MIAMI — Blake Scholl is the founder and CEO of Boom Technology, a Denver-based company that is building a next-generation supersonic jet. He is a pilot and technology entrepreneur who built marketing automation at Amazon and founded the mobile technology startup Kima Labs, which was acquired by Groupon in 2012.
Boom Technology participated in a Y Combinator startup incubation program earlier in 2016, and the project has been funded by Y Combinator, entrepreneur and venture capitalist Sam Altman, early-stage venture firm Seraph Group and venture capital firm Eight Partners. And Sir Richard Branson’s Virgin Galactic is providing development services for Boom and signed an option for 10 planes.
Scholl spoke to Airways about why now is the time to bring a supersonic jet back to the commercial aviation market, how he’s funding the production line and bringing it to market.
Airways: Why do you think a supersonic aircraft is needed in the marketplace now?
Blake Scholl: There’s two reasons for that. The first is that we need to have faster airplanes right now. Why we need a faster airplane right now is because the world has so much to offer. Thanks to globalization and the internet, it’s possible to have some type of relationship with people all over the world. That makes it even more important to have an easier way to access the entire planet.
I grew up in Ohio and my granddad was 90 minutes away in Indiana. I saw him every weekend and we got super close. I wouldn’t be doing what I’m doing if it wasn’t for his life lessons. Fast forward 30 years and now I have kids, and their grandpa is in Hong Kong. That’s 18 hours away from my home in Denver and my kids are only going to see him once a year. They’re never going to be close because we have to account for geography.
There are also kids who grow up with parents that travel a lot. They do business deals over the phone that would be better done in person. The barrier to get more things done is travel time.
We had a run at this in the 1960s and 1970s with Concorde and the American SST. The problem then was we didn’t have the technology to do this economically. A ticket on Concorde ultimately cost around $20,000 and for most people, $20,000 is a bucket-list item. It’s not a feasible mode of transportation.
Two, in 2016, we finally have a way to go not only fast, but to go fast economically. We have better airplanes, better engines, and significantly better improvements overall. When you add that all up, you can do a meaningfully faster flight for the same price you pay in business class now. These cost usually around $11,000 for a round trip rather than the $20,000 that it used to be. It’s dramatically more affordable, since a lot of people fly on business-class fares. Down the road, we want to do this for everybody, not just for business class.
You touched on some of the older iterations of supersonic travel, but we’ve had all this stuff on paper without really much success. Why is Boom different?
For one, it’s not just a paper project; we’re building a prototype airplane. The first aircraft is under construction right now and it’s going to start flying next year. We have a design that not only works technically, but also as a business case. And internally, we have a passion for hardware. Our approach is if we can think of a better idea, let’s go design it, build it, and test and learn so we can head toward an aircraft that’s going to provide meaningful service.
There have been discussions in the business jet world of doing a supersonic jet, but the challenge is but you can’t build a supersonic jet until the regulations are fixed. And most people who fly business jets fly traditionally over land, so trying to sell a $100 million product that is going to be challenging.
The thing that really unlocks it here, and when we started to think that this thing can really work, is our jet is a small commercial airliner that you can deploy mostly over water. So you don’t have to worry about the whole supersonic-over-land thing.
There are more than 500 possible routes, if you plan the size of this aircraft properly. The airlines are going to be able to fill seats on those routes, so you don’t have the 75 percent empty seats that you saw on those Concorde flights. It’s all based on the idea that you can get from San Francisco to Tokyo quicker than it takes to get from San Francisco to New York.
So building a clean-sheet aircraft is quite expensive. You have to build the aircraft, you have to pay the engineers, you have to have a specific facility to build it in, and all these things are not cheap. How are you funding this?
The first thing you have to understand is that we’re approaching this in stages. The first aircraft we are building is called the FV1 First Demonstrator. It isa not-to-scale, experimental version of the actual airliner. So it’s significantly smaller and it’s not certified to carry passengers. It’s being built just to prove the concept. When you work on such a scale and you’re more experimental than passenger certified, things are a lot easier in terms of cost. So we’re not putting hundreds of millions of dollars in this thing. We’re not even spending $80 million on the Demonstrator.
My background is from Silicon Valley and that is where my network is. There are a bunch of people in Silicon Valley who are investors and have backed us, like the same folks that backed the Googles and the Ubers of the world. And our investors get very excited, because they all want this product to exist.
The projections are huge. In Mike Boyd’s report on the aircraft, it forecast a need for 1,300 units, which adds up to a very compelling case for investors. When this thing works, it’s going to be the investment of a lifetime, and these are the types of investments that you want to back early.
Earlier you mentioned that Concorde always seemed to be flying half empty and never really made any money, so how is Boom going to overcome this obstacle?
Concorde was actually closer to 75 percent, and it was only in the last days where people really started to fly it. Is often said in the industry that Concorde was too small. I disagree. It was too big. The more expensive an airplane is to operate, the fewer seats that it should have. This is just so the airliner can have a growth factor. So at $20,000 a pop, 100 seats was kind of ridiculous. And at $5,000 a seat, that’s a business class price point. And so we’re going after the business class section of an airplane.
If you look at the 787, how many premium seats does it have in the cabin? And so with about 45 seats on the airline, if you can fly a 787 and still make money with those seats, then you can fly supersonic with that route and sell enough seats to make money. And the best reason is because it’s so practical. You find out that people already will pay for a better seat, so you don’t have to advertise the whole concept of supersonic.
They don’t have to make a huge bet in the growth of premium travel. The only bet they have to make is that people would like to get there in half the time but at the same price.
So who do you think the ideal customer is not just for the people who are on the aircraft but for the people who are flying it?
Imagine that you’re on the West Coast and you need to go to Singapore for a couple of meetings. Today, you can’t get that done in less than three days. You fly over, you have to spend a night in a hotel, then you have to stay and get the work done, then another night in the hotel, then the next day a flight back. It’s basically the best you can do with the way the airlines are established right now.
With supersonic, you could do something different and arrive there at a time where you’re still awake and they’re still awake, get your key meetings done, and catch a flight back. The whole trip, end-to-end, could be 24 to 25 hours. And from a jet lag perspective, you end up with one really long day rather than actually having to transition to a different time zone. You save two nights in a hotel and you save meals, and you probably feel better when you get home because you didn’t try to hop time zones. You’re more productive for the rest of your week as well. I think that would be huge and it would impact the way people travel.
We read about what the Wright brothers did. But when the jets were introduced, it completely changed travel patterns. It used to take 15 hours to get to Hawaii, so not many people went. Those who did had the travel time to stay for awhile. But today, people do short vacations in Hawaii because it only takes five or six hours to get there. With what we’re doing, we’re going to turn Sydney into the next Hawaii. I
Take the New York to London example, and realize that the time difference is working against you. It’s much easier to go westbound than eastbound. If you’re even able to get up to Mach 1.5, by the time you make it to the airport — and I’m not talking about just getting there, I’m talking about all the ground transportation and how you’re getting around –everyone’s already been out to the pubs and you’re too late. You lost the day. I think we have to try to get to a point where we get faster so these types of trips are possible. You’re not talking about just shaving off an hour or 2, you were really talking about how you can change your day.
What is the current EIS for the jet?
And you are marketing this to airlines and companies, correct?
Yes, primarily airlines but I think there is a chance for a secondary business in the terms of business jets. It would be the best business jet that money could buy. Our motivation for this whole thing is to build an aircraft that my staff and my friends can fly on, not just spend all that money on a prototype. And once you get to the market perspective, you still have to deal with that flying over land issue. It fits the standard commercial airline business today much better than the classic business jet model.
What is the price of the jet right now?
US$200 million. And the way we think about that at that price is we consider the ownership costs the airline can operate at business class prices on one hand. On the other hand, remember that jet that can travel up to two times faster, which means it also gets more than two times utilization and that’s where all the money seems to be. When you look at it at what the cost is for occupancy at premium capacity, it’s actually less expensive than a 787 or an A380.
How are you going to make a believer out of the skeptics out there that are still there?
By doing it. There are some people who say it’s flat-out impossible and ultimately, we will convince them by just doing it. We expect a prototype to be flying next year and have already proved that we are able to reach these types of goals. And that the team has the chops to pull it off. Just look at the all the talk over the last 50 years, there’s been a lot of talk about supersonic aircraft but the biggest thing is that was just talk, we’re actually going out there and doing it.