WIRED25: Zipline CEO Keller Rinaudo On the Next Generation of Blood Delivery

(upbeat music)

Hi, everybody.

To really understand what we do

and why we've been doing what we do,

you have to first understand this picture,

which is a picture we took out about five years ago.

We were in East Africa working with

the Ministry of Health to deliver medical products

out to a health facility where there were patients

waiting to receive these products.

But instead of getting to that hospital,

we got stuck in the mud for about five hours.

There are actually six people in this photo.

It's hard to see the person on the right

and when we finally got unstuck, we had to turn around,

and go back to the city we had come from.

And, unfortunately, this is not

a unique or rare circumstance.

This happens thousands of times a day all over the world

in a huge number of countries and, as a result,

5.8 million kids die every year due to lack of access

to basic medical products.

This is not a medicine problem.

This is not a science problem.

it's a logistics problem.

And that's what ultimately led us to build Zipline,

which is trying to build

an automated, instant delivery system to the planet.

And we do that using autonomous aircraft

that weigh about 40 pounds

and they're fully powered by batteries.

This enables us to provide instant delivery

of a wide variety of medical products

just when patients need them.

So, whenever we talk about drone delivery

or what we're doing, people think it's science fiction.

And I think, at this point, people are very cynical,

so let me only talk about what we're actually doing

in the real world right now.

This is the country of Rwanda.

We're operating from a distribution center

about 30 minutes west of the capital.

That's that Z in the middle of the map.

And from that map, we're able to deliver

about 30% of the national blood supply of the country

using autonomous aircraft.

Today we serve about 20 different hospitals.

And we're delivering about 30 different blood products.

The reason that we started with blood

is that 50% of the blood transfusions we're delivering

are being used for moms with post-partum hemorrhaging

right after giving birth and 30% are going

toward kids under the age of five.

So it's a really, really important product,

especially for family health, but it doesn't last very long.

Platelets only last six days.

Red blood cells have all these different types

and it's hard to know what you need

before you actually need it.

So, we operate in the same way that UPS operates here.

We partner with the Ministry of Health

and they pay us for each and every delivery that we do

and as a result, over the last year and a half,

in partnership with the Rwandan government,

we have been able to build what is now

the largest commercial autonomous system on the planet.

So, would you like to see how it works?

[Audience] Yes.

Okay, so I just took this video on my cell phone,

not too fancy, but this is a Zip,

one of the aircraft delivering at Kabgyia Hospital.

We deliver from about 30 feet up

and use a really simple paper parachute.

The vehicle will actually estimate

the speed of the wind when it's making a delivery,

which enables us to deliver into their mailbox,

which is the size of about two parking spots on the ground,

every single time.

(audience applauding)

The cool thing about delivering in this way

is it means there is no infrastructure required whatsoever.

All you need is a cell phone and you can place an order.

And then get what you need

to save a patient's life about 15 minutes later.

You can see these women in this picture

are like, what the hell did we just see?

(audience laughing)

But, actually one of the cool things about this

is that when we're adding a new hospital to the network,

we often are trying to describe what we're doing

and then we start a delivery and it seems like total,

just totally wild that there are a ton of aircrafts

operating in the airspace and delivering these products

and one doctor told me it's as though Jesus Christ himself

is delivering the blood from the sky.

And then it's amazing that that lasts for seven days

and then on day eight, it's totally boring.

They're totally used to is.

Doctors are totally entitled.

Of course, we have drones that solve that.

How else would you do it?

(audience laughing)

And by the way, it's like 30 seconds late.

What's up with that?

It's really, really cool how quickly technology goes

from like magic to totally boring and old hat.

So, the reason this is important is that,

especially with blood and medical products,

you're always balancing access against waste.

So, if you want to improve access dramatically,

you end up sending a lot more medicine out to the last mile,

but when you do that,

you have a lot more medicine that's expiring.

If you try to reduce the waste

by keeping more things centralized,

then you end up having stock-outs

and patients die as a result.

What's so powerful over the last year

is that in partnership with the government,

we've been able to reduce waste from 7%,

which is about an international average,

costs the government a huge amount

of money every year to zero.

Rwanda became the first country in the world

to achieve a 0% waste rate on blood.

And they did that while increasing access

to rare blood products by 175%.

That's totally remarkable.

If you think these systems need more money

to be more efficient you couldn't be further from the truth.

And, of course, the most important point of all of this

is the impact that it can have on patients lives.

So, a few months ago, a mom came into one, a 24 year old mom

came into one of the hospitals that we serve.

She ended up giving birth via C-section,

but there were complications and she started to bleed.

The doctors immediately transfused her

with two units of blood of her blood type

that had been delivered via Zipline's routine service.

We do both routine and emergency delivery.

But, she bled out of those two units of blood

in about 10 minutes.

In that case, even in the United States,

that mom's life is in grave danger.

It's really, really a bad situation.

But the doctors immediately picked up the phone,

started sending text messages to our distribution center.

The distribution center did delivery

after delivery after delivery after delivery.

We ended up sending seven units of red blood cells,

four units of platelets, and two units of plasma;

all of her blood type.

That's more blood than you have in your entire body.

All of it was transfused into her

and the doctors saved her life.

And this picture was taken when she came

to visit our distribution center a couple weeks later.

(audience applauding)

And it's worth pointing out that that's one story

but Zipline has now done over 3,000 life saving deliveries

over the last year and a half alone.

And we're expecting to do about 10 times

as many deliveries over the next 12 months.

So, we really keep in mind that when you can,

especially when you can impact the life of a mom,

that's not just her life, that's the lives of her kids

who are gonna have a mom while they're growing up.

So, let me just really quickly let you hear from

the actual teams that are running the distribution center

and the customers who are benefiting from the service.

(light music)

Zipline is divided into different teams.

We have the flight-ops

who care about pre-flighting plans,

packing, loading the packages,

and make sure the plane can fly.

Then we have tech-ops which include more the people

with knowledge of the product.

We may order through Zipline by using SMS

or by using What's Up.

[Abdoul] The package is handed to flight-ops.

We scan the package in and that's when

we put the vehicle on the launcher.

(light upbeat music)

Vehicle flies mostly up to the hospital.

We can avoid expirees, we can avoid stick-ups

because the supply chain has improved.

Blood is life.

it's sacred life.

All life is. (uplifting music)

(audience applauding)

So, just to give you a really quick tour

as though we were gonna go on a tour

of the actual distribution center right now,

it's worth pointing out that 100%

of Zipline's operations teams are local.

So, it's a 100% Rwandan team

that's running this distribution center.

When we launch aircraft,

it accelerates from zero to 100 kilometers an hour

in about 1/3 of a second.

Definitely enough to knock your drink

off your tray table in flight.

Luckily, there are no humans on board.

The reason we launch in this way

is that the vehicles don't have any landing gear

and we don't have runways where we operate.

So we have to figure out a way

of getting the airplane into the air really, really fast

and then it's actually even more complicated

because how do you do it on the other end

when the vehicle is coming home and needs to land?

And so, I'll just show you a quick video

of how this works.

This is a plane coming in to land

after making an emergency delivery to a three year old boy.

Again, just taken on my cell phone.

(audience laughing) (audience applauding)

Basically, the combination of an aircraft carrier

and a bouncy castle.

(audience laughing)

Just so you can kind of see how it works in slo-mo,

I know that's a little fast,

so we're using differential rtk-gps

to measure the altitude of the plane

and then adjust the altitude of the line

that we're recovering on,

can snag about a three foot tail hook

descending from the back of the aircraft, de-celerate it,

then plop it onto this actively inflated pad.

We basically assume that if these bouncy castles

were strong enough to stand up to kids,

they'd be strong enough to work in Africa.

And one of the cool things is because Zipline

is iterating really quickly in the technology,

just in the last few weeks,

we've rolled out a completely new aircraft

and a completely new distribution center design,

including a new kind of recovery system.

So, as I've mentioned, the last vehicle

is traveling about 100 kilometers an hour

and we're aiming for about a three foot tail hook.

Well, on these new aircraft,

we've actually eliminated the tail hook.

We're aiming now for a one centimeter target.

So, if you want to see what that looks like, here we go.

We call this snap-catch so we're actually actively snapping

the line up against the bottom of the plane.

Then we can swing it into the air.

So, this is basically something that we can do,

that we are now doing 100 times a day, day in and day out,

in a way people can rely on with their lives.

it's really designed to be simple, robust, affordable,

and to be able to work at national scale.

And this might not be obvious

but none of our customers care about drones.

All they care about is does something go

from point A to point B fast enough

to save someone's life.

We could be using dragons as far as they're concerned.

They just want a logistics service that works really well

and that's great because from our perspective,

that's a much better business model

rather than selling the hardware,

we can provide this service.

But that means that behind the curtain,

we have to be really, really good

at a wide variety of things.

Zipline designed the avionics, the firmware, the software,

all the mechanical engineering around the aircraft itself,

and then obviously the flight control logarithms,

the air traffic control, distribution center design;

we had to do all of it from scratch

because none of it existed before.

And, in reality, although the planes are really

the sexy part of what we do,

about 90% of the complexity is actually

in the distribution center design

and the way that we actually run

a fully autonomous logistics network.

Speaking of the distribution centers,

they can actually already be profitable based

on the contracts we've already signed with government.

So, it's so important, a lot of people look at Zipline

and what we're doing, they say,

Oh, it's so philanthropic of you, so generous.

It's like no, that's totally wrong,

that's exactly the opposite of the point

that we want people to take away from our work.

In order to build solutions that are gonna be able

to serve billions of people,

and solve problems at a global scale,

we have to get out of the philanthropy mindset

and show that it's actually possible

to build scalable, profitable companies

that are sustainable over time.

We think it's so important to show

that entrepreneurship and technology and start-ups

can work in these markets,

as well as they can work in markets like the US.

So, I promised I was only gonna talk

about what we are doing today,

but just to talk a little bit about

what's gonna happen over the next three months.

A week ago, we came to a final agreement

with the Rwandan government about a really big expansion

we're doing and that means that we are building

a second distribution center

in the eastern half of the country.

That's now done.

From that distribution center, we're gonna begin delivering

about 360 different medical products.

it's the entire supply chain

to all citizens in the country.

That means that Rwanda is gonna become

the first country in the world to achieve universal access

to healthcare for everybody.

(audience applauding)

It's a pretty cool paradigm shift

for people who think that all technological innovation

is gonna start in the US or Japan,

and trickle its way down to poor countries.

This is in stark contrast to that.

And, not only that, but other countries

are basically taking note

and starting to use Rwanda as a role model.

So, about a month ago,

we got Presidential Approval for a large contract in Ghana

to build four distribution centers

covering about 18 million people,

around 75% of the population of the country.

So other countries are basically

now following in Rwanda's footstep.

And not only that, but this is a picture

from the state I grew up in; Arizona.

The reality is that if you think that rural healthcare

is only a challenge in countries like rural Africa,

you're totally wrong.

The US has the highest rate

of infant mortality in the developed world.

Critical access hospitals are closing at a record rate

and over the last 15 years,

while the average life-expectancy

of people in the United States has improved,

if you live in certain rural parts of the US,

your life-expectancy has actually declined

over the last 15 years.

So, we're leaving people behind.

I think it's not that,

if you want to understand political divides in the US,

I don't think it's not hard to look beyond aspects

of healthcare to understand them.

So, we're actually now partnering with

the Department of Transportation,

as well as the state of North Carolina

to begin doing first commercial deliveries

for rural healthcare products in North Carolina

in the first quarter of 2019.

Which we're really, really excited about.

(audience applauding)

A lot of people ask us, well, why healthcare?

You know, you talk about wanting

to build a general logistics business

and the reason is that it's not just

an opportunity to save lives,

it's also a lot easier for governments

to understand the need for new regulatory frameworks

when every flight is potentially saving a human life.

So it's actually been much faster for us

to get regulatory permission

to be able to operate at national scale.

It would've been harder if we said

we were delivering burritos. (audience laughing)

I think.

And not only that but people don't realize

healthcare logistics globally is a $70 billion business.

That's the number when you're really only serving

like two billion people on the planet well

and everybody else is left behind.

So, I actually think the market

should be much larger than that.

It's a huge market that nobody really considers.

And although, we aren't planning

to do general parcel delivery anytime soon,

it's worth noting that about 85% of packages

that are delivered via e-commerce could be delivered

in the exact system that I showed you today.

So, big picture, we often ask ourselves,

I mean, building a logistics network is really hard.

UPS had a monopoly for something like 60 years

before FedEx came along and they used,

FedEx, in order to compete, used new technology,

which was ironically airplanes and they focused on a market

that UPS didn't think was very important,

which was overnight coast to coast document delivery.

And once they were providing that service really well

and they had the infrastructure built out,

they started competing in a lot of markets

that UPS really did care a lot about.

And we really think of Zipline as taking a similar path.

We're using new technology

that the incumbents don't really understand

and we're focused on markets

that logistics doesn't serve very well today.

And just to really like drive home

why this is so important to us,

a few months ago, I was visiting the Mayo Clinic,

and it's such a cool hospital.

It's one of the best hospitals in the world.

Patients there have access

to the best diagnostics, best doctors, best medicine.

It really blew my mind and then I was considering,

although any of us in this room could go to Mayo Clinic,

the reality is that for the vast majority

of humans on the planet,

your access to healthcare looks more like this,

which is a primary healthcare clinic in Tanzania.

Zipline's mission is to make every clinic

in the world into the Mayo Clinic.

We can give that kind of access

to every human on the planet.

We think we're at a point where that's possible.

So, from a technology perspective,

we're now ready to build an instant

and automated delivery system for the planet

that can deliver product as quickly and efficiently

as the internet delivers information.

But, we feel so strongly that the short

or medium potential for that technology

is not delivering tennis shoes or pizza.

We think that the real potential for that technology

is providing universal access to healthcare

for every human on the planet.

Thanks.

(audience applauding)