- Duration: 30 min
- Platform: teams
- Source: Read.ai 01JYM578SDS6D615NYE5DHH1AE (https://app.read.ai/analytics/meetings/01JYM578SDS6D615NYE5DHH1AE)
Transcript
[Mohammad Adib]: I’m the building next door to him. I don’t live there full time, but I got a place in the building next to his. [Michael Houck]: Yeah, very, very cool guy. And a friend. So yeah, feel free to feel free to run your due diligence on me with with him for sure. [Mohammad Adib]: Well, a friend of his is a friend of mine by default. [Michael Houck]: So same here, man. But yeah, so did that for a couple years. We ran a bunch of those houses and then there’s a venture fund from that. We’ve invested a portion of it, but it still is there. I personally have moved a bit away from the company. I think there were some, you know, I’m sure you kind of heard and saw what happened. There were some decisions that I wasn’t super thrilled about. So yeah, so I moved away from the company. And for the past two years, I’ve basically A, been investing as an angel, but B, built up a bootstrapped holding company, media brand, and a SaaS product. Agency sort of all under one umbrella. So we do content marketing for founders and we have a big creator network that we can loop in like 500 creators with 60 million combined followers. And then our newsletter goes out to about 75,000 founders every week. So that’s been fun. Personally, I’m thinking about another venture backed idea. But for now, just just investing and loving meeting founders like you. [UNKNOWN_SPEAKER]: Cool. [Mohammad Adib]: So is this a discussion about investing in Titan? Or is this a discussion about taking advantage of some of your like, oh, no, I was obviously blown away by everything that you guys have put together. [Michael Houck]: I talked with Michael out in the out in the bunker, let’s call it. And he gave me a great kind of TLDR on on how the process works and everything. So I’m super excited about Titan and would love to talk about participating depending on what the the structure is for the round. [Mohammad Adib]: Talk to me a little bit about your typical check size and if you’re price sensitive to a certain price. I’m not price sensitive. [Michael Houck]: These are binary bets in my mind. So, you know, whatever you’re working out with, I’m sure you’re talking to a ton of leads, whatever that is, that’s not going to impact me too much. Check size tends to be smaller, I’d say like 10k or less, not the most liquid guy in the but happy to add value in a number of other ways. [Mohammad Adib]: Yeah, I think we are still planning on doing a roll-up vehicle of some sort. We haven’t set it up yet. There’s a lot of interest. My calendar is pretty packed with like, you know, VC meetings. I haven’t really had a chance to set up this RUV with our team, but what I’ll do is I’ll put you down as interested in our RUV, and I think we should resume the discussion when I have the RUV setup. Give me like two weeks to really get all that handled and by then we should be done with our round also. Kind of like, Group it all together if that if that makes sense. But yeah, I mean if you let’s see, I’ll give you some info on TD. What so we are. I mean, as you know, you’ve been to demo day. You kind of know, like the gist how it started, nobody really got to hear the full story. Started with like, I always had a background in robotics. I was building robots from a very early age. My life actually started in Bangladesh. I came to America via the diversity visa lottery. Chances were one in 20 million. And yeah, it was like 10 years old when I came to this country. And then around 14 or 15, I started developing Android apps, got hundreds thousands of downloads immediately and then that turned into millions of downloads. That’s kind of where like my life shifted in a big way. You know those were paid apps so I was able to move my family from a small apartment to a home at like 15. High school was hilarious. My grades were absolute garbage. Still got into a great school because the CSE chair read articles about me and like force accepted me. Then I I dropped out to go work at Tinder. I was one of the first engineering hires at Tinder. Then also I worked at a lot of companies like Amazon Lab 126, Uber, Walmart, Alaska Airlines, to name a few. And I did a lot of big shit at all of those companies. In the background though, like my passion for robotics always lived on at home. Like I was always tweaking with stuff and like, you know, building a lot of crazy shit. Like during COVID, I had a whole racing simulator set up and I was driving internet controlled RC cars down the road at like miles an hour with my own traction control and abs algorithms keeping them stable it was very complex stuff but built in a simple way not just like cars off the shelf like high performance cars it’s like no like custom built like really serious shit um yeah I typically when I’m obsessed with something like I I go deep um then that hobby turned into or that interest turned into flying stuff I wanted to kind of fly something far away from where I am, about as far away as possible. I was like, you know, trying to be, you know, like hundreds of miles away and stuff like that. So got obsessed with that. That’s where Titan Dynamics was born because I needed to make my own airframes that could handle distances like that and still come back. It was all because there’s a Facebook group called Long Range Hooligans, where it’s like 10,000 people that are hell bent on trying to get their drone as far as possible and back and there’s like a leaderboard. So that was like, I was trying to get number one. Still am number one. And so. And so. [Michael Houck]: How far is number one? Is that like the next state or is that like a mile? No, it’s 126 kilometers. [Mohammad Adib]: That’s the current record for me. So basically the rules are obviously non-military tech, hobby grade tech. How far can you push it? And 100 kilometers and you still have a video feed is pretty You know, it’s pretty tough to do with what’s out there on the market right now. And so, you know, it’s a lot of antennas and a lot of math and like calculations on all bunch of shit. But Titan Dynamics was born out of necessity because I needed to make my own airframe. And investing in molds is insane. Very expensive. Anywhere from 50 to 100 grand every time you change the design. So that’s no bueno. And so I decided I was going to 3D print it. This thing. And so I did. And that’s that was the first airframe ever for Titan. And it had a range of like 400 kilometers. So like 200 out and back. And so yeah, dude, the Air Force found us 20 days after incorporation. And that was it. That was the light bulb moment where we’re like, shit, this has real use case in combat. They had a drone that that was downed. And you know, it was a six figure drone, it would cost them five months to get a new one because of lead times and shipping times and all sorts of bullshit like that. And so they just 3D printed one of ours to monitor a convoy and keep them safe. Like it was, you know, it was like the difference between life and death. If the convoy is being attacked on the ground, the drone would be the first thing to find out about that. So yeah, it was pretty powerful. And so since then we’ve completed four defense contracts, current revenues at 1.9. And this year we’re looking to do seven and a half in revenue. Pipeline visibility is about 30 mil. There’s a lot of great shit coming. We may get a stratify this year, which is anywhere from 20 to 60 million of non-dilutive funding. We’re well poised to kind of move in that direction. So yeah, the fundraiser has been going well. We’re raising a total of $10 million. I think you said you'd said at the at the tea thing that you had a Chinese investor coming up to you seriously about it. [Michael Houck]: She was dead serious, bro. [Mohammad Adib]: She was about to write 100 at 500 or some shit. Oh, man. [Michael Houck]: There was another investor call I had, bro. [Mohammad Adib]: I'm like 45 investor calls. There was another one I had where the lady didn't get the note that we're raising 10. And even towards the end of the meeting, she's like, so what are you going to do with the $100 million that you’re raising? And I was like, I was like, I was almost choked, man. I was like, I just pitched you my company. You asked me all the questions. I answered all the questions. And now you ask me what I’m going to do with the $100 million? I was like, how are you taking me seriously right now? And also you're probably like you're probably thinking like should I pivot this whole thing to be the hundred million and try to Well, I guess if I raise that like a fucking 500 valuation, I'd never need to raise again Yeah, that would that would be a surefire way to kill the company for no good reason. Honestly Yeah, so I think you know, we're up upper, you know closer towards the three digits That's what we're raising at and we've got term sheets that support that so it's going well. We're in a good spot spot. But yeah, man, we are growing pretty rapidly. So five months ago, we got a 10,000 square foot office because we knew that we were going to be growing. And that was the best decision ever because we found one of the best deals in the Los Angeles area. You can imagine 10,000 square feet in L.A. Is a lot of money, typically. Torrance. So just neighboring city to El Segundo. Cool. [Michael Houck]: I lived in Santa Monica for a couple of years, so I know the area. [Mohammad Adib]: I live in Santa Monica. [Michael Houck]: Oh, OK, cool. Yeah. [Mohammad Adib]: I live in the building, the apartment building next to the Blue Georgian Hotel on Ocean. Oh, sure. Yeah. Okay. [Michael Houck]: That's not too far from where I was. That's cool. That's cool. [Mohammad Adib]: I used to live in Montana back in the day. [UNKNOWN_SPEAKER]: In Montana? [Mohammad Adib]: On Montana Street in Santa Monica. Oh, okay. [Mohammad Adib]: Yeah, that's, that's nice over there. [Michael Houck]: You have the shops and the cafes and everything. [Mohammad Adib]: That's like the Sunday brunch spot. Yeah, that's right. That's right. Yeah. I'll hit you up when we're ready for this RUV. I got you in my Excel sheet. What's the plan with the 10 mil? [Michael Houck]: Obviously you guys have a lot of interest. Is it product expansion? Is it just supply chain? I guess you guys don't even have that much supply chain stuff. [Mohammad Adib]: What's the plan? There's three things we suck at currently, and that's sales, BD, and marketing. But much more solvable problems than the problems we have already solved. And so we're going to be putting a lot of effort into that. That's not the majority of the fund usage, though. A lot of it is going to be upfront capital that's required to get production lines up for producing hardware, so we're better vertically integrated. And the crazy thing is it's very low-hanging fruit that will have very massive ROI, immediate ROI. Because once we come out with this hardware, we're also going to sell it to the market. [Michael Houck]: Okay, like like I can go buy one. [Mohammad Adib]: Oh, I think you froze Did I lose you or the hf0 Wi-Fi has been been whack man, oh good man, um Yeah, so so the hardware we are we're trying to become like the go-to place for hardware Also, not that we really care to be but when we come out with our own flight controller It is gonna be so much better than what's out there right now that will also become a vendor for these electronics, as well as use it in our own shit. It's going to be great. So basically attacking the market from like multiple different ways for free, it costs us nothing to do that, you know what I mean? And we also want to tackle building some of our own comm links. Those are some of the typically most expensive parts of these drones, because the military comm links are like fucking four or five grand minimum. And we can produce the hard At least in China, we produce the hardware for like $30 to $100 for prototyping purposes. But outside of China, I'm sure that'll be 4x the cost. But still, even with huge margins, we can be under $1,000. So we can lower the price of that 5x for better performance, just like we did with UIVs. And then also, a lot of the funding will go towards increasing headcount. So hiring more aerospace engineers, as well as software engineers for Prometheus and a couple of other efforts. And we made by a Seabam machine, which is like a million bucks on its own. The machine that lets you print carbon fiber parts added, like it lets you produce carbon fiber parts additively. It kind of pays for itself immediately, like after you produce like a hundred parts, cause doing the molds and lay up for that would have cost a million bucks anyway. So yeah, we are using that to, it’s a hundred times faster than like traditional 3D printing. And so our, where it then will be able to produce truly huge drones in a very short amount of time, like massive ones, you know, like the size of a bedroom, essentially, is what I’m trying to get at. So, yeah, that’s where the 10 mil is going. And there’s also obviously going to be like some existing products that benefit from that, like the Vulcan, the mini factory, that’s going to get buttoned up a little bit more, more polished. And I want to see 200 of these out in the world. Asap, we already got an order for 10. So things are moving pretty fast. Nice. [Michael Houck]: Okay, that all sounds really exciting. And actually makes a lot of sense. Like, I assume at some point in the future, you guys are going to raise again, like, what’s the goal? Like, where are we getting to milestone was wise before then? [Mohammad Adib]: Before then, we need to have a stratify and a program of record. My bet is we’re going to be we’re raising the seed, we’re going to skip series a completely go to stratify and program of record and then go straight to series B. And that’s likely going to be in 12 to 18 months. [UNKNOWN_SPEAKER]: Cool. [UNKNOWN_SPEAKER]: Okay. [Michael Houck]: And you mentioned this draft. I know what that is. Program of record I’m less familiar with. [Mohammad Adib]: What is that? Program of record is when something is trialed by the DoD and deemed successful enough to go into a large acquisitions contract where they’re like, okay, we’ve tried this. We know this works. Now we want to buy thousands or hundreds of thousands. And then it’s like, bam, kapow, you’ve got this humongous defense contract. [Michael Houck]: Yeah, that’s, that’s like, is that like in the tens of millions, hundreds of millions? It really depends on that. [Mohammad Adib]: That’s the hard part to answer. It depends on the appetite at the time, when they give us the program of record. The beautiful thing about being program of record is it can change anytime. Like, like they can go from wanting 1000 and then be like, oh, we want 10 million now, like spin up the fucking factories, right? Program of record. F-35 is a program of record. B-2 bomber is a program of record. Meaning the DoD can buy at any time in large numbers without having to write up any more contracts or do any approvals or whatever the hell. So we get essentially sent to DoD heaven where we become like one of their vending machine things. That’s the goal for every defense company is to get as many products into program of record as possible Once you get to Program of Record, you are in the Goldilocks zone where you don’t have to try to sell your shit. They’ll just come by it. That’s not the best explanation. If you Google Program of Record and do some reading, you’ll kind of get a better understanding. [Mohammad Adib]: The vending machine analogy makes sense to me. [Michael Houck]: It’s like you have an agreement at some price, and they’re like, well, OK, we need this many for this mission or this set of missions, and you need to produce them within this time period, and that’s that. [Mohammad Adib]: Yeah, and when you go Program of Record, they don’t like small batches. They want a lot of shit. Unless of course it’s like a billion dollar product and maybe they don’t want thousands of it obviously, but that’s why the contract sizes will vary depending on scale and whatever the price of the product we’re selling is. The Prometheus auto design software has a clear path to program of record. It’s very close. So what they’re doing is there’s a part of the Air Force called SOC A3OU and they are going to give Prometheus blanket airworthiness. What that means is any airplane coming out of Prometheus will automatically based on 40 airplanes that we have to build. So we build 20 and then the Air Force builds 20. We fly all 40 sequentially and collect data on it. As long as it hits certain metrics, Oh, did I cut out there? [Michael Houck]: No, no, I got you. I’m with you. [Mohammad Adib]: Okay. Yeah. As long as those 40 hit certain metrics, we will get blanket airworthiness. And that then gets it straight to program of record according to them. So because they could trust it, they’ll throw it into program of record. And then every Air Force base will basically be mandated to buy Prometheus, which is like a hundred grand a year per device. So the ARR would go bonkers. Yeah. Program of record and a stratify, which, you know, could be up to 60 million. That’s series B territory immediately. Totally. [Michael Houck]: Okay, cool. Uh, look, I’m excited about it. Um, I’m excited about you. I think, um, just hearing you talk about it and your sort of, uh, obsessive nature is very similar to my own. So, uh, yeah, I I’m down. Um, obviously. You know, expected that the conversation would be sort of second step after you, uh, secure things with the lead and finalize everything. So yeah, just keep me in the loop about the RUV and would love to would love to put something in Sounds good, man. [Mohammad Adib]: Thank you for believing in us. [Michael Houck]: Yeah, of course man excited to be along for the ride and let me know if I can help in any way to Whether it’s when you guys are looking to hire on the software side I’m sure you have you know tons of people you already know from the companies you’ve worked at but happy to pull my network in and yeah, it’s about anything, well actually, first question. [Mohammad Adib]: I really want a lead term sheet from A16Z. I had my first conversation with them yesterday. Do you have any connections to A16Z, especially American Dynamism? [Michael Houck]: Yeah, I mean, Andrew Chen led our A at Launch House. So he’s not American Dynamism. He’s more on the marketplaces, consumer, and gaming side of things. But I can ping him. And there’s some people that I’ve had other conversations. I know a bunch of people over there. So I can start that conversation. And who did you meet with first? [Mohammad Adib]: I met with Catherine Boyle. I believe she runs American Dynamism. [Michael Houck]: She’s great. Yeah, she’s fantastic. OK, let me ping Andrew. Is there anything you want me to sort of communicate or convey there? [Mohammad Adib]: I guess what you could, it would be awesome if you just ping them slightly, like softly, like, hey, I spoke with Mo, founder of Titan Dynamics. You know, working on cool stuff, really like his vision type, like, obviously, say what you think, you know, I’m not writing it for you. But yeah, just like, just like, you know, kind of, it’s helpful, I think, for VCs, when there’s multiple directions that they’re getting the same thing from, and, you know, send a link to our website. That’s it. That’s it really, like, you know, don’t need to send them the data room or the deck, you You know, I’ve already communicated that with Catherine. She’s already seen that. [Michael Houck]: So, um, let’s see, even just that right there, that gives me just even more confidence in you. Like, I feel like so many founders are like, they want to send everything. They want to make sure the message is a certain way. You’re just like, you know, this guy, you guys have a good relationship, you know, all that. Yeah. [Mohammad Adib]: Let me, let me text you our website or let me just get your number so that we can text back and forth. What’s your number? [Michael Houck]: Two, six, seven, two, four, three. [Mohammad Adib]: One four one nine. [UNKNOWN_SPEAKER]: Okay. [UNKNOWN_SPEAKER]: Dope. [Mohammad Adib]: Just shot you a text. Cool. Awesome. [Michael Houck]: And then I’ll, uh, I’ll let you know when I hear back from, uh, from Andrew, uh, what he says and, um, yeah, I’ll give him a, I’ll give him a nudge. That’d be great. That’d be great. [UNKNOWN_SPEAKER]: Cool. [Michael Houck]: Appreciate it. Yeah, man. [Michael Houck]: Happy to happy to chat and, uh, keep me in the loop about the RV. [UNKNOWN_SPEAKER]: Sounds good. See you brother.