Disrupting the $113 Billion Rail Industry | Intramotev

well thanks everybody for joining us here on disruptive investing we're so lucky to have with us with us today is uh Timothy Luchini he's the CEO of intramotive and uh Jesse he's got a giant train behind him yeah so uh you make electric trains is that the is your childhood dream I know I had electric trains when I was a kid they just weren't that big yeah exactly just like with their Christmas tree and those uh hobby train sets it's just you grow up you get a big train and uh that's what we're doing here with the idea behind the the vehicle the concept and uh uh the gist of it is electric trains but obviously there's a lot of nuance there and a lot of complexity of what we can share so talk to me about how you are trying to I guess Electrify rail um I know that you know there are sections of certain places that have you know electrified rail where overhead you have some stuff that will Electrify some trains um but I think you're doing it a little bit differently um could you kind of talk about what instrument motive is working on yeah absolutely so I think a lot of people have some experience with trains from like a pastor movement side of things and you might be riding around on a street car in a city and see some overhead catenary lines if you're in San Francisco or another municipality like that but uh really one of the things that's unique about North America and the North American Freight System is we don't have that type of infrastructure so if you want to Electrify today's North American Freight Railways which is one of the things that we're trying to do you really are are caught up with an infrastructure problem of you don't have those electric lines running so that pushes you to what else can you do and one of those Solutions is as in many Mobility Solutions electrification through batteries and so what we've decided to do at intermotive is to Electrify individual Freight cars so the rail car itself uh now has a Mobility system and it creates a form factor and a vehicle flexibility kind of like a truck so today when you're used to seeing a a train that might be a mile long and you get stuck at the crossing gate and there's container after container moving by our vision is that we can fit into that model as well as unchain those cars and packetize them well wait a minute why not just make the engine electric why bother with the cars that's a that's a really nuanced question in itself and it's the same problem that you've faced with things like Trucking so one of the problems is energy density and then the cost of those systems so if you want to Electrify a large locomotive engine today you might get eight megawatts of power on board a locomotive which in itself is a NASA Investments of electrical infrastructure grid and a massive amount of batteries that you got to buy and put on a vehicle when you're looking at electrifying that whole train that's usually about fifth of the capacity of what you might get in a traditional diesel engine and that's because of the Battery tech today so our thought process is by shrinking it down you make it cheaper you make it more flexible make it more accessible and we can do things like move 100 tons of freight 100 miles with 100 kilowatt hour pack I know you have a lot of Tesla fans out there so we're moving a massive amount of commodity with a pack that's about the size of one of their Tesla cars and that is the magic of rail and that's the huge advantage of what we're doing and the reason that that is possible because you you're looking confused the reason that that's possible I'm looking dumbfounded hang on so 100 kilowatt hours that's my Model S or X right that's the battery pack size what did you just say how much can you move with that say it again 100 tons of freight 100 miles roughly but why can't I do that with my model X and so that's because that's why rail has always been so amazing it's because you have a steel on steel wheel right so the wheel is riding on a steel track and that is what gives it such efficiency so you don't have the kind of uh drag that a typical tire does it's just that you're not you know you don't have to break and make all sorts of tight turns you guys totally get it I don't have to educate you at all it's it's a seventh of the Rolling resistance of steel wheel on steel track which means you have less energy input required from the whole system and then you got to understand where rail came from so it's 200 years old it's got a legacy of 200 years worth of incremental technology improvements and change but it's built on the backbone of a steam engine and what the power system of these early engines could do which might have been uh 10 cars and it might have been a zero percent grade which is why they go through mountains instead of around mountains uh and then it also is really hard to start and stop trains so they have the right of ways and all these Crossings and all that just Stacks up energy efficiencies into the whole model where you increase your rolling resistance of your retiree on your road you start starting and stopping a lot more you have these conversion inefficiencies and then you start climbing up and down Hills and you start adding in even more inefficiencies and uh rail by accident has made it uh pretty well suited to small battery pack propulsion systems uh because of that history I see so it doesn't really make sense to convert an entire engine because of the way that the industry currently works and also because of the way that physics currently Works um if we had a super super energy dense battery this wouldn't be as much of a problem it's just we're not there yet um and so you're talking about doing individual cars um I've seen in the movies and in the and in TV shows where they have the two guys you know pumping their their little hand cart along but I haven't seen too many individual rail cars just trundling down the tracks how does that work do they need a conductor and what would that look like yeah absolutely so we we built this system around a couple different premises and the first premise is if you're sending something in a 100 car length train today and it makes sense to do that you probably should so our system is built on the backbone of that saying okay you can ride along as a rail car for that section of the leg um and you can use the Standard air brakes that we have on board you can use the standard couplers that we have on board and we can make a system that's backwards compatible with that however that's not where the the real challenges are the challenges with rail and trucking when you're looking at over LED transportation is Trucking is fast rail is cheap it's the same energy pieces and it's the way that they've optimized Trucking stop demise for speed rail is optimized for cost so when you get to those major hubs and spokes in the rail model and you're trying to sort cars and figure out where they go that's where the complexity comes into play and our average rail car might sit for one or more days waiting to be moved as you aggregate enough units to get to a hundred that all can move together so an example of uh not this car behind me but another car that we have um took him about three days to get it all sorted and organized in a yard in Texas to get it uh uh organized ready to go on a train it took about two days to get to St Louis which is where we're headquartered uh once it got St Louis and went to East St Louis and it took them seven days to get it 13 miles and that's the inefficiency in the part that is a challenge that this directly solves immediately which is customers that might be on the order of magnitude of a polyole manufacturer or a bumper manufacturer who wants a hopper car of plastic pellets but they only want one or two at a time they don't want a hundred and we can service those customers directly and then our first markets as we go into this is moving Commodities we're moving things like calcium like gypsum like manganese and uh we're moving it from a mine site in a lot of cases to a processing center so you might have to go concentrate that or or you might have to go Crush The Rock and there's a lot of these point-to-point routes that exist all over the place that uh Ferry materials like that as we step into that bigger Vision when you say that rail is cheap and trucking is fast it's not necessarily that the truck can go faster than the train because trains can obviously get up to speed it's that one particular train isn't necessarily going from where you're producing something to where you're dropping it off there are those trains that exist you know a giant thing full of coal um going to the you know the coal power plant maybe but there's a lot of other things like you're saying that you want to move cheaply because they're big and heavy and they're not that expensive so you want to put it on a rail car it's just that it takes it a long time to get there because like you're saying you take it to one place you drop off all these you know the the train of of carriages carrying stuff and then you have to break it up put it into a new train this train is going to closer to where you want to go and so like you're saying it takes days and days to get something from one place to another but I'm sorry how does intramotive speed that part of it up right yeah so the beauty of the system is that we can now allow every car to drive itself so that's the long-term independent point-to-point motion is the car has a battery system it's got a drivetrain and it can go from where it is to where it needs to be and we've sized it for system of anywhere from 100 to 600 miles of range and then as you platoon these vehicles together they physically couple and they can physically Energy share so if you have a vehicle that needs to go farther than a hundred miles you can preferentially use up the energy on a vehicle that needs to go a shorter distance because it's a train so you can have all these units connected together and then as they want to break off they can disconnect head into their end destinations and efficiently utilize the entire pack that they've got for the route that they need to run and we can run and optimize all that stuff on the back end through a lot of software so I shouldn't be scared if I see a lot of cars moving around in a rail yard by themselves one night yeah exactly well they uh in some cases do it already by themselves they take these cars to Hills and then they'll cut the cars off and let them roll down themselves but we'll do it in a much more controlled manner so it's a a new tool it's a new way to look at the rail industry and it's a new way to service customers and that's really one of the things that when we talk to customers uh they're really uh sensitive about their ESG goals and trying to be environmentally responsible and be good stewards and we're showing them that we can save them money help them Electrify it and do things like reduce their total Fleet size and reduce the cost of operating by 30 to 80 percent which is a really big win from an environmental perspective that again you can't do with the truck in the way that the Battery Technology works today so you were saying that you with one of your cars you could move uh what was it 100 tons of material 100 miles on 100 kilowatt hours of electricity um I'm assuming that's the size of the battery pack so these kind of have a hundred mile range fully loaded yep so resize the pack to be scalable so if you want a big longer range you can add more pack but it's a it's the challenge of any electric vehicle is most of the time I'm driving 50 miles but I have to buy a pack that get a 300 miles because sometimes I'm taking a long trip the beauty of these rail Vehicles is they're designed to be connected together so we can add more capacity into that system in that way they're running down the rails and they need to platoon anyway for traffic management and those types of things so it's really an elegant solution in a uh historical framework so I'm trying to picture how this works it or you know is does this car um is it always going to be you know either platooned with a bunch of other intermotive cars or is it sometimes going to be pulled by a big locomotive um or is it going to sometimes be completely separate and just trundling down some track um to some Factory yeah so the the short answer is yes like it can operate in all those modes so we can ride in a long train we can independently go point to point and then we can pull five fully loaded rail cars with our tug bolt so we can sit and enable flexibility in the rail system that they're not used to deal with so wait it cannot just drive itself it can also the thing sitting behind you which normally would just be full of something can now also be tugging you said five more fully loaded cars correct so those scenarios where you want to do that but the thing about rail today is if you take a 5 million or up to a 10 million if you want electric locomotive today and you try to pull one or two cars your unit economics start to shift and that shift is in the favor of trucking because you want to move a small amount of goods with a lower cost asset when we start to talk about this model it shifts that favor back to rails in a lot of these business and business scenarios are serviced by both Rail and Trucking and they're just constantly jockeying between cost and speed on how they're going to move these Goods wow that's really cool okay so I want to talk about charging that's what EV owners always love to talk about um which is how are we going to charge these things are these at The Rail Yards or how does that work yeah so in the scenario of it being mixed into a consist a normal train we can generally reduce emissions by about 20 percent uh just by acting like an e-bike motor so the train starts moving with a normal locomotive the rail car is behind it are getting a command signal that they need to start pushing just like when you start pedaling and they'll push so that'll reduce the load on the locomotive in the news electric uh Power professionally and then when it gets the command to start breaking it's actually regenerating the batteries on board um and there's a scenario for that we call it the revolt and it just lives in that environment it's always in a train at hybridizing the consists making it into a Prius the other mode is charging 100 kilowatt hour Pat so a lot of the customers we're deploying to now are mines a lot of those customers do things like plug in their locomotives now if they're in the northern climates to keep the engines warm uh when they're not using them and we plug into that same AC power connection 240 or 480 power and the Chargers on board the vehicle so we have a 100 kilowatt hour charger that can charge that pack and then if they use the onboard charger you're looking at recharging in a shift you have a third shift operation and then if you do the dedicated infrastructure off-board charging you can get that down to 30 minutes or so so they have a little flexibility based on the operations and how they optimize but uh it's not as big of a tax on the grid as if you take a full locomotive and you say I need eight megawatts of power all at once which is a very long charge cycle and a very big question of of how do you get that power locally so then I think there's another question that people might have which is could you use solar I mean it seems like there's a lot of space on the top of some of these train carriages and maybe some of them have to be open but would there be enough power at the top of let's say an enclosed box car to give you enough power yeah so it's a nice feeling uh and certainly if you didn't want to move very often you could look at that but generally if you're looking at the the movement needs of this vehicle that will cover about two percent with that surface area that's at the top it's not really enough so we always recommend that customers do look at solo that's a great option um and they can do things like charge during the day run their operations at night and kind of feedback to the Grid in a flexible uh way but that they do that through a fixed solar field once you start putting on a nickel it complex uh makes things more complex and uh it won't really meet the total energy needs of the system now are you worried that as trucks start going electric that they're going their model's getting cheaper so it's going to compete with you more so that's the other thing of these these vehicles so this vehicle is three and a half times the weight of a semi so it's fully loaded to 286 000 pounds for the gross rail load um a semi trucks load them into 80 000 pounds but usually you'll have uh and I'll throw some numbers at you so hopefully uh you're tracking but generally you're going to have anywhere from 150 to 300 gallons of diesel uh which is going to end up being about a ton worth of fuel so if you want that same range and you have an understanding that energy density of batteries is 40 to 50 times worse than diesel now you have to add 40 to 50 times more batteries which is consuming the load limit of the vehicle which is still capped at 80 000 pounds and so you end up with 20 30 000 pounds of batteries now you need twice as many trucks and that's a more expensive system to do that again that's really where the beauty of this system comes into play because we can move so efficiently with such a small amount of energy because of the way the rail networks you set up so I'm not really scared about Trucking and the electrification of trucking um and uh if there's a battery breakthrough or something like that which would be great a double or triple energy density still really isn't enough to close that business case so it sounds like you're saying either way trucks and trains are going to be going into the future together like they both have their use cases yeah if uh if you're Ward Buffett and seeing what he's done in the rail industry he's a long-term investor he's investing a lot in rail um and I'm of the same mindset rail is here to stay it's just too efficient and it's too strong and it's only when the rail system shuts down that everybody pays attention uh and starts understanding what a backbone of the economy it is you got in the U.S 700 billion dollars worth of goods moving VIA Rail right now um every year and that's really important that's everything from raw materials coming out of the ground to an auto manufacturer's assembly plant they send their cars out VIA Rail in Auto Wrecks so at both ends of the supply chain and at every point in between it's a critical part of how things move now trucks typically are faster in terms of like turnaround and stuff but it sounds like what you're saying is we could actually be looking at rail having a faster speed of turnaround as well yeah you'd mentioned before it's not necessarily speed it's just latency so if I'm sending a rail car at 20 miles an hour as long as it's moving I'm accomplishing something I don't need a hyperloop type of tunnel where I have a vacuum tube firing at it at insane speeds all I need is just to keep the goods on rail moving and that solves a lot lot of the problems about how these Commodities are moving around and when you have 1.6 million rail cars in the fleet and on any given day a million of those cars are just sitting around waiting to be moved that's the problem this fixes that so how does that work do we I mean because I understand how a Rail Yard Works to some degree you you bring all the cars there and you have all these different parallel tracks and you can kind of slowly you know build up a train of cars and put them in the right order and then I think I mean I've watched enough like hobo YouTubers where you can like drop off half of your train you know just disconnect it leave it somewhere for another train to come pick it up but are we going to want like different infrastructure to kind of allow a bunch of train cars to put themselves together while they're rolling down the track that's another beauty of the thing is for the most part the infrastructure is already there and the description that you gave Loosely is basically what's happening so what is the difference if you do that with a locomotive today or if you allow these cars to do it themselves it's really that the infrastructure is already there they can already organize themselves into those lines of cars that all need to move together they can just do it much more efficiently in a more automated manner so that is how do we utilize that 160 000 miles of track which today uh might have a three percent utilization factor to it and how do we just double or triple that there's plenty of capacity uh and it doesn't really require a moonshot type of investment in that infrastructure to make this possible so we don't need to be building some kind of crazy uh intermotive interchange for the trains to kind of re-shuffle themselves you're saying using the existing infrastructure it all will work fine yeah I think for your viewers out there if they're interested uh and they want to learn more about how rail works I think uh getting you all to a rail yard and seeing what's going on actually would add a lot of clarity to uh how exactly it's working so when I started this company uh three years ago I came from the outside I came from building flying cars and package delivery Jones leading a team of 40 engineers at Boeing a similar model similar concept of how do you get goods from a distribution center to a local point of consumption in 500 pound increments packetizing it the first thing I did was as a rail Outsider was find a local Railroad and go right around on the engines with the crews and understand what they are doing and as you might Intuit everything is somewhat simple and straightforward Drive tracks how complex can it be but there's a lot of nuance in what they're doing and then that Nuance is all the complexity that you have to go solve so it is a really cool industry and it's out of sight out of mind for a lot of people but there's a reason there's also a ton of rail fans out there that just love this type of equipment and the way it moves so who are the customers are the customers the big rail companies who are going to just buy these outright or are these on some kind of you know real car as a subscription model like how does this work yeah so generally we sell the vehicle and we're we're selling the vehicle there's different classifications of rail you've got your big railroads your BNS off your CSX your UPS of the world those are class 1 railroads then you have these class two and three railroads which are usually called short lines uh they're based off of Revenue but you might have it changes all the time but maybe 648 of those in the US and then you have uh people that operate things like inner plant railroads mines where the cars are actually captive and they never leave so if you're running a steel mill today you might cast your Ingot and send it to go somewhere else in your plant to get rolled into coils that rail car moves back and forth or if you're casting facility that makes steel castings they'll do sand cars for the same thing our customers right now are that end of the market so we're looking at things like mines inner plant railroads and that represents about 1.7 billion dollars worth of equipment a year going into those markets so that in itself is a very large exciting market for us to go after again it's out of sign out of mind it's not something that most people will have a lot of exposure to but it is a big part of the market and then we prove it out there as safe and reliable um in those types of very constrained environments and then you set it free as you work through those larger regulated environments with the federal agencies and things like that so when it's in a captive environment I mean I'm trying to think of how it would work right now you you're going to need something to pull those um you know sand cars or um you know castings around your facility so I'm assuming that's a pretty big expense to have like a locomotive of of any size running and operating in your Fleet and there aren't that many you know electric ones typically so this could just be a drop in replacement for not only the car but also for the the locomotive that will be pulling them absolutely so it's huge savings for those customers it's a maintenance savings generally for the case study for one customer that was moving manganese 1.4 miles from a transload they needed a locomotive and seven to ten rail cars uh we showed them we could do the same operation with one tugbole so that gets rid of that locomotive that gets rid of those seven to ten rail cars that helps them Electrify that reduces their costs that was a three-month payback period for them it was so drastic about payback that they said we'll take we'd like two because the uh payback period is not that bad and the redundancy of the system and flexibility there because today if the locomotives down they're not moving material whereas if they have two of these suddenly you now have the ability to rotate one end with the service take one out of service um and it's a game changer technology for them I got to imagine just like with electric cars that the maintenance on these are completely different than a diesel engine so I'm assuming that maintenance is also a big issue yeah so maintenance reliability as compared to an engine uh it's kind of interesting how rail works because they may be running an engine from 1960. they may be running an engine from 1970 they might be running an engine from 1980 1990 these engines last Almost indefinitely as long as they do their maintenance and keep rebuilding them but the parts that they need get harder to find every year the class of emissions of those old engines is zero it's uh not the most environmentally friendly uh class of of engines that might be there and so that is a massive savings for them because we cannot modernize their Fleet we can give them an electrified solution and it's actually a much simpler mechanical system which produces maintenance costs now you just talked about a use case where just replacing seven trains and the engine was better to go your route but what if I have like a 100 car train is there some sweet spot as to how many of your intermotive cars I need do I need to make all of them intermotive or could I just is there like five percent is good enough to reduce my costs a lot yeah so I want to run scenarios for customers we can run the game bad as a function of their operations but generally an 18 conversion two tug volts in your train will save you about 20 percent of a normal train running um which is a pretty good uh return on that type of uh scenario and then there is a future state where it's just tug volts running around uh you you don't really need the engine or the traditional view of a car if you can keep it moving on an independent basis and still platoon them still a couple them into trains but there's no necessary reason to have a head unit or a tail unit uh with that single engine anymore now when we were talking before the interview Jesse you had an interesting point about regen braking and I didn't quite understand it maybe you could ask the question and maybe we could get an answer so I mean I understand that you you have a car it has a motor and a battery um to simplify it far greater than what it is um and so essentially I can use that car instead of using the actual mechanical brakes I can use the motor to regenerate energy and so that allows me to when I'm slowing down the train you said earlier basically I send a signal to that car I say start regen braking it'll accumulate some of the uh it'll transfer the uh physical kinetic energy from uh you know the train moving into chemical energy stored in the battery and then you could use it again and so that's going to basically you you gave a number before and I just want to talk about it again what was that number you said you could reduce the emissions by for a large train about 20 uh reduction at diesel consumption so that's a direct relation to how much carbon would be eliminated there but that's a kind of optimized number for certain operations and then you can completely Electrify it so you can have the emissions go to zero with uh just tug volts in your consist but I understand so he's getting like free energy is that what you're talking about well I mean it would it would have been the energy that either um so I mean the trains approaching a rail yard it's got to slow down anyway it's 100 cars long it's got a ton of kinetic energy and you're saying by slowing down now you're recharging one of the or many of the cars in that line right is that true I mean does that work yeah so it might take a mile or more in some cases to slow a train down and stop it so um during those regeneration periods you're preferentially using the electric motor today they'll do this thing called Dynamic braking on an engine and what they do is the engines are largely diesel electric engines are ready so they have electric attractive drives they'll run that in Reverse if you're a resistor bank and blow it off as heat in our case we collect that energy and we store it in the battery pack to be used again later so that waste is actually recovered and then the the braking system is largely also pneumatic so that's a friction based brake pad driven by air and again we can preferentially use the motor in the regen mode charge that battery pack collect that energy and it is free uh uh for all intents and purposes and I assume you're saving on brake pads and other wear and tear things your maintenance goes down and and that also is uh good from a safety and reliability perspective now one of the limiting factors for a lot of EV companies right now is batteries um and because you know building out large battery packs is that something you're finding as well that batteries are kind of the limiting factor on how fast you can build out uh I mean we have a lot of components in our supply chain that we're we're pulling together that is definitely important uh batteries is a part Motors is a part our Transmissions are apart uh we got to manage all those independent pieces on a complex uh scenario I think the battery supply is uh a really important thing but one of the Beauty with where we're starting is actually we're helping solve this problem so we've been working with mines like lithium mines Cobalt mines manganese mines where they're pulling these materials out of the ground when we show them how much money we could save them from an operations perspective they didn't believe us so one mine in particular spent a quarter million dollars to do a pre-feasibility study with us create us against traditional trains trade us against traditional trucks all other autonomous electric trucks that they could find and we beat all those other solutions from an upfront cost recurring costs at the end of that study they told us that we would actually enable them to mine for 10 years longer minimally less dense material so lithium is not rare it's just diffuse so you have to move a lot of dirt to get a little lithium but if we're part of a solution and we're part of that electrified solution in that same supply chain that's a pretty exciting piece of what we're doing and helping the rest of the world electrified to because lithium is a critical element and we're going to need a lot of it why are you finding that companies don't believe you um I mean is it because like we're in this space and so it just seemed to make sense is that why because this is such a new technology and they're just like how could this work yeah I mean if you offer a very large cost savings uh uh like that any natural person is going to do their diligence and they're going to want to know how does this work how does it come up with such savings and so I I would ask the same questions if somebody came to me as well saying hey you're going to save 80 and I want to go have this independently validated so that's a very fair question and we're totally okay with that so uh we're pretty confident in the numbers that we provide and the trade studies that we run into customers and uh apologize again with a beta productive space my hair at forklifts come by but uh but we're pretty confident with that so I'm trying to imagine how this would actually work so if I'm like a I don't even know how trains work enough so you know are there training companies I mean there are trained companies railroads um but let's say that I I wanted to have a couple of these in my fleet and I wanted to kind of packetize like you're saying so let's say that I had like say 10. um and so I could offer as a service to say hey you want to get your um you know lithium a few days sooner we're going to be able to use these cars to get you it um as soon as you need it and then you'll be able to ship that out over to Tesla and they're going to build more you know uh electric cars with it or do they just bring their own overall cost down and so then they can charge customers less overall well I'm trying to really think about the packetizing it um how does that work I mean I get that the train can be autonomous because it doesn't have to like drive on the road and stay between the lanes because it's literally on Rails um but are you just basically going to say to the train keep going forward and then make some switches for that train to do and then say go backwards and it'll kind of uh connect itself or do you need a guide to be disconnecting and reconnecting and you know switching all the switches yeah so if you did what you described first which is operating it as a service you would be a railroad what we're doing is we're providing a tool to the railroads site this is going to complement the way that you run your operations and this is the way that we think we would recommend you use it and then what they do with it from there is is really best service provider's job so that's what the railroads do it's new unique in North America because the railroads own the road so if you are the NSF you you own your track you decide what runs on it so if the three of us want to get an uh our tug bolt and drive somewhere today you really can't without the railroad's permission so what you need to do then is uh schedule with them so they'll have a central dispatch of who's controlling the traffic and what's happening on that Network and then when you're trying to provide a either remote or autonomous solution that central control is actually another thing that really enables this to be adopted quickly because if you have trucks on the highway that are interacting with every other thing that could be a wind turbine blade it could be a skateboard it could be a scooter it could be a New Concept car that doesn't exist yet it needs to know that in the case of having a central dispatch railroad they'll know what vehicles are running and where they're going on that Network ahead of time Tim I'm really curious you said that three or four years ago you weren't even in this industry directly how did you see this coming like how did you get interested in it yeah so I mean I uh did my undergrad in engineering uh in South Dakota and I did my PhD uh researching jet engines and that took me to Boeing in St Louis working in the defense industry working on some very cool things fighter uh uh Jets Souls uh and then ultimately getting to lead a team of Engineers building components and systems for this unmanned aerial space Urban Air Mobility space and that's really where like uh a good teammate or a good co-founder is really critical because I lost my job I loved to wear a building and I had no intentions to ever think about Rail and then I had my co-founder Alex pifer who's doing his MBA at the time at USC in California and right before the whole supply chain Logistics crisis hit he was studying that and saying hey Tim what happens when you take all these Technologies You're Building all the batteries all the motors all the sensors and you apply that to trains and my first thought is similar to a lot of other people I haven't seen a trainer thought about it since I was stuck at a gate or since my model uh train set as a kid and he was the one that really educated me on braless huge rails expansive rail is critical to our supply chain and then we started to Riff on that what are we trying to do in Aerospace what are trying to do with trucks what are we trying to do with rail today rail pushing to longer trains and longer and longer trains and Aerospace talking about how do I get somebody their medicine immediately when they need it or how do I get a package to a customer who wants it when they want it how would we do that with Rail and that's where that packetization of that independent car came to be and that's really where we've pushed forward with that solution and we still listen to customers and still kind of respond to their needs and their pain points but that's the core of our thesis and how we've come together we were just at the micro Mobility conference in Amsterdam where everything was small their scooters there's e-bikes everything you can put in the back of a pickup truck and that to me like seems like you know you can do that in the garage like so that seems like something that Jesse and I could like maybe tackle but when I think about doing what you're doing which is essentially very similar right there's Motors and there's batteries and stuff but like right behind you is the scale that you're working at that scares the crap out of me because it just is such a bigger scale and like you said it's rail you don't control it and so what was that like wrapping your head around the fact that you're going to go into that space yeah so I wasn't necessarily scared of the scale I mean once you see the production facilities for a 747 and how big that is you have a 450 ton airplane it's massive it's expansive it's impressive and it is a very uh visceral type of feeling this is the same it's the same type of visceral compelling feeling where even if this thing's only moving five miles an hour and you feel the vibrations of it going down the track it's in your chest like it is a very tangible type of feeling uh or the the we have this facility we have a facility in Granite City Illinois uh when the cars are getting switched there and they're getting moved around if they're hitting each other at four miles an hour the whole building that we're in shakes it's that type of energy um it's not scary that's actually part of the the coolness of it uh that's the exciting part of why you would come to work every day and try and solve these types of problems but uh it certainly is um I think one of the reasons why there's so much opportunity here is because maybe some people aren't exposed to or maybe some people don't know about it or or you can't do it in your garage I noticed on your website that you do have a careers page and it looks like you might be expanding and looking for people can you explain uh to people who might be watching like why this would be a kind of a cool place to work yeah so we're a tech startup and a non-traditional Tech space I mean we're in St Louis Missouri uh where people think of tech they think of the coasts um and uh I would just make a call out there we're probably going to hire 10 more Engineers here shortly electrical computer science everything else in between uh and for people that maybe want the access to that type of startup environment we're building the future of tech but can't get themselves the coasts and are willing to live and work in St Louis I would say come join us I think we're looking for more teammates and we're going to continue to to build the future of rail Mobility right here in the history of where uh rail really connected that Gateway to the West which is uh today if you want to move East West north or south you can go through St Louis doing that because of the history of those rail networks also we're on disruptive investing because Jesse and I both feel this is very disruptive and so from an investor point of view I mean I heard that you guys just are either in the middle of a funding round or you just completed a funding round maybe you could tell us a bit about that but uh down the road I assume a company of this scale would be looking at it going public at some point probably not doing like the crowdfunding uh Road can you tell us a bit about your funding structure yeah so we're venture-backed to date uh and we brought an investment from the coast out of California and New York uh really excited about the investors that we've brought on board and the vision that they have from a clean tech Mobility perspective and what we're doing in the automated space we've closed rounds in the past we're going to raise more funds in the future and uh for anyone that's listed in there on on that side of things uh just keep track of what we're doing and I think we're not planning to go uh public anytime soon but uh certainly appreciate the enthusiasm and excitement about what we're building and and uh the technology that people will be seeing Tim it was so fun to talk to you today to learn about this I mean I really do feel like this is one of those areas that normally we just don't really think about or hear about like you said because it just seems like it's completely out of our normal space and then when you do want to think about it you're only going to be thinking about it in the terms that we're programmed to understand it which is you know Polar Express so replace that front train with something electric and maybe we can you know maybe that's the solution to it um or you know the trams that I I'm so used to seeing around some cities but this is a completely creative solution to a really big problem and it sounds like it can not only just make the thing electric but it has a lot of other um positive impacts that probably weren't that obvious yeah and we're really excited about the the impacts that we've seen so far and what we think we can do um and uh really excited to share that as well uh get this out there and and talk about uh Rail and a new light and something that isn't just old trains but something that is very Tech forward so it's a fun space to be working in and it's been a good uh business to be building awesome thank you so much Tim that was a blast talking to you I can't wait to follow you some more and see what you guys are up to down the road or down the rail yeah good pun I like it thank you very much

Channel: Disruptive Investing

Views: 7,765

Keywords: disruptive, investing, stock market, stocks, stock exchange, new york, usa, companies, startup, invest, what to invest in, future, technologies, tech, company, disruptive investing, club, top, investments, money, save, bank, growth, exponential, science, sustainability

Id: RCywpu8ItLU

Length: 38min 46sec (2326 seconds)

Published: Fri Aug 18 2023