Discussed: Deciding to Start a Supersonic Airplane Company; Innovation in Aviation; Blake's Career Before Boom; Deciding Whether or Not to Do YC; Being a Hard Tech Company in YC; Meeting with Richard Branson; Demo Day; Advice for Other Hard Tech Companies.
Craig: Let's start with the most simple question. What does Boom do?
Blake: Boom is building supersonic passenger airplanes that lots of people can afford to fly. Fifty years after the design of the Concorde, we finally have the technology to make high-speed travel economical for airlines and affordable for passengers. We're gonna make the planet more accessible.
Craig: And where did the idea come from?
Blake: Well, the idea of supersonic travel isn't new, obviously. I've been a pilot since I was in college though I never got to fly on Concorde. It's really a unique story in technology that we've had a capability and then we've actually gone backwards. Our phones are better, our computers are better, we're about to have cars that drive themselves and genetically-engineered medicine, and yet we're still flying at 1960 speeds. We had a supersonic airplane but we never took it mainstream. I'm unaware of any other story in technology that's like this.
If you look back at the history of entrepreneurship and innovation in aviation, all of the big breakthroughs have come from founder-led companies. The first airplane was created by bicycle entrepreneurs, but also the first practical airliner, the DC-3, and the first jetliner, the De Havilland Comet, were all created by companies that were run by their founders. The last new commercial aircraft company was founded 1921. The last founder retired from the industry in 1958, which, coincidentally or not, was also the year we had the first jetliner.
Since then the Boeings and Airbuses of the world have been... optimizing. They've been taking the same basic designs and making them more efficient and safer, and in doing so they've completely swapped out the technology stack. They've made the machinery more efficient, but they haven't improved human capability. I believe very strongly that if we want more human capability, we need entrepreneurs, we need founders, and we need new companies.
Craig: Why do you believe the founders make the difference?
Blake: Founders have vision. Founders start things to make the world a better place. Founders take risks. They make bold bets. By contrast, the CEO of Boeing thinks they overshot on the 787 and has publicly said that their policy is "no more moonshots." And this is from the company that was literally in the moonshot business!
Craig: Wow. So you were a pilot before YC but that wasn’t your job, right?
Blake: Yeah. I've loved airplanes since I was a kid, but it never really occurred to me to be in aviation as a career. I went to school for computer science and had a first career doing ecommerce and mobile. If you ask my closest friends, they'll tell you that I've been talking about maybe doing supersonics for 10 years. My first startup was acquired by Groupon, and truth be told, there's nothing like working on Internet coupons to make you yearn to work on something you really love, that you feel could make a difference in the world.
So after I left Groupon I started to make a list of all the startup ideas in descending order of how awesome it would be if they worked and completely leaving aside everything else. And I figured, "Well, I'll cross things off the list and I'll end up working on idea number five. It'll be, like, a rental car company or something." And, as luck had it, the more I got into supersonics, the more I learned that it's not crazy, and actually the time is now.
Craig: So what made you decide to apply to YC?
Blake: At first I was really skeptical about YC. Isn’t YC for mobile social apps? How could they help a supersonic airplane startup? But Sam put me in touch with other hard tech founders who had done YC. They raved about the experience and how YC can help normalize and catalyze ideas that are off the beaten path. I concluded that YC might not help with the airplane building piece of our business, but they’d help with a lot of other pieces, like getting and demonstrating traction and raising capital. In the early days, capital was the biggest risk at Boom—there was a very real risk that we’d never get the money to build anything, and that the company would come and go without ever really starting.
YC turned out to be one of the best things I've ever done. Boom would probably not be here today if it weren't for YC, in so many ways. In YC, they basically gave us two big pieces of advice and it was exactly what we needed. Number one–get your ass out of stealth mode, it's not helping you. And number two–go sell some airplanes.
And I was like, "Okay, I don't know how 10 guys in a basement who say they're building supersonic jets are going to sell anything to airlines, but I could try." And it turns out you can.
Craig: Your first deal was with Virgin, right?
Blake: Yeah, the advice that we got from our group partners during YC was, "Show up on demo day with sales or your goose is pretty cooked." So I looked at my sales pipeline and it was like United, Delta, Lufthansa, and Air China. At that point, we had like eight or nine weeks to demo day and I’m like, "There's no way I'm closing Lufthansa by demo day. Just not going to happen. I'll be lucky if I close Lufthansa in nine years, let alone nine weeks." So, I'm like, "Okay, well it's either gonna be a startup airline or it's gonna be Virgin."
So we decided to focus all of our sales efforts on startups and Virgin. There have been some startup airlines that have done all business class. And so we went after all the guys who are either currently operating, are starting, or have started in the past all-business-class airlines. And we got one of them to do an LOI.
Up to literally 24 hours before our slot on stage at demo day two, all we had was an LOI from a startup. If we had been on demo day one, the history of the company would be different, but because we were on demo day two we got an email from Virgin on the night of demo day one that said, "You can announce the following… We'll take the first 10 airplanes, and we've got options on them. And through Virgin Galactic, we're gonna help you build it."
I fell off my chair and almost screamed. I had to read the thing three times before I would tell the team because I didn't believe it. And so, we went from what could have been the biggest laughingstock at demo day, to the team who showed up with five billion in LOIs, a record that probably won’t be broken soon.
Craig: That’s amazing. Do you have any tips for achieving that sale that quickly?
Blake: The biggest sales advice we got during YC was, "Be persistent. Be more persistent than you think you should be. Be so persistent that you're sure you're being annoying. And you'll feel like you must be annoying, but when you have that feeling that means you're probably doing it right." And that worked.
The other thing that happened was, we went after Richard Branson directly. And we made sure we had two different avenues to him so that one of them couldn't block us.
We had friends in Virgin Galactic that were supporting us and we had astronaut Mark Kelly, who hangs out with Richard, on our advisory board. And Mark was, like, working Richard for us. What ended up happening was, in February, about six weeks before demo day, Virgin Galactic was rolling out their new spaceship. We got an email in to Richard that said, "Hey, the Boom guys are gonna be in Mojave for the spaceship rollout, you should meet with them while they're there." And then we reached out to the Virgin Galactic guys and said, "Hey, we're gonna be in town to see Richard, can we come to your rollout?"
Blake: So we got the Richard meeting and we basically crashed the rollout. I had to fight my way past the 18-year-olds that were, like, blocking and checking the invite list but we met with Richard. We had, like, 15 minutes over breakfast with him and his mom. And we showed him what we were doing, and we said, "Look, we're not asking for your money, we're asking, 'When this flies, do you want a Virgin logo on it?'" And I think that was key. You gotta ask for the right thing. When you have a deal that's probably gonna be hard to close–ask for what's really gonna help you. We told Richard, "Look, if you're a customer we'll get the money elsewhere. We don't need the money from you." And that was crucial.
The other thing that was crucial was having a deadline. For us that was demo day. And if you know anything about Virgin, you know they really care about their brand, they really care about publicity, and we told them, "We are launching the company on demo day, and either you can be part of it or not." And it would not have happened if we hadn't had that believable deadline. And they had all heard of Y Combinator, and they took demo day actually a lot more seriously than I thought they would, and they really wanted to be part of it.
Blake: If I had to boil all that down, I would say, be fricking persistent, have a deadline, and if you're in a hurry, make the deal as sweet as you possibly can for the other side.
Craig: Great. And, just to jump back a little bit, I love that comment you made about selling internet coupons making you want to start a startup. What advice would you give to someone at a job that's pretty cush but they feel like they should go do something more interesting?
Blake: I believe you have to find something in the world that you desperately want to exist. Startups are hard - all startups are hard - and I think what makes the difference many times is are you working on something that is so meaningful to you, that it is worth it for you to go through hell to make it happen? Because all startups are going to go through hell. I'm unaware of a single one that hasn't, and the question is, "Is it worth it?"
Pick something that's going to be worth it, to you, personally. Stack the deck in your favor. Stack the deck such that you will be motivated and when you look at what you can possibly create versus staying at Google or Facebook or Amazon, it should pale in comparison.
If you haven't found that, don't start a startup just to start a startup. I did that my first time and it was a horrible idea. Start a startup when you're like, "I must make this happen." And something that I've come to believe personally is that the bigger the idea actually, the easier it can be because it motivates you. It motivates the people around you. You can attract better people to come and work with you on it. The team we have around us at Boom is phenomenal, and we wouldn't have it if we were building an app or a small airplane, even. We're able to get these people because everyone looks at what we're building, and they're like, "I can tell my grandkids about this! It’s either we're going to fail or we're going to change the world. There's no in between."
I think there are a lot of ideas out there of that scale that people pass on it because they think it's too hard. Or sometimes the most important problems are kind of hiding in plain sight, and we're so used to them we don't see them. I'd love to see more founders just go for broke on that stuff. Maybe that's the wrong metaphor, but, you know, find big ideas and go after big ideas.
Craig: Yeah. I think we could fund bigger bets–maybe even slightly crazy people. Even if one in a thousand of those companies worked out it’d have such a huge impact.
Blake: I mean, I wasn't dinging YC for that. YC's doing that better than, I think, anybody else already. But I agree. It’s also not just about what gets funded, it's about who we inspire, and what we inspire them to do.
Craig: Definitely. So I’m interested in talking about your experience at YC. Do you have any advice for hardware companies in YC?
Blake: I think the thing that makes a hardware company a little bit different at YC is you have to figure out what you can build that you're going to show at demo day. And for a software company, it's probably relatively easy to figure out an MVP, for a hardware company you've got things that have a longer lead time. It might not be possible to have your product done or in the market or even have a working demo. You should figure out really early on something that both is and looks like actual, substantive progress towards the product.
When we were brainstorming on this, most of the ideas we came up with first were, like, "Well this is the most meaningful technical progress, but no one's gonna be able to appreciate it because it's like, 'Oh, in our simulations we get a lift-drag ratio that's hitting a critical threshold' right? And, that's actually super meaningful, but no one's gonna understand it or believe it or get excited about it.” Then there was a bunch of stuff that was in the category of kinda just for show. Like, we talked about building a flight simulator.
We ended up working on the aerodynamics and then we built a model of the airplane and made it look great. And we can talk about, like, "Look at this. You can see these innovations in the model. That's why it works. That's why this is possible." And, you know, that was concrete for people. We basically did the high-level design of the jet engine and made a 3D printed model of it and then we actually physically brought to demo day the engine. One of the three engines that will power the first airplane. And people, of course, were like, "OMG, jet engine."
Craig: Yeah, it's a nerd magnet.
Blake: Exactly. And we found and bought the one that we were gonna fly. So, it wasn't bullshit. So, I think that's my biggest thing–find the thing that you're gonna get done in three months that is progress and looks like progress.
Craig: That is an excellent point. Okay, last question. What are your favorite books, movies, podcasts... any type of media, really.
Blake: I mean, far and away my favorite book is Atlas Shrugged, and it's probably not an accident that all the heroes in Atlas Shrugged are also pilots. Not an accident for me, personally, anyway.
Let's see, what else... I love things that give you insight into the basics of a field, even if you're not in it. I like learning about biology on the side. There's a defunct podcast called Futures in Biotech that, if you are not a biologist but you think biotech is cool, look up Futures in Biotech. Listen to all the old episodes, they have amazing guests, and you'll feel like you know enough about biotech to kind of appreciate it. What else? I'm trying to think of what's not a standard recommendation.
Craig: It doesn't have to be non-standard.
Blake: In that case, The Hard Thing About Hard Things is good. The Innovator's Dilemma, everyone talks about it, I wonder how many people actually read it. You should actually read it. You should know what disruptive innovation actually means.