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Software for Hard Engineering

The Space Capital Podcast

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August 25, 2022

In episode 2.7, we talk to Lucy Hoag, Co-Founder and CEO of Violet Labs, a company building a cloud-based software integration for complex hardware engineering.

In this seventh episode of the second season of the Space Capital Podcast, we’re speaking with Lucy Hoag, Co-Founder and CEO of Violet Labs, a company building a cloud-based software integration for complex hardware engineering.

show notes

Violet Labs is building cloud-based software integration for complex hardware engineering. We integrate data from software tools used across the engineering lifecycle into a powerful centralized platform, enabling an engineering source-of-truth, bidirectional data update, sophisticated workflow automation, and more. Our team is founded by engineers with experience building spacecraft, launch vehicles, eVTOLs, drones and self-driving cars for companies like SpaceX, Google, DARPA, Lyft and Amazon.

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Software for Hard Engineering

This is The Space Capital Podcast. And today, we're speaking with Lucy Hoag, co-founder and CEO of Violet Labs, a company building a cloud-based software integration for complex hardware engineering. We recently led Violet Labs Seed Round, and we invested really based on the quality and the experience of the team. They're engineers with experience building spacecraft, launch vehicles, autonomous urban aircraft, drones, and self-driving cars for companies like SpaceX, Google, DARPA, Lyft, and Amazon.

Chad Anderson:

So, Lucy is uniquely qualified to help us understand the opportunity to improve software tools across the engineering lifecycle. Lucy, it's great to have you on, thanks for joining us.

Lucy Hoag:

Great to be here. Thanks so much, Chad.

Chad Anderson:

So, first of all, congrats on successfully closing your Seed Round, especially in this crazy market. I'm sure you're crazy busy right now. So, really appreciate you taking the time to talk with us.

Lucy Hoag:

Awesome. Happy to, and yeah, thanks for the congrats. We were pretty pleased.

Chad Anderson:

So, you have very broad and interesting background. To kick things off, I'd love to walk through that a little bit. You have a bachelor's, master's, and PhD in astronautical engineering from USC. Why astronautical engineering, what got you into this in the first place?

Lucy Hoag:

Yeah, and I spent way too many years at USC more than I'd like to admit, but it was a great time. So, astronautical engineering, frankly in high school, I decided I wanted to be an astronaut. I've always been interested in sort of uncharted territories and the new frontiers and obviously space is the ultimate. So, that's what got me in. And when I got into college, realized I had a particular interest in spacecraft system engineering. So wasn't actually going to be going into space, but still fantastically exciting to work on it.

Chad Anderson:

And so, you at the Viterbi School at USC, you were involved in some research there - you led some cutting-edge AI-based spacecraft design tools. Is that right?

Lucy Hoag:

Yes, happy to talk about that. That's definitely what sort of starts my story as a founder interested in better ways to do engineering and spacecraft design. So, created a tool called Spider as part of my PhD program. It was an automated satellite design and optimization tool. For the folks listening to this podcast, you likely know very well that satellite design is a very iterative process. It's a tightly coupled product. So, if you change one thing in the propulsion system, there's ripple effects that propagate throughout all the other subsystems. So, very iterative slow process involving a lot of data exchange between these different subsystems.

So, I built this tool called Spider that was built on an AI-based decision engine written by my good friend and mentor, Tatiana Kichkaylo. And yeah, it was great fun. It was a declarative programming approach to satellite design. So, based on rules and constraints, rather than an imperative approach, which is very if then, and kind of very iterative.

Chad Anderson:

Okay. And then after that you did some work with DARPA, is that right?

Lucy Hoag:

Yeah, so that work in grad school led me to DARPA where I got into some department of defense space programs. Most of them were open, so I can chat about them. Two primary ones, one was called Phoenix. It was a robotic spacecraft servicer in GEO that actually intended to harvest components from dead satellites in GEO and in the graveyard orbit and make new satellites in orbit. So, that was pretty fantastically fun. Another was called SeeMe, it's a ultra low-earth orbiting, basically disposable satellite that provided communications to soldiers on the ground.

Chad Anderson:

How interesting? I mean, there's a lot of focus on very low-earth orbit satellites today and you were working on them back then.

Lucy Hoag:

Yeah, it was cool.

Chad Anderson:

Always at the bleeding edge. And then you went from there to focus on ... you worked on autonomous vehicles at Waymo, Google, and Lyft. Tell us about that and that switch.

Lucy Hoag:

Yeah. So, my work at DARPA actually brought me over to Google, did a total 180 into the tech world. Around the time they were building their first satellite constellation, it was sort of a sister program to Skybox, but focused on communications. That turned into a bunch of different, really fascinating projects at Google, drone-based solutions to provide internet, wireless last mile to provide internet. And then finally, I made my way over to Waymo, which I'd like to say though, it's rather cheesy, self-driving cars basically like a satellite on the ground. It's a lot of the same sensing modalities and design principles. And so, had a ton of fun getting into that world.

Chad Anderson:

Okay, and then Lyft, you were leading a team of engineers focused on Level 5 autonomy, which is basically the top level like full autonomy, right?

Lucy Hoag:

Yes. So, from Waymo, I went over to Lyft, was one of the first 30 or so employees to build up Lyft self-driving car teams called Level 5. Fantastic learning experience there in so many ways. The majority of my time, I lead TPM for the autonomy software, which is basically the software that drives the car. And it was really my first time being so embedded in a software development team and was just fascinated by how they approached their work and the tools they employed and the like laser focus on efficiency and doing things as streamlined as possible to make sure you're maximizing the number of hours an engineer can do engineering work. So, that was a great time.

Chad Anderson:

Okay. And then you got back into the space game, went to Amazon, and were helping them build their Kuiper satellite constellation. Is this where you met your co-founder?

Lucy Hoag:

It is, yeah. So, after my stint in the AV world, I really wanted to get back to aerospace, sort of my passion. So, joined Kuiper and what an experience to be able to work on a constellation of that size. And it was so many bright minds. It was really great. That's where I met Caitlin. We kind of hit it off. Got to share an anecdote of one of my first times, I guess meeting her, this was in that deep of COVID. So, we actually only met like once in person in our whole first year of working together.

But we were TPM, which is, frankly if you're an engineer, TPM is the last person you want to see, because you know you're going to owe them a status update or a design update. And Caitlin was leading the implementation of our enterprise tools and she was leading a team of mechanical engineers and describing a project which was really kind of dry material and kind of went through the whole thing. And then there were sort of crickets at the end, we're all on Zoom and Caitlin goes, "And the crowd goes wild." And I just thought that was hilarious. And definitely the type of culture I want to see in our new company.

Chad Anderson:

Amazing. And so, looking at Caitlin and her background, so she's got engineering experience in structures, composites, batteries, satellites. And I was just thinking, that if you didn't team up, if Caitlin wasn't on the Violet Labs team, she would definitely be one of Violet Labs' ideal customers. So, it seems to make perfect sense that she was the right person to team up with.

Lucy Hoag:

Oh yeah, absolutely. She's really lived the enterprise tool experience, which roughly speaking, Caitlin and I have pretty interesting vantage points of the development lifecycle. My career has mostly been on the first half, which is sort of system engineering, requirements, design analysis, integration and test. And she's roughly speaking like the second half, which is manufacturing, operations, dealing with supply chain. And again, she kind of has this PTSD of dealing with these really expensive enterprise implementations and integrations. And it was just a really natural fit for us to have these two complimentary sorts of viewpoints.

Chad Anderson:

Okay. So, how did you two decide to found the company? As a first-time founder, both of you, what made you want to take the plunge and start something on your own?

Lucy Hoag:

Yeah. So, for me, what it came down to was, I got to Kuiper and after being at all these different companies, building these really fantastic, exciting products, like honestly, there's nothing more fun in the world than getting to like help build a self-driving car. I mean, come on. So fun. But it started to get to the point where it's not fun anymore. It was just more painful because it was so massively inefficient, so much manual data exchange. It's frankly really error-prone because there's a human in the loop for so many different activities. Kind of decided, I'd rather build the tool that makes this as fun and exciting as it should be.

So, yeah, Caitlin and I basically quit our jobs to build the tool that we really wanted. And it actually took, a little bit of brainstorming between us because we have these different vantage points on what would be the solution that could kind of solve this the best. And really had this epiphany that what we both wanted was really this tool that addressed the entire development lifecycle from cradle to grave, and was the central place, this repository that could bring in data from all the different software tools that you're using. So, bringing all that fantastic data into one place and then enabling you to do really powerful stuff with it.

Chad Anderson:

Is there anything that stands out to you that like now is the time? Was there something going on that made you think that now is the right time for this type of tool or was it based on something else like maybe your experience at Amazon? It was just sort of like you said, maybe it was just the final straw, you'd seen it too many times?

Lucy Hoag:

Probably a few things. So yeah, definitely the final straw, like it had just become clear that this was a continuing pattern. Probably, also, the timing. Last year was this fantastic year for space startups and space SPACs. And just made me realize, more than ever these complex products are no longer the purview of just like government and big companies. It's really being democratized to these small, more nimble companies, and they need innovative tools to do their work. And that's the part that's still just frankly stagnating. So, those two things, as well as the COVID, great resignation really kind of made things clear as far as, what I want to prioritize in my life and what I want to spend my time doing and bringing to the world. So, yeah.

Chad Anderson:

And then, so you've now founded the company you've successfully raised a round of funding, and you're off to the races. So, were there any surprises through the process, anything that you wish that someone had told you before you got started?

Lucy Hoag:

Great question. Certainly, the whole thing was surprises for a first-time founder, the whole process was really bonkers. Frankly, the thing that surprises the most was how successful it was. And I don't say that to kind of toot our own horns, but really just as a testament to kind of how badly this product is needed. And so, many folks resonated really strongly with it. So yeah, we were really pleasantly surprised at the success of that. And honestly, the thing that I wish someone had told me, which is sort of ironic, but is that you'll get a lot of advice from so many different people and you really have to pick and choose which you listen to, because a lot of it conflicts and at the end of the day, I almost wish, you know founders ... my advice would just be to have confidence in your own thoughts and your own path forward. Yeah, don't listen to anyone else. A lot of it's really useful, but you got to do your own thing and trust yourself.

Chad Anderson:

I really like that advice. Okay, so talking about your financing just a little bit, so as a first-time founder, how did you get started? How did you start reaching out to investors? How did you know who to contact?

Lucy Hoag:

Yeah, so Caitlin and I have been at it in our careers for a while. So, we feel pretty fortunate to have really great networks. A lot of people we respect in really established companies and people in the startup world. So, definitely, use that as our kind of first round of reach-outs and kind of being that annoying person who's finally asking all your friends for a favor, for a reach-out. And it kind of just became a domino effect. The more people we talked to and shared our deck with and kind of talked about the problem at hand, and really the enormous market we see for it. We had a lot of people reaching out to us on LinkedIn and texting me, and reaching out to former professors. So, it really became kind of this organic process.

And throughout that, Caitlin and I were pretty diligent about kind of organizing our pitches in time, in the way that made the most sense for us. And also, we wanted to be really thoughtful and deliberate about who we talked to and who we have ultimately got onto the cap table.

Chad Anderson:

Yeah. And I wanted to ask you about that as well. You've clearly been very intentional about who you brought in on this round. How did you think about those people in light, particularly of like, you're getting all this advice, you're getting a lot of inbound, you've got a lot of investor interest, how did you approach that interest?

Lucy Hoag:

Yeah. Well, we were really excited to have Space Capital as our lead, and I'm not just saying that because it's your podcast. But the brand identity that you guys have and having a chance to work with Tom Ingersoll is just huge for us. That expertise, the moment we mentioned it to anyone, they're like, "Oh yeah, great, that's really cool." And in addition to that, we wanted diversity in a number of ways in our round and in our cap table. One is, we don't want to be just a space-focused company. We really feel that in order for our product to be really delightful for an engineer to use, it's got to be really appealing and kind of a powerful value-add to a variety of engineers and industries.

So, we want to make sure that's not just aerospace, but robotics, medical devices, automotive, agriculture. And so, it's important to us to kind of reflect that diversity of industries in our cap table, as well as underrepresented groups in tech. That's pretty deeply important to Caitlin and I, and we want to make sure that's a strong theme in our company moving forward.

Chad Anderson:

Right. Well, we've been really impressed with how you've thought about this. Particularly coming in from doing this for the first time. It's been really great to see how you've navigated all of this. So, okay, money's in the bank, what are your priorities now? I imagine it has something to do with your team and your product.

Lucy Hoag:

Yep, absolutely. We are laser-focused on hire, hire, hire. We feel that the timing is right. There are so many companies building complex hardware products, and that number is just continuing to grow. We want to be part of this wave and we want to enable our product to get to market super-fast, so engineers can start having that better experience. And the way to do that is to build our team as quickly as possible. We're looking to hire, primarily software developers, folks that are equally as passionate about what we're doing, write really great software, and kind of want to be in a forward-thinking and hopefully a really fun team.

Chad Anderson:

Yeah. And we're hosting a couple of your open jobs on Space Talent. It seems like they're engineering-related, product-related. Is that your greatest need as you move to this next phase of your business?

Lucy Hoag:

Yeah, pretty much. So, right now we're looking for software engineers and software engineering leadership. As we get into next year, we'll be focused on product and project managers, QA, getting into business development in sales. And certainly, throughout this, a strong focus on UI and UX and hoping to get some in-house design again, to make sure our product is something that's just totally delightful and powerful to use.

Chad Anderson:

And you're going to be a remote-first company. That's an important decision. Tell me about that. Did that stem also from the way that you and Caitlin were first interacting, and maybe, that remote interaction worked out well. So, you're going to leverage it for your company going forward.

Lucy Hoag:

Yeah, it did. It's a really important decision for us and certainly, was influenced by our time in COVID and basically building a spacecraft while we're all over the country. And kind of the benefits we've seen from people being able to do their job remotely and really cut down on the noise of a lot of the logistics and mechanics of being in person. Another thing that influenced it for me was at Lyft, like I said, I was working so closely with the software team and when COVID hit and folks were able to kind of work remotely as much as they pleased, it was just really clear how that affected the quality of their work and the quality of essentially like their happiness. And we really want to champion that in our company.

So, obviously, there's some challenges, we want to make sure we have the ability to build a strong team culture and comraderie and trust between folks. So, we'll use a lot of tools like Slack and Notion to build that. And we'll also have periodic in-person retreats to make sure we can build that IRL part as well.

Chad Anderson:

Yeah, makes sense. So, as you work to attract talent to the company, what are the things that are resonating? What are the types of things that are exciting for would be, engineers on your team? Does space help there, the fact that you're working with some of these satellite manufacturers, that you're focused on a large market, that you're remote-first, that you've got a really capable founding team? What are the things that are attractive for folks?

Lucy Hoag:

Well, hopefully, all of the above that you just mentioned. But certainly, we think it's pretty interesting, looking at, for example, Caitlin and I's networks, the sort of Venn diagram of like people who have built spacecraft and self-driving cars and drones, and the circle of people who built fantastic web apps, like those are basically two different circles. There is very little overlap in kind of those industries. And so, we are finding that as we talk to software developers, web app developers, they're extraordinarily excited about the industries that we're working in. So, to be able to work on something that's affecting the build of a rocket is pretty exciting.

So, we're hoping that will be a big theme and remote as well. And also, just trying to be part of a transformation, being a company that we hope will really revolutionize a somewhat stagnating sort of industry is I think really important to a lot of people.

Chad Anderson:

Yeah. A ton of potential, for sure. Okay so, we've talked about the pain points. You've felt them yourself firsthand and what Violet Labs is trying to solve for. So, I don't want to get too much into this, but can you tell us kind of at a base level, what is your product? What is it that you're planning to sell to customers?

Lucy Hoag:

Yeah, absolutely. So, Violet is essentially a cloud-based software integration platform for complex hardware engineering teams. So, there's a segment of SaaS called iPaaS, integration platform as a service. You can think of tools like Zapier, who have really revolutionized this area and the ability for disparate software tools to talk to each other. And we want to build on that momentum. So, at its core, we are really enabling a cloud-based engineering source of truth for engineering teams. And again, that extends across the whole lifecycle. So, not just system engineering and design and ECAD and MCAD, but up through purchasing supply chain and operations.

So, some analogies we like to give, there's no kind of direct one yet since we're kind of in our minds, a new kind of tool. But good analogies are Zapier, of course, connecting disparate tools. Airtable, another fantastic tool we love. And we kind of like to compare ourselves to their feature, rich UI on top of data. And even like BI tools like Domo or Tableau, that powerful data analytics, but for hardware.

Chad Anderson:

Okay.

Lucy Hoag:

Yeah.

Chad Anderson:

Yeah. And so, have you shown your product to customers? How far along are you? Have you started those conversations and what's the feedback been like?

Lucy Hoag:

We have, we have talked to a few dozen customers at this point, potential customers, I should say. And that's across a number of industries, Aerospace and Defense, what we're calling new auto, so AV self-driving trucks, robotics, some medical devices and consumer electronics even kind of personal fitness and wearables. And generally, we're getting overwhelming pretty positive feedback from these companies. Some of them are like, "Could you build this yesterday? Like we really need this now." The NPS score with current tools is so low. The frustration is really tangible. And the use cases do kind of vary a little bit from customer to customer, but there's a lot that are really uncommon. Being able to integrate certain tools that just notoriously don't talk to each other well, don't play well together will be a huge value-add for these companies.

Chad Anderson:

And how did you connect with these potential customers? Were they people that you already knew that were in your network? Were they past employers?

Lucy Hoag:

A little bit of both. We definitely tapped into our network to start on this one. So, folks, we've kind of worked side by side with, at past companies are now at Rivian, at Cruise, at Astra and Rocket Lab and building really exciting things and leading products. So, that definitely got us in the door with a lot of these conversations. And again, it's kind of organic from there, word kind of spreads, and we've been really fortunate to get into some kind of new industries for us, Pick and Place robotics, robotic medical devices, et cetera.

Chad Anderson:

Yeah. Certainly, on the spacecraft side, we've got companies in our portfolio that we are dying to make connections to. So yeah, part of the reason why we got so excited about Violet Labs in the first place. Okay. So, on the market side, how do you think about the market for Violet Labs? How big is it now? How big could it get?

Lucy Hoag:

There are roughly 600,000 companies worldwide that are building complex hardware, from robotics to computers. And it's growing really fast as this type of manufacturing is becoming democratized to smaller newer companies. And so, the total addressable market for all those is roughly $50 billion. And we feel that, importantly, this includes both small and large, more mature companies. A prime area we like to talk about that we can bring value to is in the new product introduction phase.

So, if you think of a company like Tesla, Tesla's really famous for how much they spend on R&D. It equates to roughly $3,000 per car. Toyota and Ford are about a third of that. And then GM and Chrysler a little bit lower 8 to $900 per car. So, a ton of money goes into this and as you can imagine, really similar amount that they spend on the software tools that facilitate these processes. So, it's really enormous market and frankly, growing really quickly and with the diversity of customers we envision, we think this will be a really enormous impact.

Chad Anderson:

Yeah, definitely. And then so, we talked about some of the expansion markets as well, outside of just aerospace and autonomous vehicles, mobility, and that sort of thing. As you think about expanding this market, what are your biggest challenges?

Lucy Hoag:

Yeah, great question. I'll name two of the challenges we kind of think about, really focus on quite a lot are actually tool fatigue. So, we all know this pretty well, which is there's a ton of tools now that you have to use day-to-day in an engineering team. And frankly, it's kind of daunting when we tell people, "Hey, we've got one more for you to add into your pipeline." But we feel that, that will be 180-ed pretty quickly once we get in and have engineers testing out the tool, because essentially what Violet will be is a really fantastic to use frontend to a lot of these different tools that will kind of become more of the data repository or the brains beneath the hood and it'll become for certain users more of like the tool that they log in every morning and kind of becomes where they do most of their work. So, we envision that efficiency being really visible from the beginning.

Chad Anderson:

Got it, yeah. So, look, there's clearly money to be made here. You just mentioned a massive $50 billion market. We are tracking, I don't know, 20 or so companies in engineering design and planning systems that have raised like $2 billion collectively valued at $175 billion. You mentioned this as well, there's newer companies, there's large established companies in this area. But it's pretty big and pretty fragmented. How do you think about the competitive landscape and where you fit in?

Lucy Hoag:

Yeah, this is an interesting one for us, because frankly, we really don't see any apples-to-apples competitors quite yet. We think the best proxy is folks like Zapier, Tray.io. But those aren't quite good analogies because they actually don't support most of the tools that we plan to address. And they also don't support the government compliance regulatory aspect in particular for things like ITAR and EAR controlled data. The other groups we like to think of as maybe not competitors, almost sort of peers and hope to be growing with them, is the new entrance into often cloud-based SaaS tools for hardware. So, I'll rattle off a few folks like Duro, who's doing a PLM, KittyCAD who's doing CAD, obviously, Epsilon3 for operations, First Residents for MES and Prewitt Ridge and Val Space are on the system engineering side.

Certainly, one could think there's maybe a little bit of overlap in the roadmap that all of us have. But we feel really strongly that we want to be part of this ecosystem that's emerging now to make the whole experience end-to-end better for engineers and developers. And so, to partner, we have partnerships with a number of those folks we just mentioned and aiming to continue that, so we can integrate their tools and really kind of become this striving force alongside them.

Chad Anderson:

That sounds great. So, how can the audience learn more about Violet Labs? Let's say somebody's feeling this pain and they want to speak to you as a potential customer, or someone's excited about the mission that you've just laid out and wants to work for you.

Lucy Hoag:

Absolutely. So, we are on the www@violetlabs.com. You can reach out to Caitlin or I, Caitlin or Lucy at violetlabs.com. We are happy to chat anytime, even if it's just kind of giving some advice on maybe the tools that you're selecting for your new hardware startup. Maybe you're stuck with some really legacy tools at a more mature company. We'd love to chat through any of this.

Chad Anderson:

Lucy, I really appreciate this conversation. I know you're early in this journey and it's been great to have this conversation this early in the process. I hope we'll have a chance to circle back and hopefully, have another conversation post-product and see how things are going.

Lucy Hoag:

Absolutely. Thanks so much, Chad, appreciate the time and yeah, looking forward to the next one.

Chad Anderson:

Great to have you. Thanks for coming on the show.