DEXA Founder: Why Drone Delivery Is Bigger Than Amazon

Vit Lyoshin (00:01.208)
Welcome, Beth. Thank you for your time today.

Beth Flippo (00:04.219)
Thank you so much for having me.

Vit Lyoshin (00:06.646)
Yeah, of course. It's exciting to talk about drones and delivery. So thank you for your time. And I just wanted to start with like, when people talking about drone deliveries and this technology, what does it actually exist today? What do we have and what are we talking about?

Beth Flippo (00:28.081)
So the initial hurdle that was slowing down drone delivery was regulations and being able to fly. But a lot of those, the first companies that are now coming out like ours that are an unmanned airline that are having certified airworthy aircraft that are, you know, this is the past year has really been the momentum. So that's why you see a lot of more announcements of partnerships and places that are flying.

and we're flying right now. We just announced our partnership with Grubhub and we're flying for them in New Jersey, right near New York City.

Vit Lyoshin (01:05.91)
Okay, great. Okay, I see. So really it just comes down to regulation like with most other industries, I guess. Everybody gets stuck. Yeah.

Beth Flippo (01:15.313)
Yeah, but it's good though because they taught us how to build a better aircraft. They taught us how to fly properly, make sure we have our training program, our maintenance program on the aircraft. A lot of these rules are really important and it definitely has made us fly better.

Vit Lyoshin (01:22.335)
Mm-hmm.

Vit Lyoshin (01:37.568)
Okay, okay, great. So let's talk about Dexa and why don't you tell us a little bit about what it is.

Beth Flippo (01:47.483)
So we are a drone delivery company. We've been in business now for about six years, little over six years. And we are located in Dayton, Ohio, where the Wright brothers are from. So it's unique to have that experience to be the history of aviation and the future of aviation in the same place. we fly, Kroger's our biggest customer.

We do pizza with Papa John's. We do construction materials with a company called Wind Supply. We're really trying to see where the need is to use these aircraft.

Vit Lyoshin (02:26.282)
I see. And the product that you build in, is it just a drone, aircraft or the system, logistics system, software? What is it?

Beth Flippo (02:37.297)
So it's everything. It's the aircraft, it's our flight control, our mission command, if you will. We can monitor multiple aircraft by one single pilot on the screen. So we also have the charging stations where the drones will charge. We have battery technology. We have everything.

Vit Lyoshin (02:39.95)
Hmm.

Vit Lyoshin (02:45.794)
Mm-hmm.

Vit Lyoshin (02:50.626)
Mm-hmm.

Beth Flippo (03:02.039)
in here and we make all of our aircraft from scratch from all American parts. We manufacture them here in Dayton and we only have two parts that are foreign that are allied nations one from Australia and one from Finland that are on the aircraft.

Vit Lyoshin (03:20.288)
Okay, so basically end to end you decided to go on everything and hardware and software and the system and everything. Wow, okay. Why did you choose it this way? Why not like outsource?

Beth Flippo (03:28.837)
Right. Yeah.

So we would have loved to, but there was nobody doing it when we started. So, and you have to have a certified aircraft in order to be an airline. Airlines are only allowed to fly certified aircraft. So there were no certified aircraft. We had to make it ourselves. So if we had worked with another player and let's say that player went out of business because they never got certified, we wouldn't be able to get to fly our deliveries. So we just decided to build our own aircraft too.

Vit Lyoshin (03:38.734)
Okay

Vit Lyoshin (03:47.534)
Mm.

Beth Flippo (04:03.625)
And we would love to have other people build components, but again, it was just not something that was available. So we were pretty much in a lonely world for the past few years.

Vit Lyoshin (04:15.81)
Yeah, well, sometimes it's also beneficial for the business, Like, less competitors, for example. Yeah.

Beth Flippo (04:20.581)
Yeah.

Beth Flippo (04:24.305)
It is, there's only four of us in the United States that are a part 135 air carrier and have a certified aircraft and that's Amazon, Google wing, ZipLine and little less.

Vit Lyoshin (04:27.767)
Mm-hmm.

Vit Lyoshin (04:37.166)
Yeah, well, with Amazon. I know Amazon started something like 10 years ago or whatever and they didn't really work with them with drones. I wonder what happened there. And yeah.

Beth Flippo (04:49.697)
that was in Europe. They slowed down a lot that they were doing with their drone program in Europe, but they're still very active in the United States. And, you know, I always tell people if Amazon could have bought somebody's drone, they would have, but they just didn't exist because they started out just like us at the very beginning of all of this. So yeah, Google wing, if they could buy it, they would, but there's just nothing out there for

Vit Lyoshin (04:59.085)
Mm-hmm.

Vit Lyoshin (05:14.7)
Yeah, yeah, okay, I see. And then I also wanted to ask about this regulation and becoming a certified airline. What does it take to get through this, especially for a small company startup?

Beth Flippo (05:32.433)
to get through certification. The hardest part is that you, until you're a part 135 air carrier, you're not allowed to fly cargo for compensation. So you can't make any money. So you've got to run your company with no revenue and you have to have investors to be able to fund it. So for five years, you have to get investors to fund you, otherwise you're not going to make it. And there's no guarantees either. So it's a very hard.

Vit Lyoshin (05:34.605)
Right.

Beth Flippo (06:01.649)
thing to do. But what you do is you can, you know, the FAA has these programs and they're open. You, for us, we had to go through a lot of the original drone programs. was something called the IPP that was the integrated pilot program that was replaced by something called Beyond. And you had to be part of the Beyond program. And as you're part of all these programs and working, you can get into the part 135 program and then

You have to go through it. To be an airline, you have to have three roles that have to be filled. You have to have a director of operations called the DO, you have to have a chief pilot, and you have to have a director of maintenance. So these three have to be people that have worked in manned aviation for some period for most of their lives. So you can imagine you're paying people who would normally be a pilot at American Airlines to be your

drone director of operations. So it's very expensive, but they understand the way to do it safely. So as you hire the right people, then you have to follow all the program of it to be an airline. You have to have a training program, a maintenance program. mean, all of our pilots have to go through drug and alcohol testing. They have to get a medical certificate. It is the exact same as manned aviation. It's incredibly difficult. So.

Vit Lyoshin (07:04.609)
Mm-hmm.

Beth Flippo (07:25.787)
You're not gonna have a lot of unmanned airlines just like you don't have a lot of manned airlines today.

Vit Lyoshin (07:32.374)
Yeah, yeah, for sure. And I imagine those pilots, they're just like remote, right? Watching drones fly and make sure everything looks right. Yeah, yeah.

Beth Flippo (07:40.655)
They do. So they watch our software and they become more like air traffic control is really what they are.

Vit Lyoshin (07:46.578)
Mm-hmm. Yeah, I see. Okay. Do you think those regulations more like a bottleneck or a competitive advantage?

Beth Flippo (07:56.795)
For us, it's an advantage now that we got through it. It's definitely a moat, but it is a bottleneck, but it's a necessary bottleneck. So there's a lot of people saying, but the new regulations are gonna like ease that up and it's not gonna be so hard, but it should be hard. Should you not drug and alcohol test your pilots? Should you not maintain your aircraft with a certain maintenance program?

Vit Lyoshin (07:59.712)
Okay.

Vit Lyoshin (08:06.434)
Mm-hmm.

Beth Flippo (08:21.977)
Like all of these things, you know, our training program for our pilots is very intense and they have to go through a lot to learn how to fly the aircraft. I wouldn't want the FAA to scale that back and say, you don't need to train your pilots. So there's a lot in there that is really necessary. And on the airworthiness side, you how we build our aircraft, every single component, you have to know full traceability back to where it came from. So if one screw breaks, you know,

Vit Lyoshin (08:35.203)
Mm-hmm.

Beth Flippo (08:51.493)
the bag that screw came out of, every drone that got a screw out of that bag and you have to pull all of them and do maintenance. That is why manned aviation is so safe and that's why unmanned aviation is going to be so safe. But yeah, it's an intense process, but it's necessary. We think so.

Vit Lyoshin (09:09.454)
Yeah, yeah, that makes sense. Okay. So why don't we talk a little bit how exactly the system works? If you can give us maybe an example of what people like, is it for businesses, for ordinary people to use the service and how does it actually work?

Beth Flippo (09:26.385)
So for us, we do both. do to consumer, where you can order a burrito and have it delivered to your house. Or we do B2B, where we have construction materials companies delivering to companies that use their parts. Or auto parts companies delivering to mechanics. So it really doesn't matter if it's a person or it's a company that you're delivering to. Everybody has a need to get something in 15 minutes.

And what's really great about it is that it's the exact same time for every single delivery. And nothing like that has ever existed in logistics where there's no traffic. There's no, nothing can slow this thing down. There's nothing in the sky. There's no person who has, you know, he's busy or he's got other things to do. It is the exact same. So that's where the real advantage is for using drone delivery.

Vit Lyoshin (10:25.784)
So when you say 15 minutes, why 15 minutes? How does it exactly go in 15 minutes?

Beth Flippo (10:31.515)
So our drone goes at 40 miles an hour. This our current drone, we have our second drone that's coming out of certification. That one goes at 70 miles an hour. And right now the smaller drone, we only limit it to like three to four, sometimes five miles away from where we are. So at those speeds, it's really fast. So the 15 minutes is actually us getting the order flying out and back. So each

Vit Lyoshin (10:34.956)
Mm-hmm

Vit Lyoshin (10:50.968)
Hmm.

Beth Flippo (10:59.683)
aircraft can do four deliveries in an hour.

Vit Lyoshin (11:03.384)
Wow, so really the idea that it's like a local support for businesses in the neighborhoods. It's not like it's going to go from one city to another. The idea is to have them, a lot of them local. Wow. Okay. I can see that.

Beth Flippo (11:14.042)
Right.

Beth Flippo (11:19.087)
Yeah, we make money on volumes. So we get approached a lot to do a lot of rural. It doesn't really work for us because if we have one drone flying 10 miles away, it's not doing as many deliveries as it can. So we call it hyperutilization. We want to be using these aircraft in a way that they're constantly in use and they don't have a lot of dead legs. Dead legs are the worst where they're flying back empty, just like on the ground.

Vit Lyoshin (11:33.442)
Mm-hmm.

Vit Lyoshin (11:45.262)
Mm-hmm.

Beth Flippo (11:46.819)
So you're trying to find a way to avoid that at all costs.

Vit Lyoshin (11:50.848)
Yeah, and how much can they carry in terms of weight?

Beth Flippo (11:55.323)
So our first drone carries five pounds and our second drone carries 20 pounds. It can actually carry even more. We just have a really industrial winch on it that takes some of that payload. So it's really, if we didn't have the winch, it would be 25 pounds on that aircraft. So it's pretty robust. It's the same form factor. It's just got much bigger motors on it.

Vit Lyoshin (12:20.524)
Yeah, so that's pretty much should be enough for most of the like with Grab Hub, right? Most of the like food deliveries and things like that. So.

Beth Flippo (12:30.241)
Yeah. And we, the way we think about it is, we really even want to do one delivery that's 20 pounds or should we do four deliveries that are five pounds? That's kind of what we're looking at. Cause Amazon said 86 % of their deliveries are under five pounds. So yeah, we can deliver more, but maybe it's better to do more of the smaller deliveries. If you're getting paid $5 of delivery, then those bigger, you know, catering orders and things like that. But.

Vit Lyoshin (12:39.255)
Hmm.

Beth Flippo (12:59.995)
We'll see where the world takes us.

Vit Lyoshin (13:02.604)
Yeah, I actually when I order a bunch of things in Amazon, they bring it in multiple packages and they're small. So yeah, that makes sense actually. They don't bring it all in one big package. Speaking of Amazon, like this is gonna be quite a challenge for them I guess right now because...

Beth Flippo (13:11.941)
We all get them.

Beth Flippo (13:19.504)
Yeah.

Vit Lyoshin (13:29.408)
other companies gonna start getting into deliveries, especially like local businesses, they can sign up and make deliveries on their own. How is it gonna be impacting this big like Walmart, Amazon, all these type companies?

Beth Flippo (13:46.395)
to have that new what they just announced today, the Amazon. I mean, it'll help a lot of smaller businesses to be able to deliver for sure, but it's still not gonna help the same day. The same day is always the biggest hurdle. So even if Amazon gets the same day, they're not gonna get as close as the drones are gonna get and do it in a way that's so cost effective. So even if they do get...

Vit Lyoshin (13:52.844)
Mm-hmm.

Beth Flippo (14:15.139)
same day down, it's going to cost a lot of money like DoorDash. Like DoorDash does same day delivery and it's really expensive, just like Uber Eats, just like all of them. So if you can get drones, it's going to be a lot less expensive. So even if these stores sign up with Amazon, which I think is good for them to be able to have that delivery outlet, it's always going to eventually come back to who's got the fastest and the cheapest. And that's where we'll be.

Vit Lyoshin (14:18.446)
Mm-hmm.

Beth Flippo (14:43.671)
know, drones are going to shine really.

Vit Lyoshin (14:45.774)
Yeah, and I can imagine there many advantages of that. Like you said, no traffic, no red lights, no crashes on the road, nothing like that. It just goes straight line from warehouse. And I also watched couple of your previous interviews and you mentioned something that was really...

sounds futuristic to me. Like you don't have to be in your address to get a delivery. You can be anywhere actually. Can you talk a little bit about that?

Beth Flippo (15:15.355)
Yep.

Beth Flippo (15:18.999)
Yeah. So drones do one delivery at a time. So right now you need to have an address for trucks because trucks need, you know, routing software. They need a fixed location so they can schedule a route. And for drones, when you're doing one delivery at a time, you don't need any of that. You can just go to where that person's address is. And this is not a new technology that we all use Uber. Like, could you imagine using Uber if you had to actually put an address in? You'd never use it.

Vit Lyoshin (15:22.317)
Mm-hmm.

Vit Lyoshin (15:30.115)
Mm-hmm.

Vit Lyoshin (15:33.538)
Mm-hmm.

Vit Lyoshin (15:47.767)
Ha ha ha.

Beth Flippo (15:49.187)
So drone delivery will be able to say, won't, we won't have to put in, I'm at this hotel or about my office or I'm here. It should just know where you are when you use the app and that is where the drone heads. So right now it's, it's going to start where you're fixed. So even if you're on a soccer field, it's going to be like, this is where I am when I place the order. But even eventually down the road, it's going to follow you. It's going to know where you are.

Vit Lyoshin (16:01.483)
Mm-hmm.

Beth Flippo (16:15.888)
So, and even arrange where to meet you. So if you're driving down the road and you've got all your kids in the car and you want food, but you don't want to go and walk them all into a store, you'll be able to order and it'll say, get off at exit 17. There's a locker at this location and you can pick up your stuff. So that is where you're going to, that's what I get excited about because that's like where you're really going to see the difference and you don't need to go to the store to pick it up anymore.

Vit Lyoshin (16:20.814)
Mm-hmm.

Vit Lyoshin (16:39.885)
Yeah.

Beth Flippo (16:45.348)
You don't need to go be at a fixed location to get something that you need.

Vit Lyoshin (16:51.97)
Yeah, this is exactly like on demand. I want to have, I don't know, something right now and I'm in the park with my friends. run out of food or drinks or whatever and it brings it right to me. That's amazing. That's like I want it right now.

Beth Flippo (17:06.64)
Yeah.

I know. And when I say it out loud, people are like, why am I attached to an address? So I travel a lot. So for me, it's terrible. I'm like, what's the address of this hotel? Like all the time I'm like trying to, you know, tell it where I am. And we shouldn't be doing that. The technology is already there. We are a mobile unit. Why are we attached to anything physical anymore? It's like the people that used to say, you don't need cell phones. You've got car phones.

Vit Lyoshin (17:15.246)
Yeah.

Beth Flippo (17:38.553)
And people were like, yeah, but I don't want to be attached to the car. And we're still attached to the house. Like it's crazy. that's once that happens, no one's going back. No one's going back to trucks. Trucks are going to have to adjust to, you know, on demand. Where are you kind of capability, not a fixed location anymore. And I'm hoping people are already writing that software, you know, to a GPS location, not to an address.

Vit Lyoshin (17:41.632)
Yeah, yeah.

Vit Lyoshin (17:58.647)
Mm-hmm.

Beth Flippo (18:07.994)
Cause you can imagine a lot of that software is city, know, address city, state zip code. Now it's just GPS coordinate. It's going to be interesting.

Vit Lyoshin (18:08.14)
Mm-hmm.

Vit Lyoshin (18:14.147)
Yeah.

Vit Lyoshin (18:18.946)
Yeah, yeah, for sure. Wow, that's, yeah, that one is really made me think about like the future of stores and the future of me going shopping, how much I should buy, what I should carry with me when I can just push a button and it delivers to me. I need to buy it anyways. Why would I carry all this stuff to the beach with me when I can sit there, push a button and it deliver to me like a cold beer or ice cream?

right there in the moment. That's amazing. Yeah.

Beth Flippo (18:50.36)
Yeah, that's where you start to think like, wow, what kind of businesses are gonna get created around that? Because this is something very new. So you're gonna start seeing ghost kitchens and all these small micro fulfillment that are gonna be popping up to get you just what one person would need. Because we work with grocery stores and one of the biggest questions we get is, how can you do the Sunday delivery?

Vit Lyoshin (18:57.304)
Mm-hmm.

Beth Flippo (19:16.8)
And I always have to say, but why are you doing the Sunday delivery? Why are you ordering so much? And you're doing it because you don't want to go to the store all the time. But if somebody gives you an option to get it delivered right away without any guilt, it's eco-friendly, it's cheap. You're not going to have to pile all that into your car on a Sunday where most of it will go bad on Thursday and Friday and we all throw away food. That's like where it starts to change. Like as you start more frequency,

Vit Lyoshin (19:16.835)
Mm-hmm.

Vit Lyoshin (19:41.452)
Right.

Beth Flippo (19:45.505)
smaller delivery, that's where drones fit in perfect. And that's where society is heading. Nobody wants a minimum order quantity anymore. Nobody even like says that anymore because of Amazon. So yeah.

Vit Lyoshin (19:56.622)
Yeah, yeah, for sure. So when does this system becomes economically viable? Is it already or?

Beth Flippo (20:07.685)
So it still costs money to do this because we're getting to where we're fully remote and charging on the rooftops and not having any people in the equation. That's where it starts to become really profitable. Then you can imagine you have one drone doing four deliveries an hour and you are allowed to do one to 40 with the FAA. So it's one hour of labor doing 160 deliveries an hour.

Nothing like that has nothing in logistics has ever come close to that. And as people start to realize I can order whatever I want when I want it, like you're going to see just this explosion in demand. So most people don't think about ordering something right away unless it's food today. But eventually it's going to be, you know, in the morning when we wake up and we run out of coffee creamer, like we're drinking our coffee black. We don't even think should I just order coffee creamer, but now you will.

Vit Lyoshin (20:52.43)
Mm-hmm.

Vit Lyoshin (21:03.106)
Right.

Beth Flippo (21:03.779)
And in 15 minutes, it'll get there. Like that is going to make you start ordering all throughout the day. And we'll eventually have a subscription just like Amazon. So you don't have to pay per delivery because everybody hates that. And there's no tipping and there's nobody knowing where you live. And all of that, like, we'll make you order constantly. It'll just be like what I want. And AI eventually will start guessing what it is that you want, you know? So.

Vit Lyoshin (21:24.568)
Mm-hmm.

Vit Lyoshin (21:31.552)
I was just thinking about that, yeah.

Beth Flippo (21:34.576)
Yeah, so I talk about even batteries, like we all walk around afraid our battery is going to run out on our cell phone. And like how great it would be to have a subscription where if my battery is running out, my phone will notify somebody somewhere and a fully charged battery pack will come to me. Like that's not so crazy. Like that technology is, is there. It's just the delivery element. Why ever have to worry with my kids? I'd never have to worry again. I'll pay for that.

Vit Lyoshin (21:41.582)
Mm-hmm.

Vit Lyoshin (21:53.677)
Yeah.

Beth Flippo (22:04.353)
know, subscription all day long. So there's a lot of new things that are gonna come out because of this tech.

Vit Lyoshin (22:07.288)
Yeah.

Vit Lyoshin (22:12.462)
Yeah, I think the possibilities are endless if you're talking about this fast delivery right anywhere where you are. If you had an emergency or if you need something really quick. Yeah, it's like thousands of different use cases. I'm sure creative people out there will come up with all sorts of businesses on top of it. It's like Shopify when they created first time, all kinds of businesses popped up everywhere online.

This is another thing like that, I think, that will create this huge, huge marketplace, opportunities for all kinds of people to do this. That's amazing. Yeah. Okay.

Beth Flippo (22:49.648)
Yeah.

And not just people, but robots too. There'll be all these new robotic things coming up that'll integrate into it too. So that's what's great about robots is robots talk to robots. like Uber Eats will never hand off to a DoorDash driver. Cause even if they could, how would they even meet up? And you'd have these two people, one waiting for one order, but drones and robots, they cut through all of it.

Vit Lyoshin (23:00.035)
Mm-hmm

Beth Flippo (23:19.045)
So you're going to have people inventing ground robots that get deliveries from drones. You're going to have lockers where the robots, you know, the drone will drop it and it'll hand off to the robot on the ground and take it. And that's, know, there's so many elements of things that are going to get created around this.

Vit Lyoshin (23:38.638)
Right, we actually have seen this with military drones, right? When they can go and communicate with each other without, with like satellite connections and stuff like that. So they don't really, they can go to like a middle of the desert and still communicate with each other and figure out how to operate or help each other or whatnot. I imagine with...

like this type of technology it's also possible when drones can communicate, pick up orders, help each other, and whatnot.

Beth Flippo (24:12.603)
Yeah, we actually just started DEXA Defense because, you know, we have an American made drone fully certified by the FAA. There aren't that many. And they actually came to us saying we really need to have this aircraft. So they're planning to use it domestically, just on base, moving tools around, ordering food, even for the people on base, you know, to not have to leave the base and come back. There's so many uses for it. You know, I know a lot of people think one way drones, but that's

Vit Lyoshin (24:24.333)
Mm-hmm.

Vit Lyoshin (24:35.054)
Mmm.

Beth Flippo (24:42.565)
These are servicemen carry a lot of stuff on them, just in ammunition and all these things. If the drones could take some of that weight off of them when they're just walking around, like there's a lot that these drones are gonna do on base. So, yeah, we're excited to be able to support them, the tool purpose.

Vit Lyoshin (24:48.631)
Right?

Vit Lyoshin (24:59.554)
Mm-hmm.

Vit Lyoshin (25:05.506)
Yeah, yeah, for sure. So there are some maybe hidden costs or challenges that you had to go through. Can you talk a little bit about that for people who may be not familiar with how to build this? Like it's a physical product, it's manufacturing a lot of moving parts. What were some of the challenges along this development?

Beth Flippo (25:29.179)
So a lot of it is that there were no machines to test the stuff we were building. even if you could, so we cut our own carbon fiber, we produce all our own plastics because we can't buy anything from China because I can't guarantee it's the same for every single time. So all of these things that we make and then we have to test the drones when they're done and that equipment didn't exist either.

Vit Lyoshin (25:50.348)
Mm-hmm.

Beth Flippo (25:57.234)
So we actually had to build our own test stands and our own, you know, all different types of tools to make sure that the motors were spinning and what the throttle was doing, like testing sub assemblies. That was something that we weren't prepared for when you're a brand new industry, you don't realize like, yeah, even if you can build it, how do you make sure it's working? So when we cut our own carbon fiber, so we have these plates that...

Vit Lyoshin (26:16.984)
Mm-hmm.

Beth Flippo (26:24.173)
once we cut the holes in them, we still have to make sure we cut them right. So we have to make a reverse mold and drop it in and make sure that it fits like everything. Like anything that we do, we have to build a comparable tester to ensure we built it right. So even when we build our, you know, do our 3D printing, you still got to test that you did it right. There's no guarantees that something didn't break in the machine.

So yeah, that was the hardest. That was one thing that we were not prepared for at all, but we learned.

Vit Lyoshin (26:57.452)
Yeah, right. That's what I always try to remember that building software is one thing. When you write the software, it kind of repeats itself all the time, the same, unless there is a bug or something. But with hardware, every part that you make will be unique on its own, right? And it can have its own flaws and issues, if you will. So it's a completely different mindset for engineering hardware versus software.

Beth Flippo (27:10.32)
Yeah.

Vit Lyoshin (27:27.564)
That's interesting.

Beth Flippo (27:28.631)
Yeah, and it costs a lot of money if you make mistakes in hardware. So we had to test our parachute 45 times. We had to drop it out of the sky in all different phases of flight. So full forward flight with a payload, without a payload, hovering, descending, you know, everything. And each time you're damaging the aircraft, even though the parachute brings it down slowly, it's still going to hit the ground.

Vit Lyoshin (27:32.292)
Right? Yeah.

Beth Flippo (27:57.126)
So you lose a lot of money just trying to just test this thing to prove your parachute works. And if you fail, if one time that parachute doesn't go off, you go back to zero. So it's a very stressful testing that we were, you know, and again, just hardware costs a lot of money. I'm a software developer. I'm an embedded software developer. So I live in that hardware world, but in software I can keep hitting run again, run again, debug.

Vit Lyoshin (28:04.194)
Mm-hmm.

Vit Lyoshin (28:09.194)
Yeah.

Beth Flippo (28:25.573)
There's none of that in hardware. You send it outside. Good luck. Let's make sure. Yeah.

Vit Lyoshin (28:29.654)
Yeah, it's nature. Yeah, yeah. All the natural conditions, wind, weather, rain, all that. Yeah, it's so many variables you have to think about with this. That's a lot. Yeah.

Beth Flippo (28:37.233)
Yeah.

Beth Flippo (28:41.871)
Yeah.

Vit Lyoshin (28:44.074)
Okay, so before you got into, know, you mentioned a couple of big clients you got early on, like Kroger and now GrabHub and a others. What did you have to prove to them that this will work so they sign up with you?

Beth Flippo (29:00.465)
So we had to have the certification to be able to do it. Kroger, we didn't have the certification yet, but we were in the programs with the FAA and we would bring them on phone calls with the FAA and they would follow along the process of what we were doing, which was really demonstrating like how safe this was because that's really what they want. They don't want to have.

Vit Lyoshin (29:04.534)
Okay.

Mm-hmm.

Beth Flippo (29:22.767)
somebody that ever says to them, you don't need those certifications. those certifications are going away. Or there's another certification coming out that's gonna replace that one. They wanna hear that you are doing this by the book. You're doing it exactly right. And that's what really sells them. And you have to show demos of the aircraft and what it's doing and how it's performing. But in the very beginning, before you're certified, you need true partners. They're in it with you. If something happens with that aircraft,

Vit Lyoshin (29:38.487)
Mm-hmm.

Beth Flippo (29:52.484)
with Kroger, they're going to go after Kroger. They have the money, not me. So you have to have those partnerships in place. Now that we're certified and we've had a lot of partners, it's a lot easier and there aren't that many players. So a lot of our partners actually come to us, which is good, but that's how you just show them that you're doing it safely. And that's the one thing that'll really set you apart.

Vit Lyoshin (29:58.222)
Yeah.

Beth Flippo (30:20.273)
because there are still a lot of people out there trying to pitch that they can do delivery with robots and they don't need any of these regulations. Nobody's going to work with you with that kind of approach to flight.

Vit Lyoshin (30:20.684)
Mm-hmm.

Vit Lyoshin (30:35.34)
Right, which also brings a question to my mind. With all these humanoid robots that people are building with like Tesla and a bunch of other smaller companies, what regulations exist for that type product, if you will? I'm not sure. So with aviation, we know what exists, but with humanoids, who knows?

Beth Flippo (30:59.755)
Exactly. think the only rules that I can even think of are like fire rules. Like there's rules about being in a confined space with a robot, you know, like today that maybe, but yeah, I'm like the autonomous cars, a lot of them are writing them as these rules as they go. There's never been anything to even come close. At least you're saying you're right. The FAA at least had a path. You have to follow this path. It might not be perfect.

Vit Lyoshin (31:20.142)
Yeah.

Beth Flippo (31:28.507)
But at least we have an idea. But yeah, you're going into a humanoid in somebody's house folding their laundry. How do you make sure that they don't cause a fire or they don't grab the dog or they don't do something not realizing like, yeah, that's even scarier to me because somebody's got to start writing those. And the FAA didn't start out having all these rules. They learned them through experience, negative experiences. And it's unfortunate, but that's the way a lot of industries

Vit Lyoshin (31:30.35)
Mm-hmm.

Vit Lyoshin (31:40.565)
Yeah.

Vit Lyoshin (31:55.203)
Yeah.

Beth Flippo (31:58.054)
get built. So you're going to see accidents in the beginning with humanoids and cars on the ground and things like that, but it's just going to keep getting better and safer and safer. And I'd still take an autonomous car on the road any day over, you know, a person that's drunk, you know, like there are plenty of other things. We are all distracted. We all have had those almost accidents. My husband tries to

Vit Lyoshin (32:15.828)
yeah, for sure.

Vit Lyoshin (32:24.194)
Yeah.

Beth Flippo (32:25.765)
pretend that he doesn't. But like we all been there where we looked at our phone and been like, my God, I almost hit that guy. That I would rather live in a world where that goes away. So I just hope everybody keeps pushing for these, you know, autonomous robots and cars.

Vit Lyoshin (32:27.938)
Hahaha

Yeah.

Vit Lyoshin (32:42.318)
Yeah, no, yeah, I think it's future. It's inevitable. We will have it. It's just a matter of how long it will take to make it safe enough for all of us to accept it and actually have it in the home. Yeah. I also wanted to talk about the actual system that you're building, how autonomous it is. Are these drones? they like, is there a queue for orders? Are they picking them up? And people have to make decisions and like, is there a human in the loop in the system?

Beth Flippo (32:55.451)
Yeah.

Beth Flippo (33:12.123)
So the human in the loop right now is that we still have to put the package on the aircraft with a human. Eventually the aircraft's gonna fly over, it's gonna lower its winch, the package, raise it up and fly off. That's the future. But right now the FAA wants to make sure that that package does not come loose. So like one of the things we have is we have a free payload. So our box attaches under the aircraft, stuff doesn't go inside.

Vit Lyoshin (33:12.45)
Thank

Vit Lyoshin (33:17.569)
Okay.

Beth Flippo (33:42.288)
So it allows us to have different size payloads. Google wing does the same thing. But we had to have two ways of attaching it. So if one failed, the other wouldn't. There's all these rules around that. we still have that human in the mix. And we still have the remote operators watching all the flights. So we still do have a human element involved. But otherwise, it's.

Vit Lyoshin (33:45.793)
Okay.

Vit Lyoshin (33:53.261)
Mm-hmm.

Vit Lyoshin (34:09.066)
So the drones... Okay.

Beth Flippo (34:11.695)
Yeah, but otherwise it's fully autonomous. The flight, once you plan a mission, the drone does its own thing. It doesn't have anybody, there are no sticks for these aircraft.

Vit Lyoshin (34:20.438)
Yeah, okay, I was gonna ask if there are people actually operating or they're completely autonomously flying around. That's great, yeah. Okay, interesting. Yeah, okay. So, a couple of personal questions, I guess, for you is what were your personal hardest moments building DEXA?

Beth Flippo (34:47.321)
so you have a lot, I mean, raising money is always really hard when you can't make revenue. So that, that was unique to us, but the hardest thing we ever had to go through was the parachute testing. it really took a long time. It was, you know, really involved. You're watching these aircraft getting destroyed. I mean, it was not something that I was prepared for, but.

Vit Lyoshin (35:14.338)
Mm-hmm.

Beth Flippo (35:15.309)
Again, it was, it was a good learning experience and we've grown. We're up to 50 people now. So you learn a lot about what motivates people, what makes them want to work, what excites them, how to utilize people properly. And I think that's made us a better company. But in the beginning, I mean, like every other company you're hiring your friends, you're hiring people you knew once.

And then you start, go to the next phase, which, you know, luckily we kind of skipped, but a lot of companies then go to hiring, you know, a VP from Oracle or, know, a VP from like a fancy, you know, big company where they're not going to work well on a startup. And then you finally get to the third phase where you start to hire the, the people that are right for the job. And that's where we are now, which is great, but you know, it takes a lot to get there.

Vit Lyoshin (35:52.718)
Mm-hmm.

Vit Lyoshin (36:05.464)
Yeah, I see. Okay. Do you have any stories of maybe somebody's using to deliver something like a very strange product or very strange thing or anything like funny stories, cool stories?

Beth Flippo (36:17.969)
Yeah, we have been we've been approached by every cannabis dealer, I think in the United States. We've been asked to we've delivered a lot of light. We've been asked to deliver a lot of, you know, weird one off things. But but yeah, we're just trying to stick with with food, but everybody I don't care what they're doing. Somebody needs to get something from here to there. So we get approached with

Vit Lyoshin (36:25.037)
Hahaha

Beth Flippo (36:47.841)
all different kinds of ideas from people about things that they're trying to sell and trying to move. And yes, but right now we have to work with pretty big partners. So we can't do a lot of the smaller stuff, even though they'd be fun to try. We don't do medical deliveries. That's just not our bag. We're really in the commercial, the consumer space. Cause there's just not a lot of volume.

Vit Lyoshin (37:03.885)
Yeah.

Beth Flippo (37:16.239)
yet to be delivering organs and all this kind of stuff or rural deliveries are very difficult. So right now we're still sticking with the burritos, but we can eventually get bigger and bigger aircraft and deliver more things down the road.

Vit Lyoshin (37:34.122)
Mm-hmm. Were there any moments in this journey that you felt like this is not gonna work? That's it. Done.

Beth Flippo (37:41.412)
every day. I'm You know, in the beginning, because there's no guarantees just because you're in these programs doesn't mean you're going to make it and you'll be submitting a document over and over and they're catching something different every time. It's not like, you know, eventually you're getting less and less. The next person that reads it could find five other things.

Vit Lyoshin (37:55.596)
Mm-hmm.

Beth Flippo (38:05.743)
you get really nervous along the way of like, is this ever gonna happen? Am I gonna be able to accomplish this? And we just kind of kept our head down. We never fought with the FAA. That was kind of our rule was like, we looked at them as collaborators, like tell us what to do and we'll do it. And I know a lot of other people fight with them to try to make sense of the rules and say, this is not necessary. We never did that. And I think that helped us.

Vit Lyoshin (38:22.679)
Mm-hmm.

Beth Flippo (38:31.067)
But yeah, there were many times when you're trying to go through certification where you're just wondering like, are we actually ever gonna get this thing certified? Did we take on too much? And now that we're on the other side, it's like, now let's make a movie about it. But at the time it was very scary. Yeah.

Vit Lyoshin (38:45.486)
Yeah, yeah, yeah. Where do you see logistics on last mile delivery specifically in maybe like let's say five to ten years?

Beth Flippo (38:59.377)
In five to 10 years, drones are gonna be everywhere. Not just small drones. You're gonna see big unmanned aircraft flying around too. You're gonna see all of those handoffs to robots on the ground. You're gonna see buildings and homes having their own robots that'll go out and meet the drone. There's all different kinds of robotic interactions that you're gonna see. drones are, I believe drones are gonna be the primary form of delivery.

Vit Lyoshin (38:59.982)
you

Beth Flippo (39:29.349)
of down the road because there's just so many unknowns with cars. You know, this is why your delivery for DoorDash changes with every delivery you do. It's based on distance. It's based on, you know, it can be based on weight. The cost of gas is changing city to city. There's labor laws that are changing city to city. You could hit a traffic jam, the food's cold and now the person wants their money back like.

It's just once you find a solution that doesn't have all of those unknowns, people are going to gravitate towards that. And right now it's even less expensive, but even if it were the same price, it's still an all around better solution. So I think you're just going to naturally see these drones. Every time you look out the window, always in my mind, I see them flying around. They're going to be so high up.

Vit Lyoshin (40:11.906)
Mm-hmm.

Beth Flippo (40:21.969)
that it'll be like the tiniest dot you won't even see, but they're just gonna be part of our lives everywhere. And it's exciting because it wasn't that long ago that cars were created or airplanes for that matter. And people were scared then too. They were like, there were no paved roads. There was no gas stations. The horses were walking down the middle of the street. It was crazy to think that it would be everywhere.

Vit Lyoshin (40:25.837)
Mm-hmm.

Vit Lyoshin (40:39.424)
Yeah.

Beth Flippo (40:48.313)
like it is. And we're now at the precipice of that next thing. And I mean, we lived through smartphones, we lived in a world where they didn't exist at all. And now everyone has one. So nobody believes it until you like remember all of this, like air conditioning, people thought no one was going to be using air conditioning. They thought it was like a fad and it's everywhere. And drones are going to be the same way. Every great technology just takes a couple of years, but if it's better, it's going to be the

Vit Lyoshin (40:49.634)
You

Vit Lyoshin (40:57.962)
Right?

Vit Lyoshin (41:09.376)
wow.

Beth Flippo (41:17.679)
the chosen for sure.

Vit Lyoshin (41:19.07)
Mm-hmm. Yeah, yeah, I'm pretty sure it's gonna become kind of like invisible given fact that we all get deliveries by the drone and it's everywhere. I don't have to carry a lot of stuff with me. I can just call it and it brings it to me and maybe takes it back when I don't need it anymore. And good to go. Yeah, great.

Beth Flippo (41:41.551)
Yeah, that'll be great at the beach. If you can have it deliver all your chairs and your cooler and everything, and then also take it away so you can just walk to the car, that would be fantastic. There, somebody's gonna come up with that as a rental thing. You'll just rent all this stuff for the day.

Vit Lyoshin (41:45.985)
Yeah.

Yeah

Vit Lyoshin (41:56.322)
Yeah, I'm pretty sure. Yeah, yeah, I'm pretty sure that as I said, I have so many use cases flying through my brain right now. It's amazing. All right. Okay. But thank you very much for explaining Dexa and how exciting this is. And I wish you good luck and I'll watch what's next for your company. And at the end, I usually ask three questions. I hope it's simple, but some people complain it's not that simple.

Beth Flippo (42:10.747)
Yeah.

Beth Flippo (42:18.117)
Thank you.

Vit Lyoshin (42:26.336)
It's my innovation Q &A round and I'm curious to know your answers. So the first question is, can you define innovation in a few words?

Beth Flippo (42:38.895)
Innovation in a few words is creating something out of nothing. I believe true innovation is Peter Thiel wrote a book called Zero to One, which is one of my favorites. And he said, all the great technologies start at zero. Whereas, you know, if you add smarts to a refrigerator, it's not really zero. You're starting from something. But innovation for me is where it's a completely new idea.

Vit Lyoshin (43:01.357)
Mm-hmm.

Beth Flippo (43:08.485)
that changes the world.

Vit Lyoshin (43:10.958)
The second question is which innovation in the history of the world do you think changed the world the most?

Beth Flippo (43:22.913)
for me, probably think it'd be steel because I'm a New Yorker and, know, people take it for granted, but that built everything. and then another one of my favorites is the elevator, which, you know, I use an examples a lot because people were afraid of elevators, automatic, like automatic elevators. used to be a person in there moving it and there were accidents constantly.

Vit Lyoshin (43:46.509)
Yeah.

Beth Flippo (43:50.595)
And the automated elevators were foolproof, but people were afraid. And that's why when you watch shows like Mad Men, there was an elevator attendant, even though he didn't do anything, he just hit the button because people were still so scared of being in there alone. And that's kind of like a lot of technology for me is that path. But once it's there, it made us be able to go vertical and change how we live.

Vit Lyoshin (44:18.028)
Yeah, great. And the last question is, which technology or software or device that we use today, you think we will be laughing at 10 years from now?

Beth Flippo (44:30.705)
I'm trying to think, what will we be loud? And I mentioned things all the time. I don't know if it's a device, but like I said earlier, the idea that you're attached to something, to a place, that is what I think we're going to laugh at 100%. People are going to be like, what do you mean? What's an address? Like they're not even, people aren't even going to think that way anymore. It's just going to be this.

this comes to me and everything knows, you know, where I am. That's something I think people are going to, our kids are going to laugh at that and be like, what do you mean you had to stand still? The order came to you. you know, like they're going to be one step beyond. They're just going to be like, I'm walking down the road and it came to me. So that's something we're definitely going to laugh. It is crazy that we still attach ourselves to a piece of property.

Vit Lyoshin (45:13.006)
All right.

Vit Lyoshin (45:20.461)
Yeah.

Vit Lyoshin (45:27.83)
Yep, yep. All right, thank you very much, Beth. And yeah, I hope we can stay in touch and talk more in the future. Thank you very much for your time. All right, bye.

Beth Flippo (45:32.27)
Absolutely.

Beth Flippo (45:37.349)
Yes, thank you.