Daniel Wiegand is the co-founder and CEO of Lilium which develops an on-demand air mobility service, enabling a world where anyone can fly anywhere and anytime. The company has raised more than $340 million from investors like Tencent Holdings, Atomico, Obvious Ventures, Freigesit, and LGT Capital Partners to name a few.
In this episode you will learn:
- Building an aerospace company
- Fundraising for unique ventures
- Daniel’s top advice for founders
- Finding your cofounders
- The downsides of new trains
- Building an entirely new ecosystem to support your startup
- Spaghetti dinner interviews and long walks
For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Daniel Wiegand:
Daniel Wiegand was born in 1985 in Tübingen. He graduated with a Master’s degree in Aerospace Engineering from the Technical University of Munich with a focus on flight propulsion systems. Daniel Wiegand started Lilium in 2015 together with the other three co-founders.
Daniel Wiegand first patent was filed when he was still in high school. He has won multiple awards, including “Jugend forscht”, Germany’s most recognized tech competition. As a project manager at ABB in Zurich, Daniel Wiegand has gained in-depth experience in managing complex projects as well as insights into business development.
Flying has always been his passion: Daniel Wiegand started gliding at the age of 14 and became a pilot before he was allowed to drive a car. Daniel Wiegand has been holding the position of CEO at Lilium since the beginning of 2015.
Connect with Daniel Wiegand:
* * *
FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we’re going to learn quite a bit about aerospace, and I think the founder that we have, our guest today, is going to teach us a lot on building, scaling, you name it, and we’re going to be covering quite a fair amount of fun stories. So, without further ado, let me welcome our guest today, Daniel Wiegand. Welcome to the show.
Daniel Wiegand: Hi, Alejandro. Thanks for having me.
Alejandro: So, originally from Germany in a town called Tübingen that has 80,000 people. I know that you moved quite a bit growing up, so tell us a little bit about your upbringing. How was life there?
Daniel Wiegand: I was only born in Tübingen, and my family quickly after that moved into the Munich area, and then a large part of my childhood in Freyburgm which is a very idyllic place and the warmest part of Germany. You have France next door; you have Switzerland next door. You have wonderful mountains for mountain biking. That’s also where I did my gliding pilot license. I started that when I was 14, and I had my first flight alone when I was 14. That was one of the most moving moments in those early days in my childhood.
Alejandro: You went and did your engineering later on, and we’ll cover that, but one of the things that I remember – I think it was Steve Jobs mentioned that some of the best engineers that he would come across were the ones that also had an interest in music and that type of creativity. I know that you started to develop that quite early on. You were playing the piano and also in the classical orchestra in school at about 11 or 12. Is that right?
Daniel Wiegand: Yes, that’s right. I started playing the trumpet when I was eight, I think. Then, I played the piano and was part of the school jazz band that was part of the classical orchestra in school. I always had those two hearts: one for the music and one for the technology and flying, but the flying heart was bigger.
Alejandro: Very cool. In terms of flying and aerospace and airplanes, at what point did you start to develop this love for airplanes?
Daniel Wiegand: It was more or less, I think since I could think, since a baby. My pets had to be birds, and I loved everything that could fly. I was dreaming of being able to fly when I was five. I was filming my pets, how they flapped their wings, and how they control inflight. I was filming them in slow motion. Later, I built radio-controlled aircraft quite a lot. Then, I went to the gliding pilot license, and then ultimately studied aerospace engineering. That passion for flight was always there. I still remember. We had a vacation with my parents in Norway, and we were on an island where there are hundreds of thousands of sea birds. I was standing on that cliff, watching all those birds flying in the wind, and then I started crying. My parents totally didn’t understand what was wrong with the kid. But I was seriously unhappy that I was born as a human and not as a bird. That was when I was seven or eight years old.
Alejandro: Wow! Then, you were mentioning you got your license, and you were even doing it yourself at 14, which is really amazing. Then, you went and studied economics. Why economics? Why didn’t you go straight into aerospace?
Daniel Wiegand: That had different reasons. At the time, I was also interested in, let’s say, helping the world, solving its biggest problems. One of the biggest problems was always understanding economy, understanding how wealth is created, and how it is distributed, etc. That was a bit passionate at the time, as well. I studied this because it was also next door, and it was easy to try out and to test. I actually stopped my flying, at the time, because as a student, you have so many other things in your mind that you don’t want to spend every weekend at the airport. So, there was a little bit of phase where I, not grow, but I was withdrawing a little bit from the aviation side. But I noticed it was not where my heart was, and then I stopped the economics studies, went to Munich, and studied aerospace engineering.
Alejandro: Then, you went to Switzerland for a year, and you started working there and getting your feet wet as well on this space. I guess this was a nice segue that you needed to get your push, and this would get you into entrepreneurship. Tell us what happened there.
Daniel Wiegand: Yeah. It was extremely helpful to get me into the entrepreneurship in a sense, I think. I worked in ABB in Switzerland, in Zurich, which is, from all I can tell, one of the best corporate cultures from those classic mechanical engineering companies here in Europe. I’ve seen lots of good things about people management and how big corporations work. But at the same time, it was clear to me after being a project manager and working on exciting things – at the time, I was working on hybrid ship propulsion with 50 or 100 megawatts class. It was clear to me that a classic, large corporation would not be the right place for me. I didn’t say, “I will found a company in a year or so,” But I wanted to work in smaller, more entrepreneurial environments. That was something that became very obvious to me.
Alejandro: Got it. What happened next?
Daniel Wiegand: Then, I went back to Munich and went into the Master’s. I actually went to Switzerland to get money because I had a girlfriend in Sweden, and I needed to fly there every two weeks or so. That was quite expensive, so I had to earn some money. Once I had the money, I went back to Munich. I finished my studies, and then on the way, I did an Erasmus semester in Scotland, Glasgow. That was where I had the idea to build a company that makes an electric vertical takeoff and landing aircraft and brings different regions, maybe countries in Europe and elsewhere closer together. From that moment onward, it was like pushing a switch. I thought to myself, “This is completely crazy.” I didn’t even share it with anybody except my flatmate and two or three other people in Glasgow, but I said to myself, “I’ll do this.” I went back to Munich, looked for my co-founders, and drove everything to founding the company, getting money, etc. It was just the right thing for me to do. I still can’t describe why, but it was just right.
Alejandro: What was that process. I know that there was a very interesting process here for finding your co-founders that you followed. So, tell us about it.
Daniel Wiegand: Yeah. That was fun. I had a good friend of mine who I knew already. We had discussed before I went to Glasgow that we wanted to build a company that makes range extenders for hybrid cars. Then, I came back to him and said, “I have a much better idea. We will make electric jet aircraft.” It took me a day walking through Munich, eight or ten hours walking in Munich to convince him that we should actually bet all our little student wealth on building a company that makes electric jets. Then, he had a friend who was an aerodynamicist. He said, I can adjust the mechanical part of this story, but I can’t judge the aerodynamics part. So, he went to his friend and asked him whether he can judge it. I met the guy, as well, and we went into a conversation. It was fun, and we got along with each other very well. A few days later, we said, “Why don’t we make him a co-founder. He’s one of the smartest guys in the department. He’s on his Ph.D. He has all this knowledge, etc.” So, we brought him in. Then, we were three. The last one, we said, “We need someone who can do all the avionics and controls of our prototype. We didn’t find somebody in our network. Then, one day, I walked into the kitchen of the robotics department at the Technical University of Munich and said to the secretary, “Can you get me all the Ph.D.s into the room who finished their Ph.D. in the next couple of months? I have a job for them.” She was looking at me as if I was a little bit weird, but she actually got me the entire department into the kitchen. I was telling those people my usual story, a very embarrassing three-page presentation about electric eVTOL aircraft for everybody. Half of the people in the room left after two minutes. They said, “The guy’s completely crazy.” Then one-third stayed out of curiosity, and in the end, after 20 minutes, there were maybe three people staying. One of them was our co-founder, Matthias, and he was just buying into the story. We spent the whole evening talking for five or six hours about how to solve all those technical problems. And the same thing – we did a long walk through the city. One week later, we had a spaghetti dinner in my shared flat with the other co-founders, and that was the interview process. The funny thing is, he just started his Ph.D. six months ago. His parents were super happy that finally their son was always playing in rock bands and all these things, had a proper job, and an income. Then, he went to his father and said, “Dad, I’m going to quit my job and found this company that makes jets.” His father was not super overwhelmed by this idea. I still remember that a few weeks later, his family and his parents visited us in Munich, and I had a very tough interview with his father in the café where he was hammering me with questions on all the plans and the business plan and how this could be successful. But, apparently, I didn’t make the worst impression, so he didn’t pursue Matthias to not go with us. That’s how we started.
Alejandro: You were literally interviewed by the father. That’s the first time that I hear this.
Daniel Wiegand: Yes.
Alejandro: That’s amazing. Wow. So, obviously, you got the green light, and now that the band got together, what were the immediate steps that you guys took. This is not like the typical Software as a Service startup. This is a bit different. So, how did you guys really bring this to life?
Daniel Wiegand: The first thing was trying to get some kind of state funding, which we failed. Then, ultimately, we got a little bit of state funding from the European Space Agency, which was 50,000 euros and an office space. That’s where we founded the company. Everything else was bootstrapped in the first 12 months, which in retrospect, I wouldn’t recommend anybody to do. Obviously, you have a bit more shares than you have in valuation, but I think it would have been smarter to directly get some business angels on board. But we bootstrapped the first 12 months. We went in debt. Everybody got some 10,000 euros from their parents or from the bank and a bit more after a couple of months because it wasn’t sufficient. Then, the objective of that first summer was to make a fully functional prototype in the three-meter span. We built a carbon-fiber body, a WIFI control system, 36 little jet engines, etc. We actually succeeded in this, but we were running out of money, so three or four weeks before the first flight of this prototype, it was clear that we would run out of money before the thing was in a condition that we could actually demonstrate it to investors. So, we went off and said, “Okay, we need to find a business angel now, and maybe have a lower price for our shares. During the day, we were out at startup fairs, etc., trying to make a network with business angels, and from noon to midnight, we were in the garage building this prototype. Then, the funny thing is, we ran into, I think Germany’s most famous seed investor, Frank Thelen. I didn’t know that he was so famous. He has his own TV show that’s the German version of Shark Tank, but I was so much into this airplane and that stuff, that I only noticed who the guy actually was by the time he was visiting us, and he was standing in our workshop. But we had a click. We perfectly worked together. They liked the founders. They had a huge respect for all the thinking and the technology, and we liked them. We had a lot of trust in each other, which prevails until today, and that’s an invaluable asset, I think. I can only recommend every founder to make sure that the first investors who come in really click like your co-founders. Then, they actually called me one of two days later and said, “We’re going to invest now. We won’t wait until the plane flies. We believe in the team. We believe you guys can solve that, and we invest now.” We kept the promise, and the plane was flying four or six weeks later. It was great because we saved some time. We had cash in the company earlier, and we were, right away, hiring people into the company. The first employee was my former dance partner from the Salsa dance class, who was also working in a startup. They went bankrupt, and we went for a coffee, and she told me, “I just lost my job. My startup went bankrupt,” and I said, “I just got half a million, and I need people who can do stuff. A day later, she was employed.
Alejandro: Wow. Very, very cool. In this case, especially for the people that are listening, what ended up being the business model?
Daniel Wiegand: The business model, at the time, was different. We pivoted a little bit. When we started, the intention was to build a two-seater and sell these two-seaters in a large quantity to get the cost down and sell these to private individuals who would then have to make a private license to actually fly these planes. There were two big problems: 1) You can’t expect a lot of people to make a pilot license. So, we didn’t scale. 2) If somebody flies with this two-seater aircraft to a landing pad, and then leaves the aircraft, then you can’t park and aircraft with a 10-meter span on that landing pad. Then, it’s blocked for the whole day. So, we had to find a different solution than you do normally with cars when you park the car for a whole day. The reason we went for these two-seaters was that at the time, there was no regulation in place to make larger aircraft and certify them. But we soon after realized that this regulation was in development, and we also started lobbying and started having conversations with the European Aviation Safety Authority on these regulations. Then, about six months later, we pivoted to a four-seater design, at the time, and the service business model.
Alejandro: Very cool. Going back to the funding that you were mentioning, how much capital have you guys raised to date?
Daniel Wiegand: To date, it’s close to 350 million.
Alejandro: Got it. I know that you encountered certain issues at a seed stage, and also, it was interesting as well at a Series B. How do you think the different expectations, and then also, the challenging part has evolved from financing cycle to financing cycle as you were unlocking different [18:36]?
Daniel Wiegand: I think overall, the challenge was always the same that my heading out to a business model, to a type of technology, it’s hardware in a most-regulated environment. The regulation wasn’t even there. The operations regulation wasn’t there – almost no investor usually had experience with aerospace, and you have maybe five to six years’ time to market in the early days. So, it was always very difficult, and so far, it was clear there’s no investor who is used to this. You make a software startup, you have an ecosystem, and you can find people who have experience with these business models and with the typical cycles of development. Here it was different, and in each funding round, it was the same that you had to convince people in a very unique way, and we had to spend much more time with investors to make them comfortable with our business plan, with our development schedule and our open timelines. I have to admit, they always delayed, so I think the first pitch we had to our seed investor was that you could do this with around 50 million and 3 ½ years or so. Meanwhile, it’s probably closer to 500 million, and it’s still 3 ½ years out until we are in the market. We have made a ton of progress, and we have 500 people now. Now, I think the timelines are realistic, and we have lots of aerospace people in the team who are backing these timelines and have brought tremendous knowledge into the company. But there was a big learning on these things in terms of the actual challenge not being maybe the technology in itself, but a much bigger challenge is certification, and industrialization, the supply chain, the procurement, the operations regulation, and these things.
Alejandro: Very cool. I’ve seen that when it comes to really looking ahead and thinking about like what’s possible here, what you guys believe is that what you want to accomplish here is to allow anyone to fly wherever and whenever they want. How is this? Tell us a bit about this.
Daniel Wiegand: That’s the mission of our company. Where does this come from? I also spent some time with highspeed trains, just out of curiosity in the past. They are a great transportation system. They are fast. You travel at 300 kilometers per hour. They are all-electric, super-efficient, and they drop you off in the city center. The only problem is, the infrastructure is in the billions. They are prohibitively expensive to build anywhere else than between extremely large [21:32]. The intention we had with Lilium, and we still have, is to create a transportation system that does the same job like a highspeed train, but independently of the community size. So, the target is to connect any small village, any midsized city up to suburbs of large cities or the city centers of large cities, to each other at a speed of 300 kilometers per hour, but at the same price like a train. This promise is possible thanks to the technology developments in electric motors and batteries, etc. so that we can actually make a vertical takeoff and landing plane that is super-low noise, so it can access urban areas, and at the same time, have a sufficient range of 250 to 300 kilometers to actually serve this business model of regional and air mobility in a meaningful way. Next to achieving it technically, the most important point for us always is that it needs to be affordable. So, we have the serious intention to make this affordable to a middle-class person with an average income in countries like Germany or Europe or the U.S., and so on. Meanwhile, we have very good data that this is actually achievable.
Alejandro: Got it. Especially for the people that are listening, what would the Lilium jet be different from the normal plane that they’re used to so that it becomes a little bit more visual as they are listening to what you have to say here?
Daniel Wiegand: Firstly, it’s all-electric, so you don’t have to have a bad feeling when flying. It’s emission-free. Secondly, it takes off like a helicopter. Imagine you have an airplane that looks a bit like a business jet, but it sits on the helicopter pad and takes off vertically like a helicopter. Then, it transitions into forward flight, and about 30 seconds later, it flies like a normal aircraft with very low noise.
Alejandro: That’s amazing! That reminds me of the army planes. I think it was the F-something where you can do that vertically, and then you can go forward. That’s quite amazing.
Daniel Wiegand: Yeah, the Harrier can do this, and the B-22 in the U.S., which is a true transporter, can take it and the vertically. I think in the military, there’s a long history of recognizing the advantage of not needing a runway, but there are also big technical challenges if you make a vertical takeoff and landing aircraft because you need to carry more thrust from the engines than your own weight. A normal aircraft normally carries about 30% of its weight in terms of engine thrust, so you’re having four or five times more engine power onboard, and that is the challenge. Everything needs to be super-lightweight.
Alejandro: Got it. One thing that I know is that you even introduced this to Angela Merkel. How was it introducing this to Angela Merkel, the most powerful politician there in Germany?
Daniel Wiegand: Yeah. It came quite unexpected, but one of our employees, who runs the public affairs, had some relationships there, so I got invited to show our prototype to Angela Merkel on the trade fair. Obviously, I was nervous. But then she came, and she was extremely smart and natural. She was excited. I think she had planned one or two minutes to stay there, but she spent more than ten minutes asking questions, joking, and really understand what we were up to and how this was working. So, it was a very exciting conversation for me.
Alejandro: Very nice. How do you think that aerospace is going to change over the course of, let’s say, five to ten years?
Daniel Wiegand: Well, with corona, of course, it will at first have a debt, which is quite worrying within the next one or two years, where the whole aerospace industry will have probably a strong debt in terms of demand in revenues. But after this, I think it will come back, and it will come back very strongly because it’s the only means of transportation we have that is fast, and that doesn’t need infrastructure that can implement continents, etc. I also think that we will see a very strong push to what’s more efficient aircraft, and ultimately, fully-electric aircraft. It will take probably more 30 years until we can make electric transatlantic flights, but at least for regional and let’s say in U.S. domestic flights and European domestic flights, we will have the technology quite soon to actually replace those flights, replace the kerosene and make them fully electric. That’s an exciting time for me and an exciting time for Lilium because we are at the forefront of developing these electric aircraft technologies, and there’s an almost unlimited field to apply these technologies. Then, of course, we will see a big rise of vertical takeoff and landing of air mobility, and we will see a big rise of drones in, let’s say 5 to 10 kilograms fast. So, we will have big changes on all ends. We will also see autonomy. Some people believe that autonomy in the air will come earlier than on the ground because you are in a quite predictable and deterministic environment, which makes it much easier, and on the other side, you already have a very high degree of automation in terms of autopilots, which is from a technology point of view very established and very widespread. So, effectively, we have the full spectrum from autonomy to electrification to digital airspace management to new business models. It’s one of the most exciting times to be in aerospace ever.
Alejandro: Very, very cool. Very cool. For the people that are listening to get an idea and a sense of how big the operation is, anything you can share with regards to perhaps the number of employees or anything else?
Daniel Wiegand: At the moment, we have close to 500 employees, and we are still strongly growing, so it effectively feels like a general aviation aircraft manufacturer in terms of size of the team and size of the project. But this will continue to grow because we are also operating our own service, which means you can then have a Lilium phone – F on your smartphone and book one of our aircraft, and you will always have the same grand experience and the same service and use our experience whether you book this in London, in Berlin, or in New York. That means, we’re also having a commercialization team and a software team. We have an airline team at the moment. We have a team building up maintenance capabilities. So, also from that perspective, it’s extremely exciting for us because I’m not sure there are historic examples where you have in one company the full spectrum from design organization to manufacturing organization to maintenance organization and an airline operation.
Alejandro: I typically ask the guests that come on the show – there’s one question that I like to get your answer on, and that is: if you had the opportunity, knowing what you know now – you’ve been at it for quite a while now with Lilium, since 2015, an incredible journey. I want to ask you if you had the opportunity to go back in time, let’s say back to that time where maybe you were still in school and thinking about launching your own thing, what would be that one piece of business advice that you would give to yourself knowing what you know now before launching a company and why?
Daniel Wiegand: The most important one is raising money as early as you can, and not bootstrapping for a year because you are just so much more effective on a project like this if you have more people. I think the second advice I would give myself is hiring even more extremely experienced people in the very early phases, even when you just have ten people or so because this aerospace experience, which we have in the team right now is tremendously valuable, and the earlier you start doing this and professionalizing, the better. On the other side, it was almost impossible for us, given the funding we had at the time, to hire more people and hire more senior people. But, at least, I would say if you can in the aerospace environment, I would go for this very early. Maybe one other thing I would do is talking to the supply chain earlier. At the moment, we have tons of conversations and partnership built up with the large aerospace suppliers, but this is just something that we all noticed that it’s very helpful to see their capabilities and to see also where they have limitations so you can adapt your plans as early as possible to this. And the last, but not least, I think the classic startup doesn’t work in aerospace in the sense that the classic thing would grow as quickly as you can. Make a minimum viable product, and accept the chaos, and go on the market as quickly as possible. In the aerospace environment, it’s almost the opposite. Of course, you want to move fast, and you want to be innovative and prototype and fail quickly. But on the other side, you have only one shot, and that has to be perfect. So, our airplane is in the certification program with both the European and the U.S. Aviation Safety Authorities. The requirements we have to meet there are the same like for a commercial airliner. That means anything else than perfect will not do the job for the first aircraft that goes on the market. That drives a different way of managing the company. You need to be much more rigorous; you need to be much more process-driven; you must have an extremely strong quality-management system in all areas, from engineering to manufacturing, etc. And it’s quite a big deal to build this up from scratch. There are not many people even globally who have built up an aerospace manufacturer who has obtained all those approvals in parallel.
Alejandro: Very, very interesting. Daniel, for the folks that are listening, what is the best way for them to reach out and say hi?
Daniel Wiegand: The best way is just drop us a line on one of our social media or in our inbox. We’re always excited about people with glowing eyes and people who have a ton of energy to make our vision work.
Alejandro: Fantastic. Well, Daniel, thank you so much for being on the DealMakers show today.
Daniel Wiegand: Thank you, Alejandro. Thank you for having me.
* * *
If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at [email protected].