Will Hetzler, Co-Founder and COO – Zipline International Inc.
How one company is pioneering delivery drone services in Africa
More than two billion people lack adequate access to essential medical products, often due to challenging terrain or gaps in infrastructure. Over 2.9 million children under age five die every year due to a lack of access to vaccines and essential medicines. Up to 150,000 pregnancy-related deaths could be avoided each year if mothers had reliable access to safe blood. These are the sad truths that Zipline set out to address by rapidly delivering lifesaving medical products directly where they are needed. In this interview I speak with Will Hetzler, Co-Founder and COO of Zipline, who I first met in Rwanda during the AviationAfrica Conference we were both speaking at earlier this year (see my blog post of February 24, 2017.)
Q: What caused you to start Zipline? And what’s your vision for the company going forward?
To take a step back, Peter Thiel has an oft-quoted remark, where he said, “We wanted flying cars; instead we got 140 characters.” For me, that is an expression of frustration at the unfulfilled potential of technology, but it’s also an allusion to technology’s incredible potential to improve the world, if investments and efforts are properly directed. Over the past century, the aviation industry has been a great example of that potential. The world has become tremendously more connected, thanks largely to a wide range of technological advances. What the internet did for the free flow of information, aviation has done for the movement of people and cargo.
But over the past couple of decades, the rate of progress has seemed to slow for aviation. As the industry matured, we’re now at a point where we have a lot of what Clayton Christensen describes as “sustaining innovation,” and few, if any, breakout products or transformational changes. That has led to a feeling of stagnation. Aviation technologies aren’t progressing as fast as they once did, which is all the more costly because aviation is a critical enabler of so many other industries. A lack of progress doesn’t just hold back the aviation industry; it slows the development of the global economy. Getting back to a time of rapid innovation and growth in aviation technologies is something that really excites me. One of the reasons why I wanted to found Zipline was my belief that transformational change is possible for aviation today, that drones will be the source of multiple disruptive innovations in the coming years, and that these developments have the potential to dramatically change the world for the better.
One interesting observation is that we’re now at a point where, with over 1,000 airlines serving something like 5,000 airports around the world, it can be quicker and easier to move supplies between major cities on opposite sides of the world, than it is to move supplies from a major city out to a rural part of the same region. That counter-intuitive reality leads to all kinds of challenges in supply chains. Businesses and communities that exist in rural areas are too hard to supply and serve. Zipline is working to solve this problem, and will likely transform logistics in the process.
Zipline’s vision is a future where any critical supplies can be instantly delivered on demand anywhere in the world. At best, that level of access only exists in a few major cities today, and seems unimaginable for the vast majority of the world’s population. This lack of access leads to all kinds of hidden costs and, in many cases, tragic human stories. We decided to start with health logistics, because that was the sector with the greatest human need. Zipline wants everyone, even those living in the most rural communities, to have reliable access to essential medicines and health products. If a heath facility doesn’t have a product needed to treat a patient, Zipline can deliver it in time for the facility to provide the best available standard of care.
Q: How reliant is that vision on the evolution of technology? Right now, you’re doing fixed-wing delivery by way of parachuting the product down to the site where it’s needed. As the technology evolves, how will that influence the concept you’re delivering on with Zipline?
While efforts to develop unmanned aircraft are almost as old as aviation, it’s still very early days for what we now think of as commercial drone technology. Several people and companies recently claimed that a flight demonstration or some other milestone represents a Kitty Hawk type moment for commercial drones. While I question the grandiosity of those comparisons, I do think it’s representative of how nascent this technology is.
Over the coming years, we’re going to see very rapid development. Generally speaking, the rate of technological progress is compounding, and investments made by one industry have often yielded serendipitous returns in unrelated areas. Recent investments in the consumer electronics industry are a great example of this. Since the introduction of the first iPhone 10 years ago, the growth of smartphones has led to the development of processors, sensors, and other ICs that are radically smaller, lighter, and more affordable. This in turn has enabled new uses for these technologies. Many potential applications of robotics and other autonomous technologies that were once impractical due to the cost of the hardware are now the focus of exciting technological development. Investments that today are being made by industries as varied as automotive and communications will continue to unlock similar possibilities. This trend has the potential to greatly benefit aviation, and especially commercial drones. Zipline is working to anticipate and leverage these developments as we build the best critical inventory logistics solution in the world.
Zipline’s engineering team has achieved a lot, and we already have one of the most reliable, highest performing drone systems in the world. However, Zipline aspires to do a lot more, and some key challenges remain. One of the biggest limits on performance characteristics like range and payload capacity is the density of your energy storage. Due to the cost and operating advantages offered by electric power relative to combustion engines, small drones will almost certainly be all electric, which means batteries. So battery energy density is the big constraint, and improvements in this area have come very slowly. Zipline uses a lithium-ion battery chemistry similar to that used in most electric cars. Tesla is probably the company that has invested the most effort in evaluating the technical and commercial potential of different battery chemistries. According to Tesla, lithium-ion battery chemistries are the most promising, and will likely be limited to around 5% annual improvement in energy density for the foreseeable future. Which is to say that we probably won’t have any breakthrough changes in the energy density of commercially available batteries for the next three to five years.
Assuming that is true, we’ll see moderate improvements to key performance characteristics like range and payload capacity, which will come both from incremental improvements to the energy density of batteries and design improvements to the drone itself, including refinements to aerodynamic efficiency and weight reduction. But, generally speaking, some of the applications for bigger payloads that could be very exciting, like transporting a full pallet load of inventory rather than just a package, require either a breakthrough in battery chemistry or better hybrid power systems.
Q: You’re a California-based company, and you’ve made a very deliberate move to introduce this service, Zipline, in Africa in Rwanda. Tell us about what the genesis of that was and how you see the concept you’ve now introduced in Africa, introduced perhaps in other regions of the world and perhaps even back in the U.S. or Europe?
We felt strongly that we wanted Zipline to realize our vision of on-demand critical inventory logistics first for healthcare, because that was the sector with the greatest human need. And a similar logic guided our decision to launch in a developing country. We asked, “Where is the need greatest?” Every country in the world has challenges with transportation infrastructure. Logistics for critical supplies that need to be transported across relatively long distances in areas with low network density is challenging even for the wealthiest governments and companies. Yet these problems are most acute in rural parts of developing countries. So we decided to start by looking there.
Rwanda is a relatively small, developing country with very hilly terrain. Like most tropical countries, Rwanda has two types of seasons: wet and dry. During wet season there are very heavy rains, which can lead to flooding, wash out infrastructure, and make ground transportation slow and difficult. This is generally true for rural parts of developing countries where most roads are unpaved, and wet season can transform roads into impassable mud pits. Zipline has the perfect solution to these problems. Instead of struggling through hundreds of kilometers of muddy roads, you can fly over all these challenges of infrastructure and terrain to quickly deliver critical supplies.
What allowed Zipline to launch quickly in Rwanda was the combination of high need with the right mindset. Rwanda’s challenges with infrastructure and terrain meant that the health sector needed more efficient and reliable delivery of essential medicines and health products. Meanwhile, the Rwandan Government is technologically progressive and willing to make strategic investments in innovation. Lastly, the Rwanda Civil Aviation Authority was willing to take a pragmatic, performance-based approach to introducing commercial drones into their airspace, and was willing to work with Zipline to mitigate any attendant risks so that we could deliver a lifesaving service.
Q: As you say, there are other regions of the world, even in Canada’s Far North, where communities have access problems and are in need of medical services. In this case, I suppose not all those ideal situations, as you just mentioned them, existed. Would you say that the regulatory framework in North America is perhaps burdensome, and more difficult to navigate?
If you look at the regulatory regimes in the U.S., Canada, or Western Europe, “burdensome” would seem to be an understatement. But to be fair, civil aviation regulation is burdensome around the world, and this is at least partially out of necessity. That’s as true in Africa as it is in North America.
Two key things distinguish Rwanda from the U.S. One is that as a much smaller country with a less complex airspace and lower air traffic density, some of the considerations that really complicate the introduction of autonomous, beyond visual line-of-sight commercial drone operations in the U.S. just don’t exist in Rwanda. Secondly, since the country is still developing, and has the infrastructure and access challenges that I mentioned, the relative benefit of Zipline’s service is greater. With some notable exceptions, infrastructure in much of the U.S. is at least adequate as is access to healthcare. That is less true in Rwanda. In short, the risk to the airspace is less while the potential both for human health and economic benefits is greater. Even absent all the other bureaucratic differences, which I won’t get into, the risk-benefit calculation makes for a quicker and easier path to launch in Rwanda than it would in a place like the U.S.
Q: Just to get back to how you got started, you’re a Harvard graduate, and then went on to Oliver Wyman for a couple of years as a consultant. And now, of course, running a business. How has that transition been for you, and what have been some of the biggest challenges and biggest successes you’ve experienced?
One of the biggest challenges for any founder is figuring out who are going to be your co-founders, if you have them, and if not, who will be your early team. For Zipline, I am very grateful to have two incredible co-founders. Keller Rinaudo, who is our CEO, was my roommate at Harvard. Keenan Wyrobek, who leads our product and engineering teams, is a brilliant, world-class roboticist and is someone who Keller and I are extremely fortunate to have met as we were starting our journey with Zipline.
Another challenge is convincing investors to take a risk on your team. When we were first raising money for Zipline, a lot of investors thought that we were crazy. However, Zipline has been fortunate to receive support from a world-class set of investors. Sequoia Capital led our Series A, and about a year ago we closed a Series B that was led by Visionnaire Ventures and Andreesen Horowitz.
As for me, certainly the transition from aviation consulting to a startup had its challenges. Many skills that I learned in consulting helped me. As a consultant, you have to be able to move very quickly, because when you show up at a client, they want you to create value right away. So you have to learn the landscape, identify opportunities, and get to work very quickly. That’s all the more true of a startup, and it’s something for which my experience with Oliver Wyman prepared me.
In other ways though, a startup is a completely different beast. One thing that I strongly believe is that there’s no substitute for firsthand knowledge of your customer. It’s essential to make big early investments in understanding what your customers’ needs and problems are. When we were in Zipline’s hypothesis-validation stage, Keller and I traveled around different developing regions, experiencing firsthand the problems that our potential customers encountered, and then working to fully understand the root causes of these problems. This was important both to ensure that Zipline built a solution that actually addressed our customers’ needs, but also to understand the parts of the problem that we couldn’t solve, and be confident that Zipline could succeed in spite of these gaps.
We spent about four months on customer research. I traveled throughout southern and eastern Africa. In each country that I visited, I would go first to the lowest level of the health system. That typically meant a small dispensary or health post in a very remote, rural community. There, I would talk to the health workers to understand how reliable was their access to essential medicines and health products, and when they didn’t have everything they needed, why that had happened. I would then trace those stories back up through the supply chain, going to the district and then regional levels, talking to medical officers and health logisticians, all the way back to the central level. At the central level, I would also talk to supporting organizations like U.N. agencies and bilateral donors, trying to gather data from all of the different stakeholders in the health system.
We learned a lot through this process, which proved invaluable to the development of Zipline’s health logistics service. We also developed an extensive network. When it came time for us to begin marketing Zipline’s services, we were able to reach back out to the people who we met and say, “We heard the problems that you told us about. Now we have something that we think can help. Let’s talk about how to get this launched in your country.”
Q: What is the next step in your journey and what are your future plans?
Ultimately, service range, payload capacity, and value for money are what our customers care about. Zipline is obsessed with making improvements on all of these metrics. On the business side, we need to continue growing the service, both by expanding the scope of products that we deliver, and by launching additional countries. It’s likely Zipline will launch our second country in late Q4 of this year, or early Q1 of next year. Increasing the scale of our logistics network will be a big part of what drives down the marginal cost of Zipline’s services. On the technical side, Zipline will be introducing a new generation of our drone, which will have substantial performance improvements. We’re really excited about what the next 6 to 12 months will bring.
Q: What advice would you have for future entrepreneurs, and startups, as you’ve experienced it now?
Don’t waste your time. To state the obvious, any startup is a big risk. The statistics on new business ventures that fail is no secret. But it’s important to bear in mind that not only is a startup a risk for you as a founder, it’s also a risk for your early employees; it’s a risk for your investors; it’s a risk for your suppliers; it’s a risk for your customers. Because of that, it’s important that you have a vision that justifies those risks. Ensure that your product or service offers a big enough improvement over the status quo that it’s all worth it.
Coming full circle to Peter Thiel’s quote, there are so many really important problems that exist in the world and that need smart people to work on them. For me at least, it seemed important to work on something that had the potential to fix “a dent in the universe” rather than just “140 characters.”