Grace Ewura-Esi:

You're listening to Traceroute. I'm Grace Ewura-Esi.

Amy Tobey:

I'm Amy Tobey.

John Taylor:

And I'm John Taylor. And we're going to do something a little bit different with this episode of Traceroute. We're going to start off with a little pop quiz. Okay?

Amy Tobey:

Uh-oh.

John Taylor:

It's an easy pop quiz. Well, it's a simple pop quiz. It's only two questions, and you don't get in trouble if you don't get it right, so that's the best part

Amy Tobey:

I was just going to ask.

John Taylor:

All right, question number one. You ready? Do you know who Waldo Waterman is?

Amy Tobey:

I do not.

John Taylor:

Ah, you see, nobody knows who Waldo Waterman is. All right, so let me tell you a little bit about Waldo Waterman. So you could really describe Waldo as this weird little kid, especially for his era of time. So he was an inventor, really like a dreamer. And 1909, while he was still in high school, he designed his very first aircraft, which was a biplane hang glider that he flew on his own, broke both of his ankles doing it, but flew it on his own. The following year, he built his first powered aircraft. And in 1911, he'd become kind of a hanger on at Glen Curtis's aircraft shop. And Glen Curtis was a big aviation pioneer who had set up shop on North Island in San Diego. But the reason Waldo Waterman eventually got his own Wikipedia page, despite the fact that literally nobody has heard of this guy, is because in 1937, Waldo Waterman invented the aero bile, which many people consider to be the first viable flying car.

Amy Tobey:

Lovely.

John Taylor:

Yeah, that's Waldo. Big in aviation circles, of course. But to the general public, no clue. Okay, but there is a point to all of this. But before we get to that point, let's do question number two of our big pop quiz. Are you ready?

Amy Tobey:

All right, I'm ready.

John Taylor:

What is this sound?

Amy Tobey:

Would that be George Jetson's car?

John Taylor:

Oh my gosh, yes. Good job. That's exactly what it is. It's George Jetson's flying car.

Amy Tobey:

I did it wrong.

John Taylor:

You did it wrong?

Amy Tobey:

What is George Jetson's flying car?

John Taylor:

You still win the big pop quiz though?

Amy Tobey:

Oh, excellent. What did I win?

John Taylor:

Nothing.

Amy Tobey:

Hey, can I be on your podcast?

John Taylor:

Hey, there you go. That's the perfect prize. So here's the thing that fascinates me about that, is that almost everybody, certainly everybody of our generation is going to recognize that sound of George Jetson's flying car, but nobody recognizes the name of Waldo Waterman, who is the guy who basically invented the first viable flying car. And I wonder why that is. Speaker 4: Look, already, it is tomorrow.

John Taylor:

The year is 1957, and with the launch of Sputnik by the Soviet Union, America has become obsessed with the promise of the impending space age. Within a few short years, we will program our ovens with punch cards, cities will be contained under massive shining glass domes connected by sleek monorails, and the family robot will make sure the dog got her daily walk. And when dad goes to work, he'll wave goodbye from the luxurious contours of his flying car. But here's the thing, we never got the flying car. And crazier still, the thing that we did get, the piece of tech that has actually come to represent today's modern world that never adorned the cover of Popular Mechanics magazine in the fifties is the smartphone. What we got is a device the size of a cards that allows us to connect with anyone in the world and gives us instant access to the sum total of human knowledge and achievement. And we use it to watch videos of cats, but that's another podcast. The bottom line is we were promised flying cars, but what we got was the internet. Why? What technology did you want to see when you were a kid? What did the future look like to you?

Amy Tobey:

It's pretty easy for me, and we actually got it. So I have a strong memory of when I was young of reading a Newsweek article about, it was probably like sixth grade, or maybe a little earlier, about fuel cells, hydrogen fuel cells, and the future was going to be hydrogen. It was in the 80s, the early 80s and mid-80s, that that kind of idea took off. Then it took another, what, two decades before the reality actually hit the streets. And before I left California last year, I was driving a hydrogen car on the road. So it actually did happen in my lifetime that hydrogen fuel cells came to be a reality, and they're still growing through the world where I saw something this morning about trucks in Germany are running on hydrogen, some are. And so we got it.

John Taylor:

Oh, that's awesome. The future is now. And how about you, Grace?

Grace Ewura-Esi:

I'm legitimately very quickly googling xenon girl of the 21st century because I know that's silly, but I honestly thought that we would have so much of that technology. I really thought that we would have holographic phone calling. And in 1999, I wasn't super young, so maybe I should be embarrassed to talk about this, but I just thought, well, that clearly is everyone's future, and I can't wait for it to be mine.

John Taylor:

Right. No, yeah. For me, it really was flying cars. I remember being in my parents' garage when I was 19, working on my old 1969 Mercury Cougar and thinking to myself, this is pointless because in 10 years, I'm going to have a flying car. Now, of course, I didn't get a flying car, but what did happen in those 10 years, at the risk of totally dating myself here, is that the internet exploded onto the scene. Now, I mentioned this because I didn't see the internet coming at all. Now, maybe that's because I wasn't employed in tech at the time, but I certainly considered myself the kind of nerd that was on top of tech developments and breakthroughs. Still, I didn't see the internet coming. Why? Because there were other forces at work that brought this new technology to the consumer, three things, in fact, which have little to do with the kind of pop culture hype we saw with flying cars.

Mike Winterfield:

Hi, I am Mike Winfield. I'm the founder and managing partner of Active Impact Investments, and we are Canada's largest climate tech seed fund.

John Taylor:

In other words, Mike Winfield is a venture capitalist, and he understands explicitly one of those three main reasons we get the technology we get. Money has to be put into the tech, and money has to be made from the tech. And this is where our old friend Waldo Waterman's flying car, his technologically viable flying car eventually met its demise. He couldn't find anybody to put up the money for its production.

Mike Winterfield:

A huge financial outcome has to be possible. And that huge financial outcome literally means that across all the companies that we invest in a diversified portfolio and a fund, we need any one of those particular companies to have the potential to be able to return all of the money of the fund. So that's a big outcome. And so to get a big outcome, you need a giant market, a giant problem. You need to know that there is a ton of customer pull so that the timing is right.

John Taylor:

Before we go on, let's unpack a few things here. The role that money plays in the development of technology can be a dicey subject. On the one hand, we all need a paycheck, and striking it rich with a brilliant new idea is fundamental to the American dream. On the other hand, does that mean that really cool ideas that might not be as financially viable are never going to find funding?

Grace Ewura-Esi:

I think a big part of venture capitalism is the hype cycle. And so while there might be some really incredible ideas that exist, I don't think that those ideas get funding the same way that if another tech genius comes up with something that is the holograms I had mentioned earlier, that might be more likely to be funded because that's a part of the hype cycle.

John Taylor:

Okay, that's a really good point, and it's one of the reasons why I sought Mike's input here. Because while some might say that green tech is pretty hype these days, it still has significant detractors, people who believe society can't make a viable shift away from a petroleum economy. But since Mike is a VC who specializes in funding tech, that's not part of this hype cycle, this is a great way to test our theory that money is a key driver in new technology. Mike, you've been really forthcoming in the idea that profit plays a significant role in what gets chosen and what doesn't. Do you find yourself needing to reconcile that with the good work that you're doing in climate technology?

Mike Winterfield:

I used to think it would, and that was definitely a debate early in our thesis, is there are some funds out there that have decided intentionally to be a lower return profile. But point two is if we want to grow this market, which we do, so those that are willing to invest in themes like climate, you're going to have to show investors returns. There's just not enough investors out there that are willing to put money in harm's way just to do the right thing. And so that's another reason why we have decided our thesis is we're going to have to be competitive with any other place that somebody could be placing their money in order to grow this market.

John Taylor:

But you must believe then that there is room in climate tech for large profit.

Mike Winterfield:

Absolutely. I actually believe that climate tech will be an enhancer of returns. If you think of a Venn diagram of another VCs out there looking for the very best enterprise B2B software companies to invest in, guess what? So are we. But layered over top of that is that we are investing in ones that also create this sustainability advantage for companies. And so now we get all of the tailwinds that come along with that.

John Taylor:

According to Mike, that means $32 billion in venture capital looking for green projects, which is up three x in the last two years, as well as 370 billion in climate initiatives from the inflation reduction act. But money is isn't everything, and throwing money at a piece of technology doesn't guarantee success.

Mike Winterfield:

We have to invest across the board. And if I could tell you right now which ones were going to work, then I'd have-

John Taylor:

10 times the income you have right now.

Mike Winterfield:

Exactly. I'd have the highest performing fund in history.

John Taylor:

So new technology takes money, it takes money to make, and it needs to make money. So did no one want to put up money for flying cars back in the 1950s? Because judging by at least their iconic popularity, it seems like there'd have been a lot of money to be made in selling flying cars. But the truth is, venture capital to start a flying car company was not exactly readily available in the late 50s. In fact, the first modern VC firm by the standards we recognize wasn't created until 1946, and venture capital as an asset class wasn't really established until the 1960s. And this is why some of the earliest flying car designs were created not by entrepreneurs, but by aircraft and automobile designers and manufacturers. But it wasn't just a lack of funding that prevented a flying car in every garage. You see, in order to get new technology, you need old technology. It's called the stack for a reason. To get new stuff, you're going to have to build on the old stuff. And Amy, you were talking about this in the AI episode where you were explaining how basically everything that we put in place for the blockchain is kind of responsible for AI. We had all of this processing power available to us, and the blockchain thing kind of was like, okay, it didn't quite go where we thought it would go. But because we had that, because we had all this compute power, now we could do more AI with it. Is that sort of the way it works, that an infrastructure exists and we build a technology off of that, and that that's the determining factor of what we get?

Amy Tobey:

Largely, yes. An advancement that's happening in personal computers is the PCI express bus, but I learned something about that recently that changed my view a little bit, in that most of the technological advancement in that space is materials research. So when we think of a computer, we think of people writing code and we think of CPUs, which are also largely determined by materials research. But the bus there, it's when new alloys of metal and manufacturing techniques are created so that they can build these high speed wires between all the chips in the computer, that's when we release a new version of PCI, right? And it's not just the new wire, it's the full technology stack has to evolve, not just in the manufacturer of those alloys, but in the people who manufacture the boards and the people who manufacture the chips, and the software engineers have to build new software to drive it. So each of these kind of incrementally steps up and we put a number on it and say this is the new thing because that's kind of where we all come together on an agreement. But each time we're kind of building on the science that came before. We've learned from the science that came before. We built something just a little bit better. And sometimes we take many things that are a little bit better, put them together in a novel way, and we get innovation.

John Taylor:

So do we have the infrastructure now for flying cars?

Grace Ewura-Esi:

The infrastructure has to really support the idea, and it really has to give that idea space to flourish. And I don't know about y'all, but what I've seen about the cars on the ground is not giving me faith about those cars being lifted up to the heavens. I would have a lot of logistics questions, but I think that that's part of the problem, is we just don't have an infrastructure kit that can support it. Who's going to be the traffic guard for the flying school bus like what we saw in the Jetsons? I'm not volunteering myself. Is anyone volunteering themselves and their jet pack?

John Taylor:

Grace has a really excellent point here. An existing infrastructure that supports your new technology is key to both the development and adoption of that new technology. Before we had horse-drawn carriages, we already had wheels. And before we had motorized cars, we had roads. So is grace right? Did we not get flying cars because we didn't have the infrastructure for it? Well, the short answer is yes. If you look at the design of the first flying car prototypes, they're basically a car with an airplane attached to the top. How was the thing supposed to take off? Freeways are not runways. There was a proposal that had flying cars launching from the rooftop of your suburban home, but every rooftop had to be designed like an aircraft carrier for this to happen. So does that mean we're forever doomed to a world without flying cars? No. Because great entrepreneurs know that if the infrastructure isn't there, then adapt the tech to the existing infrastructure.

Oliver Walker-Jones:

I'm Oliver Walker-Jones ,and I'm the head of marketing and communications at Joby Aviation.

John Taylor:

And what does Joby Aviation do?

Oliver Walker-Jones:

Joby Aviation is a company that is developing all electric flying aircraft that take off and land vertically, and then transition to forward flight a little bit like a traditional aircraft before landing vertically again at the destination.

John Taylor:

So you make flying cars?

Oliver Walker-Jones:

Yeah.

John Taylor:

Yes. Obviously, I've been really looking forward to this part. As you probably knew from the very beginning, flying car development is in fact finally taking off about 70 years late. And one of the reasons is because companies like Joby Aviation have solved the infrastructure problem.

Oliver Walker-Jones:

The most obvious one is batteries. We need batteries that are capable of delivering a very high output in terms of power to lift the aircraft vertically off the ground, but also having lots of capacity so that you can fly a good distance with the people that you've got on board the aircraft. So batteries is one key area. The next is lightweight materials. So if you want to lift something off the ground vertically, you want the aircraft to be as light as possible. And so advances in materials, things like carbon composite, lightweight, strong materials that you can cast into interesting shapes, that's an area where there's been a lot of development these last couple of decades too. And the third is compute power, so being able to get a lot of computing power in a very small space, also very lightweight, that allows you to control an aircraft like this. So we have six propellers stationed around the aircraft instead of the one big one that you'd see on a helicopter, and each of them work independently. And so the pilot doesn't sit there with six little levers that they're pulling in pushing forwards. All of that is automated and controlled by the compute on the aircraft. And so you need to be able to put a significant amount of that within the aircraft. We needed it to be small, we needed it to be lightweight, and combine those three things coming together kind of put us where we are today.

John Taylor:

Very interesting. So that compute power, that didn't exist until very recently?

Oliver Walker-Jones:

Yeah, and certainly not in a lightweight way. And that's really the thing you'll hear me say a lot, I think, is if you want to get an aircraft off the ground using batteries, you need to make it as light as possible, which means compute power that can be condensed into the smallest, lightest possible space.

John Taylor:

Also, as it turns out, there's no need for anti-gravity, robot traffic cops.

Oliver Walker-Jones:

Yeah. Actually, when you fly around the skies in the US or in other parts of the world, the vast majority of the sky is actually relatively uncontrolled. You don't need to be given vectors to fly by somebody in a tower. You just go where you want to go as long as you don't go over a certain altitude. It's pretty uncontrolled, and most people don't get that.

John Taylor:

So we've now covered two of our fundamental building blocks for new technologies. The infrastructure has changed enough or evolved enough to make flying cars viable, and the money is there. In fact, Toyota is one of the many investors in Joby Aviation. And as of this recording, they've already put in around $400 million to the project. And that leads us to the final element that's necessary for new technologies, demand. You can't sell a product that nobody wants. Now, obviously I want a flying car, and I have since I was nine years old, but did people really need them in the 1950s? There were actually significantly more cars sold in America in the 1950s than there were in the 2020s, so one must imagine that demand would've been high for a car that could soar above all that traffic. However, it only proves the point that all three elements, money, infrastructure, and demand must be in place for new technology to flourish.

Oliver Walker-Jones:

People will, in the future, get their phone out, tap in the Joby app and book a flight that they will... Let's say it leaves in half an hour, and it'll fly them from JFK airport to Manhattan downtown. And you'll book that as an individual, and you may well share the aircraft with somebody else, but it will function very much like a taxi. Now, who decides to travel on it depends on where the roots are. And the way we like to think about it is it's relatively unlimited in terms of the opportunity because the amount of infrastructure you need to start a service or a node in the network is basically a concrete pad and a charger. So you need somewhere to be able to land the aircraft, you need to be able to charge it, and that's kind of all you need. So there's no reason why in a beautiful future ahead of us, as you look ahead, that that customer base shouldn't expand to be basically anybody who might get in an Uber today.

John Taylor:

This idea of demand as a main driver of new technology is something that Mike Winfield also had a unique take on.

Mike Winterfield:

So if you have a giant problem and lots of demand, but you've got the wrong team working on it, you're in deep trouble. If you've got the very best team in the world and they're working on a small problem or a problem that not a lot of people care about, you've got a big problem. So it really is the marriage between finding a world-class founder and a founder who knows how to stack amazing talent around themselves and that they're working on a big awesome problem that they've got a unique solution to that the market's ready for.

Amy Tobey:

I kind of want to come back to your original question, John, about demand. And for you to ask customers what they wanted, they would've wanted a faster horse. I don't remember the exact quote, but it goes something like that. And so it's not always demand. I think that folks who want to believe in the capitalistic drive toward innovation, that is the best explanation for their theory of the world, is that demand drives innovation. But we know that's not true as the only way. It's one way that innovation gets done. And I think John and I both have in the rooms we're in, musical instruments. And very often, we go and we create with musical instruments out of curiosity and joy, and not necessarily because of demand. And in fact, almost all the stories we tell about great musicians, a lot of them were hustling to pay the bills, but we don't necessarily tell that story. The one we tend to tell is the one about what they wanted to create because they were driven to create. They had a curiosity. They wanted something new in the world, and it wasn't just necessarily about putting bread on the table.

Grace Ewura-Esi:

But I wonder if demand these days is changing and if an informed citizenry is starting to incorporate more criteria into demand. I like that example of musicians, Amy, because I do think that a lot of musical innovation is about hunger and hustle. We don't think about it, but it's individuals or collectives looking for this outlet for what I think is a divine conception, which is creativity. So I think that as we talk about demand, I think in this current age, a lot of people are still driven by a bottom line, but that there's also another group of people who may also be interested in that bottom line, or not, who are saying, "Let's really plan out the way in which we actually do this innovation in a way that maybe does the least harm to other people and to the planet that we call home," and that that's actually becoming a part of the pipeline process of ideation, implementation, and distribution of new technology, new products and new ideas.

John Taylor:

Honestly, I'd like to think the same thing too, that there's this group of people who innovate and a group that nurtures that innovation who come from a thoughtful, informed place. And I see it in people like Mike Winfield who funds new technologies that exclusively help our climate on a massive scale, and I see it in companies like Joby Aviation that knew on some level that demand for flying cars would come hand in hand with thoughtful developments in infrastructure. This American space age society we live in, we do so many of the right things for the wrong reasons. We wanted to defeat Soviet communism. And in doing so, we landed a man on the moon. Some scientists and academics wanted to see if they could talk to each other through their computers, and what we got was an internet that allows almost every living soul on the planet to connect with one another. It takes money and infrastructure and demand to create new technologies, but perhaps just as important, it also takes weird kids with big dreams, kids like Waldo Waterman who tret of flying cars. New technology takes dreams of a future we want to live in. So keep dreaming people. Keep dreaming.