Interview with Mark Moore, CEO of Whisper Aero
We’re still in the Model T era of eVTOL engineering
Whisper Aero’s electric propulsor technology
Hi everyone, Robert here. This week I sat down with Mark Moore, CEO of Whisper Aero. Mark is a fascinating person: an early pioneer of Advanced Air Mobility, the leader of an eminent company in the sector, and a man who speaks his mind. In this brief but enlightening interview, Mark shares a series of timely insights. We cover the following topics:
Why some eVTOL companies won’t make it through this economic downturn
Why Archer is the only eVTOL stock Mark owns
Why a Chinese internet troll is after Mark and his friends
What Mark and his colleagues got wrong in their 2016 Uber white paper
I learned so much during our discussion. I’m sure you’ll enjoy reading through Mark’s answers to my questions below.
For those who are new to the AAM space, how would you describe Whisper as a company?
Whisper is all about developing the future of distributed electric propulsion. We’re not developing one specific aircraft, but instead enabling all future advanced air mobility (AAM) aircraft to have better ways of turning electricity into ultra-quiet, ultra-efficient thrust.
You are one of the pioneers of the AAM space, and you helped write an influential white paper with Uber in 2016. In part thanks to your work, an entire industry has cropped up around battery-electric aircraft. Looking back, what has changed since then, and what do you think you got wrong?
I was the technical lead on the Uber white paper, which was written by three of us: the Chief Product Officer, Jeff Holden, the lead product person, Nikhil Goel, and myself. I take responsibility for the technical content. In terms of the vision and the business case, that was the result of all three of us working together.
We remain close friends today because developing the Uber paper was a bonding experience; we were in the trenches, battling, and not only did we survive, but the product we put together laid the foundation for the urban air mobility (UAM) industry. We are all very proud of what it has done—it has exceeded our wildest dreams in terms of being a catalyst for ecosystem development. When we started, we had no idea whether people would laugh us out of the park (and I'd be out of a job), or whether it would be embraced.
Within four years, we went from science fiction to having 10 vehicle partners who were all paying their own way to develop new eVTOL concepts, with wonderful diversity across those concepts. This comprised automakers, Boeing, big aerospace, little aerospace, real estate developers for vertiports, and major venture capital firms who were putting in billions of dollars. In fact, by the time Uber sold Elevate to Joby, over $4 billion had been committed to urban air mobility. Four years before that, it was a big zero.
So let's get on to what we got wrong. Uber Elevate’s most important product, I believe, was the economic demand model. We had one tool that essentially had all these different layers of analysis to determine the market feasibility of any city. We leveraged 15 billion trips of Uber data to give us a good understanding of where the trips were happening and how much people were willing to pay. We had layers for understanding the zoning across different cities and how much noise you could make. We had layers for the airspace. We had layers for the weather. We had layers for additional demand modeling. We got a bunch of anonymized cell phone data from StreetLight that we used to supplement the Uber trip data. So we really had the most sophisticated way of understanding market feasibility. To this day, nobody has done this as well as we did.
One of the key results that came from that very sophisticated tool was a projection of how expensive these trips were going to be, i.e., how much we could charge in relation to ground trips. We had a really good understanding of how much time we were going to be saving consumers and the elasticity of what people were willing to pay, but our initial projections in the white paper were optimistic, like any early product. To put that in context, our thinking mirrored one of the pioneers of AAM, Joby Aviation. JoeBen Bevirt (Joby’s CEO) wanted to get price down to $1 per mile, with the goal of “saving a billion people an hour a day.”
That means we were off by a factor of three; that’s enormous.
A dollar per mile is going to be really hard to do with these aircraft, at least in the first 20 years. I think we were overly optimistic about the economics because we didn't have a sophisticated enough understanding of all the complexity that makes up this new transportation system. So instead of $1 per mile, I think in the near term, you're going to be seeing what both Archer and Joby project, which is about $3 per passenger mile.
That means we were off by a factor of three; that’s enormous. But that's a five-year price. In the 10 to 20-year timeline, as the networks and the vehicles get into the next generation, you're going to be able to see $2 per passenger mile.
The good news is that Uber trips were about $1.80 per mile in a car. The vast majority of trips had one person in the car, so that really translates to $1.80 per passenger mile. So if eVTOLs can, in the longer term, get close to what Uber was very successful in making money at, then I think that's an amazing success. But I think getting to that initial projection of $1 per passenger mile will probably take many more years.
That's one of the reasons I'm really interested in, not just urban air mobility (UAM), but regional air mobility (RAM). Regional air mobility lets you cheat with the aircraft requirements: it lets you use runways to reduce the requirements and the complexity of the vehicle, thus allowing you to get costs down to less than 50 cents per passenger mile. You just can't do that when you're doing vertical takeoff and landing. It's always going to be on the order of four to six times more expensive to take off vertically than to use a runway.
In 2016, the focus seemed to be Urban Air Mobility. Why has the industry drifted toward AAM with a regional focus? It is due to better economics?
I think people still don’t understand the economics; until we have real operations, nobody is going to accept the projections as truth. People recognize that the future of aviation markets is much more than just urban air mobility. UAM is one facet of it, but regional air mobility has the opportunity to reach into rural communities and achieve an amazing thing, especially in the United States: bringing the same levels of job opportunities, access, and prosperity to rural areas that the urban areas currently enjoy.
It’s going to make America a less divisive and more constructive place to live, work, and play.
This is really important because if you look into the divisiveness that exists in the United States, a lot of it has to do with who we do or don’t interact with. The urban cores are becoming quite liberal and democratic, and then the rural areas are staying very conservative and Republican. Frankly, for the health of the country, we really need ways to provide the same prosperity and access to all of America. I don't want to get into politics, but I was in San Francisco for four years, and before that, I always lived in urban areas. With Whisper Aero, I very consciously moved the company to rural Tennessee, and that's because I wanted to live in the future that I was trying to create, where distributed aviation services provide this wonderful access. I can tell you, being totally immersed in Red America, you really understand better the disenfranchisement that's taken place through this urban and rural separation. I'm just so excited about the combination of broadband technologies that are now reaching these rural areas, along with the next 10 years of AAM being able to provide physical access as well as digital access to these rural communities—it’s going to make America a less divisive and more constructive place to live, work, and play.
You could run for president on that.
Okay, sure (laughs).
It’s even more than just UAM and RAM. It’s also this amazing unmanned aerial vehicle (UAV) market that's developing for package delivery, which is going to be way cheaper than putting cargo into big aircraft for distributed cargo missions. I don't want to leave that out; I really think there are just three fantastic opportunities. At Whisper we want to develop this next generation of electric propulsion that works as well for small drones as it does for nine-passenger aircraft or two-to-four-seat eVTOLs.
I understand that you work with Archer as a member of its Technical Advisory Board. Why are you bullish on Archer and how do you think the next few years play out in terms of this very competitive OEM landscape?
Really easy to answer: first off, I'm very bullish on both Joby and Archer, and I have no affiliation with Joby whatsoever. I've known them since 2010 when I issued the first contracts to get Joby started developing eVTOL aircraft in partnership with NASA. I've never made a cent off of Joby, but I can tell you that Joby and Archer have the best eVTOL concepts. The definition of best needs to be clarified when somebody makes a statement like that: in terms of performance—range, speed, payload—Joby and Archer are just ruling the day.
I don't mean to be rude to the slower lift-plus-cruise eVTOLs.
I don't mean that to be offensive to Volocopter, Lilium, or others, but I've analyzed every single vehicle. When I was at Uber, we had to know how each aircraft was going to perform, whether they were partnered with us or going to be competitive with us. Whether it's Beta or Airbus, I know exactly what their vehicles are going to be capable of. The bottom line is that anything in aerospace that is taking off the ground is going to be inherently expensive. It has very expensive development cycles, stringent regulations, and high certification costs. With inherently higher costs, you have to make sure that the vehicles have high productivity to be able to amortize those costs effectively.
I don't mean to be rude to the slower lift-plus-cruise eVTOLs, but when you're flying as slow as 40 miles per hour with Volocopter or 80 miles per hour with Airbus’ NextGen, you don't have the productivity to make money to offset the costs. Especially with Volocopter, this idea that you're going to fly around one passenger with a pilot who has a commercial rating. I know what their economics are, I've analyzed it and it doesn't make sense.
I don't mean to come across as saying that I have a bias for two manufacturers, but it's like: I know eVTOL aircraft better than anyone because I've been working on them longer. I know what matters, and the other aircraft just don't have the performance to be able to compete and amortize the costs effectively.
Additionally, the first generation of batteries is really expensive. If you have to do a deep discharge on a 15-mile trip like Volocopter and then recharge all the way back up, the batteries don't like that. Then you’re sitting on the ground for a long time charging. If you're sitting on the ground, that's even lower productivity than what Archer and Joby have figured out, which is you have to be able to do 15-minute trips. And you have to do them repetitively for at least a three-hour period during the peak mornings and the peak evenings.
I know both Joby and Archer’s teams really well. They both have excellent experience from Tesla, Apple, eVTOL, etc. Joby and Archer have the most talented teams. And I don't mean that as an insult—it's just a matter of experience with these sophisticated new technologies.
Speaking of superior versus inferior eVTOL concepts, can you tell me your view on the Chinese eVTOL developer EHang? I came across some instances on the internet where it seems supporters of EHang have a bone to pick with you.
I've been very critical of them for a long time. I very much believe in standing up for the technical truth as I see it. And I'll be the first one to say, “I don't know it all.” Sometimes I'm wrong, but I'm very active in engaging in public debate because I'm anxious for the community to get as wise as possible, as quickly as possible. I'm seeing investment of billions of dollars that are going to be flushed down the toilet because technically what they're working on does not make sense. I put EHang at the top of that list.
Until China is willing to grow up and be part of a sophisticated and safe aerospace industry, there's no reason to take EHang seriously.
I want to clarify: trolls are people who just badger people. When I comment, I do so in relation to companies and concepts, and never individuals. There is one individual—a fake individual—named Robin Bird, who isn't brave enough to use their real name and has anonymously harassed every single person that I know because I've spoken what I know to be the truth about EHang and its concepts. I really think it's important that people understand the difference between professional, rigorous debate that's trying to help investment dollars go to the best possible places, versus nasty trolls who pick fights with individuals and spout nonsense.
EHang doesn't follow the same rules as US and European companies. They don't report incidents, which is mandated by the Department of Transportation in the U.S. Anything larger than 300 pounds that has an incident has to be reported and investigated by the National Transportation Safety Board (NTSB). It’s just not the same in China; the same rigorous certification standards are not there. There is no visibility into the CAAC certification that EHang is supposedly completing, while for EASA and the FAA, there is significant industry and government collaboration to define requirements. Until China is willing to grow up and be part of a sophisticated and safe aerospace industry, there's no reason to take EHang seriously.
Are we going to lose some OEMs during this market downturn?
We're going to lose a bunch of OEMs over the next two years. I know this because I'm living the same reality that they all are—needing to raise venture capital to run a pre-revenue company. Over the last year, there has been a complete change in venture capital’s willingness to embrace risk, especially in the AAM sector. It is much harder to raise capital. If you don't have a near-term path to revenue in the next two years, I would say don't expect to be able to raise venture capital.
It sounds like you're not worried about Joby or Archer’s financial position.
This is the wonderful thing: if you look at the stock prices and valuations, Joby and Archer are sitting on more cash than anybody else. So, again, not to pick on Lilium, but they're scrambling for dollars because even with their latest raise, they only have a year of runway before they run out of money. That's not going to be nearly enough to get through certification and initial production. Joby and Archer are in really good places. It’s staggering that Archer actually trades for less than their cash value. I'll tell you, the only eVTOL stock that I own is Archer, precisely because the fundamentals across the team and the concept that they're developing are great. When you look at the stock price, they have more in cash than what you could buy the company for. If you look at EHang, they've got a measly amount of cash and yet they’re trading at something like 20 times cash holdings. How is that justified? In terms of value, I don't see it.
It’s staggering that Archer actually trades for less than their cash value.
It could be hard days for a lot of eVTOL companies, but you have certain companies that are really well positioned, both in terms of the cash that they have and their certification progress. I don't mean to speak for all eVTOL companies, but I understand Joby and Archer really well, and they are on a clear path to execute successfully for a 2024 vehicle certification. That gives me a lot of confidence, and I cannot say that about any other eVTOL developers.
Peter Thiel has a favorite interview question: what important truth do very few people agree with you on? In this context, I’m curious: is there something that you’re seeing in the AAM space that you think everyone else is missing?
This is such a great question. The whole reason we made Whisper is this: the final success of all these markets is not just technical and it’s not just economics; it is all about the consumers and the consumers accepting this new form of transportation.
Not only that, consumers will have to accept this new form of transportation in very close proximity to them—whether it's backyard drone delivery from Amazon, Wing, or Walmart; or regional air mobility where you're flying to these local neighborhood runways that are only 3,000 feet. Our company is right next door to the local airport, and we hear and see every single aircraft that lands. We hear them before we see them, especially if it's a Pilatus PC-12.
The community has the final say in the success of this market.
So the truth that people don't realize is that the community has the final say in the success of this market. A lot of them saying yes is going to be based on how much noise any of these aircraft make. Just this week in the news you have people in Arizona screaming about Walmart operations and how noisy those drones are that they're operating. They want them to just go someplace else.
The dirty little secret that we knew very well at Uber Elevate is this: if you want this industry to scale, you're going to have to have really quiet air aircraft that can do high-volume operations. The only companies I know that are really taking noise very seriously are Joby and Archer. And I will even challenge them: they have a great initial product for the first years of operations. But when they get up to hundreds and hundreds of flights from one location, they're going to have to be even quieter than they are today. And that's why we're so fixated and know that the future is all about who can be the quietest across these three markets while still being really efficient and really fast.
I will add a little teaser: we have a lot of DoD funding already coming to Whisper, and we know from their evaluations and other industry evaluations that we have the quietest way to make thrust that has ever existed, and at the same time we're significantly more efficient. That is what makes me so excited about the future. The engineering efforts that are out there right now are really good—and I don't need to diminish them—but they are the Model T of AAM. We’re in the 1910s of the automobile industry equivalency of AAM. A new wave of technology will include Whisper’s propulsors and new lithium metal batteries, and it’s going to make all these aircraft so much more capable, and allow communities to embrace them with open arms.
You had me until you said that Joby and Archer are the only two that are taking noise seriously. Lilium!