Today I'm sitting down with Keller Rinaudo Clifton, the co-founder and CEO of Zipline. Zipline is a drone delivery startup and I think the biggest drone delivery startup in the world.
You guys have done a total of 2.8 million deliveries to date. And then you just announced that you're aiming to do like a million a day in two and a half years.
With one partner. And so I want to kind of start this off like I don't know if people realize how insane that number is. So I want to start us off with what does this ramp actually look like over the next thousand days?
Well, you know, we're here in the factory where we're going to be producing all the aircraft that are required to make that happen. The internal perspective on how we make that happen. I mean, Zipline has been growing incredibly fast. We obviously operated outside the US for the first eight years of the company's history. Last year we finally got full regulatory approval, this kind of unprecedented regulatory approval from the FAA. We launched in the US at scale. And the system just grew exponentially fast. I mean, we grew 10 to 15% week over week, most of last year and this year. That's growth in terms of flight volumes and in terms of revenue. As a result, we made an operating plan at the beginning of this year to scale the company to a million deliveries a day as fast as humanly possible. And we built this factory in order to achieve that goal.
The problem is that as we've been scaling across some of these metros in the US, some big companies have been looking at what Zipline's doing, saying, 'Hey, like that would be very valuable infrastructure for our customers.' So, case in point, you know, you mentioned Uber and Dara, you know, showed up here four weeks ago, looked around the factory, talked to us about like we ran some numbers on a calculator and he was basically like, 'I'll take all of it' because, you know, a million deliveries a day was the entire capacity that the company was planning for at that point when we signed that partnership. You know, as a result of that, I mean, Zipline needs to do a lot more than just serve Uber. We have a lot of other amazing customers. Some of the biggest companies in the United States rely on us. And so, it means that just 6 months after setting that plan, the plan is now being thrown in the trash. And we're now having to set a way higher target of the total number of deliveries that we need to achieve per day two and a half or three years from now. It has a lot of implications. It means that even though this, you know, factory that we're sitting in, I mean, you've gotten to walk around it is, you know, it's big. We're going to need to go five or 10 times bigger than we were initially planning. You know, the other implications are that when you see this technology growing in the real world, it actually sort of feels just having now two years of observing how customers use automated instant delivery. We're realizing it's totally different customer behavior than we were previously expecting or you kind of saw.
Well, so I mean, first of all, keep in mind like this is already a huge market, right? Like you know there are these very big companies, the big marketplaces as well as you know more traditional retailers like Walmart or Amazon. I mean when you look at all instant delivery in the US there are about 5.5 billion instant deliveries being done every year and that's just instant not including more traditional like two-day or parcel delivery so that's a very large market and it's not even including outside the US but the crazy thing is that if you were to just look at the customer buying behavior that we're observing in Dallas, in Houston, in Cleveland, in you know these cities where Zipline initially launched and then extend that buying behavior to the rest of the United States, there would be 55 billion instant deliveries, not five. So it's like you see customers who instead of ordering a couple times a month are generally ordering every single day. And it's just a result of having access to a system that is 10 times faster, extremely reliable, totally safe, magical customer experience and less expensive. On top of that, you know, customers change their behavior. And actually, you know, interesting analog to Uber, in that I remember in the early days when Uber was launching, people would say, 'Oh, well, even if Uber only grows to be 50% of the taxi market in San Francisco, it's only going to be a 20 billion company.' And obviously, the thing they had wrong is today Uber is more than 10 times the size of the taxi market in San Francisco. So, you make a new kind of service that's magical in a lot of ways, customers totally change their behavior around it.
I was watching one of the interviews of Travis probably like three or four days ago and he was talking about the user behavior of Uber and he's like people when they have a car available at their fingertips they kind of change their behavior and how they interact with the city. And so he was like we can't even predict exactly how much each user is going to use our product because they keep on using it more and more over time. And this almost feels like the exact same analogy again where someone uses the instant delivery and then suddenly they use it like twice next week and three times. Like last week I bought multiple things on DoorDash in the same two-hour period in two separate deliveries and I was like this is exactly the use case for Zipline.
Yeah, I think that's right. I mean Travis was very farsighted in that prediction. You look at like what happened with Uber. I mean he was exactly right. Like all of these new, I mean people now commute in Ubers that you never would have done that with like the traditional taxi industry and so that's obviously like a giant market expansion that was kind of unlocked and in this exact same way I mean Zipline, you know, when I'm spending time with customers in these different markets I mean you meet a dad who has like five kids and he's ordering from Zipline a couple times a day they'll order multiple things like even over the course of an afternoon or evening. You know, 80-year-old grandma who's ordered from Zipline 350 times in the last year. I just posted on X yesterday this funny video I saw of like it's basically a rooftop apartment rooftop frat party that's happening in a pool. It's like the seventh floor rooftop pool deck of like all these kids just hanging out listening to loud music in their swimsuits and they're ordering Zipline and Zipline is delivering directly next to the pool on the seventh floor of the apartment building. And so you kind of realize like, whoa, these are just totally new kinds of different ways of engaging with delivery.
Something that I also loved about that video was there's like very few products where everyone just kind of is astounded by, oh, this thing actually exists.
Yeah. What the hell am I looking at?
Yeah. On that video, every single person had stopped what they were doing, whether they were in the pool or sitting on the side to just look up at the drone delivering some package. And my bet is that has like a very strong emotional reaction. Suddenly they want to go, you know, use the service themselves.
Yeah, I mean a lot of the, you know, one of the reasons we've been seeing this crazy growth. I mean, you know, a lot of these different, we're sort of launching like neighborhood by neighborhood in these cities and a lot of these neighborhoods, I mean, you know, take a guess like there's a, I mean, some of these cities, we have more than 50% of all homes ordering from Zipline. There's just like insane levels of customer adoption in just 6 to 8 months. And you kind of ask like how is that happening? And the reality is it's a very visual product. People love like people are using it when they're at soccer practice and like one of the moms will be like I'm gonna order you know whatever Gatorade and oranges and then have it delivered right here and like the entire, you know, you have a hundred people like what am I seeing and you know and then they can download the app and use it themselves and get their first delivery that night at home. You see, you know, birthday parties like it's, you know, it's a hit. You're delivering to people's backyards. I think that, yeah, the product is inherently viral, I guess, is the short version.
I love this line, everyone has a plan until they get punched in the face. And I feel like if you look back 18 months at the beginning of last year, I don't think it's almost possible to predict, you know, 15 to 20% week-over-week growth for an entire year or an entire 18-month period. And so I got to imagine that the plan 18 months ago was completely different than it was like 12 months ago, 6 months ago and today you know one customer walks in and they take your entire supply that you were planning to build for maybe multiple years. How has that plan kind of shifted in the past like 2 years and how are you kind of planning going forward to basically predict for unpredictable demand?
I think that, you know, the reality people say hardware companies are hard. The reality is that the challenge with hardware companies is you have, I mean, you have 30 different disciplines, right? You have everything from electrical engineering, the teams that are building the actual flight computers and the avionics and power distribution board and the battery management system. You have the firmware teams who are writing the low-level software that runs on those boards. You have the powertrain team which is designing the electric motors and the batteries and then all of the, you know, bus bars in the aircraft to actually transfer energy throughout the aircraft and then you have the mechanical engineering team which is designing the 43 major subassemblies on the aircraft. You have aerodynamics, aeroacoustics, guidance, navigation controls. You have all the different software teams owning everything from communications architecture to multi-vehicle deconfliction to, you know, detect and avoid like computer vision based detect and avoid. You have the customer ordering application. And that's just engineering. Then you also have to be really good at operations. You have to be really good at logistics. You have to be really good at manufacturing. You have to be really good at supply chain. And so you can just imagine all these things as like a really long chain. And you are as good as the weakest link in the chain. So you can imagine you can be really good at 29 of the 30 things. You're, 'Oh man, we nailed it on 29 things. Manufacturing, we just didn't nail it.' So cool. The company's a zero. You don't have vehicles. Any one of those things is a zero, the company is a zero. They're all multiplied by each other. And I think this is the reason that maybe it's like only the paranoid survive or, you know, if you didn't have like psychological problems before starting the hardware company, you definitely will afterward, you know, because I think it breeds like a very healthy degree of skepticism, paranoia, and humility. It is really hard and especially once those kind of companies enter hyperscale. You're now in a mode where you have like hundreds of millions or billions of dollars of commitments in a supply chain and those are like hard and fast financial commitments. You have a factory that you have bought or are renting at, you know, usually factories aren't cheap. The factory has to operate at extreme scale in order to make sense from a unit economics perspective. You know, I think it's all hard. And then yeah, as you mentioned, you also are sort of engaging with the real world, which is you're sort of suddenly realizing, oops, our plan was off by 5x. Our plan was off by 10x. We actually have to do five times more than this.
Or like your timeline is completely off, like you thought you had 5 years to scale and you actually only have like 500 days or.
I think all of those things are true. And so I think it's the reason, you know, people talk about like hard filters and soft filters and the Fermi paradox. I don't know if you've talked to anybody about that but like yeah I think you could think of it as like the filters.
The Fermi paradox for hardware companies where are all the hardware companies like why did they all die you know oh they died because there was a, there are multiple hard filters and getting these companies to scale is hard and capital intensive and also requires a lot of luck I think but the reality is when you then look at a lot of the most valuable companies on earth are the companies that are playing the biggest role in moving humanity forward you know a lot of these companies have giant hardware components if not are primarily hardware companies and so I think that it's not for the faint of heart but it's also important for humanity.
What is the thing that has caused you the most stress in the last 12 months?
It's a different thing every month. I think you know to my exact point like there's no, you know, you're like combating this insane fire that will for sure kill the company if it cannot be fixed quickly. And then you know you're attacking that thing with total focused ruthless energy and then two weeks later it's onto something completely different. That is no longer the bottleneck. The bottleneck is here. Now we got to go focus on that. So we needed to launch platform 2. Then there was a huge amount of just like integration work that we had to do to kind of like shake the rocks out of the gears actually get the system operating reliably last year. Then the system started to scale exponentially fast in terms of flight volumes. We had to figure out aircraft utilization and a lot of, there's a huge amount of improvement we had to do to kind of like the customer-facing app and how we integrated with all these different partners throughout a metro. Then, you know, tariffs were announced and this caused like, you know, some pretty significant disruptions in the supply chain. Then we were having a problem manufacturing enough aircraft. Then you get all the aircraft into the field and you realize like oh my god we got to maintain all these aircraft. And so Zipline has had like multiple existential maintenance crises over the last year. Fleet health today is the best it ever has been. A month ago it was the worst it had ever been. So it's just giving you a sense for like, you know, it feels like you're living in this heightened state of it's just like incredible sensitivity to timelines and having to like attack these problems one at a time. So and what will be the existential crisis for Zipline a month from now?
Interesting. If I knew we would be focusing on it today.
Brian Chesky has this interesting idea of you basically as the leader of a company have to be scaling faster than your company is or else you're kind of like falling behind and you're kind of becoming the limiting factor for something like this where the growth is just getting pulled forward like crazy and the expectations are rising insanely fast. How do you kind of stay ahead mentally?
You know, the reality is I think it usually feels like you're sort of like holding on for dear life, you know, by your fingernails. I think that the way I thought about it for myself is that I'm learning as fast as I possibly can. I'm being humble and curious in any given year. And usually I'm totally failing and having to figure things out, you know, and maybe by the end of the year I feel like, oh wow, I finally feel like you're Neo. You're seeing the ones and the zeros in the matrix. You see how it all works. You're like, I can.
But then the game changes.
And then yeah. And then a week later, the company doubles in scale and you're instantly back to being useless and unprepared. And I think the key thing is being humble enough to listen to the people around you who can tell you when you're being stupid, who can point out like all the things that you're doing wrong, you know? And then also I think it requires like a certain degree of shamelessness, you know, like so much of Zipline has felt like I'm saying, 'Oh, let's just, you know, this is the answer. This is the direction we're going in. Everybody follow me.' And then a month later it's like, 'Whoops, that is not a good idea at all. Everybody back. Like, let's go in the complete opposite direction. You know, this isn't working. We need to do something totally different.' And I think you can like beat yourself up for bad decisions. You can look backwards. You can be like, 'Oh my god, I look like an idiot. Why would people even trust me?' You know, I think it's better to not look backwards and just, you know, practical problem solving, be low ego and try to figure out on any given day like what are the things that are not working and then how do we fix it as fast as possible.
I think when you kind of go through this hypergrowth phase, the company has to radically change how it operates and how it's like structured generally like you may need to increase your manufacturing capacity by like 10x over a year and that's a completely new function that you've never really done before. So, how is the company changing over the next like 12 to 24 months?
I think that, you know, there are certain things that Zipline focuses on that are not changing like the culture of the company focusing on practical problem solving, focusing on hiring people who are hungry, low ego, practical problem solvers, mission-driven fast learners. Like we never fail when we hire people like that. In general, we've tried to set the company up to be small special forces teams that are moving with high degrees of freedom and responsibility. We believe in having as little like middle management, basically like no middle management. I just think especially in a world where velocity determines the success of the company more than anything else and in a world with AI tooling and in a world with frankly just better communication tools like email and Slack and other solutions, the idea of having middle managers who need to like pass information up and down the chain is useless. And so we prefer to have small teams led by entrepreneurial leaders who have a huge amount of responsibility and operate like, you know, with CEO level responsibility with regard to the thing that they are owning. That isn't really changing.
I think that, you know, as projects become more and more complex you do have to like you don't get to be a scrappy startup with like all these teams running in totally different directions. And so I think, you know, you have to try to get really disciplined in terms of how do you like set clear goals and then think about those goals across these teams. So like assuming that they all add up to one unified coherent vision that results in a complicated product launching into the real world is also particularly critical for things like safety and reliability. Like those are cross-program requirements that we have to on every day that we're going and serving customers. We are attesting to our regulator and more importantly like to the communities that we serve that this system is going to be safe and it means that Zipline's had to build a huge amount of infrastructure and I think this is one of the ways that the company really had to level up in the last few years. We built a huge amount of infrastructure. Some of it is actually here in this building. Huge amount of testing that we do, component level testing, aircraft level testing. You know, we have chambers here where we can make it rain, where we can make it snow, where we simulate intense heat and humidity. And then we go from there to our three large test sites that we operate in the real world 24/7, 365. These test sites are a huge part of the way that we can move very fast from a hardware and software development perspective while then validating the overall system to an ever-increasing safety bar. You know, like it used to be enough to be able to say, 'Oh yeah, like something's only going to go wrong one in 10,000 flights' and then you got to get to one in 100,000 flights. Then you got to get to one in a million, one in 10 million.
You're looking for increasingly rare problems and it requires increasingly clever or extreme ways of testing systems to their limits so that we know how it's going to perform when we put it into the real world.
When you first came back to the US like from Rwanda and you started doing deliveries here, I imagine that that product experience was completely different than the thing that exists today. And you also don't necessarily want to scale something up a bunch if it's like not super great. What was kind of the flip in your mind for this is like good enough that we do, you know, it's like a nine out of 10 or 9.5 out of 10 customer experience and this is what we want to scale.
I, you know, my first reaction to your question is actually hardware companies generally don't really have that luxury. I think software companies do have that luxury. You're like trying, you know, you deploy an app oh it's not good like let's learn from it. Hardware companies honestly I mean at least for the first, you know, three or four major platforms which will probably take the first 10 or 15 years of the company's life every new product is a complete existential bet for the company if it doesn't work the company is certainly dead you know it's not like if Tesla when deploying the Model S it turned out the Model S wasn't a very good car I mean Tesla doesn't survive company's dead if the Model 3 winds up not being a very good car even though Model S had been a profitable program, Tesla's probably dead at that point because of, you know, the crazy amount of debt that the company had taken on building the Gigafactory and, you know, scaling up that production line. So there's this obvious sort of goal of like you find your beachhead, the use case where you can find customers who will actually put up with a surprisingly bad customer experience. I mean, that is kind of a thing, right? If you look at the Roadster, the Roadster was like a Lotus Elise chassis and then they put like a battery designed by a different company into the trunk of the Roadster and it's like.
I think there's like hundreds of separate suppliers.
Yeah. Oh, the car I mean car was incredibly unreliable. They lost a lot of money on each car that they sold and yet, you know, they were able to show that there are customers out there who are willing to buy an electric car which I think at that time was a totally counterintuitive idea. Yeah. And in the same way, you know, Zipline focusing on blood transfusions for the first four or five years of the company's history, we had found this teeny little narrow beachhead where we knew the service wasn't going to be perfect. We knew we were going to have to get these unprecedented regulatory approvals. We knew we needed a customer who'd put up with just a lot of like iteration and imperfection. But we had, you know, it was kind of clear. It's like, oh, but every flight is saving someone's life, so the customer will probably kind of partner with us on this. And we were right about that. And so I think and then you go from there, you know, you can look at the parallels for either company but for Zipline going from that to like getting platform 1 to the point where today it serves 5,000 hospitals and health facilities and saves 17,000 lives a year and then, you know, we had a lot of big companies in the US like Walmart and Chipotle and Cleveland Clinic and many others saying we would use that like we think this would be fundamental infrastructure in the United States that we could build our businesses on top of. That gave us a fair amount of conviction like there's something here. You know, if you could automate delivery from any building directly to any home, that would be a really big important system and layer of infrastructure. But when we were launching platform 2, I mean if it didn't succeed, the
What have been the strangest challenges that you've run into?
