Houston innovator shares difficult journey to IPO, the challenges of hardtech innovation, and more
It's been a busy past year or so for Nicolaus Radford, founder and CEO of Nauticus Robotics. He's taken his company public at a difficult time for the market, launched new partnerships with the United States Marine Corps, and even welcomed a new family member.
Originally founded in 2014 as Houston Mechatronics, Nauticus Robotics has designed a fleet of underwater robots and a software platform for autonomous operations. Radford caught up with InnovationMap about these recent milestones for him and the company in an interview.
InnovationMap: Tell me about life after IPO. What’s been surprising for you leading your company through the transition and now on the other side of IPO?
Nicolaus Radford: I'll tell you what, it’s the hardest thing I ever did in my professional career by a factor of 10. Everybody finds their red line once or twice in their career. You know, when you're working 100 hours a week, you're going to bed at 2 am, you're waking up at 6:30 am, you're sleeping three hours a night, right? Everybody's found that moment once in a while and you're like, “okay, I've touched my red line and I would never want to do that again.” This was I knew where my red line was, and I went so far beyond it, I couldn't even see where I thought my red line was. It was a very exceptionally challenging period of time. It took a long to complete the transaction, and the market was just changing under our feet. Rules were and regulations were changing — were we grandfathered in or were we not?
I'm part of some business organizations and, and some of those confidential relationships have turned into friendships. And a couple of them call me and they're like, “we're really worried. We think this is going to be we don't know if you're going to get it done. And we just want you to be aware that you're not you may not get it done.” It is a little scary because once you engage in it, you're running quite a tab with bankers and law firms and all sorts of things. And if you don't complete the deal, it just might kill the company. But we did it. We were one of a few people last year to actually get a deal over the line. I'm very proud of that. I think it speaks to the quality of the deal that we had. The macro economic environment was exceptionally difficult. It remains to be very difficult today. But we had strong backing from our strategic investors and our partners that were already on the cap table. They put a tremendous amount of money into the deal.
You know, I look back on it and it's, you know, ringing the Nasdaq bell when we listed, and giving that speech at the podium — it was a surreal moment. I remember when I was standing there looking at the Nauticus logo on the seven-story Nasdaq tower, having as many people in the company as we could bring, and just sharing that moment with all of them, especially my wife, who, I will be very clear about this, I could not have gotten through this moment without her. She is the rock that keeps our family together and my head straight. A little known fact — we had a newborn during this time as well, so that was also very difficult. And and she just handled so much that there's just not another person like her.
I was excited but cautious at the same time. I mean, the life of a CEO of a public company at large, it's all about the process following a process, the regulations, the administration of the public company, the filings, the reportings — it can feel daunting. I have to rise to the occasion to tackle that in this the next stage of the company.
IM: You’re working with the military on a project that adapts Nauticus’s tech for Marine Corps use. What’s it been like working with the military on this project?
NR: We've probably worked with military interests for the last six years, but all of the things that we have been doing have been extremely confidential and hush. Now we've been able to work with customers that have a stronger public facing persona, and the Defense Innovation Unit is one of those. Their charter is it's quite literally looking for commercial technology and adapting that towards military applications, and so it's been nice to be able to show the utility and the application of of a lot of our technology and what we've been working on for so long as it's applied on a broader scale to the big services, whether it's the Navy or the Marine Corps. Both of the programs we’re working on are all about mine countermeasures, and mines are really, really difficult, especially underwater mines. We've been we've been applying all of Nauticus’s broad technology portfolio to being able to search autonomously and being able to identify and neutralize threats in the water. I love that mission because anytime we can remove our service men and women from these situations, that's just the right thing to do. There are those three universal truths — all babies are cute, all puppies are huggable, and all Canadians are nice. But there's a fourth one — nobody wants to defuse an underwater bomb. And so I'm really happy to be working on robotics technologies where that's the case.
IM: The Ion recently announced Nauticus as a new tenant. What’s the strategy behind creating a footprint there?
NR: We've signed the definitive documents with the Ion about our presence there. We’ve been designing it for a while, and now we're starting to build it out. They're giving us temporary space, so we're going to be immediately there. Nauticus was really born from this connection to spaceflight. We started up Nauticus around NASA, and there's an incredible amount of talent here. And people tend to change jobs sometimes, so we were attracting a lot of talent from NASA. Now that NASA has solidified their mission and what they're doing and gained a little traction, we wanted to have more draw from the universities being up in town. Clear Lake, even though we have water access and it's much closer to Galveston where we test a lot, we wanted to be up in town. So, we're creating a bit of an innovation center. There's a lot more collisions downtown with customers and talent, it just made sense that we had to be there. And because we support the city of Houston so much and what they're doing for the startup community and early stage companies like ourselves that, we want to support that.
IM: How would you describe the state of the hardtech sector?
NR: We still need improvement by far. Hardtech companies are still viewed as a bad investment. We're always going out to investor events, and I remember this one investor came up to me and asked me to tell him a little bit about my company. The second he got into the essence of what we do and sussed out that obviously we are not just a software company, he just goes full stop. “Hey, listen, you know, our investment thesis is we only invest in software companies.” I had just kind of had it and I sort of shot back at him and I just said, “that's a rather that's a rather dumb value proposition and pretty shortsighted.” And we parted ways. It just irritates me that that's this is most of everybody's comeback. Like, they're a special class because they only invest in software companies.
I'm sure you've heard of ChatGPT and how that's going to alter the world forever. Now is probably a really shitty time to be a software developer, and I think it's going to place an extra emphasis and value on hard tech companies because I haven't seen ChatGPT run a run a milling machine yet break a piece of metal on a machine or assemble a circuit board. I love that now the position of companies like ours that are in the robotics space where you take this multidisciplinary blend of hardware, software, and electronics toward an application, because I think that is going to start becoming a premium value.
Software companies tend to attract more equity investment because people have this idea that the scaling costs and the startup costs are lower. Anyone with a keyboard can get online, create a website, and have an e-commerce business. Turns out, that because that’s true, there’s a million out there. What I love about a hardtech company that if you get it right, the cost of trying to compete with that company that figured it out is so high that the negative now begins the benefit. A fast follower is almost impossible.
The VC community sprung up in a post World War II world to help fund the commercialization of the computer and silicon — that's kind of what it originated from. I mean, there was not an investment vehicle that companies that were developing technology in this space could go to and get a loan, couldn't go to the bank. The venture capital world developed to help spawn hard tech investments. And, I hate to break it to you, but one of the most valuable companies in the world was a hard tech company: Tesla. This is a physical world. And I believe the last 50 years were absolutely characterized by the ubiquitous manipulation of the virtual world, but the next 50 years are going to be characterized by the ubiquitous manipulation of the physical world. And that's where we're at.
IM: What’s next for Nauticus?
NR: What’s next is tough to talk about, because I can only talk about what’s already been published. I see Nauticus being the preeminent ocean robotics company. I want Nauticus to be an empire. It starts small but it grows — and it grows in many different ways, and we’re exploring all of those different ways to grow. We’re leading a technology renaissance in the marine space — and that happens only a few times in an industry.
This conversation has been edited for brevity and clarity.