It's a boat, it's a plane, it's REGENT's Seafarer | E2205

Register for Founder University Japan's Kickoff: https://luma.com/cm0x90mk Today's show: *The key to avoiding long airport delays? Low-altitude sea planes! Why didn't you think of that? We've got an awesome line-up of TWiST 500 founders giving us an inside glimpse inside their startups on this Friday special edition. FIRST: Billy Thalheimer of REGENT introduces us to their aircraft/boat hybrid The Seaglider, and walk us through how it all works, AND why they're operating in BOTH the commercial and defense sectors from their Rhode Island HQ. THEN, we've got Convexia co-founder Ayaan Parekh showcasing how they're using a collective of specialist AI agents to exploit other pharma labs' leftovers and turn them into new drugs and treatments for rare diseases. FINALLY, Hunter Leath of Archil joins the show to tell us why efficient utilization of cloud data remains a surprisingly complex, and unsolved problem. His solution? Caching-as-a-Service! Find out how it all works, and why pre-caching is SO difficult to do, in this TWiST exclusive chat. Timestamps: (03:01) Billy Thalheimer of REGENT introduces us to the Seaglider (05:06) Inside the EV aircraft/boat hybrid's three modes of operation (08:22) How REGENT uses low altitude flight to avoid airport-related hassles (9:42) Sentry - New users get 3 months free of the Business plan (covers 150k errors). Go to ⁠http://sentry.io/twist⁠ and use code TWIST (13:57) The converging tech that makes Seaglider possible (18:20) How REGENT is operating in BOTH the commercial and defense sectors (19:39) LinkedIn Ads - Start converting your B2B audience into high quality leads today. Launch your first campaign and get $250 FREE when you spend at least $250. Go to ⁠http://linkedin.com/thisweekinstartups⁠ to claim your credit. (25:05) Why Rhode Island?! (29:23) Pipedrive - Bring your entire sales process into one elegant space. Get started with a 30 day free trial at ⁠https://pipedrive.com/twist⁠ (31:04) Convexia co-founder Ayan Parekh joins Alex to discuss "the world's first AI-maximalist pharmaceutical company" (33:02) Using AI agents to revisit leftover bio IP and unused data (33:22) Why so many drugs fail to reach market (35:46) Applying different agents to different kinds of tasks (44:26) The unique opportunities posed by rare diseases (46:58) On the road toward vertical integration (50:48) Hunter Leath of Archil tells us why utilizing cloud data effectively remains a complex, unsolved problem (51:56) What is "Caching as a Service"? (55:53) Why pre-caching is NOT obvious and "tremendously difficult to do" (57:00) Why the major cloud players didn't built this themselves (01:00:37) Deliberately keeping the focus narrow… for now… Subscribe to the TWiST500 newsletter: https://ticker.thisweekinstartups.com Check out the TWIST500: https://www.twist500.com Subscribe to This Week in Startups on Apple: https://rb.gy/v19fcp Follow Lon: X: https://x.com/lons Follow Alex: X: https://x.com/alex LinkedIn: ⁠https://www.linkedin.com/in/alexwilhelm Follow Jason: X: https://twitter.com/Jason LinkedIn: https://www.linkedin.com/in/jasoncalacanis Thank you to our partners: Sentry - New users get 3 months free of the Business plan (covers 150k errors). Go to http://sentry.io/twist and use code TWIST LinkedIn Ads - Start converting your B2B audience into high quality leads today. Launch your first campaign and get $250 FREE when you spend at least $250. Go to http://linkedin.com/thisweekinstartups to claim your credit. Pipedrive - Bring your entire sales process into one elegant space. Get started with a 30 day free trial at https://pipedrive.com/twist Check out Jason's suite of newsletters: https://substack.com/@calacanis Follow TWiST: Twitter: https://twitter.com/TWiStartups YouTube: https://www.youtube.com/thisweekin Instagram: https://www.instagram.com/thisweekinstartups TikTok: https://www.tiktok.com/@thisweekinstartups Substack: https://twistartups.substack.com

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  So how do you manage to have a thing that flies and doesn't use airports? It feels like you've hacked the system.

• 0:06Speaker 01

  We are creating a fundamentally new vehicle. It goes fast, it flies low, it's sort of operating in this different way. Sea gliders are sort of hybrids of boats and planes, sort of use the best of both worlds. We'll go from Providence here to New York. That's about 180 miles. We can do that on battery technology. So you're going to board right next to the city center. We don't need to travel to an airport. It's floating at the dock like a boat. Then we're going to hydrofoil through the harbor or through the bay. We're going up to about 50 miles an hour on those hydrofoils to maneuver through the crowded waterways. We take off from those foils, so it's float, foil, fly.

• 0:41Speaker 00

  This is exactly what I was hoping to get because I do go to New York and currently it takes three and a half, four hours on Amtrak when the trains are on time, which just seems archaic in the extreme and unimproved since like 1860.

• 0:53Speaker 01

  Technical hard part of what we're doing and why we can only do this now with electric propulsion and digital flight control systems.

• 1:00Speaker 00

  Where are we in terms of progress? This week in startups is brought to you by Pipe Drive. Bring clarity and control to your sales process with Pipe Drive, the number one CRM for small and medium sized businesses. Supercharge your sales today. Start with a 30 day free trial. pipedrive.com/twist. LinkedIn ads. Start converting your B2B audience into high quality leads today. Launch your first campaign and get $250 free when you spend at least 250. Go to linkedin.com/thisweekinstartups to claim your credit. And Sentry, your team should be focused on shipping features, not chasing down bugs. New users get three months free of the business plan, which covers 150,000 errors.

• 1:45Speaker 00

  Go to sentry.io/twist and use the code TWIST.

• 1:50Speaker 00

  Welcome to This Week in Startups. This is Alex. It is Friday, November 7th, 2025, and we have three awesome interviews for you today. That means three Twist 500 startups, three founders and three chances to learn from some of the best out there today. First up on the show, Regent. It's a Rhode Island based electric boat hydro- Hydrofoil airplane startup that could shake up both how people commute today and also play in the rising startup defense market. I love this company. Then Convexia, a self-titled AI maximus pharma company. It wants to mine IP and bring drugs to market that may be overlooked with a commercialization twist in the near term that I absolutely love. It's brilliant. Then to close

• 2:31Speaker 00

  off, Arkil, they're building a tool that helps developers interact with cloud data as if it was local, something that matters quite a lot in the AI era because companies really want to bring their own proprietary data to bear, but may not have it on site. I learned a lot. I hope you do too. Three interviews. Let's start with Regent now.

• 2:51Speaker 00

  Here in the US, trains are a joke, ferries are under capacity, and our airports are creaking because there's too many people that want to get around. Essentially, we have cars or very little else. But there is a company called Regent that wants to make electric sea gliders that are going to take us around the coastal regions quickly and safely. I'm excited about this because I want to use it. So please join me in welcoming to the show. It's Regent's Billy Talheimer. Billy.

• 3:15Speaker 01

  Alex, good to be here.

• 3:16Speaker 00

  I'm so happy that you're here because I never get to make niche Rhode Island jokes in the pre show. So thank you for showing up. But first, let's talk about the technology here. This is not a seaplane. This is not a hydrofoil. You guys at Regent are building something that is kind of in between them using wing and ground effect. So for the folks out there not in aerospace, what the hell is that? And why do you like it?

• 3:39Speaker 01

  Yeah, well, definitely. Next time we're gonna have to do the show in person. We'll just walk right down the road and shoot in person. We'll do it from a sea glider.

• 3:45Speaker 00

  Sold.

• 3:46Speaker 01

  Regent builds sea gliders, as you mentioned. Sea gliders are sort of hybrids of boats and planes, sort of use the best of both worlds. As you mentioned, the the technical part is we are a hydrofoiling wing and ground craft. There's a lot there. What does that mean? We are wave tolerant and super efficient. So sea gliders use hydrofoils to rise up out of the water, giving us very high wave tolerance, therefore, high utilization. You can rely on sea gliders. They operate in all weather conditions up to five foot waves, which is basically hurricane. And then when we do fly, we fly on this cushion of air over the surface of the water called the ground effect. Sort of think about it as Compressed air under the wing between the wing and the water.

• 4:31Speaker 01

  Same thing that you see birds flying on when they're flying low over the surface of the water. It makes it very aerodynamically efficient for us to fly. Uh, and that allows us to get very long range on battery technology. Uh, 180 miles on our battery electric version. So overall, there are a lot there. We float, foil and fly. We operate in all three modes.

• 4:53Speaker 00

  Okay, so I presume that I start floating at rest and then I'm, I'm foiling at middle speeds perhaps? And then I'm flying a couple of feet, I think, off the ground, off the sea, I suppose, at peak speed.

• 5:06Speaker 01

  That's exactly right. We'll, we'll go from, uh, we'll go from Providence here to New York. That's about 180 miles. We can do that on battery technology. So you're going to board right next to the city center. We don't need to travel to an airport. It's floating at the dock like a boat. Then we're going to hydrofoil through the harbor or through the bay. We're going up to about 50 miles an hour on those hydrofoils. We're using, uh, technology from America's Cup and SailGP. You know, these advanced racing, yachting worlds to maneuver through the crowded waterways. We take off from those foils. So it's float, foil, fly. Take off in the air, actually retract the foil. So it's like takeoff gear instead of landing gear. And then we fly on that cushion of air. We'll be about 30 feet over the surface of the water.

• 5:47Speaker 00

  That's not very high at all. That seems actually quite pleasant.

• 5:50Speaker 01

  Yeah, it's pleasant. It's, it's high enough that the waves aren't a huge issue. So again, we want to be able to take off and operate in, you know, a, a wide range of weather conditions. Low enough where we still get that compressed air effect. So we get the long range. We'll fly 30 feet over the water, zip on down to New York. We'll be there in about an hour and the ticket price is less than a hundred bucks. So we're talking about like high speed rail and every coastline on the planet.

• 6:13Speaker 00

  That's why I started with public transit because it turns out that building high speed rail in the U.S. Is impossible because we have, uh, a multi stakeholder form of governance and land ownership. And that's tricky. But this is exactly what I was hoping to get because I do go to New York and currently it takes three and a half, four hours on Amtrak when the trains are on time, which just seems archaic in the extreme and unimproved since like 1860. So I'm stoked that this is coming. Where are we in terms of progress? Cause I went through your guys' company timeline, you know, opened your DC office in 24. You kind of picked, um, uh, you broke ground on your manufacturing facility here in Rhode Island in January of this year. And you started sea trials in March for Viceroy, your first sea glider that is a little bit smaller than

• 6:57Speaker 00

  your later one. But I'm kind of curious how far this is from commercial application, because that's what I'm clearly waiting for.

• 7:05Speaker 01

  We are moving really fast. Uh, so as you mentioned, that Viceroy sea glider prototype is in the water right now undergoing sea trials. We, we started that in March. Uh, Viceroy is our first product. So that carries 12 passengers or 3,500 pounds of payload on our cargo and logistics missions. Um, Viceroy prototype is in the water right now. You know, the hard part of building this machine that floats, foils and flies is that we're simultaneously building the fastest hydrofoiling boat on the planet. And then we're also building the slowest flying machine on the planet. At the same time, that's why this has never been done before is because those two speed regimes have not been able to overlap. So

• 7:49Speaker 01

  we're, we're bringing up the hydrofoil speed, bringing down the flight speed and we're able to overlap them for the first time with our electric propulsion, digital flight control technologies.

• 7:57Speaker 00

  We'll, we'll get to the EV side of this in a second, but, but the speed of the air component to this brings a question up because it feels like you're cheating in the best possible sense because going to the airport sucks, going to security sucks, waiting at the gate sucks, being crammed into a Southwest, you know, Boeing 737 sucks. The whole thing's miserable. Uh, so how do you manage to have a thing that flies and doesn't use airports? It feels like you've hacked the system. So is the low speed a component of that?

• 8:24Speaker 01

  It's actually the low altitude on that front. So the, the low speed allows us to use the foils. There's, there's sort of a top speed of the foils waters 800 times more dense than air. Right? So you only go so fast through that. And then there's a low speed of landing, which is you need enough air going over the wings to generate lift. So that's why you see, we have that distributed propulsion system, a lot of different propellers.

• 8:45Speaker 00

  Yeah.

• 8:45Speaker 01

  Blining the wing, we're sort of blowing air over the wing, tricking. Into generating high lift at low speeds. And in so doing, we can slow down that takeoff speed and for the first time overlap it with the hydrofoil speed. So that's sort of the the technical hard part of what we're doing. And why we can only do this now with electric propulsion and digital flight control systems.

• 9:05Speaker 00

  How do you have so many propellers, right, pushing so much air to create enough lift to make this happen? But not end up with a lot more forward speed?

• 9:14Speaker 01

  We can size the system with these electric motors, which give us, compared to sort of conventional jet engines or internal combustion engines, we can really size how much power we put anywhere, how much thrust we're putting places. We can really dial that in to sort of be the perfect amount and also make it an efficient system for our long range operations. So that's sort of the big unlock, right? We can do these unique configurations and we can distribute propulsion wherever we want it. And we can dial it in with electric motors and batteries.

• 9:45Jason Calacanis?

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• 10:29Jason Calacanis?

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• 10:54Speaker 00

  To me, this is competitive with trains, for sure. It's competitive with all sorts of other kind of ground transportation. And it's better than than flights for a lot of things. I will never have to fly to Newark again. For example, I'll just take a boat.

• 11:07Speaker 01

  Or Yeah, take the boat. Exactly. It's a sea glider. It's a boat.

• 11:10Speaker 00

  Kind of a boat, kind of a plane. I'm going to have to figure out how to talk about it.

• 11:13Speaker 01

  Well, it goes back to your previous point of, you know, what what allows us to fly without using the airport? Because we stay in that ground effect, because we're within a wingspan of the water, actually about half a wingspan at that 30 feet. We are regulated under the Coast Guard as a vessel. There is a special rule in US law that is also mirrored in international law and regulation that this kind of vehicle, and a sea glider is a wing in ground craft, is a vessel under maritime jurisdiction. And that makes sense because we stay over the waterway. We do not rise up to airport altitudes or go into airspace. In fact, we're flying below the height of a sailboat mast and well below the height of a cruise ship. So we're in the maritime domain. And that's why this is regulated as a boat.

• 11:58Speaker 01

  We call it a boat. We have a lot of boat builders on the team.

• 12:01Speaker 00

  Here in Rhode Island, there's a lot of boats. So you'll have to deal with traffic. You're also talking about a deal. You guys did a joint venture with the UAE to, quote, "bring manufacturing and aftermarket services for Viceroy and similar to the UAE." Lots of boats there. So how do you handle regular maritime traffic when you're going a multiple of the speed of any ship that might be in and around the Viceroy's area?

• 12:25Speaker 01

  You mentioned the boat builders in Rhode Island here. And that's actually one of the reasons why we're here is sort of, you know, a non-characteristic startup market. That's actually perfect for us because we can leverage this incredible local talent that we have here in building composite racing boats. It's like the center of the sailing racing world. But in terms of traffic avoidance and maneuvering, that's where float, foil, fly comes in. Because a conventional seaplane, you think about it just goes from float to fly. So you need to clear these long takeoff routes. You need to get to very high takeoff speeds to get on the wing. In our case, we don't need to do that. We can separate our high-speed takeoff and landing operations. From our docking operations. And so we can be hydrofoiling again at 50 miles an hour.

• 13:09Speaker 01

  So that's like highway speeds. We can actually, it's almost like a high speed taxi. We can go very far from the dock. We can go through rivers or bays or harbors on the foil where we're as maneuverable as any other boat. And then we can take off once we hit the open water. So here it'd be like, we get south of Newport and we take off south of the bridge.

• 13:26Speaker 00

  Got it. So essentially because you'll be being a boat around other boats, there's not much of an issue. And then when you get out where there aren't boats, then you can just fly.

• 13:34Speaker 01

  Exactly, exactly.

• 13:35Speaker 00

  That's lovely.

• 13:36Speaker 01

  It it's makes sense.

• 13:38Speaker 00

  What changed in technology terms to allow this to be possible now? Because when you explain to me, the combination of float foil fly seems quite obvious, like, oh, God, of course, why not? And so it was the composites that have changed. Was it battery technology? Was it just people finally getting around the idea that we will have electric planes? Like, what changed?

• 13:57Speaker 01

  Yeah, there's really three big things. The first is, you know, hydrofoil technology being used in the America's Cup for the past, say, decade or so, but really seeing a lot of maturation in that technology and the modeling of it, the hydrodynamic modeling.

• 14:12Speaker 00

  Interest of it.

• 14:13Speaker 01

  Right? It's sort of like how we saw a trickling down, or there's always been a trickling down of the most advanced automotive technology from the racing world and F1 into sort of commercial automotive. All of this incredible racing technology in America's Cup world did not have an outlet until now. It's like we can use that hydrofoiling technology. And I think you probably seen the listeners have seen around a lot more applications of hydrofoils. There's hydrofoil boats and hydrofoil surfboards and all these things.

• 14:41Speaker 00

  There's the famous Mark Zuckerberg with sunscreen on his face doing the, yeah.

• 14:45Speaker 01

  He was doing that for us, really, to try to, you know, advance the state of awareness of hydrofoils.

• 14:50Speaker 00

  That's why he's an early investor in the company.

• 14:52Speaker 01

  Great partnership, really great partnership there. So, um, so, you know, hydrofoil, so we're capturing that hydrofoil wave. Next is electric propulsion, that doing something like blowing the wing like that to enable takeoff from a hydrofoil. At a relatively low flight speed, I mean 50 miles an hour is very low speed to take off a plane. And so that is enabled with electric propulsion and not only unlocks that takeoff and landing operation, also brings down that cost incredibly. If I told you you could get, you know, from home here in Rhode Island to New York in an hour, but it was going to cost you the same as a flight ticket, it may not be that interesting. But if I could say it's going to cost you less than your train ticket, uh, you know, maybe less than the tolls you're paying on the road anyways,

• 15:34Speaker 01

  and it's faster, and it's greener, and it's more comfortable, all of a sudden you're way more interested. So we bring down that maintenance cost by switching to an all-electric system.

• 15:42Speaker 00

  You should just match whatever I pay for Amtrak, which is several, I think several hundred dollars to get from Providence to New York City, for example. I mean, if you guys are cheaper and faster, I mean,

• 15:54Speaker 01

  It's game over.

• 15:55Speaker 00

  It's absolutely game over.

• 15:56Speaker 01

  And so the, the last piece now, uh, because the control of that, float, foil, and fly, all different modes, all different controls. So the last part of this is the flight control system. So we now have like computers and softwares. We have this incredible, you know, half of our engineering team is software engineers. So we have this incredible control system to keep it safe in all modes to the point where you don't actually fly it when it's a plane. We have this autonomous control system that governs it and makes sure you're safe in your flight envelope and controls that height above the water. So the only thing you do as the captain is boat controls, left and right, fast and slow. And it just locks you in on that 30 foot plane. So now we can train mariners.

• 16:36Speaker 00

  So it's kind of like super cruise for like cars in that it does the, for cars, it's this is the person in front of you tracking things. But you're just really doing left and right. So in this case, you're doing kind of the same idea. You're doing boat controls for a plane. Well, that solves your pilot problem right there. Because if you can have mariners, and there's a lot of people out there who, who know how to do boats. So what do you think that's going to take in terms of time and money to get like, I don't know, let's say a tugboat captain geared up and ready to rock a regent?

• 17:02Speaker 01

  Yeah, we're working on the training course right now. We actually have some great partners on that. We expect it to be about a four to six week course to go from, say, your, your trained commercial captain into a sea glider because the operations are very similar. Uh, and it's really just familiarity with, you know, the speeds and some of the systems. Uh, but you know, I'm a pilot, my co-founder is a pilot, a lot of our teams are pilots coming from the aviation world. So much of your pilot training is how to take off and land and how to recover from an unusual attitude and all these failure mitigations and a sea glider, you don't even have control of that. You're driving a boat and if something goes wrong, you land, press the land button.

• 17:38Speaker 00

  I googled what we were talking, the, uh, the minimum takeoff speed for a Cessna one forty-two, but I have most of my flight experience in is about fifty knots. So, you know, that's a number that comes up quite a lot in this conversation. Uh, you guys have talked about having, it was seven billion dollars in orders, I think at the end of like twenty-three, and I think it was nine billion in backlog by the end of twenty-four. That's great, Billy, but why not not sell it and make your own coastal airline that just consumes tons of business and becomes enormous? Like, why, why sell it? Why not just run it?

• 18:14Speaker 01

  There's really three reasons. Uh, the first is, uh, brand recognition and, you know, we are creating a fundamentally new vehicle. It, it goes fast, it flies low, it's sort of operating in this different way. Um, you know, I do expect a lot of people to just think this is an incredible experience. The ride is going to be smooth. You know, if you're afraid of heights, this is a great thing for you. Um, but it's net new and, and I think there will be a lot more brand recognition by taking the service with a trusted airliner, trusted ferry company where you're already operating verse, you know, jumping on this net new Regent system. It also allows us sort of to use a very similar business model in selling to defense, which is actually, I would say, one of the fastest growing parts

• 18:56Speaker 01

  of our business and not operating in defense, uh, as commercial. So, you know, that's one. Two is from an economic perspective, we can sell the sea gliders, get them off our balance sheet and onto our customers' balance sheet as owners and then Regent participates in the aftermarket maintenance. Uh, and then number three, if you look at value accretion across, say, airlines today.

• 19:18Speaker 00

  Versus Boeing.

• 19:19Speaker 01

  Exactly. If you look at Boeing and Airbus and all of the tier one suppliers, the engine companies, avionics companies, significantly more market cap and value there than there is in all of the, all of the world's airlines. So that, that took us down this road.

• 19:33Speaker 00

  What is the United Airlines price sales ratio?

• 19:36Speaker 01

  Airlines tough. And airlines are tough, a tough business. We're going to help though. You know, there's, there's much better margins in operating sea glider lines to those entrepreneurs out there that are interested.

• 19:44Jason Calacanis?

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• 20:27Jason Calacanis?

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• 21:05Speaker 00

  Maybe the better question than Billy is, do you think there's going to be eventually companies that specialize in using Regent Craft to run what we might call regional C routes? Because United guy, shout out United, they've flown me so many miles. But I'm not quite sure I need to have United run my Providence to New York City, you know, Regent craft line.

• 21:26Speaker 01

  I mean, we are already seeing it. We're seeing so, you know, in that order book, which is now over 10 billion, including firm orders. You know, we're one of the few, few companies in the space where we're taking substantial non-refundable deposits, millions of dollars worth of these non-refundable deposits that Regent is using to subsidize the build of these vehicles and actually non-dilutive capital for us, which is fantastic.

• 21:50Speaker 00

  What's the list price for Viceroy when it comes off the manufacturing?

• 21:54Speaker 01

  So we haven't been public with the list price. We have an awesome sales team that's going out there, but I will say it's sort of between, you know, a Cessna caravan and a twin Otter. That, you know, we're sort of in the middle of the size class. Our payload at 12 passengers and 3,500 pounds is right in between. And so your upfront cost for the vehicle for the sea glider is right in line with those competitors. And then the operating cost is half of those competitors. So huge, huge value in that operating cost. But yeah, so we're seeing entrepreneurs put together now sea glider lines and some of our orders are from net new operators that are saying we are forming to operate sea glider. So we have the airlines, we have the ferry

• 22:35Speaker 01

  companies, we have energy companies and oil and gas companies, we have hotels.

• 22:40Speaker 00

  No more, no more helicopters out to oil rigs.

• 22:42Speaker 01

  It's a big market.

• 22:43Speaker 00

  That's a huge market.

• 22:45Speaker 01

  Exactly. And then one of the biggest ones is actually defense now too. That's, that's buying these, you know, we're, we're with the Marine Corps. We've been working with them for three years. We have $15 million worth of contracts with them to do this experimentation. And so the great thing is, you know, it's, I think it's hard to be a dual use company, but what we have here is an asset that actually works for both of these customers in very similar ways.

• 23:08Speaker 00

  Briefly, what is the defense application for the Viceroy? Because I can absolutely see it as a way to like, maybe move people between Navy ships, but I don't see as many obvious applications for it as I do with, say, unmanned aerial drones. So just fill that in for me.

• 23:23Speaker 01

  We really started with the Marine Corps on the mission of high-speed logistics and contested logistics, which is moving around island chains. We're sort of In the secular shift from desert operations, you know, Afghanistan, Iraq sort of conflicts to now distributed maritime operations, South China Sea, right? Exactly. Big island chains, long distance. We need more boats. We need faster boats. The boats we have today are slow. They're easy to hit with missiles and things. And the aircraft we have today, drones included, are still fairly expensive. And if you need the range to go between islands, you're building even more expensive systems and you still need land basing. So what we have is really in between. We're like a boat. We can operate

• 24:08Speaker 01

  from the water. We can sit out there indefinitely, but we have the the speed of a plane. And so that's a huge, huge gap that we're filling right now for Indo-Pacific operations. So we're doing contested logistics, which is moving people and supplies around island chains. There are, you know, drones out there right now, lots of drones, which is definitely a focus of DOD. But you can win a battle with the drones. You cannot take and hold land and win a war with drones. You need people to do that at the end of the day. So you still have to move people. When you're putting people into a fight to do that, you have to be able to take them home safely. And so Medevac is also one of our fastest growing applications for this vehicle of actually being able to go out, land on the water, rescue people and bring them home.

• 24:52Speaker 00

  So to be clear, you're going to be able to serve airlines, net new carriers, various military applications, and also I presume some of these rich people just buy these for themselves.

• 25:02Speaker 01

  Big market.

• 25:03Speaker 00

  Big market. Which brings me to my last, my last question for you, Billy, which is just, you're doing it in Rhode Island. And like, I, look, Rhode Island's a tiny state. No one knows who we are outside of like the Northeast. But I find it really exciting that not just regions are here. I mean, we were talking about that and systems before the call, and you mentioned Havik and Endural has the prisons here. What's the Rhode Island pitch? Like, what types of companies and startups should be thinking about putting down some boots here?

• 25:29Speaker 01

  Rhode Island is sort of in the midst of this maritime defense renaissance, which is very well aligned with, you know, national priorities and that that whole defense scheme I laid out. You know, national defense for the next decade plus is going to be water-based. And so you have a lot of sort of overlapping things in Rhode Island that make it compelling. Obviously, it's the ocean state. You have an air against the bay. It's an incredible testing facility. There's a great military presence here. Naval Service Warfare Center and the War College are here. So you get, you know, the top brass, the generals, the admirals, the decision makers coming into Rhode Island. And you can call them up and say, hey, we're a half hour away. Come check it out because everything in Rhode Island is a half hour

• 26:12Speaker 01

  away. So, you know, you can just come on over and check it out. So that's been great for, you know, engagement at the highest levels of defense leadership. One of our senators, Senator Reed, is one of the ranking members on both Senate Appropriations and Senate Armed Services. So he's an incredible support to companies in the state. And in being in a small state in Rhode Island, it's like he comes and visits, you know, quarterly, personally.

• 26:37Speaker 00

  You get so much more hands-on, like compared to like California, for example. I mean, I've run into, like, the mayor of Providence was just like eating in my local diner. And I was like, this is, this does not happen in San Francisco where I used to live, you know, like, you're not as abstracted from government. It's right there.

• 26:51Speaker 01

  Exactly. And then I'd say the last thing is we're in what's called Quonset Business Park here. So like General Dynamics builds their their nuclear subs here. And there's just this huge growth going on because of the compelling financing that the state offers. And we're just building factories left and right. Like Quonset is the factory factory right now.

• 27:09Speaker 00

  Is Governor McKee sufficiently engaged?

• 27:12Speaker 01

  For sure. I mean, I was with him last week. Super engaged in this, growing this out. The state is investing real capital into growing the manufacturing base here, all focused around maritime and defense. But for example, we are building our 255,000 square foot manufacturing facility that we were able to build. I mean, this is a $50 million project. We were able to build this as a series A startup that had raised a total of 60 million to date, you know,

• 27:39Speaker 00

  I know.

• 27:39Speaker 01

  Crazy leaning in from the state. It's, it's really incredible. So that facility will open in the spring. We'll start cranking out sea gliders for both those commercial and defense customers. We'll deliver our first sea gliders in 2027. But it's not just us, you know, Andorl's building their facility across the street.

• 27:58Speaker 00

  Yeah.

• 27:58Speaker 01

  All these other companies coming in. Saab is bringing their undersea warfare center. There's a good, you know, presence from Raytheon and RTX. Like, it is, it is a very cool state to be in right now.

• 28:08Speaker 00

  I mean, Narragansett Bay is essentially one large subpin. Like, let's be honest. Like, it's just, it's great.

• 28:13Speaker 01

  It's awesome.

• 28:13Speaker 00

  I love to be enthusiastic about a company and my adopted home state. So Billy, thank you so much. I will come down at some point and say hi and, uh, and just see what y'all are building. But 2027, last thing, early seven, later 27, when do these first touch customer hands?

• 28:28Speaker 01

  I would say, uh, second half of 27 is, is where we're, uh, focused right now. First half is going to be a lot of sea trials. So they'll be out on Narragansett Bay. They'll be working. They'll be in the hands of the Marine Corps, certainly, uh, you know, working on those missions as well. Uh, second half is those 27 deliveries.

• 28:45Speaker 00

  Can I come on a sea trial?

• 28:46Speaker 01

  You, you gotta come out. Yeah. Come on over. Just walk, just walk here.

• 28:49Speaker 00

  I think I will get in my EV and drive down, but, um, I would love to see this before it's fully baked and such because I'm a huge dweeb for both airplanes and boats and, uh, and getting places faster than Amtrak. So a pleasure. Um, Billy, it's regioncrafty.com and, uh, any job you're looking to fill, you want our shout out while we have you.

• 29:07Speaker 01

  We actually have a ton on regioncraft.com/careers. We're, we're growing right now. We're looking for, uh, you know, technical support on building the prototype. We're going to start to build our manufacturing team very soon as that building's, uh, soon to be open. So definitely, uh, go to that website there and check out careers. And we have a bunch of cool videos too. So.

• 29:25Speaker 00

  Billy, you're the best. Thank you, man. We'll talk to you in, uh, late 26, early 27.

• 29:30Speaker 01

  Uh, hopefully before then. We'll get you on the sea glider before then.

• 29:32Jason Calacanis?

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• 30:32Speaker 00

  If you listen to the show on a regular basis, you know, we talk about AI probably too much. The one thing we talk about in the realm of AI is agents, little things that can go out there and do stuff for you. This usually comes up in a context of SaaS or enterprise software, or something incredibly boring like expense reports, or I don't know, refactoring your spreadsheets. But there's a startup out there who wants to use AI agents to find old, unused bio IP, test drugs out, and maybe bring them to market. It's a really interesting idea. I love the company, and I wanted to learn more about both how it works and how fast it's going to change our world. So please join me in welcoming to the show. It's Ayann Parikh from Convexia. Hey, how you doing?

• 31:10Speaker 03

  Hey, doing good. Thank you so much for having me, Alex. Looking forward to chatting with you.

• 31:13Speaker 00

  My pleasure. I just love to talk about AI in a context that isn't like trading, or something involving enterprise SaaS. It's such a nice change. So Convexia, as far as I understand it, essentially wants to use a series of AI agents to find unused IP or just leftover ideas, vet those ideas, run business queries about how popular or commercially viable those drugs could be, and then help bring them to market. Is that fair?

• 31:40Speaker 03

  Yeah, pretty much. So we're looking at all types of drugs. They could be really early-stage drugs that are just sitting in labs. They could be shelved assets that are, you know, sitting in the shelves of these small, mid, or big pharma companies, or they could just be things that have been overlooked. We evaluate the science viability, the clinical viability, and the commercial viability to score which ones have the highest chance of succeeding, and which ones can save the most number of lives.

• 32:03Speaker 00

  And why are those the most two important metrics? Because I could think like, speed to market, or number of people you could impact, maybe on a non-life-saving basis, that would also be good vectors to judge against?

• 32:15Speaker 03

  Yeah, so I mean, when you consider like, what will bring a drug to market, and what will make it succeed, there's generally, or the way that we think of it is like, what will cause a drug to fail, essentially. And the three reasons drugs will not come to market are because either it's not safe and effective in human bodies, either there's too high of a clinical risk, meaning like, there's some manufacturing problem, or just running a clinical trial is really, really hard. Or it could be that there's no commercial viability, that there'll be, that there's already something out there that's way better, or the market size just isn't there. Or perhaps that like, an insurance company will never cover it because the standard of care is already so good. So those are the three key reasons why drugs will fail, and those are the, that's why we look at those and consider why they'll either succeed or not succeed in the market.

• 32:56Speaker 00

  Oh, no, that helps a lot. Because I was really curious about like, To me, there's a lot of ways you could approach this, but you have to narrow it down.

• 33:01Speaker 03

  Right.

• 33:02Speaker 00

  The thing that I was really kind of hung up on prepping for our job today was just how much leftover IP or ideas on the shelf or I don't know, preclinical trials out there. Like, how much stuff is there for you to go out and look at and run through the Agentic stock that you're building?

• 33:19Speaker 03

  Incredible amount. So just to put some statistics out there.

• 33:24Speaker 00

  Yeah.

• 33:24Speaker 03

  Out of all the drugs that enter into phase one, only about five to 10% ever even make it to market. And the percent of drugs that even make it to phase one is a really, really small proportion as well. So the point being that there's a whole bunch of preclinical drugs that are never making it to clinical trials. And that even when they are entering clinical trials, many of them are shelved for reasons beyond just the molecule not being good. For example, the clinical trial might not have been run the right way. Or a company might just have a change in strategic incentives or in strategic alignment. And now they just have this really cool drug that's just sitting on their shelves.

• 34:04Speaker 03

  So there's many, many examples I can list off as to when a potentially life-saving drug was just sitting pre-clinically in a lab for really, really long, or from where it's just sitting on a shelf even after entering clinical trials. There's a lot of examples like that. And I think as, you know, AI drug discovery continues to increase, the number of drugs being produced will simply continue to increase. Creating novel drug molecules will almost to some degree become commodified. But what will become really critical then is actually trying to evaluate which one of these will actually be successful. Out of all these drugs we're making, which ones of them will actually be successful in clinical trials? I think that's where the future of the space is going to. The future of pharma is an M and A. I can talk a bit more about why that is.

• 34:48Speaker 03

  But the larger point here being that we want to be on that forefront.

• 34:52Speaker 00

  Okay, so down the road, you know, five, 10 years from now, we're going to have AI models of sufficient quality to kind of come up with their own ideas. And then from there, we can vet them and then eventually get them to market if they work. Today, though, AI models, maybe not quite there yet, but there's tons of stuff out there that you can go out and mine. Okay, that makes sense to me. Glad that I understand that. The question is, how do you get access to the information? Because I presume that if I was Merck or some other large pharma company, if I shelved something. The public may not know about it. So how do you get the ability to have access to the information you need to do the work to vet as these drugs as possible candidates for Convexia?

• 35:29Speaker 03

  So I think the last mile of this is always somewhat relationship based. Like in order to actually strike that deal to some degree, you know, you need to know the right people. However, in order to like even start those conversations without already being in that circle, there's still a lot of predictive work that you can do to understand what is shelved and what was being pursued at some point. For example, you can mine company reports. You can mine how much a company is manufacturing certain molecules. You can mine patents. There's a lot of information that you can look at to predict what is being pursued and what is not being pursued. And we've built our models to be able to do that and predict which drugs will, you know, are up for market or are up to be sold or out licensed, which ones are just sitting there and which ones are actually being pursued right now.

• 36:10Speaker 00

  And this is the first layer of your agentic stack, as I call it, which is your sourcing agent, the thing that goes out there and pokes around and finds stuff and brings it back to the company. Is that part of the company's technology in production today? Is that going out there and doing this? Or is that something that you're working on building so far?

• 36:26Speaker 03

  We've done this. So we're not only using this in-house internally, but we've also sold this technology out to some customers as well. As we kind of talked about, it's not only does it mine both structured and unstructured data, but it's also kind of hypothesis generating and thesis aware, which is how we compare to a lot of these other, you know, typical competitive intelligence tools. That's really the alpha that we generate compared to those.

• 36:47Speaker 00

  Essentially, you better understand not only biology, but also the pharma industry. And so with that information, you can just make much better guesses.

• 36:53Speaker 03

  Exactly.

• 36:54Speaker 00

  Then comes the next thing, according to your rundown, which is the scientific agent. And this uses a number of, as far as you can tell, just like AI bio models. I'm not as familiar with how fast those are advancing. Can you give me just, I don't know, a state of the industry, if you will, for that part of AI?

• 37:10Speaker 03

  I guess the gold standard for a lot of these in silico tools has for the past years been physics based models. And that's been pretty true for a lot of, I mean, the entire world of computational biology and computational chemistry. But now we're kind of seeing a bigger and bigger push towards ML based models. Like just in the today, some cool models were released yesterday or a couple of days ago, Bolt's Gen was released from MIT. So a lot of really, really cutting edge tools are being released in this ML space. And I think like, when we look at the next five, 10, 15, 20 years, I think these ML models will become increasingly better and become the gold standard. Whereas right now and in the past, it's been more so the physics based models. So I think like, like in different worlds, there'll be different, I mean, in different

• 37:55Speaker 03

  kind of sectors of the science side of things, change will be seen differently. Like right now, if you look at like binding, ML based models are actually pretty good. But if you look at like toxicity, there's not a lot of good ML based models or even models at all. So I think like, there's a lot of room for growth in this space, but we are getting there.

• 38:12Speaker 00

  So physics based models for the work that we're describing to my non biologist's brain seem like the way to go. Why are ML based models in your view going to supplant and surpass them?

• 38:25Speaker 03

  Well, I mean, like, I think the pace of ML innovation is faster than anything we've ever seen before.

• 38:30Speaker 00

  Yep, okay.

• 38:31Speaker 03

  So like, they're growing faster than ever before. And like, even physics based models, they have a lot of limitations right now as well. Like, a lot of physics based models can actually predict everything that an ML based model can even like touch on. So I think like, the capability as far as like compute goes, as far as speed goes, as far as like raw capability goes, will soon be, I mean, the physics based model will be far exceeded by the ML based tools.

• 38:53Speaker 00

  That makes a lot of sense to me. Now, the next thing is your commercial agent. That one makes great sense to me. Then we get to the clinical agent side of things. This is when I get even more excited because you're talking about using digital twin simulations. And I think digital twins are a brilliant approach from, I mean, a lot of places, everything from, you know, factory design on down. But in practice, how good is digital twin simulation for individual drugs? Because to me, they could be a cool technology and maybe a tough use case. So I'm curious how well they they wed, if you will.

• 39:21Speaker 03

  Running digital twins is a very, very difficult problem. And I think like we're still exploring what that looks like to its fullest capability. Um, I think like kind of where we're starting is by not trying to boil the ocean and like, you know, try to create these digital twin simulations, but more so. Starting with like, okay, how can you understand the manufacturing? How can you understand the patient stratification? How do you understand even the trial design? Right. These are all small components of clinical trials that might lead to a to a clinical trial failing. But aren't like the whole, you know, digital twin in itself. So I think like the way that you eventually build to like being able to run digital twin is by. Starting off with smaller components. And that's what we're focusing a lot of our time on right now.

• 39:58Speaker 00

  So if we go from sourcing through science, through commerce, through the clinical agent, and we get all the way to a phase one trial. And you said earlier that what 5% of drugs make it through phase one, more or less, and you get out on the other side?

• 40:09Speaker 03

  No, so 5% make it to market. So 5% of make it to like through phase one, two and three.

• 40:15Speaker 00

  When you guys have this full pipeline in place, how much better do you think you'll be able to do on that 5% from start of phase one through production?

• 40:24Speaker 03

  I think significantly better. Um, we're, we've been doing a lot of internal backtesting and we're going to be publishing some really cool results. We're actually publishing a paper pretty soon that'll like talk about specifically some of these benchmarks. So I think. That's coming up pretty soon and we're, we'll be excited to kind of publish what those exact results look like soon. But. I mean, based on what we've been seeing, there's a lot of promising results that we've been seeing by just doing simple backtesting of our, of our agents.

• 40:46Speaker 00

  Are we talking about like 2% better from five to 7%? Which would be 40% is quite a lot. Or are we talking like 5 to 25% like a 5X?

• 40:54Speaker 03

  Yeah, something, something like the latter. Um, it's, it'll be significantly better. And that's just because like. Not only are we now able to predict like just commercial success, like that wasn't too difficult before, but like. Also being able to look at like the actual science of this, being able to understand like out of all the history of clinical trials. How much better is it to, you know, use this contract research organization or this manufacturing organization? Like, these are all very, very small details that we can actually fully understand and understand like how that affects the probability of success. Of a certain drug. And I think that's where we get really excited, um, because of how granular we can get with some of these, um, details.

• 41:31Speaker 00

  Well, I mean, that explains why you're you've decided as a company to sell bits of your technology to other people and you're seeing uptake from it. What does your customer base look like today? Are you selling to like the pharma companies that I can name? Or are you selling your technology more right now to companies that are more in the starter realm?

• 41:46Speaker 03

  It's not big pharma. Most of our customers are small to mid cap pharma companies. And then quite a few like investment firms as well. So things like biotech VCs, hedge funds. We're starting to work with some investment banking, like biotech IV firms as well. So that's what the primary customer base looks like right now.

• 42:04Speaker 00

  Is the future of Kondexia building technology that you sell to other companies that then use it to bring more drugs to market? Or are you eventually going to have the full stack put in place and you're going to run the process yourself? Because I could actually see a great argument for either direction for the company.

• 42:19Speaker 03

  I think the goal is to be like, as the tagline says, an AI maximalist pharma company. That's kind of the long term goal. The way that we think through our company is that in order to actually bring a drug to market, you need a lot of information, you need a lot of experience and you need the right team. And the way that we eventually get to that long term goal is by first working hand by hand with our current set of customers and partners to understand how they do it. And then we would leverage those insights to eventually run this process for ourselves. So the long term goal is to be fully vertically integrated and to be a pharma company.

• 42:49Speaker 00

  How far away is that? Is that five years, 10 years, one year? I just don't have a good guess.

• 42:54Speaker 03

  Yeah. So when you look at like a lot of the other companies that have done something similar for them, like Schrodinger is a good example, Recursion is a good example. These are all companies that it took them like anywhere from like nine to maybe 12 years.

• 43:05Speaker 00

  Okay.

• 43:06Speaker 03

  I think our pace can be much, much faster. We're already helping a lot of companies make decisions about drugs to in license. So I think like, I mean, we're keeping our eyes out if we spot something that really piques our interest and that makes sense for our portfolio. Like, there's no reason why we can't pursue it if you have the confidence that our models are actually that good and that it's worked in the past. So I think it could be as near as like, you know, a year from now, it could take a couple of years as well. It's pretty cool how quickly we can move in this space. And given the right circumstances, we can actually move on some of these drugs pretty quickly as well.

• 43:39Speaker 00

  Is your ability to move quickly predicated on simply the advancements in ML we were talking about earlier, or is there something else going on at the regulatory level that's providing the tailwind just to your pace?

• 43:48Speaker 03

  I think it's a bit of both. I think like we certainly understand that like these models will continue to get better and we want to be on that forefront. Um, I think Sam Alman talks about this, like as the model gets better, our company will also get better. So we're not really competing against models, but like it's very synergistic.

• 44:01Speaker 00

  Yeah, sure.

• 44:02Speaker 03

  Yeah. And I, I think like there's also some interesting regulatory tailwinds, specifically with rare diseases that we're very, very excited by. Um, like we can get into specifics of them, but like CNPVs and PRVs, these are all like vouchers that can essentially make it very lucrative or very like monetarily exciting to pursue a rare disease drug if you actually achieve some of these vouchers. I think this is like a really, really compelling space that, I mean, that's why we've been looking a lot into rare diseases, severely underserved market. And our model, like we're really, really small lean teams. So whereas like a Pfizer, they're looking for a $10 billion outcome, we can actually like an under a billion dollar outcome is incredible for our company, which is typically what the ultra rare or rare disease space might look like.

• 44:45Speaker 00

  Now, what is a good example of a rare or ultra rare disease that people listening might be familiar with? Cause I feel like we should ground that in something to get into an example.

• 44:54Speaker 03

  What's defined as an ultra rare is under 200,000 people get affected by it each year. So I mean, there, there's a lot of examples. K-SAX is, is a, is an ultra rare. Um, and there are also some more commonly rare ones as well, but um, anything that's kind of falls under that perspective is um, what would be defined as a rare disease.

• 45:09Speaker 00

  200,000 per year per around the world, not just here in the US.

• 45:14Speaker 03

  In the US.

• 45:15Speaker 00

  Oh, okay. So 200,000 in the US per year. That doesn't seem that ultra rare to me. That seems like my hometown times four.

• 45:21Speaker 03

  So, so that's, that's what rare disease is. Ultra rare would be under 50,000.

• 45:25Speaker 00

  Still, that's my hometown. I grew up in a town of 50,000 people. I, that, that's a non insubstantive. I thought it was like, fine. No, I, I had this entirely wrong. Okay. But essentially because convexia is so lean and because you don't run wet labs, you have lower operating costs, et cetera, you can afford to go after these drugs that don't match the cost structure of one of the pharma companies that we can manage.

• 45:46Speaker 03

  Exactly.

• 45:47Speaker 00

  How many of these rare diseases are there out there that people need help with? Like, is it, is it, I don't know, a couple thousand? I mean, how long will it take to chew through them?

• 45:55Speaker 03

  An incredible amount. So I guess for some perspective, out of all the rares and ultra rares that are known right now, only 5% of cures. So 95% of the market is still up for grabs. So there's an incredible like thousands upon thousands of ultra rares and rare diseases that are like, that are that there's no solution for right now. And we've been spending a lot of time thinking about like, not only like, developing new cures, but also repurposing existing drug composition. We've been working with a select number of, so select number of partners to understand, like, can we build out repurposing models using some version of our agents to help them find, how some approved drug can be repurposed for an existing or like for some rare ultra rare disease.

• 46:40Speaker 00

  So a bit like how GLP-1s are great for reducing your appetite, for example, they're also great for, diabetes, I think, and they're also good at like addiction control. They do a lot of stuff. So, single compounds can have multi variant impacts. And so you want to see if existing, compounds can help these super. How do you, how do you do that? What's the, what does the AI model or agent do, to try to form fit existing compounds into known but unrelated problems?

• 47:07Speaker 03

  There's a couple of ways. I think the kind of the standard way of doing it right now is just using like a graph neural network. I guess this is the standard way is in terms of like how we would develop it or how we have developed it. I'm essentially trying to understand like, what mechanisms is a certain drug hitting and can those mechanisms, like whether it's through off target impacts or on target impacts, can any of those be reapplied to fix diseases or to fix some of these ultra rare diseases? So just like, cross applying like, oh, this drug hits this mechanism, can that be used to help solve this drug? And then there's a lot of other steps that kind of go into it. You have to look at the pharmacokinetic properties. You have to look at like the, the dose ability, the toxicity at certain different levels. So there's a lot of kind of sequential steps that go into it, but,

• 47:49Speaker 03

  at a high level, it's like, it's, it's a version of like making this puzzle based on all these different, pieces of information that you have available to you.

• 47:55Speaker 00

  Okay, but if we have improving models, if we have agents that can do more and more, we're able to collect the data and do a lot of work outside of the lab to see what might be functional. And we can go after lower commercially viable drugs. It sounds like if Convexia ends up winning, we could tackle quite a lot of these rare and ultra rare diseases in the next five to 10 years, which revolutionize quality of life for millions of people here in the U.S.

• 48:21Speaker 03

  Agreed. I think that's the goal. I think there's, there's a couple of other players working in this space as well. But I think like, I think like the general vision of being able to find and bring drugs to market faster and use find existing drugs and seeing is there a way to within repurpose these for existing companies or for sorry for existing rare diseases. I think it's a really, really exciting space. And I think, given as you said, that the models are getting so much better so quickly. I think there's certainly a path to seeing a lot of value come out of this space in the coming five, 10 years.

• 48:50Speaker 00

  One question I have though is just about capital because right now, if you look at where venture dollars are flowing, I, I don't think it's biotech's best year ever. And so I'm kind of curious, are you guys classified as a, as a biotech company that uses AI or as an AI company? Woo, easy fundraising that's working in bio.

• 49:08Speaker 03

  A mix of both, I think. Like, I think for our seed round, we just closed up our seed round. We, thank you. So that was, I guess, more so the latter, like an AI company that's being used for bio. I think like, as we transition over towards becoming a pharma company and actually like having an asset pipeline, I think we'll transition more towards like the kind of the bio side of things, the bio side of the spectrum. But I think right now it's more so, it's more so oriented was like being an AI company that is being applied for the bio slash pharma space.

• 49:36Speaker 00

  I love this. You're giving me actual hope for the future that when I get old and need help, there'll be much better things there. So thank you for that. Two things before I let you go. One, what is the place people can find the company online? And also in case you want to shout it out, is there a job you're looking to hire for? And having a hard time finding the right candidate, they might be listening to the show today.

• 49:53Speaker 03

  Of course. Yeah. Convexia dot bio is our website. So we have a lot of information about the company there. And of course, all the, all the socials are linked as well. We're looking to work with, with AI ML people. I mean, as is everyone that are very interested.

• 50:10Speaker 00

  Good luck.

• 50:11Speaker 03

  That are interested in the bio and health space. So if you're interested or working in that space, but would love to chat, we love making great conversations. And if you're interested in hiring or interested in getting hired, even better.

• 50:23Speaker 00

  All right. Well, thank you so much, my man. And when you have your next milestone, whatever that is, come back and tell me about it because I have an eye on you guys. I think you're honestly big.

• 50:30Speaker 03

  Thank you so much, Alex. I really appreciate it.

• 50:33Speaker 00

  I fricking love data companies. I love companies that store it. I loved Box. I loved Dropbox. I've known Databricks for so long. I think I actually grew up with that company. But that does not mean that we have solved the problem of information in the cloud and using it. And that brings me to the startup we're talking to today, the ARKIL, A R C H I L. And they have a very interesting, may I say innovative way to ensure that you can access your cloud data very quickly as if it was local. How does that work? How's it gonna make money? Let's find out. Please welcome to the show. It's Hunter Leith from ARKIL. Hunter, hey, how you doing?

• 51:08Speaker 04

  Great. Thanks for having me, Alex.

• 51:10Speaker 00

  Dude, my absolute pleasure. So let's start with, did I get that right? At a very, very high level, ARKIL wants to make it possible for me to interact with my cloud data, say on Amazon AWS, as if it was local to me, therefore it's faster to access and just easier to work with. Fair?

• 51:25Speaker 04

  That's right. Traditionally, you would spin up like a server in a place like Amazon or Google. And then you would have to transfer that cloud storage to your server in order to be able to do anything with it, which is slow and expensive. And so we've cut out that step completely and just made cloud storage appear local.

• 51:43Speaker 00

  So for folks out there who are not deep into the storage weeds, instead of having to drive to a place and put something in my car, drive my car home, and then walk back and forth to my car, it's essentially already in my living room. And you guys make that possible via some tech that we'll get to in a second. But fair?

• 51:57Speaker 04

  That's exactly right.

• 51:58Speaker 00

  Now we can go kind of one level deeper. You've created a caching system. And this is where I begin to have questions because I get caching, for sure. And I get the idea of having a cached copy of something that you can access more quickly. But where does the cache live? And You still need to get all the original data from, for example, S3.

• 52:19Speaker 04

  That's right. So we, in the general sense, like to put everything in the same, we offer like a SaaS kind of model where you sign up with us, you get access to our mega shared cache and we only bill you for the amount of data that you're actually using. So you don't have to worry about any infrastructure to take advantage of the performance benefits and the cost savings.

• 52:40Speaker 00

  How does the caching element of this work? Because that seems to be kind of the magical thing you guys are bringing to existing S3 customers, for example, to make their data more accessible. So maybe give me the idiot version and then the actual version in sequence.

• 52:54Speaker 04

  We effectively, if you think about S3 or cloud storage in general, as this low-cost, slow storage, there is also high-cost, high-performance storage you can buy, which are traditionally like the SSDs that you might have in your laptop. We run a fleet of servers with those drives attached to them so that we can serve the data that's in the cache really, really fast. And then we have a bunch of magic on the backend to effectively predict what kinds of data you're going to need so that you're never waiting for us to go to the cloud to download that data for you.

• 53:29Speaker 00

  How effective is that intelligent pre-caching? Because my concern would be if I'm paying for this as an active gigabyte per month, and we'll get to pricing in a minute, I would not like you to pre-cash more stuff than I need and therefore possibly incur either a higher bill on my side or unnecessary costs on your side.

• 53:48Speaker 04

  Yeah, I think that's right. And so what we aim to do is effectively make our service as simple as possible for anyone to use. This strategy is used by every company out there. Databricks, Snowflake, Netflix, everyone is effectively trying to cache data out of places like S3 to make it more accessible. And so we want to make that available to people. But then there is this next level of configuration around what if you know what you want? What if you don't want us to pre-cash? What if you're cost sensitive that we can expose as knobs to our customers? Who care about that level of detail? So that they get exactly the experience they want.

• 54:29Speaker 00

  So essentially, I might be able to tell our kill in the future that, hey, you know, don't pre-cash too much. Let me just kind of walk around and tell you what I need. And then you guys talk a lot about data being available effectively instantaneously. I presume that's after you've taken stuff out of S3 and then put it into the Alex Incorporated cache.

• 54:47Speaker 04

  It is, yes.

• 54:48Speaker 00

  Okay.

• 54:48Speaker 04

  But the, there's a different model of accessing the data in our system than before. Whereas if you were using, say, a 10 terabyte folder that was in S3 before, generally, you would have to download this entire 10 terabyte file in order to use any of it, which backed everything up in your system.

• 55:10Speaker 00

  Okay.

• 55:11Speaker 04

  And what we've done is we make it possible for your applications to go ahead and use the data, even if it's not in the cache. And they will wait as they request individual pieces. So they can get started earlier, even though we might be backfilling it asynchronously.

• 55:27Speaker 00

  I don't need to wait for 100% of a folder to make it over into the R kill cache. You guys will intelligently help me know what has been cached. And then I can interact with that part of the data set or part of the files in question. Okay, that makes good sense to me. Silly question, but as someone who hasn't really written code since high school, how hard was that to do?

• 55:49Speaker 04

  Oh, it's incredibly difficult.

• 55:52Speaker 00

  Because you're making it sound pretty easy. I have a question after this that I'm getting to, but I'm just curious.

• 55:56Speaker 04

  It's really interesting. So I built this company after spending eight years at Amazon, working on a service called the Elastic File System, which does something similar in shape, which is offer this high-performance storage in a fully elastic, expandable way.

• 56:13Speaker 04

  And it's really interesting if you look at the cloud companies and their offerings, because Amazon is the only company that has actually built a product in this space, because it is so tremendously difficult to do. So it's easy to explain. Everyone understands caches, but it's extremely hard on the backend.

• 56:32Speaker 00

  That kind of answers my next question, which is why hasn't someone built this before? Because going and looking at your kind of marketing speak, you know, 90% lower cost than using EBS and 30x lower latency than using SD directly. It sounds almost like a magic potion for the problems of moving data around online and interacting with it at the corporate level. Like, it seems like magic.

• 56:54Speaker 04

  That's good. That's exactly how we want you to feel.

• 56:57Speaker 00

  Well, everything feels like magic to me because I mostly bang rocks together and rub sticks together. Why were you able to do this when Amazon and Google Cloud and Azure haven't been able to? Is it partially because you're no longer inside the beast, as it were? And so because you're outside, you don't have to follow, I don't know, normal Amazon development patterns? Or what was the unlock that made you, Hunter and Arkil able to do something that, you know, $10 trillion worth of market cap cannot?

• 57:23Speaker 04

  Well, I think if you look at the clouds as a market offering, you can effectively draw a through line from how people used compute and storage in the 1970s to actually the products that they offer in the cloud today. It's like servers, multi-tenancy, hard disks, object storage. Done. And I think what the unlock was for our product is really understanding that the cloud has actually changed the way that we can offer these primitives to customers. And so it's very non-obvious that this product is like, A, worthwhile to build and B, is possible to build.

• 58:06Speaker 00

  But you guys talk about how, you know, everyone has to kind of collude together a similar caching system if they want to have a similar thing today. So it seems like the need for this is pretty obvious. And I'm curious if you guys have managed to convey what you're building to the market effectively? Like, are people reacting strongly to what Arkil has cooked up?

• 58:25Speaker 04

  Oh, yes. I think what is...

• 58:29Speaker 04

  I feel very lucky to be a part of is there is tremendous demand for what we're building and we get to collaborate with some of the largest companies on earth as well as some of the most innovative startups, maybe working in AI that need this kind of technology and need it yesterday. So I think so, obviously, there's, we can always improve. And because we're such a technical product, simplifying and making it easier for people to understand is is really important part of how we think about marketing.

• 58:57Speaker 00

  I did complain a little bit internally. I'm like, why do I always fall in love with companies that are very complicated that I have to explain to an audience? Like, it's just like, why can't you guys just do SaaS for bunnies? You know, that'd be so much easier.

• 59:09Speaker 00

  A question about where you guys actually store the cached data on the SSDs or whatever. Is that also a bit of cloud technology that you're renting from one of the major cloud companies?

• 59:22Speaker 04

  That's right. Yeah. So we actually rent servers from the cloud that have these SSDs attached to them. We then pool all of that storage together and then we rent that storage space out to our customers at a smaller granularity. But even being on top of the clouds, we're able to effectively turn a profit on a service like this.

• 59:40Speaker 00

  We'll get to that. But I was curious if Amazon hates you because I feel like you've kind of shown up to their party and been like, these people can't dance. Let me show you how. But it sounds like because you're helping, in many cases, I presume, Amazon customers better access their stored data on AWS and you're also a customer of AWS, you're probably like their favorite person because you're doing the hard technical work for them and they get to have two customers instead of zero.

• 1:00:08Speaker 04

  I think that's exactly right. People will frequently ask me about what it is like competing with Amazon. And I have to kind of tell them that we are not, we're not in competition with Amazon. Amazon is in this great position where they win no matter what happens because they own the underlying infrastructure. And so if we're able to unlock AWS for more enterprises that couldn't otherwise use it, or if we're able to bring these startups that are doing the new things in AI to Amazon's infrastructure, that's a net win for them.

• 1:00:38Speaker 00

  Do you guys plan to have a similar setup with Google Cloud, Azure, OCI, and you know, et cetera, et cetera, et cetera? There's a lot of cloud providers now that are doing quite well. It's not 10 years ago when AWS was kind of the only game in town. So, one, do you guys support other clouds today? Or two, is that something that's coming next year?

• 1:00:57Speaker 04

  Yeah, and this was one of the shocking things that I found out after leaving AWS was that there were other clouds that other people used. But we are today in Google Cloud as well. We intend to be in all of the major hyperscalers as we're just following customer demand, customer demand as well as the GPU clouds that are actually becoming popular now.

• 1:01:16Speaker 00

  So your CoreWeaves, et cetera, et cetera, et cetera.

• 1:01:19Speaker 04

  That's right.

• 1:01:19Speaker 00

  That's interesting, though, because when I think about caching lots of information, I can see how a company that wanted to use its information for, let's say, RAG in an AI context would want to have access to that data. But how does it interact with a NeoCloud directly? They seem like different, related, but different conversations to me. I presume I'm missing something.

• 1:01:41Speaker 04

  No, I think you're right. And so we actually like, we segment the market a little bit internally, which is that there's all of these existing players, like maybe geospatial companies that are doing data analysis on imaging and bioinformatics and things like that, where they have applications that are in the cloud, but maybe need better performance or are just otherwise underserved by the storage offerings that exist today. And then there's all of this new stuff that's happening with AI that we're excited to be a part of. And that spans everything from pre-training, where people need to ingest a tremendous amount of data into the GPUs very quickly, of which there are only a few storage solutions that can support this at

• 1:02:23Speaker 04

  very high cost. And even all the way down into the kind of agent space that people are talking about today, where you need these agents to be able to crawl something like a file system in order to find out what data is available and use it effectively.

• 1:02:38Speaker 00

  Hence RAG. Okay, so it sounds like for training use cases, you want to be able to move a lot of data into a NeoCloud for training. So you'd want to have it cached for quick transfer, fair enough. And if you're doing anything in the agentic realm, you want to have access to specific information, lower quantities, but very quickly. And that's where you guys fit in as well. Oh, interesting. So you're kind of like, you help facilitate both inference and training for AI. Ah, well, that's a huge market.

• 1:03:02Speaker 04

  I like to tell people that our goal over like the next three years is to become the universal access layer for data, which is that our product, because we offer this kind of rare combination of performance benefits and cost benefits.

• 1:03:18Speaker 04

  Should be the easiest way for anyone building any kind of cloud application to actually interface with their data, no matter where it lives.

• 1:03:26Speaker 00

  So how long until I don't need to go to Amazon to start my storage journey and then layer Arkil on top? How long until you use white label S3 for me entirely? And I come to you guys and I'm just like, I don't really need to care about the cloud. I just wanted to have my data pre-cached and available around the world.

• 1:03:45Speaker 04

  I absolutely think that we will get there in time, but today for us, it's a matter of focus and we are so focused on building this high performance layer on top of things that that's probably where we'll be in the short and medium term.

• 1:03:57Speaker 00

  That helps me with some timelines. Now, on the customer side, you know, I can absolutely see why companies that are deep into the AI weeds would like to use this, but I'm curious what other company sizes, industries, sectors, whatever the right question is, are taking up Arkil for their own uses.

• 1:04:14Speaker 04

  Because storage is so broad, we see our customer use cases also be incredibly broad. We see tremendous pull from enterprises that are trying to spin up research environments for their ML and AI engineers who need to collaborate and share data very quickly and effectively. We see, like I mentioned earlier, kind of geospatial and bioinformatics companies, which traditionally don't have applications that connect to cloud storage natively and need some way to bridge that gap, which we make possible for them.

• 1:04:46Speaker 00

  And let's pause you there because this is actually, I think, is pretty important. You guys use something called POSIX, P-O-S-I-X, to ensure consistency and also to make it possible to treat storage served via Arkil essentially as if it was local. So apps don't need to be cloud data to access it. They can treat it like it's on machine, which probably makes it more flexible.

• 1:05:08Speaker 04

  That's right. It unlocks an entire segment of applications, which is to say that traditionally S3 has this API that applications need to be written against in order to take advantage of. And while a lot of applications over the past 10, 15 years have changed to actually use S3 as their backend, most applications don't. If you think about databases or like FFmpeg, kind of the video transcoding stuff, all of these things are things that you could imagine running on your laptop against files and folders that you could see in Finder. And so we take that cloud storage and turn it into this. Postix is the right word, compatible format that can run with any application that works on a machine today.

• 1:05:52Speaker 00

  It's fricking awesome. What stops Amazon from just buying you now? Because I feel like you're going to become bigger and bigger and more expensive, but I can't see any major cloud not wanting to have this offering as part of their quiver, if you will.

• 1:06:07Speaker 04

  I agree. And, you know, if that becomes relevant for us, it will certainly be interesting. But I think we're in a really good spot to execute on this quickly. And because of kind of the incentive structure that the clouds have around the products that they're selling today, I think it's unlikely that in the short term, anyone builds this themselves.

• 1:06:28Speaker 00

  So that's a very interesting statement. Unpack that for me. What are the incentives that are pushing back against them building this? You can be rude. You don't work there anymore.

• 1:06:35Speaker 04

  I have tremendous respect for my people who are working at AWS and Oracle and all of these places.

• 1:06:39Speaker 00

  Here's the boilerplate, kids, in case the startup fails. Andy, take me back.

• 1:06:44Speaker 04

  But because these clouds in the storage realm today generally sell object storage, like S3, which is something that is billed per byte used. It is very low margin for the cloud. And then in addition to that product, all of the hyperscalers also sell effectively a hard disk kind of product where when you launch a server, you tell the cloud how much storage space you need on that server and they provision something that looks like a hard disk. And you pay, in this instance, for the amount of space that you asked for, not the amount of space you've used.

• 1:07:21Speaker 00

  This is one of the core things you guys put out as a developer sticking point, as something you're trying to solve by making it essentially elastic.

• 1:07:28Speaker 04

  That's exactly right. And so if all of these clouds are making billions of dollars on effectively the unused space that's on those disks, it's very unlikely that they would want to spend a tremendous amount of R and D to get rid of that extremely high margin income stream.

• 1:07:45Speaker 00

  That makes a lot of sense, especially right now when technology companies are at once their most profitable and their poorest because they can't afford anything. Let's talk about costs. So for folks out there who have not looked up the S3 price list recently, if you're curious, for S3 Express One Zone, it's about 11 cents per gigabyte. You guys are currently charging about 26 per quote active gigabyte per month. It does seem like you're not charging that much because if you have to pay for S3 yourself to a degree or, you know, compute, uh, there's only so much margin there, Hunter. So tell me about the economics of this and, and how it works.

• 1:08:23Speaker 04

  I think that's right. And this is another reason why a lot of companies are not super interested in building storage solutions is because it's not your high margin SaaS play where costs and revenue are completely unrelated kind of a thing. We are selling, much like the AI companies, effectively something that has costs of goods sold that we have to deliver actual margin on top of.

• 1:08:47Speaker 00

  Cogs plus, plus, plus margins, how it goes, so.

• 1:08:50Speaker 04

  That's right. But when we talk to engineers who are at these enterprises that are interested in using our product, they're very indexed on wanting to use cloud storage like S3 because for one of many reasons, it's very low cost. And so they want, in the default case, to only pay the costs that they would have for storing that data in S3 if nothing else is happening on the system, and that would make it a good design. So when we think about charging, our pricing is directly tied to what our customers are doing. If they're actively using that data and we're caching it and we're facilitating access

• 1:09:34Speaker 04

  for them, we're charging them for it. If they stop using their data, it's no longer in our cache, we charge them nothing, and the data is just on S3 for them to use as if they only used S3 in the beginning.

• 1:09:46Speaker 00

  So there is enough margin there for you, and it's positive for customers because they're just not paying for unused capacity, unlike the current object-oriented storage system set up by the major clouds. So you're more developer-friendly and you're speedier.

• 1:09:59Speaker 04

  That's right.

• 1:09:59Speaker 00

  Pretty good combination of things. It does seem though that companies, over time, will sometimes try to take a bit of margin back, a bit of a little customer surplus. How are you guys going to avoid, uh, becoming the sort of company that puts ads in consumers' video subscriptions, à la Amazon?

• 1:10:15Speaker 04

  It's funny, it's, it's kind of hard to put ads on someone's file system, though we have, you know, thought about what that may look like.

• 1:10:22Speaker 00

  Don't, don't do that, please God.

• 1:10:23Speaker 04

  I think that, that for us, the story is the same as it is for something like.

• 1:10:31Speaker 04

  Any AWS or Google Cloud or things like that, which is that storage is a place where we start. And then we want to provide services on top of that that might be more valuable to our customers. So rather than offsetting these prices with things like ads, we would rather offer things like compute on top of the storage that provide a better experience because it's tightly integrated with what we do to generate additional revenue.

• 1:10:57Speaker 00

  So if cloud computing and storage is abstracted compute for companies, it sounds like what you want to build is like a like a synthetic layer on top of that, that takes kind of the raw grunt of data centers that other companies have built and makes them much more modern, if that makes sense, and offer them to people in a manner that's much easier and better to consume and interact with.

• 1:11:20Speaker 04

  I think that's right, which is that over time, the way that we see people interact with systems continues to become higher and higher level, which is like maybe 15 years ago, developers really wanted to use S3 directly, use disks directly, and put all these blocks together themselves. But you know, now people expect higher level primitives. They want to just use Vercel and send us some JavaScript and have that work. And so I think that you'll see the same arc on this backend data intensive work, like even Databricks, where people just want to ship a problem to us and have us solve it for them in whatever way makes the most sense.

• 1:12:02Speaker 00

  Well, being pretty darn asset light, because you're not making your own data centers. You're not buying land. You're not trying to get power generation sorted out. You kind of get to lean on what has been built and take it a step further. I really, I really like that. Last question for me is you guys raised some capital, I think it was in June or July of this year. I think Felices led that. Who was your lead investor?

• 1:12:21Speaker 04

  So Stasia at Felices.

• 1:12:23Speaker 00

  I love Stasia. She's fantastic. One of the smartest VCs that I've ever met, actually. She was at Redpoint before, right?

• 1:12:29Speaker 04

  That's correct.

• 1:12:30Speaker 00

  So how much capital do you guys need, though, to, to take us as far as you want to in the next couple of years? I ask because I've talked to a lot of companies that are raising amounts of money that don't seem to track with their needs. And so I'm just kind of curious, like, what, what will it take in dollar terms to get you to the next, I don't know, three or four years?

• 1:12:46Speaker 04

  I think it's hard to say, and I think, like, there is obviously a spectrum of companies that you see today. From all the way on the left, like light capital requirements, your traditional SaaS, where there's not really any costs outside of R and D, to all the way on the right, where you're building a foundational model and you need to, you know, go buy a billion dollars of Nvidia chips. We're neither of those things. We're somewhere in the middle, which is because we're offering storage as a service. And storage is something that both the capacity and the performance and the safety actually scale with the number of servers you have. We have a fixed cost to actually appear in any region, which is

• 1:13:29Speaker 04

  why we're only in a couple of regions in AWS and GCP.

• 1:13:32Speaker 00

  I see. You have to, okay, right. You have to provision or kind of take on to yourself a certain amount of, let's call it flash storage or whatever. And so if you replicate that in every single AWS instance, that's very expensive, or region, I mean, sorry.

• 1:13:45Speaker 04

  Yes. And so we do have capital requirements. They are low compared to obviously model training or data centers or energy.

• 1:13:53Speaker 00

  Yeah.

• 1:13:53Speaker 04

  But we hope to raise more capital over time, to be in more places, and then fund more R and D into the higher level services that we chatted about.

• 1:14:02Speaker 00

  I'm even more excited about the company now. Where can people find you on the internet? And what is a role you're hiring for? You would like to shout out to the audience in case there's the right person listening.

• 1:14:12Speaker 04

  So you can find us at archil.com, A R C H I L dot com. If you've heard this and decide you already need the product, we also have disk new, which you can go to and just immediately get logged in and set up with something that gives you high performance storage. We're also on Twitter and LinkedIn, of course. As far as open roles go, everything for us is engineering, as may or may not be a surprise to you.

• 1:14:36Speaker 00

  I'm blown away by that revelation. No marketing people? You're not hiring on the GTM side yet?

• 1:14:41Speaker 04

  Not yet. I think that if you look at companies like Modal, for example, which are this kind of high performance compute platform, one of the things that they did well early on is just focus exclusively on engineering. And if you get the best engineers, you can grow the product and then fill GTM in later. And I hope we take the same playbook.

• 1:15:01Speaker 00

  I think that's the right way to go in your case, because you have to sell to developers who are famously relaxed, casual, and not picky whatsoever.

• 1:15:07Speaker 04

  That's right.

• 1:15:07Speaker 00

  Hunter, an absolute pleasure. Thank you for teaching me so much. Good luck, and I'd love to have you back in six or nine months.

• 1:15:12Speaker 04

  Thanks so much, Alex.