The Startup Hero with Tim Draper Episode 5: Nadir Bagaveyev

Welcome to Startup Hero. I have here Nadir Baghavi of Baghavi Rockets. And Nadir, why don't you tell us a little bit about what you do?

Tim, first of all, thank you very much for this meeting. First of all, I wanted to thank you for continuing to support my endeavor. And it takes, it seems like, a special investor to understand these very long-term projects. So we build rockets. We are trying to open up the smallest channel into space for aspiring entrepreneurs by building smallest rocket possible, which is going to be about 5 tons in size, but it will be able to take small satellites all the way to space. So small teams can get together, come up with new idea, pitch to investors or work on it in university, and then launch it with us. If it works, they can launch in bulk with other companies or stay with us for their customized services.

And what is your edge? Why are you better than what's out there right now and other small rocket companies? Why are you better than SpaceX, for instance?

We're better than SpaceX for small companies because they don't have to wait to get on the rocket for 1.5 to 2 years. to just get on launch manifest. We're customized service. You can launch with us next week or week after next after you give us an order to launch. So there's no downtime, and there's no downtime that you have to pay your expensive engineers while you're waiting on the ground.

And so they're smaller rockets. Is there anything different in the design of the rocket engine or the the shape of the rocket or anything that makes it somehow significantly different?

Well, in basic, all rockets are chemical machines that burn fuel and push it out, so you cannot be too inventive about it. But our rockets are 3D printed, rocket engines are 3D printed, which tremendously saves us on labor time, on skilled labor time, and eventually Much of the manufacturing can be automated.

And if you see a better design, you can make a quick shift.

Yes. Yeah, there are quick changes.

What is your training? What's your education?

I— well, as a basic, I have a bachelor's in aerospace engineering from Embry-Riddle Aeronautical University in Florida. Before that, before even coming to the United States, I studied for 3 years as a helicopter designer engineer in Russia. I had a little bit of, maybe half a year of experience working there. I was also enlisted in U.S. Army as a mechanic for helicopters and an officer in U.S. Army as air defense artillery officer. So through my military experience, I know how to obey orders and issue orders. Through my schools, I know my basic math, and through some work experience.

And you ended up being a U.S. military officer. But you grew up in Russia.

Yes.

So how did that all happen?

Are you asking about my moral stepping from being Russian to becoming a U.S. Army officer, or just stepping?

Either. It could be a moral, it could be any kind of a question. Like personal. It's a personal question.

My whole family moved to the United States when I was 19. It was a voluntary choice. If you decide to come to America voluntarily, which means your conscience is yours to choose what side you take on. And I was always fascinated about the United States, about the entrepreneurial spirit, about things that people can achieve here, including examples of Igor Sikorsky, who started Sikorsky Aircraft, and Wernher von Braun and many, many other engineers.

Mm-hmm.

So by choice, I'm an American, and I thought that military, first of all, would teach me all these leadership skills, and second of all, it is my— I actually wanted to know all kinds of power structures within, whether they're money structure, force structures, or everything else, because I try to think more globally than Than being tied to one country or another, is that what you mean? Not necessarily being— yes, that too. A lot of people say, you know, United States is a global policeman, but I would rather see United States as a global policeman than China or Russia. They would be a little more cruel than Americans.

Yeah, I think that's probably right. Who knows? Our country seems to be kind of getting a little rough around the edges, too. Its heavy-handed bureaucracy is getting a little—

Somewhat true, but for example, if I learned basic types of weapons that both countries use, and Russians would still use thermobaric weapons, which is basically turn air into an explosive, and when something like that explodes, everybody loses their lungs. around in every building. So if you design more inhumane weapons, then it's most likely that this kind of a cop would be less cool than this kind of a cop.

I get it.

So these are kind of like very basic decisions on why you decide one or another thing.

So why are you involved in space? Why do you care?

Well, since childhood, I I think almost everybody wanted to be an astronaut. They just never lived long enough.

Well, not everybody. Some wanted to be firemen, some wanted to be princesses, some wanted to be mathematicians and baseball players.

Well, maybe I'm originally from Soviet Union where—

And they all wanted to be— every one of them?

Well, yeah, 99%. Those who didn't hit it. I don't know if that's true, of course. I mean, I'm sure people—

But anyway, you wanted it. Yes.

And I thought I actually want to do not things like Mars or Venus. I wanted to go to other stars. I think that would be a very ambitious goal that I wouldn't be able to even achieve in my lifetime. But I would love to create multiple industries that are conducive to the time when it stars, maybe 100 years from now, when they— when people would say we have all the industries necessary to build starships, which means huge, you know, 2,000-people stations, big propulsion mechanisms that can propel all of it for thousands of years, energy sources.

So why aren't you pushing the technological envelope I am. Well, it's the same kind of rocket engine as you see everywhere else.

True. And I thought—

Have you tried those— the rails? Using rails? Like, use a railgun and get yourself started and then launch from there?

No, but I've constructed a little coilgun. The difference between railgun and coilgun is Rails are very simple. You have 2 rails but very much current going through it. Coil guns are just—

A solenoid.

Yes. So I actually made one and gifted it to my friend Jonathan, and he brought it here to show Brayton. So I'm experimenting with these things on a small scale, but one of the reasons I wanted to do the rocket company first is, first of all, if I'm successful, people will want to do any kind of business with me because I will build myself a name as a successful rocket builder, and after that it's easy to—

To innovate. Easier to innovate when you—

Yes. Second of all, when you do reach space, a lot of things are related to reentry, to going into space, testing things on small scale first. And this would be a perfect platform to try inflatable structures, for example.

Mm-hmm.

Solar reflectors, which also could be reflective— sorry, inflatable dishes. Different types of radio or laser communications. Satellites that can go into constellations and act like one big radio telescope, and things like that. And yeah, I guess it's also my ambition to When I was driving to Silicon Valley, I thought, what's the hardest thing that I can pull off based on what I think about myself capability-wise? And I thought orbital launcher would be the most difficult thing that I still will be able to pull off within 3 to 5 years.

Good. And tell me about how it's gone so far. What's happened? I backed you. And we put some money in and you have built— tell me what you've built so far and how far are we from getting something launched?

So to get to profitable orbital deliveries, we have 3 phases to go through. First phase was our first launch. So we did it in 2015 with the first ever in history 3D-printed rocket engine. SpaceX did it 3 weeks after us with their escape tower.

Mm-hmm.

Our second phase, in which we are right now, is to launch suborbitally to space, which means you jump to space and then fall back, but the rocket will have everything necessary for complete launch, which means it will have autopilot, it will have engines, and it will have pumps. Those are the 3 most difficult and most important parts of a rocket. So although this launch will not be as impressive as the final launch that produces money, but it will have 80 to 90% of technologies that are necessary there. And that's why it took a little more time and a little more money.

So which parts of that do you have done? You have the rocket and pumps, but you don't have the navigation gear?

Autopilot. It's being built right now. We have hardware for it, but a skilled person has to sit and program it for 2, 3 months. Well, and we—

How many of you are there now?

2. Our team is being rebuilt right now. I have—

There were 4 for a while, right?

Yes, yes.

And the 4 of you worked on this one rocket engine, and then you ran out of cash.

Yes.

And now you're back down to 2, the 2 hardcore—

Hardcore workers. But others are— well, some people are not coming back, but others said, if you have more money, please bring us back. It's a little different for aerospace engineers than, say, software engineers. People are very reluctant to change their industries because there are not too many aerospace jobs as there are software jobs, and it takes a long time to convince somebody to come to your team because startups are not very, you know, founded things.

Sure.

Although, although I found out that my learning curve goes way much crazier in startup than being a usual employee, even in engineering. Oh yeah.

Oh yeah. Oh, you're— though you learn all through whatever life you lead, you learn. It's just a matter of what you learn.

Including this fundraise, actually, it taught me a lot about being careful about cash, having your runway, having reliable people both on my team and as investors, and also the value— cash is king, let's put it that way.

Yeah. Well, and it's good not to ever get into a position where you're going to run out. So you should always be, as an entrepreneur, always be fundraising. Don't spend it, but always be fundraising. So what's the current situation now is you are— what's happened?

Yes. So we're in phase 2 and we are filing with FAA, Federal Aviation Administration, to launch August 30th, 2017, which means this date is already going to be set. Set in hard set date with government, so we cannot postpone any further.

What's the date?

August 30th, 2017, in Black Rock Desert, Nevada. And I'll send you—

yeah, you gotta let me know coordinates. Yeah, let me know as soon as you possibly can.

Today I talked to a person who will file with FAA, so he agreed to job— to do the job as contractor. So although I have very few employees, I have a lot of contractors. I have a welding contractor who is building a launcher for it. I have somebody who will do paperwork. I have machinists. I have a person who does radios for a rocket. So I prefer— it seems like it's better to work with established contractors than try to bring in a lot of employees, at least now. When we become more stable, hopefully with next funding—

How much capital do you need to get to that launch? Are you going to be able to do it with the money you've got?

Yes, to the second launch we will. To profitable orbital deliveries, we will need another $20 to $25 million.

So you've got to get out there and start raising money again.

Yes.

But maybe the way you raise the money is you invite everybody out to the desert.

Yes, of course. I mean, Phase 2 is specifically designed for that, to show that although I don't have $100 million like Elon Musk to put into my But with small amount of money that we have, we can achieve so much, which should be good enough proof that we can go all the way to orbit, to space.

Yeah. Well, Elon's rocket, I think, blew up either just before or just after we put the money in.

He blew up 3 rockets, then he almost ran out of money, then he came to you and he's The first launch was successful.

Right.

Thanks to you.

Yeah. So we went ahead and backed it. And rockets are—

Notorious to blow up.

It's flammable gas. It does blow up. So controlling it is a little like controlling a teenager.

I found an interesting thing about rockets is you have to desensitize yourself so much to fear that it starts affecting your life and you start doing things that You should— you have to think, is this considered bad or good? Uh, I don't know, just driving a little less careful because I experienced so much of that fear there that almost stopped being afraid of things that I should be afraid of.

Yeah, good, good for you.

Well, kind of good, but at the same time, I have to be so careful.

Hey, you gotta be a hero. You gotta take some risks.

I guess that is part of it, for sure.

Yeah.

I think it's very important for Silicon Valley to have aerospace enclave of entrepreneurs who do drones, or as my friend Jonathan is doing that blimp drone, me doing rockets, almost like an accelerator for aerospace people, because aerospace people need specific needs, as in Machines, 3D printers, CNC mills, and everything. And we have— right now we have to run around and ask all different companies. But if they would be concentrated in one accelerator-type area and every entrepreneur would have access to them, they would save so much on expenses of building any new type of machine. That's one thing.

Okay, that's very interesting. Maybe we should set something up like that. And moving to Silicon Valley, what was that like?

So before that, I worked for XCOR Aerospace in Mojave Desert. So first of all, this place is much greener. But of course, way beyond all of that is it's like a nerve center of humanity. It seems like the whole humanity starts specializing. If, you know, Chinese are working arms and hands and things but Silicon Valley is our nerve center that will eventually become a brain of humanity, if you look at humanity as one whole organism. And I thought it would be either in one of the big aerospace corporations, or if I start a company, it should be in Silicon Valley. And there was one point when one other company came to Mojave and launched their rocket, but it was unsuccessful. And I was sleeping in desert where they launched it, and I woke up, there was a beautiful sunrise. I thought, okay, it's time to start my own company since they fail and cannot do it. And what's the best way? Maybe you try accelerators.

Yeah.

And in fact, I saw your speech on YouTube where you talked about your son Adam Draper with his accelerator, and your son Adam is just as interested in rockets or heroes And Iron Man to have me lucky enough to actually be a right fit for him.

And then is your hope to eventually get people up there, or is it to get payloads up there, or just to kind of design a really good engine? Or what is it that's your hope? Given the next 15 years?

And that's again the question is, what are my final goals before I die, which is build all the foundations for starships. But within my lifetime, or as you asked, within 15 years, yes, I would like to build a spaceship for 2 people because it's a very underserved market where you can take your significant one to space for a weekend. And that would be A wonderful $10 million per launch type of experience for—

Elon's going to have 7 people sitting around.

There's no privacy when you have 7 people.

Yeah. So 2 people would be like a date.

Exactly. In space for the whole weekend.

That's pretty interesting. There's a service there that could be done. Yeah. Okay. Well, good. Are there other things you want to talk about?