The Startup Bringing Air Taxis to the LA Olympics with Adam Goldstein l Build Mode

It was a great strategy. People always ask me, are you happy you went public? Are you, you know, do you wish you could do it, you know, differently? It was the by far and away an amazing decision. I would do it over, you know, again every single time. And if you think about like what the Olympics is, it's a it's a source of inspiration for the countries and so they like to show off new technologies. And so back in 1984, um, LA, the last time LA hosted the Olympics, they had Jetack. That was a a huge phenomenon everybody talked about for a long time. and it's almost like the best sort of uh you know advertisement for the industry that I think you could have.

Going great.

Sure. So, I am the founder of Archer Aviation and we are building electric vertical takeoff and landing aircraft. You can think about this as a modern-day helicopter. It is a aircraft that's designed to take people off the ground instead of uh driving 60, 90, 120 minutes uh in into the air and getting to where you want to go in 10 or 15 minutes.

Yeah, there is a uh both a civil and defense application. Um when we initially started building, the company was really designed around this typical helicopter use case for consumers. So you can think airport to city center is like a great example, a trip that there's known demand. There's known customer willingness to pay. So people are typically, you know, driving in these 90-minute, you can think ride share like routes. So think, you know, Manhattan to JFK. It's a typical route. I've done it, you know, hundreds, maybe even thousands of times. It costs a lot of money. It's grueling because it takes you 90 minutes. You're not really actually going that far. But if you could fly that route, all of a sudden it's quite exciting and you could get there in 5 minutes and you could do it for something that's a similar price as a high end of the ride share. Um, but the market really started to recognize that there were multiple use cases of these types of aircraft. And so there were defense applications that started to become very very relevant. Post the Ukraine war. It was obvious that everything was switching towards what they call autonomous and attractable applications. So think unmanned low-cost solutions and these aircraft are very well suited for missions like that as well. So you can think anything from uh you know troop movement to attack to uh supply chain or think contested logistics is what they call it. So bringing goods in and out of areas um that uh you know may be in the middle of a war zone. And so all of a sudden you have these applications that went beyond just moving people and opened up a whole new industry. So it's really the first new category that's been created in aviation in many many decades. And so this is just the things we're thinking about today, but I think the applications are going to be much broader. We'll have to wait to see what the future holds.

Sure. So, I actually uh if you go back even further, I started out actually um in the world of finance and I graduated college in a very, you know, unusual time in 2001. And there were tech had just like gone through a you know a pretty big downturn and there weren't a lot of opportunities to raise capital uh for tech companies and the highest paying job I could find out of school was actually in finance and so I took a job actually in investment banking and it was an amazing opportunity because it really taught me how to work really hard to have really good attention to detail um and I met some unbelievable people my analyst class at Maril Lynch was around 200 people and now I'm 46 and you know all my friends have grown up and they all run the big banks and funds and so it's a great network to be a part of. Um but it was an amazing opportunity to just go out and learn. As I went through that journey, I really learned very clearly that I wanted to be an operator and I didn't want to be someone on the outside kind of, you know, thinking and just building models about what was to come. I wanted to actually get into the arena and go build myself. And so it was really important to me that uh I had a I took a chance to do that. And so I had an opportunity um to start building really around the kind of 2010 time frame when New York was going through this like amazing like renaissance period where these new companies were starting to pop up. You had companies like um you know we work and Pelaton and Warby Parker and Rent the Runway and all these new amazing companies and I started a software business right in the middle of all that. Had a bunch of friends that were doing this and it gave me an ability to get into the action and I really just love the sport of it. The game of it was like so it was so fun. It was amazing. It was, you know, building teams and creating product and just watching New York go through this transformation. I went and ultimately started a a business that happened to be in the talent space, but it was really all about the software that we were building and really the sort of fun uh just you know amazing community that was being built in New York City around this period of time. Um but ultimately um you know I found saw an opportunity to actually sell the business and did that to go out and start the business that I think would be you know more of a lifelong journey which was a journey in hardware building products that I could really uh you know see and touch and ultimately have you know real impact on the world and it was something that I could see myself really doing for the rest of my career.

So in transportation, most of the big changes happen around changes in the powertrain. So you've seen this across the steam engine or the ice engine, internal combustion engine or the jet engine and now the electric engine. And each time that happens, you see these industries go through this massive amounts of change. And so when electric engines were really not just created, but the core underlying technologies, the batteries, the lithium-ion batteries got good enough to provide enough energy and power density, it was all of a sudden a new industry could be born. You could build new types of vehicles. And of course, we saw that first on the ground and Tesla became this huge source, you know, of I'll call it inspiration uh of watching what you could do uh with this new type of technology. And of course, you know, Elon did an amazing job building Tesla, but really creating a whole community of people that could be passionate about hardware. And so that's really where all this started. But the other thing that he did um was he actually showed you could make money in hardware. And so there was a long kind of longtime rule in Silicon Valley that they don't fund hardware. Very very hard to raise any capital in the hardware industry before Tesla and really SpaceX were successful. And so I had sold my previous business and then went to go start a business that was using electric engines and electric powertrain to build a new type of aircraft. It was an aircraft that could both take off and land vertically but then also transition and fly like an airplane. And so this was really, you know, a concept and I went back to the University of Florida where I went to school and we went and set up a building on campus which the main road that runs through University of Florida is called Archer Road. So everyone worked in the Archer lab and that's where the name obviously comes from and we went and just started building to see what we could do to create new flying vehicles using this electric powertrain. What was very clear was the application worked really well and the theory behind using multiple electric engines to create a new type of aircraft actually solved one of the core problems that you see in helicopters is safety. Because now you could build an aircraft that has multiple layers of redundancy and eliminate the single points of failures that helicopters have. And so that was super exciting and it was also aligned very well with the regulatory environment which was to create safer vehicles and they had already obviously certified helicopters as you can see them out today. And so the opportunity to actually build a new category that could be uh a replacement of that product but also at a safer and higher safety standard was was really unbelievable. And so there were companies out there that were doing this from a research and development perspective. And then my whole intent was to build a company that could take these products and actually commercialize them. And that's why I focused Archer um from the beginning was once we could prove that the aircrafts, you know, could work, that you could build a a product that um you know, actually did the things technically that theoretically you thought they could do, it was all about could you certify and ultimately manu mass manufacture this type of product to bring it to the consumers. And that's what Archer was really all about from the very beginning. And then can you convince the public to get in one of these things? So, how have you done any civilian flights to date?

Well, I think it's very clear that if there was a solution where people could just miss traffic, they could fly over it. Um, they would do it. The reason the real reason people don't take helicopters in mass, it's not really about the safety side. It's really about the cost side of things. So, if you if I guess civilians buy aviation on two core metrics, one is safety and the other one is cost. And so if you look at um you know today in New York City as an example, there's two really kind of big uh you know providers of helicopter transport. One is a consumer application which will cost you a couple hundred to do it. The other one is much more of a a high-end kind of corporate version of that. The high-end corporate version of that will cost you anywhere from $5 to $10,000 per leg. Though it's very expensive to do it, but they have a perfect safety standard. And so in almost 30 years they've had zero incidents in New York City. The consumer version of that has a much lower safety standard and has had multiple incidents. And so but that you can book for hundreds of dollars. So the question became, could you build an aircraft that could really be even safer than the highest-end helicopter application, but at the prices of the lower-end helicopter offerings? And that's really what we could do. And I'm 100% convinced that if you could do that, there is virtually unlimited demand. If you even look at helicopters today, the safety standard is actually still quite high, especially compared to driving. And so the safety standard in that's accepted in aviation is zero incidents. And so that is the the rate that we are targeting and that is the rate that I think is possible with these type of aircraft. So we'll show that through examples. There's plenty of people um that are going to be interested in taking this.

Yeah. So, back in 2022, the FAA actually set out a goal where they they called it Innovate 28. They wanted the Los Angeles summer 2028 Olympics to be the first event where you could see, you know, this these type of aircraft flying in, you know, in use. And so that was a goal that the FAA set out there. Now, of course, we had to establish the category. So again, not a helicopter, not an airplane. So the FAA had to create this category, which we worked with them to go do. We then had to go build the aircraft, test the aircraft, make sure it's safe, and then ultimately launch all the infrastructure that goes alongside that. So all this stuff is taking place simultaneously. Last May, the Olympics decided to name an exclusive air taxi provider for the games, which they picked Archer. And so it was an incredible opportunity to be able to showcase what we can do. And so you'll have the ability to see these aircraft flying. Um it's on the global stage. And if you think about like what the Olympics is, it's a it's a source of inspiration for the countries. And so they like to show off new technologies. And so back in 1984, um, LA, the last time LA hosted the Olympics, they had jetpack. That was a a huge phenomenon everybody talked about for a long time. And I think we have an opportunity to do something similar in the upcoming 28 games where you can start to see these aircraft flying and people can understand that this is going to be a part of everybody's life on an everyday basis um in the coming years. And it's almost like the best sort of uh, you know, advertisement for the industry that I think you could have.

Well, the goal is that we'll have be through the certification process, which is when the FAA kind of gives us that stamp to allow us to do that. And so, if the FAA does that, we will certainly be uh, you know, excited to take people. And so, what I always say is it's our job to build safe aircraft and it's the FAA's job to certify them. So, we'll see how it shakes out.

Well, if you look at hardware companies, they're extremely capital intensive. And so, you have to find a way, a mechanism to be able to raise a lot of capital. And there's lots of different strategies to do this. If you had a typical, you know, software company that's generating, you know, you're signing up users and you're showing that, you know, um, you know, CAC to LTV, you can acquire the users and they're, uh, you know, it's a good ratio versus like the lifetime value of these customers. It's like there's a there's a game that you play on software that's pretty different. part hardware has to do with how big is the market, how long will it take you to get there? Ultimately, can you capture a large part of of the market? And is it going to be create is it going to create value? And so the challenge is when you look at a bunch of the sort of famous hardware companies that have made it, Tesla, SpaceX, uh Whimo, I'd even put like an Uber in into a category like that, they typically cost many, many billions of dollars. So, it's very hard to go out and build an airplane 10, 50, even hundred million dollars at a time because you can't really plan that way. And so, you can think about it. You know, it'll cost you billions of dollars to certify a new um aircraft program. It's a it's challenging to say $50 million. We're going to go stand up a team to go do this and then along the way show a couple milestones and then use those milestones to raise, you know, more dollars. So the dollars are you just kind of need to add a zero or two zeros or three zeros to everything that we're talking about here in aviation. And so historically you would see only the you know the sort of rich and famous do this. Larry Page and you know Elon Musk and Richard Branson would do this. But the world changed post Tesla and SpaceX being successful because it allowed the capital markets to open up and start to finance this stuff. And so hardware became really like the new software. And so now everybody's rebranded this physical AI that's like been like the new branding towards this. Um but it's the same hardware game that is extremely capital intensive to go get this done. So I was um you know I've been very plugged into the New York network for a long time kind of where I started my in my roots. And so I was watching what was happening as Tesla and SpaceX were really successful and then I was also watching the capital markets as you start to see the public markets fund companies early and earlier in their journeys. And so there was a unique period of time where I saw we could actually take the company public very very early. And so we were able to raise close to a billion dollars of capital when the company only really had, you know, less than 100 people um in it. And so we had a really great concept, amazing team, you know, a really kind of I would say plan that was executable and uh the public markets liked it. It gave us an ability to raise money and it was a point in time um that we could do that. But you that that that time I think has actually come back and so that was back in 2021. But I still do think that's possible to do now. You're seeing that with some autonomy companies. You're seeing that with some uh physical AI companies where there there is an opportunity I think to actually access the public markets again um to raise big dollars. And so Archer has raised almost $4 billion today to was you know a little under a billion dollars in that first raise. And so you still have an opportunity to keep accessing the markets even after your IPO. So it was a great strategy. People always ask me, are you happy you went public? Are you, you know, do you wish you could do it, you know, differently? It was the by far and a way an amazing decision. I would do it over, you know, again every single time. Um, but um, you still have to find a way to ultimately show the investors in the public markets because you're graded on a quarterly basis every 90 days that you make traction and that there's great progress and that you can ultimately get these uh, you know, this business to market.

Well, again, more amazing things that happened um that allowed, you know, this type of company to be public and be successful um that really I think just changed the game that's different than maybe where it was 20 years ago. So, take like Robin Hood as an example. Um amazing company that gave um access to people trading with lower amounts of money. So retail, you know, if you think about people under the age of 30, typically, you know, maybe 20, 30 years ago, you might have had a different demographic that was investing, but now younger people that tend to be earlier adopters of technology, they're bigger risk takers love this kind of stuff. They've seen what Tesla did, and they were early adopters of Tesla. They're they're not bogged down by the politics. They're they're simply saying, "Wow, that's actually a great product. It's super safe. It's super fast and the autonomy is amazing." Like, what a great product. if you could just get rid of all the the politics here, it's pretty hard to argue that you know Tesla's anything other than an amazing product. Um it's the same thing with uh you know you know many other companies that that that you're seeing. And so the retail tends to really like this. The second thing that happened was you have a very organized uh you know chat board. So things like Reddit um and and and X where people can go on and discuss these idea ideas with each other and sort of discover you know these these companies. And so those two phenomena really helped I think bring companies like Archer to the public markets and have a new type of investor base that's not just all institutional investors. The retail played a huge part in this. And so I do think that trend will continue. And the beautiful thing here is the retail is actually um pretty long-term oriented. And so they're not looking at this from a quarter-to- quarter basis like a hedge fund might um or even an annual basis like a hedge fund might. They're looking at it as something that actually they believe in and they're inspired by. So when you see the SpaceX IPO come up, I think that's going to be something that everyone wants to own in the retail community, it's going to be something that um you know, you know, just as an example, you know, a bunch of people in the gym will be talking about, right? It's a it's kind of like locker room talk or water cooler talk about SpaceX and you get to be a part of that journey. That's really cool. Giving people access to that and those are people that are not necessarily looking at it wondering what is SpaceX going to earn next quarter. They're thinking, "Wow, if SpaceX could put data centers into space and if X.AI could become a major platform, that this company has a chance to be, you know, one of the world's greatest companies ever built." And you look at that with a totally different duration than you would of a hedge fund that's judging this. Or is it expensive today verse where the comps are trading? They're looking at it much more aspirationally. And I think that companies like Archer fit into that buckets where we have just incredible loyal uh you know retail following that has really enabled a lot of our ability to raise capital.

Yeah we have a lot of partnerships with different airlines. So United, Korea Airlines, Japan Airlines, Indigo. So lots of airlines all over the world and so typically the biggest airlines you know by country u you know have uh you know connect with us in some way and we've started to develop the relationships where we're either selling planes or working together u to build out the you know air taxi routes. Again it's going to be a long journey to get there but it's you know one that I think is um will you know really help the general flying public understand the safety standard of these aircraft. It's like if you see one with a United flag on it, it's one that you might say, "Well, it's a it's it's if United's willing to do that, it must actually have it must be safe." And effectively what they're saying, a consumer might not understand this, but effectively what they're saying is the FAA has certified this. United would only fly certified planes. Therefore, it must be very safe. So, that's kind of the the beauty of partnering with the airlines, and they've been uh great partners to help get this all started.