Jed Kalkstein / GPMS
Start Here Podcast | Episode #72 | 12/5/2022
Today we sit down with Jed Kalkstein, President and CFO of VCET portfolio company GPMS International whose hardware and software keeps high value aircraft and industrial engines operating safely and reliably.
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Transcription:
Start Here – Jed Kalkstein
JED KALKSTEIN
We had another aircraft that was flying, and this one was one that sort of gave us a little bit of a start. It was flying, and they had what’s called a chip light. So it basically means that some of the components are chipping off metal into the oil line, and then it sets off a light saying you need to set this aircraft down and check it out.
Our system didn’t say anything, and we were concerned. We were like, why didn’t we see anything? And so we double-checked the data, and we said no, it doesn’t look like there’s anything that’s an issue. They took the components off the aircraft and had a third party go look at them, and they came back and said, no, there was nothing wrong with it. So again, validating us. An operator goes through that once, and then they have that extra confidence to really depend on us.
SAM ROACH-GERBER
From the Vermont Center for Emerging Technologies, it’s Start Here, a podcast sharing the stories of active, aspiring, and accidental entrepreneurs. Today we sit down with Jed Kalkstein, President and CFO of VCET portfolio company GPMS International, whose hardware and software keeps high-value aircraft and industrial engines operating safely and reliably. Welcome. This is Sam Roach Gerber.
DAVID BRADBURY
And Dave Bradbury.
SAM ROACH-GERBER
Recording from the Consolidated Communications Technology Hub in downtown Burlington, Vermont. Hi, Jed. It’s good to see you.
JED KALKSTEIN
Hey there. You too.
SAM ROACH-GERBER
It’s been a while.
JED KALKSTEIN
Thanks for having me.
SAM ROACH-GERBER
Yeah we can’t seem to keep you out of this place. So, you know, we’ll open the door to the –
DAVID BRADBURY
Hey, it’s Okay. Jed and his partners first walked into VCET eight years ago Eric Bechhoefer –
JED KALKSTEIN
Yes, it would have 2014, probably.
DAVID BRADBURY
2014, yeah, an overnight story. Let’s get into it.
SAM ROACH-GERBER
Alright, Jed, what is GPMS, and why does it matter?
JED KALKSTEIN
Yeah, we’re a new generation of predictive maintenance solutions for high-value rotating equipment. So we’re on helicopters primarily, but also on EVTOLs, the electric vertical takeoff and landing aircraft that are being developed now. And we just last year did a demonstration on the Humvee for the Army, and are looking this year at doing another demonstration for the Army on potentially a surface vessel, a ship, which would be really fun.
DAVID BRADBURY
Why do I care about predictive maintenance?
SAM ROACH-GERBER
Seems like important shit here. I already swore, we’re 30 seconds in.
JED KALKSTEIN
We care because if we know when something is going to need to be replaced, then we can plan the downtime. So it’s really about moving unscheduled maintenance into scheduled maintenance. If you look at a helicopter, the typical helicopter has somewhere between 15% and 38% of its maintenance as unscheduled maintenance. In the equivalent of your car, when you bring your car in for an oil change, that’s scheduled maintenance. When you’re driving around and your wheel bearing starts to fail, that’s unscheduled maintenance.
So what you really want to be able to do is pull that wheel bearing replacement into the oil change window, and that makes sure that between oil changes you’re continuing to be able to operate your vehicle. When you’re talking about helicopters, things like that can lead to very bad days, and certainly lead to downtime that costs a lot of money.
SAM ROACH-GERBER
God, he’s able to dummy-proof that so well.
DAVID BRADBURY
Literally just raised our intelligence, right? It’s not an easy topic to get into, but it’s really stinking important. Like, is there any business case of why I would not want this system on my helicopter, my Humvee, my windmill, my nuclear pump?
JED KALKSTEIN
There’s no reason for any of those examples. The issue becomes if you’re talking about having this kind of technology on something that is low value. A $1,000 motor, it doesn’t make sense to equip it with something like us. So it’s got to be high value where the cost of downtime is very expensive, or the consequence of downtime – as with something that flies – is very dramatic.
DAVID BRADBURY
Yeah, we’re talking like the risk of life or something like that. The product is called Foresight MX, hardware, software. Could you just tell us a little bit – and again, use little words and maybe graphics with your hands – for us?
JED KALKSTEIN
Well, I’m giving you a sign with my hand right now!
DAVID BRADBURY
Thank you for the bird.
JED KALKSTEIN
The hardware is primarily vibration sensors. So you’re looking at the vibration of something that’s rotating. So on a transmission, if we were doing it on a car, for instance, the transmission would have one sensor on it, and that sensor is monitoring the shaking. And with the algorithms that we have, the math that’s done on those sensors, we can parse out all of the gears, shafts, and bearings in that transmission. So we can tell you that it’s this bearing that needs to be replaced, and then we can further tell you that that bearing is going to need to be replaced in 100 to 150 operating hours, which for a helicopter is anywhere from one to four months. So that gives them plenty of time to plan their logistics, to get parts on order, to schedule it into a normal maintenance window, and perform that when it’s safe and easy to do.
The software side of it, once the aircraft comes back from an operation, our system recognizes that, automatically offloads the data through a cellular network to the cloud, and then users can access the information on any browser-enabled device. So they’re looking at their phones, their laptops, or whatever to be able to look at the data. And then it’s showing them really clearly with stoplight simplicity, it’ll show a picture of a bearing and it’ll show that it’s red, or it’ll show that it’s yellow, and that tells them that they need to focus on them.
DAVID BRADBURY
It’s sort of like Steve Jobs decided to design an information system for a helicopter. I mean, it’s really cool, the leap in technology. Okay, so we’re grounded now, Sam.
SAM ROACH-GERBER
I have a little bit clearer picture here for me. The first thing that comes to mind is, that it’s super valuable data obviously for your users, but are there any other applications for the data that you all are collecting?
JED KALKSTEIN
Certainly the manufacturers are interested in the data, because they can look at reliability, they can look at how aircraft is being flown, and they can improve their customer support for their customers. As with your cars, the maintenance is often done by a third party, and so it provides the ability for that third party to have a really clear insight into what’s going on on the helicopter that they’re helping to maintain.
So now when one of their customers has the maintenance event coming up in the normal maintenance window, those guys can go to them and say, “We also need to do XYZ as part of this maintenance window.” And so it really adds to their ability to provide a much higher, more reliable service to their customers as well.
SAM ROACH-GERBER
Wow, that’s very cool. Who are your customers? Who is using this?
JED KALKSTEIN
So, we have commercial customers, we have government customers, and military customers. Some of the ones that you would recognize are Duke Energy in the Mid-Atlantic, a utility that’s flying – they started with our system on one helicopter, and then they rolled it out to the rest of their fleet. They do power line inspections and that kind of work, so their helicopters are flying a lot and it’s important that they have that uptime. That’s an example.
On the government side, the Tennessee Valley Authority is flying with our system on all of their aircraft. And then the commercial customers you probably wouldn’t recognize, but they’re large fleets and small fleets.
DAVID BRADBURY
And are they doing things like tourism, fire protection, or oil & gas, perhaps?
JED KALKSTEIN
Yeah, there’s a lot of firefighting. In fact, the US Forest Service, which contracts with most of the firefighting helicopters, is starting to require this as part of some portion of the helicopters that they contract with, so that’s a really good bellwether for our industry. But then there’s law enforcement. We have some law enforcement customers. There’s obviously the military, and air medical is another huge category. We don’t have any air medical customers yet, but that’s around the corner.
DAVID BRADBURY
Yeah, I would imagine firefighting, too. I mean, it used to just be a four or five-month window, but it’s probably eight or nine months now that they have to operate given the climate changes, and so utilization and safety have got to be paramount.
JED KALKSTEIN
Yep.
SAM ROACH-GERBER
It feels like probably pretty long sales cycles, is that the case?
JED KALKSTEIN
It can be. I mean, with the Tennessee Valley Authority, they had an experience with another technology that didn’t work out. And so when we met them, we were actually referred to them by the team at Duke Energy. I think they essentially made the decision to go with our system on their whole fleet in one phone call, so that was quite different, but mostly it takes a long time.
And helicopter operators, really anybody in aviation, aren’t known for embracing early technology. They want to see it work. There have been lots of people in the predictive maintenance space in general, certainly on the industrial side, that have made some pretty big claims that haven’t panned out, and so often they’ll come to us with a fair amount of skepticism. And then they put it on one aircraft and test it for a while, and then they’ll roll it out to the rest of their fleet.
And that’s been our experience so far. We’re excited to have new customers just put their toe in the water on one aircraft, because it almost always turns into subsequent rollout.
SAM ROACH-GERBER
That’s awesome. So great.
DAVID BRADBURY
All right, Jed, let’s just step back here. Tell us about you.
SAM ROACH-GERBER
Yeah, who is this guy?
DAVID BRADBURY
Who was young Jed, and why was finance, operations, and technology the calling?
JED KALKSTEIN
So, I have had many different walks of life over the years. I started off actually in government. I was a political appointee at the Justice Department in the 90s. Then I went back to business school and was interested in economic development. After business school, I went to work at a venture capital organization, which was somewhat different. It wasn’t a traditional venture capital funds. It was affiliated with the State of Connecticut, and they had a dual mission of building companies and also building high-wage, high-value jobs in the state. That was really interesting. We got our fingers on a whole bunch of companies.
But then as a venture capitalist, I was going to board meetings and listening to companies talk, and for some strange reason, the other side of the table seemed more exciting than the one I was on. All of my entrepreneur friends said to me that I was insane – and that the golden rule is he who has the gold makes the rules, so t’s a lot easier to have an impact on the finance side of the table – but I didn’t listen.
And I jumped into my first company, which was an IT security business.
DAVID BRADBURY
Perimeter?
JED KALKSTEIN
That was Perimeter, yep. We built that, and then ended up recapitalizing the business. The business sold a few years later, a successful sale to BAE Systems. Then I started coming to Vermont. I have been coming to Vermont to ski since I was a kid, but I met people like David who convinced me that there was something I could do here in the state.
DAVID BRADBURY
We saw potential in you, Jed.
JED KALKSTEIN
Yeah, something like that. So I got introduced to a bunch of companies, and I was really looking for one that I could kind of sink my teeth into. I helped a bunch of companies raise capital, and ultimately, David actually introduced me to GPMS, to the team there, and I just loved it.
DAVID BRADBURY
And that was after the cyber company, Pony, that we tried to help get going. Also, Jed, I want to acknowledge your volunteer time in helping VCET and the creation of the Vermont Seed Capital Fund. That Connecticut experience was so valuable, and the skills you brought really were monumental in giving us the courage to take the risk, I think, and to put money in and get other money. And in a way, we go, now 32 companies later, this little fund is making it happen.
JED KALKSTEIN
Well, I can take very little credit for that. You guys have really done a great job.
DAVID BRADBURY
Oh, stop! Thank you. But no, the experience with GPMS – the two cofounders – describe the other two co-founders for us?
JED KALKSTEIN
Jack Taylor and Eric Bechhoefer are both brilliant engineers. Jack is on the software side and Eric is a system engineer.
DAVID BRADBURY
They are scary brilliant. How do you deal with that?
JED KALKSTEIN
They’re both super approachable. I mean, I’ve worked with lots of entrepreneurs – particularly on the engineering side – who are so deep in the engineering that it’s really hard for them to communicate to people like me who need a sandbox description of things. But both of them are patient. They have humor. One of the things that really distinguished Eric to me was that he was very clear on what he was good at and what he wasn’t good at.
And I think when you first introduced me to them, the premise was that they were brilliant engineers, but it was going to be hard for them to figure out how to build the business unless they brought someone in that could help. Eric was incredibly open with that, and so the partnership has really been a successful one so far.
SAM ROACH-GERBER
That’s great, that’s good to hear. A strong team everything right?
SAM ROACH-GERBER
Yeah, I always admire folks that are just deep, deep experts in their field and can pick their heads up and say, “Listen, we need help. We need someone that knows how to build the business.”
DAVID BRADBURY
Particularly the business where, those two would come from larger corporate backgrounds where the idea of raising outside money was probably something they didn’t have visibility into. And you brought that to the table here.
JED KALKSTEIN
And I was able to sort of do small slices of time with Eric and Jack. I had another software company in Connecticut that I was working on at the same time. It started to get to the point where I couldn’t do both, and so actually last year we sold the company in Connecticut as well, another great exit, to a strategic buyer.
DAVID BRADBURY
So humble, I love it. Another great exit, right?
JED KALKSTEIN
And then I was able to really focus on GPMS. So the last year has been really great. And actually early this year we were finally able to recruit some additional talent, some folks who have really helped to move the bar up. First, we brought in a new Head of Marketing who was the former head of commercial marketing at Bell Helicopter. Being able to lure him away was great, and he really sees the promise of this in the helicopter industry.
Then later in the year, in May, we brought on a new Head of Sales, who had been with Airbus for 18 years and was a chief pilot of a number of big helicopter operators. He was Airbus’s number one salesman. So bringing him on board as well really raised our profile in the industry and has really helped to make people take a second look at us. Because as I said, this is not an industry where people make decisions willy-nilly. They really want to know that they’re investing in something that is going to be able to deliver the kind of promise that we talk about.
SAM ROACH-GERBER
It’s high trust, right? I think that’s a big piece of it. So that’s one thing that I did want to ask you about: how do you test this technology really early on. Do you have any partners in that space? How does it work?
JED KALKSTEIN
There are data sets where you can take gearbox information. Like, you’ll have a gearbox that you know went bad, and you have data on that from various – NASA data sets that you can run this stuff on. So you can run your algorithms against that to see that it actually sees the faults that are there. Back in 2015 we did a demonstration with one of the top helicopter manufacturers, where they brought out a gearbox, we attached our system to the gearbox, we ran it to get a baseline and just to know that the system was on, and then they wheeled it away and they put some bad components in it. And they did this a couple of different times to see if we would catch them.
And one of the times, they came back and we ran it and we said, “It looks like you have two bad bearings.” They said, “Nope, we only put one bad bearing in.” We had a moment there where it was like, oh, boy did we misjudge it? And Eric, our founder, was like, “There are two bad bearings. I promise you there are two bad bearings.” So, they wheeled the gearbox back into the darkness, out of the room, and they came back a few minutes later and said, “Oh, you were right. We accidentally pulled from the wrong box.” That was pretty cool.
SAM ROACH-GERBER
Oh my God. This is exactly what I was hoping to be here for when I asked that question. That’s so cool.
JED KALKSTEIN
And then we’ve had plenty of operators who have been flying. We had an operator that bought a brand new aircraft and was flying that aircraft for about 25 hours, and our system started to say one of the bearings was not good. It still said that they had plenty of time, so we said, this is not something to do anything about now. Let’s watch it and see how it progresses. Because sometimes you’ll have early engine break-in, and it’s just normal.
But over time the fault continued to propagate, and we were able to say, “You have 120 hours of remaining useful life on that.” And sure enough, they used that time to plan how they were going to do that engine replacement, and who was going to pay what to whom, and how all that was going to play out. And it turned what could be a very dramatic, scary incident into something that was boring, and we like boring.
So they used that, and they pulled that part out, and it was very clearly damaged at that point, there was just no question about it. So we’ve seen anecdotal examples like that as well, which help to increase our customers’ confidence that what we have works and does what we say it’s going to do.
SAM ROACH-GERBER
Yeah, it’s not easy to spend money on preventative stuff, but one issue and you’re just so glad you did.
JED KALKSTEIN
Yeah, absolutely. And you know, in that case, that engine is probably a $750,000 engine, so it’s a huge expense. We’ve had other situations, we had another aircraft that was flying – and this one gave us a little bit of a start – it was flying and they had what’s called a chip light, which basically means that some of the components are chipping off metal into the oil line, then it set off a light in the cockpit, saying you need to set this aircraft down and check it out. Our system didn’t say anything, and we were concerned. We were like, why didn’t we see anything? So we double-checked the data and we went back, and we said, “No, it doesn’t look like there’s anything that’s at issue.” That gave them the confidence – they have to go through certain steps that the manufacturer requires anyway while they’re in the field – and so they did those, and then they had the confidence to fly the aircraft back to their base. And they took the components off the aircraft and had a third party go look at them, and they came back and said, “No, there was nothing wrong with this.” So, again, validated us that there was nothing wrong.
SAM ROACH-GERBER
From the opposite standpoint, yeah.
JED KALKSTEIN
An operator goes through that once, and then they have that extra confidence to really depend on it. So that’s great.
DAVID BRADBURY
So given the number of years, the people, the engineers, the talent you have, and sort of the time to customer, how has the company faced this along the way?
JED KALKSTEIN
First we actually did some engineering services work. That’s a tried-and-true way to fund the business while you’re trying to figure out how you’re going to build the product. So we did that, and then we started raising some angel money, and we were able to raise capital from a bunch of angels. There’s one in particular who has been great, and has been with the company almost since the beginning.
More recently, we did two rounds of institutional funding. We brought in Diamond Stream partners in the beginning of 2021, and then Hearst Ventures – connected to the Hearst Company – in December of 2021.
SAM ROACH-GERBER
So one thing I want to ask you about is, we talked to a lot of companies about when they’re fundraising, whether to get investors that are specific to your industry. Can you talk a little bit about that and how you’ve approached that?
JED KALKSTEIN
We have the proverbial friends and family who don’t really know much about the industry, and so they’ve put some in. But the large angel investor that invested, he hadn’t invested in or hadn’t built companies in this particular space, but he has been in aerospace. He’s been a very successful entrepreneur, so he knew enough about the industry and he was a very technical guy. So he met Eric, and I think they really resonated with each other, and that was really what drove him. He said, “This guy, he’ll figure something out.” And so that was kind of the investment thesis, I think.
The institutional investors, Diamond Stream is primarily an aviation investor. They’re not as big in the helicopter space, but they’re very interested in how aviation is changing, and they like picks and shovels technology, enabling technology, and so that was what fed their interest. And they’ve been great. Hearst also has been great. Hearst has a toe in the water on the aviation side, not on the hardware side, but certainly Hearst, through their various television stations around the country, they have a lot of helicopters that are flying. But they also own one of the really large aviation data companies that’s out there. So that’s how we got introduced to Hearst. So they are all aviation aware, and certainly helpful in that regard.
SAM ROACH-GERBER
I like the concept of being aware. You don’t need to be fully in a certain space, but just having the knowledge and seeing what else is happening in the space is certainly helpful.
JED KALKSTEIN
And certainly in aviation, there’s a whole other level of complexity that, before I was involved in it I had no idea existed, with the FAA certification requirements. If you don’t fully understand that, then you could get sort of very optimistic about something that then turns out to run up against aviation certification requirements, and that can be a huge dislocation for where you’re trying to go. So, as an investor, being. aviation aware is pretty helpful.
SAM ROACH-GERBER
You seem like you have a lot going on and are sort of a Jack of all trades in the company, but I’m just curious, what’s your jam? What do you get most excited about?
JED KALKSTEIN
Yeah, I love the team. I love building the team, and essentially getting out of the way and just trying to help them to do – I sort of try to help them be successful and remove barriers for them. That’s kind of how I see my role. But when the team is tracking, that’s the most exciting part of it.
DAVID BRADBURY
You’ve assembled in this past year – the team has just step functioned higher, in terms of their knowledge, their expertise, and their street cred within the industry. Like from certifications, to sales, to software, engineering and all that supports. Really great. It took a bit, and it’s all about timing – and you’re scaling it as the certifications are in place on different platforms – really pretty pleasant to see.
JED KALKSTEIN
All of those things really start making it feel like you’re final, pun only slightly intended, planing, where you’ve come out of the water and you’re now really skimming along well. But you don’t get there without having built the foundation, right? You can’t recruit people like that until the company is real, and until you’ve been able to cross a whole bunch of hurdles and milestones. So the early team, almost all of them are still with us. They’re the ones who really built the foundation that gets you up to that next level, and gives you the ability to continue scaling and demonstrating capabilities.
DAVID BRADBURY
What’s the next one or two years look like for GPMS? Is it all about sales? Are there big technical things you still need to resolve? Is it certification of different platforms, which is really kind of a fancy way of saying this helicopter version, or this EVTOL, or this drone?
JED KALKSTEIN
Yeah, so it’s about scaling now. On the manufacturing side, have to be able to scale. Right now we’re a contract manufacturer, so we need to be able to scale on the manufacturing side. And you have to do that particularly in aviation with no missteps. You need to make sure that your quality is there, so making sure that all of those pieces are in place to allow you to continue building.
Supporting customers. This is an industry that is all based on referral. You can’t afford to have customers that are unhappy talking to other prospective customers. You need to every day knock the cover off the ball.
And then it’s about sales. As with any early stage company, you need to grow ales and make sure that people are understanding the value proposition of why this is important to them. Not only from a big picture – you can always kind of pull the safety message and talk about that – but even from an economic standpoint, why this is going to be really impactful to them. Scaling is really important, so that’s really where our future goes.
And then we talked briefly about the other initiatives we have with ground vehicles. I think that’s really promising. When a truck breaks down, that’s not necessarily a bad day. When it’s a truck carrying soldiers into harm’s way, you want to make sure that, at least from a mechanical standpoint, that truck is going to come back, and not break down in the field and require some kind of intervention to get those soldiers back safely. Having this kind of technology on those types of vehicles can be a huge plus as well, so we want to demonstrate that and move forward.
DAVID BRADBURY
I think if I recall, Senator Leahy and his team played a little role in trying to bridge those relationships on the Humvee side, am I remembering that correctly?
JED KALKSTEIN
Yeah, absolutely. Senator Leahy has been a great supporter all along, both with the Humvee demonstration and with this year’s demonstration program. Senator Leahy’s team was able to make that come together.
SAM ROACH-GERBER
You talked a little bit at the beginning about how it has to be high value, right? Because it’s not a cheap product, by any means. In terms of ground vehicles, does that shift the business model at all, or are Humvees high enough level that it works out?
JED KALKSTEIN
There are markets where the unit economics, the value you can get per unit is higher, and some where it’s lower. In aviation, partly because of all the certification requirements, the unit economics are high, but with ground vehicles it’s going to be low. But in the helicopter space there are 60,000 helicopters, commercial and military, around the world, so it’s not a big market. If you’re looking at ground vehicles. You’re talking about hundreds of thousands of ground vehicles that could be – probably millions of ground vehicles if you go outside of the military space – that could be candidates for something like this. And so while the unit economics are low, the quantity is high, and there’s an attractive market there that makes a lot of sense.
SAM ROACH-GERBER
Is the technology somewhat simplified? I imagine it’s a little bit easier to monitor a ground vehicle.
JED KALKSTEIN
There are some things that are easier and some things that are harder, but you can definitely scale it down. You can say, I want to have visibility into just the transmission, or I want to have visibility into the transmission, wheel bearings, and differentials. So you can scale it up or down depending on how important it is to monitor something.
If you don’t have a frequent issue with some particular part of a truck that’s going to fail, then it wouldn’t make sense to monitor that. But if you really look at where that 80/20 rule is – where is the 20% that I can invest to get 80% of the value – then you can get to something that’s more cost-effective.
SAM ROACH-GERBER
That’s so cool, that’s really cool.
DAVID BRADBURY
It feels like Car Talk, right? I love it.
JED KALKSTEIN
You’re the only one with the Boston accent, though!
DAVID BRADBURY
Yeah, seriously. It comes out now and again. So talk about Vermont. You’ve been through startups that have worked, startups that have scaled, as an investor, and as a participant. How are you feeling about things of late? What have you noticed?
JED KALKSTEIN
Well, I mean, I love Vermont. And I moved here for a reason, and it’s only sort of gotten more locked in since then. I had an opportunity with one of the companies that I was helping to help that business scale by moving out of Vermont, and I decided not to do that.
SAM ROACH-GERBER
Thank God. Right, Dave?
DAVID BRADBURY
I think you would have saved the company.
JED KALKSTEIN
I don’t know about that. But Eric, our founder, is also very committed to Vermont. It’s not, at least historically, a big aviation Mecca, although with Beta and some of the other companies that are here, there’s certainly more of an aviation community than there once was, so that’s really exciting. I think that there are certainly things that would be easier to do elsewhere. Recruiting is a bit of a challenge here, particularly for some job functions, and so you have to be patient and really get the word out.
But Vermont is a small place, so you can find yourself getting networked to people pretty quickly, so that’s certainly helpful. When I was in Connecticut, we had this sense that we too were a backwater, and we always sort of looked to Silicon Valley, Boston, and New York, and wished that we had the kind of money, talent, and all that stuff that they have.
I think it’s just wherever you are, you’re always tempted to look elsewhere. But I think in Vermont, we have a really smart workforce, and if you have a good company that has really strong prospects, I think you can find folks. The capital environment in Vermont is definitely improving, but that’s been a long time coming. So hopefully all of these new things that are starting to percolate out do happen and make that world a bit easier.
Honestly, I think in Vermont, because it’s a small state and these changes that are happening on the capital front, investors have a bit of a leg up because they know everybody. We were just talking about, you know this other company and several companies that I’ve worked with. We’ve known each other for a long time. So that is good when you’re looking at entrepreneurs, and trying to figure out if they’re really someone that we can invest in and have a good, open, honest, productive relationship with or not? So I think that there’s a competitive advantage that you have in a small state like this, in that regard.
DAVID BRADBURY
Going back to when the seed fund made its small investment during the sort of friends and family stage, having working with Jack and Eric for maybe a year or so – and like, alright, bring this guy in – the team becomes so much more powerful and attractive. That was an easy decision, right? Because we look at team, tech, timing, and terms. I mean, that’s really the four things that matter, and away we go. Really encouraging. How many people are working at the company today?
JED KALKSTEIN
We have 18, I think now. Not enough of them are here in Vermont, but we’re working on that.
DAVID BRADBURY
But you got a brand new office down in Waterbury, right in the old Green Mountain coffee complex. Our other two portfolio companies are across the street, Core and Nomad.
SAM ROACH-GERBER
Are you hiring?
JED KALKSTEIN
Yeah.
SAM ROACH-GERBER
What are you looking for? We have a pretty big audience, so it’s worth mentioning.
JED KALKSTEIN
Yeah, we’re always looking for technical people. Our primary focus right now is actually on the procurement side. We’re looking to find somebody to help us manage sourcing and that kind of thing. We’re also looking for a manufacturing technician that we’d like to bring on. We’re looking for somebody on the embedded side, for embedded software programming. That changes often, so we’ll continue to be looking for folks. Anybody who is interested in the company should certainly reach out and get on our radar, or let us get on their radar.
DAVID BRADBURY
I love all these terms: planing, radar, right? It’s such a nifty company. I mean, I think I’ve heard someone say, you want to invest in sectors that are inevitable when change is coming. And the regulatory, the business cases, the safety cases for having these systems on equipment where lives are at risk, and there’s high value in what they do, is trending right? We see Europe starting to require it and drafting rules. The Forest Service, you’re talking about picks and shovels, air medical, and then the EVTOL market, the electric planes and the vertical ones. There’s no scenario that I can think of where these systems won’t be required, so we don’t have 2,000-pound things falling onto our backyards. It just seems inevitable to me.
JED KALKSTEIN
Yeah, I was at a conference earlier this week, and one of the guys was talking about how when Pan Am – you know the Pan Am building had a helicopter that crashed on top of it, and a rotor blade went falling into the streets in New York. That pretty much shut down New York for that kind of building top-to-building top use of helicopters. And so as the EVTOL and these other advanced air mobility platforms are getting out there, that’s very much on their minds. They’re really worried about making sure that there’s not a bad incident from any of them, because any one of them will impact everybody else, so that’s a big consideration.
Particularly when you move into the non-piloted categories, we like saying that the original systems like ours that would sense vibration and give kind of early warnings are the pilot’s backside, and that doesn’t exist when you don’t have a pilot in the aircraft. So systems like ours are going to be absolutely necessary in those categories. Some of the EVTOL companies like Beta are thinking ahead – we’re actually designed into Beta’s system right now – they’re definitely sort of system thinkers. They’re thinking all of the different ways that things could go wrong, and want to make sure that they’re tracking on those. Some of the other developers that are out there are focused more on flight dynamics, and just trying to make sure that their aircraft will fly.
DAVID BRADBURY
The concept.
JED KALKSTEIN
Eventually we’ll get there. I think you’re right, all paths lead through technology like ours, whether it’s us or not, that certainly will be a barrier to certification for any of those guys unless they have these types of systems on board.
SAM ROACH-GERBER
That’s a comfort. Jed, any favorite Vermont companies right now? Can be completely unrelated to GPMS, just a company that you’re looking at .
DAVID BRADBURY
Tell us a ski company brand or something. I’ve been trying to get him a snowboard for a few years, it’s not going well.
JED KALKSTEIN
Favorite Vermont company? I mean, I think there are so many really cool companies out there. I wish that I wasn’t as aware of these companies. I hear from David a lot about some of your portfolio companies. I’m also on the board of the Flex Capital Fund, so I see a lot of their really cool companies out there. SI just think there are a lot of really exciting things that are going on in the state. And yeah, I’m just sort of like everybody, else strapped in here waiting to see how it all plays out.
SAM ROACH-GERBER
A very diplomatic answer. We’ll find out.
DAVID BRADBURY
It was. He’s careful. That’s exactly the temperament you want building an aerospace company. You don’t want the swashbuckling cowboy.
JED KALKSTEIN
I should have said Lawsons and Caledonia Spirits.
DAVID BRADBURY
That’s where I thought you were going. What do I eat or put on my body? Darn Tough socks. I think we need to wrap up, Sam.
SAM ROACH-GERBER
I like having Jed here. Let’s keep him around.
DAVID BRADBURY
You ask him the final question.
SAM ROACH-GERBER
It would be my honor. Alright, Jed. If you could change one thing in Vermont today with the magic wand, what would you change?
JED KALKSTEIN
I think it would have to be on the capital side, just figuring out how to get more capital into these Vermont companies.
SAM ROACH-GERBER
We’re trying, okay.
JED KALKSTEIN
Yeah, well step it up!
DAVID BRADBURY
Give us a couple of weeks.
SAM ROACH-GERBER
We’ll do our best. That’s good. We need to kick in the ass every once in a while, Dave.
DAVID BRADBURY
Again, capital is tough. Your sector is not always welcoming to everybody, but you’ve got customers and an unbelievable horizon. I am really thrilled that we play such a small little part in that, and a great group of investors that you’ve assembled, right? It really has been an inflection point in the company.
JED KALKSTEIN
I would not downplay the fingerprints that you have on this company. I mean, you made some absolutely critical introductions for us that have really – I mean, even on the ground vehicle side, that was your introduction that really opened our awareness to that opportunity. So you guys have been fantastic, and we’re really looking forward to continuing that as we roll forward.
SAM ROACH-GERBER
Will you let me know if Dave is at some point not helpful, and I’ll take care of it.
JED KALKSTEIN
He does need a slap every once in a while.
DAVID BRADBURY
Absolutely. We all need to be trued up now and again, recalibrated. Jed, thank you so much for taking time out of your busy day and flying back from California to do this show. I really appreciate that.
This has been Start Here, a podcast sharing stories of active, aspiring, and accidental entrepreneur. The series supported by the Vermont Technology Council and Consolidated Communications. Let’s get back to work.
