Drones Changing Logistics: Keller Rinaudo / CEO of Zipline

Direct Talk

In the spring of 2022,

a major project began
on a group of isolated Japanese islands.

What is it?

It's a drone-based
medical supply transport service.

The service was developed

by the CEO of the American
start-up company Zipline, Keller Rinaudo.

Keller Rinaudo
CEO of Zipline

It just feels like teleportation,

and one doctor told me,

"God himself is
delivering blood from the sky!"

This groundbreaking service

has even been called
"A revolution in the skies."

So how will it change
the future of logistics?

Drones Changing Logistics

Our mission is to build a logistic system
that serves all people equally

in order to ensure universal access
to health care products,

but also transition logistics
toward a green energy future.

Today, Zipline operates distribution centers in
Rwanda, Ghana, the United States and Japan.

The reason we're so excited about
this partnership with Toyota Tsusho

and building instant
autonomous logistics here in Japan

is that the country is
obviously making big investments

in universal access to health care,

as well as the transition
to sustainability and green logistics by 2050.

As a new base for the
drone transportation services,

Keller chose Goto City
in Nagasaki Prefecture,

which includes 63 islands.

In partnership with a
Japanese trading company, Toyota Tsusho,

Zipline started a service
to deliver emergency medicines

to areas with scarce medical facilities.

So how does it work?

You know, the overall service of Zipline
is incredibly simple,

although the technology
behind the service is very complicated.

Any doctor, any nurse,
any community health worker,

or any person even just sitting at home

can pull out a smartphone,

log in, press a button,

saying what product they need at that time.

And then that product can be teleported
to those GPS coordinates.

The operations base is a facility
called the distribution center.

Upon receiving a request,

a staff member boxes medical supplies
stockpiled in the warehouse.

Then a special application is activated.

The box and the drone both have barcodes.

By scanning the respective barcodes
with the application,

the computer inside the drone
automatically recognizes the destination.

Being lightweight and durable,

the styrene foam airframe
is ideal for long-distance flights.

The box is placed inside
the body of the drone.

All that remains is
to set it on the launch pad

and press the launch button.

The delivery method is also simple.

The parachute-fitted box is

dropped above the destination.

We are dropping the package

from about 10 to 20 meters in the air.

We use a really simple paper air brake

that basically means that
we can gently deliver the package

into the mailbox of the customer.

And then the vehicle
will turn around, fly itself home

land at the distribution center,

and we can then typically have that plane
with a new package loaded

and out, making another delivery
just 3 to 5 minutes later.

The way all of our customers
experience this service

is, it just feels like teleportation.

And then that product can be
teleported to those GPS coordinates

ten times faster than traditional logistics
is capable of doing.

The company first launched its services
in the Republic of Rwanda in Africa.

The transport efficiency
of goods there was poor

due to a fragile
rural transportation infrastructure,

and women bleeding to death
after childbirth was a serious social issue.

So in 2016 the company
created a distribution center

in the capital city of Kigali
to begin airlifting blood for transfusions.

I still remember the conversation
with the Minister of Health.

We were saying, "Hey, we'll deliver
all these different medical products

to 500 different hospitals and
health facilities throughout the country."

And she looked at me and said,
"Keller, shut up!"

"I'll believe it when I see it.
For now, just do blood."

It's really hard to get
the right product to the right place.

And she was emphasizing
50% of blood transfusions

are being used for moms with
postpartum hemorrhaging after giving birth.

30% are going toward kids
under the age of five.

So this is an incredibly
important product for family health.

As a result, the transportation time
was reduced from 4 hours

to just 15 minutes.

Currently, 70% of transfusion blood
in Rwanda's rural areas

is supplied by drones.

What does Keller regard
as the value of this logistics system?

People think that
the magic is all about the drone

or all about the autonomous aircraft.

And in fact, the value is
in having an integrated service.

You can centralize things that are

urgently needed or
short shelf life or kind of long tail.

And by sending them just when they're needed,

you can dramatically reduce waste

while increasing access.

So that really is
the promise of this technology.

It's not just like, "Oh, won't it be exciting
if we have delivery that's ten times faster!"

That means we can totally change the way
that we imagine the overall system.

Up to now,

rural medical facilities
have had to stock more medicines

to prepare for emergencies.

However, by managing medicines
at the distribution center,

it's now possible to establish a system

provide an immediate supply
of necessary items

while also reducing waste.

The operations are
supported by locally hired staff,

so the drone transport system
not only improves logistics access

but also contributes to
social community development.

Some of the countries
where Zipline initially launched,

and I think you even now
see this happening in Japan,

are now leading the way in terms of
showing what regulatory reform is required.

And like if a country wants to be
on the forefront of like

autonomous airspace management and instant
autonomous delivery at national scale,

a big part of that is actually through
regulatory reform and evolution.

And so all of those are big investments
that Zipline has been able to make.

It's investing in infrastructure,

it's investing in people,

and it's investing in
entrepreneurship and technology

at a national scale in
every country where we launch.

How did Keller come up with
his vision of innovative drone logistics?

Keller was born in 1987
in Arizona in the U.S.A.

He says his desire to become an entrepreneur
developed during his high school days.

Honestly I didn't enjoy school that much.

And as a result,
I ended up getting a full-time job.

So I was working like
50 hours a week at a restaurant

all through high school
for almost all four years.

Working in the service industry,
particularly in the US,

where your wages suck,

you're getting paid very little

to work really hard

and like late into the night

and nine-hour shifts,

like you're constantly on your feet,

there's zero room for error.

You have to be really friendly all the time!

Interestingly, I think that taught me
more about leadership,

management, work ethic, responsibility

than maybe a lot of the things that I learned
in high school around the same time.

Even to this day at Zipline,
when we're interviewing folks,

we always love asking people like,

have they ever worked
in a fundamentally unfancy job?

And we love hiring people

who have at least had that kind of
an experience in their background

because it tells you something about, like

I actually think building really,
really important technology for the world

is often way less fancy
and less fun than it sounds.

While majoring in bioengineering at college,

Keller was also an avid rock climber.

After graduation, he visited Tanzania
in search of business opportunities,

and it was there
he got inspired with an idea.

And there was one
fundamental experience that we had.

We were actually in Tanzania

visiting a lot of different
health facilities and hospitals.

And because of the fast adoption
of of cell phones and smartphones,

there had actually
been these systems designed

that were doctors and nurses were texting in,

saying when they had an emergency,
when a patient was in need.

And he showed me
the database of thousands of texts

of like, "We need blood, we need antivenin,

we need anti-rabies,
we need anti-malarials, what have you."

And then I kind of realized,
"Wow, it's actually a database of death!"

Because

a one-way flow of information,

but then nothing was being done about it.

And the more we learned about logistics,
the more we realized,

"Wow, this is a service that really only serves
the golden billion people on the planet well."

So if you're lucky enough to grow up in

Osaka or Tokyo
or a city in the United States,

cool, yeah, you won the human lottery!

But for 6 billion people on Earth, you don't
have access to that class of logistics.

And as a result of that,

five and a half million kids
under the age of five

lose their lives every year

due to lack of access.

He started his business

based on the principle of
delivering goods equally to all people.

As he was searching for a place to expand,

a country which had recovered from civil war

by upholding the ICT
Nation concept came forward.

It was Rwanda.

We did not know how to integrate
with the national health care system.

We didn't know how to do things
as simple as like inventory management,

control systems and software that
would allow us to intake medical products

and then send them
to hospitals and health facilities.

And so that first year
was really scary and difficult,

and luckily the government
was an amazing partner to us

and we spent the first nine months...

You know, we've often asked
ourselves the question of,

“Well, what about an alternative history

where Zipline actually launched
in the United States first?"

I think given what we learned,

you know, I'm not sure
Zipline would have survived.

And I think the key for this kind of
technology to really thrive in any country,

the key is close partnership
between a government

that has a clear vision for
where it wants health care to go

and where it wants
infrastructure development to go,

and then entrepreneurial
technology based startups

that can bring the solution
and move lightning fast.

And so so many global experts
also told those countries,

like, "You can't do this,
you don't have enough money,

you don't have the technological know-how."

And now they've totally proven them wrong.

Paul Kagame
President of Rwanda

Keller launched his business operations
in Rwanda and Ghana,

and he has built up
a track record of success.

And business expanded further
during the COVID pandemic.

You know, when the pandemic began in 2020,

I remember sending an email to the board

like that week where
the initial lockdowns were occurring,

saying, "Hey, this is really bad news."

And then I remember
sending an email two weeks later

saying, "Never mind, I was completely wrong.

You know, we need to prepare to grow
ten X over the coming 12 months."

And in fact, that's exactly what we saw.

For example, in Ghana,
orders for vaccines go from X to ten X.

We've delivered a million doses
of COVID 19 vaccine,

4.5 million doses of traditional vaccine
in that country alone over the last year.

Obviously any global catastrophe
like the pandemic is incredibly tragic.

But I think one of the silver linings

is when humans are challenged
in this fundamentally new way.

And so when people were quarantined at home

and we needed to find new ways
of delivering medical products to them,

and we needed to find new ways
of operating a health care system where

where traditional
logistic systems are failing,

it meant that a lot of health systems

suddenly had this opportunity to just jump
straight to the new way of doing things.

With the start of operations
in the U.S.A. in November 2021,

the use of drones is now
also spreading in developed countries.

So what kind of potential does
the burgeoning drone business have?

I think we don't worry
about this as much now,

but when we were building
the first couple of distribution centers,

we were really worried,

like, "Are communities going to accept this?"

I mean, it's so weird,
it's so out-there, it's so sci fi!

And one doctor told me,

"It's as though, you know,
God himself is delivering blood from the sky!"

And so there's seven days

of kind of like magical science fiction
of providing this kind of a service.

And then on Day Eight,
it's completely boring.

And doctors and nurses and
health care workers just depend on it.

In fact, when I was at one hospital
watching a delivery be made,

a nurse looked at her watch,

and then looked at me, and she said,
"It's 30 seconds late!"

And to us, that's the
beautiful thing about technology.

You know, it shouldn't be like,
"Oh, it's so sexy!"

or "It's so exciting!"
or "It's so science fiction!"

Like, at the end of the day, you know,

the sexiness of technology
wears off very quickly.

What it comes down to is like,
"Does this transform the way

that we can care for patients or
does this improve people's lives?"

Logistics is like
it's the most boring thing in the world

and it's one of the
most important things in the world.

And we think that's pretty exciting,

showing that technology can actually improve

the lives of the people on Earth
who need the help the most,

not just the people who maybe
are in the richest 1% of humans.

Finally, we asked Keller
to tell us his motto.

The potential for human knowledge is limitless.

Curiosity is our scarcest resource.

Studying science and engineering
over the last 15 years

has made me realize that there is
no problem on Earth that can't be solved.

I think the thing
that's hardest to protect as

we grow old is protecting
childlike wonder and curiosity.

That's the thing that
actually limits our imaginations

and prevents us from learning and growing.

Potential for human knowledge is limitless.
Curiosity is our scarcest resource.