Boom, Virgin, and the Pre-Order Playbook for Hard Tech Companies

Boom is low-key famous for LOIs and pre-orders. We inked $5B in LOIs during YC, including one from Virgin Group. "A new record," Sam Altman tweeted at the time, and one that may still stand. Since then, we've racked up $26B in orders and pre-orders for our Overture supersonic airliner, from United Airlines, American Airlines, and Japan Airlines—all deals done before XB-1 had flown, let alone broken the sound barrier.

The most common question I'm asked by founders is: How did Boom do this—and how can other startups replicate this success?

Why Do Pre-Orders Matter?

So many great companies started with ideas that were not obviously good. "Summon strangers from the Internet to give you a ride." "Locate strangers on the Internet to sleep on their couches for a fee."

In fact, it's so hard to distinguish good ideas from bad at the seed stage that most investors have learned to judge startups on traction. That is: the way you tell whether an idea is any good is to ship an MVP and see if product/market fit emerges. This works for most software companies because it's inexpensive to ship an MVP.

But you can't ship a supersonic jetliner as an MVP. Hardware is too expensive. So hardware founders need a capital-light way to validate product/market fit before the product exists.

This is the role of pre-orders. They're effectively B2B Kickstarter for capital-intensive products.

How Did Boom Get Pre-Orders?

Let's start with the story of Boom's famous $2B LOI with Virgin, executed during YC.

Before we signed up Virgin, we studied their history. Richard Branson loves nothing more than sticking it to British Airways. He's famous for publicity stunts. And he'd tried to pull off supersonic before: when BA was shutting down Concorde, he offered to buy the aircraft and keep them flying under Virgin. BA didn't let him. He also talked about point-to-point high-speed travel as a goal for Virgin Galactic.

Virgin Atlantic was the upstart to the big, stodgy British Airways. They wanted brand differentiation. Richard loved speed, sex appeal, and a good public spat with BA.

So it seemed obvious that Virgin would want supersonic jets.

Yet, everyone we talked to at Virgin Group said no. "We don't do hardware companies," I was told. "What about Virgin Galactic?" I asked. "That's an exception."

It became clear Boom would also need to be an exception. And that only one person could make the exception.

We networked our way to Branson and scored a 15-minute breakfast meeting ahead of the SpaceShipTwo rollout in the Mojave desert. We brought a one-of-a-kind wooden model of our airliner, painted in Virgin's livery.

We explained what we were building, and why we thought Boom would succeed where Concorde failed. Branson asked about the business model: economics, fuel burn, passenger count. He leaned back and said, "This is brilliant. But I'm already doing Virgin Galactic... I don't know if I have it in me to do two of these."

"I'm not asking for your money," I said. "I'm asking whether when this flies, if you'd like to have the first few airplanes exclusively for Virgin. If you're willing to raise your hand and say you want the jet—you can have it before your competition, and I'll get all the money I need elsewhere."

This turned out to be the winning angle. But the deal was dragging and not getting done. Demo Day was coming—and we were at risk of showing up empty handed. So I told Virgin that we'd be launching the company at Demo Day—and they could either be part of that launch or miss it.

The deadline worked and we got approval to announce a deal the day before Demo Day. And although our relationship with Virgin (sadly) fell apart a few years later, the initial LOI probably saved the company—and for that I'm forever grateful to Richard Branson and Virgin for throwing in with us in the earliest days.

Why did the Virgin deal work?

• Credibility: The early Boom team had friends at Virgin Galactic, and some had worked on SpaceShipTwo. This social connectivity meant we'd automatically pass the sniff test on technical credibility.

• Source of Urgency: Turns out the fear of missing out on a Demo Day launch was enough to drive even Virgin to move.

• Near-Term Value: Virgin correctly calculated that the announcement would strengthen their brand as young and innovative. Supersonic is sexy—the announcement would drive an earned media cycle filled with positive publicity.

• Long-Term Value: As part of the deal, Virgin got a price lock, a most-favored pricing guarantee, and exclusive rights to buy the first 10 airplanes.

• Low Risk: We didn't ask for money up front. Payment would come later, only if Boom delivered and only on mutually agreeable detailed terms.

These principles show up in every deal we've done since. Here's the distilled playbook:

The Pre-Order Playbook: Key Lessons

• There must be something in it for the buyer, both short-term and long-term. This applies both to the company and the individual champion. The deal must serve the champion's goals and make them look good.

• Initial risk must be low. Don’t ask for up-front money—or ask for no more than what the buyer might write as a venture check. If they have a corporate venture arm, consider structuring an investment as a prepayment with warrant coverage.

• Ensure the deal validates the product concept. Bake key product specs into the deal: price, configuration, and quantity. The press release alone isn’t the win—validation lives in the contract.

• Create a mechanism to convert pre-orders into firm orders. Virgin taught us this the hard way. Structure the pre-order as an option agreement and make sure the option expires only after a sexy milestone is achieved. Since then, we've embedded incentives in our airline deals that nudge partners from LOI to firm order to delivery with social dynamics favorable to Boom.

Pre-orders aren't just about hype. They're about building commercial momentum, reducing fundraising risk, and getting real validation for your product. Done right, they can be your biggest lever in getting a hard tech company off the ground. I think they are a fundamental strategy for hard tech companies.