Chad Sweet - CEO and Co-Founder of ModalAI

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Cox Business and welcome back to the Tacos and Tech Podcast. I'm your host Neil Blum and I am joined with Chad Sweet, co founder and CEO of Modal AI. Hey Chad, thanks for being with us.

Hi Neil, thank you very much for having me.

How are you doing in These Corona times, we're recording this in early April. You holding everything together?

Yes, definitely. Hanging in there, trying to keep the whole thing moving while working from home. So I think everybody's in the same boat here and we're trying to keep going as fast as we can with one hand tied behind our back, I suppose.

Yeah. Well, we want to learn how one, how you came to be tied one hand behind your back, how you're doing in that. But first, let's learn a little bit about modal AI. Do you want to give us a quick synopsis of what it is?

Sure, yeah. At Modal AI, we're building Autonomy solutions for robots. And our latest product launch, Voxel Flight, is really focused on autonomy for drones or flying robots. What makes our platform special is the integration of state of the art AI technology paired with the ease of use of some of the products found in the DIY community. Our goal is to make Autonomy accessible to as many folks in different groups and businesses as possible. What we build accelerates our customers time to market specifically for autonomous drones.

Okay, so you're doing, are you doing both hardware and software?

Yes, that's a good question. We're really a full stack company. We, we design our PCBs, build our PCBs here in Southern California. We do all the firmware on board, and we do software all the way up to the application layer and the autonomy layer.

Okay, got it. Well, I'm curious to hear the founding story. I think that has something to do with a place you worked for a long time. Qualcomm. Correct?

That's true.

Okay, yeah.

So a bunch of us in the company were in robotics R and D at the company. A lot of us were at Qualcomm for actually more than 20 years. And modal AI really is somewhat of an extension of the story of what we were building at Qualcomm for robotics R and D. And that's really advancing robots around Qualcomm Snapdragon processors. And so in 2018, we had the opportunity to try and see if this was a business that could survive on its own and actually grow and maybe be better off as a separate company. And that's the path we chose. And actually it's going great since then. We've been growing. At first there were just two of us. Now there's about 15 or 16 and we're off and have a lot of customers and are going and building great technology.

So curious around some of the work you're doing at Qualcomm, like leading up to this, was there already a focus on specifically drones or anything in that kind of extra peripheral area, or was it more of like this chip stack that was thought of and it's like, how can we apply this to future industries?

So certainly a bit of both. What we were doing was actually a bit of the tip of the spear for getting Qualcomm Snapdragon processors into new industries. When we had started the efforts in maybe 2010, 2011, there was broad thought that this is just smartphone technology. It's great that it runs Android and they're awesome smartphone processors, but, you know, but you have to show me that they, they can do something else. And so that was, that was exactly what we did. So we repurposed everything going on on the Snapdragon for a smartphone and reapplied it to robotics, of which it's an incredibly powerful processor that can do all sorts of applications. And this was, this was a great one.

Got it. So what point did it feel like it was time to, to, you know, flee the nest and spread the wings?

What did that look like in terms.

Of like a business opportunity?

Well, there was always a ton of demand, but it's. It. This space was needed to be served maybe in a bit of a different way than a big company like Qualcomm could do it. There's certainly, it's a very challenging technology that requires a lot of hand holding, requires a lot of direct access with direct access and customization of the technology. So really we, we took the approach that we were going to enable this with a lot of open source technology and a lot of effective, try to build a community and build an ecosystem around the technology so that we could cast a wide net, work with a lot of small companies as opposed to a few large ones. And that was really the opportunity that presented itself. The market for drones specifically, in a broad extent to autonomous robotics, was really about servicing a lot of small customers. And so it took maybe a little bit different approach to the business than we were doing at Qualcomm.

Got it. Okay, so what was the, how many people left Qualcomm to start this initially?

So it ended up being three of us, or two of us really founded it early on, and then a third one joined effectively immediately. And then we grew to six or seven within six months. And, and we've been growing since then pretty consistently.

That's great. So is Qualcomm also a funder too?

No, they helped a lot. They really, really helped a lot. Early on they were incredibly supportive of what we were doing and helped us so that our first day as modal AI looked very similar to our last day at Qualcomm. So we had tools and equipment that we could go use to build technology right away. And so that was a tremendous help. Much bigger than actually cash would have gotten us because it's hard to build small amounts of anything. And so what we were able to do was take a lot of the stuff we were working with at Qualcomm and use it to really seed this company and get the company started off with the development tools and, you know, PCB hardware and actual devices that we needed to keep working on the. On advancing the technology.

Okay, got it. So how did. I'm curious, two, and then three of you, probably all pretty technical engineers, how. How did you draw straws on who would be CEO and things like that?

So I. That's. I guess that's a tricky question or an interesting question, but I was the project lead at Qualcomm, so. So some of it just kind of flew naturally. I had the relationships with a lot of the customers. I guess I'm the one that's most comfortable doing business. The business aspect of IT versus engineering, we all love. Every one of us loves engineering, but somebody's got to do the business side, I suppose.

Yep, totally. Okay. So have you guys had to go for outside funding? Have you raised some venture capital or anything like that?

No, we haven't. We've bootstrapped the whole way. And like I was mentioning earlier, some of that initial hardware, equipment and so forth that we got early on really meant that we could stay really lean. I think our first. First four or five months, our monthly expenses were in the single thousands of dollars, you know, so our burn rate was incredibly low early on. And then it took four to six months to really burn, get customers signed up. And then we. We've signed up a number of really good customers, and then one of them was the Department of Defense, where they're really trying to get us made drone technology. And we were selected as the company that could deliver on that. And then that was. That was quite a big deal that really enabled us to grow and get going at the speed we wanted to go.

Oh, very cool. So it's more of a B2B, not like kind of your consumer, like your average consumer kind of drone kind of stuff, so.

That's right. We're casting a wide net, trying to get as many developers and companies on board as possible. We have a website, modelai.com, you can buy our products directly from the website. And that's really our strategy for onboarding new customers is bringing on as many people as we can in a broad fashion and then supporting that publicly, having as much open source code as we can. We have code.modelai.com, we have, we have a ton of project repositories that do a lot of the autonomous technology we demonstrate on videos and demonstrate to our customers. A lot of that's just available. So the hardware is available, the software is available, documentation is available, and then the, the goal really is to be working with customers that are trying to start their own drone company and want the latest and greatest technology and really want to work with the latest autonomy and build their new use case out of that. And there are just so many new use cases coming about really every single day. And so we want to try and help folks make all those use cases possible.

Very cool. Can you talk to us a little bit about the drone community of San Diego? I know we've got, you know, we've got, I want, I'd love to see how we are comparatively to the rest of the world. We've got some huge enterprise players in like military drones, obviously. And then we've got a few like well funded startups in the space too that do both drone technology and anti drone or drone defense. Are you involved in that and can you give us like kind of an overview of San Diego drone communities?

Yeah, there's, I think throughout the world, San Diego is a big spot. Zurich in Switzerland is a big spot. But I think those two. It seems like almost every company we run into is either in Southern California or in Switzerland. But yes, San Diego definitely is a big, big hotspot for drones. Modal AI itself is a part of the San Diego, San Diego Economic Development Council's efforts into the FAA's integration pilot program. That's about 200 acronyms. But the integration pilot program is ZFA's attempt to bring along the commercial applications under their umbrella of regulation so it doesn't impact existing aircraft. Right. So cargo and people carrying passenger planes. And so that's been a big opportunity for a lot of, a lot of drone companies to get together. I know that there's. One of the biggest efforts is at the Chula Vista Police Department where they've been working with a few companies to go do drone as a first responder. That's a very interesting one. We've worked with a number of folks on various food delivery aspects and we've worked with some of the Department of Homeland Security, understanding what can be done at the border. So that's created a whole slew of opportunities and there are companies, Planck Aerosystems is one of the startups, maybe well funded startups around here in San Diego doing rather military focused but small drones, small UAS applications using computer vision. That's an interesting company. So yeah, there's a bunch of stuff going on that's really cool.

I know you mentioned the Chula Vista and the EDC component. There is like a whole like physical training space, Right. For San Diego drones to test out new technologies, right?

Yes, absolutely. And we've been there and we've taken advantage of it. It's actually beautiful. It's a, it's a beautiful spot to go. You're up on a mountain, you overlook a lake and you can fly drones. It's, it's great.

Oh, that's really cool. That is really cool. And especially to have one have that FAA designation but two to have this cluster in San Diego kind of a leading known industry throughout the world. Really cool. Tell how though theoretically, not theoretically, what's for what's going on right now in Corona Virus world being we're recording this in early April, we'll see when this goes live, but we might be here indefinitely for a bit. Well how has that impacted the industry for you specifically?

So that having a diverse set of customers certainly helps. The the DOD is not going anywhere. They're going full speed ahead. And then on the commercial side it seems that the demand is going to be there to automate. And whether it's in the air like maybe a Google wing is doing or some of the others, the famous one being Amazon Prime Air trying to do more delivery via air or on the ground, there's companies doing ground robots that'll navigate or that do navigate sidewalks and deliver packages and deliver food and drop off groceries, you can just imagine that demand is, is only going to increase if we've, if the social distancing becomes a thing that happens. You know, I really hope it doesn't happen frequently, but let's say it happens every couple of years. That's just going to compound the demand for, for doing stuff with as little, little unknown or maybe as little stranger human interaction as possible. And so there seems to be plenty of demand to go figure out how to automate, how to increase the utility or increase the usefulness of all these platforms. And the less the pilot needs to be involved, the less of the human operator needs to be involved, the more cost effective these solutions are.

Got it. Okay, so your Team's all remote right now. How's that been going? I'm curious, just working all remote.

Well, it's, we're learning, we're learning, we're learning how to do it, you know, it's hard. So when you build robots, you have to put your hands on things and you have to, you have to make them work and go do something. And so yeah, what we've been doing is keeping interaction at the office to as little or almost nothing as possible and then just leaving those offices office hours sparingly for whoever needs to do flight testing or whoever needs to do hands on hardware work and then everybody else is at home and on Slack or video chat and making the best of it.

Yeah, it's a crazy new world, that's for sure. But obviously it's really cool to see a whole new kind of emphasis in the economy of where delivery services like you're saying and others are going to be useful. I think. San Diego, I was reading an EDC article that said like we, we did our first medical testing delivery, not just a few months ago. So I think it was like we sent, I don't know, maybe a blood sample or something across town by drone. So you know, like how cool would be to have Covid tests dropping off either the test or maybe even the vaccine at every home right now.

Absolutely. And yeah, that was, that was another example of the San Diego IPP program. And then in China they've got trucks that are automated or at least remote control, basically full trucks driving supplies in to these quarantined areas to just limit the, you know, they don't want the driver getting out, talking to people, bringing it back, you know, to wherever he came from. So yeah, supply delivery, whether in bulk or in one off like you mentioned, with individual tests. I think, I think this is going to be a big wake up call for why that technology is important. It's not just. It's cool and you know, it helps the dreamers keep dreaming about fun things. But it's going to, it seems like it's going to be really important to realize this sooner rather than later.

Yeah, for sure. Well, we're all hoping this is super temporary. I'm curious. This ends the quarantine lifts. What's the first meal you're going to go have?

Well, my favorite restaurant is Bayou, the Cafe Secret or they changed it to Coia Secret or something like that in Del Mar, that I love the Peruvian food there. That would be my favorite spot to go hit.

Okay, do you have a favorite taco spot too that you're just not able to get deliveries from right now.

Yeah, I don't know how original it is, but I love Roberto's Fish Tacos. That's my favorite fish taco spot in San Diego.

There's nothing wrong with that at all. Everyone knows anything with Alberto's at the end of it is super legit. There's a Alibertos, Roberto's a stone's throw from everywhere, so totally get that. Chad. Appreciate the time tonight. Curious where can people find out more about modal AI? You have some social media presence or is it mostly just web?

Yeah, certainly modalai.com or you follow us on LinkedIn or Twitter? We're pretty active on all of those.

Okay, awesome. And you too, are you an active engager in social? Can people find you on both LinkedIn and Twitter too?

LinkedIn, absolutely, yeah. LinkedIn and Twitter for that matter.

All right, awesome. We'll put in the show notes. Chad, thanks so much. Stay safe, stay healthy and send me over, send me over a little note or some food by drone sometime.

All right, that sounds good. Thank you very much, Neil.

Thanks, Chad.

Thanks for joining us on the Tacos and Tech podcast with Neil Bloom. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem. Big shout out to School of Wrap for our rad intro music. And thanks as well to Nest Podcast Network where we are recording live inside their studio at Nest Co working in Bankers Hill. You can find Neil Bloom on Twitter Eelbloom as well as fresh brewed tech and tacos and Tech Pod on Twitter too.

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