Our next-generation drone.
The Founder Series is a column by and about Utah founders and how they got to where they are today. Click here to read past articles in the series.
This is the story of an ordinary kid who tried to do something extraordinarily hard and failed more than he can remember. I was born in Salt Lake City, Utah, with an insatiable passion for flight. My entire family is from humble Slovakia, where my mom was a flight attendant. I think my first memory is sitting in the cockpit of a jetliner high above the ground. For much of my first 10 years, I remember imagining ways to experience the freedom of flight.
And when I wasn’t dreaming, I was inventing ways to make money.
High-flying dreams
One of my early businesses was a hot chocolate stand. One Christmas Eve, a guy who looked like Jesus pulled up and said he’d buy all the cocoa I could make for his workers. I hopped on his truck, delivered the product and got paid $60 (which was worth being grounded “indefinitely” later that day). In hindsight, this is where I realized I’m an eternal optimist.
All the other money I earned in elementary school—through magic shows, auctioning rare rocks and illegally selling kiosk toys at Fashion Place Mall—was used to buy a hobby-grade airplane, a Super Cub. It was a new way to experience flight. I instantly fell in love with it.
On my first takeoff, the plane flew into the side of the local junior high school and caught fire. I shed some tears, fixed it with duct tape and continued the cycle until I became a much better pilot. When I was 12, I got an email from a manufacturer I was subscribed to that said they need test pilots. I applied to be one. Weeks later, I was picked out of 2,000 applicants to test their new planes, helicopters and equipment.
Other than making me feel cool in junior high, being a test pilot gave me more access to technology. On weekends, I’d build, fly and test, learning about the hardware and software involved. When drones started becoming real, I saw huge potential and thought about what might evolve over the next decades. I desperately wanted to be part of that future.
Dropping out and taking off
There was a big gap between what I’d seen created so far and the laws of physics. So, I spent a few weeks building a big quadcopter that could fly for two hours and carry up to 30 pounds of payload. A few months later, I built a thrust vectoring drone for a school project that could fly over 100 MPH. I got that one patented.
One of the last prototypes I made was a smaller drone you could fit in your pocket. It was the first of its kind—with an Intel processor inside that made it app-powered like a smartphone—and it was modular, meaning you could fix or upgrade every part of it. As I finished that prototype in the early hours of the morning ahead of English class, a new idea appeared: making smart drones that are app-powered.
The optimist in me started thinking this was the type of product I could build a company around. Doing so would take a lot more people than just myself and way more money than my family and I had. Outside of those two things, I knew basically nothing and went on to start a company called iDrone. Little did I know that building a company in this industry would be like eating glass and staring into the abyss, but I kept making prototypes and was proud enough to take some early drones to a university competition (a hackathon) at Stanford University.
Me during my Thiel Fellowship in-person interviews in San Francisco.
I met a representative from the Thiel Fellowship, and she liked what I was working on. The fellowship was started by Peter Thiel a decade ago and accepts 20 kids a year, giving them $100,000 to work on their ideas. The catch: you have to drop out of college if you get into the program. Even though I was still in high school, she encouraged me to apply.
I applied later that day. While I waited to hear back, I got to know a serial entrepreneur in Salt Lake City. I talked with him about the future of drones and asked for any advice he had. He eventually asked if he could invest $150,000 into my company, and I accepted.
Around the same time, I was accepted into the final round of in-person interviews for the 2015 Thiel Fellowship. I didn’t expect that. Ahead of the interviews, the nerves made me sick to my stomach—but on the big day, I tried walking confidently into their office in San Francisco, struggling to hold six different kinds of drones around my body. When they gave me the news at the end of my junior year that I was accepted, I felt just like I did when I became a test pilot. I was on top of the world.
I thought I was seeing the light of inevitable success at the end of the tunnel. As it turns out, it was just the first of many trains.
Navigating stormy skies
After raising my first round of institutional investment later in 2015, about $3 million, I learned important lessons. I was told by a board member, “George, your job is to hire good people and not run out of money. It’s in your capable hands; don’t f*** it up.” It sounded simple but proved much harder than I thought it would be.
I still knew very little about creating a product that could be manufactured at scale. I didn’t know how to lead a team or build financial models. I made almost every mistake you can imagine. I kept surrounding myself with smarter people than myself and set a vision to empower that team.
If we wanted a chance at being successful—despite China’s DJI starting to take over the market—I’d have to double down and raise a lot more capital. I inked a deal with a Fortune 3 company whose name rhymes with Snapple to resell our drones around the world. But, in the first half of 2017, the drone industry began imploding, with most other American companies getting destroyed by DJI. It became hard to find a VC who hadn’t lost money in (or was skeptical of) the drone industry. Rejections were constant.
I had a brief trip planned to see my family in Slovakia that summer. As soon as I landed in Bratislava, I got another rejection from a VC I really thought would invest. One of my board members called me and said, “Turn around right now, or there won’t be a company for you to come back to.” We were almost out of cash and had to figure something out fast. I turned around. After hundreds of investor pitches in America and abroad, the sovereign wealth fund of Oman led our Series A financing, putting an additional $10 million into the company along with existing investors. We never missed payroll, and by the end of 2017, we started shipping our first product, Teal Sport.
We used our fresh capital to invest heavily into product as well as supply chain and manufacturing, quickly placing large material orders to prepare for our projected sales volumes. But on top of the manufacturing delays we faced, we were trying to build a consumer hardware product that defied gravity, all in America. To my knowledge, we were the first company to manufacture this kind of product at scale in America (which was important to me from day one), but we screwed ourselves on price. We wanted to sell our new drone, Teal One, for under $1,000. It ended up costing $1,400 to produce. That wasn’t fun to tell the board.
The Teal team that survived through the consumer days and built the Golden Eagle.
It would have taken a lot more volume and investment to drive the cost down to where it needed to be, and the market wasn’t going to accept a higher price point. This became existential issue #1 to the company’s survival. With little money remaining by the end of 2018, my only choice for Teal to survive was a reduction in force. We had a lot of good people who really loved their jobs that I had to let go. I’d just met the love of my life, but this was a very dark time and a deeply low moment for me and the Teal team.
With this chapter of Teal coming to an end, one of our early customers reached out—a veteran who lost his legs during the war. He told me that the drone he got from us saved his life: he’d fly every day with video goggles on to experience the freedom of flight. I shared this with the rest of the team, and we felt solace in our efforts not being for nothing.
A pivot to national security
There were only 10 of us left in the company. We were trying to switch from consumer drones to enterprise and government, but we didn’t know much about those markets and didn’t have much time or money left. The near- and long-term future was completely uncertain, but I believed there was still a chance to bring the Teal vision to life.
A little luck finally came into play—a mix of preparation and opportunity. Around that time, the U.S. Army banned Chinese drones (including DJI) altogether. The Department of Defense (DoD) saw that drones were becoming vital to national security, as we’re now seeing in Ukraine and Israel, and decided a domestic drone industrial base was needed. Up to that point, they were buying and using DJI drones across the service. They formed a program called SRR (Short Range Reconnaissance) to get every platoon in the Army an American drone.
When the SRR program was announced, Teal was one of the only surviving drone companies left. Though we were small, we had the right combination of technology and expertise to compete for this contract. The Army needed a handful of companies to compete against each other in a winner-takes-all, and the big defense contractors weren’t able to build something this small. I applied for it, and a few weeks later, I flew out to meet with the government. It felt like a scene out of the movie “War Dogs,” and I got the prototype contract.
The moment Teal was awarded that contract, a few things happened. I no longer only felt a responsibility to return capital to investors and see the Teal vision come to life, but I would now work on something that could be vital to national security. The collective mission grew from making drones ubiquitous to also trying to protect America and its allies.
“Be so good they can’t ignore you.”
With an Army prototype contract in hand, I began growing the team again. We only had nine months to design a new drone that was military-grade and ready for a final test event. We were competing against five other companies, and though we got close at the final test event with the drone we made (called Golden Eagle), we lost the initial production award to a company in California.
Then, COVID-19 took the world by storm. Raising money to continue surviving became even harder. It became difficult to find a venture investor who hadn’t lost money in the drone space. But simultaneous to all these challenges, the need for drones was rising. There was a resurgence of demand for American-made drones—not just in the Army but across the country—and the other companies just kept going out of business.
I realized that while private markets became super challenging, the public markets were actually really excited about drones. One group I’d known about for a few years was Red Cat Holdings, a small, NASDAQ-listed company. Red Cat acquires drone-related companies with the strategy of combining them where the sum of its parts can be far greater. Our combined visions of the future aligned, and a discussion about merging began. In 2021, Teal became a public company under Red Cat, which gave us access to public capital. Interest in the company skyrocketed, and we raised $60 million to continue building.
Since then, we’ve moved into our own factory, which is 10 times the size of the last one. Our team has grown to around 100 employees, and we’ve released our latest generation product based on the Golden Eagle, called Teal 2, which is being used across all branches of the DoD and many other government agencies. It’s app-powered and fully modular, just like the prototype I made in high school. We believe it is still day one for drones, and we will always stay focused on being so good that we can’t be ignored.
Ordinary people succeed at extraordinarily hard things. While never having felt “good enough,” to my knowledge, I am the youngest person ever to receive the Thiel Fellowship, the youngest CEO to receive a multi-million dollar DoD contract and now one of the youngest C-level executives of a public company. I wouldn’t trade it for the world.