- Every day, people rely on air cargo
to get food, medicine, and other essential supplies
as quickly as possible from one place to the next,
but not everyone can afford to get things fast,
especially in the developing world.
- Airplanes are amazing because of how they can fly
direct A to B,
but they're limited by the fact that they're expensive.
- But what if air cargo didn't need airplanes
or an airport?
How might that expand access to things
like emergency supplies or same-day shipping?
- Logistics is really the lifeblood of civilization.
And so our mission is to enable same-day shipping
to every person on the planet.
That led us to make a very different kind
of aircraft than anyone has ever built before.
A cool thing is not the same thing as a good product.
We needed to make the business model work.
By lowering the cost of air cargo,
that allows us to achieve this mission
of making same-day shipping available
to everyone everywhere.
- You just started your dream business.
How much profit would you need
to pay your basic living expenses like rent and ramen?
This is a show on the economics of entrepreneurship
and founders turning their dreams into reality.
This is Ramen Profitable.
So how exactly does an aerospace company become profitable?
We'll get to that.
But first be, meet Dave.
- I started with a background in computer science
and grew up really enthusiastic to learn how to build things
and making new things.
And the way that I got into this field
was by working in it first.
I was part of a small drone company
where I was a contributor on the team.
And I learned what was the state of the art,
what the future looked like,
and that started to percolate ideas
for what could come next.
- Dave took those ideas,
and with his co-founder, Clint, started Elroy Air,
a scrappy new aerospace company
made up of engineers, designers, computer scientists,
and leaders from places like Northrop Grumman and Uber.
- I love entrepreneurship because you can disrupt
what exists and do it in a sustainable way,
talk with people who are also dreaming,
and then put together a team that's really, really fun
to be around.
- For years, Dave's team grinded away
at their mission,
which required solving a technology problem
alongside a business problem.
- In order to upgrade express logistics all over the world,
we needed to develop a lower cost form of air cargo
that not only was cheaper than existing airplanes,
but had more capabilities.
- After years of development,
Elroy Air's first aircraft began to take shape.
They call it the Chaparral.
It's an autonomous aerial cargo system
that can carry 300 to 500 pounds of cargo over 300 miles.
- Every time we would bring it out to the flying area
and Shane would arm the vehicle,
and then he would, while the vehicles armed and hot,
would put this on, screw it on,
and then just like kind of run away.
(laughing)
- They still have a long road before
they revolutionize the way we ship goods,
but their first major hurdle,
getting this massive aircraft to actually fly.
- A big aerospace company, trying to do what we did,
would probably have 50 to 100 people on the project.
And when we built and flew Chaparral
for the first time, we had 16 full-time people
on the Elroy Air team.
We were scrappy.
We did it on a small budget, and that's scary.
So when the day came for the first flight,
I was racing down to the airport
where we did our flight tests.
The minute those rotors started to spin,
I just felt my whole body anticipating
what was gonna come next.
And when I saw that aircraft go up into the air
and fly in a way that was stable,
hang out there for about 30 seconds
and then come back down and gently rest on the ground,
it was one of the best feelings of my life.
And then it was all hugs and high fives on the team.
It was just an amazing triumphant moment for all of us.
After that campaign was done, we got to work.
We've been heads down building the next generation aircraft
and pushing it toward a state where we can build it,
fly it, prove that it works,
and then get it into service with customers.
- But how does a business like this
become profitable?
First, they need to be able to compete
with alternative forms of air cargo.
- In the long run, our goal is to make sure
that the Chaparral aircraft is lower cost to operate
than other air cargo options
and can approach that cost of trucking.
And we do this by getting
to higher and higher levels of scale,
which means that we can get bulk discounts
on all the components that make up the aircraft.
- So they're gonna make a lot of them,
but that still won't be cheap enough.
So how else do they get the cost down?
- The other way is that we can allow a single pilot
to operate a bigger and bigger fleet of these systems
where a single pilot can control a fleet of 10
and then a fleet of 50 aircraft.
That gets us to a profitability point
not this year, not next year, but several years out,
we see the company turning cashflow positive.
- Elroy Air is one of a number of startups
in a new wave of aviation technology,
making things like flying cars, flying taxis,
and autonomous flight a reality.
Breakthrough is being made possible today
by entrepreneurs like Dave.
- For someone who's thinking about becoming an entrepreneur,
the one piece of advice I'd give is go talk to people
who have done it before.
This knowledge isn't something you're born with.
You get it by doing, and you get it by talking to people.
In the end, the thing that you gain by being an entrepreneur
is a real self-directed ability to push something
that you believe needs to exist in the world
and share it with everybody else.
That's a beautiful feeling.
(upbeat music)