00:00hi everyone welcome to the a 6nz podcast
00:02we're continuing our annual Thanksgiving
00:04series with a ongoing series around good
00:08business doing good and in this episode
00:10we're featuring drones for healthcare
00:12delivery in Africa and beyond
00:14this episode is based on a conversation
00:16from our most recent a 16z summit event
00:19featuring zipline CEO and co-founder
00:21caller Renato and John Menna VP of
00:24healthcare strategy at UPS in
00:26conversation with Chris Dixon thanks for
00:32being here Kelly you might start by
00:34talking about what you're doing as a
00:35point sure we build a system that is
00:38basically instant delivery for health
00:40care we make it possible for governments
00:42to deliver medicine instantly to people
00:44who live in hard-to-reach locations the
00:47companies currently operating in Rwanda
00:48we delivered blood to about half of the
00:50transfusing facilities in Rwanda Rwanda
00:53delivers about 55,000 units of blood a
00:55year 50% of that is going forward mom's
00:58right after giving birth and that 30% is
01:01going to our kids under the age of 5 who
01:02have anemia due to malaria so the
01:05company is now basically delivering
01:07blood instantly to people who couldn't
01:10get access to it before yeah joint you
01:12tell a little bit about what what you
01:13work on I president and healthcare
01:15logistics strategy for UPS and we serve
01:18manufacturers in the healthcare and life
01:20sciences industry primarily farmer
01:22manufacturers medical device
01:24manufacturers and we do everything from
01:26warehousing products to distributing
01:29those products and obviously
01:30transporting those those those goods
01:32everything from manufactured products to
01:34the transportation of specimens and
01:38biological specimens as well and you and
01:40you have operations all over the world
01:42including in Africa we do obviously a
01:44very strong footprint in North America
01:47for healthcare logistics in Europe and
01:50in parts of Africa and Asia as well UPS
01:53is basically supporting the work that
01:54we're doing in Rwanda so they've both
01:56been helping fund the work and they've
01:58also been advising us in terms of
02:00actually creating a logistics network at
02:02national scale the reason that it's been
02:04so awesome to work with UPS is that we
02:07both share a vision for taking logistics
02:10in a direction where you can get
02:11anything you need instantly
02:13particularly for products that we rely
02:15on with our lives you want it maybe a
02:17more detailed whenever we talk about
02:19like drone delivery people are like this
02:20is science fiction it's not real people
02:22are very cynical about it because some
02:24big companies and made some
02:25announcements four years ago and
02:26basically nothing's come out of it so
02:28people think okay it's impossible it's
02:30marketing I did just want to emphasize
02:31it's not marketing it's happening right
02:33now so this is a zip which is the
02:35vehicle we build delivering blood to a
02:37hospital this blood was transfused into
02:39a patient shortly thereafter the blood
02:42that we're delivering is being
02:43transfused in saving patients lives this
02:45is actually happening at a national
02:46scale 5.2 million kids under the age of
02:49five die every year because they can't
02:50get access to basic medical products
02:51this distribution center is serving
02:53about a half of all the hospitals in
02:56Rwanda and we are already planning a
02:58second distribution center which will
02:59put every single one of the 11 million
03:02citizens within a 15 minute delivery of
03:05any essential medical product they could
03:06need the overwhelming challenge is just
03:09that the roads suck if you grew up in
03:12the u.s. you have lived primarily in the
03:14u.s. you probably don't appreciate how
03:16bad the roads are in these environments
03:17and so it's really difficult to set up
03:19logistic systems that rely on roads well
03:22the roads suck but they have great
03:23mobile phone access a lot of people have
03:25mobile phones totally and you can just
03:27literally hit a button on the mobile
03:27phone and bypass the fact that you don't
03:30have roads totally for a doctor who is
03:33trained to help a patient they have a
03:35mom in front of them and that mom is
03:36bleeding out what happens today is that
03:38doctor needs to get in a car and drive
03:40two to three hours to a blood bank if
03:42the roads are passable and then two or
03:44three hours back but usually when they
03:45get back the mom is either stable or
03:47dead so today that doctor can use this
03:49mobile phone which is becoming a you're
03:51always saying it's giving you
03:52superpowers they can use this mobile
03:54phone to summon the blood that they need
03:56to save this patient's life and get it
03:57in 15 minutes the you know one concept
03:59we think about is this notion of
04:01leapfrogging people talk about how in
04:02Africa they you know they sort of
04:04leapfrog bahir of landline phones and
04:06went directly to mobile phones I think
04:09in China they kind of skipped the PC era
04:10and went straight to the mobile phone
04:11era by some assessments that has made
04:13them more sophisticated without having
04:15these legacy technologies so it seems to
04:17be that you're doing that with drones
04:19and roads right yes so em ups standpoint
04:21this whole Rwanda operation came to us
04:23as a humanitarian effort for McKellar
04:27real revenue-producing operation they're
04:29making some money on this but when you
04:32look at Africa you look at humanitarian
04:33needs we work with a lot of the major
04:35NGOs around the world helping them solve
04:37logistics challenges and and because of
04:40the poor road infrastructure many parts
04:42of Africa a lot of the relief supplies
04:45and a lot of vaccines and everything
04:47else that are meant to save lives don't
04:49get through there's a statistic that
04:51they caught they often cite in in these
04:53NGOs which is the absorption rate five
04:56ship 10,000 vaccines into the country
04:59what percentage actually get injected
05:02into a into a citizen and it would that
05:05vaccine being a good condition in some
05:08estimates in some parts of Africa that
05:09absorptions rate twenty to twenty five
05:11percent so only twenty to twenty five
05:13percent of what gets into the country to
05:15be to be injected in patients is viable
05:17this solves a real problem because using
05:20the zipline operation we can get blood
05:24we can get vaccines and everything else
05:25and then can you talk a little
05:28the developing world is this something
05:30where we've only seen in Africa or what
05:33it also does for us collectively is
05:35build out a use case and all the
05:37detailed operations and work through all
05:39the all the regulatory hurdles of
05:41putting this operation in place because
05:42we think not only is this leapfrogging
05:44the road infrastructure in Africa and
05:47other parts of the the less established
05:48world but for the more established well
05:51this becomes potentially a much better
05:53urgent delivery of urgent health care to
05:57patients that are in need of products
05:58that are maybe expensive and very
06:00temperature and time sensitive and the
06:03other thing you're asking about like
06:05developed world use cases the cool thing
06:07about launching in Rwanda a lot of
06:08people look at it and say oh of course
06:09you'd go there because you're
06:10experimenting or you know you're showing
06:13that it'll work but actually
06:14interestingly like well or because
06:15there's no regulation interestingly the
06:17regulation there is just as strict as
06:19the regulation here in the US it's just
06:21that because they're a smaller country
06:22they've been able to implement modern
06:24regulatory practices faster so they
06:26we've basically fully integrated with
06:27their airspace and at this point we are
06:30actually you know hearing from the
06:31Secretary of Transportation of the US
06:33and other countries for Japan for
06:35example saying what would it take to
06:37bring this to developed countries
06:38because you have all that like a lot of
06:40medical challenges in rural places in
06:42the US that you have in Rwanda talk
06:45briefly about the technology how far
06:47does that drum go and is it and how is
06:49it controlled and it's completely
06:50autonomous it's battery-powered we use
06:53dual band RTK GPS so the vehicle knows
06:57where it is with centimeter level
06:58accuracy and it's autonomous from the
07:00moment it leaves the launcher so when we
07:02load the package we that that package it
07:05has a QR code on it that the vehicle can
07:07read and the vehicle automatically has
07:10the it's mission it knows what hospital
07:12it's going to and it makes all of its
07:14own decisions flying out to make a
07:15delivery and then coming back why don't
07:17you think in this fix wing versus
07:18quadcopter because a lot of hobbyist
07:20drones you'll see today are quadcopter
07:22view but you guys the fixed-wing have a
07:23lot of advantages you had you had to go
07:25build your own because there weren't any
07:26that satisfied your yeah you know
07:29building a fixed-wing vehicle allows us
07:31to have about 20 times more range than a
07:33quadcopter so instead of going five
07:34kilometers we go 150 kilometers and when
07:38you have 20 times more range that means
07:39you serve 400 times the service area so
07:42when you actually want to make this kind
07:43of a system economically viable that's a
07:44really big benefit I thought one of the
07:47cool things when I went to see it was
07:49the fact that you do two passes before
07:51you draw up the first pass is to measure
07:52the wind speed and things and the second
07:53is to like do a very precise within 10
07:55feet or something is that right yeah so
07:57we deliver into something we call that
07:58customer's mailbox yeah I always
08:01learning from UPS we you know we're
08:04delivering into their mailbox there's
08:05basically an imaginary rectangle on the
08:07ground it's about the size of two
08:08parking spaces and as the vehicles
08:09approaching it estimates the wind speed
08:11and then it incorporates that in its
08:13position when it drops so we can
08:14actually always put the package into the
08:16mailbox when the winds really heavy
08:17sometimes it'll seem like the vehicle
08:19overshot you and then it'll drop it'll
08:21come on a diagonal slant into your hands
08:23you don't appreciate how cool and how
08:25real it is until you actually get to
08:26receive a delivery in this way and then
08:28it becomes instantly completely obvious
08:30to you that this is the future and this
08:31is how products will be delivered you
08:33know John something you and I always
08:34talked about is how logistics is going
08:36toward light and fast in this case it
08:39was because the infrastructure of the
08:40road infrastructure doesn't allow
08:41reliable deliveries in certain times of
08:44the year but there's many healthcare
08:46related products that are extremely
08:48expensive extremely expensive to store
08:51so you don't want to have significant
08:53amounts of inventory and
08:54we Hospital in the u.s. 6,000 hospitals
08:56you know it's much more efficient to
08:59locate a smaller quantity of inventory
09:02in total in and maybe 25 or 30 locations
09:05throughout the US and instantaneously
09:07when those products are needed pull them
09:10out of a very controlled environment
09:12temperature humidity controlled
09:14warehousing and and get it rapidly to
09:17the point of care within minutes that's
09:19that's a much better economic model and
09:22the viability of the medication is much
09:25better because in many cases those
09:26medications are not always stored
09:28correctly when they're more in a more
09:30dispersed inventory but when there's a
09:32central more of a centralized inventory
09:34you can control the conditions at those
09:36products are stored I mean and when you
09:37think about the future but you think
09:38about personalized medicine medicine
09:41that's genetically specific to the
09:42person as we go in this direction with
09:45these rare immunotherapies and things
09:46like this it you don't get to just like
09:48stock a hundred of them at the hospital
09:50you basically have to make the product
09:52specific to the patient and then get it
09:53to the patients as quickly as possible
09:55so especially when we think about
09:56personalized medicine think about
09:57telemedicine building the half of that
09:59system so you can get on your cell phone
10:01and automatically talk to the specialist
10:02but then the other half also exists
10:04which is the specialist can deliver the
10:05medicine to you in five minutes I just
10:08think it's exciting to think about what
10:09the future might look like I think we
10:11have a sense that things are good but
10:12it's actually really annoying to go
10:14receive medical treatment even in the US
10:15we spend a lot of time it's very
10:17inconvenient and that doesn't have to be
10:19the case yeah so John can you talk a
10:20little bit more beyond drones what kind
10:22of new technologies are you thinking
10:23about it sure so within the autonomous
10:25space UPS is running a number of
10:26different experiments and different
10:28pilots some of which are fixed-wing some
10:31of which a helicopter some of which are
10:32using autonomous vehicles within the
10:34four walls of our facilities to move
10:35things around but but then specifically
10:38in healthcare as more and more products
10:40are moving to sell gene therapy and
10:43personalized medicine and biologics
10:46there's a significant amount of
10:48temperature control and humidity control
10:50it's that's required for those for those
10:52shipments so you know we've built a lot
10:55of capabilities and we've we've licensed
10:57a lot of technology to monitor shipments
11:00while they're moving through the supply
11:02chain and make sure that they're always
11:03kept in in perfect condition little
11:08they go inside the pack out that will
11:10set off alarms when products might get
11:12out of temperature control or humidity
11:14control and then obviously we can
11:15recover them GPS position them and
11:17understand exactly where they are so we
11:19can rescue those shipments on a very
11:20timely basis and this may be talked a
11:22little bit about beyond health care via
11:24both drones and also the new modern
11:25infrastructure do you see your product
11:28your service applying beyond you know
11:31we're gonna be focused on health care
11:32for a long time just because I think
11:33that's where this is really needed I
11:35mean everybody's talking about using
11:36drones to deliver your latte to you on
11:38the beach or burritos you know we're
11:40gonna deliver our 6-pack to your home
11:42and we look at that and we think that's
11:43really goofy because from a community
11:44acceptance perspective it's also not
11:46clear the economics and the regulatory
11:51environment is not going to build its
11:53use cases on that they're great on
11:55life-saving products right now it's not
11:57legal to have fly drones what we're
12:00doing in Rwanda is illegal in the US
12:02unfortunately now as I mentioned we're
12:04working really closely with US
12:05government we're really optimistic I
12:06think that everybody in the government
12:07knows that this is fundamental
12:09infrastructure I was talking to
12:10Secretary of Transportation and we were
12:12going back and forth and I was like I
12:13think if cars were invented today they'd
12:15be illegal because they're dangerous and
12:17noisy and you know and annoying and but
12:22but of course you know Obama you know
12:24was mentioning in this wired article you
12:25have to let a thousand flowers bloom and
12:27then garden appropriately that's totally
12:29what we need to do here it's gonna be a
12:31real shame if we as a US company go
12:33build competitive advantage for all
12:34these other countries and the u.s. falls
12:36behind just because we aren't willing to
12:38do something new from a regulatory
12:38perspective but when we think about a
12:40healthcare mean first of all it's very
12:42obvious to me like instant delivery you
12:45know instant car door - all these
12:46companies that are doing it for food if
12:48we have instant delivery for our burgers
12:50we should have it for our medicine the
12:51most obvious place where he would really
12:53want to know you have access to great
12:58now that we've basically launched in
13:00Rwanda we're having all of these
13:01additional partners coming out of the
13:03Woodworks refugee camps there are three
13:05or four refugee camps within range of
13:07the first distribution center we've set
13:09up we had a bunch of surgeons coming I
13:11know this is still healthcare we had a
13:12bunch of surgeons come and ask us we
13:14could deliver coumadin to the patients
13:15that they've done heart transplants for
13:17because patients have to take commit in
13:20for the rest of their lives and then a
13:22really weird one is sperm I would not
13:24have predicted this but I actually think
13:26it's quite possible the first thing we
13:27do that is in medicine will probably be
13:29sperm a substantial percentage of the
13:31people who live in Rwanda depend on
13:33cattle as their primary economic
13:34livelihood and if the cattle has
13:37relatively low quality genetic profiles
13:40so there have already been programmed to
13:42try to live a Holstein grade sperm from
13:43the u.s. to Rwanda to improve the
13:45genetic profiles of this cattle turns
13:46out if you can get sperm to these
13:49farmers you can increase the economic
13:51productivity of that family by like 30
13:52to 50 percent which is a huge deal but
13:56sperm is a lot like vaccine it's light
13:57it's really expensive it's you know it's
13:59complicated you have to get it there
14:00fast you're going to all these little
14:02rural locations so you can't deliver you
14:04know one big one big amount of it -
14:07sounds weird you can't deliver one large
14:11amount to one you know central place so
14:13anyway the future is weirder than we
14:15could imagine and you just don't know I
14:17think until you start to set up this
14:18infrastructure anyone have any questions
14:20audience right now we are engaging both
14:31with the humanitarian and the technical
14:35arms of ups but what we do in Rwanda is
14:38not we do not think of it as
14:40humanitarian at all we're making money
14:42for every delivery that we do and the
14:44Rwandan government pays us for every
14:45delivery that we do it saves them money
14:47it's a totally obvious decision for them
14:49because it costs less than doing it
14:50similar delivery using a motorcycle it's
14:5220 times as fast and it doesn't depend
14:54on roads and it's great for us because
14:56instead of being in a crappy business of
14:59like trying to sell hardware to people
15:00who wouldn't know how to use it we're
15:02actually able to make money for every
15:04single delivery and as the air costs
15:06come down the system becomes even more
15:08we are currently covering all that all
15:09the costs of the system with what we're
15:11doing in Rwanda and we are going to be
15:13using money from that first distribution
15:15center to fund the second this paradigm
15:17that if you're operating in Africa
15:19you're doing charity or you're doing
15:20philanthropy is totally gonna change if
15:23you talk to the President of Rwanda he's
15:25always saying we want trade not a trade
15:27not aid because they view Aid as
15:28fundamentally setting them up to be
15:30dependent as opposed to interesting here
15:34it's almost reverse because this
15:35infrastructure for humanitarian it then
15:38potentially becomes the infrastructure
15:40to get more commercial products in and
15:43out of those countries as well by doing
15:44this we build out the infrastructure
15:45commercially as well all these
15:47pharmaceutical companies that John
15:48spends all of his time surveying they
15:50want to figure out how to serve the
15:52other six billion people but there's
15:54this general challenge which is first of
15:55all you don't have the economic growth
15:56when there aren't the roads so that the
15:58people can pay for it and second of all
15:59if the roads don't exist you can't get
16:00the medicine to them anyway good
16:03okay good how much when do you actually
16:04need to take off and land drowning what
16:07about the precision of the delivery
16:08drop-off matching a big city like Mumbai
16:10I mean is that feasible so we carry
16:14about one and a half kilograms today the
16:16box is like a really big shoe box it's
16:18enough to carry any medical product you
16:21could want to deliver there's basically
16:23no medical product emergency medical
16:25product that we have yet to discover
16:26that we can't deliver except for
16:28radioactive treatments that have to be
16:29surrounded by lead we're not going there
16:31quite yet you don't need very much
16:33footprint we're actually doing kind of
16:34an aircraft carrier landing the vehicle
16:35catches a wire and then plops onto it's
16:38essentially a bouncy castle and so we
16:40can actually do that in a very small
16:41amount of space you only need something
16:43like 30 feet by 80 feet for both launch
16:46and landing there's no landing gear on
16:48the plane there's no runway and then
16:50you're your final question precision so
16:53we can drop into about two parking
16:55spaces so any driveway as long as like a
16:57house had a driveway we could deliver to
16:58that house we're probably not gonna be
17:00delivering to skyscrapers any time soon
17:02but skyscrapers are really effectively
17:04served by UPS already it's very
17:06efficient for UVs to drive a big brown
17:08truck up to the lobby of a skyscraper
17:10and unload it whereas we're a lot more
17:12focused on suburban and rural where it's
17:13less efficient speed and range of the
17:16vehicle seems to open up new
17:18opportunities how fast is the speed and
17:21the range expanding point they're
17:22expanding very fast because batteries
17:24are getting better every day and we're
17:26also making the vehicles more efficient
17:27we can fly 150 kilometers right now we
17:30have a top speed of 130 kilometers an
17:31hour and we fly in a straight line as
17:33opposed to roads that do this but yeah
17:35those are increasing every day
17:36our our plan is to significant bottle
17:38makers battery and the bottleneck is
17:39battery yep and it's it's the energy
17:42density five percent better every year
17:44something well that's just the energy
17:46density but then the reliability
17:48and durability is improving faster than
17:49that and that's partly a result of the
17:51electric car yeah and we actually use
17:53the exact same cell that goes into the
17:54Tesla Model S so we kind of benefit from
17:56all there it's sort of this interesting
17:57spillover effect that you don't always
17:59think about right that they've all this
18:00investment in electric vehicles and
18:02ground vehicles is also benefiting
18:04drones all I assume like the cell phone
18:06infrastructure and all the components
18:08are probably similar to cell phones yeah
18:10the problem with drones right now is
18:12that you can buy a twenty million dollar
18:13drone that kills people or you can buy
18:15like hundred dollar drone that your kid
18:16can fly but that'll crash every fifth
18:18time and there's basically very little
18:20in the middle and so we're really trying
18:21to build in the middle we want something
18:23that's really cost effective for our
18:25customers but is reliable enough to fly
18:26in a commercial way over populated areas
18:28the way we've done that is essentially
18:30we've looked at how flight computers in
18:32commercial jets are designed and then
18:35we've built the same architecture just
18:36using cell phone components for one one
18:38thousandth of the cost can you actually
18:39just expand upon that a little bit when
18:41you said that you had you look at the
18:43market you couldn't find any drones you
18:44had to build it yourself what do you
18:46actually mean by that did you hire some
18:48aerospace and your heirs did you
18:50outsource that how did you actually go
18:53through that product development same
18:54thing for UPS how are you guys doing it
18:56you know we we basically we bought a lot
18:59of components and then flew them in
19:01planes and then crashed the planes I
19:03mean yeah we have a team of people who
19:07have designed these kinds of systems in
19:09the past both on the military side and
19:11on the consumer side we're not just
19:13aerospace engineers because aerospace
19:14you know over the last 50 years has had
19:16some issues it's not like a booming
19:17industry and so we really wanted to
19:19marry rapid prototyping robotics
19:21experience with some people on the
19:23aerodynamic side and on the flight
19:25control side we're really really strong
19:26because what we really want to do is
19:27design planes that are as safe as Boeing
19:29but write software as fast as Facebook
19:31so right now we're we are designing
19:34manufacturing and operating a completely
19:36new fleet of vehicles about every four
19:37or five months that's new airframe new
19:39avionics new everything and the only way
19:41we're able to do that is through really
19:42good testing and rapid iteration ups
19:45perspective we're working with a couple
19:47of different manufacturers for different
19:48types of use applications and and we get
19:50involved in the design to work in the
19:52conditions that we operate in and then
19:54obviously the testing environment and
19:56the piloting to iterate so you have to
19:59you have their questions
20:02you learned anything that's been really
20:03interested in shocking like I one of the
20:06things I randomly think about if you
20:08have any hijackings actually it's a
20:12question we usually only get in the US
20:13which is can you shoot them down we
20:15never hear this anywhere else but in the
20:17US every wants to know if you can shoot
20:18them down I mean we build end-to-end
20:21encryption and security into the system
20:22from day one so it's it's a really
20:24secure system and people are always
20:26could you deliver bombs if you want to
20:27deliver bombs it would be a lot easier
20:28to buy an off-the-shelf quadcopter into
20:30it using that our system can only work
20:32if it's authenticating with our global
20:34servers etc etc etc in terms of really
20:37interesting things we've learned I think
20:39the most interesting thing I've learned
20:41in this is that people in the US are
20:44possibly the most pessimistic people
20:46about technology in the world we were so
20:48concerned about how people in Rwanda
20:49we're gonna interpret this and you see
20:51these two hundred people who line up on
20:52the fence every day I I show up
20:54sometimes at like 5:30 a.m. at the nest
20:56at that distribution center and there
20:58are 12 people that are getting good
20:59seats they're so excited to like watch
21:02it take off and land take off and land
21:04and you go and talk to them you're like
21:05what do you think about this and they
21:06say oh it's just a sky ambulance they
21:09get it it's like damn that's who we used
21:12to be you know I kind of feel like
21:14Rwanda is probably what it felt like to
21:16be living in the u.s. 200 years ago when
21:18there was relatively little regulation
21:20and just tons of people building new
21:21things build new infrastructure like you
21:23know we were building railroads and
21:24highways or whatever and it would be
21:27really awesome to return to that alright
21:29we're out of time thank you guys
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