Underwater drones can cost far less than Navy vehicles

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 38:17

   The broad shape, again, the beauty of our business is that like the same way that business is done or operations, maritime operations are done for the Navy, for the ocean conservation, for the energy folks is all pretty much the same. Big expensive surface ship and as you know, we're not building ships fast enough these days. So it's like there's a backlog to even get the ship. Once you even get the ship, you're chartering it at, you know, an order of maybe a few hundred thousand dollars a day.

2. 38:45

   What do they cost to make, by the way? We haven't really talked about the core economics of what you're making versus what they're making. So, yeah, so we've on the underwater vehicle, we can sell them. So we primarily only sell them when we're working with navies with the offshore industry folks. They want to buy services off us or running this like services business. But if you're working with a navy, we can sell them for as cheap as $50,000.

3. 39:08

   dollars. For contrast, the most common autonomous underwater vehicle that the US Navy is buying today is somewhere on the order of maybe five million dollars. So yeah. So you're targeting at two orders of magnitude cost improvement. Now that's for the base vehicle. Once you add the leather seats and the other nice things. Premium subscription. Exactly. But frankly, when you add advanced sensing, advanced navigation, but even still, then you get to one order. You have a low It's a platform that then you can add sensors and everything to it.

4. 39:36

   Yeah, so that's the underwater vehicle. And the surface vehicle is like, you know, that is like less than a million dollars, more than maybe half a million, but it depends. So Chris was flagging earlier, bad buyers kill companies. And I think this is true, where if you're selling to governments or multi-year procurement cycles or something like that, that's just like fairly frequently the company...

5. 40:00

   can run out of money before the buyer has a chance to finish the procurement process. It strikes me that you kind of have bad buyers where, I mean, you have some private companies buying from you and everything like this, but it's long procurement cycles and some selling to governments. And so how do you deal with this fire? Or you can push back the premise, but the fact that ultimately your time to revenue is longer than for other companies.

6. 40:27

   you know so right now um you know the two main groups we're starting to are yes navy and offshore energy and yes both of them have you have to go through in the on the energy side you have to do all these health and safety things you have to get onto a master services agreement you have to ladder your way up to that um government kind of same you have to get on put on a contract vehicle get the clearances all the stuff um i think they're like actually the shape of business that venture scale like you know venture companies are actually very well suited to go after um like we can afford to to kind of invest the money in the r&d and wait because once you win those contracts you're very sticky actually uh you're very sticky and um you're kind of hard to pull out and uh they're like they don't want to wait two years to put someone else in against you so um i have always

7. 41:16

   been attracted to to i mean my my first startup was um kind of the first scooter sharing startup in the UK and Ireland and that's where I like learned to kind of sell to government and I loved it I loved it for two reasons I mean once you won a contract it was very difficult to lose them because just a very sticky customers but also you're like seeing your technology go into the hands of people that like really need it like my underlying kind of thesis around my own entrepreneurial path has been like I'm first startup was like you know going into you know transport and trying to change that this is now going into like the public domain a public good working with events or going into the ocean in general which is a public good um and trying to like uh build deploy technology into it but um you know 60 years ago the people working are thinking

8. 42:02

   about these problems like most commonly like transport and thing where we're not guys who are like here in san francisco they were like in some like government job or something like that and my underlying premise around technology has just always been like i think like public services or public domain um technologies are like maybe the most interesting because um you know if you think that like uh yeah the smartest person in 1960 was probably going working in government there now they're going working in san francisco ergo uh the the kind of like an increasing share of the things that were previously the reserve of government are now going to be the reserve of uh private companies so it's like there is a future where like ulysses is the largest navy in the world um uh and you know like we're the largest like store to the ocean is pretty big

9. 42:42

   yes i bet she has more craft soon but i'll tell you as an investor once these companies actually get to the contracting phase, they're very reliable and very bankable. So it may take