The Vertical Space

#102 Adam Woodworth, Wing: What aviation looks like at Google scale

• Luka T • Episode 102

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Adam Woodworth, CEO of Wing (Alphabet’s drone delivery company), joins us to talk about making delivery ubiquitous and why drones should be an equal player alongside other delivery methods. Adam argues we’ve already passed the “risk peak” for UAS integration: the industry now has the operational data to validate safety targets, and the safest path is to fly more because drone trips displace riskier car trips. He traces Wing’s journey from Google X to Part 135 air carrier, the shift from “drone company” to “delivery company,” and what’s changed in the last 18 months as regulatory processes became predictable enough to plan and scale.

We go inside Wing’s growth flywheel in Dallas: ~20 locations, 100k+ deliveries last quarter, and days approaching 2,000 orders. Plus partnerships with DoorDash and Walmart, expansion to Charlotte and new metros, and lessons from Australia and the UK (including hospital logistics). Adam shares why noise complaints dropped after design and routing changes, how one pilot can now oversee dozens of aircraft, and what Part 108 should fix to keep progress moving. We close on the big claim: within a decade, drone delivery can handle the majority of last-mile demand.

Adam:

We've had a pretty consistent North Star since the beginning of make delivery ubiquitous, and do it through small flying airplanes. So,"done" is: drone delivery is an equal player at the table to all other forms of delivery. And the good but challenging part of that is those delivery volumes have kept going up year over year. So it's a market that's getting bigger and you're sort of tracking it. But yeah, I think that success is, and I tell this to the team frequently, I don't want us to be a great drone delivery company. I want us to be a great delivery company. And be considered in the same breath as the other folks in the space that have been around for a very long time that go and move packages every day. And that implies a certain level of sort of scale across the United States. It requires sort of international scale. And, just generally it's like drone delivery is the default, not the exception when it comes to how you're getting your goods.

Jim:

Hey, welcome back everyone to The Vertical Space. It's a special treat to welcome Adam Woodworth to our conversations. As many of you know, Adam is the CEO of Wing. Adam discusses the evolution challenges in the future of drone delivery and UES integration in the United States and around the world. He highlights wing's early days and emphasizes the importance of pragmatic frameworks for commercial deployment. Adam details, wings, expansion plans, partnerships with DoorDash and Walmart, and insights from the international operations in Australia and the uk. Our conversation also covers the potential impact. Of the proposed part 1 0 8 regulations, listen to how Adam Projects drone delivery will become a major player in last mile logistics. But we have background, as I mentioned, Adam is the CEO of wing. He served as wing CTO from the time of its graduation from X alphabet's moonshot factory in 2018 and has held a range of engineering leadership roles. With over a decade of experience in the broader aviation industry. Adam is also a passionate model, aircraft hobbyist. In his spare time, he studied aerospace engineering at MIT. Adam, thank you for joining us and to our guests. We're sure you'll enjoy our talk with Adam Woodworth as you profitably operate in The Vertical Space. Adam, welcome to The Vertical Space. It's a great pleasure to have you on.

Adam:

Awesome. thanks for having me. Excited for the conversation.

Jim:

Yeah. So are we. Thank you. Adam, is there anything that very few in the industry agree with you on?

Adam:

Yeah, I, I've thought about this one a lot. I think, it's something actually I come back to a lot in industry conversations and policy conversations, sort of all the above. I would assert that we've already passed through the risk peak for UAS integration in the United States. and I think it's one of those things where the idea of, drone delivery specifically, but sort of drones for commercial uses have been around for like very long time, but the actuality of it is only sort of very recent and that's left an immense amount of space for people to dream up all these what ifs. and the reality is that like, when you actually just go do it, a lot of those what ifs get either disproven or sort of get, get proven in sort of positive ways. But, in terms of the actual, airspace management pieces and things like that, when I started at Wing, it was like pre part 1 0 7, it was like pre walk into a Best Buy, be able to walk out with a, a product that could go fly more or less autonomously and, be used for sort of like recreational video capture. those markets, like that sort of like consumer drone as a flying camera market, has already gone through its boom and bust cycle. So, and it tracks sort of similarly to a lot of other sort of like emergent widgets type of technology. think about like action cameras or, a new form of sort of like audio media or something like that. when the first Mavic came out, it was this like magical product. you were like, I can, for the last a hundred years in aviation, like it took an immense amount of like training and skill and effort and cost to go and sort of. Operate in the airspace. And even as I'm a lifelong model airplane person, even that you have to build the planes, you have to go find a club, you have to go to all these other, you have to learn how to fly the plane. and suddenly you could walk into a store and walk out with something that just worked. And you didn't have to be an expert about any flying thing. And now you could go exist in the airspace. so in the like 20 15, 20 16, 20 17 timeframe, you could go to any park, anywhere in the United States and see people flying stuff around, go to any carnival, any pier, like you'd see somebody like trying to, capture, some new picture for Instagram or something like that. And, you go to all those places today and you don't see that. and I think it's for a couple of reasons. One, you walk into Best Buy or target and you. Put down the better part of a thousand dollars and you come out with this little flying thing, it's cool, it works great, but is the version they release next year better enough that you walk back in and buy another a thousand dollars one? if you're not a, if you're not using it professionally, you're just sort of like a recreational user of drones. Like the sort of incremental goodness does not warrant like going and getting another one. and at the same time, every state and local town council is starting to be like, Hey, it's kind of annoying that like we've got all these planes flying around in parks and stuff or like we had to stop the parade because there's somebody flying around. And so there's now you go most parks in the US and there'll be a little sign on all the same park rules and one of'em says no drone flying. and so like you went through this peak of excitement and you had you can track the registration numbers and Millions and millions of new flying things in the airspace. And then since then, they've sort of precipitously dropped and you can go look at the sales numbers and all these other different things and like all tracks of that peak occurred and that peak happened before any of the rulemaking that we've been talking about was in place. Right. So like even it happened, even a lot of it happened even before part 1 0 7 was even a thing. So you had probably the most things flying in a completely ad hoc way with like relatively little structure around it and the world kept spinning, right? So it's I think that, you can find a handful of news articles of things where, you know, people did stuff they weren't supposed to with these things, but it wasn't, there was no like, cataclysmic thing that occurred. and now today like that. That Tide has receded. So when I think about the future, and I think about sort of like the risk landscape today, we already have some of these proof points of yeah, the, like you can have millions of airplanes flying around and even with like very little structure around it, like it just works. and structure will make it better and more scalable and all these other different things. But I think that's the piece that, I think that everyone is looking forward to this. oh, the risk is on the horizon, so the risk is in the rear view mirror. and, I don't know. I'm usually a relatively lone voice in the room on that one. But I think it, if you just look at the numbers, it, the story sort of, tells itself and looks pretty compelling for what the future is.

Jim:

that's a unique perspective. Let me ask you, in order for the drones to achieve commercial validation, has the risk for the proper commercial deployment of the drones and drone service delivery, has that risk been addressed?

Adam:

yeah. That one I think is definitively yes. Right? this is another one of those places where, the first better part of a decade of this industry was just agreeing on like a target level of safety or like agreeing on what the bar that you were measuring to with, because it started from a place of the bar is no risk shall be tolerated. Right? And you can't, that's not something that works in the physical world. Like any physical thing that exists will have some probability of failure. And you, in the same way that big aviation looks at it, you roll up all those probabilities into an aggregate assessment and that, that's called a target level of safety for sort of the, the reliability of the service. we did that really early on in the sort of, in the formative years of wing looking at what's the system level reliability you need to get to, what's the sort of physical characteristics of the aircraft? What's the, population densities are flying over and like ground cover and sheltered operations, all these other that throw out any infinite number of buzzwords. but it was all like math on a paper, right? Like it was, you were doing, you're building up like probability distribution functions of okay, this is the likelihood of a motor. seizing up, this is the likelihood of a person being outside. they're all just, they're all little graph shapes and you put them sort of all together and you get to, to aggregate assessments. we've now, we and others in the space have now operated enough that like you have a big enough denominator of operations that you have fully validated those sort of, either sort of mathematically derived or heuristically derived probability functions where it's okay, I can now say with more or less statistical certainty that the projections we made about target levels of safety and required sort of risk assessments back in 2015 are valid. and that validation comes from the body of operational data and testing that's been done. But I think that's a place where, I think that one's moved distinctly outta the hypothetical and is no, like really, the math checks out. and that's one of those places that is usually that's usually the hardest argument to have is okay, like I can sit here and imagine any sort of straw man scenario or construct sort of any what if thing, but what is the actual performance show and, what's the actual numbers multiply out to? and when you do that, it's what I routinely say to folks is the safest thing to do is operate more because all the operations you're doing are displacing inherently less safe operations. So, like everybody steps on a car every day. It's like the single most dangerous thing most of us do every day. and the idea of replacing car trips, to move burritos around with drones to move it around, like the right answer is fly more.

Luka:

Adam, can I, follow up on your contrarian take that we are past the, the peak of UAS integration clearly. US integration. There's a, a pedantic meaning of that word when we get into different, increasingly risky and controlled class of aerospace. But there's also a, perhaps a more loose interpretation of that. So can you unpack that a little bit more? What exactly you mean by, and I'm assuming it's on the small UAS side of things. And then number two, kind of a se second part of that same question is what is then the consensus view and arguments?,

Adam:

Yeah, I mean, I think there's a couple different ways to go on that one. I am, I'm framing it of just like physical widgets. operating in the airspace above the ground. Right. So, if you think about take the total number of small UAS that were registered, in between when they implemented the sort of registration guidelines to today, like there's, that's a very large number. and even, and that number sort of peaked and has been getting smaller year over year. Like you have to renew every several years. And that number has trailed from the peak. and I think I look at it from a perspective of that's completely uncoordinated integration, right? So that's just those things are just, they're above the ground. they're not, operating in a UTM ecosystem. They're not sort of, they may, some of'em, they may not even be aware of NOTAMs, even. Even at the beginning of this was before a lot of the like airspace awareness tools were even created. So like right now, today, I can open up like, before you fly, or I can open up open Sky or any other thing, and I can say Hey, I'm here and I wanna fly my drone. Is that cool? And like it'll do a bunch of backend checks to say okay, there's no active tfr, you're in the right airspace. All these other things. stuff like Lance, where you can do automated airspace, authorization in, in controlled airspace. Like all of that stuff, is happened after the sort of, it was a reaction to the boom, not sort of precipitating it. so I, when I say that take, it's sort of in the unique lens of that scale of operations, absent any framework around it. and then since then we've only added frameworks. So like by definition, all of those things have become inherently sort of more organized and controlled. At the same time, you sort of have, inherently fewer users sort of in that same space. so I think that is, sort of a click deeper into it on, I think the sort of opposing view. I think there's some element to it of if we have more rules or we have more standards, or we have more insert something, or we have more working groups, or we talk about what it might look like, then it'll be better. and it's the classic when folks are trying to do something and then folks are talking about trying to do something like. Let's bias towards the, action of doing something. particularly when it's grounded in some fundamental truths that are backed up by math. I think that's the place of, I think people are assuming there's more uncertainty than there really is, or there's like an unwillingness to accept the fact that there's certainty in a place where we've talked about uncertainty for a very long time. and some of that is like in some cases, there are whole sections of industries built around quantifying uncertainty, right? there's a self preservation aspect of that sort of inherent to it, which is there are some places where like the task is to talk about it, not to do it. and I think those are the environments where I see. A lot of conversations centering around what it will look like instead of just looking at okay, like we can talk about what it's gonna look like, or you can just look at what it does today. and that's the, my alternate answer to this question was gonna be everybody thinks about drone delivery or drone integration as this thing that's happening in the future, and it's already happened. and I think that the more that we can get folks to look at the present and the sort of actual performance versus the hypothetical and, an ever receding horizon that will always be another mile away. if the goal is to just keep talking about it, my biases towards action and towards sort of the present.

Jim:

Adam. I mean, let's face it, there are probably not many organizations that have the volume of operations that you've done, which probably gives you the comfort, the confidence to know it works. a lot of people see the future for their volume of operations. You're dealing with it today, so you probably speak with a lot more confidence because of this experience you have.

Adam:

Yeah. And I, I think that, the cool part is that, there's now more folks at the table with that same experience. So, I think that, we've been leading the charge for a while now in terms of that volume on the residential delivery side, but now there are more and more folks that are getting to, inherently new levels of scale that starts to be that volume where, you know, all of those, all that math can be proven out. so I think it's been. I, maybe it's like there are now, I think maybe there are folks getting close to being in more agreement because they're experiencing it and sort of seeing that those, what those hypotheticals look like in reality.

Jim:

Adam, You joined back in 2014. Tell us a little bit about the industry wing, your role over the last 11 years. Before you do, let me ask you this. Back in 2014, you probably had a vision for what's 10 years from now, gonna be like, how is today different than what you envisioned 10 years ago?

Adam:

Yeah. I mean, I think, the, the most candid answer is I thought it would be done faster. I just think that, this has always been a sort of fundamentally like. the rate living step in this development has always been the regulatory environment. and I think it's, from what we've seen, it's like really hard to, one, it's hard to sort of build and predict for the future of a business in an environment where there is yet to be a framework to do the business. and so, that leads to thinking about what the plans might look like and then having to constantly update them. As, schedules change, as priorities change across administrations, as, different CAAs adopt different frameworks. And then, if they're slightly different, then you have to build two different things to sort of work with both different pieces. But I think at the core of it, it's like, if you had asked me in 2014, I'd be like, oh yeah, we'd already be done by now. It'd already be like everybody in the US already has access to it. but you know, that's the. I think that's just inherent to working in a emergent field that is sort of at the end of the regulatory sidewalk and sort of the next step is very difficult to predict. so that's the answer to that one.

Jim:

ask you real quickly before you go back to the history when you say done by now, what does done by now mean? What would you have envisioned to be done? and in other words, that probably is what you mean by success. What would that have been back in 2014?

Adam:

we've had a pretty consistent North star since the beginning of make delivery ubiquitous, and do it through, small flying airplanes. so, done is. Drone delivery is, an equal player at the table to all other forms of delivery. and, the good but challenging part of that is those delivery volumes have kept going up year over year. So it's a market that's getting bigger and you're sort of tracking it. but yeah, I think that success is, and I tell this to the team frequently of I don't want us to be, a great drone delivery company. I want us to be a great delivery company. and, sort of, be considered in the same breath as the other folks in the space that have been around for a very long time that, that go and move packages every day. and that implies a certain level of sort of scale across the United States. it requires sort of international scale. and, just generally it's like drone delivery is the default, not the exception. when it comes to how you're getting your goods.

Jim:

Great. All right. Now give us the highlights of the last 10 years if

Adam:

Yeah. so, I joined Wing in 2014, as a hardware engineer. So I came to, I'm a sort of aircraft designer by education and trade. so I did for, so first half of my career, and so I came to design airplanes. and, when I started at Wing, I was a individual contributor, tasked with, looking at the current architecture they had, looking at the aspirations that, that they had on the sort of, partner and business side and building a plane to meet those needs. that was the starting goal. And that's what I had traditionally done throughout the rest of my career is like build interesting aircraft to sort of, non-traditional design requirements. And, so I, when I came in, I sort of, started rebuilding a lot of the framework by which you go and define requirements and assess the, design space and go build out all the preliminary design tools to figure out, I'm sure, have y'all seen the like Vitol wheel of death where it's here's all the vitol concepts that never worked. like how do we not end up on that? and the cool thing for me, and one of the things that sort of brought me to at the time, Google, like it was still sort of within Google X, was like, what would aviation look like at Google Scale? Right? think about, the daily active users for Gmail or YouTube or anything like that. Think about the compute horsepower, like what would it look like, in aviation, a lot. Of traditional design is like you're optimizing around local maxima or mini, right? Like you'd have a heritage design and you're iterating on it and you're getting a few percentage points here or there. but what if you, you had the resources to not just look at sort of like where the next peak was, but look at the whole mountain range and figure out like where the, where are you standing on, are you missing where Everest is?'cause it's a thousand miles away. and there was a lot of like really cool like hard science at the beginning of how do you do aircraft design at that scale? How do you make really high order dimensional sort of trade spaces of looking at all sorts of, it's like why the airplane looks as weird as it does, because it's not starting from a sort of baseline of permutation off of a, of off, of a known. so, So that's where I started. And then I sort of followed the, what seems like the natural career path of most engineers, which is if you're good at engineering, the reward is you do less engineering and more management. and just started like slowly growing a team. I was like, okay. I started then managing the, other airplane people and then I started managing the airplane people and the mechanical engineers and then I started managing those folks and the flight testing stuff and it just sort of started to snowball. and all throughout this time we were still really focused on just like building the core building blocks of a service for the future. and I think a couple of the things that, like we decided really early on that still are with us today, is like we picked food very early. Because one, it's where the volume is. It's like everybody orders food every day, like we all eat. it's a growing market segment. that last mile food delivery piece is sort of ever growing online, grocery, ever-growing. and it's like really hard. So, and this is back when the sort of within Google X, the whole idea was like, build these moonshots, do things that are gonna be like 10 Xing in terms of sort of impact. And they have to be hard, right? it can't be like, oh, we're just gonna try a new incremental thing. And the hard part for Wing was twofold. One was the regulatory space of just at the time, like part 1 0 7 wasn't even a thing yet. So there was no, there wasn't even a framework for like scalable commercial operations at all in the United States, let alone delivery. and then two, like for food to work. your margins are tight, right? Like you have to, you can't operate like every other part of aerospace, right? it's like these have to be, you have to build like a commoditized aircraft if you want to be able to do food profitably. and so it's how do you lay the groundwork early on where cost is at the forefront in terms of a lot of the sort of design and architectural decisions? And then how do you, skate to where the regulatory puck is gonna be, right? you're like, okay, this is the future we believe is gonna happen and we're gonna build for that. And that means that like in between we might not have anything to do'cause the puck's not there yet, but like we're building for where we think makes sense in the future. so, we cycled through a couple different generations of the project in terms of sort of structure and leadership and all these other different pieces. and in, late 2016, early 2017, one of the projects Leads Departed and, the former CEO, James Burgess and I were like sort of senior engineers in the company or in the project at the time.'cause we weren't a company yet. and, we went to our boss and we were like, Hey, can we just try this? we sort of seen like we've been here for a while,

Jim:

Try what Adam?

Adam:

try running it, right? we know you guys are gonna go do a search for our new boss, but while you're doing that search, can we, we've seen all different states of the pendulum of sort of how it can swing. What we wanna be like. We think we've got a pretty good idea of how this is gonna work. and so, to, to Google and X's credit, they were like, yeah, sure. you guys should try it. And we're still gonna interview for your boss. And so,

Luka:

You are still trying.

Adam:

yeah, we're still, well, so this is the like, it's the, anyone wants to Princess Bride like classic eighties movie where it's okay, Wednesday, like perhaps I'll kill you tomorrow. it was like, every day it was like, okay, we still have a job today. It's cool. must be still doing good job. and we went from interviewing new bosses every week to every month to then just not interviewing them anymore. and over that timeframe, we really focused on we want make this like. We wanna make this real. And the only way to make this real is to go operate it. and we were still, it's still, it's pre UAS integration pilot program. It's like just post part 1 0 7 being a thing. There's not really a clear pathway in the US to go do this. so, as we were looking sort of at CAAs around the world, CASA in Australia had just adopted the SOA process, which is sort of like a different risk assessment piece. and we looked at it and there was a pretty, there was a, not straightforward, but there was a path you could identify. To go, run the business, even in a sort of small nascent state. and so we poured like all of our attention and resources behind that and we're like, okay, we're gonna go actually operate. and in 2018, we went and, deployed our planes to like a, the middle of a field and out in the outskirts of Canberra. And for the first time, and I've been in, I've worked in the UAS space my entire career. The first time I really saw stuff operate beyond line of sight. and we showed, like we, we in in a week answered gears of what ifs. and at that point we showed enough commercial. Like we showed that there was viability for this on the commercial side, but then at that point, Alphabet had been created and they spun us out as another bet in 2018. and at that point, James became the, we were running it as two in a box. James became the CEO and I became the CTO. I'm sort of have always naturally been drawn to go in the lab, sort of be heads down. stuff like this is things I've gotten better at over time, but as definitively an Introvert. so it was a great partnership and a great split between the two of us of he did a lot of the policy work, a lot of the sort of partner and outward facing things and I sort of, did a lot of, I continued to work on the sort of technology and the deployment aspects of it. and yeah, we should, we continued to show like steady progress. that's always been our like, little engine that could like type of approach. Each week, each month, each year, show that you're climbing up that mountain and that the sort of, ideally the sort of slope of progress is always positive, but more importantly, the second derivative is positive as well, where it's okay, we're, you might not be in the like real hockey stick of growth yet, but you're seeing like, okay, like this is better than linear. and, so we had started operations in Australia, and then in, I'm trying to remember if it was 2018 or 2019, but in the, it must have been 2019, the first Trump administration put out the UAS integration pilot program, which was like the unlock for the United States, more broadly for commercial drones, but very specifically for delivery operations. Because up until then. even after 1 0 7 was created, there was some, there were some regulatory sort of gotchas in that you could do package delivery under part 1 0 7 for compensation line of sight, or you could do package delivery under part 1 0 7 beyond line of sight, but you could not do it for compensation. and that sort of traces it back to some, like economic authority assessments and like the idea of what if you crossed state lines with the box and is that now like interstate commerce and all these other different pieces. And so, like right after part 1 0 7 came out, everyone was all excited, okay, like we're gonna go do drone delivery. And I was like, oh, actually you can't.'cause like you can't really build a very great business if you have to see where the plane is to go, you just go walk the box over there, it'd be better. and, that IPP sort of started laying out the frameworks for okay, how do we do drone delivery commercially in the United States? and that's when sort of the determination of, okay, you, you're gonna go become a part 1 3 5 air carrier was the answer. so in 2019, we sort of, and we were the first one, went through I remember, weeks and weeks of sitting in conference rooms looking at, the, stack of FARs, taller than me, going through line by line and being like, okay, this requirement aircraft shall have seat belts, all right? we need to get that waived. This requirement, like aircraft shall have ashtrays. it's like in the.

Luka:

Adam part 1 35 is what unlocks then being able to collect revenues for BV loss

Adam:

that's the, that's, even still currently that's the way to do, package delivery for compensation or higher, the online site. There's some additional waiver processes you need to go through to be able to do all those things at once. But there was no waiver approach under 1 0 7 to get, to be able to do that in its totality. So, you gotta go become an air carrier, and then you have to do all the things that air carrier does and have, training programs, line checks, like sort of pilot qualifications, all the other different pieces. and we started from, in, in 2019, we got the piece of paper said we're an air carrier. And like that alone isn't, doesn't do much. You then need to get the sort of operational approvals and all the conditions and limitations associated with it of okay, how do we then go work on all those to. Be able to run a functional business because when you start, it's okay, let's say you can only fly fixed routes or you can't fly over moving vehicles, or you can't fly over this highways like roads with this speed limit on them. and then throughout sort of iterative process of continuing to demonstrate progress and, do additional testing and have additional conversations, you start getting, those updated in your operational approvals. So that's been the march, pretty much since 2019 has been this like, steady increase in capabilities over time. And, we started from, one to one ratios between one pilot, one plane, one plane in the air at a time. And the keys to unlocking scaled business in this, in the sense is like, how do you get those all to, much higher ratios? So I think today we're like, I think it's one pilot to 36 planes, one pilot to 20 different operational locations. we're very close to getting to one pilot to an area because like the sort of pilot workload is really more associated with the airspace they're managing versus sort of any particular number of aircraft in that airspace. so getting to a sort of overseer or dispatch model, but like that's been the, going from person to plane to then person two area has been the sort of slow climb. and the sort of bigger commercial unlocks have happened in in concert with that, where, when we started this, it was all first party, right? it's hard to go pitch a partner when. you're like, well, we think this is how the business will be allowed to operate, but we don't know. And like we don't, we can't tell you when it's gonna happen. so when we did all the sort of early stuff in Australia, it was like, it was our marketplace. We were onboarding merchants, we were sort of, leasing warehouses and we had a show from the ground up like, this is what it can look like. and then, I think once partners both started to see the operational attraction we were getting sort of globally, but also, continuing to see that like user demand rise, where it's more and more transactions are happening online. More and more folks are not only just expecting, delivery to be an option, but to have it be the default and to have it be like definitely same day, if not same hour. That need statement started to get louder and louder, and it overlapped with sort of like a crystallizing regulatory framework, where we could have, and the sort of first big partner we onboarded was the DoorDash. and they've been great of we are really good at the airplane stuff. I'm not also aspiring to be building out, all the vendor management pieces and like how to deal with different menu items and like food quality and stuff is we move the box. and finding partners who help us move the box and add the excellence in other spaces. Great. and then, we've been working with Walmart for just about two years now. we started with a couple store pilot in the DFW area and then have just sort of consistently grown that from there. and there it's there's the additional solve of This open question of like, where do the airplanes live? and, Walmart's real estate footprint is second to none. and so you now have like standardized layouts in parking lots. You have, a model that you can start to build out. Like this is the bill of materials for a nest. And that's what we call sort of where the planes live. And like we can copy paste that across all these different stores and we can start to think about what that looks like, across different metros. you start to get into one plus one equals three type of opportunities with the partners. and that's where we're now, so

Jim:

let me ask you a question. That's terrific. The back in 14, maybe 20, maybe now, and you're talking to whoever it is you may report to at Alphabet and they say, listen, at the end of the day, this is really what we wanna achieve. this is our end goal.

Adam:

Yep.

Jim:

What's the end goal they're sharing with you?

Adam:

I mean, I think the goal largely has been the same since the very beginning, which is build relevant business, right? the, the last mile sort of market in general. that has like a trillion at the end of it, right? that's a big number. and then when you start looking at even all the haircuts that you have to take, when you're like, okay, well we're not gonna be delivering like, flat screen TVs and, hot tubs and stuff like that. There's still, there is an enormous amount of goods being moved every day right now today. It's not a market you need to go create. It's not demand. There's like infinite demand. You don't even need to generate it. It's just it's latent. It's there. and so, our task from our stakeholders and from ourselves since the beginning has like, how do you go unlock that market and how do you go serve it? and how do you serve it at a scale that's relevant to our parent?

Jim:

And so with the work that you did in Australia with the work you're doing in Dallas with Walmart, what has been checked off as it relates to that end goal where you're saying done, done, done, done, done. And then what are the three or four things on your whiteboard that we've still gotta accomplish this.

Adam:

Yeah, I think, a couple of things. One, the biggest one is just a predictable and pragmatic regulatory environment, right? So, are you at a place where you even know what test you're studying for tomorrow? Are you in a place where you can be like, okay, this is what the framework looks like. I can roadmap out a couple years. I know that it's not gonna get it. Like I, I have, it is more likely than not to sort of be improving or sort of stay the same, but like I can chart a path towards business operations in the current regulatory environment. That's something that like up until probably 18 months ago was not checked off like that was that's been the big empty checkbox for a very long time.

Jim:

18 months ago.

Adam:

I think it was really when we started to expand in Dallas. we started to get into a place where like the expansion process was standardized. So, it was okay, we're at, take, take something like, We have to go do environmental impact, but at the very beginning, we fall under nepa, so like we have to go do environmental impact assessments for new locations. And when we started it was like, if you're in this parking lot on this side of the street, we have to go do a NEPA assessment for that parking lot. If you wanna move the nest across the street, go do another NEPA assessment. And that could be, those are the things that like cost a lot of money and could be they're like indeterminate in timeline. Like something, it could be six months, it could be 18 months, you don't know. in Dallas, that was the first metro where we got, environmental impact assessment for the entire metro. So it was like, okay, you can have up to this many sites, as long as all your sites sort generally look like this. And, we've gone and done the studies and we've come out with no significant findings and stuff like that. It was like, okay, I can. I can now look at a level of operational predictability of if I'm on this side of the street and the partner says, well actually, we're gonna, our lease is running out. We're gonna need to move over to this side of the street. I don't have to go, oh, sorry guys. it's gonna be nine to infinite months. I don't know. I don't know if we'll even get permission to go do that. So those sorts of things of stuff that was either like completely bespoke for every new thing. a lot of similarities on the aircraft side where we could spend multiple hours talking about aircraft cert and all sorts of other stuff. But, generally when we started, there wasn't really a practical framework for determining airworthiness. And then even once we got to a place that was like reasonably practical, it was still like, okay, you want to go change, The color of the, wing tip, that's a whole new process. Or you wanna go, put a new box on the airplane. That's a whole new process. So getting to a place as well where there was like efficient change management sort of between us and the FAA folks on the search side. We're now in a place where it's like we can do monthly software releases and that's in a sort of, predictable. Like we have a standard test plan and that's all agreed upon. same deal with hardware changes, like being able to have that level of, you don't necessarily have predictable, you don't have guarantees in the outcome, but you have predictability in the process. and that's something that has only happened in the last 18 months or so.

Luka:

Adam, can we talk a little bit about the scale of operations right now? Can you, explain, what geographies you're still actively flying in and how many commercial deliveries in those locations?

Adam:

So, right now today, we have, operations in Australia, the uk, and the us. In the US we've got, one site in Grisman Berg, Virginia. we've got one site in, Charlotte. And then, the rest our sites are in the DFW Metroplex, and that's where we've been seeing sort of, that's where most of our operational focus has moved. and the Charlotte site is sort of the first of the expansion into Charlotte, which sort of, you know, our plans are to take what we've done in Dallas and start to replicate it across more metros. DFW is sort of like, there's that often misattributed quote that's like the, the future is here. It's just not evenly distributed. Dallas is it's pretty evenly distributed across Dallas. Like we've got, 20 ish locations. we've done over a hundred thousand deliveries in the last quarter. and we're seeing like every week we're, that trend is increasing. And last weekend it was, each day was almost 2000 deliveries a day. and that's that's starting to be like meaningful scale. and that's also starting to be like meaningful utilization where, you're hitting, for some of our sites, we're starting to hit the, this is the predicted maximum throughput for our location, and you're sort of a hundred percent utilizing that asset. we're starting to see more sort of self-sustaining. Awareness and word of mouth. Like it's the first time where there's been enough density of operations where like people are hearing about it from their neighbors, not about it from us. and we're getting more consumers organically versus sort of having to go and do activation exercises and things like that. So that's sort of current snapshot of scale

Luka:

What about UK and Australia?

Adam:

it's much smaller at the moment. So, in the UK we're doing a completely different, as a different operational model and different use case. we're partnered with a company called AP N that's like a sort of technology healthcare integration company. and we've been doing like hospital to hospital deliveries in there. So not in the US we're doing like direct to consumer commercial goods in there. We're doing like B2B. movement of medical supplies, test samples, things like that. and then in Australia, we still have, a number of different locations also with DoorDash there. But we've focused most of the growth over the last year just in terms of like our resources, onto Dallas because that flywheel has reached sort of like a critical level of momentum.

Peter:

And in Dallas and Charlotte. Is it, driven by food deliveries like via DoorDash or is it driven by Walmart type products that

Adam:

It is a, it's a mix. but I would say even like across that mix, it's food, right? Like most of the items are food or grocery. and on the food side, a lot of the items are, This is the, if you forgive me to go on an interesting aside. when we first started operating in Australia, we did all these user studies of what would you like, if you had drone delivery available, what would you order? And it was like, choose one of these hundred dropdown items anywhere from medicine to golf balls, to apparel to food. and we got like super consistent feedback of drone delivery should only be used for like emergency medical delivery. Like we'd never use it for anything else. and when we first started, we had a ton. We like had a warehouse with a whole bunch of different merchants where we either had a little, like we either had their inventory in stock of a bunch of golf balls and t-shirts and stuff, or we had, like a little sort of like over the counter pharmacy container, all these other pieces. We had a coffee vendor on site, like a little, like food truck barista. and within a couple weeks of operating, 80 plus percent of all the deliveries were coffee. and it was like we were moving thousands of cups of coffee a week out of one location. and it was like higher than the demand that kiosk had gotten, on their own, from foot traffic. It was like more demand than they'd done. and it was like vast majority of every order we'd done, and all of us were like head scratch. what? Why? what is this? Like why would you like, you have access to like magical flying robots that bring you anything you want. and like all the survey data had completely conflicted with the results. and everyone was using it to order coffee. And we talked to a few different customers and the general feedback were like, I drink coffee every day. My mornings are busy. I either have to like, I'm trying to get the kids on the bus, or I'm trying to get out of the door to go to work and I'm running late. So do I have time to stop at the, drive through to get my coffee Or do I have, does the milk gone bad in the fridge? And I can't, they're like, this is, this solves a problem that they, it's not a, it's a nuisance they have every single day. And this is just the people are like, I know that if I push the button at this time, when I walk outside, the coffee will be sitting there and this just makes my day better.

Peter:

I mean, it's it's a couple of things. It's like the, in, in some ways the stomach is the least patient thing in the world and it's what really values that immediacy. And then, I've received drone delivery, before of coffee. And the first time it happened. You know of course we've been in this industry, we've studied it academically, we understand it so well, but the first time you actually do it, there's this cognitive disconnect that happens. It's what just happened? Because I pushed a button and then a drone came to me and suddenly I have coffee in my hand and I just bypassed the entire ceremony of going to get coffee, right? All of, the parking, the getting in there, the standing in line, the talking to people, the paying for it, the waiting, all of that just drops away and you have coffee and it's just, it's a literally a magical experience.

Adam:

and I think that it's it's one of those things that, is seeing, is believing. Like you, I can, you can have this conversation with people and they're like, well, you know, really, like, do, but I think you've seen it and experienced it and it is a, it's a light bulb moment, but then you start thinking about well, what are all the other things that are nuisances in my life, or like compromises that I am like making that, I can be putting my time and resources in better places or like I can, one of the, one of the folks that we work with at Walmart had an interesting way to frame it of like, you're taking the anxiety out of shopping where it's like, you know, you're at the grocery store and like I have a. Three-year-old and a 7-year-old. And it's not easy to take the three-year-old to the grocery store without them like grabbing a bunch of stuff on the shelves. And and you're like, you're trying to get everybody back in the car and you get home and you realize, oh no, I didn't get, the taco seasoning, or I didn't get the limes, or I didn't get the quarter milk. What if you didn't have to worry about that anymore? and that's the, like we, we see those as the behaviors that emerge in the orders. It's like those types of items that are either like forgotten baskets or, things that are like latent demand in a system where the current means of getting it today just don't work, right? nobody orders ice cream by delivery because it would be melted by the time it got to you. I rarely order french fries because like I know that they're gonna be all soggy and gross by the time they get here. And if you look at it in the. I, if you sort of look at it just in the scope of okay, well, is that worth all this, to bring crispier french fries to people? you can come to your own conclusions, but if you zoom out and you look at like how that changes consumer behaviors and then also the fact that people are gonna order the french fries no matter what they're gonna order. like people are not gonna just tomorrow stop ordering things.

Luka:

Yeah, not to mention what, what Bobby and Manna, often, uses it as an example. It empowers local businesses and creates this Amazon effect, where now it's a growth multiplier across many different dimensions. But let me ask you about the, the geographies and kind of the shifting focus towards the us. it's interesting how some of these early regulatory front leaning markets like Australia that you went into are now somehow, well actually a question to you. do you feel like the, you have saturated that market enough? and is it what you expected initially given the easier regulatory path and, how come now the switch back to the us? Obviously it's a much larger market, but is it mostly part 1 0 8 or a, greater sophistication on the customer side?

Adam:

I think there's, it's a multifaceted answer at one point. It's just you go where the demand is and like the biggest demand is in the us. So like the biggest business opportunities here. I think there's like a, another facet, that, we've observed over time and I think you can sort of track it across the industry broadly, even in big aviation of like sort of, the US is slow to regulate, but then fast to act once they do. And the rest of the world is usually pretty fast to regulate, but has been slower to implement. and so I think that's the, that's what we've observed over time where it's it was really easy to get off. It's not easy. It was, it was predictable and fast to get off the ground in a baseline sense in the rest of the world. It has been harder to evolve that, right? to get

Luka:

And why is that?

Adam:

I am, I'm, I don't know if I knew the answer to that, I might not, no. Might not do this job. But,

Luka:

No, I mean, But did you see some of those rate limiters in your businesses as you were trying to

Adam:

yeah, I think it's there's now approvals we have in the US that we don't have in Australia. just because, I think that it's like once that regulatory flywheel got spinning, the impetus was like, keep it spinning. okay, you've shown progress. Like you can't now stop. You have to keep showing progress. and I think that it's, yeah, it's, I don't actually know the answer to that one. I don't think I could pinpoint it, but it's a relatively consistent observation I've seen over the, now decade of doing this where, like in the eu there's been a ton of like really forward thinking airspace, sort of rulemaking ideas like use space is. Really, that was the idea around how you do airspace management but the implementation of it has lagged behind substantially to now we're like, we're doing shared airspace stuff in Dallas with other delivery providers that we're not doing in rest of the world because the implementation hasn't cut up to the rulemaking.

Luka:

In terms of, demand and feedback that you're getting from users, whether this is in Australia or the US or elsewhere, how often do you get complaints about noise or otherwise? And how are you dealing with this?

Adam:

Yeah. This is, this could be its own podcast in, in, in this story. this is one of those things that didn't look at all what I would've predicted it to be. So, when we first started in Australia, we had a completely different version of the airplane with different propulsion systems and stuff. And it like wasn't like if you held noise meter out, it wasn't like loud, but it made a higher pitch noise than sort of background noise. and when we initially operated folks were like, this is cool, but it would be nicer if it wasn't loud. it would be nicer if it sort of blended more into the background. and, we had, I think we could have done a better job very early on in the initial days, like of doing more community outreach. Had we known that, had we like done more engagement, had we done more interactions with the communities before we started operating And like we had to learn that lesson through some initial pushback. As a result of that initial pushback, we completely redesigned the hover propulsion system. We made it like, basically if it's flying around, if it was delivering something in your yard and you didn't know it was there, you wouldn't go look at it. it sounds like other things in the environment. but we then started getting, complaints from over flight and, at first I was like, that doesn't make sense because these are like, objectively quiet when they're flying overhead. like I, there's a guy that has a, grass field probably like five miles away from my house. And like I can hear when he fires up the Cessna and takes off. these were like, I don't know how anyone heard them, but they heard them. and it was a really, we went and talked to folks and it was like really interesting in that Yeah, we focus everything around, make it quieter when it's hovering because that's where it's closest to people. But those people that it's closest to are participating in it, right? Like they ordered the thing. So if they ordered the thing, are they gonna complain about the thing that came to give them the goods? No. It's the thousand homes that it flew over to get to you to then go down and hover to, to deliver that. Like many of those people might not have access to the service. They might not like it. if you just run the numbers of like, how many people in a community might not like something like it, the probability goes up more with overflight than it does in h hovering. and so then we went and redesigned the cruise propulsion system. And my, my, my tasks, the team on that one was like, make it so that no reasonable person would notice it. unless you were standing outside and you had a clipboard and you're like, I wanna I wanna write a complaint, I wanna, you would not know that it's, that's in your backyard.

Jim:

how much of it was audio versus visual noise?

Adam:

a little bit of both. some of it would just be like, I saw the plane. I don't like that. but you know, I think we also started seeing, like in our, when we first started, like a lot of our planning algorithms were more rudimentary than they are now. So like you might have nodes in the flight network where you had more over flights of a certain space. because, like this neighborhood was getting a bunch of deliveries. So this one house at the edge of the neighborhood, like all the flight paths go over that. So, an average house in the neighborhood might have one over flight a day. And this one was getting 15. And so they were like, Hey, Why is there a plane flying over? so then we went and did changes to the planning algorithm, so that waited how many times it flew over any particular spot. But all of this was like the two things we learned, one, were like, the more you can make it blend in the better. Two, the more you engage with the stakeholders, the better. And so, like our approach when we rolled out in Dallas was like informed by all of that. And we did a bunch of engagements. We even, we, we've since we now have a demo van that drives around that has a little, it's got like a couple airplanes in it and we can fly them for people and they can see even we'll bring the planes to the mall on a Sunday and set it up like across from like the fudge kiosk and show people what it looks like and people will be like, is that a model of the plane? You're like, no, that's the plane. that's what we're talking. Oh, okay. That's cool. Like when is it gonna, so like some of it just came from like understanding the communities more. and since we've taken those approaches, pretty much no one cares, I would say generally, to first order, right? it's not and particularly compared to any other infrastructure or aviation thing, like even in the early days in Australia, the number of noise complaints you would get would be much less than that of oh, there's light rail construction, or there's, a new airport going in or something like that. but it was something that, we wanted to be respectful to the communities for and we wanted to like know that you want this thing to be something that people put their arms around and pull in, not try to push out.

Jim:

I wanna ask you about 1 0 8, if we could in a

Adam:

Yeah. Yeah. Yep.

Jim:

Let's say there's a scale of one to 10. One is purely experimental, five is, it's a business at 10 is it's scaling profitable business, getting close to what Alphabet's dream was. Where are you on that one to 10 right now.

Adam:

say like a seven. I mean, it's we're scaling, like

Jim:

And it's a, and it's a profitable business.

Adam:

it's, all the leading indicators are such that like it's not like I can't get into sort of any financial details, but it's like the flags are trending green. and yeah, it's really a place where it's like, even just in the last six months you're starting to see okay, like I think we're in the hockey stick.

Jim:

And is 1 0 8 giving you more lift or is it stalling? You talk about the implications of 1 0 8.

Adam:

Yeah. I'll sort of talk about it in, there's a couple different ways to come at this. So one, we're doing all of this today without that rule, right? So all of our operations, all of our growth today is like part 1 35 and exemption frameworks and all these, different waivers and pieces. and, the intent, of like a rulemaking exercise like this is to take all the stuff that's like either being done by exemption or by waiver and codify it so that like it's repeatable and equitable. and, and when we've seen sort of, in with the new administration, we've seen like a big push behind like enabling sort of like the growth of the UAS industry in the United States. there are two executive orders that were put out to sort of promote That same, directive and one of, like in the sort of enabling, eo sort of one of the items was like, get the rule out. and so we were really excited to see the rule, right? Like it was, like, it's something that's been talked about for a very long time. it's been, stuck almost at the, there's been some log jam somewhere of it hadn't been published yet. and it got published and we were like, okay, this is you can't react. This is back to like hypothetical versus not, like you can't react to something until you see it. and it's one of those things where it's like the intent great, right? I think the motivations behind like why to do it. Like a lot of the ideas around how to integrate highly automated things into not automated systems, like how to. Sort of enable progress, all these other different bits. Great. As we kept reading it, like the details of it come up short. So some of it is just, I think an artifact of it's been in the development process for so long that some of the stuff has just been outdated by events. Like all the airworthiness stuff is like problems that like we've solved with the FAA since the whole sort of what is certification for UIS gonna look like and stuff in the rule looks like a sort of big retread of back to where we started those conversations, it was like, no, like we've already done, we've all done the like SRM panels to go and quantify the risk. We've done all the change manager pieces. we have a repeatable structure, like we should probably just copy paste that in. But I think based on sort of, how long it takes to go and author these things. Progress continues to happen

Peter:

That's what we've heard is that, that because we've heard exactly that feedback from others and that it is an artifact of the drafting and approval process, but. We may well see that rectified between the public comments and then seeing the final rule, that it will catch up with what's happened.

Adam:

and I think that's the, like, you know, one of the good things about the rulemaking process is there's a comment period. I think there's like over a million comments, which like, I think there's also I don't know if sort of the comment processes has, is ready for the post LLM world where it's like much easier to write like a volume of comments. but yeah, I mean I think one of the good things is, sometimes, I've been through a few of these cycles now in my time at Wing, and sometimes you'll get a proposed rule and all of the industry trades will just be in complete conflict around what's in there, right? Some people will be like, oh, I like this part, and other people, I hate this part, or this part is great for me and this part's terrible. oh, what about this one? And it's like very hard to get alignment across the stakeholders. And then that leads for disjointed comments and like lots of conflicting feedback here. everyone I've talked to is yeah, that doesn't make sense. Like to your point and good news, we have things that make sense. So there's been a, I think, unprecedented amount of alignment in terms of the stakeholders around where it gets stuff, right, where it needs improvement. so that's my general take there. I, our approach is it's again, I'm a part 1 35 area carrier today, I'm running my business. Like I will keep doing that. and this rule should be enabling and make it so that it's more efficient to run those businesses and like more predictable and like better, sort of like more efficient use of the government resources to go and do all these approvals and things. so like we, we continue to stand by. that's the outcome that we're gonna continue to advocate for. we put in pretty lengthy comments to that effect. and the part that always gives me hope on stuff like this is what's the intent? from reading it, you can see the intent is progress. And so now it's just okay, well make the words match the intent. and you can really enable things.

Luka:

And there, there's been a recent blog, that came out of, your team, explaining your comments to part 1 0 8. I'm curious to hear which one of those comments are you most, excited about? I think those were, remove the need to require security threat assessments, for packages. I think the other one was eliminating non-cooperative detect and void. then three maintaining, criteria for making decisions, I guess going down the flight standards route as opposed to, the traditional, flight cert route. and then the other one was, I think the last one was about around hazmat. which one of those do you feel most passionate about and really want to see changed?

Adam:

so the airplane person inside of me wants the airworthiness stuff is just, It is really hard to make progress on something and then see that, start over. So I think that there's been an immense amount of like really good work across industry and the regulator to come up with frameworks that make sense for UAS and I think those frameworks should just be enshrined, right? that's the, like the airplane nerd inside of me is this is the right approach. The approach that we've gotten to over the last couple years, is the right approach for airworthiness for UAS. So that's the sort of past engineer inside of me. That's the one that stands out the most on the sort of business practicality side. it's a lot of it comes down to the TSA pieces, where I, at a baseline, I fully understand the intent, right? I get it, this is sort of. And emergent technology, sort of, we're seeing use cases all around the world where like drones can be used for good and not good. And like I get it. Like I get the need to like, want to ensure that the airspace is safe and that like everybody that we fly around is protected. I think that there's a gap in between that and what's in the rule. mostly just because of like how the systems actually operate. So, as written, and this is just as written, so I don't know what it'll end up looking like or what was intended, but as written, basically anybody who touches the cargo needs to go through the same processes that, people that touch the cargo, that go onto like a D Hhl triple seven or, like ramp workers at an airport. same requirements. And so there's you gotta go to a field office, you gotta go get fingerprinted, you gotta go do all the different pieces. If you look at how the businesses work today. Our cargo is on the shelf of a store. it's like that, that I use the box of macaroni and cheese because I think it's kind of funny, but that mare and cheese is cargo for the plane. Somebody from our operation or from Walmart's, goes, picks it off the shelf, puts it in a box that goes on the plane. Anybody who walks into the Walmart can go touch that box. So are we then saying that everyone who walks into a Walmart needs to go be vetted to make sure that they don't like, touch the box in a way that can cause danger? and I think that's where it's like we start connecting the dots. You're like, this doesn't feel right sized to the risk. And then if you look at what the threat chain is and what you're trying to mitigate, I think there are a few places where just inherent to how these operations work, that threat chain is broken. And so, for example, like our pilots. Don't have any ability to fly the plane like you would like a, like they don't, they can't take over and direct it somewhere. all they can do is like start and stop the operation or request that an airplane lands. and then the airplane like does some math on board of okay, am I over a safe spot that I can land all these other different places? So the operator doesn't have the ability to precision guide the aircraft and in most cases they don't know what's in the box. Like they don't know what package got loaded onto the plane and they don't necessarily know what it's flying over. They just know that a flight has gotten assigned from this location to this location and it's gonna be carrying a box. So like the ability for a nefarious actor to infiltrate that and redirect. Is that it's like traditional like security com compartmentalization where you've. You've walled off that thread on the side at the store. The person loading the box doesn't know where the plane is going, so like the person loading the box knows what's in the box, but they don't know where it's going. The person flying the plane knows where the plane's going, but they don't know what's in the box. So just from the fundamentals of how the operation work, it doesn't warrant that like that. There's multiple links in that chain that are either broken or sort of.

Luka:

It shouldn't be the same treatment. Yeah. Adam, talking about scale again. are there any things that you can share about your expansion plans? And when you mentioned that you're actually at an inflection point, let's say this time next year, where do you want Wink to be in terms of deliveries or run rate?

Adam:

Yep. So, I can't, I, in sort of true corporate fashion, I can't make tons of forward looking predictions, but like I can tell you stuff we've already signed and are working on. so like in June we signed a hundred store expansion with Walmart. that represents, about four additional metros, onto Dallas at around sort of similar scale. So, we've got Charlotte, we've got Tampa, Orlando, Houston, and Atlanta. Are sort of all on the list for, you know, stores have been, are there's a list of like, here's all the stores that this could work for. Here's sort of like the rollout plan. here's the progress to that. that question of like, where are we in the zero to 10 rating, to keep sort of the flags green and moving in the right direction. It's are we executing on that path to growth as predicted, right? are we opening stores when we said we're going to, are we opening new metros when we said we're going to, A lot of this relies on the sort of operational model that we've refined in Dallas, but can we efficiently copy paste it and can we show that store 51 took less resources than store 50 and 52 takes less of it. Just like, are you climbing up Those sort of traditional metrics around doing more isn't linear in terms of resources. So that's the, at a baseline it's like we have an expansion plan to do those a hundred. are we executing to that to plan and then are we continuing to get the same types of volume per expansion? so, I would expect us to be like, you know, we're doing one to 2000 deliveries a day today, across 20 stores, put that across 120 stores. are we sort of at appropriate utilization across each one of those? Is the sort of, are the demand curves match with what we think? So I think it's really this next bite at the apple on that scale growth will really vet out, is what we did in Dallas Repeatable,

Luka:

what camp do you stand in as it relates to scaling? are you in favor of going into a smaller number of regions, but deep or many regions, but more shallow?

Adam:

I'm probably sort of, I probably have one foot on either side of that line. I think it depends. I think there's value in like just establishing beachheads in markets so that you can show folks like, this is what it looks like. And even if you don't have access to it yet, you can go to Dallas right now, you can drive around and you'll find a Walmart that has planes in the parking lot. You can go watch and see what it looks like and you can start curing a lot of those what ifs, even if we're only at one or two stores in your metro. but at the same time, like from a business standpoint, there's economies of scale that come with the saturation, so, I have a certain amount of fixed resources per metro around like pilots and training staff and maintenance personnel, and all these other different pieces. Like the more flights I can do in one place, the better all of that looks.

Luka:

what does the Library of aircraft mean in your model of scale out?

Adam:

I think it's, it's basically I think the, how do you make it so that it's easier to adapt to sort of the unique needs of partners? I think that's the place where, I think you move from an interesting technology to a useful tool. and we're doing that right now with DoorDash and Walmart where we're rolling out new package shapes. We've got, the bigger airplane that's starting to enter into service. all of those are sitting on the same physical infrastructure. They have the same avionics units on the back that's running the same code that has hundreds of thousands of flights on it. they've got the same charging infrastructure. And if Walmart or DoorDash or any other partner comes to us tomorrow and is look like we've learned something in these operations that like we didn't expect to learn, I don't know, it's some equivalent to the coffee revelation, but for retail and, you need to carry around a box that looks like a pizza instead of, a cube or we actually need to go, we need to go 10 miles instead of six miles for this to really make sense in the long term. Like, that pump is primed. And I think that's been our approach on the technical side is like building up all the constituent elements. Like when we rolled out the bigger airplane, it's pretty high parts commonality with the small ones. It's just Different propulsion system, different foam, but same delivery system, same charger, same batteries, same avionics units. and like my philosophy has always been you go to an airport, you look out on the ramp, you see, a whole bunch of different looking airplanes. but they all like, each gate looks pretty similar, right? Like the runways all are built to the same specs.

Jim:

Adam, Let me ask one last question let's say last mile is a trillion dollar market. 10 years from now is last mile drone delivery, a billion dollar market.

Adam:

Yeah, I think drone delivery should be able to do the majority of the last mile deliveries that happen.

Jim:

and not in 10 years.

Adam:

I firmly believe that

Jim:

Are you enjoying your work?

Adam:

Yeah. No, it's cool. Like I've loved airplanes since I was a little kid. and so I couldn't have asked for a better job, right? Like I enjoy the, policy parts in a way that I wouldn't have imagined, five years ago. But yeah, it's great.

Jim:

You've been very gracious joining us. It's been a great talk. Thanks for your time.

Adam:

Cool.

Luka:

Thanks, Adam. I.