This Week in Startups - Uber Q3 earnings, macro picture + Brinc Drones CEO Blake Resnick | E1602

Episode Date: November 3, 2022

First up, Jason gives an update on his busy weekend. (2:32) Then, Molly joins to break down Uber's Q3 earnings report (8:50) and the macroeconomic picture. (14:31) Then, Brinc Drones CEO Blake Resnick joins for another edition of The Next Unicorns. (38:07) (0:00) J+M tee up today's topics! (2:32) Jason gives a quick work update (8:50) Uber's Q3 earnings (12:50) LinkedIn Marketing -  Get a $100 LinkedIn ad credit at LinkedIn.com/nextunicorn (14:31) Fed's newest 75 basis point rate hike, comparing average Uber driver earnings to teachers (23:58) OpenPhone - Get an extra 20% off any plan for your first 6 months at https://openphone.com/twist (25:24) Ideas on improving public education (31:47) Jason's warning to founders on the state of the downturn (36:40) Kalshi - Sign up to win $100K at https://kalshi.com/efc (38:07) Brinc Drones CEO and Founder Blake Resnick breaks down why he started a first responder safety-focused drone company (47:12) Blake walks through a demo of Brinc's technology (54:59) The business of running a hardware startup: sales cycles with government buyers, building prototypes, customer-focused product iteration (1:07:24) Blake demos Brinc's newest product, the Brinc Ball Check out Brinc: https://www.brincdrones.com FOLLOW Brinc: https://twitter.com/brincdrones FOLLOW Jason: https://linktr.ee/calacanis FOLLOW Molly: https://twitter.com/mollywood Subscribe to our YouTube to watch all full episodes: https://www.youtube.com/channel/UCkkhmBWfS7pILYIk0izkc3A?sub_confirmation=1

Hey, everybody. It is a Wednesday. Welcome to Wednesday. We're reunited. Reunited. And it feels so good. There we go. We don't think so good, but. Yeah, I'll give you a quick update on today. First up, a little, what the hell? A little update on what I've been up to this weekend, but, you know, very, very short and not a lot of details. So you're not going to get much out of me. But then some good news for me, my other favorite company, after Twitter, Uber had earnings. And they were spectacular. And I get to do some dunking. and have a little victory lap here. Finally, after a decade plus of defending this company, they don't need to be defended anymore. It's a great moment for me.

It is a note to everyone that every storyline takes 10 years to develop. So just think about that when you're writing your headlines. But while we're at it, because we have not gone to podcast together for a little while, we're going to cover everything from COVID rates to minimum wage to the gig economy, to what's going on in the American workforce, to more ideas to fixing education. It's just all in there in Uber earnings. Just, yeah, Uber earnings has like 10 jump-off points and go out of the macro economy,

and we go a little macro if we will. And then I do an interview for our next Unicorn series. I had bring drones on, and they are building drones for SWAT teams, and they have two different ones, and they're both really awesome. If you're not watching on video, get Spotify video or YouTube.com slash this weekend to see these very, very cool drones in action. It's going to be a great show. Stick with us.

This week in startups is brought to you by LinkedIn Marketing. To redeem a free $100 LinkedIn ad credit and launch your first campaign, go to LinkedIn.com slash next unicorn. Openphone. As a startup founder, a lot of mistakes are easy to roll back, but using your personal cell phone number as your company number isn't one of them. Open phone makes it easy to get business phone numbers for you and your team, right on top of your existing devices.

Visit openphone.com slash twist to get 20% off your first six months. And CalShe just launched an election forecasting challenge ahead of the national midterm elections on November 8th. Go to calshy.com slash EFC, fill out predictions for each race, and if you get a perfect score, you'll win $100,000. If no one gets them all right, then the best forecaster gets $25,000. sign up and play at calshy.com slash EFC. All right, everybody, welcome to this week in startups. I'm back in the saddle. I took a little staycation, was working on a side project, if you will,

but I don't want to talk about that all that much. There's leadership at that company, the Twitter company, that can talk about all the great things going on there. Yes, I am on the transition team, whatever that means, but just trying to help out with the transition since my friend bought the company. But I don't want to make a ton of comments here because it's not my company. And there are incredibly qualified people at that company who you are seeing speaking more and more often. And the new CEO can speak for himself as we all fully know. So I'm trying to be as helpful as

possible. I am not a full-time employee at the Twitter Corporation. I am just on the transition team helping out during that time. So I know that a lot of press want to ask me a bunch of questions. And it's a little bit awkward for me to be a podcaster and so outspoken and not be able to talk about all the details, but you will see me tweeting some details about what's going on during the transition. But I still have my day jobs. I'm still working on inside and still working as an investor and doing podcasts. That's not going to change. So let's get back to work here at This Week in startups. And if you have questions about the Twitter corporation, I will more than happily read them on Twitter and in some cases even respond to them. So there's the

end of that message. I just hope the press doesn't clip. this and make a big deal out of it. It's not really a big deal. Just helping out on the margins where I can. And let's get back to work here on this weekend startups, because there's a lot of great news. And so let me bring in my co-host, Molly Wood. Hey, Molly. Oh, hello. Oh, hey, how are you doing? Oh, hey, hi. How's Scott? How was your weekend? I had a long weekend. How was yours? Not like that. All right. Not like that. I have no involvement, everyone. No. But there have, there have been those questions as well. So to be clear, I have no involvement.

Right. You're working on investing in climate startups. Would you like to answer every question about the future Twitter? Can you give us a statement on every single aspect of social media going forward? I don't know. I mean, you know, it seems like y'all are planning to solve it by the end of the week. Yes, precisely. The pace is exhilarating.

So speaking of exhilarating, my favorite company in the world is Uber. Other? Yes. Other favorite company in the world? Tide. How about Tide? How about my other favorite company? Yes.

Your other favorite company in the world. Twitter and Uber. Come on. Yeah. Love is love. I was having like a crazy busy weekend and then my phone started blowing up about Uber. Fantastic. Fantastic.

I don't know. I have a great deal of my net worth in this company. How am I doing? And a rare bright spot in the earnings situation. Uber stock was up as much as 16% yesterday after reporting 72% revenue growth year over year. What? 72% revenue growth. You're over your people are going places in cars.

It is occurring. They are traveling. They are taking Uber's to parties. As we head into the holiday season, parties are back. Ironically, I now once again know seven people with COVID. So like that's back too, which is kind of crazy. I haven't met anybody with, I haven't heard a single friend have COVID, but I guess. a whole bunch of friends all at once.

Now, I'm going to ask a stupid question because as opposed to reading about COVID for two hours a day for 18 months, I am reading zero stories about COVID. Without us being medical experts here, is it surging again or is it, is there like, let me ask it this way. The seven people, did they have COVID already? Are these like, they got COVID again?

One couple got it again. One newly got it, which is surprising because he's an ER doc. And then the other. There's, there are at least, there are at least two repeats, I think, and then a couple who had gotten it for the first time. Yeah. But like a surprising mix. I know. It did make me, I was like, is it?

I honestly, it just all of a sudden happened all at once. It was like, oh, I, whoa. What. Interesting. You know, was like one guy. It was his 50th birthday and he tested positive on his birthday. I'm like, COVID's still out here. Runa birthdays.

Anyway, I do not mean to buzzkill everybody's Uber rides because I'm still taking them. I think it's a good thing to just take a look at here. if we pull up the, if you do a Google search, remember we were all doing this like three times a day, like it was the stock market trying to understand how bad this was. And you just type in, you know, COVID cases, USA. And it says we're seven day average is 37,000 cases. And it's pretty flatlined. And then I guess if we switch to debts, which is the horrible part of this. And of course, I don't even want to get into the controversy of like with COVID, from COVID, blah, blah, blah. I'm so over. It's not a controversy. Yeah, I mean, obviously, like, both things are possible and no data is perfect here. So let's just look at the debts because we're looking at. Oh, there is debts. Okay.

Yeah. The debts haven't changed. I guess February was the big spike that we had last. So who knows? I mean, they did. Don't they always say that holidays? We have a spike because of parties and winter. And it's winter.

I mean, so like everybody's getting sick right now, right? There's the rhino virus that's going, that RSB that sounds terrible that everybody's got. And then people are getting COVID again. So, yeah, I mean, we can assume that the chart's going to. look like this probably for the next few years. Right. And so this is the normal. Yeah, I have this weird anecdotal, anecdotal update.

The New York Times says plus 2%, which is, you know, pretty flat. But just sort of an interesting, like, it's just an interesting note going into the holidays that I will say we recently had a meeting in which somebody had a really bad cold and wore a mask the whole entire day. Of course. And none of us got it. And I was like, oh, okay. So if you're sick.

Maybe still wear a mask, right? Like, that's so simple. As a courtesy to the rest of the world, this is something great we can take out of this horrible COVID. Yeah. Wear a mask when you're sick to not get other people sick. Or if you're getting over a cold. This is what they do in Japan. Let's have this be one of the silver lines, hopefully getting out of this.

Like let's. And so if you're in the Uber, let's get back to Uber. If you're in the Uber and you have a cold, wear your mask, but still take your Uber because everybody freaking is. 72% revenue growth year over year, $358 million of positive free cash flow. Oh, finally. Is this the first time this happened?

I think they had some moments of it. It's the second quarter. So everything that Dara said, he was going to do to cut the costs and make the thing profitable and turn the da-da-da-da-da-da, seems to be occurring. Yeah.

And so this is fantastic. I said this for, I don't know, maybe six or seven years. A lot of these problems are solvable because when you have a marketplace, so for startups listening, when you have a marketplace, you have dials. And one of the dials is how much you charge for a service and what your take rate is. And then there's demand. And so marketplaces will sometimes give boosts to increase demand. There's a lot of little tools in your toolkit, if you will. So if the marketplace for advertising on Google search, they can choose how much they charge in the auction, right? They could lower the minimum click price. And it used to be two cents and

then it went to five cents. You can change the number of ad you show per search, right? All of those things are part of a marketplace. Well, in the case of the ride sharing and delivery marketplaces, you can raise prices. Well, then that screws up demand, but puts up profitability. And as we know, the market with low interest rates was rewarding top line growth. And in the course of one year, you know, we have this crazy recession-ish thing. We should talk about that. The recessionish thing are going through? Are we? Is it?

So anyway, this recession is downturn thing that we're going through. Now people are saying, okay, show us you can make money. And that was something the narrative was Uber can never make money. Remember I said, if you do a billion rides and you charge $1 per ride, you now make another billion dollars. If you lose like 10%, you're still going to, you know, it will net out to profitability. And that's exactly what's occurred. So, you know, I don't want to pat myself on the back for stating me. obvious, but shouldn't this have been obvious all along that you could just raise prices,

lose the bottom end, and be profitable. So you can choose to do that if you have a leading brand like Airbnb, Uber, or whatever marketplace it happens to be, DoorDash, etc. Right. Airbnb had good earnings yesterday as well. I think they made a billion dollars. I think they maybe made a billion dollars. Other interesting things of note about Uber's gross bookings and take rates. Q3 gross bookings were $29.1 billion up 32% year over year. And this is really interesting. Growth bookings for mobility and delivery were exactly the same in Q3.

So to that point about people are taking rides again, this is not all. And in fact, they may be taking rides to go out to eat and getting less delivery, right? Like it could be a take away from delivery and an ad to rides. That was always the theory, right? That they were, as I think Dara always says, like, we're rain, you know, or shine. So when it rains, you water in and it's shining, you go out kind of thing. They're an all-weather company, and that seems to have been proven out. I guess the thing that always makes us confusing is their ownership in other companies

and the variability of the cost of that and these massive grants they give to employees. I'm sure those two things came up as well, but it's hard for people to understand kind of their EBITDA taking those two things out. But I think savvy people on Wall Street have been doing that, and that's why the price is going up. There's a lot of institutions I understand. I don't have exact proof of this. But my understanding is institutions have put $45 price on this, the IPO price, paradoxically.

And people believe it's going to get there. And they are, yeah, well on their way. And if they start throwing off cash, then it gets dangerous. A company that throws off cash, as we've seen with Apple, Google, and Microsoft and Amazon, can do extraordinary things in the world. So congratulations to the team over there. Yeah, absolutely. I bought a teeny tiny bit of Uber at like, whatever, $15.

I mean, you know, good job, guys. I appreciate the effort. I'm not making, I'm not making J-Trades right now. Hey, everybody. I'm here with my pal, Tom Eshbacher. He is the senior sales manager at LinkedIn Marketing Solutions. And today, we're going to talk about marketing for startups. And LinkedIn did a great new internal report called Today in Startup Marketing.

Welcome to the program, Tom. Thanks, Jason. We all know organic reach, super important. You make great content. You get your likes. You get your shares. You get your comments. But what people don't know,

is that you can boost organic and it creates a bit of momentum on your site. Can you unpack that for people? Definitely. So organic is just going to go to the audience who's already following you and then a smaller group of members who are connected to any of those audiences. So what we often encourage is keep an eye on your organic engagement metrics and who are the people and companies and segments that are engaging most frequently with your content and then amplify that reach via our best in class paid advertising targeting.

So what that means and what we've seen, especially for Seed and Series A companies, is by boosting successful organic posts with paid, it results in a 13X lift in unique reach. And that's really meaningful insights that can help inform your product and go to marketing strategies and open up new audiences for you. We think your B2B marketing on LinkedIn ads and get a $100 credit on your next campaign. I kid you not, a hundee coming to you in free advertising and marketing. Go to LinkedIn.com slash next unicorn to get $100 off. Again, LinkedIn.com slash next unicorn for $100 off.

Of course, terms and conditions do apply because they're giving you a hundy. Oh, by the way, breaking news, the Fed has indeed, the Fed is not satisfied with the status of the recession that the Fed has been trying to induce all this time. They went 0.75, right? That's what they did. They didn't go, no, no, no. No, no, no. Okay. They didn't go one, but nor did they go 50 bips. Like, there had been, you know, there was starting, because there was that kind of jobs report that said that actually, that's crazy. Job openings. I mean, what up above 10 million? Right. Like, nothing about this economy is normal. And we're just trying to, the Fed just keeps, there was a really funny tweet about it actually from this guy who's sort of an anti-monopoly Twitter guy. And he was like, it's pretty funny that the Fed keeps trying to like throw millions of Americans out of work. But he just keeps bapping like billionaires and corporates. corporations. Like, it's all playing out in, like, stock price. Well, at this point right now, it's just, and meanwhile, like, companies are like, we still can't freaking hire. There's too many Amazon and Uber drivers. And so we can't, okay, so

final point. Final point on the Uber thing. $36 per hour is the average hourly rate of an Uber driver. So to everybody who said to me for a decade, Uber doesn't care about drivers. Uber. their drivers, Uber is abusing their drivers, $36 an hour. Two and a half times, no, four times federal minimum wage, more than four times federal minimum wage, almost five. And in a major city like San Francisco where it's 15, it's double. That's after the take rate?

Yeah, it looks like the... So in Q3, drivers and couriers are in $10.8 billion, not including tips, and this is up 25% year over year. So, of course, nobody in town, nobody, I'm not going to get on a high horse here, but they love to write the story of, oh my God, this person made less than minimum wage, blah, blah, blah, this thing happened, you know, for whatever company it is. But where's the high five story in the New York Times that the best job with the most flexibility currently in the United States is being an Uber driver?

Where's that headline? Yeah. That should be a headline. You can make your own hours and make $36 an hour. For a parent, for somebody in debt, for a student, for a person down on their luck who's been laid off, this is the greatest gift to the United States workforce as a backstop. You know, if you get in trouble. Like I remember my dad when he was, you know, I'm going to get emotional here, but when we got in financial trouble as a kid, which was pretty frequent. Yeah.

It would have been freaking great if this existed for my dad to go out and do a shift to be able to pay the more. mortgage, you know, like we had some really dicey times. And there is a great job with that. A health insurance marketplace. Like that exists via Uber. Yes. Yes. Yes.

You should be worried, by the way. $36. You should be worried, by the way, that one of our producers just said that's more than she makes. So, you know, just saying, I'm just saying. I'm just saying. Do you want to go pick people up? Mayday.

Your Prius? Mayday. No, well, hold on. What is that per year? So $2,000, $2,000. hours of work a year. Thirty-six dollars an hour is, uh, yeah, 70,000 dollars, yeah. So a journalist working at Vox, entry pay is 49,000 last time I checked. So the Vox union pays 48,000. I think the average writer is probably at 60, 65. So Vox, you know, somebody working at Verge or whatever,

I'm not saying all writers. Obviously, there's some probably make double. But, you know, if we could pull up the... But I like how you did, I like how you did say, though, do you. you really want to go pick people up? Like, it still is maybe not people's number. It's a hard job. And of course, it's going to be a way lower average if you drive on Tuesday, right? There's flexibility, but there's also like the times when you're going to make more money. It's not a guarantee.

There are plenty of people who still would rather just get paid $36 an hour to do something at the same time. However, all of that said, yes, right? Like, you do not see people on mass protesting outside of Uber saying being an Uber driver is the worst job I've ever had. And nor do you see them quitting on mass. And you see, you know, the opposite. Restaurants and hotels unable to hire, like all kinds of companies unable to hire. Yeah. And I do think there is 100% a correlation between that, like the Amazon hiring, the ability

to drive for any of these services. And the labor shortage, I suspect is related. Someday I'm going to win the lottery and I'm going to start a foundation that just like does research into stuff I sort of think might be true. And I think part of the reason that we have. a labor shortage is because we have these massive companies doing all of this hiring. And frankly, like that compared to dishwasher, no thanks. Average salary according to Payscale.com for a Vox employee is $70,000.

The floor is $53,000. Wow. So I think that's gone up. And I think it's going to go up to about 60, the floor. So it is absolutely now the case that you can make your own hours and make more money than the average Vox employee. No, that's not me dunking on them. As an Uber driver. I'm just, that says to me, you know, how great a job Uber has done.

This is not a dig to Vox. I mean, my friend Jim Bancoff runs it. My point is that there are journalists and those jobs. Dude, there are teachers making it. Like, let's like make this even more messed up for society. Oh, yeah. Teacher salary, average US. What is the average public school teacher salary?

The average USAFacts.org. perhaps correct. I don't know. It's a dot-or. You totally believe it. Okay. So yeah, you can make more as a Uber driver than potentially. Teaching our children. Than teaching our children. God, God help us.

I mean, exactly. Like, if you want to go all the way back to that conversation and what's wrong. Yeah. This is so, I mean, look, I mean, oh my Lord. I know. Some of these states, the average salary in Alabama, Alaska, Arizona, 48, 68, 47. I mean,

it's actually significantly less to be a teacher. Like, it's really, it's a, I know we already had that whole conversation about education and how to improve it and, like, maybe competition would be part of it. But the truth is,

if we don't value it as a society, enough to pay people. Yeah. For real, like, pay them. We do. We do. Yeah.

I mean, it's that, it literally is that simple. Like, if you make this a desirable job, good people, we'll take it. I read that I had this long conversation with somebody once about how like, because the thing is like 30 or 40 or 50 years ago, if you think about the caliber of teachers,

those I would have been a teacher. Yes. Right. Marissa Meyer would have been a teacher. Like think of any amazing woman you know who has some high level job today. Yes. And realize that 40 or 50 years ago, she would have been a teacher because that's all we had. Now it's like. So I was like, oh, lady wants to work, oh, nurse or teacher. Right. They literally, and like, for me, it was like, be a cop or a firefighter, which, by the way, two of them, we're talking about some of the most important jobs in society. So this is not a day.

Like, I was literally. What we're saying now is, that job is only going to pay $43,000 a year, you're going to be totally disrespected. And P.S. you're going to have to buy all the crap for your classroom. And the class size is going to be 30 or 40 kids. Right. And you're not going to have any AIDS. And you're going to have literally, I mean, my sister-in-law is a public school teacher

in Oakland and has, has, has, has had kids in third and fourth grade who come in and cannot read at all. Yes. Unbelievable. Anyway, we should pay them more. I mean, we should essentially. We should pay teachers at least as much as Uber drivers, am I right? Like, this is crazy.

It really has two things. In today's market where people have figured out, the world is dynamic, right? Yeah. And it turns out flexibility is something that is a new vector for employment. And it turns out people value flexibility. and people value not having to commute. So you have to then adapt. If we really want to make teachers happy and take the job,

instead of saying, you know what, I'll just do 20 hours a week as an Uber driver and I'll have all this other free time and joy to do what I want in my life, pursue other things, I think they have to double the number of teachers and increase the pay 50%. At least, yeah. So if it was 70K a year for a teacher instead of 50K,

and if it was double the number of teachers, then you could be in the classroom half as much time, so have more professional development time, or you could have half as many students, and it would be 50 times more enjoyable. So there's some, I think those are the two dials that teachers really care about. How much time do they have to prepare?

And then how many students are in there? So I think maybe you give 25% more of each. I don't know, a teacher would have to tell me what would be meaningful to them. But you got to make it attractive. Like, you really do. And that, I think, is the, you know, interestingly, you said that we need competition and education, but the competition is any other job that you can get at this point.

So that's the part that needs to, that's the competitive part that needs to sink in, that there can't be these. There can't be this societal valuation on teachers that's just like less than, less than Uber drivers. Listen, a lot of founders are Lucy Goosey with their personal phone numbers. You know that can cause chaos. Why? Because now you got somebody's phone number in some sales documents, in some corporate emails, and then they leave your company. And then what happens? One of your great clients looks in their email. They look in their docs folder.

They find the document. They call that person. Now they've left your company. They're working for a competitor. Or the number doesn't pick up, and you look super unprofessional. And listen, you've got to grow up as a startup. Nobody wants to spend $100,000 on a phone system in an office somewhere. No.

You want flexibility. You want that number to be provisioned quickly and digitally. And that's what Open Phone does so well. It's pretty simple. We all understand that. So here's what you do. You get open phone. You create business numbers for your team.

It just works like an app on your smartphone. It is an app on your smartphone or on your desktop. You pick a number. You install the app. You're done. Easy. Peezy, lemon squeasy. We use open phone in our sales team every day day in and day out.

It's amazing. It's flawless. It's stable. And it, dare I say, it's affordable. Open phone. absurdly affordable. I'm going to say it at $10 a month. But Twist listeners can get an extra 20% off any plan for the first six months because they love

startups. Sign up at openphone.com slash twist if you want that discount, please do it, so that they know we sent you. Openphone.com slash twist. You got other numbers that you're paying a whole bunch of money for? They'll take them over, right? You can port them over for the cost of $0.0 and zero cents for free. I want you to head over to O-P-E-H-O-N-E dot com slash twist today. Openphone.com slash twist. Go do it right now. Listen, the success of Uber. We're all over the place on our Uber earnings, by the way. We've gone to politics and monetary policy in schools, but we do have to look holistically at the

impact the gig economy is having on this country, you know, and it's profound and it's beautiful, dare I say, that people have more options. You know, you want to look at what will improve the state of any ecosystem. Any ecosystem will do better with competition and innovation, right? There's no argument there. It's just proven. And if you look at what happened with livery drivers, mobility, and you look at what happened with food delivery, absurd competition. has led to incredible outcomes for everybody. Consumers are winning. The drivers are winning.

Now, who loses the markets that are not competitive? And the most uncompetitive markets we have are healthcare, higher education, and education. Education and healthcare, I'm thinking, are the two least competition. Yeah, I think that's probably true. And the most sort of rigid, like, this is the way we've always done things. Regulation, regulatory capture. In health care, certainly, yeah. bit of, I'm trying to think of, because I see what you're getting at with education.

I like regular, it's like, I mean, there's standards capture, right? There's like, you all have to teach to the same tests. Thank you, Bill Gates. I think the number of administrators is a part of the issue as well. And so how many people are actually teaching is the administrators, right? Like, just so that, you know, but you can't go in there and say, you know what, we have two administrators for every teacher or whatever the number is. Let's flip it.

You just wouldn't work, right? You're just not allowed to do that because of regulation. unions, you know, inertia. And this is why you have to break the system with outside competition. We got 50 states. And I think some states will give vouchers and the states that give vouchers will see better outcomes. And California would probably be the last to do it. And I know vouchers are very controversial.

I've had my... I think the reason, yeah, I mean, the reason they're controversial is because when it has been tried, it's mostly led to, like, crappy schools that are scams, that don't have better educational outcomes. And also, they drain money out of the public schools. So you have this, like, worst of both kind of outcomes in. And that's been empirically the case, like, with states that have really, and my kid goes to a public charter that has a better outcome. Like, we're actually an example of this working.

It's not a voucher, but it's a charter school. Yeah, it's an option. It's a competitive option. Exactly. It's just how the competition manifests itself is, you know, going to be required testing and thoughtfulness. Right. But competition must come if we're going to change this, right? But it's like you wouldn't, it would be like, the thing about vouchers is that it literally takes money away from the public school.

So it's like it handicaps them before they can even compete. It's not competition. It's like I broke your leg and I'm skating against you. If they lost 10% of their students and then they had to downsize their staff by 10% that would actually be a healthy rift to occur. You get rid of the 10% lowest performance. Now, I don't know if they're allowed to get rid of the 10% lowest performance. So I think the issue on execution here is that. the people who get cut might be the higher new, you know, folks, not the 10% who are the highest paid and doing the least actual education.

Right. So this is where, you know, you can pervert competition. And I think that's the issue I read was when they execute a riff where they have to downsize, the wrong people get downsized. It's like some administrator making 150K a year who barely works versus the three 50K teachers, you know, they will get rid of the 350K teachers. Anyway. Anyway, great job Dara. It's good to have jumping off points. I think we're as a society, we have to think about these things.

And then just on the economy, you pointed out that jobs have gone up again. And then we had a 2.6 job openings. Thank you for the correction. So job openings, right. We had a million in August go down. And then we had a couple of hundred thousand go up in September. These things are trailing numbers. And then the GDP in the third quarter was 2.6% growth.

So we went from like negative growth of two quarters, jobs and the stock market is tanked and earnings are have a headwind and the more and the fed is now saying hey we're going to we did the 75 that just happened while we're on air yeah but now there's a rumor that they might come off the uh they might pump the brakes on the hikes or they might see the end at the tunnel i mean there's a it it's so interesting because what we keep perceiving as good news in the economy the fed sees as bad news So like if we see job openings happening and we see GDP growth, the Fed sees that as a negative signal that its interest rates are not cooling the economy. Inflation is still there.

That inflation is still there as demonstrated not by price increases, but by consumer activity. There's still tons of demand and therefore prices will continue to go up and that means inflation. And so it's this like weird, I'm saying it's extremely counterintuitive. And at this point starts to make you question if the Fed is applying the wrong tool here to an economy that is not playing by rules that have ever existed before. I don't know. So, yeah, they want to raise unemployment. They want to lower the price of homes. They want to lower the value of your 401K.

Yeah. So they're literally trying. And they want to lower consumption too. And yes, and get you to stop spending money on things you enjoy. Okay. So like that's when like let's be super clear here. The unelected body that is the Federal Reserve is just trying to like ruin our fun lives right now. It's like, dude, you're big a bummer.

Like lots of stuff. It came to the party. They're like, you know what? I'm going to just ask you to turn the music down, turn the lights up. And I think everybody needs to go to bed. And we're like, what? We took all your tequila away and we replaced it with Pepsi. Because you're not supposed to be doing this well right now.

I'm like, dude, we got another DJ on the road. What are we doing? Come on, man. This is this party's getting turned. Like, maybe the economy is doing fine. Like, maybe there were a lot of externalities that cannot be accounted for by the regular old tools that the Fed has already used. I don't know. Well, just to be clear, it's going to be another.

I've always said six quarters. So if you count, like, this started in the second quarter in earnest. Second quarter, third quarter, it just finished. The fourth quarter of this year would be the third quarter of this. And then in three more quarters, first second and third of next year is when I think the chaos will come down. So for founders who are the bulk of the listeners here, we're not out of the woods. Things are going to get dramatically worse in all likelihood, feel more chaotic. And the funding environment will not change, I believe, into Q4 of next year.

Yeah. And so just be prepared to make it to then. And you need to make it then to that period, if you're an early state startup, with good unit economics, with the proper burn rate and spend, commasure it with your revenue. And growth, you know, some really significant growth. So, and valuations are not what they were. We're not out of the storm. We're in the exact, I believe, we're in the eye of the storm right now. You know, if you think of the storm like a tornado molly. Yep.

We, all this turbulence we've done has gotten us to the center. Exactly. We're now to get out of it. So it feels like we're equalizing, but we're actually not. No. O contrary, Montferre, this is going to get real. It's going to get harder, possibly. The turbulence could be greater coming out of this than going into it.

Yes. Yeah. And of rant. It's a great, no, that's a great note for founders and a great reminder of the beautiful basics. Valuations are not what they were. They just are not. And if you have to raise out a lower valuation and it means you get money in the bank, probably still worth it.

Do it. Have 18 months is, you know, what I always tell founders. and in a situation like this, the founders who took our advice who had 18 to 24 months, remember I said six quarters is a downturn? A quarter is how many months, Molly?

Three. And six quarters times three is? 18. And I tell people how many months of runway? Exactly. 18 months? You can see, it's all, it all comes together in the math department.

Yes, Nick. I hate to put people on the spot to do real math. Those are super easy. I got those ones. Those are good ones. Multiplication. No, there's not a whole bunch of zeros or whatever. It doesn't have to be a percentage.

It's just 18 months. A depressed valuation says, Nick, is better than a dead company. And a depressed valuation is better than no valuation. Good T-shirts. All right, everybody, that's enough Uber and every other piece of news for today. We have, you know, we just, I realize, haven't gotten a podcast for a few days. We just had to, like, we got a lot of pent up things to discuss. Podcast energy.

But next up, we actually. I have a great next unicorns interview. Jason talked to Brink Drones founder, Blake Resnick. What's special about? Oh, these drones are right up your alley, first responder stuff. Yeah, yeah. So they create drones. And this is really a great story of finding product market fit on the cheap.

He basically saw the shooting in Las Vegas, that tragic shooting. He had lived in Las Vegas during that time period. And he said, why didn't they have like a way to find the shooter faster? And, you know, I wonder how SWAT teams do this today. because we've all seen that robot that comes up for bombs, and it's very slow and yada yada. So he said, wonder flying drones could do this.

He got in his garage. He started building drones, and he started going on runs with the SWAT teams in Las Vegas to do product research. He then made a drone. Wow. And I kid you not, Molly, this quadcopter is made industrial.

It will go through a window. So let's say there's a hostage situation. This thing will break the window and throw itself into the, the home, then rebalance itself, flip over if it needs to, and then start flying through the home, find the person in there, whether it's a distraught person who's emotionally distraught or, you know, a serious bad person, and then turn on a two-way radio and video with the person to start talking to them. Because one of the big things they have to do is get in communication with the hostage

situation. Now you send the drone in, the drone starts talking to you, and the drone then clears the rooms. So when the SWAT team comes in, what do they have to do? They have to clear each room. Now the drone's gone into each room. It's cleared the rooms that are empty and told you, hey, these rooms are empty. And then he built another device, which is a ball, which I explained, that they throw into emergency situations. So this is next level stuff. It's in a really hard category.

And it really has profound impact on saving lives. And obviously, these interactions with police in emergency situations can go south really quick, as we've seen. Or in some cases, people who are completely innocent can get pulled into a bad situation and get killed. And that's not what the police wants. That's obviously not what any any of us want. So this is a Teal Fellow who is a product maniac and there's a lot of lessons in here for founders. I really enjoyed this interview.

Fascinating. Fantastic. So stick around. That's right now. All right. You've heard me talk about Kalshi before. K-A-L-S-H-I. I want you to remember this name.

It's a regulated exchange that offers financial prediction markets on everyday events. So you can trade on things like, hey, what's going to be next month's CPI? or whether certain legislation will pass, maybe what global temperatures will look like at the end of the year, and more. But now, Cali has an awesome new contest. They just launched an election forecasting challenge ahead of the national midterm elections, which are taking place on November 8th. Basically, they're looking to find the best election forecaster in the country. Here's how you join. Go to calci.com slash EFC election forecasting challenge, EFC. Fill out predictions for each congressional race. It's like March Madness, but for voting, if you get a perfect election call, you win $100,000. Are you following the polls? You can change your submission right up to the day before

the election. If no one gets them all right, then the best forecaster gets $25,000. This is like crowdsourced predictive market right here. Super interesting. The contest is free. All you need is an email to play. The entire twist team is on CalShe now and we are going to be talking about our bets during these ad reads. When you hear me talk about Kalshi, you want to listen and hear our bets. I want you to sign up and play at kalshi.com slash EFC. Calshe.com, K-A-L-S-H-I.com slash E-F-C. All right, everybody, welcome back to the next Unicorn Season 4. Great season so far. We've had amazing founders, and today will be no different.

One of my favorite categories are drones. And today on the program, Blake Resnick, he is the CEO and founder of Brink. B-R-I-N-C. That's right. They make defensive drones to enter disaster situations before first responders. Like my brother, Josh, who is a retired New York City firefighter, and these drones can do search and rescue, active shooters, and all that great stuff. You were a Teele fellow, so my guy, Peter Thiel, convince you to not go to college. I'm sure your parents were delighted by that, Blake.

and you were a former engineering intern at DGI drones and you were an intern at Tesla. Tell me a little bit about why you were inspired to make brick drones and what's the current state of the company and the problem. Yeah, no, absolutely. I mean, so I dropped out of school to work on drone technologies broadly, but what kind of vectored me in the direction of public safety

was the October 1 shooting. So I don't know if you remember that in 2017, Mandalay Bay shooting through an annual harvest festival. This is the Las Vegas shooting at the country music festival, yes. Correct. It's very tragic. I think if there was one shooter, 50 people died or something in that range. And we never actually got an accounting of what happened there.

It was very suspicious in many ways. Yeah. I mean, to be a conspiracy there is, but it was pretty extraordinary what happened there. Deadliest mass shooting in American history. and I unfortunately knew people there and that's sort of what got me thinking like maybe there's a place for modern technology to help first responders in these types of events

and that yeah that's really what inspired brink and so you see this tragedy very sorry for your loss or people impacted by it and just looking at my notes here 60 people killed 400 wounded when you are a founder you get inspired to maybe solve a problem in the world. This person shot over a thousand bullets.

Your mind as an entrepreneur starts thinking of products. So take me through that ideation process. You look at this problem. We have school shootings, and obviously we have combat situations, we have fires. Your mind starts going. Where did your mind immediately go to? What type of drones? What type of technology?

Because different founders have come up with different ideas in the space. There's one company, for example, that does triangulation of gunshots and tells you the location of the person based on microphones, right? So a lot of different founders have looked at these kind of situations, mass shooters and fires and other emergency ones. Where did your mind go and how did you, you know, basically codify in your mind a product? Let's go through that ideation process. It was a journey for sure. So, yeah, you know, October 1 happened. A couple months later, I've been thinking about, I thought, you know, immediately started thinking about

solutions, but I wasn't entirely sure exactly what the correct approach was. So when I found the basically just a cell phone number of the police department online, I cold called them at maybe 17 or 18 at this time. Surprisingly, they took my call and agreed to go get coffee with me. And we just ended up talking more about the event. And what I learned there was a couple of things. First of all, it took first responders over an hour to make entry into the room where the gunman was firing from, which didn't strike me as a good statistic. And the reason why that happened is when when plain clothed police and security officers started hearing gunshots along the, you know, the Las Vegas strip, they took out their weapons and then were basically misidentified as additional active shooters.

So this flood of 911 calls comes in, you know, there's an active shooter here. there's an active shooter there, what first responders are thinking is that this is a coordinated terror attack at like six or seven different sites along the strip. And then they sent resources to all of those locations. So they're sending SWAT elements and patrol elements all over the place, getting bad intel and wasting time. And they just, they had to sort through a lot of this noise before they were actually able to understand the true nature of the event. So that was sort of my first big insight here. And so to pause there, this is a very important lesson for founders. Before you started building anything, you said, let me talk to the experts who would use my product or service and just reach out to them.

And as you learned, the world believes in entrepreneurship. They believe in new products and services. You might think somebody's going to not have time for you. Nine times out of ten when a founder, or a would-be founder says, I want to talk to you because I'm an entrepreneur and I'm thinking of building a product. I was wondering if I could just, you know, bend your ear for a moment and have a cup of coffee with you. People find that extremely engaging, do they not?

Listen, I agree wholeheartedly. And I don't think this company would have happened without those early interactions. Because these folks just operate in a very challenging operating environment. You know, there's chaos. everywhere. There might be RF interference. It's just, it's really hard to actually understand these environments and these situations without talking to end users. And I think that's something

we did really well from basically the get-go. So problem one was just general situational awareness in the early stages of like a mass casualty event. So that was the first issue. The second issue that they told me about, basically the shooter in the Mandalay Bay, He had a bunch of weapons laid out to actually shoot into the concert, but he also had a couple of weapons at the door. And he had sort of like a baby monitor camera that was pointed outside of it. So his plan was when police tried to storm the room, there was a long hallway in the Mandalay Bay, and he just opened fire into the hallway and kind of see people coming and be able to do that. And it would have been really bad because it just it just wasn't a good situation from a tactics perspective for a SWAT team or patrol element or similar. So kind of the next issue that came up was we need the ability to kind of look ahead in indoor situations.

And that is the idea that ultimately we started pursuing immediately and resulted in this, which was our first commercial problem. product and bring. A drone. You just held up a quad copter, I think they call those. Yeah. Or maybe it actually has eight rotors in it, but four that's been two and each or something. So he said, hey, if they had had a drone, they could use indoors or outdoors, try to find this person. Well, that would be a good first step. What's interesting here as well, as dark as it is, this psychotic person, this evil person who perpetrated this horrific instance and murdered so many people, they were thinking of,

how to execute this. And so now you're in a situation where you have an adversary. This is a very unique situation for a founder to be. And you're not just going to a bunch of account and saying, hey, how can I help you reconcile expense reports? You've got an actual adversary that you're trying to defeat. So this is a different type of problem to solve, is it not? Yeah, no. I mean, I think that's fair. And I think, you know, through these, through these conversations, the other thing I learned is, you know, this core customer demographic is dealing with situations where, you know, they need eyes and ears places that are too dangerous to send a person every day, every single day, every time a SWAT team deploys, they need the ability to look ahead, try to find someone,

and then talk to them. And if you're able to create that distance between a SWAT operator and a suspect, you're reducing the probability of a gun fight. You know, you're keeping both sides safe because you're just, you're just not risking that escalation. You know, send, send in the robot first. And if it gets damaged, who cares? And we've all seen these bot robots like the R2D2 looking really slow ones for bombs. Those have been around for a long time. Yeah. Those are not a great solution. They seem very expensive. They seem very slow. And obviously, they're not airborne. So your solution, this Lemaure drone, maybe we could play a video of it and you can sportscast it for us? Yeah, let's do it. So here it is. This is your video. We'll hit play on it.

You tell us what's happening. And for people who are listening, please describe what they're seeing. And if you're not seeing this, YouTube.com slash this weekend or use Spotify. And you can flip over to the video version of this podcast. Yeah, done. Okay. So kind of what's happening here, this would be a conventional SWAT callout type event. Maybe like a barricaded suspect. So think murderer, track down to his house, needs to go to jail, but is resisting arrest. This would be a very typical kind of lead up to a SWAT call out. You don't want to send people inside because this person is likely armed. And again, you're just risking that escalation. You know, deploy the drone from a block away. What's normal in these situations is just to do a quick scout around the exterior first,

see if there's someone in the backyard. That's, that's pretty basic. So that's kind of what's happening in this video right now. We see a police officer putting on what looks like a VR headset. He's got the remote control in his hands and a block away. He's got one of these quadcopters circling the perimeter of the suspects, the perps, the bad guys, home. Yep, that's exactly right. And, you know, this, right now what we're seeing the drone flying around outside, this is sort of like normal fare for a quadcopter, nothing too unique. But this, this is, is sort of where that changes. This is now the drone deploying a glass breaker against one of the windows in that house. Yeah. So just for people who are not watching, this drone has hardcore metal on the edges. It's a more industrial looking drone, but it's about the size of the DGI. And this thing has a spinning blade that is capable of shattering a window. And I kid you not, this drone just went through the living room, sliding glass doors, etc.

landed on the floor, flipped over, and is now taking off again. In other words, this thing just jumped through a plate glass window, which means a cop doesn't happen. Well, the thing is, I mean, we built an indoor drone, so it has to get inside. You know, we had instances earlier on where you'd have sent up an operator to rake out a window, but then they might be risking their life to do that. If a suspect inside is armed with a rifle, they could just shoot the officer. So, yeah, that was kind of the purpose of that feature.

But yeah, here we're flying around. You mentioned self-writing. So we built the first sort of commercially available drone in the world that can flip itself over after a crash and take back off. So it has this turtle mode capability. We also have the ability to push open like partially ajar doors in indoor situation. So yeah, that's something that comes in handy all the time. A great night vision system. So even in zero light conditions, you can see perfectly, which is important because almost all SWAT callouts happen at like

3 a.m. I found out. Wow, that's a great piece of information you got talking to him. It's like, yeah, when bad stuff happens, it's the middle of the night. And what we saw here is, the bad guy is in the bathroom with the lights off. The door was half open, and the drone literally goes up to the door. It seems to have a very powerful motor. I noticed a giant battery pack being put into it. I'm assuming this thing has an energy capacity that's different than a standard drone. And it is pushing the door open with force to get in there and to, to, to, to, to, to, get eyes on the bad guy. Yeah, and now kind of what's being displayed is, is what we think is our

most important feature, which is two-way communications. So we build the first drone in the world that you can actually use like a flying cell phone to communicate with this aspect. Brilliant. Okay. So now to recap, this drone is industrial strength. It can write itself. And it has incredible night vision. It's got more power than a normal drone. It's got a blade that juts out from the front of it, giving it the ability to break through the window, and a two-way communication system. So you get this thing inside the house, and you don't need to use a megaphone like we see in every other movie to say, hey, pick up the phone or, you know, somehow establish contact with the bad guy. Yeah. I mean, in short, it's the only, it's the only drone in the world that can

take off from a block away, you know, do an exterior scouting mission, find a window, get through the window, enter inside, still maintain control. By the way, this is actually pretty hard. because the second you get under a roof, you lose GPS, and we operate in zero light conditions all the time. So that means conventional GPS-based drones won't work. Conventional like V-SLAM drones also won't work without pretty advanced. What's a V-SLAM drone? Yeah, so basically it's like video simultaneous localization mapping. So it's a way to use cameras to basically teach the drone where it is in the world. And it's relative velocity. So that's a technology that's guys. IDEO uses, for example. So does DJI and a couple other companies. But it's really hard to do in

low-light scenarios. So that doesn't work. So ultimately, what we designed is a LiDAR-based system. So that's how the drone is kind of mapping its environment and continuing to function under a roof. Yeah, look around, push open a door, find a person, and then talk to them. That's really what our stuff is all about. All right. We have a second video here, I see, and we'll play that one. This is a 28-second video. Maybe we can sportscast it again, describe what we're seeing. Okay, sure. And the product innovation here, as you did so well in the last video. Yeah, yeah, absolutely. One of the other cool things, we have a bunch of accessories that can just click on to this thing. So forward-facing lights are kind of being displayed right here.

We find this is really useful in collapse building situations where we're pushing around a lot of dust. We find visual, sort of like visible light gets through that a little bit more easily. And these are super bright lights that you're showing. I mean, these are like major lumens coming out of this thing. Yep, exactly right. We also have a dropper attachment. It's kind of silly, but this actually comes in handy during like hostage negotiation type situations, like drop off a candy bar or water or similar.

Like that's useful. I was about to say, this is the classic, hey, can we get you a pizza moment? And it seems silly, but if you've, if you know Chris Vaugh, I'm sure you've read his books. Never split the difference, I think is the name of this book. He's a hostage negotiator. Building rapport with these individuals who are typically distraught and are having control issues and trying to find an exit ramp.

Something like some calories. If you've ever been with somebody who hasn't eaten, they might be a little grumpy. And getting just somebody a hot cup of coffee or, you know, a Snickers bar, it sounds silly. But he talks about this in his book, the building of rapport is absolutely critical. And in a situation like this where the person needs to have a drink and maybe a slice

of pizza, this could be all the difference in the world in terms of building rapport and building rapport can solve the situation, which is where the two-way communication comes in. Yeah. And really, that's the point of all of this. These are de-escalation tools, right? I mean, before this stuff existed, SWAT operators would just blast through the front doors of these homes, make entry, gravity. grab a person and physically arrest them.

You know, that's the conventional approach to solving these problems. And the problem with it is it's just extremely dangerous for everyone. Very dangerous for the officers, very dangerous for the suspect, very dangerous for the family that might be living next door. So why do that at all when you can create some distance and send in one of these devices first to find and talk to someone and hopefully just de-escalate the situation completely from there? What does it take to build a hardware startup? This is your first startup, I take it?

Yeah. So it's your first startup, and most people will not invest in hardware. But I get the sense that this is hardware as a service, as we say in our industry now, has. Yeah. You're not just selling these drones. I assume the business model is to sell a subscription to these drones to SWAT teams, correct? There is an initial purchase of hardware, but as you said, there's also this recurring element. Software, updates, data storage, maintenance, repair, spare parts.

It's all of that's bundled up. What is this cost to equip a SWAT team with this? I'm assuming they want to have two or three of these drones. They've got to have some training to do this. What are the costs of enabling, you know, the Las Vegas SWAT team or, you know, a local city, San Mateo SWAT team with a couple of these drones per year? Yeah, totally. So what we find is sort of the initial purchase orders that we're seeing around $30,000.

And then in off years, maybe it's like six. So they usually put the hardware in three-year replacement cycles. So every three years, it'll be another $30,000 purchase. And then in off years, it'll be around six, yeah. And so when they're making the justification for this, how do they make the justification for purchasing this? You have sales teams, I assume at this point, selling into these organizations,

selling into the government, which is what you're doing, not easy. There must be some discussion. And what is the sales pitch here? What is the, I mean, obviously, offers their safety is there, but there was probably a more granular pitch here. So tell us, how did you do that pitch and refine it? I'd say, I'd say what really moves the needle is they watch a live demo of our stuff. And what they're thinking is it's going on is if I had this technology two years ago,

you know, my friend wouldn't have gotten shot. And I think that that's what actually, that's what actually forces the buy. in these situations is they can just think of situations where someone got hurt because they didn't have a tool like this. And from there, the sales process is pretty simple. Yeah. And, you know, the SWAT team has budget for these things. And then if you were just to think about the time off of an officer who was injured, God forbid, you know, the compensation and the loss of life if somebody would actually die. But just if you were to look at it in a very pragmatic basis, somebody winds up not being in service for six months and the hospital bills. You know, you could be talking

about hundreds of thousands of dollars in cost. And again, you're, you're totally right. And I mean, looking at this from purely a financial perspective, big SWAT teams can cost six, $8,000 an hour to deploy. By the time you think about hazard pay and overtime and equipment and just all the bodies that are required to kind of execute a SWAT operation, it's extremely expensive. And, you know, what they've been using in a lot of cases prior to our stuff, either they make entry immediately, which is extremely dangerous, or they use those like decade old bomb robots that you just described, which can take four or five hours to clear a small apartment, struggle to get upstairs, get stuck constantly. Also, these environments, there's trash up to your

knees in almost all of these like SWAT callout homes. That doesn't work very well with a tracked robot. I mean, it does speed up the way that these things happen and that that saves money too. Tell me what you've learned about building a hardware startup because these things burn cash at a level that, you know, just building the software. So if you were using commercial drones made by DGI and you were just building software, okay, you just build software. You don't have to worry about the hardware, but here it's a requirement to have specific hardware for this use case. You know, for this mission, you can't use a DDI drone. You can't use some off-the-shelf drone. Luckily, a lot of these parts, I do think the rotors, I understand,

and a lot of these components are available to you. So how do you budget for that? What does it cost to build a 1.0? And I think you're on the 2 or 3.0 of this product now. Right. Well, I mean, listen, the first version of this, I built in my garage with no money and no staff. So that, I'd say, really helped. Why? Why did that help so much? Well, I was able to move extremely fast, you know, and iterate very rapidly on versions of this technology. So, I mean, really, the way all of this came about is I went on call with Vegas Metro SWAT for like six months. So after that, yeah, after that initial phone conversation and coffee, we just stayed in touch. And when I built the first version of this technology, they were like, this is pretty cool.

You want to try it. Wow. Yeah. So you got to. This is a big unlock for founders who are listening here, not only did you have the coffee, listening lab, as we call it in the industry. You can look up listening lab. I don't know if you were familiar with that term before, listening labs. Have you ever heard that?

No, no. Yeah, there's a guy out of New York, a company called Creative Good, that came up with this listening lab concept. It was, you'd find somebody and you'd say, hey, just pretend your friend handed you this app and, you know, you'd hand them Uber and told you it was great for getting a car service. And they'd say, okay, go ahead and use it. And the person would say, what should I do? And you'd say, I don't know, your friend just told you, so just I'll watch you use it. And you just watch and you record it and you see, you get humbled, basically. You know how humble it is when you give your product to a person to use.

So what you did was a listening lab, but then you actually went into the field and you got to do this extended listening lab with them. So this must have been an incredible signal and a story for you raising that seed round. Yeah. Am I correct? Yeah, very much so. When you tell an investor, you came to me and said, hey, I've been working with the Vegas SWAT team for six months, running my homemade drone that I made in my garage. If you're an investor, now you've taken the founder from a bucket. of idea to relentlessly, relentlessly innovating on it as a builder themselves who is side by side

with the customer doing product iteration. This is what most founders miss. They just start building something in a lab without ever talking to the customers. Yeah. And that can be really disastrous. It can be very disastrous. Yeah, no, I mean, I was hiding behind engine blocks, you know, overhearing gunfire and explosions while my drone was going in.

It was a very strange six months. But I'll tell you what, it was the best way I could possibly imagine to develop this product. Was there a specific call or a moment that you remember where you said, you know what, this is a good mission for me to spend a decade or two of my life on? Was there a specific moment when you said, we got this? This is very clear to me that this product deserves to exist in the world. Yeah, that's a good question. So kind of our strategy with all of this was the first callouts we went on, we didn't deploy the drone when the suspect was still inside. We thought it was just a bad idea.

The technology was too immature. So sort of the thought was that the SWAT team will handle this conventionally, you know, arrest the suspect. And then while they're cleaning up and packing up all their gear, we'd send in the drone to fly through the house, both to record some evidence and also just to test the technology. to make sure that it actually could work in a real operating environment. And that, you know, that taught me a lot. But, you know, eventually we gained enough confidence in it that we were like, okay, we're ready to actually deploy this on the real thing. And first, the first call out where we deployed the drone with a real suspect was,

was pretty memorable. So. Yeah, tell me. Yeah, let's do it. Tell me the story. All right. So the lead up to this, basically someone attempted a drive-by shooting. So a couple people in a car, they tried to kill this guy that was walking down the street in Las Vegas.

They failed, though. They missed. So he immediately called 911, as you do. And he was pretty sure he knew who these people were. So he called 911, said, I think so and so just tried to kill me. 911 takes this. They go, look these people up, track him down to their address, and then send some patrol units out to knock on the door. door and say hello. And by the way, there was the car that this person described as being

involved in the in the drive-by shooting in the driveway. So they're pretty sure that the people are here. Patrol gets there, calls out for a while, tries to initiate contact. No one, no one answers the door. And now this is a, again, this is like a classic lead up to a SWAT type situation. You have like armed and dangerous folks in a house resisting arrest. You call the SWAT team. So SWAT team arrives. I get there maybe 45 minutes after they do. They put up this big speaker system, have been calling out for a while.

That doesn't work. So their next step is they deploy some people up to the front door. They place some explosive charges on the front door. This is kind of a normal tactic to start removing windows and doors and stuff. So the folks are motivated to listen. They blow out the front door and maybe 45 seconds, later two or three people run out of the house and just surrender. So great, you know, people, people are surrendering, situations getting, you know, kind of deescalated through this.

That's great. They interview them, though, and they say that there's still one person left in this house that that doesn't want to come out. Yeah, exactly. So this is our cue, right? This is our queue. So one of the officers takes off our drone. We never flew it due to a number of legal reasons. It was It was always officers, which was also good because it forced us to invest in pilot assistance and similar technologies early. But officer takes it off, flies it up into the front door of this house, enters, starts flying around the first story, doesn't see anyone, clears the entire thing and maybe 45 seconds or a minute, goes, scales the staircase up to the second story of this house, makes a right turn, and then sees the suspect. So it's this woman. she kind of freaks out a little bit when there's a drone flying in her house. Fair enough.

They start, they call into the drone. They start trying to negotiate with this lady and that's working. So now host negotiators are using our drone as a flying cell phone. That's functioning and good. But she goes and kind of like beckons us into this other room with her, which ended up being a closet. So she's like beckoning the drone to follow her in, which the pilot does. now we're in this pretty small like walk-in closet situation with her. And she rushes towards the door trying to like lock us in the closet.

So the drone can't follow around anymore. But our pilot saw this. It was pretty good and was able to pitch the drone forward and get out of the closet like just in time. So that was great. But in the process, he crashed the drone. And what the lady does now is she picked it up. kind of like this, where we could see both of her hands, you know, right hand on left prop and left hand on right prop. We could see her face. The crisis negotiators are still talking to her.

But think about all the intel that the SWAT commander has now. Melanie O'Donnell was the SWAT commander during this incident. So she knows that there's no one downstairs. She knows that there's only one person upstairs because we cleared the entire thing. She knows that this person is not armed because we see both of her hands holding this drone. They're actually. actively talking to her, you know, over the two-way audio system, and she knows exactly where this person is in the house. So she also knows she's pretty clever because she tried to lock the drone up. So this person is, yeah, this person's smart.

But this was enough data for her to decide to send in the team. So sent in the SWAT team, ran up, easily grabbed her, arrested her, and that was, that was the end of the mission. So that was, that was our first call up. All right. Now you got a 2.0. you got a ball throw a ball in here

so we're sending in a BB8 unit let's take a look at this video it's a minute long video and you can sportscast this one for us let's do it all right Blake here comes another situation

I see a firefighter dropping a blue ball with a tether on it's right so now this is this is another product that came directly from customer feedback so we were doing one of the first trainings we ever did with lemur and they were like

we love this two-way audio system in this drone. And we really wish that we could just somehow like throw this into a situation. Then the customer went and he grabbed what they currently use for hostage negotiation, which was this huge Pelican case, this huge black plastic case, with like sort of a telephone booth style phone like handset in it. They were telling me how much of a pain in the ass it was to like hold this thing up to houses, break out a window, like, throw it in. That was a nightmare. They were telling me how often

suspects would just hang up on them, which I guess something you can do, and then the negotiation ends. So that wasn't great. They're telling me how expensive and how unreliable all this technology was. And then they brought me to something that they tried to build, which was basically this modified cell phone shoved into like a gouge open Nerf football. and how they wanted to try to use this for hostage negotiations instead because all the all the current solutions were so bad. And my thought was, well, like I already did all the electrical engineering to build this two-way audio system.

So all I'd really have to do is build an enclosure. And then they would have exactly what they want. They'd have a phone that they could throw into situations to enable hostage negotiation. So I, yeah, I went and did that over a weekend, showed it to them. they lost their minds and how quickly it happened. They immediately wanted to buy it. Then maybe two weeks later, we did our first demo with LAPD. I bought the prototype to show it off.

They also loved it. And maybe three weeks later, we got a random purchase order from LAPD to buy this technology. My thought was, okay, if LAPD buys this half-ass prototype done in a weekend out of my garage in three weeks, this is probably a product that will succeed. This is a product that they desperately need, so desperate that they were hacking their own solution. And this is when you know you have market pull, as we say in the business.

If they're trying to hack something together to solve this, you'll see this with SaaS software. People are like, well, we don't have software to do this. So we opened up an Excel spreadsheet. We used a survey monkey or a type form. then we piped it into notion and we did the you know we created the script that did this you know and you're like well you know what that should be an actual software product that you know we can build for you and then this is the equivalent in hardware i wonder if the form

factor would be better as an actual football because here's the thing about a football everybody knows how to throw one and uh you get a pretty good arc with that and uh you know that can take out a window as i learned in my youth uh you know uh a good toss with a nice spiral on it. Maybe that'll be the version two. But I mean, this one is like the size of a softball, like a small grapefruit or a large orange. What's the necessity for the tether?

Is that just so you can pull it back or is that actually providing some telecommunications or something? No, kind of the main thing is just if the throw doesn't go perfectly, you can recover the ball and throw it again. Another thing that came from user feedback. You know, they wanted it. So we did it. What's interesting about this brick ball that you made, too, is you can use a

standard phone to call into it. So the officers can just, you know, you don't need to make on a two-way system. It's just got a phone number essentially. Yeah, exactly. But no camera in it yet. You got to put some cameras in this. That's, that's a unique problem because you need a 360 degree camera in the 2.0, correct? Yeah, we'll think about it. You know, it's interesting, though. A lot of our customers actually prefer no camera in this, just because it's easier for them to deploy. They don't have to worry about privacy implications or or various other things. And sometimes departments have policy that just makes deploying a camera a little bit harder. So, yeah, sort of the simpler version of this product in some ways is better. You're coming into the space. There must be large incumbents who build equipment like this. You're just beating them by, what, product velocity and your ability to build this faster and cheaper and iterate faster than them? They're just building bad products. I mean, they, you know, they haven't iterated on them in a decade.

This is a massively underserved market, I would say broadly. Like public safety is not an area that's attracted a huge amount of startup interest. And I think a lot of people assume that the market's just relatively small and hard to enter. And they're just wrong about those things. We're excited to be building a technology company that is obsessively focused on public safety, both because we think it's a great business opportunity and also because we think it's an opportunity to you know, have a very positive social impact. All right. Everybody's going to want to know this.

Is there a concept here of putting active measures on the drones? Pepper spray. You say you could drop a ball in it and are there regulations around that? We know that people don't want to put guns on drones. That's been pretty clear, I believe. But SWAT teams do use smoke and flash grenades and other things. and you've got to get pretty close to toss that flash grenade in. It makes total sense that the drone would come up

and then this woman who was trying to capture the drone could just drop a flash grenade at that point. Yeah. So, I mean, it's something that comes up a lot, but it's not something we're super excited to explore. So we've banned ourselves from building weaponized systems. And I'll tell you why. I mean, really, like the long-term ambition of this company

is to make the police helicopter obsolete, bring global emergency response times down to seconds no matter what. And basically put drones and nests on top of every police and fire station. So if you call 911, you're guaranteed response in, you know, 45 seconds. That's really what we want to do. And then use that technology to give first responders, you know, a live flying thermal image review of a fire before they arrive. Drop Narcan, drop epipens, drop defibrillators to save tens of thousands of American lives.

know, a year with this kind of stuff, make the police chase obsolete. I mean, these things are wildly dangerous. Again, for everyone, for the suspect, for officers, for just the general public that are driving around, why do that at all when you can just send a drone to kind of follow a car back to a house and then accomplish the arrest there? Yeah. I mean, if you had these things on top of every precinct and they could, the precinct could just have a drone center on the roof, the drone might get there before the fire department does. And yeah, great. The drone is already flying. There's a central command for that. You might even be able to have drones as a service at some point with the ability for some central drone command to just do this.

Amazing work. Continued success on it. You're hiring. What positions are you hiring for, Blake? All sorts of stuff. What's the most acute? What's the hardest position to fill? Because, hey, we got a little bit of an audience here. And I'll ask everybody, whenever we do this little thing at the end to the show to forward it to a friend who wants to do meaningful work in the world. So what's the hardest position to fill right now? I got a sense you got AIML in your plans here. Oh, yeah, very much so. Well, I mean, we're building out a lot of web app stuff.

So, you know, full stack folks in general would be great, especially starting to think about that kind of broader 9-1 response drone system. You know, a city might put this on every police and fire station. They likely will. That could be hundreds of buildings. So, you know, web apps to control hundreds of drones at a time, integrate with 911 call-taking software, also push video feeds to the right people on the ground, so they have that situation awareness. You know, all of that's really critical.

So I would say certainly from a technical standpoint, web app folks in general are kind of our biggest need. Awesome. Listen, continued success, Blake, and it's great to see you doing the work. What's the domain name so we can send people there to learn more? Yes, it is brinkdrones.com. So, B-R-I-N-C-D-R-N-E-S dot com. All right, listen, continued success and thanks for coming on the program. We'll definitely check in with you in a year and see where you've gotten with the startup and, again, continued success doing this very important work in the world. Thank you for doing it. Yeah, I can't wait. Thanks for having me.