11.15-16.23-RD-Transcend-Air

PETER SCHMIDT: Good afternoon. I'm Peter Schmidt, co-founder and coo of Transcend Air. My MIT connection is that I was an undergrad here. I got most of my way done with a physics degree, and then I switched to computer science, which I do not recommend doing.

[LAUGHS]

Embarked on a career in high-tech software and networking, went back and got my master's in management from the Sloan School. I've had a career as a serial entrepreneur with three successful exits of my own. My co-founder, Greg, adds another two. So between us, that's five. We both switched career paths from high-tech software networking to aerospace about 13 years ago. And the ultimate outcome is Transcend and what we're doing today.

Helicopters are really useful, but they're slow. If they could go as fast as jets, you could sell a lot more of them. And that's the problem we're solving, simply put. We see that fast helicopter replacements worth $1 trillion with both civil and military applications. This is going to change travel like nothing has since the introduction of the jet airliner. We can get you from Manhattan to Boston in 32 minutes. And I hasten to add that's at a lower door-to-door cost than taking a taxi to the airport, the Delta shuttle, and a taxi to your destination in New York.

So you're going to see a really cool-looking aircraft, and you're going to think it's for rich people. It's not. The real point of this is to fix regional air transportation and force the airlines to fix the rest of the network by doing so. What it comes down to is you won't have to go to an airport. Vertical takeoff and landing means no airports, and that means no congestion. Forget TSA. Forget lines to board. Forget sitting in traffic to get to an airport. This is our route network played out to about 2030. And that comprises about 20% of the air travel volume in the US.

This is the aircraft that we're going to market with. It's called the Vy 421. It's 421 because it's designed to cruise at 421 knots. That's 486 miles per hour. It's three times faster than helicopters. So it combines helicopter versatility with the speed and comfort of a light jet. We are the world's experts on high-speed vertical takeoff and landing. We have an amazing team. Our core executive set here is my co-founder, Greg, myself, Bob Schulman, who is our chief software officer.

He has safety critical software running on B-1, B-2 F-22, F-35, the Bradley Fighting Vehicle, all the special ops helicopters out there. Jeff Spitzer, our VP of engineering, has brought 10 aircraft into service over his career so far, one of which he was the original co-inventor on the Predator, the military drone you've probably heard of. We've spent 10 years optimizing our aircraft design, and I mean optimize seriously. As the product manager, I can find no change to our design at this point that doesn't make it cost more, go slower, weigh more, or all three.

And we've so far won four competitive Air Force contracts. We have more in the pipeline. The Air Force wants the-- for military use now. This aircraft is a true dual use aircraft. It's the same for civil and military. You just change the seats and the paint. As you can see, the magenta volumes there have been reserved for military applications. That's where we put the coms, the countermeasures, and the weapons systems.

This aircraft's going to be irresistible to high-end helicopter customers because it's three times faster, has three times the range, features a stand up cabin-- which most helicopters, you're like this-- and a whole airframe parachute, which is not something we invented. It's been in use for over 20 years in the Cirrus family of aircraft. And it's resulted in 3X improvement in safety versus what helicopters can achieve with their architecture.

This is not yet another eVTOL play, which you may be familiar with. Companies like Joby, Archer, and others, names you might have heard. eVTOLs can't replace what helicopters already do. The limitations of batteries means they go shorter distances slower, carrying less. That makes them no competition at all to what we want to do. In our markets, we need to go fast and longer distances.

And as you can see in the background there, those yellow orange boxes, that represents the range and speed envelope of eVTOLs. That the diagonal lines up and to the right connect the corners of what our aircraft can do. So again, we're three times faster or more than eVTOLs. So decarbonizing aviation's imperative. And the only practical way to get there by 2050 is going to be a massive investment in sustainable alternative fuels. Our favorite type of those are e-fuels.

And the reason that's the only way to get there is that any decarbonizing effort is going to require massive investments in production, either of electricity and batteries, or hydrogen and hydrogen storage, or sustainable alternative fuels. But SAFs can use the existing liquid fuels infrastructure. And that makes them really the only practical way to address aviation's carbon impact. And so that's what we will be doing with our aircraft as well.

Our go to market is to license our technology to an aerospace and defense OEM manufacturer, and use those funds to get us into our civil applications. The way we see it, given how compelling the value proposition is for our aircraft versus existing helicopters or tilt rotors, major aerospace and defense OEMs are going to find that they want to compete for the opportunity to partner with us in this regard.

Now we understand the path to success with this aircraft. My co-founder and I, being successful serial entrepreneurs, did not want to make a business that was going to die in the valley of death or fail to have a real market on the far side, as far too often happens with aerospace startups. So we studied every major civil and military program we can look at for the past 50 years. We understand why they failed. We understand why the one succeeded. And we've distilled those lessons into our business plan. It's practical, methodical, and maniacally detailed. And again, that comes from the fact that I spent way more time on the first draft of this business model than I spent on my master's thesis.

What's great about it is it will yield a large, profitable business that we can sustain the profitability of with defensibility through intellectual property over time. So this is not yet another race to the bottom kind of commercial airline that we're going after on the commercial side. It's also going to strengthen our nation's defense. And with luck, one day, we'll see one of our aircraft hanging in the Smithsonian.

Our business model-- to develop and own the critical intellectual property in the vehicle architecture, how it comes together, and in the software that flies and controls it, and let established partners do the hard work of manufacturing and et cetera that they're already good at. So you can see we've got some amazing partners today, and we're looking for more. That's why I'm here today. So come find me at the booth afterwards. Thank you.

[APPLAUSE]

SPEAKER: Excellent. One more round of applause for our incredible startups today.

[APPLAUSE]

Really well. So now, we are into an exciting portion of the day, and not just because it's lunch time. But it's lunch time with a startup exhibit. So you will be seeing all 10 presenting startups exhibiting during the lunch hour in addition to three MIT-connected startups that did not present but will have an exhibit booth-- Nurture, [INAUDIBLE] AI, and Zennovate. So we really encourage you to explore those conversations and the exhibit, meet the founders that you heard from this afternoon, and to enjoy your lunch.

And so before you head off, Yue and Sheryl will now provide a very brief overview of the workshops that will follow the lunch break. So thank you all once again.