TTT030 Reimagining coastal transportation – Billy Thalheimer – REGENT Craft

2:51PM Mar 14, 2024

Speakers:

Jonathan

Forrest Meyen

Announcer

Keywords:

gliders

fly

building

maritime

craft

working

tech

electric

boat

aviation

tough

investors

region

aircraft

ferry

today

technology

rhode island

electric propulsion

vehicle

If the guard called and said, Hey, come fly off 30 fives at that time, I was so sort of deep into electric aviation. And we were acquired by Boeing and we had all this money. And it was basically, you know, the leadership of Aurora said, Hey, why don't you help us usher in this new era of Air Mobility. So it's like, you know, fly the F 35. Or start, you know, electric aviation, with these amazing people I was working with, but then, you know, going forward to make this all happen from regions perspective. And we built this incredible team in Rhode Island that is mixed between aviation and aerospace, and maritime. And it's been really cool to see these two sort of previously separated worlds engineering disciplines come together and sort of share the best of both worlds.

Welcome to Tough Tech Today with Meyen and Miller. This is the premiere show featuring trailblazers who are building technologies today to solve tomorrow's toughest challenges.

Welcome to Tough Tech Today. Today is our second episode on our series of blue tech. Today, we have Billy tall Hiber. Here he is co founder and CEO of region, he founded region in 2020, to create better solutions for transportation by electrifying coastal and regional transportation. Billy, Welcome to Tough Tech Today. We're so happy to have you here.

It's great to be here excited to talk about tough tech. Awesome.

So as we kind of get into this episode, we've been really talking about the ocean as a resource and how tough tech can basically utilize this resource for technology for the betterment of mankind. So one thing that you're trying to solve his transportation, which is very interesting region has a electric aircraft, but there's something very special about it. Is that it's it's kind of amphibious. Can you just give our viewers a high level description of what this aircraft is? Yeah, so

region, build sea gliders and sea gliders are actually a whole new mode of transportation. So they're, they're not aircraft, they're not boats, they're, they're sort of this thing in between. Sea gliders in general, as a use case, are for coastal mobility, so dock to dock over water transportation, think about routes like Boston and New York, LA to San Francisco island chains like Hawaii, or Japan or New Zealand, throughout the Indo Pacific. These are the sorts of missions that sea gliders are used on. Sea gliders are a type of vehicle known as a wing in ground effects Wi G, or wig vehicle. And these are flying machines, basically flying boats that fly low over the surface, on a cushion of air, and that's called the ground effect. So it's the same sort of dynamic air cushion that you see birds flying on when they're flying over the surface. So see, gliders are similar dock to dock over water transportation, when they fly, they're always flying within a wingspan of the surface of the water in that cushion of air called ground effect. They do so with 100% battery, electric propulsion. And so we're basically bringing a new mode of mobility to market that has the speed of an aircraft with the cost and convenience of a ferry with zero emissions.

Yeah, so that's, that's really amazing. So you say it's a completely new mode of transportation? Did you invent this mode of transportation? Or is there something about this period in history that makes it a feasible technology?

Well, it's sort of a dusting off of old wing and ground effect technology, plus, you know, new technologies that have recently matured, that really unlock the concept. So looking at at weaning ground effects, or wigs, this concept has actually been around since sort of the dawn of aviation. And if you look at the 1960s, there were efforts in in the Soviet Union with the chrono pylons and Germany, with these lippage type wig machines. So people had sort of figured out like, Hey, if you fly in low, you can fly like a bird, you can get these range increases, but they never really caught on. And they didn't catch on primarily three reasons. The first is poor wave tolerance, they're taking off and landing on their holes, they're skipping off the surface of the waves. The second is poor maneuverability as they come up to take off, they're ripping low over the surface of the water at aeroplane speeds in these crowded water environments. In three is poor safety because they're basically asked that the pilots of these wigs have these wing and ground craft to pilot them and essentially land the plane for the entire time you're flying in the plane right? Like hold them just a few over the surface, which is very demanding. Myself, my co founder and a lot of the starting founding team actually came from the electric aviation space so we are working on electric aircraft working on EV total electric, vertical takeoff and landing. And what we saw there was new technology and electric propulsion and in flight controls that would help some of these things. And then the other half of the founding team came from the maritime racing domain came from America's Cup, which is basically the f1 of the racing world advanced composite yachts that are hydro foiling. So what we have in a sea glider is the world's first hydro foiling, wing and ground effect craft. And for those listeners, not familiar with hydrofoils, they're basically underwater wings. So they provide lift being under the surface, they lift up the boat, or in our case, the sea glider on stilts, and then the waves are able to go underneath you. So those hydrofoils in harbors provide a high degree of wave tolerance, a high degree of maneuverability and comfort. And then we take off from those hydrofoils, using our electric propulsion systems stabilized with our digital flight control system in the open waters so that all our operators are doing and our operators are maritime captains and not FAA, aircraft pilots. So they're driving this thing just like a boat, left and right, fast and slow. And they're doing so within a wingspan of the surface, but they're still operating in two dimensions. So you drive left and right, and you just happen to be 20 to 30 feet over the water. And so basically, what we've done is we've solved those complexities with an in the reasons for their commercial viability of the early wing and ground crafts, that maneuverability the weight safety. We've also solved some of the problems with electric aviation today, like the limited range because now we have aerodynamic efficiencies of ground effect. And the certification and crew training pathway because we're about operated by mariners, what we found is, you know, the sea gliders now that we have this technology are really a great solution across the board. And in the three years since founding, we've we've built a backlog of about $9 billion worth of border. So the market has certainly responded accordingly. How

has it been in terms of potential, what we call the sort of dual use applications where there's certainly a commercial interest to get maybe goods and people from point A to point B, but also with with areas where there may be some defensive maritime operations, particularly if the good parts of the Asia Asia Pacific, where there could be applications for this kind of coastal fast maneuvering? Craft?

Yeah, well, while region was founded with that sort of commercial focus, like man, it is just painful to get from Boston and New York or LA to San Francisco. On those missions, we realized pretty early on, there is a huge and actually existential capability gap in this sort of literal operations, which is the focus of geopolitics today. I mean, you look even today in in what's going on in the Red Sea, we're talking about maritime operations, you look at geopolitical tensions with China and Taiwan and throughout the Indo Pacific. Really what is needed across the services is more boats. And it was put that simply, we need more boats, we need more ways of moving troops and supplies, and establishing communication systems and getting intelligence and surveillance platforms out across the tyranny of distance in the Pacific, and ensuring security of the waterways, both abroad and also domestically. And so sea gliders really fit right into that. So region is actually on contract with the Marine Corps right now to develop this technology, specific the specific mission that we're working on. And the near term, what is high speed, logistics and contested logistics. So we're supporting Marine Corps expeditionary advanced base operations, or EAA, Bo, we're supporting that movement and disbursement of troops on island chains that might just be there for a day and might come in quick. So what you need to do that is a vessel that is very fast, it's hard to see. So maybe it flies slow. It's very reliable, so it can operate whenever so that means high wave tolerance, it's affordable because you need to buy 1000s of them to spread them out over the Pacific. And these have a high payload it needs to be really easy to operate because again, you need to act in these crafts throughout the Indo Pacific and a sea gladder checks all those boxes. So we've seen the defense use case as one of our fastest growing use case we actually have a team out in Hawaii at the post conference right now working on exactly that.

So can you give our listeners just some context on the speed difference between this type of craft and a standard, you know, boat that you might use in this sorts of situation?

Absolutely. Well, a fast boat will go say 30 to 40 knots, right. That's a fast ferry. So it's about 40 to 50 miles an hour. Yep. At 15% picker unit. I don't know if you have listeners in Europe we go kilometers an hour to so that's sort of your fast boats, fast ferry and obviously Depending on how big your boat is, right waves are going to affect you or not. So if you're, if you're in a fast ferry, and you're going 35 or 40 knots, you know you are you're getting thrown around in those waves. The next fastest vessels beyond the fast ferries are probably hydro foiling craft. So there are hydrofoil ferries. Today, they've existed for a while, actually Boeing made some back in the day to their operational in places like China and Japan, those will get you up to about 45 knots or so. So about 55 miles an hour, the next fastest marine craft would really be a hovercraft, and you look at through the Marine Corps, the use of vehicles like the L CAC for these amphibious operations, that'll get you up to maybe 50 knots or so maybe a little higher, obviously, these massive, you know, expensive, incredibly loud things. And so we go from from that regime and sort of the very fastest boats on the water going 40 to 50 knots, so So call it about mid 50s miles an hour to our vehicle, which will go 160 knots on the way or about 180 miles an hour on the wing. But importantly, it's not it, you can't just go fast, you also need to be able to go slow and be maneuverable in the harbors in the littoral environments that make sense. And so that's what's so unique about a sea glider is we have three modes of operation we float, foil and fly. So you can float for easy docking, loading unloading you foil. So you can be that sort of as slow as 20 as fast as 50 Not hydrofoil ferry in the harbor, but then you still have that 160 980 mile an hour top speed in the open water.

If we were on safari, I'd bring up some trivia of is is a zebra black with white stripes or white with black stripes. With with with region craft is Is it a? Is it a classified as a as a low flying plane or as a somewhat like a flying ship? How did you work through that? Yeah,

well, fortunately, there is, both at the international and national level already rules for this kind of vehicle. And because we are not proliferated, you know, most people don't know these rules exist, but there are rules. So we just follow the rule. So to the sort of zebra question, we are a boat that flies were both the flies in the ground effect. So we're under the jurisdiction nationally of the US Coast Guard and internationally of the IMO, the International Maritime Organization, because there's actually a rule set co developed by the IMO and ICAO, the International Civil Aviation Organization that puts we and ground craft under the jurisdiction of the maritime body. And that makes sense, because we're flying at 20 to 30 feet over the surface of the water. So RC glider captains will be looking up at sailboat mass, they'll be looking up at cruise ships and cargo ships, they're very much in the maritime domain, they're only doing over water ops, we're going to be dealing with maritime right of way rules. And we're actually already in the international right of way rules, we have a light that we need to fly that's already in the rule. So if you're ever on the water, and you see a blinky red light, that's a wing and ground craft. So I'll see gliders will have blinking lights. And so you're right of way your navigation, your safety of lives at sea, your communication systems, all of these are in the maritime domain you're navigating with with maritime charts, right. And so because none of that is aviation, that's why it makes sense that the Coast Guard and the maritime bodies are the the certification authorities for this vessel.

Fantastic. So one thing I want to, you know, dive down into like, this is a startup you just started in 2020. And this is, this is tough tech, right? You're kind of creating a new thing. It's got three different modes of operation. You have lots of automation involved. How did you how did you make the pitch to the first set of investors?

Yeah, well, our first investors were actually Y Combinator. So we went through the Y Combinator process, we were winter 21. And I would actually say to any aspiring founder, whether they're planning on applying to Y Combinator or not going through that Y Combinator questionnaire, and having very, you know, quick, exact, intentional answers to each of those questions is kind of the best way to start a business because yc is a machine and they know how to create great startups. And it starts with having the clarity of thought and vision of the company. So we started there, and we applied it, we basically said, Look, we come from this aviation background, there have been billions of dollars that have gone into this because we're talking about transforming the way people move. We're talking about saving people, the only truly limited resource on the planet, which is time and so we're saving time and we're increasing the connectivity of the planet. That's why the electric aircraft and the Eevee tolls about billions of dollars poured into them. We're leveraging electrification which is being Funded by the wave of EVs in general across modes, so including automotive. But there's this problem, because we've been living in this space, it is not easy to electrify aviation. If you look back through history, it costs a deck, it takes a decade, and it costs a billion dollars to certify a new aircraft. And with the technological limitations of existing battery technology, if we're not going to get a Nobel Prize in battery chemistry, anytime soon, we're talking, you know, Max ranges of on the order of 50 miles for these vehicles. And we already have vehicles that will do 50 mile range pretty darn well. And they're electric and even going autonomous. And they're called cars. So what we said, we can we can solve this regional mobility challenge, you know, growing up in the Boston area, we're headquartered in Rhode Island today. So I'm thinking routes like Boston and New York or Providence to New York along the East Coast corridor, as we've raised capital, I'd become intimately familiar with the pain of LA to San Francisco, for example. And these routes exist all over the world. So we said, we can solve these routes, hundreds of mile routes, we can bring to it, the sustainability aspects, but almost more importantly, the economic advantages of an all electric propulsion system by solving the problems with electric aviation by sort of dusting off the concept of the wing and ground vehicle, and then, you know, solving those problems with new technology, like I was talking about earlier. And they, they respond to

delay. That's, that's awesome pitch, very convincing. But I imagine a lot of the investors that are perusing YC companies, right, or your typical software investors, they want to, you know, relatively quick exit with a, you know, scalable kind of network effect business plan. And how did you how did you address those things, both the timeframe? And, you know, the just the different type of business that there used to? Yeah, well,

I think to your point, you know, half to maybe three quarters of the investors were just immediately off our lists, like they wouldn't apply. They don't, they don't understand hardware, they don't get tough tech, it like building with atoms is harder than building with bits, like you can break stuff and it takes time to fix them, you can't just revert to your last code push, you know, they're, they're expensive things you have supply chain, you have lead time. So it's a fundamentally different business, which takes longer to incubate and grow. But then when you establish the technology, you have far more defensible notes. And so, you know, early on, it was really just finding those investors that that got tough tech, or were previous operators and had already been through that process that could actually sort of help us and advise us on how to scale a manufacturing business or an aerospace business or maritime business, you know, a business that is an OEM and delivering to operators, and how we facilitate that sort of b2b play while simultaneously communicating and advertising the product to the end user, who are the customers, the passengers, we're gonna be operating on these. So that was sort of all how we handled this in the in the early days, what I think we're seeing now with a, you know, shift towards climate investing, which needs to it which in many cases, is hardware, because you actually need to make a dent in emissions, with a shift towards defense and dual use investing was sort of the the refocus on the US industrial base, we actually need to build things. Again, it's hard, but that's okay. And also with the success, frankly, of companies like SpaceX and Tesla and rivian, and some of the rocket companies that have, you know, taken off no pun intended late recently, like those moats are real. And when you build a business like SpaceX, that is a truly defensible business, as opposed to you build the latest app and someone else builds another app and starts to steal your market share. So I think when we started when he 5% of the investors got it and now we're starting to see I think a shift in venture in his region now gets into the growth rounds, right? Some of these equity investors on on tough tech is becoming more in but they still need to understand it and it is still more capital intensive and much longer cycle.

Hey, it's Jay mill. I'm just gonna pop in here to mention our episode sponsor the end effector. Because the points Billy raises about the importance of tough tech, defense and dual use investing are key parts of what we're working on over at the end. effector. Science advantage startups face unique challenges that are different than those faced by SAS companies, or hair salon, or someone who wants to make yet another dog walking at the end of factor is gathering a community focused on hard tech sharing insights into the unique challenges and opportunities faced by scientist entrepreneurs, investors and others who get tough tech. Sign up for a free account at end f.com That's E N D E double f.com. No one builds alone. Now, back to our conversation with Billy you have have capital that has come in from across the US and similarly across from elements around the world. And yet the company is based in in Rhode Island. Ken, could you elaborate on what what you are seeing in the in the Rhode Island area that is making it possible for region to grow into this kind of international player? Yeah, well,

it was it was obvious it was the Silicon Valley of the east as they call it. So, you know, we're fighting our way into Rhode Island. I said, a little tongue in cheek, obviously, you know, Rhode Island, not the not the obvious pick of where to put a startup sort of a developing ecosystem. We spent a long time actually thinking about where do we put the company? How do we maximize, you know, region's chance of success. We were founded in the in the Boston area, actually, a lot of us came out of MIT came out of a Boeing subsidiary that was based in Cambridge building electric aircraft, but we are by no means tide to New England even. So we searched the whole country, we said, we need a will, we had some geographical constraints, we're building flying boats, so we need good waterways. So we need wide open, protected deep waterways. Early on for testing, we need access to the ocean. So the ones we put these vehicles through their paces we can send about on longer missions subject them to real ocean wind and ocean wave. We need access to airports, we need access to talent. And we need a place to build right now we need facilities sorted today. As you know, that seedling company that was testing our quarter scale prototype and 18 foot craft through now were regions building our full scale, human crude prototype 65 foot wingspan to our future where we're building 100 Passenger craft with 100 Plus foot wingspans, we need the area to build and scale and we actually found all of that. In Rhode Island, we're right on the water, we're on this great, this great industrial complex, just north of electric boat, where they're building nuclear submarines. So we have the infrastructure round to scale, massively, Rhode Island is does a lot of things. Well, the two of the main things are the blue economy and defense. And we do both of them. And so we've had great support, both from the state and state leadership, and even state investment, but also from local talent. Rhode Island is the capital of the sailing world in America. And so the very best composite boat builder, the naval architects who are all critical to our design and build, many of them are based here. And then we're close enough still to, you know, Boston to get our flight software and control engineers and to sort of the the aerospace giants like Sikorsky and Pratt and Whitney and Connecticut. So we're actually able to leverage or that latent talent of both aerospace and maritime in New England plus the, the waterways centric nature of Rhode Island, and it's been a great decision for us so far.

Fantastic. I would like to kind of learn a little bit about yourself, Billy, like when, when you set out on your career, did you anticipate being a co founder of a startup? Or was there a point in time where you had some realization that you want to take your career a new direction, create something new, and lead the charge in a brand new industry?

Yeah, well, I kind of failed in that regard. Because I want to be an astronaut. I think you're me and me and all the other kids in my class, right? We want to be astronauts. So I kept that dream alive for a while. Even going into school, I chose MIT because they had the most astronauts outside of the military academy. So I went there. I studied aerospace engineering. So that's what astronauts study. And then I actually started to get involved with, with the Air National Guard. Because when I was at, when I was working at Blue Origin and Virgin Galactic, so I was doing, you know, the commercial space efforts. I befriended the astronauts there and said, Hey, how do you become an astronaut? I want to become an astronaut. And I like the best way to become an astronaut is to be a fighter pilot first. And I said, Well, I've seen Top Gun That looks awesome. So then they said, you know, if you want to become a fighter pilot, the best way to become a fighter pilot is to join the National Guard. Because rather than sort of have your your risk throughout the process, you join and you go through officer school, then you go to flight training, then you get fixed wing, then you get jet, then maybe you get your jet. In my case, and again, I was I grew up in Boston was going to school at MIT. Burlington, Vermont, not too far away. It was getting the F 35 is the very first base. So I said, I'm gonna fly, you know, the most badass weapon system ever flown. So I applied to the Burlington Air Guard actually got selected for the job. And then around the same time because I was doing a lot of hiking in the mountains as I would as I was visit Burlington, Vermont. I got Lyme disease, and so I could not accept the offer. I went into industry. I remember going to Aurora Flight Sciences, which is at Boeing subsidiary working on electric aircraft at the time basically saying I'm only here for six months, I want to design some airplanes, because that's that was my education, but I'm going to go fly F 35. And so that's fine Come design some airplanes. Will recovery from Lyon ended up taking about a year and a half of you know, antibiotic regiment and things like that. And by the time I got better, you know, the, the guard called and said, Hey, come fly F 30 fives at that time, I was so sort of deep into electric aviation, and we were acquired by Boeing, and we had all this money, and it was basically, you know, the leadership of Aurora said, Hey, why don't you help us usher in this new era of, of Air Mobility sounds like, you know, fly the F 35. Or, or start, you know, electric aviation, with these amazing people I was working with absolutely the hardest decision of my life have so much more respect for, you know, the armed services of our nation. And while while I obviously did not choose the service, and in that decision, I came to real terms with what that service means, and how important it is that it is true service, even flying a fighter jet. And so I chose to stay in industry, I started leading some strategy studies there in terms of what the market looks like, and how these electric aircraft work. And basically, within six months of making this life changing decision, convinced myself I had made the wrong choice, and that none of this would work. And so that's sort of when I started poking around like, well, there's there's so much goodness here in electrification and the sustainability and the economics and the noise and the safety and like, this makes sense. And we're seeing it makes sense in automotive. And the, you know, the reasons that we talked about earlier, why it's not making sense in aviation, is the certification pathway. And the range, which is just physics. And so, you know, how can we bring all that goodness? How can I bring the reason I was so excited to stay in industry and electrify transportation? How can I bring that to market in a different way? And so that's when my co founder, and I quit Boeing and sharpen our pencils, and, you know, increase the sort of engineering acuity of this and started doing details like, hey, maybe this would work, maybe, maybe ground effect craft, we started calling some customers, like, hey, let's try to let's try to raise some capital for this. And then we called in our friends are, like, apply to Y Combinator. And, and, you know, we're off to the races from there.

That's, that's amazing. Really, you know, with a company growing in this space, what? Who are the people? What are the organization's? What are you looking for? Through for the next stage?

Yeah. So, you know, we've been really fortunate to build up, you know, as I said, this, this amazing order book, $9 billion. On the commercial front, we have, you know, awesome strategic investors like Japan Airlines, and Hawaiian Airlines and Lockheed Martin. So we've been building this, this great cap table, you know, investors, like at 90 Industries, and Founders Fund and caffeinated capital point 72. So those partners have all been fantastic. I think as we enter this, this next stage of Regent key partners across supply chain, so those in the electric propulsion space, those working on next generation, sensor systems and flight computer systems, super important for us, I think, potential customers, of course, operators of this, whether they be airlines or ferry lines, or even entrepreneurs were like, Hey, this is an amazing capability. And I want to create a company around it, which we've already seen. But then, you know, going forward to make this all happen from regions perspective, I mean, it comes down to our team, and it comes down to our people. And we've built this incredible team in Rhode Island that is mixed between aviation and aerospace, and maritime. And it's been really cool to see these two sort of previously separated worlds engineering disciplines come together and sort of share the best of both worlds. So you know, to that end, like we are, this year, building our full scale human carrying prototype, we're gonna put it on the water towards the end of the summer, and we expect to fly with humans on board by the end of the year and a 15,000 pound vehicle, it's going to be truly amazing. So we are hiring like crazy. We just raised our $60 million Series A. So structural engineers, flight control engineers, flight software engineers, electrification, engineers, aerodynamics, hydrodynamics bits, it's probably if it's related to air or sea, it's probably a listing on our website. So you know, just to that end, and to do sort of a selfish plug, definitely recommend people go to reject craft.com. And check out our careers page where you can check out more on just like what a sea glider is because it is so different. But that's really where we're going. It's supplier partners, customer partners, and then obviously, our team.

That's awesome. Thank you. Thank you, Billy, forced us really to to do the thing.

Thank you very much for coming on the show with us today. Yeah, at the end of every episode, we just ask that our guests say their name and stay tough to kind of encourage our listeners to be tough and pursue tough tech and stick to it when times get tough. So, can you go ahead and say that? Oh,

I love that. It's real. Tough tech is tough. You gotta hang in there. So kudos to all the tough tech founders out there. I'm Billy doll Heimer. Stay tough.

Awesome. Thank you very much.

Thank you. All right. Wow, schools. 13. Yeah. Shout out to Mariama, our newest pioneer subscriber. Thank you so much data