Intro: Concord killed supersonic flight. Apollo killed space exploration. I remember thinking, what? How is it that the most amazing airliner ever made is in a museum while nothing better is in the skies? Humanity went backwards 'cause the business model never really worked. 20% of seats at the front of the airplane business class are 80% of the profit dollars.
This is like the business case for what we're doing with flight's working. What do you hope the future of travel looks like? What if you could go to London, have a dinner meeting, and come home and tuck your kids in the same night? What's been the most counterintuitive lesson you've learned along the way?
The most surprising thing that I never would've predicted.
Logan: Alright, Blake, thanks for doing this.
Blake: Yeah. Thank you for having me. Welcome. Great To be here
Logan: So, uh, at a high level, I want to talk about the history of aviation and uh, maybe we can, we can start with some basic facts. So, um, commercial airlines right now, if I'm flying from San Francisco to New York, how fast does that plane go,
Blake: goes about 75 to 85% of the speed of sound, which is. [00:01:00] Which is like 600 ish miles per hour. Um, you know, it's, uh, and it hasn't changed in 50 years.
Logan: changed in 50 years. That was my next question. Uh, at one point in time there was the Concord, which went faster than that.
Logan: Can you give people a little bit of a history on the Concord airliner, how it came to be, uh, what the commercial application of it was, and ultimately why it failed? I.
Blake: Yeah. So the first half century of aviation was really incredible progress. Uh, the, of course, the first airplane was built by bicycle entrepreneurs in 1903 and, uh, who totally did not have the resume to do what they were doing. And, uh, uh, there was a golden age of flight released from 1903 through 1921, when all of the companies that we think of as great aviation companies were created.
Boeing, Lockheed Douglass all created during that, that window. Uh, and then we had decades of really, I think, founder led progress in aviation. Airplanes kept getting [00:02:00] bigger, faster, safer, more comfortable. Um, and it was, it was generally commercially led. Uh, and then in the 1960s, uh, of course we had the Cold War and the leadership changed.
Uh, in fact, the introduction of the first jetliner corresponds exactly with the retirement of the last founder. Uh, the first jetliner was the, uh, de Havelin comet, uh, introduced by de Havelin while he was still running his company. Uh, but by the end of the sixties, all the founders were gone. And of course, uh, the Cold War was in full swing.
And, uh, the world started to see technology as a, uh, a symbol of national progress. And countries started leading the technology rather than industry. So we had, uh, in the sixties we had supersonic projects launched. In Soviet Russia, uh, in Europe, and in the US and the, the European one was Concord, [00:03:00] and that was a joint venture between the French and British government.
And I, I find this really remarkable that it ever worked at all. It's usually when the French and British governments get together, it's a war, not an airplane. Right? And, you know, and they may or not even be on the same side of the war, but, uh, but so that the, a goal of Concord, much like Apollo, uh, was to demonstrate the superiority of Western technology.
Of course there was, you know, basically there's this massive Russia versus the West and, uh, trying to win over the, the, the rest of the world. You know, there's sort of this com uh, communism versus capitalism competition. And very ironically in trying to compete the West Wind, the Communist Way. And we had this like, centrally planned, uh, aerospace stuff.
And so, uh, Concord and Apollo were very much, um, brethren on this. And I, you know, I think. I have a pretty radical view on this. Concord killed supersonic flight. Apollo killed space exploration. [00:04:00] You know, we had the moon landing and we had a Concord flight, 1969. And I think if you'd stopped anybody in the street and said, tell me about 2025, no one would've said, we can't go to the moon and we can't fly supersonic.
And uh, and yet I think both of those programs that were theoretically about demonstrating great progress are actually the death nail of progress. And, and the reason is both were done without any economics. I mean, Apollo was obvious, right? We spent a percentage of GDP to go land on the moon and we plant a flag there and we don't even know what to do next.
And, and Concord, um, in a way was worse because it at least pretended to be commercial. Uh, 'cause oh, airlines will take this, people will buy tickets like it's a product. No, it's not. Uh, it, it technologically very impressive, just the same way the moon landing was. But here's a hundred seat airplane with really cramped uncomfortable seats, [00:05:00] uh, where in order to make any money, they ended up having to charge $20,000 for a round trip ticket.
And you just can't find a hundred people that wanna spend 20 grand to go somewhere quickly. So the airplane flew half empty. It really only worked at all on a couple of routes, and it convinced the world that supersonic flight was economically impractical.
Logan: Hmm. I, I want to, uh, drill into all of that stuff.
Logan: You made the point earlier, um, or it felt like an implication that the founder led, um, transition or people, uh, moving out of their companies maybe had some implications for innovation. I, I don't know if that was the right, uh, framing of how you were sort of articulating it, or was it more the government stepping in less the founder
Blake: Well, I think both of those are very, those are two sides of the same coin, right? Like what's driving innovation and, uh, if it's commercially driven, uh, Adam Smith's hand is really helpful. And, uh, founders are pushing progress. They're looking for [00:06:00] things that get to product market fit. They're always thinking about is what I'm building actually useful or is it just a really great demo?
And Concord was a really great demo. It's a, you know, if it had come from a startup, the, the knock would've been that it never got to product market fit. Um, and, uh, and, and so the, the rise of national prestige driven. Technology efforts and, and the decline of founders in aerospace, I think are very much intertwined.
Logan: Yeah, I, I guess my question was, or, or the distinction I was trying to draw out, like, CEOs can still, uh, push forward progress in some ways, and CEOs aren't necessarily the antithesis of government, uh, intervention or government pushing things forward. Word, uh, founders maybe have some unique abilities to innovate, uh, in a lot of different fields.
Blake: Yeah. Well, if I just look at what actually happened in aviation, um, there was, you know, there was founder leadership through the 1960s, and then there was a kind of a new generation of leaders that were basically [00:07:00] people who worked with the founders. Um, and then, and then the accountants took over. And, and that is, uh, very much the trajectory of Boeing.
Uh, where in the last it's, it is been more than 20 years since Boeing's launched a new airplane. I just think about that more than 20 years without an all new product. Apple goes for 18 months without updating something and people say they can't innovate anymore, two decades. And, and what happened was, um, really a a, a couple things intertwined.
One was just this, this focus on the next quarter and trying to run an aerospace company focused on the next quarter is like trying to fly an airplane while only looking straight down. It'll work okay for a little while, but pretty soon you're in a very strange place in the sky. And that's, that's really what happened at Boeing.
And at, at the same time, the political fallout of Concord, because it was a competition between nations, um, [00:08:00] was really disastrous. So after the American competitor to Concord was canceled, um, we tried to protect Boeing from Europe. And so what did we do? We banned supersonic flight in the continental us.
Uh, literally we put in place a speed limit. Everyone claimed it was because sonic booms were this massive problem. Uh, if that were really true, it should have been noise limit, not a speed limit. Um, but uh, when the way supersonic flight should have started, the minimum viable supersonic jet would actually have been a private jet that was designed to fly from, say, Seattle to Miami.
Uh, carry a handful of people whose time is most valuable. And that small, sort of minimum viable supersonic jet would've been easy to make quiet, easy to make, economically viable. But if you can't fly supersonic coast to coast, there's no that basically the product's illegal. So we banned the minimum viable supersonic chat.
Logan: and so, so I, I wanna talk about that and, and the [00:09:00] business model implications for the concord and the different regulatory considerations. But, but before we. Let, let this point go. I guess as we sort of zoom out, there was a lot of innovation that happened in society from, uh, with physical goods from 1900 to 1960 plus or minus.
And it wasn't just aviation, uh, necessarily that started to stagnate in terms of innovation. It's true of critical infrastructure as well. Our ability to build trains or highways was, uh, amazing in the forties, fifties, sixties, and now the cost of these things, the central planning, all of that. And so I guess I'm curious how much, there's obviously the government, um. Intervention into the private sector, or at least trying to commercialize things that were out of scope historically for it, for maybe orthogonal means, which was showing off our technological superiority more than trying to build fundamental businesses. Which I think is, is an interesting point. But I guess as you think about the regulations that maybe [00:10:00] started to permeate the industry even beyond the, the point about the concord and, and sonic boom and all that stuff, 'cause I wanna talk about that in a second.
But was there, were there other regulations introduced at that point in time, in the sixties or seventies that really started this, um, uh, general stagnation of innovation?
Blake: Um, broadly, yes. I mean, there's a, uh, if, if you follow sort of history of technical progress, you find there was an inflection point around 1971 where a lot of positive trends, uh, uh, vanished. Like prior to then energy consumption per capita was on an exponential growth curve. And then the, the curve completely changed and it became a slow linear growth.
And, uh, it got much, much harder to build things. And, uh, I think that the story is complex. I think at one level it's cultural. Uh, where we went from utopian visions of the future, we went from like [00:11:00] Jules Verne Sci-fi to dystopian sci-fi. Uh, I think our motivation changed, but also we, we did things like the the NEPA Act, which made it extremely difficult to build things physically and really easy for people to block stuff getting built.
Logan: explain the NEPA Act.
Blake: Yeah, so NEPA was the National Environmental Policy Act and uh, and basically said if you want to go build something, you're just gonna be subjected to a whole bunch of environmental review. And anybody who doesn't like the project can sue. Um, and, uh, and so now we have projects that get mired in years, if not decades, of approvals.
And just, just to give you one example. So we, we built a factory in North Carolina where we're gonna build supersonic airliners. And, uh, it took as long to get the permit as it did to take the, to build the actual factory. And, uh, and it took a, it took a year, um, to get the permit. And by the way, people tell me that's a great timeframe that we [00:12:00] did really well, that it only took a year.
Why did it take a year? Well, we had to go through a noise review for how much noise the airplane would make after we were building them in the factory in order to start building the factory. And this is, this is a noise review on an airplane that we're not even done designing yet, let alone actually building where we've publicly committed.
It's not gonna be louder than other jets. And yet I can't roll us a net mixer until we finished. An environmental review. Um, and it just is not like we're in our own way.
Logan: And do you think these are maybe well-meaning, well-intentioned, uh, people or policies that have just been taken to the, to the outermost extreme or are there, are there dark forces from other airline industries at lobbying play that are trying to, uh, make this a more difficult process?
Blake: I think both is the reality of it. I mean, everybody wants clean air and clean water. No, no, no, no, no. Nobody [00:13:00] wants to be woken up in the middle of the night with the sound of, you know, something loud. Right? Like, like obviously. But I, I think most regulatory stuff is, um, there, there's always a moral cover story, which is very believable.
And then there's what's actually driving it. And, uh, very often the actual driving is some kind of protectionist interest or it's some kind of regulatory capture. Uh, and, uh, you know, but you know, if you're, if you're Boeing and y your Concord competitor just got canceled and all you've got is the 7 47, well now you make, you, you gotta make supersonic jets the enemy, or at least that's what they thought they needed to do.
Um, and, uh, and so now, they, now, now there was a, i, I think a lot of like funding of that opposition that was like secretly funded by industry. And you know, I think the, uh, I think we have business ethics all wrong. Um, business ethics should be things like, don't [00:14:00] fucking do that. Like regulatory capture is unethical and, and we should not allow businesses to do it.
And business leaders should be taught, uh, to play fair, not to use, um, red tape to hamstring potentially better things. I.
Logan: The, the shift between the utopian sci-fi to the dystopian sci-fi, the 1971 culture shift. Is there, sounds like you, you've, you've thought about this and looked at some of the different considerations around it. Uh, in 1971. Is there any societal event at, uh, cultural level that we look back on? I mean, obviously the sixties were a pretty transformative decade between, um, you know, different political leader assassinations, different, um, civil leader assassinations, obviously the Vietnam War, all that stuff.
Is there, is there something societally that feels like it actually shifted as a moment in time?
Blake: I think so. I don't know if it's any one thing. These things are often lots of threads woven together that [00:15:00] have a combined result much bigger than any one. I don't, I don't, I'm not aware of any like catalyzing event. It's not like, oh, it was Woodstock. Yeah. You know?
Logan: or, you know,
Blake: No. Yeah, no, I think it was, I think it's probably a lot of things in combination, but just gen generally.
Culturally and then politically a loss of, uh, focus on building a better future. And I think, you know, the, it was on the heels of, call it a century of the, the future actually getting better and a loss of appreciation of what actually makes that happen. The, the, the future can be far, far better, but it isn't automatically far better.
We have to actually make it better and we have to not have things that get in the way.
Logan: So the Concord, uh, was so French and British government get together. It's uh, is it mostly, uh, it sounds like they're not thinking through the business model necessarily in a meaningful way, like how this is
Blake: [00:16:00] No
Logan: be cool and then we'll figure it out
Blake: ba basically, I mean, there was hand wavy economics, right? Uh, but it was not at all what, you know, any business minded person would've built first.
Logan: So first test flight was 69.
Blake: Yes.
Logan: And first commercial flight
Blake: 76 70,
Logan: 76. 76. And how many were made?
Blake: uh, 14 carried passengers. 14 carried passengers. Right, right. And this, this is actually an important part of the story. The, the, so the internet, so prior to me starting boom, the internet was full of basically false, conventional wisdom about supersonic flight.
And one, one of those myths is, oh, it was, um, nine 11 and, uh, you know, one crash that killed Concord. No, there were only 14. It was stillborn,
Logan: Yeah. So they didn't actually take it to the full extent. Well, I, I guess maybe let's talk about the different business models. So, 14, how many people fit in?
Blake: uh, a hundred, a hundred people. A a hundred packed in like sardines.
Logan: to packed Xs. And it flew. How? How much [00:17:00] faster than today's
Blake: Uh, almost two and a half times. Two and a half times. So it was mock two, which is twice the speed of sound versus. Point seven five to 0.85 for today's airplanes. So,
Logan: so us
Blake: to San Francisco. It could be. I mean, theoretically that wasn't the route you were actually able to travel, right? Yeah. That was two and a half, 2 45, maybe three hours, something like that.
Uh, yeah, probably like three, two and a half hours. Coast to coast. Yeah, something like that. If, if you'd actually flown it coast to coast. If you had actually
Logan: coast to coast. Uh, which is, uh, interesting story that we'll talk about in a second. But, um, okay. And how many people would fit on it?
Blake: a hundred, a hundred. So, so a hundred people, they would charge $20,000 in today's dollar? In today. In today's dollars. Yeah. Actually, well, maybe it's more than that today. Today, but, um, uh, but yeah, it's the, the, again, this is econ 1 0 1. The higher the price, the smaller the market, right? And so if you're gonna make an airplane where the tickets are gonna cost $20,000 and you're designing for 1970s or eighties market size, uh, the airplane needs [00:18:00] to be a lot smaller.
Um, what Concord actually did is fly around a lot of empty seats. Even on the best route, which is New York to London. This is the like rock stars and royalty route, right? This is the, if you wanna make a premium supersonic product, there is no better route than New York and London. And even on that route, it flew on average half empty.
Logan: And it flew half 50, presumably 'cause of the price
Blake: Right? It sounds like something. Yeah. So there was a, there was a vicious cycle that kind of spends here, right? So you start off with like, um, a high price point, an uncomfortable product. So that lowers demand. Um, now, uh, you can't keep the airplane flying all the time 'cause there's not enough demand. So you gotta schedule it so that like the first, uh, uh, eastbound flight from New York to London would leave at 10:00 AM uh, out of JFK.
Well, why 10:00 AM Well, it's, it's actually a terrible flight time, right? I'm terrible as an exaggeration. Uh, it, it, it, it gets you to London, uh, after [00:19:00] dinner. Um. Versus if you live a little bit earlier, you can make a late afternoon meeting, a dinner meeting if you wanna come home the same day. Uh, there's actually a much more compelling use case with an earlier departure.
Well, why was it 10:00 AM? Well, they didn't have enough demand because of the, the cost and the comfort. And so they had to have a later departure so that connecting passengers would've time to connect onto a 10:00 AM departure. So you'd fly, say, from Chicago or Denver or whatever, early morning departure and still make your, your 10:00 AM Concord flight.
But it, so all of that kicks off a vicious cycle. So now there's not enough demand. So then the, you, one of the economic advantages of supersonic is you can do more flights, the same airplane and crew, but you only realize that benefit if you've constructed the whole thing such that there's enough demand to keep the airplanes full and flying.
So it's, it's a whole, you know, the, the, it's a flywheel that's spinning in the wrong direction.
Logan: And so, so ultimately, uh, the Concord was disbanded when?
Blake: 2003.
Logan: 2003, and they never made more than [00:20:00] 14. It was sort of the
Blake: Yeah. 14. I mean, there's some prototypes and whatnot, but four 14 carried passengers. Seven, seven for ba uh, British Airways, uh, seven for Air France.
Logan: Did it feel like it was on that inevitable path? 'cause the business model never really worked. Uh, was there a public outcry at all? Were people upset about losing this or at that point,
Blake: Oh. Uh, in, in a certain world, like it's regarded as just this unbelievable tragedy. And there, there are still people campaigning today to get conquered out of museums and put the literally actual Concords back in the sky. It's, I think it's something that has captured, um, it's captured a lot of people's emotional reaction because it is a symbol of going backwards.
Right. How is it, and this is my, a little, in a certain sense, part of my own journey to doing this. I, you know, when I was in my twenties in Seattle. I went to the Museum of Flight, um, and I saw, you know, the Concord that was in the museum there. And I remember [00:21:00] thinking, what, how is it that the most amazing airliner ever made is in a museum?
While nothing better is in the skies? Like that seems wrong. Humanity went backwards. That's not how it's supposed to be. And I think that, um, paradox in a way of, of regression is so contrary to much of the rest of technology that it is, um, it's almost like a murder mystery in
Logan: Structurally as existing planes are today, like what is the, the limiting force that hasn't allowed us to, it feels like so much of the digital world. We just get incrementally better
Blake: some way, shape, mm-hmm. Or form right? Or iPhone.
Logan: even the, you know, the iPhones get better. Every new model that comes out is just,
Blake: Yeah. Works a.
Logan: little bit better.
It's a little faster, photos are better. All that stuff. Like what is the structural limitation on just why we're not going from six 50 to 6 75 to 700 [00:22:00] incremental
Blake: Yeah. So the, the question is what's the product for which there is product market fit at scale with somebody with a business incentive to deliver it? And, uh, so let's break that down. Uh, if supersonic flight over land were allowed, uh, the Gulf Streams of the world would long sense of delivered a supersonic business jet and, and that would've kicked off exactly what you're describing, a whole cycle of innovation.
We'd all be going Mach five by now. Uh, but we banned, basically banned that product, so, okay. What would, what would ordinarily be 2.0? What would be the first step beyond a supersonic private jet? Well, it would be a small premium supersonic airliner. So if we look at the. Economic anatomy of international air travel today.
Now this, this is really fundamental. This, this is like the business case for what we're doing and why it's working. 20% of seats at the front of the airplane business class are 80% of the profit [00:23:00] dollars. This is why you have fancy wine lists, nice lounges. Essentially all of the money on a per trip basis, um, is premium international travel.
And by the way, if you look at it on a passenger cohort basis, it's even, it's like 99%. The frequent flyers who fly at the front of the airplane are substantially all of the international airline profits. So Boeing and Airbus today, they make three class airplanes, business premium economy coach. Um, economically that airplane balances because of the monetization in the front, relative to the monetization in the back.
So if you're Boeing today, um, you don't wanna build an all business class supersonic airplane because it disrupts the bundling of the three class airplanes. Uh, so if, if Boeing shipped a [00:24:00] all business class supersonic jet, it would undermine the market for seven eight sevens undermine the market for triple sevens.
Same story at Airbus. And because it's a duopoly, uh, nobody blinks like, well, I, I'm, I won't do it if you won't do it. Okay. We can, we can all kind of rest on our laurels.
Logan: I just wanna understand that point. So, so, so if, if they, let's say, I think I'm probably in the 99% given all over the, uh, the country at different times. And so I would love, uh, obviously to shift to, uh, a plane like you're describing. If that happens, then the Boeing has that in the sort of duopoly world.
They sell it to United, for example, and then I now start flying that plane exclusively. does that, wouldn't I shift over to what airline it is? Like if, if United's doing it and I'm a Delta member, wouldn't I shift to United? So it's like a, a net benefit to United to have this and therefore Boeing to have
Blake: Well, this is why United's doing exactly that. Yeah, sure, sure. Let's take someone else.
Logan: uh, not someone you're [00:25:00] JetBlue, uh, for example, or something like. Why, I guess from a business implication standpoint, I, I, I guess I'm not fully following why Boeing wouldn't be pushed to innovate or want to innovate on this. I.
Blake: It's duopoly market dynamics, um, and an un an unwillingness to cannibalize an existing product line. This this is classic big company behavior in a duopoly market. Uh, uh, very few. And this goes back to the, I think the importance of founders like Steve Jobs was willing to destroy the iPod business to create the iPhone business, right?
Boeing, today, many, many, many CEOs removed from the founder, uh, working for the board, being very focused on the next few quarters, is not willing to eat the 7, 8, 7 business to create a much larger supersonic business. If there was perfect competition, if there are lots of airplane manufacturers, they would have to, because they would know that if they didn't do it, somebody else would.
But there's only two. There's only Boeing and Airbus. Right. [00:26:00] And if you look at every Boeing product, there is an exact same Airbus product, the 7, 8 7, and the A three 50, same airplane, 7, 3, 7, a three 20, same airplane. Um, and you know, if you're a real AAV geek, you'll be like, oh, but the, the shape of the boarding doors, no, no, this, this, this.
By the way, this is why the margins are terrible as well. When, when you're, you have a competitor that has the exact same product line, the customers, uh, get to compete you down to like almost no margin. Uh, which is the story of Boeing's commercial business. And Airbus is commercial business, like they're terrible businesses because there's no product differentiation.
Logan: So we touched on this element of flying over water versus flying over land and the, uh, considerations from a regulatory standpoint about what we're, uh, what's allowed and what's not. Can you talk about like, uh, how that came to be and what the
Blake: Yeah. For different airliners. So I think, I think maybe the thing I should explain is what's the breakthrough that actually makes Boom possible here?
Blake: Is it, uh. The, the, it is, you know, we've known how to build supersonic airplanes since 1947. When Chuck Yeager broke the [00:27:00] sound barrier, we had Concord, you can build a supersonic passenger jet, like that's been done.
Um, the question really is what is the right supersonic product to build that will make sense for a new entrant to, to build. And the, um, our, our going and approach at Boom was for have any chance of succeeding at this As a startup, we would need to, uh, eliminate, uh, every conceivable risk systematically.
So we're only using. 20-year-old proven 7, 8, 7 level technology things for which there's already a regulatory precedent. Basically everything's pre-approved. Um, and we are not assuming any changes in regulation. So what can you if with those constraints is the surprising thing is there's actually a great product to build.
And that product is in all business class supersonic airliner, designed to focus on the roots that are the trans oceanic roots, where you fly subsonic, overland supersonic over water. And it turns out with that constraint, there are about 600 roots in [00:28:00] the planet, uh, uh, where there's enough traffic to fill the seats.
At fares, people are already paying, um, that airlines can operate very profitably, and that turns into a multi-hundred billion dollar market for the, for this product. And so think, you know, New York, London, but also Miami to Madrid and Seattle to Tokyo and DC to Paris. Uh, literally there are hundred of these routes that have enough people flying in business class today.
Who would happily walk away from their business class to get a faster flight instead. And when we, we make the airplane only 64 seats. 64 by the way, really nice seats. That's important. Um, economically, it fits for airlines. If you can operate a Boeing or Airbus wide body and have profitability in your business class, you can operate a boom, overture jet on that same route and have even better profitability.
'cause you'll be able to fill the seats of those passengers. They'll probably pay a bit more for speed. And you can do twice the flights with the same airplane and crew because it's [00:29:00] faster and there's enough demand to keep the, so you can sweat the asset. So,
Logan: And so subsonic over land, what's the fastest in the US that you're allowed to fly?
Blake: right, right now, um, 14 CFR 91 8 17 says, thou shalt not exceed mach one. The speed of sound.
Logan: Mock on the speed, which is how fast?
Blake: It, it, it, it varies, but like, you know, think 700 ish.
Logan: ish. And so how did that regulation come to be
Blake: Well, this was, uh, this was protecting Boeing from Concord. So this was 1973. Congress had said, Hey, FA, a figure out a way to, um, protect the public from sonic booms that can be bad. And uh, and then what actually happened is we got a speed limit.
Logan: and sonic booms for people that don't, I mean, I assume most people know what a sonic boom is, but can you just explain what a
Blake: I actually, I think, I think there's not much understanding of what a sonic boom is. It's, um, think of it as like the wake of a boat. And so, uh, when a, [00:30:00] when a boat goes by, if you're like right next to a big boat, you'll feel a big wake. Um, if there's a, uh, a smaller boat or a boat further off on the other side of the lake, you know, the wake is smaller.
Um, but it, it is basically the pressure wave, a supersonic airplane creates anytime it's supersonic. Uh, you know, and today because there are no commercial supersonic airplanes, there are only fighter jets. Um, you know, if you scramble a fighter jet and you fly supersonic at a low altitude, it makes a very loud sound.
Uh, however, if you fly an, an airliner at 60,000 feet, it's a completely different story. And one of the breakthroughs that was not part of our original plan, uh, but something we figured out along the way is it could actually do it with no audible sonic boom.
Logan: So, so, and we'll show a picture on screen of there was actually, uh, captured, uh, of what it looks like and you can almost see the wake,
Blake: Uh, behind
Logan: Um, and so I guess that, that, that's an important point though. I think when people think of the sonic boom, there's the, the, uh, [00:31:00] auditory element, uh, uh, uh, associated with it.
And so what, what is that? What is the, when, when people, uh, and when Boeing is lobbying against this, obviously people don't want huge, loud noises flowing
Blake: right down.
Logan: and disrupting cityscapes or whatever. Uh, countrysides.
Blake: So I think what we're gonna see actually happen is this, this could happen very quickly 'cause nobody's opposing it now. Um, and it just makes common sense. If there's a supersonic flight with no audible boom, it should be allowed full stop. If there's an audible boom, then reasonable people might differ about too loud or not.
And, um, and that's a, that's a complex conversation,
Logan: Which, which goes to your point on the auditory regulation, should have been where we would've, would've landed if there was, if we were trying to do a, a societal good around this back in 1973, if Boeing was, it's like, okay, let's focus on the noise element
Blake: right?
Logan: instead we focused on the speed element of it, which is theoretically an [00:32:00] input into the noise element, but not
Blake: Not, not, not, not directly. Right. Um, the, yeah. The thing that should obviously be allowed is Boless Supersonic flight. And, and by the way, it's. This is a concept that's been around kind of theoretically in academia for a long time, but now we've done it. And so that's, that's something, uh, that I'll, I'll show you the picture and we'll put it up on screen.
Uh, so we, we broke the sound barrier on our prototype airplane, uh, earlier this year. Um, it's called the XB one. Um, it is the first supersonic jet, uh, made, not by a nation state. It's the first one made out of airliner ready technology. It's the first civil supersonic jet since 1969, and it's the first one ever made in America, um, basically, uh, for,
Logan: people listening we're, we will show it on or watching, we'll show it on screen for people listening. It basically, uh, looks like a boat with a wake behind it almost. Uh, which is, uh, is, are those the sound waves or
Blake: uh, there's what they're, they're called [00:33:00] shockwaves. So ba basically, um, the, I'll be nerdy for a second here. Yeah. The, the, the best question that nobody asks is what does the speed of sound have to do with an airplane? And the, the answer is the speed of sound is the speed at which pressure waves move in air.
And airplanes are all about pressure waves. If you're flying less than the speed of sound, there is a pressure wave in front of the airplane, um, that's basically nudging air out of the way before the airplane gets there. If you're flying supersonic, that means the airplane's out running the pressure wave, uh, which means when it smacks into the air, it compresses it.
And so you get these little bands of compressed air that come off the airplane. Um, and the way they stack up on top of each other, as they go from the airplane down to the ground, uh, can create this sort of constructive interference. Uh, it creates this sort of like insha wave that is hurt on the ground as a sonic boom
Logan: So you've been at this for 11 years.
Blake: very nearly. Yeah,
Logan: Nearly [00:34:00] 11 years, and you recently had your first flight that broke the sound
Blake: that's right. Yeah. And, and so.
Logan: so what is the business forward from, from here? So we're looking at, we, we got in front of us, this united
Blake: Mm-hmm. Like, I,
Logan: I guess where, where do things sit from? A timeline, commercial, uh, applicability.
Blake: yeah, I mean, so I think where we are now is we've really had supersonic aviation's Falcon one moment. And the, the Falcon one was the, that was the first SpaceX rocket that made it to orbit. And uh, and so what we did on XB one, I think in some ways was even more meaningful because there was a human on board.
The, the first three Falcon ones, um, blew up and it was okay 'cause they were unmanned. Um, but, uh, we, we have a pilot on board, um, our airplane, of course, we're gonna have passengers on board the product airplane. So failure's not an option. So we, we demonstrated it could be done by a small team with a relatively small amount of capital, and that the technology [00:35:00] actually exists.
And moreover, we can do it without an audible sonic boom. Um, and so what's, what's next? It's time to go big. Um, you know, this is a, this is a business that was, you know, to this point, uh, funded by VCs investing their own money, um, uh, to kind of get to the right point of demonstration that the technology is there and the, and the team can really do it.
And now it's time to scale up and go big and build the airplane that you and I get to fly on. And, uh, we, you know, we, we will start building the first full scale airplane next year, and our goal is to have it in the air, um, by the end of 28 and ready for passengers by the end of 29. So we are, um, if we look at technically where the development is, we are a few months ago where the Boeing 7, 7, 7 was five years before it carried passengers.
So if we execute as well as 1990s Boeing, uh, it's less than five [00:36:00] years for you and I can buy a ticket and break the sound barrier.
Logan: And what is, uh, the relationship with United?
Blake: United was first to place an order with a deposit. And, um, uh, I, I think I have an enormous amount of gratitude for the leadership team at United that had the vision to place an order for Supersonic jets during COVID. Um, and it's, it was really, um, Scott Kirby and Mike Kinin who looked at Covid and said, uh, everyone else is retrenching.
Uh, this is actually the time to build for the future. And so they, uh, they made a couple of bold bets. Uh, they made a, uh, made a bet on supersonic flight, and they made a bet on, uh, EV toll, and they were willing to put their money behind the bet and put their brand behind the bet. And so, uh, so United ordered, uh, 15, uh, overtures.
They pre-ordered another 35. And, uh, most important, they're actually working with us, uh, on the [00:37:00] airplane development. So the, the United team. It's deeply involved in our development. When we do technical reviews, uh, United comes to them, uh, their pilots fly the simulator. They give us feedback. Their flight attendants look at how the Galles work, help us make sure that those are gonna be great.
So is an airplane, uh, it, an airplane has a million decisions that go into it and creating the product. And if I contrast, boom, with, say, a SaaS company, the, the thing about a SaaS, there's this sort of falsehood that SaaS companies are less capital intensive than deep tech. But if you look at like the money consumed by an Uber or a Lyft or an Airbnb, uh, versus the capital consumed by like a SpaceX or an and Android, it, it turns out the SaaS companies actually consume more vc.
Uh, but there is an important difference, which is how much capital do you need to demonstrate product market fit with a shipping product?
Logan: to get to the, get to the, you know, zero to one. That
Blake: Yeah, so the, the, [00:38:00] um, the it, you can build an an Uber and see if anybody wants to use it Sure. For a small amount of money. Um, uh, and if it doesn't work well, people lose their seed money. But that happens all the time and it's okay. Um, you can't test product market fit on a supersonic airplane by shipping it.
You have to test it differently. And, uh, and so one of our very early insights was, you know, we basically needed a Kickstarter for supersonic aviation. And so getting, uh, getting orders with real non-refundable deposits and getting the airlines to lock hands with us and be part of the development program such that we're not gonna ship another Concord that they don't want, that their passengers can't afford.
Um, you know, we call it, we call it the three legged stool. There's the technical execution of the airplane, uh, which in many ways is the easiest part. Like people have been building supersonic jets for a long time. We just have to build it capitally efficiently. Um. But then there's the what are airlines really gonna be able to operate profitably and what are passengers gonna pay for?
And, and getting those three [00:39:00] things in sync is really important. You know, should it be a little bit more seats, a little bit less seats? Do you want a little bit more range, a little bit less range? Um, all of those decisions really matter and we needed to prove to ourselves that we are, what we were building has product market fit before we're done physically building it.
Logan: It's impressive. I mean, you've sold more, you've pre-sold more, uh, planes than Concord ever sold.
Blake: have the first five years of production in the books.
Logan: And so how much, how much capital have you consumed to date? Rays consumed?
Blake: yet we've consumed about 4 50, 4 50, um, which makes it by a large margin, the most efficient supersonic development program in history. We did XB one with 50 people, including the engineers that designed it, the technicians that put it together, the test pilots. All of that. Um, and we've also designed a full scale jet engine.
We've designed the full scale airplane. We have a factory, almost 200,000 square foot factory in North Carolina. [00:40:00] Um, like we've done, we've done a lot for about four 50.
Logan: Hmm. And so what, what stands in between now and, uh, me being able to go on a, on a plane?
Blake: It's, it's scaling up the engineering. Um, so, uh, just a few weeks ago we hit what's called config freeze, meaning, uh, we broke the engineer's pencils and said, you're done optimizing. It's time to go build. So the, um, there is a slightly refined version of this airplane. I think to the layman, you wouldn't notice the difference, but it actually takes a bunch of lessons we learned from the XB one test plane, folds it into overture and, uh, and so we are, we're now doing the more detailed engineering.
Next year, we'll start building parts. Um, around the end of this year, we'll have the first full scale engine running on a test stand. And, uh, and then we will take it through an enormous amount of testing. Uh, we'll do as much as we can on the ground, um, what we have to do in the air. We'll do in the air, uh, and then we will, uh, all along the way [00:41:00] we're working with the FAA, uh, and generating their buy-in.
Uh, so that when we're all done, everyone agrees it's ready for passengers.
Logan: Hmm. And plus or minus, like what is it? What is the shelf life of an airplane? Like what is it? What do they typically sell for? Can you just give a
Blake: Yeah, so a typical Boeing 200 seat wide body airplane, like a 7, 8, 7, uh, after all the discounts, it's on the order of $150 million. And the time to payback on that for an airline is about a decade. Um, and, uh, we sell over.
Logan: for how long?
Blake: Decades. Decades. I, I mean, they, uh, by the way, which is a demonstration of the lack of innovation, like they should be obsolete long before they wear out, but they're not, um, uh, the pro product cycles have, have gotten, innovation is so poor that the pro, the products have a very long shelf life, long longer than they really should have.
It's pretty remarkable. Like, to think about
Logan: [00:42:00] decades plus, uh, products that we use in other, I mean, televisions 10 years ago, just, uh,
Blake: 20 years ago,
Logan: just look ridiculous compared to today. You would never use it even though they're functional
Blake: right? In, in the 1960s, the average time an airliner would stay in service was about six years. Not because they fell apart, but because there was a new one that was better that you wanted to upgrade to.
Logan: Hmm.
Blake: Right? Um, so I think, um, it, one, one of our biggest goals at BOOM is to speed up the innovation cycles.
To, uh, to shorten the development costs and timeline for new airplanes so we can iterate much faster ship, newer products much faster. Like over Overture is like the first of what's gonna be a whole family of products. We're gonna build a smaller one that's a private jet, we'll build a larger one, uh, that can have a, a coach cabin in it.
There will be a whole family of airplanes just the same way Boeing and Airbus have a whole family of airplanes. You know, an overture is just the starting point.
Logan: Hmm. So, uh, if we look forward in our lifetime, let's say 25, 30 years, what do you, what do you hope the, uh, [00:43:00] future of travel looks like?
Blake: There's gonna be a lot more travel. So, um, trivia question. When Uber launched in San Francisco and started out with black cars, uh, what percentage of the black car market did they take
Logan: Within what period of
Blake: a year or so?
Logan: I don't know the answer to it. I would guess that, I mean, over time it's much greater than a hundred percent.
Blake: You were the first person. I've asked that question if we've got that right.
Logan: Thank you. I appreciate
Blake: But yeah, I usually hear things somewhere between 10% and 70%. And the actual answer is 300%. Yeah. And so, you know, people talk in AI about Jeff's law now, um, about when you reduce the cost of something, demand goes way up. Uh, but really there's a broader principle, which is when you reduce the friction of something, demand goes way up.
And cost is an element. Accessibility is an element. Um, and I think what we're gonna see with air travel is the market for supersonic jets is much, much [00:44:00] larger than the market for subsonic jets. Because when flights are faster, people travel more. And, you know, we can look back in history 'cause this is, by the way, this happened before it happened in the 1960s when we went from propeller airplanes to jets.
Flights got twice as quick and travel went up. Sixfold, nobody went to Hawaii before. There were jets took too long to get there,
Logan: Hmm.
Blake: you know, and now it's like, okay, what about Sydney? Oh, who wants to go to Sydney? Takes so darn long. What if you could go to Sydney as quickly as you could go to Honolulu, what if you could go to London, have a dinner meeting and come home and tuck your kids in the same night?
What if our kids could grow up in a world where they actually have friends in other continents that they've spent time with? What would happen if there's a factory in Asia, uh, that produces a product and in less than 24 hours it could be back on the desk of the engineer that designed it?
Logan: Hmm.
Blake: Right? Right now that takes four eight hours.
We'd actually double the rate of iteration.[00:45:00]
Logan: Hmm.
Blake: Uh, the second order effects of supersonic flight will absolutely destroy the first order effects. Um, and so I think, you know, to go back to your question that the future is supersonic flight's not special. It's just normal. It's how we all fly and we do a lot more flying.
And the speed up that kicked off in the air. Uh, ricocheted on the ground. We figured out how to build much more efficient airports. Um, you can imagine you could arrive at the, um, the terminal 20 minutes before your flight, uh, without worrying. You're gonna miss it. Um, that, uh, that all of that will put more liquidity in the travel ecosystem.
More, more demand, more flights, more passengers. That means more frequency of flights, which means, uh, more choice of when you leave and when you arrive and that flywheel starts spinning. And it's the flywheel that started spinning in the 1960s with jets. And then it just kind of slowly coasted down 'cause we haven't gotten any [00:46:00] better.
And it's the flywheel that Concord never started because it wildly missed on product.
Logan: Hmm. In some ways regulation at this point, uh, is a moat or an advantage for you all in that you had to go through all these different hoops to kind of get to where you are. Uh, do you
Blake: Agree with? Uh, not, not really. Um, I mean, so we designed. Everything we're doing to make it easy for our regulators. And you know, a thing I always tell the team is regulators are humans too. They wanna work on things that are exciting, they want to be involved, they want to put their fingerprints on the things they work on, and they want to feel trusted and able to trust.
So with XB one, what we did was we involved FAA from when it was on paper to when it was a bucket of parts to when it rolled out to when it was ready to fly. And when we said FAA, we're ready to, you know, we always said, come anytime you want. Look at anything you wanna see, talk to anybody. There are no secrets here.
[00:47:00] And when we said we're ready, they gave us the paperwork the day that we asked for it.
Logan: Hmm.
Blake: Why it wasn't some miracle, it was common sense.
Blake: Build, build, trust, build, buy-in as we go. And then it's not a big deal. And by the way. This is a high profile program. If we screwed it up, it would make the regulators look really bad.
Um, so it's all the more important that we build trust as we go. But it's, this isn't rocket science, this is just human relationships and doing good work and being transparent about the work. And when there's a problem, be open about it. When there's a tough decision, involve the regulators in the decision.
Logan: if you could wave a mag magic wand, uh, for regulations that exist or maybe, uh, elements of FAA and different considerations to make it easier to do what you've been able to do, is there one thing that stands out
Blake: They're Oh yes. Repeal the ban on supersonic flight.
Logan: and, and, uh, where, [00:48:00] where does that currently stand? I know Elon Musk said it's something that should happen under this administration.
Blake: I mean, I've been at the White House four times this year. I've been all over Capitol Hill. I've met with, uh, multiple cabinet secretaries. Um, uh, uh, it's gonna happen.
Logan: Hmm. That's great.
Logan: What's been the hardest part of getting to where you are today?
Blake: It's not the engineering, it's not even the financing. Um, it is building a startup team in an industry that has not had a startup in a century. And, and so we have to find people who are incredibly good technically, but also have the right, I'll just call it startup gearing ratio, uh, to move fast, to be efficient.
And I, and this is, this is part of why I said earlier that I thought Concord destroyed supersonic, and, uh, Apollo destroyed space exploration. And, and part of the insidious way they did that was by creating an entire industry that had no cost pressure. And there are all these like, cost plus government contracts.
And, [00:49:00] uh, so if you're operating on a time and materials contract, uh, you're incentivized to use more time and to use more materials and, uh, and you don't wanna embarrass the customer. So you don't wanna take risk and fail. And so all of that has led to, um, a bunch of just calcification. You know, we, I'm sure we all see the same headlines about just Boeing and their, their struggles, but the whole industry has elements of that.
So we, you know, we, um, we had to learn how to build a team where the, the incumbents were culturally the antithesis of what we needed to be.
Logan: Hmm.
Logan: Where have you found these people from, that comprise like the core? I don't know. Like, are, are these people that, uh, are similar to you and background that maybe came up in traditional tech world and then pursued this
Blake: Yeah, interesting.
Logan: Or are they more Boeing entrepreneurial
Blake: Um, I'm not aware of any Boeing entrepreneurial people. There you go. So it's not that, it's not just take, take that, take that one off the table. [00:50:00] Yeah, no, the, um, uh, so we, we have some people from SpaceX. Um, we have some, we, we care about what you can do, not what's on your resume. We care if you've solved a hard problem and you're passionate and smart and curious and learn quickly, uh, and driven by the mission.
You know, so for example, the, the guy that, um, cracked the code on some really difficult landing gear engineering issues previously worked on janitorial equipment, a different company. I remember when I interviewed him, I looked at his resume and I'm like, why is the team having me talk to this guy? Um, and then I, I had the conversation.
I was like, oh, I get it. This guy is way bigger than a power mop, um, uh, is a brilliant mechanical designer. And so what we, so we, we've tried to find really talented people from just anywhere. And, uh, we also, um, we, we find people who went to Boeing by accident, uh, earlier in their careers before they got corrupted.
Uh, like we hired, uh, another guy who ended up being a very talented mechanical [00:51:00] designer who reached out to me and said, well, I went to Boeing 'cause I, I wanted to work on a supersonic airplane. And somehow I didn't realize that would never happen. Can I please come to, boom, this is what I really wanna do.
And uh, and there are, there are a handful of stories like that as well, but we, we also just, we take young people and we put them in absurdly big roles and uh, and they can do it. Resume,
Logan: are something of a, um, or companies in general are something of a filtering mechanism when we can talk about how good it, it actually is. Colleges, same thing, right? We can, we can certainly rail on that probably for a while, but I'm curious like how, as a sorting mechanism of talent, I assume you guys get a fair number of people coming through the doors, applying, I guess EE everyone I know probably aspires to find the, um, undiscovered talent, the undiscovered gyms within the, that could be at their company and really scale.
It's hard to go pursue just people from SpaceX or Stripe or whatever it is, one of those businesses exclusively. And so I guess as a filtering mechanism, do you [00:52:00] guys take a disproportionate number of first calls when people come through the door? Like how do you actually,
Blake: um.
Logan: uh, make this a practice that you can go through, um, and try to find the un undiscovered gems?
Blake: Um, there's sort of multiple, there's no single answer to this. Um, one, one part is we keep our eyes open for high agency candidates. So like, people email me, uh, directly, and some of the best people we've ever hired have been cold emails to me. Uh, and so I re I i, I place a lot of value on a well-written cold outreach.
Um, so that's, that's kind of one avenue on it. An another is, um, and Brian Chesky talks about this a lot, uh, starting with the work and reverse engineering the human. Like there's a, if there's a thing that we admire that is out there in the world, let's figure out who really did it and talk to them. You know, another, another twist on this is the, the way, the way I got the initial team.
So, uh, I wasn't from the industry, like my last job. It's become a joke now. [00:53:00] My last job, I was a product manager at Groupon. Um. And I remember going to LinkedIn and filtering for industry equals aerospace connection equals first degree. No results. I didn't know a soul in the industry, not a soul. So, okay.
Second degree. Well, there was somebody who now worked at SpaceX who had played hockey in college with one of my directs at Groupon. Okay, great. Maybe I can get that meeting. Is that a strong enough connection to get a good intro? I'll try. And I, uh, I flew down to Hawthorne, uh, in LA where SpaceX headquarters is.
Um, and my only cred was I showed up in an airplane that I had flown myself a little single engine. This was, this was my only cred on day one. I like, I had my pilot's license. Um, and I, I, uh, I sat with him and I explained what I was doing and why I thought it made sense. And, uh, he got pretty excited. And I said, Jamie, um, if you could wave a magic wand and get [00:54:00] anybody in the world to come.
Be in the trenches with me on this. Uh, and you're not thinking about whether they'd want to. You're not thinking about whether I can afford them. You're not thinking about whether they have a job that they're happy about. Now all you're thinking about is who would you absolutely want in the trench with you fighting this battle, making this thing?
Who would be your top five? And, uh, he said he'd think about it. And on, on the flight back to, uh, Palo Alto, my phone Buzz and I had five names. Um, and so I met those five people and I asked 'em the same question and I was sort of recursively searching my network for the best people. And you know, there's that old joke about, you know, everybody's six degrees to Kevin Bacon, uh, turn, turns out everybody's also six degrees to the very best people in aviation.
And so, uh, when I would tell people I was building a supersonic passenger jet, the first question was always, are you crazy? And it, people would rarely ask it out loud, but I could always tell it was the first question. And there was this, [00:55:00] there's just like the meme amongst like aviation people that they're always these internet guys with like crackpot airplane ideas.
And I remember when I, I met the guy who became our first chief engineer. I showed him the work I'd done, um, on a market sizing and on technical feasibility. And he looked at it and he says, wow, uh, I didn't think you'd be this far. And I'm used to hearing a lot of airplane ideas that make no sense. Uh, this one actually makes sense.
And then he, he wanted me to hire him as a consultant. And I was like, Nope. Like you, you're either in or you're out, dude. Uh, and he, he couldn't stop himself. He, he just like started building his own spreadsheets and his own models. He just could not help himself from working on this. And he became, he became our first chief engineer.
Logan: Hmm. Along the way.
Logan: Um, I'm sure you've made a bunch of different trade offs. Is there one that you feel was really a fork in the road that you're particularly happy you made?
Blake: Yeah. Um. We were [00:56:00] insanely ambitious in, uh, our choices, uh, for what to target with our first prototype airplane that made the job far harder, what to target. How so? Uh, so we, we said we're gonna go fly. The original design was 10% faster than Concord Incorporated one passenger seat. Um, uh, it, it had all these like requirements on it that, um, on paper were very achievable.
Uh, but we did not, uh, we did not appreciate where the real break points were in challenge, in including we decided to put a, a person on it. Um, like if we'd made a supersonic drone and the only goal was to like build a thing that's looks like an airplane that breaks the sound barrier. Oh boy, it would've been so much easier.
Also, we would've learned way less and proven way less. We, we, the most important thing we learned from xb, one, two things. One was how to build a safety culture. Hugely important. Um, easier to say than it is to actually do. Number two, we learned where the real breakpoints in [00:57:00] practicality were. And so when we said, okay, great, now we're ready to scale up to the airliner.
We were able to make far more pragmatic choices. We backed off a little bit on speed. We went from Mach 2.2 to Mach 1.7. Why at 1.7? Um, we can use completely off the shelf materials that were already certified for the 7, 8 7. We don't need to qualify even the same materials for different operating environments.
Uh, it's far easier to meet the same noise regulations that apply to subsonic jets for takeoff and landing at 1.7 than it is at 2.2. Um, at 1.7. The aspect ratio on the wing can be wider, meaning a higher wingspan that makes stability and control for takeoff and landing dramatically easier. One of the technical challenges on XB one was.
At Mach 2.2, you have this very slender airplane, slender wing, long, skinny fuselage. It's hard to make stuff fit. And at [00:58:00] 1.7, which by the way means another 15 minutes across the Atlantic, it's not that big of a deal. All of those things get easier. And along the way, taking all that thinking, remembering this is not a one trick pony.
We're gonna ship an airplane and an 0.1 revision and a 0.2 revision, and then a 2.0 and a 3.0. We don't have to put every good idea on 1.0 that we, we can really embrace the m and MVP minimum viable product. Uh, and that allowed us that that plus the experience in XB one allowed us to be far more pragmatic about what we're doing.
Logan: Hmm. What's been the most counterintuitive lesson you've learned along the way?
Blake: The most surprising thing that I never would've predicted. Was that an airline would place an order and give us money before we ever flew an airplane. I, I've guaranteed on day one that that would never happen, but yet it did. Thanks Scott. Thanks Mike.
Logan: Do you think this happens [00:59:00] XCOD, that they're, they're like thinking about and taking into all the consideration, or you think that
Blake: Or you think that was confluence of events? I think we've, we've always found, so, so we, um, we, we were going through yc, um, we did a pre-order deal with Virgin, um, that we like unveiled on demo day, uh, like $2 billion LOI from Virgin. Uh, we got a pre-order from Japan Airlines actually before United. United was the first to put money in with an order.
Um, so why Virgin? Why Japan Airlines? Why United, why American? After that, there, there is a specific answer why that team, with that set of humans at that point in time wanted to do the thing that did with us. And it it, the answer. You know, the, the answer's different for Richard Branson than it was for United and different from what it was for Japan Airlines.
But at each point, each point, we caught them in the right moment where this created real value for them. Uh, short term and long term. Uh, like I, when I met Richard Branson, there's a, there's a whole story of there how I managed to basically crash a Virgin [01:00:00] event to get time with him. Um, but I, I, uh, I, yeah, I explained to Richard what we were doing.
Um, we had a little model of the airplane with a, a Virgin logo on it. And you know, he, where he sat back in his chair, he says, wow, guys, this is, this is brilliant. Like, I love it, but like I'm doing this Virgin Galactic thing. Like, I don't think I've got an in me to do two of these. And I, I said, Richard, no, no, no.
I'm not asking you for your money. I'm not even asking for your belief that we're gonna pull this off. All I'm asking is when it works, will you like the first one to be for Virgin? And if you're willing to say, yes, I want this, I'll go get all the money somewhere else. I don't need your money. I just, I just need your belief in the product that it makes sense given everything you know about airlines.
And he said yes to that. And, um, there was a similar story with Japan Airlines in, in a different way. And that, that deal took a year and a half, um, [01:01:00] uh, versus the Virgin Deal took eight weeks. Uh, but there's al there's always a reason to, to why, and it's, uh, it, it's, you gotta find the company and the team in the right place, like United wanted to build their story, um, and their plan for how to make United the greatest airline ever.
And, and I think that's actually one of the many things that's brilliant about Scott's leadership is he, he doesn't tell the team at United be the best airline. That's actually not that inspiring today. He says, be the best airline in history. And that framing causes the team derive to the occasion and it causes 'em to think much more ambitiously about everything they do.
Well. The best airline in history would've a faster airplane.
Logan: The symphony system that you guys have built out, can you, can you describe to people what that was? And then I'm curious, was that an entirely new design or was it based on something existing?
Logan: So
Blake: Symphony is our, um, full scale custom jet engine. Um, and this is, there, there is still, you know, if you said what's [01:02:00] the stink on? Boom, like, I think we still have the biggest stink around engine, uh, because there is this mythology, uh, I I think perpetuated by the big three engine companies that only the big three engine companies can build jet engines.
And um, you know, we, I think we made the mistake along the way of, um, flirting with them. We, we publicly sort of dated with Rolls Royce. Uh, and so the world kind of thought that, um, it was gonna be a rolls engine. And, and when I made the mistake of feeding into that narrative, what we found along the way was, uh, a startup working with a hundred year old.
Uh, company was a really bad idea. Uh, they didn't wanna build us a custom engine. They were only kind of shoehorn what they already had. And so we got to a point where we said, you know what? We're gonna do this the SpaceX way. We're gonna take control of our own destiny. And you know, we will, we will happily create for you a face saving way off the program.
Maybe we'll license something from you, you know, but we'll, you know, then we'll lock arms and kind of, you know, wave goodbye and give each other a hug. And then what, what actually happened, [01:03:00] uh, was, so we, so United placed an order about a year later, American placed a bigger order. And uh, you know, we were still incubating our own engine effort.
Uh, we weren't ready to show it to the world yet. And, uh, and roles freaked out and they ran to the press and said, there is no supersonic market. We're not interested. Uh, I think, I think 'cause they didn't wanna, you know, the market was clearly coming together and they weren't gonna be part of it. Um, and so that, uh, and that was just.
It was one of the darkest moments in boom history. 'cause the, the, the world was like, ha ha boom has no engine. They're building a supersonic glider. Um, and, uh, uh, and so we very, you know, my team wanted to just, uh, save everything we actually thought. And instead we said we we're grateful to roll for our work.
And, uh, we'll show you our engine when we're good and ready. And, uh, and then we eventually, we did announce, you know, our own engine program and it is, it's just like the rest of the airplane. This is all proven technology. There's nothing new on it [01:04:00] materials wise or science wise. It's just custom. And, uh, and because it's fully custom, it is much, much better.
So the whole boom less cruise thing would not be possible if we weren't doing our own engine. Uh, because the key thing is it's gotta be able to break the sound barrier at a sufficiently high altitude that comes down to something called transonic performance. Um, with a modified roll engine, we could only break the sound barrier at 26,000 feet.
Boom, lift doesn't work. Um, with our own engine, we can do it well above 30 and it's a complete game changer 'cause it can do supersonic over land with no boom. And that would not have happened if we hadn't said, alright. Yes, we're gonna follow in SpaceX footsteps. We're gonna build not just our own vehicle, but our own engine too.
People still think we're crazy for this, but like the, the actual craziness was entertaining. Any other plan,
Logan: And what is the big, I guess what was the timeline of how that, when, when that played out? Like the initial
Blake: uh, roles? Yeah, [01:05:00] I mean it was, um, you know, the, on day zero our plan was to build our own engine. And then I, you know, I'm accountable for this. I, I made the mistake of thinking, Ooh, if there's a modifiable engine, wouldn't that be easier? And, you know, wouldn't it be nice to have the brand association. Um, 'cause we're, you know, we're trying to convince the world that like we have any shot of pulling this off, right?
And so we're executing like crazy, but anything that adds credibility, we're like, you know, thir, you know, I, I, I made the mistake of getting too thirsty for it. Um, and, uh, and so we kind of, you know, continued to go for down paths with roles, but like, you know, kind of, it was, it looked great on the outside.
Uh, but a startup in a big British company is just not, the gears don't mesh well, and it, a supersonic airplane really wants a fully custom engine. Um, and, uh, I think it was 2022, that kind of, it all, it all became public. Um, and then, you know where we are now, uh, we're building our first custom engine right now, [01:06:00] and it'll be running on a test stand around the end of the year.
Uh, and so we will, you know, I'm, I'm sure it'll be challenging, but you know, the, the world will find out soon whether a startup can build a supersonic chat engine.
Logan: What's the, what's the biggest difference between what you will have, um, versus what currently
Blake: Yeah, it is a, um, a, a thing that is, I think, easy to miss coming from the software world is, um, how important sizing is to physical engineering. What the heck do you mean by sizing? Well, so Overture has a turbofan engine, meaning there's a jet engine core that powers a fan that blows air around the core of the engine.
Okay, well, which Turbo fan? Um, what are the design parameters? How, what's the fan diameter? What's the actual size of the fan? How much air goes around the core versus through the core? What's the pressure ratio? Uh, what's the design operating temperature? And these are all [01:07:00] choices. You can, you can turn these knobs, you can make a bigger fan, a smaller fan, a bigger core, a smaller core.
And a, a Subsonic airplane tends to want a big fan and a small core, and a supersonic airplane tends to want a medium sized fan and a big core. Um, it's the same stuff. It's just different, different sizing. You know, our fan blades are smaller than other people's fan blades. Our core is approximately the same size as the largest chorus that have been done.
We're very careful not to go outside the bounds of what's been done before. We don't wanna stumble off in like, oops. We're building the world's largest single crystal, um, uh, castings. Nope. Not on version one
Logan: Hmm. What, what's something that's, uh, maybe looks simple from the outside? Uh, with the overture? Uh, I
Blake: in general. Mm-hmm.
Logan: uh, that is actually insanely complex. I.
Blake: Hmm. Uh, low speed. Uh, the, the high speed's, the easy part, the low speed's, the hard part. [01:08:00] Um, everything for high speed. You know, it dri drives you towards long, slender airplanes. It drives you towards skinny engines. And all of those things are the exact opposite of what you want for quiet, low speed takeoff and landing so that the art is two airplanes in one.
It can go fast and it can go slow. The fast part's easier than the slow part. Um, and we spent, uh, a lot of energy on XB one, uh, working out low speed stability and control and uh, but all of those lessons you just scale up very directly. And with our sort of backing off a little bit on top speed, they actually get a lot easier.
Logan: on the business side of things. Uh, we, we talked a lot about the Concord and some of the mistakes that they made, um, and it seems like you guys are taking a vastly different approach to it. So as you, I guess as you've been talking to United and other folks that are interested in, in placing orders around this, like how much of, of the business model or the, the price points and the considerations on all [01:09:00] this, how much have you come to them with like, Hey, here's how we think it should work.
Here's a price point that we've sort of thought through. Here's the implications versus they came to you. And I guess where have those things met in the middle? Like what are we sort of talking about? Number of flights, price point,
Blake: Yeah. Um, so our, our approach was, uh, we actually built a team out of X airline, uh, analysts, and we said, let's do all the work that we would expect an airline to do in evaluating the product before we ever call them. Uh, so, you know, when was this in the journey? Like how long ago? Uh, so I personally did this in 2014, like a baby version.
Um,
Logan: showed up at SpaceX with some of the
Blake: yeah, yeah. I had a spreadsheet model of the airplane technically, and I had a spreadsheet model of the airline economics, uh, and the, and the overall market sizing. And that was something I built myself in Google Sheets with a bit of JavaScript code and some screen scraping of like market data out of fly to air.
And, and today we have pros doing the same thing, uh, and it's far more [01:10:00] sophisticated, but it gives basically the same answer. Um, and so we would, um, we would show up to an airline and we'd say, let's just show you the math here. Here's the vision. Lemme show you the math. Um, this is what the airplane can do, uh, if you make this fair assumption.
This is how that sits. Relative market fairs. This is how many people we think will fly on it. These are the routes where we think it makes sense. This is how you would schedule the airplane. This is how many round trips you can do. This is why you can fill those. Here are the departure times, the arrival times, how it fits into your banking structure.
Um, like we just, we kind of did all the work and, um, and because of that, they're like, oh, it kind of makes sense. And of course they'd have like bits of feedback around the edges. Um, uh, but I think, you know, I think if we, if we'd said, Hey, United, what airplane do you want? We never would've gotten anywhere
Logan: Hmm. And so the price point for, for the consumers will net out about
Blake: about like, business class today. So, you know, Concord, $20,000 ticket, uncomfortable seat, um, [01:11:00] overture $5,000 ticket. Uh, really nice seat. The, the one thing it doesn't do for a transatlantic flight is lie fully flat, which when the flight's three and a half, four hours, you don't need a flat bed. Just the same way.
You don't have a flat bed on a domestic flight that's three hours.
Logan: Hmm. uh, have you, have you spoken publicly about the interior design and what that's
Blake: Um, we have a, a little bit, but we have a couple things that are still under the, the wraps I'll, I'll share a bit. So, Concord, if you've ever gone on one of a museum, the first impression is terrible. It's got a really short boarding door. Most people have to duck to get on. Um, there's the equivalent of several rows of floor to ceiling equipment racks and a narrow aisle.
Uh, so you just have to squeeze your human into this airplane. And by the time you get to your seat, you're already just emotionally convinced. It's tiny and cramped and this seat's not great. Um, so we, we said, look, uh, we wanna build something that passengers are gonna wanna fly over and over and over again.
And, uh, the first impression has to be great [01:12:00] and the inea experience has to be great. And, uh, and so we do have a long, skinny airplane with a very unusual shape. It's actually bigger in the front and skinnier in the back, uh, the back of the airplane, the very last row of seats. Um, is the same, uh, diameter as like the best Gulf stream.
And in the front the boarding door is actually 10 inches taller than Concords an inch taller than a 7 37. And you step on board the widest part of the airplane where they're these like eight foot cathedral ceilings. Um, so it's a, it's a great first impression. And then there is, the front cabin has something I can't share yet, uh, that if it was a collaboration between design and engineering, that changed, it changed the, the aerodynamics of the airplane slightly, but created something that I think when people see for the first time, they'll be like, no way.
Logan: Hmm. from a consumer
Blake: Experience. Yes. From the customer experience side. And so, so, so as we look here, so is, is it two and two through here? How is it laid [01:13:00] out? Oh, that'd be one way to do it. Okay, got it.
Logan: As you get near the back as it narrows, I guess, let me ask this a different way. Uh, are there, are there different seeding as you Yeah.
Blake: so the, the, the, the, the back is, um, one plus one, and actually the best seats are in the back of the airplane is every seat's a window seat and an aisle seat. Um, we, uh, we actually, again, there's magic that happens when design and when designers think like engineers and engineers think like designers.
So one of the things we did, um, uh, is we changed the, the structural frame spacing on the fuselage to line up with the interior. So the windows always line up with the seats. And this is, you know, this is not done today. And you, we have that sometimes you get lucky and there's a window where you want the window to be.
Sometimes it's like, well, the window kind, like kind of halfway between rows and you can't get a good view. And what's the reason for that? For in a Boeing plane, uh, the interior and the airplane itself are developed independently by like different companies. [01:14:00] Yeah. And there's a lot of like principal agent kind of problems,
Logan: Yeah. Got it. So, so I end up with two windows angled slightly weirdly, and someone else ends up with no, no
Blake: right? That's what you're right. Yeah. And versus we designed the interior and the airplane together,
Logan: In terms of the actual like design, we, we spent a lot of time sort of talking about the different technical considerations, regulatory considerations and all that stuff.
As you moved into the consumer experience, how, how opinionated were you about these things? Did you bring in different consultants or different
Blake: hiring once you
Logan: sort of realized the commercial viability and you started to
Blake: make plans for the actual, you know, commercial availability. So we, we built a design team that had never done an airplane before and we brought in a few consultants that had. So they would, you know, teach us what we didn't know about, you know, say certification for crash worthiness. Uh, but mostly, um, it was me and a handful of, uh, really great designers, uh, thinking very [01:15:00] aspirationally about what we could create and just really sweating the details.
Um, you know, one of my favorite, just, you know, favorite days at Boom is when I go from a, a deep technical meeting where I'm just working with the team on say how we, how we design the approach to landing, uh, for quiet operation and without compromising high speed performance. It's like fasting little technical problem right in there.
And it's like right at the intersection of regulation and engineering and pilot experience. And then I go to the next meeting and we're looking at a mockup of the windows and, uh, we're talking about. The design of the interior and how the airplane sidewall interfaces with the window and how we can reduce seams and gaps to create a visual experience that is far more tranquil.
And so there is, um, one of the things I just very much love about this company is, uh, there is a, a lot of art, um, and [01:16:00] design and ineffability, you know, how do we make it a, a sensory experience that's pleasant? How do we make this an oasis in the cacophony that is an airport? And also there's just like the most awesome physics and engineering and manufacturing, um, and that all can be in, you know, all can be in one day.
And the, the magic happens the more these are threads that are woven together and cross pollinate. And, uh, the more we, you know, like, like one of our big things is no silos. And, uh, I, I expect every. Person at Boom, to be, not just be an expert in their own discipline, but to be curious about every other one.
See, uh, this is again, a difference between physical products and software. Everything's a trade off. Uh, if we make the fuselage wider, it will create more aerodynamic, drag and fuel economy will get worse. Range of the airplane gets worse and the required fares go up. [01:17:00] Uh, so there's a tension between making the airplane bigger and more spacious and making it more cost effective.
And the, uh, you know, you, you could look at this as a tug of war or you could look at it as what we call invent together. And invent, invent together is like one of, it's one of our five values. And it means everybody on the team has the obligation to teach what they know and to learn from what their peers know.
And, uh, a belief that when there is a shared understanding of every side of every trade off, that's where the magic gets found. And like this, this thing I'm not quite telling you about, the front cabin of the airplane came out of one of these where it's just like a, you know what I saw? There's like, it was like a no way wait.
That could really work. Um,
Logan: we talked about the, uh, the initial going and meeting the gentleman from SpaceX and the cascading effects of trying to find five and then five A along the way. Um, 11 years in, you've had to retain these
Blake: oh, or different, yeah. [01:18:00] Different people, uh, with
Logan: um, different points of, um, validation,
Blake: mm-hmm. From the outside
Logan: uh, and probably different, uh, people feeling like, um, they were making a ton of progress.
Or maybe like, where is this going at different points
Blake: of security. Yeah.
Logan: I'm curious on the talent retention side, like what have you learned about keeping people going through what
Blake: probably felt like manic episodes at different points along. Yeah, boy, I, we could do like probably three podcasts just on this question. 'cause I've, I've made, I've made plenty of mistakes along the way and I've also learned some important lessons. Um, I'll share a couple. Um, so one, one is, um, what we're doing requires a lot of perseverance and a lot of grit and rational people will give up if they don't care about the mission.
'cause it's just too, it's just too tough. And so one of the most important things we, we've done all along the way is to select for people who really, really care about delivering [01:19:00] mainstream supersonic flight is that if they, if they don't and they're sane, they're gonna leave and go do something far easier.
So that's, that's one. The other is, um, was less, less obvious. Um, it's about burnout. So I'll tell you the story of how I learned the lesson. Um, this was, uh, 2020. We were about to roll out the XB one airplane and, um, you know, to, to plan a proper, proper event. You know, we had to call the shot on when rollout was gonna be months in advance so you could do all the media planning and all the, just all the event prep for it.
Uh, so we called the shot, I think it was October 20th, and, uh, the airplane wasn't ready when we called the shot. So we had to, you know, work like crazy to get this to be ready. And the, the engineers were working like crazy. The, the people on the shop floor were working seven day weeks, 12 hour days, um, at literally polishing the airplane.
Like if you go back and look at the reveal video in XB one, [01:20:00] we, we revealed it in a light box with these long, skinny light bars. And those are the least forgiving lighting environment for a physical product. If there's any surface and perception or imperfection, uh. It'll be really obvious, like people are literally polishing the airplane and, uh, an insane amount of effort.
And so we, we had a awesome event and uh, and I said, all right, everybody take a week off because then we're gonna come back. And the next job was to fly the airplane. Um, and, uh, they came back and morale, which had been really high, was suddenly in the tank. And at first I was like, WTF people. Like, you just got a bunch of external validation.
The world is so excited about what we're doing. Um, and I gave you all a week off. So what are you telling me you're burned out for? And at first I was like, very upset. And what I, what I realized was that what everyone tells you about burnout is actually not what burnout really is. Burnout is not, I'm working too [01:21:00] hard.
And, and in fact, people, uh, teams can work extreme high intensities for long periods of time without being burned out so long as there is a believable, tangible goal that is within what I call their gratification window. And I think as humans, we all have a gratification window. Some people have long gratification windows, some people have short gratification windows.
But how far away can a motivating goal be for me to believe in it and for it to actually motivate me? And what we went from was like, oh, it is like a couple months to weeks away from a very important deadline that I know if I work really hard, I can hit to, Ooh, this airplane that we just rolled out needs a lot of work before it's really ready to fly.
Um, I don't even know how to get my head around that plan. I. And so the solution was we engineered, um, something called [01:22:00] Mission Success Events, um, which is basically, uh, every roughly month there were one or two major milestones that the team could rally around and celebrate and enjoy. And, uh, we, we still do this today, and one of the, one of the things is a, a mission success event is not just celebrated by the team that did it, but it's celebrated by the whole company.
Um, and we, you know, we try to have, uh, we try to have like maybe like three a month, uh, across the whole company and, you know, everyone gets together and celebrates and it's a, it's a whole company victory. And so there is a very long marathon divided into sprints. And you can think of it as, you know, you get to take a shot at the end of every sprint,
Logan: Hmm.
Blake: sometimes literally.
Logan: We've spent a lot of time talking about all the different component parts and developing airlines and, and, uh, all of that.
Logan: I, uh, recently obviously there's been the implications of tariffs, kind of roiling through [01:23:00] the, the economy. I get the feeling you have, uh, opinions about different elements of this.
So, one, can you share, um, we were talking a little bit before about the bitter pill element of, uh, of what tariffs may maybe will accomplish.
Blake: Yeah, I, I've changed my mind a lot on this. Um, I think I, I, I booted up very much a unabashedly free trade, uh, pro-globalization, uh, let's have one big happy world. We embrace comparative advantage. Not everything needs to be built in any one place. The world's a better place like that. And, um, I think I'm on this multi-year journey of realizing that the world is, that that is definitely the world I want to live in, but it's not the world we actually live in.
Um, I. You know, Russia invaded Ukraine. Uh, China has an explicit goal of taking over Taiwan. Uh, we lived for, you know, post World War ii, post Cold War, a [01:24:00] few decades of relative peace. But the world is not a safe place. Um, not every country is free, and there are, there are real life bad guys. Um, and what is, what has happened is, let's go back to World War ii.
The way we won World War II was not by having a bunch of defense companies ready to go or having a big stockpile of weapons. We had no defense companies and we had no stockpiles. But what we had was the best commercial industrial base in the world. And companies like Boeing and Douglas, uh, pivoted into defense products.
Ford retooled, and they built, they built fighters and bombers and tanks. Um, and we, uh, we outproduced the axis and we won. And, and then we, uh, lost our way. Uh, we went into this defense. Uh, I think [01:25:00] Eisenhower very appropriately warned about the military industrial complex. We, you know, we, we put the defense industrial base and corporate welfare, um, defense programs became as much as anything, jobs, programs, uh, we got, you know, really fat and dumb, uh, in a shooting war with China.
We'd run out of stockpiled cruise missiles in eight days and it would take another two years to get one. Um, and meanwhile, the, the, the efficient agile industrial base has left America and it's gone to China. And this is, I find this incredibly scary. And, and I, it's, it's happened in a lot of industries.
Aviation. You know, we, we, we all know what happened with chips. Like chips went to Asia. It's a huge problem, very hard to get them back. Um, and we are watching right now, the same thing happen in slow motion with aviation. Uh, but China today is shipping a 7 37 clone. They are working on a 7 [01:26:00] 87 clone, and they just announced last weekend, the next thing after that.
Yep. It's a supersonic passenger plane. And Boeing, on the other hand, America has not shipped a new airliner, um, in decades. The, the, the 7 8 7 launched, um, I think 2004, um, nothing new. And, uh, pretty soon the world will be first Chinese knockoff airplanes and, uh, that, uh, that every other country will buy because they're cheap.
Um, and we can tear off them in the us but you can't stop that internationally. Uh, and, and then, and then we'll be all surprised that they've caught up with us technologically and they're ahead. And the, um, I, I cannot overemphasize the importance of this. Boeing's the number one US exporter. A quarter of all Air Force airplanes are modified commercial airplanes.
So if we don't have next generation airplanes, not only do we not have the exports and the [01:27:00] economics, we don't have the next generation defense platforms. This is how we get our tankers. This is how we get our military transports, even some of our spy planes or modified commercial airplanes. So, um, okay, you asked about tariffs.
Um, I think the most important thing here is reindustrialization and, uh, and, and in a world, you know, if we, it sounds like motherhood, apple pay, but if we had world peace, this actually wouldn't be important. The planet could operate as one. Um, but that is not the world we live in. And, uh, we need to, America needs the greatest industrial base in the planet.
Uh, and I, I think the, I think it's urgent and important and that what we need to do is pull every lever completely simultaneously. Uh, so first off, we need to get out of our own way. Like all this stuff that makes it hard to build all this stuff that takes, you know, a year or to do permitting, uh, or more.
Gotta get rid of that, uh, supersonic flight. We gotta legalize it. Um, you know, e [01:28:00] everything we can do that ba basically makes it more expensive to build here. We need to fix, we need to fix rapidly. Um, we need to massively cut federal spending, which will cause more ca capital to flow into private markets, uh, where it can be deployed money more time is more effectively than, than any government ever could.
Um, and then we need to create economic, and this is the part, I know it's controversial and I I used to be on the exact opposite side of this issue. By the way. I'm still with you. I.
Logan: haven't disagreed with anything you've said yet. I have a feeling I'm about to,
Blake: Okay. Um, you know, I, I started off thinking, you know, I was in the tariffs are really dumb camp, and I am, uh, uh, I am now in the, this problem is so urgent and important that we need, we need to be willing to do painful things that, that accelerate the transition. And, um, and so, you know, I, I don't think the, the tariffs that we have as of like, I don't know this morning, um, are the right ones.
Long term. I don't think they're gonna stay that way either. Uh, but I, I [01:29:00] think I, I think what we need to do is accelerate that shift towards reindustrialization. And this, this is one of several levers that will contribute. And, uh, by the way, all, many of these are painful levers. Um, uh, I think it's a bitter tasting medicine and I, I also think it's temporary.
It's a little bit of like economic chemo and it sucks. Um, uh, uh, but then it will work its way through markets. Um. The economy will get realigned. And I, you know, and I think I, I dunno, I'm not a, IIII, I shouldn't put a timeline on this, but I, I'm very optimistic that things look very, very different. You know, 12 to 24 months from now than they do today.
Logan: Hmm. And, and the tariffs specifically as a, as a mechanism, the broad based thing that we've seen over the course of the last whatever period of time, I guess as an accelerant to this, how do you think about, how do you think about
Blake: That, and that the inputs, yeah. And puts and takes that kind of come. I think one of the things that is important to realize is we're also [01:30:00] seen, uh, there, there are different ways you can plot your way through this, right? Like, one, one is a very surgical approach where, you know, it's like, ah, so maybe, maybe, you know, we should figure out exactly which products should be tariffed.
Let's make sure we don't tariff like industrial equipment coming into the US from Europe. Uh, let's, you know, let's, but maybe, maybe finish goods out of China in some circumstances, but only, you know, but not, not the critical minerals. Like there's a surgical approach to this and like, I, like, you know, a lot of people say like, ah, you know, like the surgical approach makes so much more sense.
Uh, by the way, it would also take forever to figure out. And I think the, you know, I, I think what is very Trumpian, I think very musky in leadership is, um, uh, someone once described, uh, Elon's management cell to me as management by thermonuclear explosion, blow everything up and then fix it. And, um, I think that's, you know, I think that's a bit of what we have going on now.
It's not that let's, there, there was a view that this is so urgent and important that, that we'll make big blunt [01:31:00] moves and then we'll figure it out and it will get refined. And that drives a lot of chaos. And you have, you have to be willing to tolerate wild volatility in the stock markets. Um, I think that the theory is that this will result in actually getting to the best configuration faster.
Um, I certainly understand the, the argument for the surgical mode, and I, I think we will end up in the surgical state. Uh, but we are following a very, um, chaotic path to get to that state.
Logan: is the implication of all. Of that. Therefore, as you sort of talk, talk all that through is that it might be net detrimental to the overall US economy in terms of just pure GDP cost of goods sold, being as low as they are. But in terms of the, the ability to withstand shocks and the long-term, uh, potential resiliency of the United States, it's just mission critical.
So if that's a trade off,
Blake: Well, let's, let's talk about the end state, because I think it [01:32:00] starts by, let's get really clear on the end state, and I think people should be able to agree on the end state. Um, and then, and then, and then we can have reasonable debates about what is the best path to the end state. Uh, in my, in my view, the end state is, again, we have to remember.
The world is not peaceful. If the world is peaceful, a different end state is better, but Okay, great. So, so basically what there needs to be is, uh, you know, America needs to be a free country that is the best in the world at making things, uh, physical products, digital products, uh, inventing the future. And, and by by best I mean, we're gonna be really efficient.
We need, and we need all the economic incentive to be efficient and be good and be innovative and to move fast. And we, and I would just add important things. I think we should be the best at making important things. Well, which, which things are unimportant. I, I don't know. I don't think,
Logan: t-shirts are particularly important. I don't think, uh, you know, I mean, there's a lot of different widgets that don't, don't necessarily feel particularly
Blake: um, important to me, toys feel particularly important to me. Well, you don't, you have a little boy on the way.
Logan: I [01:33:00] do, I do, but in the grand scheme of things, I, I don't think we need to be the best toy manufacturer in the world.
Blake: Um, I actually profoundly disagree. Um, one of the great things about toys. Is they need to be mass produced at low price points for families. And, um, the manufacturing technology that enables scale, production of toys, uh, might also be really important in wartime. It could be and, and this, but it's gonna be more expensive.
Like, why to do it domestically will just be well, well, why?
Logan: Because, 'cause we will pay workers more here than we would, than we pay to get goods
Blake: Great. So let's, let's keep asking why recursively until we eliminate the root causes of, of cost,
Logan: People in Vietnam are willing to accept lower wages for their jobs because of cost of living
Blake: right. So let's, so let's invest heavily in robotics. Let's make Americans the best leveraged workers. Let's effectively promote every American into management and they can manage a whole bunch of robots and be far more productive than [01:34:00] somebody sewing by hand in Vietnam.
Logan: It, it sounds great. I, I agree with you Over what period of time, I guess is the possibility
Blake: Uh.
Logan: Uh,
Blake: I dunno if anybody's smart enough to put a number on that. I'm certainly not. Yeah. Uh, but I think that's the, the, the sooner we get there, the better. Um, and this is, you know, it won't be easy. Uh, but there is a much, much better future, um, that we can, we can create here, you know, but we have to, we have to be willing to tolerate some disruption on the way there.
Or it might take too long. And, and again, if it weren't for China, I would've a very different view on this and with, and, and a lot less urgency would exist and therefore a, uh, the surgical approach would make a lot more sense.
Logan: Well, I have a feeling we probably could have, could do another hour or two just on this topic. But Blake, I really appreciate you doing this. This is a lot of fun. It's a super impressive business you're building and I, uh, I glad we were able to dive deep into it.
Blake: Oh, I really enjoyed the conversation. Logan. Thank you so much. Thank [01:35:00] you.