling. on it. They can correct me if I'm wrong, but putting proactively, if I read that research, and I saw I was having this kind of damage,

I would say, you know what, that's it. The new age limit is two years older. Whatever. Just start somewhere. If it was 13, I'd make it 15, it was 15, I'd go to 16, whatever. Because people should have some personal freedom when they're adults. But we're talking about children here. And then, yeah, turn it off. If somebody's 16 years old and they're using it, yeah, it gets turned off at 10 p.m. It gets turned off after X number of hours. and they use it more than five hours in a week. It says come back Monday. That's it.

What about it? Will you do it? Give us an answer. Somebody asked Mossari. He's on Twitter. Everybody right now will stop what you're doing. And I think he's at Mosari. I'm not sure you can look him up.

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According to Socket site, a website I love, Socket, S-S-K-E-S-I-T-E dot com, quote, while inventory levels in San Francisco are still down 35% year-over-year basis, there are now 21% more homes on the market than there were at this time of the year in 2019 prior to the pandemic. Check out this graph, which illustrates the levels of housing inventory in San Francisco from 2007 onwards. Now you remember 2007, 2008, you have the great recession start, housing market collapses. And you have tons of people who are underwater because they should never

have had a mortgage. They had a variable rate mortgage. They bought a home that was greater than the income they had. So when they lost their job or soon after they bought the home, they couldn't flip it. You know, a lot of people remember flippers. They would buy houses and two years later flip them for 500K more because everybody was getting mortgages and if everybody can get mortgages, then the prices can keep going up, well, you had a flood of houses in 8, 9, 10, and 11 there, you can see. And then in 12, 13, 14, 15, 16, 17, 18, 19, you had a very low inventory here in San Francisco because it's NIMBY here. They don't let many new units on the market.

Of course, the pandemic happens and everybody leaves San Francisco. They realize it's too expensive. I can work from home. And now that trend is continuing. So the inventory is crazy. Now, you also have to take into consideration that a lot of the people, people who lived in San Francisco were extremely wealthy in the tech industry. And a lot of them, this is completely anecdotal, were holding onto their homes in the Bay Area or in San Francisco.

And it's very interesting to watch. A lot of my friends who relocated are now saying, you know what, I'm just not coming back. And that's my thesis of what's happening here, is they kept their homes thinking, oh, wait a year, it's COVID. I can't show the home easily. now that we have the vaccines and we know how to manage COVID and you can have open houses. Remember, you couldn't have open houses last year and it was really hard to sell your home. Now we're seeing this massive amount of inventory. It is truly staggering. Now, this is the most homes on the market in San Francisco in a decade, save for last year, which was the massive pandemic exodus.

So if you take this report and your pair it with another report published in August by the Hoover Institute at Stanford, which stated that California lost 74 business headquarters in the first six months of 2021. I think what we're seeing here is a large number of, let's call it, high net worth individuals, people who work at large tech companies and large tech companies themselves, giving up on the Bay Area, giving up on San Francisco specifically, because San Francisco is so mismanaged because of the crime, because of the cost, and because it feels like it's getting worse. Now, if it felt like it was getting better, I think this would not be.

be as acute. But this is now a three-year exodus from California. It started in 2018 because of the cost of living here, because of the taxes here. Each state in the United States is in competition with each other for these businesses. San Francisco and the Bay Area were winning for a long time because there was so much talent there. Now, talent doesn't want to come here. And this is what I'm seeing as, you know, somebody who's the canary in the coal mine, I invest in companies with two to ten people, not Cula Packard or, you know, other companies, Oracle that moved to Texas in the last couple years. I invest in the two to ten person startup. I can tell you a lot of the young people who are starting these two to ten person startups, they've never been to San Francisco.

They don't want to come to San Francisco. They're in Miami. They're in Austin. They're in Salt Lake. They're in Brooklyn. They have no interest. San Francisco is second to L.A. with 47 total HQ departure since 2018. According to the Hoover Institute, The Bay Area Exodus, quote, reflects high-tech companies opting for less expensive locations, not only to control business costs, but to lower workers who want to avoid living in ultra-expensive Silicon Valley or San Francisco. Now, put this all together. People are working from home.

That has become permanent, right? We thought that in the fall, people would start going back to work three days a week. Remember that grand bargain that was happening? And then Delta came and changed everything. so the idea of coming back to Apple three days a week or going back to Google, they push that to January. I think now everybody's basically given up. Talented people are going to work wherever they want.

You can't put the genie back on the bottle. And then at the same time, well, if you're not having all of these amazing workers come to San Francisco or want to be in the Bay Area and they want to live in a low-tax state or they want to have a lot more home for the dollar and they want to live in the suburbs, this is a trend that cannot be reversed. Let me say that again.

I think that this is a trend that cannot be reversed. I don't think San Francisco is capable of reversing this trend. I think this is going to be a straight line down for, I don't know, five years, 10 years. It's going to take San Francisco not being able to make its tax payments or to be able to operate the city. It's going to have to crash, in other words, I think. And so if you're a startup, and this is this week in startups, You really want to focus on having the longest possible runway you can. And to have the longest possible runway, how do you do that?

The longest possible runway is to have the lowest overhead. How do you have the lowest overhead? You let people work wherever they want to work, and you don't have an office, and you have to hire talent quicker, so you don't have that position open longer. You get the idea. The genie's out of the bottle.

And I thought those two stories in combination were an indicator, not just that this is incredibly bad, but that it's going to get dramatically worse for San Francisco. Now, south of San Francisco, east of San Francisco, and north of San Francisco, the markets are on fire. So there's a lot of people who have love for Northern California. And people who lived in San Francisco would spend their weekends going east to Tahoe, going north to Napa, and going south to Santa Cruz or Monterey, Big Sur, etc.

Or sometimes L.A. even. well now that you work from home if those are the places you want it to go that you love well now you can live in Santa Cruz you can live in Tahoe you can live in Napa the whole time where you can live in L.A. or anywhere in between so it is going to be crazy

days in the Bay Area All right next up on the program we have Kevin O'Brien he is with a company called Orbital Insight What do they do? Well they use satellite data to look at things like foot traffic military aircrafts, and does all the heavy lifting and analysis of that so people can use that data.

And we'll find out for what purposes from Kevin right now. Welcome to the program, Kevin O'Brien. Hey, nice to meet you. Thanks for having us. Yeah. So working from home like the rest of us, I see. Exactly. I'm sure you've been doing so throughout the pandemic. Tell us a little bit about the scale of orbital insight. How long have, I know you joined a COO and then became CEO.

last year. How long has the company been around and who are the customers and what do they pay you for? Sure. So the company's been around for a little over seven years. It was actually founded by Dr. James Crawford. His nickname is Jimmy in the industry. Jimmy originally got a PhD and AI at University of Texas at Austin, so hook him horns. And it was really one of the leading thinkers in terms of leveraging AI for different types of applications. He started by working at NASA for a number of years, came out to the Bay Area actually. to run autonomy and robotics at NASA AIM Research. And then made his way over to Google. And when he was at Google, he saw a really fascinating development of this growth of the commercialization of space,

meaning you have more and more satellite constellations that are being launched. And as someone that worked in the space industry, he said, this is super cool because you're going to be able to image more and more of the planet on a more real-time basis. So you can solve more humanitarian problems, security problems, business problems. But there's a catch. And the catch was human beings can't process all of this data. I mean, it's just an extraordinary amount of content that are being produced by these systems. So the big idea, basically, was to use AI to take in a lot of this inbound data sources coming from not just satellites, by the way, but from other geospatial sensors and sources,

put them up into the cloud, run computer vision, machine learning, data science on them, wrap them into specific analytical packages around not just national security and kind of traditional use cases, but sell them out to an entirely new generation. generation of customers. And that's what really kind of got me excited about the company. And so we've been doing that, as I said, for seven years. I've been here for about five. We've got kind of an equal split between traditional kind of public sector customers and a really exciting roster of commercial clients all over the world. So do you operate the satellites as well? Or do you buy the datasets from, you know, a number of different satellite operators? And then

you focus on doing that analysis and AI on the images. Yeah, Jason, we're very proud to claim the biggest piece of hardware that we own are Mac laptops. We've got a couple of GPU farms that we've been setting up to reduce our AWS costs. But no, we basically work with a lot of the constellation owners. And we've gone to them and said, look, you're producing really fabulous content. And there's still going to be a very large market for satellite imagery. But why don't we talk about opening up secondary or tertiary revenue streams for you? And we didn't buy all of their data. We gave them some small kind of minimums, but we basically got access to very, very large libraries of current and historical satellite imagery.

And so you've got this big liquidity base that we built up. And then you hand that off to your engineers and say, here, go work on identifying different types of objects or different types of change detection using computer vision and other aspects of AI. And then we're going to package that. We're going to go sell that to our customers. And then on the back end, when we sell that, we'll pay you a royalty. So think of kind of an IT type of model.

So it enables you to do two things. One is to get really large amounts of content to train algorithms. on. And that's one of the big things because you couldn't start this business by buying all of that content outright. It simply wouldn't work. And then once you have that liquidity base, you can innovate and you can develop new types of insights and then you just sell that as a subscription.

So, if I were understanding that correctly, they give you the entire corpus. You look at it and say, hey, these are, I don't know, container ships. And here they are all around the world and now we have 20 years worth of data and we have all these images.

Let's just run it against everything and say, hey, we have container shipping data for, you know, at this level of fidelity, we have this level of insights. And then you go find buyers for it, as opposed to having to get a buyer, then go back and, you know, do a bunch of phone tag back and forth. And they're stoked to get some incremental revenue off the data that's just sitting there on their hard drives. Absolutely. If you really think about it, Jason, at the end of the day, what's happening is the satellite constellations are imaging the entire planet, literally, every inch of the entire planet, and they're doing it on a more real-time basis. It used to be

they could go over what we call it AOI, area of interest, and go over that maybe once or twice every two or three weeks. And so you have kind of this not enough kind of revisits on that, but what's happening with more and more of the launches that are happening is you have higher revisit rates. They're seeing the same location over and over. And then we come in and contextually focus on a particular business problem, humanitarian problem or security problem. I want to go look at foreign airfields. I might want to look at disposition of their assets on a more real-time basis. I might want to look deeper into my supply chain for any type of disruption. And the power of what we're doing is you can do it in virtual real-time.

You don't need to wait two or three weeks or two months to get an insight with these new types of sensors and the analytics that we develop. What is the state of the fidelity of images today? Can you see down to a person's face like we might see on a TV show like 24 or homeland where, you know, I think sometimes people get confused between what a drone can do at, you know, 40, 50,000 feet, 30,000 feet, whatever it's at, versus what satellites can do. But what are the satellites you have access to? What can they see just in terms of layman's terms? You can't. It's great for television, but there are international regulations around commercial satellites of down to the granularity of what can actually be produced. So that's some of the highest resolutions around 50 centimeter resolution. It's something like that. You can pick up a car pretty clearly, buses, trucks, aircraft, rail cars, infrastructure, roads, and whatnot. And so we've leveraged a number of those constellations. They have more medium resolution, which is, it's a bit fuzzier, but it's got a bigger footprint. It can be used for things like land use classification. Now, when you do get into some of these newer and other geospatial sensors, like you mentioned, of drones, we work with high altitude balloons, we're working at different aerial assets. They may fly at a lower level and get higher resolution. We've actually done some testing recently with one of our partners.

It gets down to 15 centimeter resolution. And so that can be used for, again, a number of different use cases. I will qualify that, though, that we are very strict about privacy. We don't want to be able to go in and just do things that you shouldn't. people should not be doing because they're very powerful tools, they're very powerful sensors and they need to be used in the right way. And so we've got very, very strict guidelines on that. So there's regulations that are keeping you from seeing that what the actual hardware

is capable of. The hardware can actually see much greater detail than you're allowed to have access to. Is that what I'm interpreting? No, for the most part, that's what they'll get down to that level. Got it. Because building a 30 to 50 meter centimeter resolution satellite can cost several hundred million dollars a copy. Right.

And so when you talk about some of the newer generation, like you're coming from the folks that planet have a really exciting SkySat platform that's coming out, much lower footprint in terms of cost and also really phenomenal resolution. So the economics are compressing in terms of cost, the precision is getting better, and the revisits are also getting better. So it's really a win-win for both the industry as well as the end customers to be able to get access to it and not have to pay kind of quite frankly a King's Ransom to get access to it.

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So Planet Labs throws up a bunch of satellites. They can look at China. They can look at Saudi Arabia. They can look at North Korea. there's no laws against that. You're up in space. There are certain restrictions. I don't know the specifics right offhand.

I know there's some restrictions about the state of Israel. There's some restrictions there. There are restrictions about imaging for deployed U.S. forces. And so the constellation owners have to follow those. And so there are some minimal restrictions on that. But yeah, I mean, basically, if you're going over certain territories across Africa or the Middle East or Asia or North America, for that matter, they're being imaged. And so it's basically all of that imagery that's coming down is both the beauty and a little bit of the beast of how do you consume it.

And that's where we come in to say, hey, let's let our software help process a lot of that and be able to get you to these insights faster. Now, when you're collecting these insights, you're doing it with a thesis. You're saying, okay, we're going to look at this region. We're going to look at troop deployments, airfields, whatever the examples we were discussing. Has anybody ever looked at the data set and said, let's just look for anomalies. In other words, here's Antarctica. We know nothing happens here. And let's just look for something that shouldn't belong here.

And then surface them. And if we have done that, what have we discovered during that process? There's different, there's commercial applications we can talk about. There's humanitarian. We're actually doing some really exciting work with CBP, a part of DHS, basically rescuing people on the southern border. And finding activity in an area where we haven't seen it before. sending someone there to go rescue an actual individual, which you feel really good about. Oh, wow.

Yeah. Wait, so just to be clear about that, on our southern border here in the United States, Department of Homeland Security is watching. People are making that border crossing. It's incredibly dangerous. We have satellites going over there, and we can tell them, hey, look, there's a group of people, you know, crossing the border at this location that you may not be aware of. Generally, we're trying to avoid tracking people per se.

We're trying to do things like object detection, change detection. And quite honestly, the really people kind of focus on folks coming over the border. The really ugly thing that's happening is a lot of people are dying each summer due to exposure, that they're making this long trek across the Arizona desert and many of them don't make it. And so if there's a way that we can help with the rescue of those individuals, we're all in to do that. Yeah, of course. There's a lot of illicit drug activity going on as well, which is just bad for everybody, except the drug dealers, of course. Yeah.

And so we basically approached this saying with the previous administration. presidential administration, it said, hey, why don't we build this large, you know, physical wall? And we put politics aside, but I looked at it and said, hold it, why don't we use advanced geospatial technology, save the government about $6 billion. Sure. And basically use kind of a digital, digital, we call it geospatial search and rescue, to monitor certain areas across that border using environmentally friendly technology. That's really easy to use as well.

And so when we think about that, maybe satellites would be secondary to putting up balloons or putting up drones? What is the state of the balloon technology? You know, we hear about that. I don't think many of us see it. Is that occurring on some regular basis? And if you put up a balloon, what does it look like? What's the footprint of it?

And what is the aperture? Is it cover 100 miles, 1,000 miles? It really depends upon the package. You know, the Google folks had been developing Loon. They actually shut the Loon down last year. We were sad to see that because there was a really phenomenal package that you could basically put on different sensors onto it. It's super low cost.

compared even to a satellite, quite honestly. You can direct where you actually want to visit or monitor in that particular case. So it's very targeted. It's not just to say, hey, cover 1,500 miles, but it's like, no, cover 15 miles right here. And then be able to get that insight down to decision makers faster. So there's some that have been more successful than others. We've done some work with this customer where they're doing launches out of the back of a pickup chart. And so, yeah, it's really cool to see it.

But our ultimate focus is look at the sensor. just look at the technology, but ultimately, how do we deliver a better impact for that customer at the end of the day? Is it a sheriff's deputy down there? It's a DHS agent or CBP agent to protect life and use assets more efficiently. Has anybody thought about, you know, we talked about the wall and what would cost to build an entire wall and how people can use things like ladders and ropes to throw up walls historically. Like, we've been through this before with castles and whatnot.

Yeah, yeah. Imagine a line. Here we go again. Yeah, exactly. like, walls, how do we overcome these? Anybody got an idea? Exactly. It's like, watch the load of the rings.

You can see lots of different ways to scale a wall. Yeah. But setting up a series of drones or balloon permanently or semi-permanently, whether it was quadcopters, military drones, balloons. You know, literally in my mind, I'm just thinking of like a series of tethered balloons across the border. How many balloons would it take? And what would that cost be?

Has anybody ever considered that kind of a proposal of creating like an entire? That's how we actually, yeah, it's actually how we started this entire process. I called one of my folks in the DC office the day after Christmas and I was watching all the news and saying, hey, we're going to build a physical border wall. I'm like, this is nuts. So we put together a two-page summary document. We sent it up to, I think, Speaker Pelosi's office and said, hey, we think there's a better way to do this, low cost, higher impact, and you can get it out to the field much,

much quicker. And that was less than three years ago. And that's one of our main customers here. because they looked at it and said, this isn't science fiction, this is very real. And that's when you think about what we do as a company,

it's not just to, like I said, work with satellite providers, but it's working with different geospatial sensors, tie them together or fuse them together into kind of a more cohesive

kind of view of what's happening on the ground, make it easier to use, process it, and deliver to customers as fast as possible. And like I said, save lives, save equipment. How many balloons would it have taken, do you think?

I don't know exactly about balloons, We started with our partners at Airbus, and we've been looking at using some of their sensors that are under development. They have a thing called a HAPS program. It's high altitude solar powered drones. It's really phenomenal in its development capability. You could fly for two to three months, no carbon footprint because it's all solar powered. And basically build that across the entire U.S. southern border. We thought if you went operational on this in four to five years, it costs probably about a billion dollars to run it over five-year periods, a couple hundred million dollars, which is a lot cheaper than six to seven billion.

to go build a physical structure. Wow, I'm looking at some of these haps, and they are just giant wings, giant solar wings that just fly, you know, what, 50,000? They're above any plane, so they're not going to run into anybody. They can just hang out up there for two months at time.

Two months at a time, and that could be analyzing things on a border, could be looking at your pipeline. Are you running different sensors on those platforms to look for emissions, for example? So there's one or two satellite platforms that are being launched specifically for like CO2 emissions. And that's what's really exciting is there's more investment coming into the sector.

So space is a very hot sector. But you still need to take it down to a level, Jason, of where not just kind of the normal government customer that uses satellite imagery or maybe an energy customer, there's some great applications in agriculture. Our business believes that, yes, you can service those industries, but we think there's a lot of opportunity in consumer-based industries in terms of manufacturing. When you look at what's happening in the global auto industry of supply chain disruption, it's hitting multiple areas of the supply chain.

And what we can do is provide visibility into those different nodes of that supply chain for decision makers, supply chain managers, whoever that may be in a more real-time basis to help them take better decisions. And it's never been done before at scale. And that's why we're so excited about what we do. I can't get over these haps. I love a good acronym. High altitude pseudo-satellites. Yeah, yeah.

I just love the fact that Air Show. Sudo satellites. I love it. We saw them at the Paris Air Show a couple of years ago. We said, we want an indication of interest right now that the moment you guys are ready to roll, we're going to test these things. And so Airbus is already a big partner of ours with their satellite constellations.

And so there's others we're working with as well. And again, it kind of stitch that those different sensors into a narrative that you can sell as a software-based subscription to the new generation of customers, as I call them. I'm guessing that, you know, people are looking at extreme weather. Some people might define that as being caused by climate change, but just looking at it as extreme weather. I'm assuming you guys have been monitoring that. And I'm curious as the CEO of this company with the insights you have that we do not,

what is your take on what's happening with the amount of extreme weather we're seeing? And what have people learned about, you know, places where there's wildfires, the fires are getting wilder and places where there is rain, it's becoming torrential and places where there's wind, it's becoming, you know, more extreme and obviously ice caps and glaciers are melting. So what is your take on the state of this extreme weather? So I'm not a scientist by training, and so there's probably a couple of other folks in my company that answer that question more intelligently. But we look at that of saying, what is the actual impact of these events? And so, you know, a few years ago when you had Hurricane Harvey came in and really smacked the coast of Texas. I've got a lot of family there. Our Jimmy, our founder, went to UT.

And so we looked at that and said, look, we're a geospatial software and analytics company. We should be doing something about this. So in a period over a weekend, I called my blog. lobbying firm in D.C. They also were based in Texas. And we said, we think we've got a way to track the water extent and damage of Hurricane Harvey across Houston. And it wasn't just from the humanitarian side of things, but it's like we overlaid oil storage tanks and other infrastructure. And we said, based on our analysis, 30% of those tanks are under two meters of water. You've got a huge environmental problem developing here. And we actually took that to the governor's office

and said, we'll give this for free and maybe use that for your emergency response and other applications. We've done some work supporting Cal Fire. Unfortunately, it's really close to where you and I live up in Northern California, Oregon and other parts of the West Coast, looking at the movement of fire, not just using satellites, by the way. We've also done anonymized kind of geolocation tracking of groups of these mobile devices to look at what's the impact of these events. Is the disruption to these events permanent? Do you see people leaving areas and not coming back? What's the impact of the economy and the infrastructure? We actually did some work with the governor's office in California at the early stages of COVID

with people being compliant with shelter in place. And so when you said the beaches down in Southern California that people were violating some of those shelter in place, we're actually helping kind of track that to say, hey, you've got a problem here or you've got a problem in this part of California. So we did some of that work with Google and some others. So it's a developing, unfortunately, it's a developing area. I don't want to call it a line of business, but it's evolving rapidly. If you and I said five years ago, we had some really bad fires here that this would have been

happening five years to today. We probably would have said that's not going to happen, but it is. And it's probably going to have next to five or ten years on top of that. So we want to lean into that. And it's a big humanitarian piece as part of our mission as a company of how do we develop the technology, take all the really smart engineers that we have in the company and develop solutions, ideally solutions that you can put into the hands of folks that are either fighting these issues, whether they're firefighters or first responders or policymakers and say

this is what we see kind of on a long-term basis. And the beauty with some of the access of all that content that I mentioned, we have like 25 years of history. So you can go back into time and say, what's changed over the past five or 10 years due to either economic or infrastructure development or kind of the environmental impact as well? To help people take better decisions on a go-forward basis could be deployment of relief funds, deployment of development funds, really thinking about where you should build and not build. And so there's, it's like I said, it's an evolving, it's an evolving issue and we'll be at the forefront of that as well.

I'm really interested in the humanitarian stuff because having watched the Uyghurs in China and the interming camps, a lot of our information came from satellite images. I wonder if you were part of that or you can speak to. what you're able to tell about, you know, remote regions where maybe humanitarian crises are going on. Yeah, we've done quite a bit of work. We don't like to get into too much detail of the stuff that we've done in that part of the world, but we have definitely our engineers and computer vision engineers have gone in and done some research on that. And you look at things like building change detection and like, why are there new buildings being built around a prison camp?

That's kind of weird. Yeah. Why is there a growth of buildings around areas that they're doing? cotton development. So, I mean, that area, by the way, I think it's something like 70% of the cotton coming out of China comes from that area. I mean, yeah. Think about that.

Yeah, it's like, well, it's a humanitarian problem. It's a business problem. It's an environmental problem. It's a political problem. Huge. Yeah. At the end of the day, it's not, some of this stuff is not the right thing to do. And we're not trying to take a political position on something.

We're trying to basically leverage our technology to help people do the right thing. Like we said, what's happening on into the earth? I told a story to a colleague the other day when I was actually interviewing at Orbital five years ago. They came in and said, we work with the World Bank and the World Resources Institute to map poverty. And I'm like, how in the heck do you map poverty using geospatial sensors? And so they were tracking activity in Sri Lanka that you could go over a village and you do things like, are there any new roads? Have we seen growth of their crops? Are there new buildings, i.e. did people build houses?

do you see more cars and trucks there or do you see less? And you calculate it and go, okay, it's gone up or down by 2%. And then you do the region, and then you do more of the country, and then you do the entire country. And you use this as basically tracking the growth or decline of poverty either at a national level or down to hyper local level. Wow. Super cool.

And the second year, we did it in Mexico. And when we got the contract, I said, we're going to take a bath on this one because of all the imagery we have to take in and all the AWS processing and compute. But it's like, it's the right thing to do. And we did it the next year in Mexico. And so that was actually used by some of our clients to deploy different resources and track where they should be focusing and where things are getting better. Well, I mean, what's interesting about that is you think about the last couple of centuries, we did surveys to figure out populations. We did site visits to figure out economic conditions.

And now we're going to be able to infer that. You actually probably know the population of towns better than anybody or you could be able to calculate it, right? Just by people being in certain weather conditions, they would be out in the streets, a certain percentage of them. And you would know the population. You could, but we tap the brakes on that a bit, Jason. We're very, very strict about privacy. We don't track individuals.

We don't like to go. Yeah, no, it's just about really. Well, what about traffic patterns? Like, if people are walking around a city knowing how many people are walking over a bridge or using a bike lane, you could anonymize that data. Exactly. it's somebody on a bike, so you could actually know bike usage in San Francisco. Which is what we're doing.

That's a great example. We like to anonymize that, kind of at a higher level and say, not about a particular person, but this is what we see from kind of a time series basis of change. And, you know, for a variety of different purposes. And that's, again, with the example that you just use, you could use satellites for that. You could use electropical satellites, radar-based satellites, geolocation, RF signals, infrared signals.

And so we kind of put that in and say, what's the, the easiest way to generate the best insight for a client and then deliver that to them. And it's really hard, but it's really fascinating from an engineering and design standpoint. You know, I just realized, like, if you think about what's happening with the Uyghurs in China and those images, I wonder if during, you know, World War II and Hitler, if we had known and seen what was happening in Dachau or Auschwitz, etc. We could actually, your firm could have documented, like, look, there are people getting off trains in these areas.

they're working in these areas and these are the actual conditions, you know, intervention could have happened earlier. Yeah, I mean, that's a big one, but definitely. And again, at the end of the day, someone asked me this the other day, like who would be your ideal customer? We work with, like I said, Fortune 500 companies

and NGOs and charities and defense and intelligence and whatnot. But I said, if we do what we can do as a firm at the end of the day, this might take 10 years, might take one. or my ideal customer is a starving child in Central Africa. How do I provide capabilities that you may have that farmer that says, I'm going to plant that second crop or you work on better irrigation systems? So you can basically get aid and get food and get infrastructure and shelter to people literally anywhere on the planet.

And when we've done that, we've done a lot of good. And that's how we type of get up in the morning. We're going to go sell to our commercial customers and government customers, but really what gets us excited at the end of the day is how do we make a huge impact virtually for every person on the planet. You know this sounds crazy and perhaps it's naive as well. Have you found or have we found with satellites, islands, and by extension, perhaps even civilizations that we previously did not know about as far into the 21st century as we are now?

I don't know if we've picked up identification of new types of populations. We definitely have picked up change with respect to land and also change with respect to water, for example. One of the first algos I came across or algorithms that we had developed using. computer vision was water detection. And I thought, what a fascinating, what a fascinating capability that you could go and analyze, go to Lake Tahoe. And you could basically image that and take that and calculate and basically get estimates

of what is the water levels in places like Lake Tahoe. You used that same example when we went down to Houston and said, there's a whole bunch of water in places where there shouldn't be. And it's at this level. And you can use that for other use cases. So we have picked up degradation of land, identification. of new types of areas and then change. What change did we see in these particular areas?

And then you put it into the hands of your customer and like, why is that happening? We're just there to present, this is what's happening on into the earth. And then our business decision makers or humanitarian organizations can take it from there. How much of this is used by people to make investments or to trade the stock market or, you know, to determine, hey, there's so much activity at these ports or there's so much activity at these sports or there's a lack of activity at these ports, I'm going to trade stocks in this country or that country and I'm going to predict GDP based upon how many containers are being taken off a ship. That's what we hear about this data is used for. Is that actually a major use case or not?

It is a major use case and it's actually partly what drew me to Orbital. I spent about 20 years of my life in that industry. And so I helped build a couple of companies to help address those types of questions or those types of challenges. One of my previous companies was mapping out supply chain relationships, both upstream, midstream, and downstream. So who are suppliers of different types of components or materials to go into products? And then how do you ship those products to end consumers? And we tied it into kind of this big interconnected network.

We had loads of financial services customers use that for equity research, investment banking, some trading and whatnot. You are seeing more and more financial services firms that are saying, hey, how do I how do I use these different sensors to kind of embed into my workflow. We do work with Goldman Sachs as an investor as well as a client of ours, Deutsche Bank, Royal Bank of Canada. Royal Bank of Canada has come out with some just fantastic research that they have really smart analysts, but then they're using these new types of insights to showcase what's happening with commodities,

with equity, supply chain. One of the first pieces that they did at the beginning of COVID was to go and use our aircraft detector and count aircraft movement across China. And you thought, well, why would they do that? China was where COVID was first happening. And they're trying to get a read of aircraft activity as a future indicator of the spot price of jet fuel. And so it had never been done before.

And they just put it out in the report. Clients didn't ask more and more questions. So there are a number of different use cases that can support global finance. It's an area we do have lots of customers there. But we also like to think about instead of the person that might be buying and selling a stock, let's look at that company itself. You know, can we help them improve their operations? Can we lower their risk of operations?

Can we help them maybe find more customers? Is there risk in their supply chain? Is anybody in their supply chain maybe doing things in that cotton supply chain in China that they're not aware of? So it's like know your customer and know your supplier, and we can do both of them using these tools. So that's fascinating. If a company that was in apparel wanted to make sure that the cotton was ethically

sourced and not from slave labor, they could, you would actually know, hey, listen, this factory that you're using gets deliveries from this location and that location is providing cotton from slaves. Yeah, absolutely. And one of our marquee clients that we work with right now, we love working with them is Unilever. And so that's a big, big consumer products company. And so they came to us and said, look, we have this problem. We want to be able to get first mile visibility into some. of our suppliers around palm oil. We started working around palm oil. I didn't even know what it was 10

years ago. But they came to us and said the first customer was actually the World Resources Institute that wanted to track deforestation. And one of the biggest contributors to deforestation historically has been palm oil production, palm plants. And so you see now a lot of the world's best companies are investing in this saying, we want to make sure we're ahead of this and we are an ethical sourcing partner and a sustainable sourcing partner, especially around things like Palm. And so we work with them, develop using our technology and our algorithms to help with that first mile that when people are collecting palm fruit and then they're delivering that to a unilever facility, is it certified sustainable? Because they want to make sure they're doing the right

thing. The upside for the environment is just exactly that, that people are operating in a sustainable way. The upside also for folks like Unilever and others is that You can go to a demographic, like a millennial demographic, that has research has shown, I think a century did this in MIT, saying that millennials will spend two and a half to nine percent more of their disposable income if you can showcase that your products are sustainable, that you're doing the right thing. And how do you know reasonably that it is sustainable? Kind of hard to know.

We're making it easier. We're making it easier. And so you could do it with palm, you can go into soy, you can go to cocoa, cotton, and other things. And so these are some current use cases that we're supporting and then also some future use cases as well using these new capabilities that we're developing. Yeah, it's absolutely fantastic. And this stuff is not available to the general public,

but at what level do companies start engaging in something like this? What would be the minimum ticket price? Is this like the minimum is quarter million dollars or a million dollars to actually fire something like this up? We generally start anywhere from like 25 to 35K with a customer. Yeah. We'd like to grow them to kind of load a mid six-figure customers.

We have some seven-figure customers as well. But as I call it, let's go hit singles and doubles with some of the world's leading companies in a consumer, in automotive and distribution and materials and petrochemicals as well as in supply chain. And then grow them, you know, showcase what you can do, step by step, deliver value, deliver efficacy, deliver impact, and then just grow those accounts. And that's just a great way to build a business. And that's what we're doing here. Well, listen, it's absolutely fascinating. Thanks for sharing it with us. And continued success.

You're hiring for some positions now, I understand. Yes. Engineering, solutions engineering, core engineering, anything around engineering, especially in computer vision, data science. We've got, I think, the best team in the world. And we want to continue to build on top of that. And then basically smart people that want to just make the world a better place. We'd love to talk to them.

All right. Just type in orbital insight jobs into Google and the, you'll see the LinkedIn page with all of their job listings. They're hiring a lot. It's like they have 86 jobs open right now. So continued success and we'll see you all next time in this week's startups. Bye bye.