About an hour north of Boston, in a city by the sea, there’s a project underway to reinvent the marine industry. More specifically, the marine defense industry.

Imagine a boat that moves through the water differently from any other boat in existence. It uses “supercavitation”—the creation of a gaseous bubble layer around the hull to reduce friction underwater—to reach very high speeds at relatively low fuel cost. Its speed and shape means it can evade detection by sonar or ship radar. It can outrun torpedoes. Its fuel efficiency means it has greater range and can run longer missions than conventional boats and helicopters.

Now imagine that this vessel has already been built and tested. It “flies” through the water more or less the way it was designed to—like a high-tech torpedo, except part of the craft is above water—and it can be maneuvered like a fighter plane. “It’s almost as much an aircraft as it is a boat,” says its inventor, Gregory Sancoff, the founder and CEO of Juliet Marine Systems, a private company in Portsmouth, NH.

The vehicle, dubbed the “Ghost,” is the first of its kind and is garnering attention from organizations like the U.S. Navy, Coast Guard, defense contractors, and foreign governments—as well as hackers in foreign countries, who are presumably trying to figure out how it works. Juliet Marine Systems has received about $10 million in total funding, about half of which comes from its founder and private investors. The startup’s institutional investor is Avalon Ventures, a VC firm with offices in the San Diego and Boston areas.

Until recently, the project was kept under wraps because of secrecy orders from the federal government. But this summer, Sancoff says, the Ghost—which looks like something out of Star Trek (see photos)—will be ready for prime-time deployment. His team of 16 employees is working on integrating weapons and sensors for military missions. “We have a fully functional, basically go-to-war boat right now,” Sancoff says.

The question is, does it really work? And, more to the point, can it be used for missions safely, reliably, and effectively? If the answer is yes—and that’s a big if, from an outside perspective—one could imagine a squadron of Ghosts being deployed to the Persian Gulf, say, to defend warships and other interests against “swarm” attacks by small boats, Sancoff says. The vessel also could be used against pirate attacks, for Coast Guard rescue missions, or to transport workers to and from oil platforms. The technology might have much broader uses, too—in global cargo shipping, for example, to reduce fuel costs, or for commercial jet skis. (Wacky as it is, the concept is not as far-fetched as, say, a submarine that can also fly.)

But to get a better sense of the ship’s real prospects—and the company’s—let’s consider the whole story.

From Medical to Marine Tech

Sancoff, 55, is a prolific inventor and serial entrepreneur who, I’m told, takes engineering magazines to bed. He grew up in a military family and went to high school in Lawrence, MA. As a kid, he lived on Army bases and says he remembers saluting the flag when he got out of the car. Sancoff never served in the military, but that’s probably because he was too busy inventing stuff.

He started his first company when he was 18—a machine shop for doing rapid device-prototyping for other businesses. He sold that and headed west to San Diego in 1982, at age 25. As a consultant, he became an expert in medical devices, including systems for delivering intravenous fluids, collecting health data, and other applications. He started a new company, Block Medical, and sold it for $80 million in 1991. His next company, River Medical, was based around a new kind of drug-delivery device for hospitals. River acquired IVAC, a medical-device firm divested from Eli Lilly, and ended up being sold to Advanced Medical (IMED) for $400 million in 1995.

Sancoff’s next big project was to start Onux Medical, a surgical tech company based in New Hampshire. It was there, in 2000, that he first got inspiration for Juliet Marine and the Ghost ship. Sancoff was sitting in a conference room when he heard the U.S.S. Cole had been attacked off the coast of Yemen by a small boat loaded with explosives. Seventeen U.S. sailors had been killed and many more wounded. He sat there in disbelief as he realized a billion-dollar warship had nearly been sunk by a couple of guys in a raft.

Juliet Marine would derive its name from a U.S. Navy “war games” exercise held in 2002. At $250 million, it was the most expensive exercise in Naval history. “Fleet Battle Experiment—Juliet” involved warships parked off the coast of California and a series of simulated small-boat attacks. The results of the simulation were grim: more than 20,000 deaths and massive losses to the fleet, in a Persian Gulf scenario. Yet, Sancoff says, the Navy hasn’t done anything in the past 10 years to guard against such attacks, other than work on targeted rocket systems.

“When you’re an entrepreneur, there has to be an overwhelming reason why you do it,” Sancoff says. “That was it for me.”

He saw a big opportunity—if only he could design a ship fast enough and maneuverable enough to intercept attackers before they could get close to big ships or shorelines. He had raced hydroplanes as a teenager—probably could bulls-eye womp rats, too (sorry, Star Wars joke)—so he had an intuitive feel for what it might take.

Which brings us to supercavitation. It’s an old idea. During the Cold War, the Russians developed a torpedo called the Shkval (“squall”) that could go more than 200 mph—five times as fast as a conventional torpedo—using a rocket engine and air ejected in front to produce a gaseous bubble completely enveloping the projectile. That reduces the friction between the hull and its surroundings by a factor of about 900, enabling superfast travel. Yet rocket-propelled torpedoes have downsides in performance and reliability; the sinking of the Russian submarine Kursk in 2000 is rumored to have been caused by a malfunctioning Shkval.

Meanwhile, the U.S. Navy and others reportedly have been working on a next-generation supercavitating torpedo since at least the 1990s. And in recent years, the Defense Advanced Research Projects Agency (DARPA) ran a program, called Underwater Express, to design a supercavitating submarine. There is also interest in using the concept to improve fuel efficiency for oil tankers, ferries, and other large ships, typically by creating air bubbles at the front of the hull. As of yet, however, nobody has publicly demonstrated a successful supercavitating craft.

To that end, after leaving Onux (which was bought by Bard in 2004), Sancoff spent several years doing research on his own and incorporated Juliet Marine in 2008. By June of last year, using $5 million of mostly his own money, his team had built a fully functioning prototype—Sancoff prefers the term “pre-production” vehicle. And earlier this year, he secured an additional $5 million from Avalon Ventures, the VC firm that invested in his last two companies.

At a Bay Area event in March, Kevin Kinsella, the Avalon partner on the deal, spoke glowingly of River Medical in particular. “We got 10x [return] in 18 months, and I only had to go to four meetings. An ROI of 2.5x per board meeting is fantastic,” he said. (Onux didn’t cash out quite as well, but it still worked out fine.)

After seeing firsthand what Juliet Marine built with $5 million, Kinsella said, “If you were taken around by a handler from Lockheed or Grumman or Northrop or any of them, and they told you, ‘We developed this on $150 million,’ you wouldn’t bat an eye.” He told the story of a meeting with Avalon and its fund investors. Someone asked Sancoff, “How did you get to be so capital efficient in your company?” Kinsella relays, “He leaned on the podium and said, ‘Because it was my money.’”

Not Your Grandfather’s Boat

OK, so here’s how it works, according to a patent filing (see diagram, below). The main compartment of the Ghost vessel, which houses the cockpit and controls, sits above the water in between two torpedo-shaped pontoons or “foils,” which are submerged and create all the buoyancy and propulsion for the craft. The angle of the struts that connect the foils to the command module is adjustable—so the craft can ride high in choppy seas and at high speeds (so waves don’t hit the middle part), and low in calm water and at lower speeds.

“We’re basically riding on two supercavitating torpedoes. And we’ve put a boat on top of it,” Sancoff says.

At the front of each foil is a special propeller system that pulls the craft forward. The propellers are powered by a modified gas turbine—a jet engine—housed in each foil; the air intake and exhaust ports for the engines are in the struts. As the ship moves through the water, the motion of the propellers creates a thin layer of bubbly water vapor that surrounds each foil from front to back, helped along by the presence of “air trap fins” that keep the vapor in contact with the hull (and keep liquid away from the hull). The vapor is what constitutes the supercavitation, so the foils can glide effortlessly through the bubbles.

“The key is the propulsion. You have to have a lot of power at the right location in this vessel,” Sancoff says. Exactly how this is done is a trade secret. But the propulsion system, which he says generates 30 percent more thrust than any other propeller-based system, essentially “boils water underwater and generates steam vapor.” (I take this to mean the pressure directly behind the propeller blades is so low that the liquid water there “boils” off and becomes a gas—hence the bubbles.)

After doing some digging in the literature, I asked Sancoff whether what’s in the patent filing is really how it works—in terms of how the Ghost creates its mysterious supercavitation. His answer: “No.” (OK, so there’s more to the story here. But you know when you’re supercavitating, he says, because the engine efficiency actually improves as you go faster.)

In any case, the overall design makes the craft go fast, but Sancoff isn’t making any public claims yet about exactly how fast. “We don’t talk about speed, how many weapons [it can carry], or how far we can go,” he says. Yet its rumored speed is at least 80-100 knots—over 100 mph. That’s not going to challenge the top speedboat records—there have been hydroplane efforts (riding on the water surface) that have exceeded 200 mph (174 knots) and even 300 mph (261 knots), some with fatal results—but the Ghost is faster than any previous underwater vehicle, Sancoff says.

What’s more, he says, the Ghost provides a much smoother ride than what Navy SEALs are used to; many of them blow out their backs from the bumpiness of their boats, he says. “Our boat does not have impact from the waves. We cut through the wave,” Sancoff says. “That is critical science.”

Hydrodynamics experts I’ve talked to say the main challenges of such a craft are controlling it, stabilizing it, and making it quiet. Going superfast in a straight line might be doable, they say, but any sort of turning or maneuvering must be done very carefully, because if the bubble layer distorts or breaks down at high speeds, tremendous water forces will come to bear on the foils, which can be catastrophic.

To steer itself through the water and maintain stability, the Ghost uses four movable flaps on the front of each foil and four on the back of each foil, for a total of 16 flaps. (The flaps reach through the thin bubble layer into the surrounding water.) The struts are adjusted to keep the command module out of the water, and the foils stay submerged, so waves at the water surface should only hit the struts, which have a small cross-section.

“It’s computer controlled, like a modern F-18,” Sancoff says. “We’re boring what looks like two wormholes underwater, and we’re flying through foam.” Sancoff himself has been test-driving the ship over the past couple of years. “I have been learning an entirely new craft since then. It’s a totally new experience,” he says. “Just because you drive Grandpa’s boat, you’re not going to drive this one. It’s more like a helicopter.”

As for the craft’s audio profile, Sancoff is proud of its “silent propulsion” system that includes a sophisticated muffler system for the engines. You can’t hear it from 50 feet away, he says.

Coming Out of the Night

With any grand invention like this, some outside experts are going to be skeptical. “I wouldn’t say it’s not going to work. But I have concerns,” says Gary Balas, head of the department of aerospace engineering and mechanics at the University of Minnesota. Balas is an expert in flight and underwater control systems, but his main objection is that the propulsion system of the Ghost, with its forward propellers, is very unusual for a supercavitating craft. The typical approach, as in the Russian torpedo, is to propel the craft from behind and eject gas and/or use a blunt shape in the front to create an air cavity around the craft. “I don’t see how they’ll achieve what they expect to achieve,” Balas says. “And I don’t see how they’ll control the altitude and the yaw of the vehicle.”

His colleague, Roger Arndt, also a professor at the University of Minnesota, is an expert in fluid flow and cavitation. He has doubts about the Ghost propulsion method as well. In fact, cavitation bubbles are normally bad for propellers and can cause serious damage. But there is a type of propeller, with wedge-shaped blades, that produces supercavitation in high-speed racing boats; presumably this is similar to Ghost’s propellers. But in this case, Arndt says, “I am dubious about the application of supercavitating propellers.” (To be fair, Sancoff said that what’s in the patent filing isn’t quite how it works.)

Other experts on supercavitation declined to comment for this article. Sancoff emphasizes that the project has a lot of sensitive aspects to it, in terms of national security, so people who know about it aren’t talking. And he claims that Juliet Marine’s website is getting “attacked” 350 times a month by hackers, mostly in foreign countries.

In any case, the current vehicle—which resides under tight security at Portsmouth Naval Shipyard (“a great asset” for a startup to be able to rent space in, he says)—holds 18 people and weighs some 60,000 pounds fully loaded; the underwater part of the vessel is 62 feet long. Sancoff says it can be launched from any beach. “A group of these boats coming out of the night in the Persian Gulf, armed with torpedoes, would be undetectable to large ships,” he says. “Ghost cannot be hit by a torpedo. You would have to shoot it with a gun.”

Not surprisingly, Sancoff sees an urgent military need for his craft. The Navy loses sleep about swarm attacks and security in the Strait of Hormuz (which runs between Iran, United Arab Emirates, and Oman) and other strategic waterways, he says. Yet it hasn’t moved quickly enough to do anything about the threats. “We talk with the Navy weekly,” he says. “We believe the U.S. could use a hundred of these boats right away.” At a price of $20 million per boat—fully loaded with electronics, radar, and so forth—that “provides us with a billion-dollar market opportunity for coastal and fleet protection,” he says.

Meanwhile, the U.S. State Department has granted Juliet Marine permission to talk with the governments of Israel and UAE, which both have marine security concerns. The company says it is currently building a manufacturing facility near Portsmouth, in anticipation of ramping up to sell Ghost ships to customers. Sancoff adds that Juliet Marine is planning to build two more versions of the ship this fall, using what he calls “the final configuration.”

And while the startup strives to gain full acceptance from the U.S. Navy and other potential defense customers, it is “working on weaponizing” the craft, says Sancoff. “The vehicle’s done. Now it’s time to get mission modules complete.” That means mounting torpedoes, machine guns, radar, mine-detection systems, and other sensors onto the craft—and making sure it all works the way it’s supposed to.

That remains to be seen, of course. But if it performs as advertised, Juliet Marine could end up playing a vital role in global security on the high seas. “That’s the beautiful thing about being an entrepreneur,” says Sancoff. “You take a risk with it.”

Wade Roush contributed reporting to this story.

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