We have been dreaming about flying cars (and startups have been promising them!) for over 70 years, and it looks like we might almost be there. Orders have been placed, and delivery schedules set.

Today we sit down with Tom Fukuzawa of SkyDrive, and we talk about the development of their flying car and their recent contract with the city of Osaka for air-taxi services.

However, we also talk about the real difficulties of turning a group of passionate volunteers into a passionate startup. I don’t want to spoil anything for you, but it did not turn out like it was supposed to.

It’s a great conversation, and I think you’ll enjoy it.

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Show Notes

  • Why the word is experiencing a boom in flying car research and prototypes
  • The cool concept vehicles of the Carivator project
  • How to bing young innovators in an industry together
  • Why driven, committed people rarely “volunteer”
  • Why just asking for money can be easier than getting investment.
  • Why aircraft innovation is slow and why aircraft startups are rare
  • The size of the future flying car market
  • How we will integrate flying cars and traditional infrastructure
  • Why the enterprise to startup revolving door is so important

Links from the Founder

Transcript

Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs.

I’m Tim Romero and thanks for joining me.

You know, we seem to be in a bit of a flying car startup boom right now. Of course, the flying car has been a symbol of the future for over 70 years now. And for that whole time, we’ve always been just 10 years away from saying goodbye to traffic and taking to the skies. 

Well, today we sit down with Tomo Fukuzawa, founder of SkyDrive. And he explains how he plans to have his flying cars on the road or rather in the skies in three years. 

And while there are many startups making such claims today, SkyDrive recently signed contracts with the City of Osaka to deliver an air taxi service. And last month SkyDrive began the final stage of government certification for their vehicle. So yeah, there’s something here that deserves a closer look. 

Oh, and by the way, Tomo was at their testing facility so there’s some background noise in this interview. The drones and flying cars themselves weren’t flying around so just some cars passing by. It’s not too bad. But at one point, it sounds like a tractor trailer drives between us and knocks over our table. You’ll know it when you hear it, trust me. 

Anyway, Tomo shares some really important lessons about running a moonshot startup, how partners and collaborators and people you’ve known for years begin to treat you differently. Many of these lessons apply to anyone following their dreams, but the startup experience makes everything so much more intense. 

But you know, Tomo tells that story much better than I can. So let’s get right to the interview.

 

Interview 

Tim: So we’re sitting here with Tomo Fukuzawa of SkyDrive, who is making flying cars and cargo drones. And thanks for meeting with us today.

Tomo: Thank you very much for inviting me.

Tim: It’s my pleasure. I love the whole aerospace and aviation sector. I love what startups are doing in here. I want flying cars to be real so badly.

Tomo: Thank you.

Tim: So tell us a bit about your current prototype. It’s currently a one-seater model, right?

Tomo: We started SkyDrive three years ago. And last summer, we studied manned test flight of a flying car or eVTOL. And this was the first time in Japan to show manned flying car, and we have one-seater and eight propellers. And now we are flying 5 to 10 minutes by one charge.

Tim: I want to get into the details of the technology in the future in just a minute. But it seems like in the last, let’s say, two years or so, there’s been this huge interest in flying cars startups, not just in Japan but all over the world, what’s driving this?

Tomo: Yeah. There are about 400 project of flying around the world, and about 10 project have already studied manned flight. Those project started 3 to 10 years ago. So, movement of flying car is coming for the last two or three years, but they have already started years ago. And the biggest lesson is that the sensor or controller is very, very smaller size and high spec but reasonable price.

Tim: When you say the controller, do you mean like–

Tomo: Okay. That means CPU or flight controller or motors are used and how much electricity to produce the controller.

Tim: Okay. So despite all this recent global interest in flying cars, I mean, you’ve been very involved with this for a long time now, right. So, you started out at Toyota and you were part of a project called Cativator.

Tim: Yeah. Cativator is a volunteer group. It was found eight years ago when I was in Toyota Motor Company and other members in other companies. We wanted to make a nice vehicle, and we finally decided to make a flying car.

Tim: What other kinds of vehicles were you working on? Because it wasn’t just the flying car, right? It was a lot of different experimental projects.

Tomo: Yeah. Before we decided to make flying car, we thought of unique vehicle, like, two stories car or car we can sleep in or cargo to see or like that, yeah.

Tim: What was the motivation of starting this? Because it was a lot of engineers from a lot of different companies, I mean.

Tomo: Yeah. So the member was about 20 or 30 years old. And as they are in a big company, they cannot see whole vehicle but only light or only washer or only steering wheel, like that. We wanted to make a vehicle, and also we wanted to make innovation to the vehicle.

Tim: And so of all these different, you know, two-story vehicles, you decided on the flying car,

Tomo: We experienced many things and we found if we can freely, it is very fantastic, not only efficiency but also very fun. And we decided to make flying car.

Tim: That’s awesome. So it was just this project, a bunch of talented engineers who wanted to work on the whole project. So, what made you decide to change the structure from this friendly group of people collaborating into a real startup?

Tomo: When we started Cativator, the first prototype was drone-size product. So, we bought radio controller car, and also we bought a drone, and combined together and fly. And after that, we made a full scale prototype, and it wasn’t flying very well at first. And we finally started flying it in 2018. And I thought, oh, it might be a good business.

Tim: So just it seemed like it might be something that you could turn into a business?

Tomo: Yeah. 

Tim: But that’s a pretty big shift.

Tomo: Yeah. When I see full-size prototype flying, I was very surprised, because for the last three years, it wasn’t possible. And if it is possible, we have to try hard to make a real flying car.

Tim: Yeah, yeah. And so during that transition, changing from a community of engineers to turning it into a real company, so a lot of your current staff is from Toyota and Mitsubishi. So, did most of the members joined the new company?

Tomo: Not too much. So, there are about 100 members in volunteer group. And now in the company, there are only five to eight members from volunteer groups.

Tim: Oh, wow. Who came? How did people make that decision? That must have been a really difficult time.

Tomo: Yeah. When we made a company, we found a very, very specific engineer in our volunteer group, and asked him or her, why don’t you quit your job and come to our company? And of course, not all agreed about it, because it is very difficult to make flying car with five or six or seven full-time members. We hired engineers from outside too, before that, many members of our brand to come group was from automobile sector. But it is our drone and also aircraft, so we searched aircraft engineer too.

Tim: All right. So, what’s the biggest change from running the organization versus running the startup?

Tomo: Ah. It is totally different. If we joined volunteer group, it is just a hobby. So, don’t have to focus it so much. And for startup, it is changing of life. Yeah, if they don’t–

Tim: They don’t commit or–

Tomo: Yeah, yeah. Commitment is so much different. 

Tim: Yeah, that’s true. I mean, startups, it takes over your life. It’s not a hobby. You don’t have any hobbies when you’re running a startup.

Tomo: Of course. And I found another part that very committed people don’t join volunteer group but join startup. 

Tim: Ah. You know, I guess that makes sense. Because very committed people want to be around other very committed people.

Tomo: Yeah, that’s right. And committed people want to do project seriously, not hobby.

Tim: That makes perfect sense why it was time to change from a hobby to a startup. Actually, it looks like a lot of your funding came from Toyota and Mitsubishi and the same sources that a lot of the engineering talent came from too.

Tomo: Yeah. To be honest, first funding was from venture capital, and the last funding stage, some big company begin to fund. 

Tim: Okay. So they came on later.

Tomo: Yeah, that’s right. Yeah. But when we are a volunteer group, we get money from Toyota or other company, other sponsor fee. And we got more than $2 million. That was very good.

Tim: So you get $2 million from the sponsor fee as the volunteer group?

Tomo: Yeah. 

Tim: But they wouldn’t invest early on?

Tomo: That’s right, yeah.

Tim: Okay. Well, I’m glad they’ve invested now. Let’s talk about how flying cars and cargo drones are going to roll out. So, are cargo drones kind of the first step, is that what we’re going to see commercialization of first?

Tomo: Yeah. We launched cargo drone last month. And now, more and more cargo drone is flying near the mountain.

Tim: So, what is the use case for cargo drones? Because it seems to fit in this kind of middle ground. So, it has to be too heavy for people to carry, but too small for a helicopter to carry? So what are the use cases for that?

Tomo: The payload is about 30 kilograms. And there are many drone that carry very heavy goods around the mountain, for example, to the power in the mountain, or to the hotel in the mountain, or like that. And it is very dangerous to walk very heavy good around the mountain.

Tim: With 30, 60 kilos on your back. Okay. So for things like repairing power lines or transmission stations and things like that.

Tomo: Yeah, that’s right. Those kind of work is happen about 200,000 times per year around Japan. So, we want to change it to automatical cutting via Sky.

Tim: Who’s the biggest customer for that right now? What’s the main use right now?

Tomo: Yeah. The first main user is electricity company. They have to fix power in the mountain like that. And second is construction company, especially who make bridges or who make road, or like that.

Tim: All right. That’s interesting. I mean, and that makes sense that that would be the first thing that gets deployed, that finds commercial acceptance. But what everyone is talking about, of course, is the actual flying cars. And what I find amazing, just recently, you guys launched a joint project with the city of Osaka, and Governor Yoshimoto was saying that he wants to have flying car taxi service in Osaka by 2024. That’s really soon. I mean, that’s two years away. How do you do that? I mean, this isn’t like B2B SaaS software. I mean, you’re building a new aircraft.

Tomo: Yeah. We are setting target to launch flying car. In 2025, we are having a plan of developing flying car and certification. 

Tim: So, 2024 might be a little ambitious, 2025 is the target for flying cars?

Tomo: In 2024, we have to have many tests. But business is starting from 2025, I think.

Tim: Excellent. We’ll have to get you back on the show in 2025 to check and see how things are going. 

Tomo: Yeah.

Tim: But let’s talk about that process, because I think it is — a lot of Disrupting Japan listeners are coming from software startups. And developing software is so much faster and so much simpler than developing aircraft. So very recently, you also announced that the Ministry of Land Infrastructure Transportation has accepted your application for a type certification. What does that mean? I mean, I know it’s just the first step. But can you talk me through why that’s important and what comes next?

Tomo: Okay. When we start business of aircraft, you have to get type certification, because JCAB have to make it sure that new aircraft is safe enough, and the level of safety is same level as existing aircraft. If we get type certification, we can start business and people can ride it. That’s why type certification is very, very important.

Tim: So how do you prove that your aircraft is safe enough to receive type certification? What kind of tests or what kind of data do you need to show the government?

Tomo: Yeah. So many data, for example, part data like motor or propeller, and also, so many flight tests. And of course, we have to care about the bird strike, so if bird strikes to the vehicle, what happens? And could it be critical damage or not? So many, many tests we will have.

Tim: That seems like a huge amount of work for a startup.

Tomo: Yeah, I think so. We have many partnership company so that we can go together.

Tim: And so, receiving the type certification, is that the last step in the process, or is there something that comes after?

Tomo: Last step, but Japanese Government is working with us with development process too, because they have to check development process is good. production process is good, service process is good. And finally, we can get type certification. So, it is long process, maybe it takes about two to four years.

Tim: But I mean, I guess that’s good. You want aircraft to be safe and to have everything checked out.

Tomo: Yeah, yeah. Maybe after we finish type certification, there are 10 or more 10 pound truck of papers.

Tim: Documents. Yeah.

Tomo: Yeah.

Tim: That’s right. And it’s Japanese Government so it’s all paper too, isn’t it?

Tomo: That’s right, I think.

Tim: Well, you know, we have been seeing a lot of these flying car startups recently. But compared to other industries, there are more satellite startups, there are more space startups than there are aviation startups. And that seems surprising to me. Why is innovation so slow in aircraft in general? 

Tomo: Yeah. I think IMB software startup, as they can make prototype and they can release to the customer. 

Tim: Yeah, we have it easy. 

Tomo: Yeah. We cannot release customers before we can assume 100% safetyness. That is very difficult problem, I think.

Tim: So, is it really just the regulations? I mean, people have been talking about flying cars since long before I was born. I mean, in the ’50s, right? 

Tomo: Yeah.

Tim: Every generation gets promised, like, oh, no, no, we’re going to have a flying car really soon. And we’re still waiting anxiously. Is it just regulation or is there some real difficult engineering challenges that are holding us back?

Tomo: Yeah. Until six or seven years ago, the bottleneck was technology. But now, technology is driven by smartphone or other computer, because there are so many sensors in smartphone and the cost is very down and very high spec and very light. Now, the certification is a bottleneck.

Tim: So, we have low-cost high-performance CPUs from smartphones and similar devices. Regulation is a challenge, but that’s probably good long term. 

Tomo: Yeah. 

Tim: But there seems to be other real engineering challenges. So for example, to really make an air taxi, you can’t have a one-seater, it’s got to be at least two-seater, it’s got to have much more lifts, some more range. What’s the bottleneck there? Is it battery weight? Is it material science? What’s the big challenges?

Tomo: There are two big challenges. One is, as you say, battery. So, thinking of electric vehicle, EV, we cannot ride more than 100 kilometers 10 or 15 years ago. But now, Tesla can ride more than 300 kilometers. And flying car is same way. So at first, they can only ride 10 to 50 kilometers, but gradually, more and more. And the second is autonomy. So at first, pilot have to sit in front. But in the future, autonomy might be possible. But there are some challenge of technology.

Tim: Yeah. Actually, let me ask about that. Because another challenge I see with flying cars, and have since like the ’50s forward, is that — so, I have a private pilot’s license. 

Tomo: Oh, nice.

Tim: Yeah, yeah, I mean, I love aviation. But it’s hard to get certified. I mean, flying a plane is not a simple thing. And so, do we expect people who use flying cars to be pilots or is AI and automation going to get to the point where it’s fully autonomous and the human isn’t doing anything? How are we going to get past that? Because we can’t train everyone to be pilots.

Tomo: Yeah. At first, thinking about safetyness, we have to get a pilot license to drive it. And industry is thinking that in five years, after we launch flying car, we want to make it autonomy. And already now, our drone and flying car can be autonomy now. But if something emergency situation happens, it is very difficult to go safety landing by autonomy, with 100% safetyness now.

Tim: So what would that look like? Would you have a ground-based operator that could land the car in an emergency?

Tomo: That’s right. At first, we have to have a ground-based operator. But if some wave between the aircraft and the ground member is shut down in emergency station, it cannot be possible. So how to overcome, that is one problem, I think.

Tim: That makes sense. The battery weight makes a lot of sense. But I mean, we have helicopters that, know, huge amounts of lift, is it possible to use other green fuels like hydrogen or something like that?

Tomo: I think hydrogen might be the best solution in the long run, but now, hydrogen battery doesn’t have so much power, so it’s difficult to use in flying car. We have to have very high power battery so that we can change the location of motor very quickly.

Tim: Okay. In running a flying car startup, you guys are making big bets it’s going to  be a long time before you have a commercial product, and even longer before you’re profitable. So, what’s been your strategy to ensuring you have stable investors and that you’ll be able to raise funds again? Because obviously, you’re going to have to keep going out and raising funds for the next four or five years, at least, right?

Tomo: That’s right, that’s right, yeah. We have 10 years business plan. And in the latter one, we have profitable area. But before that, we have to use so much money or resources. Thinking of development schedule, we have some good milestone, for example, manned flight start, or PC start or exit. To reach the milestone, we get fundraising.

Tim: Okay. So some of your investors’ future investment is conditioned on hitting milestones, and then you get additional capital from them?

Tomo: As we finished first or second or third milestone, the possibility will rise.

Tim: All right. Let’s talk about flying cars globally. So a few years ago, Morgan Stanley estimated that the global market for eVTOL, for flying cars was going to be 1.5 trillion by 2040, which, to me seems like a crazy number, that’s more than like half of the entire automotive industry. And I’m curious, do you share that vision? Do you think that’s overly optimistic? How do you think it’s going to work out?

Tomo: Yeah, I agreed that it is including service around flying car. If we think of flying car mobility sales, it is about 1/10 or 1/5 or like that.

Tim: So that would include not only the servicing and maintenance of the equipment itself but also taxi rides as services?

Tomo: Yeah. Or infrastructure or travel service or like that, yeah.

Tim: Oh, I see. So, all of the businesses–

Tomo: Around eVTOL is included. Yeah.

Tim: That still seems like a very big number, though. But okay, but if that’s where we’re heading, what has to change in the world for us to get to the point where this industry is a $1.5 trillion industry? What’s going to change?

Tomo: The first thing is thought acceptance. Social acceptance means everybody in the world is welcoming eVTOL or flying car or not. If everybody welcoming, the law might be not so tough, and also investment money will come, and also, many people want to buy it or want to use it. But if it is very low, some people say, “We don’t want a flying car to go overhead of me,” or like that, we can’t fly.

Tim: What’s the attitude now? Are people generally positive or negative?

Tomo: I think positive. But it is depends on the country. For example, in Japan, when the path of aircraft allowed Haneda Airport change, many people are angry because there are so much noise. 

Tim: Yeah, sure. That’s understandable, right? Yeah, it can be noisy, people worry about it.

Tomo: Yeah. 

Tim: If we’re looking 20 years in the future here, what do you think is going to be the relationship between regular cars and flying cars? Is it going to be most people are using autonomous flying cars? Is it going to be 50-50? How do you see it breaking up?

Tomo: I think, the data, not only flying car but also automobile might be going to autonomy. And if autonomy of automobile happens, the price of taxi might be decreased 70%. So, the price is almost same with the price of bus ticket. So, people who rides bus every day now is going to use taxi. And people who is using taxi every day might be going to flying taxi.

Tim: So it’ll be a gradual transition, where based on the price, it will replace cars or not.

Tomo: Yeah. I think so, yeah.

Tim: Well, listen, Tomo, before I let you go, I want to ask you what I call my Magic Wand Question. And that question is, if I gave you a magic wand, and I told you that you could change one thing about Japan, anything at all—the education system, the way people think about risk, their attitude towards innovation, anything at all, to make it better for startups and innovation in Japan, what would you change?

Tomo: I will change the mind of big company, that it might be good to move to startup.

Tim: So you would change the way that company employees think to make them more comfortable moving to startups?

Tomo: Yeah, that’s right, especially hardware industry.

Tim: That’s an interesting point. I think that one of the big advantages that the US has in terms of innovation is that employees tend to move freely from big companies to startups, and then go back to big companies. And that leads to more innovation of big companies, but it also makes it easier for big companies to work with startups. And we don’t see much of that in Japan, do we?

Tomo: Yeah, that’s right. Thinking of IT industry, it is more and more common in Japan. But thinking of hardware industry, it is very, very rare case. So when some people say, “I’m going to startup,” oh, are you kidding your life or like that. 

Tim: Why? Why is that? Why do you think that is? 

Tomo: Because almost all people doesn’t have any friends who is going to startup, so they don’t have any information about startup. And just image is that low salary, hard work, very tough, we cannot have good relation with family or like that.

Tim: You know, it’s funny, when we talk about how to get high school students and college students interested in startups, everyone always talks about the importance of role models. But it sounds like it’s the same problem for corporate executives and large company employees. They also need role models of people who’ve successfully joined startups.

Tomo: Yeah, I think so. I think a combination with large company and startup is also important, I think.

Tim: Yeah, yeah, I agree. Especially in Japan, where the larger enterprises have so much more influence over the economy than they do in Europe or the US. 

Tomo: That’s right. And there are so many great engineers and smart engineers in big company. And sometimes, they cannot work so well, because the division is different from the engineering skill. It is very sad.

Tim: So I imagined like recruiting really good engineers is a challenge. Because as you said, you know, their family and friends kind of are panicked and surprised. But I would also imagine really good engineers love the chance to work on the whole vehicle and not, like you said before, just working on the headlight or the steering columns.

Tomo: Yeah, yeah. That’s right. So, we want to know more about startup for everybody in Japan.

Tim: Do you think it’s getting better? 

Tomo: Oh, yeah. Thinking about 5 years ago or 10 years ago, it’s much better. But before we launch flying car, we want more good engineers.

Tim: Yeah. You never have enough good engineers. No company I’ve ever worked with has ever had enough good engineers. 

Tomo: Yeah, that might be. 

Tim: Listen, Tomo, thank you so much for taking the time today. I really appreciate it.

Tomo: Thank you very much. 

 

Outro

And we’re back. 

Yeah. let’s talk about following your dreams, because we can learn a lot from Tomo’s experience of changing his vehicle from the nonprofit association Cativator, to the for-profit startup, SkyDrive. Cativator’s a group of very passionate and talented engineers, but very few wanted to join a startup to pursue that passion full-time. 

And even financial backers, who are willing to give Cativator millions of dollars in grants as PR and open source R&D initiatives, with no thought of financial return, well, they were not willing to invest even one-tenth that amount pursing the same goals.

 It can be a pretty big shock for a founder but it’s perfectly normal. 

You know, many social impact startups face this exact same problem, and it’s usually not a problem with you or your startup idea, it’s that people start viewing you differently, and you find yourself dealing with people with very different motivations. 

In terms of investment, at any given company, the people making the startup investment decisions are completely different from those making the PR and R&D funding decisions. The two groups probably don’t even talk to each other, and they probably wouldn’t have that much to talk about if they did. 

As for the staff, as Tomo explained, most of the passionate volunteers won’t follow you. So you need to focus on attracting passionate employees, and passionate employees will be aligned with the startup growth and ways that passionate volunteers simply never will, even when both share exactly the same vision. 

Because running a startup, whether it’s a world-changing moonshot or a process optimization, running a startup is about so much more than vision or passion. Lots of people have vision and passion. The experience of Tomo and the core team in moving from Cativator to SkyDrive perfectly illustrates the difference between those who have a dream and those who take that dream and build a startup. 

It’s the same dream, it’s the same technology. But wow, it is a completely different experience. 

 

 

If you want to talk more about flying cars and come on, I know you do, Tomo and I would love to hear from you, so come by DisruptingJapan.com/show187 and let’s talk about it. If you leave a comment, I guarantee Tomo or I or maybe both will respond. And hey, if you enjoy the show, tell about it. In this age of omni channel advertising and reviews as a service, you’d be amazed how much power your honest recommendation carries. 

But most of all, thanks for listening. And thank you for letting people interested in Japanese startups know about the show. 

I’m Tim Romero, and thanks for listening to Disrupting Japan.