[Music] he [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] [Music] we came to this world [Music] to to sh [Music] future [Music] [Music] feel e [Music] you're watching tvpn it is Thursday March 27th 2025 we are live from the Temple of Technology The Fortress of Finance the capital of capital this show starts now we got a great show for you
today folks it's defense day let's hear Jordy defense defense defense defense wins championships and we're breaking it down today on TBN live talking to a bunch of people in the defense World Delian ACS AJ from hermas we got a bunch more folks coming in that's starting in half an hour we're going to give you a little brief overview of what's going on in the news in Tech Broadley talking
about tariffs talking about what Pat Ginger is up to now that he's out of Intel uh and then we'll take you through some history of Defense Tech how we got here and then we'll talk to the builders that are actually doing it the good stuff so let's take it with the news first first I noticed uh you are uh you could say you're verticalized Orange today I'm going big I'm going long orange long orang I want to go on record
I'm shorting it's March 27th 2025 I'm short yep and it's uh it's downhill from here in many ways you could say that slop is like the most important word of the year but that is also a top signal for the word overall it's going to get overused it's going to get applied with a broad brush but uh very fascinating time on the internet yesterday obviously there was eventually a backlash to all the
giic all the gies going out and Lords cleaned up yesterday they did I posted um one that was just I know frame from Oppenheimer gibli 30k likes Jordy had another 25k or something on morning routine just take the viral mem make it gibl and it was easy money on Elon bucks were flowing can't wait for the payouts uh there's there's this sense maybe for people that aren't in the uh Creer Revenue sharing program that the payouts
are big uh they are not they're not we could maybe pay for a week's supply of Saratoga Water yep uh with the X payout from this entire month but it was a fun day I think I think a lot of the chisms were correct that you know this this is a degradation of Aesthetics in some way it's a collapse of Aesthetics uh it's this all consuming meme everyone was obsessed with the exact same image exact
same look um and it was a little odd but you know it was a it was a very peaceful time on X yesterday there was no politics no Wars no fighting it was just uh people posting anime having fun H in the chat says lisan Al GI yes of course of course um and so uh I'm sure we'll dig into that more I want to hear from mid journey I want to hear from David holes I also want to hear uh about more of the tech that went
into developing that model how narrowly is it trained on studio gibli type content will there be a legal battle there I also want to know was this truly just an algorithm change or was there more scaling applied to this is this the model's clearly better don't think anyone debates that is it better because of scale did they did they spend more money on the training run or is this a
you know an algorithmic improvement so uh interesting to dig into I'm sure we'll talk to a lot of folks we have Christel Valenzuela coming on in a few weeks uh founder of Runway which does AI video generation I'm sure he'll have a lot of commentary on this and we'll try and cover this as the story continues to develop but the story that is developing today is new Trump tariffs where things
stand from The Wall Street Journal um giving a little Roundup here Canada and Mexico got a 25% import tariff on Goods took effect March 4th with an exception for for Energy Products and potach which received a 10% tariff um little bit more critical what is uh potach you look that up I think it's an industrial fertilizer potassium containing salts that are mined and manufactured uh it's used as a
fertilizer it's a key nutrient for plants so uh bad news for the potach industry did get the oh did the domestic potach industry you mean because the domestic the US domestic potach industry they want the highest tariff possible but there's a smaller tariff 10% on on potach and energy 25% on Goods uh Trump Administration later suspended those tariffs until April 2nd on autos and all other Goods that are eligible for
dutyfree trade under the US Mexico Canada agreement or usmca uh many Goods entering the US don't comply with usmca and are therefore subject to the new tariffs Canada responded by placing tariffs on $21 billion in US Imports including fruits vegetables appliances and liquor uh Canada also said it would tariff an additional 20 billion of us Goods in response to Trump's steel and aluminium
tariffs so a little bit of trade war going on and then the big news today is that President Trump on March 26th that was yesterday announced that he would impose 25% tarff on Global Automotive Imports to the US that's all cars that are made uh internationally doesn't matter if it's a BMW or a Han Chinese EV like that's the brand Han oh really yeah even though Han is like eth the most
dominant ethnicity in China the one of the that's cool that's like calling your bank Bank of America yeah basically yeah uh and of course Huawei also is Huawei or big Alpha is somebody making a political podcast called podcast of America have pods America pod save America but just the podcast of America yeah like Bank of America I like that it's good uh and so um Auto stocks have been in turmoil since this happened and
um uh and then of course there are also tariffs on China that has been the big focus of the trade war on February 3rd the Trump Administration imposed an extra 10% tariff on goods from China on top of those various tariffs Levy during during the Biden and Trump first Trump administrations China retaliated with a 25% tariff on us coal and liquefied natural gas and a 10% tariff on crude
oil agricultural machinery and other products that all took effect February 10th and then on March 3rd Trump again hiked tariffs on Chinese Goods by an additional 10% China again retaliated with tariffs that took effect on March 10th including 15% on us chicken wheat corn cotton 10% on sorghum soybeans pork beef Seafood fruits vegetables and dairy products so they are taxing our food and
we are taxing their like manufactured goods basically uh there's also some recipro reciprocal tariffs going on over in Europe in in the EU um but you know what they aren't raising tariffs on I didn't see mentioned at all in there Swiss watches that's right and so head on over to bezel shop over 23,500 luxury watches fully authenticated inhouse by bezel team of experts great time because
a lot of things if you buy something before the Tariff comes in the price goes up you know it like the the free market will reward you for that right you know some people that pay attention to these tariffs they trade them with size on Wall Street they're running massive hedge funds some other guys are just buying Rolex daytonas and fpj hoping that tax tariffs hit and they strike it rich many ways to make a buck
around here always a bu Market somewhere well right um speaking of luxury goods Ferrari is is set to raise prices on some models in response to us tariffs this is the big question who really pays the external reeven Revenue Service is is levying tariffs will the foreign countries pass that through to the consumer by raising prices in the case of Ferrari it's certainly seems like
they are they're raising a they're seeing a maximum 10% price increase on the puru which is their SUV and the DOL chinder the 12 that was pretty good normally he really B those but I'm proud of you I'm working on my Italian accent yeah yeah um the 12 cylinder which very controversial car I think it's beautiful not many people agree with me uh John it's the wheels oh I always thought
it was the front uh the the front hood that black stripe which is also a design element in the f80 The Wheels on the do they go and are just they go round and round but they're very bad oh okay I didn't know that well I mean I mean I'm still partial to the to the rear engine Ferraris uh the sp3 even the sf90 the 296 I think those are all fantastic cars but um in terms of you know what does Ferrari
really do well front engine v12s and the doind is still in the game but it's 10% more expensive now so and pinch ferari was already having issues with pricing people uh it seems that the true market value of a of a lot of new Ferraris is simply less than what Ferrari is charging yes and so having to increase prices and and pass those on to cons you know basically pass the the Tariff cost
onto consumers yep is not going to have a positive impact on sales so we've covered this before Ferrar Chang their strategy they are producing a lot more cars and there has been a glut of these models that were formerly very special like the sf90 it's a what 600 $800,000 car used to be when there was a $600,000 Ferrari you really needed to know someone to get one you need to be on a list you to be invited to buy it now you
can just kind of pick one of those up and the folks who did pick them up have uh taken a lot of depreciation on the chin with that one um and also just from a design standpoint the sf9 they look pretty similar the stories of people buying SF 90s you know putting up a lot of equity and then still being down underwater in the red yep like it's very rough having to pay to to sell their car
well the good news is the 296 the sf90 and the Roma will all remain unchanged in price regardless of the import date uh this implies that Ferrari will cover the cost of any duties due on such models imported to the US after the April 2 deadline so it's truly an external Revenue Service event yep you said you wanted to hear it for someone well let's hear it for the Ferrari management for taking one yeah for the
US consumer us consumer is undefeated yep they they really are anyway uh you know who drives for Ferrari Charles lir and you know what bed he sleeps on sleep on he's an eight SLE BR Ambassador and today we're telling you about eight sleep nights that fuel your best days turn any bed into the ultimate sleeping experience go to as sleep.com tvpn just do it just do it um code tvpn $350 off
um and uh you can compete with with John and I we both been putting up big numbers this we I I woke up at 4 am. but I still put up a big number last night something like 90 94 and once you get really into it you can go deeper we are learning this we're going to we're going to dive into this later but um eight sleep does a bunch of other analytics they don't just give you a sleep score
and tell you how long you slept they check your heart rate and your heart rate variability your HRV as well as your breath rate and your breath rate and so you can compete with your rival on those metrics as well it's not just about who slept longer it's also about who's putting up big numbers in HR across the board there's always a bull market somewhere in your always bull market somewhere we uh we got to hang on
Zoom a bit with uh Maui and and Alexandra over at the eight sleep uh Team this morning which is fun we got some cool stuff cooking but uh back to the show so Pat Ginger former Intel CEO absolute Legend uh he he's an absolute dog John he was he's out at Intel and he's in to a venture capital firm little Personnel news going on he is joining the Venture firm playground Global as a
general partner with a focus on semiconductors and other Investments that lie somewhere between the improbable and The Impossible I like it he's really going long shots I I love this I I I was thinking about this the other day that um you know there are funds that have gone all in on defense Tech or they've gone all in on crypto or they've gone all in on AI and I would love to see a fund burn the ships and
just go really really hard on we're going to figure out how to make money in semiconductors and we have a lot of money and we think this is important we think it's an important Mission and so that's what we're going to figure out and sounds like that's what Ginger's going to do and uh I mean he's a legend he's been in the industry forever uh and he would be probably a fantastic board
member I I mean I I don't know exactly how good he is at startup governance but I imagine he'd be very knowledgeable and' be someone who you would want as an advisor uh I'm over here on LinkedIn he's putting up some big numbers he hasn't shared this news yet by the way so it's it's breaking news okay uh he calls himself an electrical engineering expert with four Decades of Technology experience a Coupes um but I love that
he's leading with his uh expertise uh got to be cracked to go on a run like he did and uh excited to have him on the show at some point he started a brief stint at VMware the Intel veteran came back home to the chip Giant in 20121 this time is CEO with a mandate to revive the company's prospects and rebuild its technological prowess amid market share losses and highly publicized delays for its most advanced
chips his turn but his but his turnaround strategy focused both on designing and manufactur ing chips which was controversial remember a lot of people were saying Intel should split those two businesses up become two different companies um this round ran counter to the direction that the industry had taken over previous seal several decades with Rivals like AI chip designer Nvidia and Chip manufacturer
Taiwan semiconductor manufacturing tsmc setting the pace and so the whole market and the big Power law companies were all saying you got to be a pure play until you're trying to do two things at once you're you're neither in Nidia you're not Nvidia and you're also not tsmc so you're following falling behind everyone was saying hey just go Pure Play he didn't he chose not to do that and
eventually they said hey we want to try a different CEO but the new CEO lit Bhutan is signaling that maybe he's story maybe he's staying the course and maybe not splitting up Intel but we'll see he could just be saying that because internal politics and he wants to really get the Playbook lined up before he rolls it out so uh I'm sure we'll be talking to more folks about Intel in the coming weeks stay tuned tuned um but uh
you know I was thinking if he if he wants to just get a couple deals under his belt maybe he takes a you know he's you know this his first time really being a VC call saquan saquin he's been very active the last couple months yeah maybe saquin could be like his his Junior partner yeah just like or Venture partner honestly saqu saquin at least over the last two months is getting into the higher profile companies the
companies that 10x the demand yep uh for for their Equity so it's possible that you know they could I'm sure they could both learn a thing or two from so hopefully he uh he like saquan gets into ramp of course you know ramp time is money save both easy use corporate cards bill payments accounting and a whole lot more all in one place as saquan says keep your team focused on the game not
expenses I love that it's great let's move on to uh some news in the Wall Street Journal about flexport Ryan Peterson's friend he's been on the show um this uh this article is kind of deep diving into their uh their profitability and revenue the title is Freight startup flexport misses profitability Target we're going to give you the details and then give you our take so uh Peterson said too much of the
company's 5.2 million square feet of warehouse space spread across five buildings went unfilled last year he said demand for fulfillment service is rebounding and he expects that flexport will be quite profitable by the end of 2025 so so that's the real story here folks for Ryan he's been working really hard on this billions of Revenue and 2025 profitability if we were writing
this headline we would have led with that yeah exactly exactly yeah so uh in 2023 flexport did 1.6 billion in Revenue last year they did 2.1 billion still growing and of course Ryan actually rotated out hired a CEO and then went back into the CEO seat put the company back in founder mode did made a bunch of hard decisions taking like four or five flights a day yeah you I mean you've
seen he called in from Texas cuz he's traveling like crazy he is he is doing everything necessary to make this company work and successful more than I possibly can yeah flexport is is in this position where Flex many of flexport's customers have gone through the craziest last six months of their time as you know companies right with you know trade Wars tariffs you know all this crazy stuff
happening and um it's almost like they need to kind of thread the needle on making that you know they're uh building a great bus but also not putting too much pressure on their customers who are already seeing their costs rise in various ways yeah I mean last time I was talking to Ryan he's on all these flights I was telling him like Hey when you're traveling you really got to book a wander you should find your happy
place you could book a wander with inspiring views Hotel great amenities dreamy beds top tier cleaning and 247 Con Air Service I remember you said that word for word yeah I was saying it's a vacation home but better go to wanderer.com use code tvpn um and so uh check it out uh let's uh let's run through a little bit so so we're doing defense day today we're taking you through uh defense Tech
trying to give you a tour of what's happening in the industry we're going to have a ton of great Founders on a couple investors as well but I wanted to run through a little bit of history on how we got to this point in defense Tech and so I gave a talk I want to know at what point did they decide to call it defense Tech versus offense Tech because that would have been it is the time for
offense well you know that the Department of Defense used to be called the department of War yeah because it was just like yeah it's the guys who we handle War it is a better but uh we we've toned it down now we're focused on defense because defense wins championships of course um and it really all this whole the idea of like before you can't call like the Civil War like defense technology really because they
weren't using Electronics back then uh World War II was the first electronic war and so this all started during the Blitz in 19 40 the Germans were bombing Britain and there were these series of Radars called the cam hubar line uh and they were decimating our bombers they had something called The Messer schmidtz 262 and it was really a war of Technology we'd build a radar system they'd build a bomber to bomb the radar
system there was uh Radio Systems and then counter radar systems and all these different things my great grandpa was shot down twice in a in a in a uh he was the rear gunner in a B52 sort of long range bombers um wasn't his dying wish not to mention that on a podcast no he said uh it's fine talk about this forever about forever to the loudest you know in the loudest possible way to the
most number of people it's legendary to survive to survive to and then he was redeploying to the Pacific to uh be a fighter pilot when the war ended but yep anyways and so uh so the solution was vavar Bush the science Legend uh I think he worked alongside Oppenheimer uh and this was the first time that there was like this really combination between civilian scientists and Military efforts
and this is like a continuing theme throughout the evolution of Defense Tech so uh there's he brings this one-page memo to FDR outlining a plan hey we're going to use our best scientists at universities to uh build defense Tech and FDR approves it in 10 minutes talk about like founder mode like it's like really really great uh so this creates the nrd uh the ndrc the National Defense
research committee uh in 1940 and they work on the bomb which you know from Oppenheimer but they also work on radar and so uh the office of science research and development 1941 bush is the director in 1942 the Harvard radio research lab starts government spending on defense Tech and Bush was a thesis adviser to Fred Turman and Fred Turman is known as like the real father of Silicon Valley because he runs the
Harvard radio research lab they create over 150 anti-radar devices and they're pivotal in disrupting German radar capabilities um there's a whole bunch of different things they invent chaff uh like the literally just aluminum foil that is cut to half the wavelength of the radar so it's like barely Tech in my opinion but it's like still there's math to calculate how you cut the tin foil
but it's just chopped up tin foil but if you chop the tin foil at a certain size it messes with the radar and so that's when you see planes throwing out just aluminum foil the reason is because it disrupts the radar right carpet Jammers were high frequency transmitters that overwhelm enemy radar you just send so much signal that they get confused uh and this contri this contributed to
Major successes of bombing raids like operation gamor in 19 in 1930 1943 uh now the radio research lab gets disbanded in 1946 and they needed something new so Turman goes to Stanford and he brings ideas from Harvard over to the West Coast he's the dean of the School of Engineering and this is the formation of the Stanford Industrial Park which created Varian Associates hit Packer General Electric locked Martin
they all had offices there and so it was this crazy inter interface between science and and business basically and this is all pre-transit but it led to uh but it led to like all of Silicon Valley basically so then you go into the 50s so we'll go DEC decade by decade that was the 40s in the 50s DARPA obviously speeds up this is all because of Sputnik October 4th 1957 it's the it was the SP
it was the Sputnik moment of the Cold War okay exactly uh it was just a radio s satellite but it could hold payloads and so all of a sudden everyone's thinking wait if they can put up a radio satellite they can put up a bomb so we got to be able to do that and so spotnik's a huge deal the New York Times published 279 articles about it in one month it's like crazy uh the the it was like total wall to--all coverage it was
crazy it was like a the Sputnik moment really was real um and so the Cold War was heating up the gibly moment yeah the gibl moment of gibly moment of space for the Cold War and so uh uh the the Soviet Union took huge World War II casualties but they were strong in Tech and Sam raber and the Speaker of the House Representatives at the time said that the people of the United States have
been humiliated they're Disturbed and they're unhappy the CIA actually knew that Sputnik was going to happen but Americans were scared because they didn't know and the solution was uh we responded with the Vanguard TV3 launched two months later but that crashed and then Explorer one worked in 1958 so the pace of play was really fast Sputnik 1957 uh Explorer one in 58 smaller but it goes deeper into space so we got that
superlative now there's too many conflicting rocket projects like the Army had one I think the CIA had one like there were a bunch of different projects going on they're like we need to consolidate this we're going to President Eisenhower says put it all under the advanced research projects agency we're going to create a new agency it's called arpa eventually becomes DARPA and and DARPA is like
legendary they create the internet through arpanet they create stealth aircraft GPS drones and even self-driving cars originally came out of DARPA and so it was been a great you know like farm team for tech for a long time 1960s we got talk about Maguire was at Dara himself for I think a year and a half that's right um so 1960s Skunk Works uh the dod was 36% of all R&D spending not in the US in the world the
dod was spending so much on R&D really like Tech race and so uh Harvard radio research lab and DARPA were very government uh driven Skunk Works marked a shift into proper research and development being done at companies and so Skunk Works it's all led by Kelly Johnson he's designing planes at age 12 at age 23 he goes to work at locked as a tool designer he's super confident he
tells he goes into the chief designer Chief design engineer at locked and just uh and just says hey our our best aircraft it's flaw I'm G to go fix it and give me a wind tunnel and he does it and so then he designs the Hudson bomber the model 14 it's more maneuverable important in World War II uh the jet powered M SMI 2 2 262 that obliterated Us in World War II uh so he's fighting against that they
wind up building the U2 spy plane which you're probably familiar with that one gets shot down um and but it's a Recon plane that can fly at 70,000 ft locked wasn't invited to submit a proposal they get money from the CIA there's like this crazy story where Kelly Johnson goes to a cafe in Georgetown meets the CIA gets 30 million in funding like basically in a black bag um the initial bid for the
F35 was in 1992 just started flying um uh just to show you like the pace of things like the F3 took 30 years and they did the like the pace of play around the SR71 was like insane so the U2 was great but Francis Gary Powers got shot down by a s Soviet surfac to a missile uh and they needed something faster Supersonic and so then they build the SR71 it goes over 2,000 miles per hour it just outruns missiles
it doesn't have like missile defense or chaff or anything it's just like I'm faster than a missile so I'm good then of course the moon landing happens in 1969 and this is the peak of NASA in some ways like the last harah and then of we go into like the decline in 1970s there's this like this is when stagnation starts this is like the teal thesis uh all the bitcoiners say like
what happened in 1970 that whole thing and so there's a lot of different reasons for this um economics the bitcoiners say like the it's the broken dollar gold link politics people say this is when overregulation started it became harder to build in the real world because of nuclear scares everything needs to be approved the FDA is charging 1 billion per new drug um nuclear plants cost billions and laws change while
they're building uh and Technology like there's just the Allure of software opportunities like if you're a really smart person in the 70s like you build a tech company or like a software company and you'll make a lot of money you're not going to go into hard stuff so um that's kind of what's going on in the 70s then the 80s uh there's like this fake solution to seg nation in the form
of globalization Henry Kissinger just went to China opened up that that relationship post Cold War us manufacturing employment actually peaked in June of 1979 at 22 % of total non-farm employment by 2019 that share had fallen to 9% so America basically said hey we can just do manufacturing elsewhere and obviously we're seeing that come back to bite us now and we're going to talk to some folks that are
bringing it back um but uh this was the idea of like the Multinational Corporation America was good at bits it's only rational to to prioritize that and of course this is all capped with China's rise they joined the World Trade Organization in 20 in 2001 and of course there's been a lot of problems with the China relationship over the last uh few decades uh in the 1990s the end of the
Cold War happens December 1991 and there's a desire for a peace dividend like the American taxpayer is just saying like hey maybe I don't want to spend like $20 of every hundred that I pay into the taxes in on like defense it doesn't make sense we're not at War like we let's just let's just invest in other stuff tax cuts Healthcare education and this was this was bipartisan by the way uh dick ch said because we now face
neither a global threat nor a hostile non-democratic power dominating a region critical to our interest we have the opportunity to meet our requirements at lower levels and at lower costs so everyone was on board with this uh now the source of the problem was that uh the this All Leads up to the the Last Supper Turning Point the Pentagon says the US doesn't need so many defense
companies there were like 50 at the time uh and so Secretary of Defense lesli Aspen be clear those 50 they consolid but they also had thousands and thousands of tiny subcontractors yeah tons tons it was a massive massive organization uh and so William Perry brings all the defense tech companies together in the fall of 1993 he encourages mergers says you got to cut cost we expect defense companies to go
out of business there's dozens of mergers uh Hughes electronics and McDonald Douglas ceased to exist General Electric and Chrysler sold their defense subsidiaries at one point the industry was shedding a thousand jobs a day and it was the Francis fukuyama idea idea of the end of history there will be no more war now that we're in the era of capitalism there used to be 50 defense primes now there's just five locked
Martin Ron General Dynamics Boeing and north of Grumman then of course there's the war on te a wakeup call you get palen tier it was really tough to get started but in inel steps up the CIA funds the VC Farm of the CIA funds uh Palante here and they actually had to sue the government to allow them to um to win an army contract and they won and then interestingly SpaceX used the same
lawyer to sue uh the government because again there was like okay is this you got to have that lawyer on yeah uh yeah he might actually do it I I I'm connected so maybe we should reach out to him uh then of course in 20 in the 2010s you can think of it as like Space Race 2.0 the story is really like SpaceX growing there's that SpaceX law lawsuit but the 2010s are the era of of SpaceX
like 2010 it's the first Falcon 9 flight 2012 the first commercial ISS resupply 2015 the first orbital rocket Landing 2016 the first drone ship Landing the first crude ISS flight happens in 2020 and there's the space suit this the SpaceX lawsuit of course and so there's a bunch of key moments here Ash Carter creates the defense Innovation unit uh Eric Schmidt is the inaugural chairman of the the defense Innovation board uh
and uh Trey Stevens founds Ander roll and he also changes the lp agreement at Founders fund to allow for defense investing in weapons basically uh and they just went to their LPS and were like hey hey we're just going to like remove this one Clause like don't worry about it like we don't really have any plans and then like the first the first investment that they made was andall right after that but it's a funny story
um and uh and and then that caused like a Cascade in Silicon Valley where every firm can now invest in in defense Tech and even two years ago a lot of firms still had these sort of LP agreements that did not allow them to make defense Investments per y in the same way that Founders fund at one point had it and and what that just meant is if you had uh it's already hard enough to raise
money right there's only a few thou you know maybe it's a couple thousand companies a year that raise like anything close to like traditional venture capital and imagine doing that when 95% imagine raising when 95% of the funds just say like I think you're smart I I like what you're doing it's good for the country but you I still legally can't and they they can go and ask for individual exceptions but it just
becomes much more complicated and it's easier to just say like no we're not going to do this yeah totally well we got Delan in the house welcome to the Temple of Technology he's back how you doing oh yeah Delta V and I heard today was the day where we were all supposed to call him from the factory floor so I oh yeah around I like it it's a beautiful background proof of work work
nothing in the background is itar control that one place so unfortunately it's the least interesting view of the factory we got a nice logo back there it's great exactly uh I was just given a little bit of a history of kind of how we got here in the evolution of Defense Tech um can you walk me through kind of like I literally just ended it like 2020 how have you experienced it how would
you explain to someone that's kind of just like generally aware of venture like how did we get to this particular mix of firms and companies and strategies in defense Tech investing yeah um I'll a funny analogy uh to describe the various generations of Defense Tech and how it's evolved over time if you look at the basically 203 through 2015 call time period in order to start a successful company and like defense
Aerospace thing that basically worked with the government um you both had to be a billionaire co-founder and you had to be willing to sue the US government in order to uh you know have any success and so you know both SpaceX and paler in the 2010 through 12 time period basically to sue uh the government in order to win contracts 2015 to call it roughly 2019 we're gonna Sue our
customers uh The Playbook is like we're going to sue our only customer that doesn't apply anywhere else you don't hear about like oh yeah like the you you know this this SAS company had to sue Nike to get them to use their SAS products we really want to we really want ramp to sponsor us we're going to we're sue them yeah exactly exactly and so it gives you a sense of like how difficult it was the only people that
could afford to sue their customers and still be alive as a business and like you know get to the other side of it we're literally billionaires right you had to be a billionaire you had to be willing to sue your customer and then in uh you so 2015 through 2020 at that point you no longer have to be a billionaire and see your customers you can at that point just be a billionaire so it's still like very hard you no
longer tossue them and so then you know Palmer lucky you know sort of starts and roll and then you know call it from 2020 to 2022 my one liner is like now we're finally standing on the shoulders of giants these guys have broken down the barriers the dod and you know General the US government is ready to work with you know startups and so you no longer have to be a billionaire suing the
government you no longer have to be a billionaire at this point you can just be friends with the billionaire and that's sort of close enough to you know having the appropriate level of power and wealth to be able to do that and so people like me uh who are just you know merely uh lowly friends and billionaires are finally able to start companies and now in 2022 people extrapolated that
Trend all the way down they're like you know billionaires that sue the government now it's billionaires now it's friends of billionaires let's take the logical leap and high scho students can now start defense companies that raise you know1 million that's obviously a logical conclusion of that Trend yeah uh what what do you right now it seems like every every investor that's online
is like yeah I do defense yeah yeah you know I dabble I dabble dable I'm I'm a patriot right but but is that still the case where the average VC in 10 years is like yeah I do defense or is it the average VC is like yeah I kind of you know fomo in in like 2023 got over and I'm back toing just skiing skiing and AI they're back to skiing they're back to just skiing not being over their skis on the
defensive yeah I I think I think I heard you guys talk about this when I you know s of hopped on but um you back when andal started in the you 2017 time period a significant amount of the investors that now all talk about defense literally had it in their LPA of you know the three things that they weren't allowed to invest into was gambling horn and defense and it was like put as one of those top three
effectively like was in like the vice CLA yeah um I think it's pretty likely that you know over the next decade some of those LPA end up going back to having defense in the vice claw um you know and all these people that you know YOLO in their LPS are like [ __ ] off like we don't want you doing this again you were clearly terrible that you had no idea what you're doing we're just putting it
like back in the vice clause and so no investing your port in defense as far as we're concerned they're the same thing like leave that to only fans and Fab fun to figure that out that's great uh I well I the reason I wanted to have you on mostly was uh to kind of restate and restart the debate around the continuing resolution uh we put out a clip from you we got a lot of text messages I got a
couple essays delivered to me uh a lot of chat GPT stuff come in my way can't say I read it all but uh I I I said I will ask Delian about it again next week so can you restate your thesis on what's going on with the continuing resolution and just the overall DOD budget and what it means for defense tech companies and then what's been the push back what's what have the good responses been and
what has been like the cope yeah what's funny is like I see so much of it is like pure copium like if you look at the people that are closing the biggest you defense contracts you know Tim Hughes it you sort of space act uh you know Matt Grim Trey Stevens Etc that whole crew at you know androll you know sham sanra paler somehow none of those people um you critiqued you know sort of my framing of it I admit my tweet was a
little more pippy but it was funny seeing some of the critiques were like you just didn't watch the clip like yes my tweet was like an attempted summary of it I basically like you know was a bit hyperbolic and saying that there are no net new starts there are going to be some that are potentially allowed but it all still P you know it needs to be um uh paralleled to the original basically
you know Cong Congressional um you know and House and Senate you know sort of bills that were passed in you sort of late February so you know some of the critiques came in from some of these I think more Junior companies that have a little bit you know sort of rosecolor glasses on how they think this process is going to go in that yes it points to you know allowing that type of reprogramming and at the same time
you're seeing like in a continuing resolution year going win the f47 contract and so I think they have this view of like oh man you know Now's the Time where I can like you know all the rules are scrapped we can totally you know go reprogram everything and I'm like there is some flexibility there but also like look at what happens when people get a little over their skis like one of the topics that I sent you kugan
was like around the nas administrator it's obviously more on the Civil space side than defense side but like you know Elon tweeted out like you know basally FBI s we should deorbit it you know I don't want that up in space anymore that shouldn't be a NASA priority and like yeah he got his like you know sort of wrist SL a little bit he also got his wrist lapped when he like went to the
Secretary of the Air Force then two hours later you know the f47 you know basic contract on announce even though elon's been on this Rampage against it was s human raid fighter guts for a long time so it's like look like even Elon isn't able to convince the air force that we would shouldn't have human rating fighter jets like you think your [ __ ] thing that's like a mediocre copycat ofand Ral is somehow going to
that they should spend like you know money on your [ __ ] Ponzi coin like probably not like I think there's a lot of copium that's going on there so it's like people were like trying to site these like super it's like look I read the CR like I know the section that's in there what matters is not like the exact legal lease that is in the continual resolution it's like how that's going to
be interpreted both by the warf fighter and by like Congress that timately is gonna you know sort of go you know uh approve like you know sort of reprogramming and then the you know um um you know budget uh you know reconciliation you know sort of you know bills so anyways uh more that I can go into there but it was like lots of copium and all the sophisticated players didn't say anything do you think uh that
there's a lot going to be a lot of like sort of potentially wasted talent coming out of this era of Defense investing where people want to be Founders so bad but they would actually be potentially much more successful going into Ander Ral and like working on a specific product and and just leveraging you know the entire platform that they've built and you know the the sales Channel
everything like that and the sort of like Silicon Valley ethos of like everybody's like aspiring to be a Founder uh you know because I think probably at least the three of us and many other people like the the Ander roll of Ander roll is Ander roll is sort of like you know uh uh probably gonna play out right um I will probably be andrel rather than a different company you know yeah but uh but yeah do do you
see except for and roll of bears I think bear domestication is very important and I think that is a white space that and's weak on and so we're announcing kogan's new incubation yes ready to go co- founding with some Ries yes those guys know how to handle their Bears we're domesticating bears and you're GNA be able to ride them like horses and we'll also make small ones and they'll be like
teddy bears for your kids it'll be great yeah um you know Keith used to always talk about how one of the things I thought like I learned from him was that some of the best companies are actually founded and some of these more like recessionary periods where it's not hot to be a Founder that it's like a lot easier to aggate Talent like I think about that even you said with v today like I'm very glad that we put together
our founding team in 2020 because a bunch of those people in theory today if we were like trying to put together the founding team would just like refuse to be on the founding team inste split up at all rais their own pieces of capital and so it's like I I would imagine that it's like incredibly hard to be an early stage founder today trying to recruit super talented people because the super
talented even like 22y old San FR kids are getting like 10 million thrown at them like the current like ped seed ecosystem for all things like Frontier tag AI Etc is like in such a crazy double right now um and that actually just makes it really hard for generational companies to be found it like a part of why anderol almost certainly was successful like everybody that like ched to go work at anderol
from 2017 to 2022 before the called the Ukraine war was like choosing a very contrarian field to work on nobody else was going to be go funding those people to be you starting companies anytime soon and so they aggregated a bunch of talent where it's like okay yeah now defense is hot but Ander is already off into the races we were talking about this with like the Year Facebook came
out of Harvard like I think it was the one of the only startups and so if you were like I want to work at a startup and you went to Stanford or Harvard it was like well Facebook's kind of the only game in town and now it's like you w just take a taxi or take an Uber over to San Hill Road and you got $10 million like next week well the other thing is is we've been trained for 20 years this
sort of like dream big yep you know call your shot I'm going to build this amazing CRM and then you can like put together a te team and you can build the amazing CRM but the thing in hardtech the challenge is like you run into like physics and you run into all these challenges where it's like you're trying to make some new Quantum Computing chip and it's like okay like you can have the
big idea and that doesn't and you can put together a lot of capital and people and work really hard on it and like you're not always going to get there whereas software at least you can ship the product it might not work dude this feels like it's like literally like you describe my Edge basically in like the investing in this sphere where it's like look I think there's a amount of like
I'm decent at the found read macro whatever a bunch of people can do that the one thing that I do that I think is like relatively unique is like for all of my category Investments that sit in the world of like Hardware difficult thing that they're doing Etc I just I Walk the Line I like you know go and I talk to like the technician doing assembly I talk to the thermal engineer doing the thermal model I talk to like
you mechanisms engineer structures engineer software engineer firmware Etc and just like you can you know I'm not saying that I'm a world class engineer in all of those categories or anything like that but I have enough of a surface level understanding from the work that we do here I can kind of gauge like this person like the Quality Bar and like you know doesn't have to be that like
literally everybody you C there is but if like half the people are looking kind of like Schmucks it's like well you can only like you know sell a story for so long at some point you have to like deliver Hardware to customer that works and so it's been fascinating to me to watch investors honing up like hundred plus million dollars to companies that are like consistently having Hardware fail out in the field where it's like
what do you think is going to happen here like you know if you've given them $50 million and the hardware is failing non-stop $100 million isn't necessar going to be the thing that sof the problem like they've already got culture all rot to the level that it's like basically going to be impossible to backtrack but there's so many people that like just don't even have the capability to diligence that and you
know I'm not you know I think sometimes I admit that I can over rotate like you know you know I'm probably on like when I think about amount that iwait product engineering relative to like you know our CEO Peter right he's obviously probably more on the opposite end of like you know thinks that people over rotate on that and I probably am one of the people that sometimes does but in
this field it's definitely I think saved us some from some you know sort of Investments where like you know we debated making a series a investment and then you watch the companies it's like they have like six projects in a row fail now people are for some reason rescuing those companies and still ging them 100 million bucks but like at some point I'm like how long does that go for
I was lit texting with our colleague John Luda yesterday I was was like he was like texting me these like three or four companies like the SC like crazy like it must like doing really well right and I'm like no like every satellite that they've sent up is failing they haven't closed any contracts like I don't see any Pastor program of record like they're scaling like they're really good at hiring but
like you know but like not necessarily good people so like hiring bad people is not a like somehow people like use headcount scale as a proxy for like Su sex in the company like I don't know that that's like a thing one should be focused on so yeah I think there's gonna be some tough reconciliation that happens you know over the course of the next year or two where it's like there's
G to be like you know 50 to 60% of this field it's just gonna have to die off or get acquired for pendings on a dollar yeah the other the other thing that's funny people love to roast like Market Maps right like the joke is like all right if there's a market map you're too late but then the market Maps like actually provide like if you're an investor you should really understand the market that you're investing in so
that when a company comes to you and you think it's a smart team and you're excited about it you actually understand like okay is there a a a two times better team that's like doing this exact thing the other thing is like I I I I've seen uh you know I've made a number of I think smart investments in the space and I'm sure like just sort of hard tech broadly and I'm sure like some that will
Zero out but I I try to pay attention to like you you really have to penion it it's not all about like oh a tier one is doing this it's like is somebody that's been doing robotics investing for 20 years and has like is on their seventh fund are they doing this because they've seen it all right and you have to ask yourself if this investor like why do I have the right to even have an allocation in this company and and a lot
of times if you're coming into this space and you're making some of those net new Investments that company has been seen by all the specialists and like not like happened and so like you're now getting like the the sort of luck of getting to take a shot on this company when like a bunch of people that have invested in other similar winners have already said yeah it's not for us or like you know
we're going to wait and see kind of what happens um so anyway uh can we move on to the signis spacecraft can you break down I I'd never even heard this word term before can you give me a little bit of history and then what's going on with the news yeah I mean I brought because I think it was like two weeks ago that we chatted about like the you know astronauts being stranded and then you
know sort of SpaceX going to you know bring them back down um this past week it was revealed that the signus spacecraft which is a spacecraft I'm pretty sure made by North Grumman um that originally was awarded basically commercial uh cargo contract the isap this was like back in like 2010 11 it was basically you had cargo Dragon which was done by SpaceX and then the sign spacecraft done by northr grummond um to
basically deliver cargo like food water Etc to the international uh space station it generally performed you know decently well it's kind of a crazy vehicle and that it's only one time use like it doesn't even have like a shield or any way to like come back to it so you literally like ship it up the ice assd docks dropped off its things and then it just like burns up in orbit so
it's like the epitome of just old school you know sort of Aerospace um they didn't even like attempt to make it economical from the like fundamental design phase but like it's you know delivered plenty of cargo to the ISS at this point um this past week um they dropped it um and so NASA was like look like yes this has been tested Etc but like we don't know what happened in the drop we need to basically send this
thing back and run through a full testing campaign and make sure that it's okay and so that means that that cargo that previously supposed to be delivered to the isasia north north of grman now is yet again going over to SpaceX so it's just like one of these moments where it's like if SpaceX did not exist right now like the United States would neither have like Boeing able to take
crew to the ISS nor would it have north of Grumman able to take you know basically cargo to the ISS and so it's like you know without SpaceX the astronauts would not only be stranded but also starving what do you mean by dropped they dropped it does that mean dropped the program physically dropped no no no they like physically dropped it like the spacecraft like like fell fell
fell it just fell yeah had an accident like you're not supposed to little oops little oopsy in the like how much like you know the pulley could hold and they [ __ ] dropped it I hope we're is there like security camera footage we can find somehow like is gonna try and control that real tight and avoid anybody we got to call our friends over at the CIA NSA the Deep State you know really get them to to
Fork that over we need the blooper real we've seen the SpaceX crashes I need to see the Pod dropping and crashing we uh you know we drop our spacecraft but you know we do it on purpose right that was the one that we dropped from space back down to the ground but that was on purpose wow I have not been to vaa HQ recently it looks like you have a lot more equipment that is filling up congratulations where are packed in like
sardines we've got you that's the one that I just showed you is the first one that landed last year second one landed in Australia two weeks ago and it's out at an air show third one's currently up and over but fourth and fifth are off to the side of me right now so yeah this place is uh you know turning into an operation yeah real operation you have a followup I have another one after go for
it I I I want to cover in the maybe the last five minutes uh like slop as a trend oh yeah that' be fun generally but yeah let's close out with the space stuff and then we'll go on that uh I want to know more about uh Jerick isaacman uh momentum seems to be building for Jared isman to become NASA administrator what are the Dynamics what should we be reading into this RFK got confed firmed is it a similar process
like and what does this mean like what's the vibe around him generally yeah I mean Jared is definitely like really beloved by the space Community you know ourselves included like it's really awesome to have somebody that is go a phenomenal for doing our right shift for payments you know sort of Mega company but then also it's like putting his own capital and literally life on the line
by like paying for his own you know basically space missions with SpaceX and then he the first private astronaut to ever do a space walk I don't know if you guys saw that you know live stream from I'm forgetting the exact time but it's like sometime that was him Jared no way like literally like he's the first private citizen to like [ __ ] go out into the vacuum space and like PE
outside of theace live streaming so we could run exactly exactly so you know hopefully get one day exactly okay super legit you know what I mean like he is literally you know a like like privately himself sponsored after not you know putting his real like life on the line that mission could have gone poorly could have died on it Etc and obviously you didn't to really loved um but he like Affiliated you know for sure
with Elon since like you know his entire Polaris you know sort of uh set of missions was all contracted with SpaceX he obvious has done a ton of press with Elon Etc um so when Elon made this you know sort of comment around wanting to basically uh deorbit the ISS sooner than the original plan so the current plan is BAS the end of the decade Elon was pushing for like let's just deorbit it
next year now I assume from his perspective it's you know hey I don't really see the value of this program we should use that budget for you know sort of pushing straight to Mars um you know what's the point of you know sort of these like human rated stations both run by the government or these private ones um and there was a bit of a slap on the wrist you know for that via you basically Ted Cruz um you know sort of
the senator from Texas that is the you know senior chair of the house sorry the Senate science committee which basically controls the NASA budget and is also you basically responsible for you know sort of voting and um confirming the schedule for the NASA Min confirmation basically stalled right like he refused to actually set a date for the NASA administrator so now you've had to see
like a bunch of Governors you know and other Senators basically say hey Cruz we really like Jared isin a bunch of stat Ur have like you to send Cruz letter he's finally relented and okay said fine I will set a date but I want Jared isaacman you know sort of coming out and explicitly saying that he's in support of the ISS going through the end of the decade in support of these commercial
space stations and so why is you know sort of Cru in support of that it's because you know the Johnson Space Center which is where the vast majority of the like terrestrial jobs that support the space station are is in you know Texas and it's it's you his constituent and so you know you're starting to just see these tensions of like you look yeah you've got like Tech's greatest leaders at like the Helm
of the government but that doesn't mean that there's going to be some like not going to be some antibodies that like you know prevent people from getting exactly you know sort of what they want done and so this is all more like the Civil space side of things but I think has a lot of parallels to what everybody's thinking about in defense where it's like look again GNA point out
it's like you know Elan is phenomenally successful super powerful Rich Etc but like there are you know antibodies and balances of power built into the US government and like Ted Cruz is clearly you know showing that he can like swing his dick around a little bit and say like yeah like you know you want to [ __ ] with my ISS like I'm gonna [ __ ] with your administrator and you know I'm
gonna delay his confirmation hearing and I'm gonna bump it out until like it sounds like it might not be until like May at this point and then that does have like a real operational effect in NASA where it's just like look like you know there's like this NASA reauthorization bill which basically sets NASA's budget for the next like you know sort of you know five to seven years that's kind of stalled out because
there's no administrator you know none of the like major you know sort of program leads are making huge swings right now while they're waiting for the administrator so it's like NASA's kind of Frozen right and this has like Downstream operational effects this may slow down our ability to like get more lunar missions you know sort of book actually figure out what the mar program you know sort of looks like and so it's
just like a reminder to people that like you know us and Tech have to always remember that like there are also jobs that Senator Cruz is going to be you you know making sure to stick around too uh follow up I mean the ISS budget is uh 3 billion a year crazy idea we get a couple of our buddies together make it into a casino or something like could not privatize this thing you know Jed MB
Mr crypto uh you know sort of man is trying to you know put you know crypto money to use and turn into a state space station and I kind of see crypto in my opinion is basically just gambling so you know he's basically already making it you know he's you know all he needs to do is you know maybe it's not crafts tables but it's uh you know a couple coinbase servers up there that are uh
you know getting you hooked right into the you know s live stream of trading [ __ ] coins I guess you can't really roll dice in zero g because the dice never fall well yeah dice never if aliens are ever going to come and assimilate on Earth we should have a like a a space Casino where they could kind of like learn the American way of life here because if the culture shock if they came here and they they have
know to gamate for sure they would just like probably kill us all you guys like I don't even know what you guys are doing or that's our planetary defense we just get the aliens hooked on gambling they become toal degenerates they're mortgaging their home planet in order to be able to it and we're like actually you thought you were coming to conquer us Spar we're sending our bookies back
over your break all your kneecaps and take it so you know that's maybe the best planetary defense game who needs aspirate deflection you've got space casinos yeah we got five minutes what you got big uh what's your take on yesterday I I was joking uh around earlier I said in hindsight Sputnik really was the gibl moment of the Cold War but yesterday felt like a big moment uh it just I I did John and I had a
couple posts go pretty viral and break containment and people still were quoting them and being like all right guys like stop joking around with me like who's got the filter app so it still feels like there's people out there that they didn't know that it was open AI like chbt they were just like oh there must be a new app out there that does this and uh yeah what's your reaction are you long I I I'm personally
I'm short the word slop but I'm long the underlying Trend but I'd love to hear your take uh you know I want to relate it back to defense which is you know sort of markup maps are no good focus on a longtail winner is there's like a whole [ __ ] set of like a hundred like AI image generation companies that all just got you know [ __ ] sherlocked by open Ai and are going to be totally
relevant because like they've got the biggest brand and know they have the best technology good luck catching up when you're like you know sort of losing on both angles um I think you're going to see this stuff get implemented into Hollywood like ASAP I mean there's like a whole set of things where you can like look there's gonna for sure still be like human fine details or things that
it's not perfect at it probably never will be like quite perfect at but if you want to start like throwing together like rough draft vision boards Etc and then what you'll end up seeing is like the equivalent of like you know that there's you know sort of now you know sort of two um you know two Engineers can build like a billion dollar you know AI company like two animators and a director can like make the next Pixar
film basically because like you know they have so much you know sort of Leverage and it's like bullish for open Ai and also bullish for Jason kman right but you just don't want to be in the middle but it's like short all the dudes that just invested like $500 million into like these like slop companies basically and it's just like good [ __ ] luck and it's the same thing
with defense it's like you know bullish on andall bullish on the warf fighter that gets new tools totally don't recommend being anywhere in between yep exactly don't get stuck in the middle the barbell don't get in the M the sloppy middle as we like to call it the sloppy middle it's you the White Lotus uh you know sort of reference there is uh be careful of the sloppy middle between the brothers oh I haven't
watched the latest episode so I I but I I've heard enough that I get it and it's not good yeah you can skip that one white L White Lotus is funny white is funny cuz like it starts the season it's like kind of relaxing cuz it's like these Resort settings hang like oh it's just like I relate to these people in different ways and like and then it's like oh it just gets so dark like Episode by episode want nothing to do
with any of these people yeah what what you know so so somebody that launched an image generation Tool uh is like Mike uh spiser over at Sutter Hill Ventures like they've done didn't they do like snowflakes they they like they they're like goats of incubations in in many ways comes out with an image generation tool what do you like what do you do at this point obviously not even just
speaking directly to him but there's like mid journey and there's a lot of other players and uh it just feels like maybe there is no Edge and distribu you know relating back last week M journey is not in the conversation because they haven't raised money so it's like true but they're they're dependent they raise money every day from their customers I guess I guess but just so the funny thing is is we on the
show last week about a PT quote around like you need basically distribution for a monopoly and you can get a monopoly from product but you can also get a monopoly from distri just distribution and so it is the but like do you think these you know image generation models should be rethinking their life and and future plans and and the game is lost or is there going to be if you just lean in
let's say like you know setup shop here in Hollywood and just work with all the studios and say like you spend billions a year what would you do if you were actually running a $50 million series B stage image generation company yeah I mean look this is very top of mine like I literally met up with Mike I think it was like two weeks ago to like talk about you know what he was s of working
on and I'm like I'm a huge fan of Mike we worked together on you know a handful of things obviously he's like crushed it with snowflake he's like clearly one of the valley you know sh of best incubator entrepreneurs investors you know you know exec leaders Etc but like yeah like I don't envy being in that position but you know I think you're seeing this in a bunch of different fields where it's like you
know you've got the you know sort of you know mice that are trying to jart around the you know s elephants and like these like big tech companies are both very sophisticated like have great engineering but are also massive right like I mean again just look at like what SpaceX is doing with Starship and like you know stomping out a bunch of you know other you sort of mice and they're the elephant what andil is doing
stomping out a bunch of mice it's like it's not an easy time to be like a mid-stage company that's trying to Dart around all these major players that are like not like old school incumbents that are moving slowly but like are led by Sam Alman and like you know are really pushing the fold and so yeah tactically like if I was in Mike's Shoes I think it's like look the like consumer play
that just seems basically impossible to catch up on it's like this is kind of good enough for any consumer app right like it's not good enough to like immediately go make a feature like film but it's good enough for any consumer to like you know send a photo you know to their wife basically and they already have the winning consumer brand so don't even try to do that go where the M you
know the elephant isn't even headed Dart in the opposite direction I think yeah go like heavy on Enterprise build up Studio relationships try and convince them you know hey look if you start using you know sort of chat GPT for this stuff they're going to use you for training data we're going to make like proprietary models that like you know f- tune to your own aesthetic and like the
specific film that you're working on we'll make sure the data only stays basically like inhouse right like you just need to like just constantly be thinking about like yeah what is your you know angle of it is super unique but also those are like all really constrained Tams relative to like the thing that you know I think open AI is you know going on capturing it's yeah I mean I really love Mike and I think he's
a phenomenal entrepreneur but like I also don't envy like I can guarantee you he was [ __ ] up late last night and you know is grinding today with his like you know exec team to figure out like what their you know sort of approach is in light of like you know this new world and that's what's so crazy about like Tech accelerationism all this stuff happening is like dude like this stuff
like I felt like when I was in the valley in like 2014 like happened over the course of like 18 month periods and it's like dude this stuff like it feels like literally every month now we have like crazy new capabilities that come online that massively disrup out of build like a series B company ver in 2014 that new technologies disrupting like a late stage series B company like
didn't honestly happen that often like never happen you kind of had like your stable growth like even at Bardo the stuff that we do is like super hard long time frames Etc like I feel like we actually like literally need to be nimble on our feet on like a month-by-month basis between like the changes of DOD priorities Congressional priority what other space companies are doing how Supply chains are maturing
what the [ __ ] China's you know s doing it's like God man it's such a dynamic world and you know the like you know wealth the CR to the you sort of riches so good to be Peter good to be Sam you know I don't I don't myself or sper we were joking around you know a lot of early stage Founders will like time a release to try to catalyze a fundraise and it just Fe it felt like there was a
world where Sam was like all right team like we know gibli will go viral like just make sure that this is perfect everything else can you know everything else doesn't have to be perfect but like we need to take over the timeline we need to go mainstream this day I'm closing the round on Monday like just go go go also Google just launched something that most people think is like competitive but the product is just
buried in AI studio and like it was like it was good to break containment and it was going to be a Google story and Sam was just like not today I love it then maybe he paid that one influencer to make the like photo of his wife and like you know get that to go viral all I'm saying is like it just a little too convenient we need get a tin foil hat over on your side yeah we got it we got it right
here the exciting thing bring it back to hard tech and defense is like we need we need better science fiction we need the the next of Science Fiction and if we can kind of like open source that and everybody can createing Vision someone has a good idea and they can inst need $200 million to like imagine the future and like convey that idea and uh that seems like the biggest opportunity to
take away if you're not even if it's a little sloppy right now the the art will come yeah anyways uh great to see you thank you for by good luck with the rest of later boys enjo the rest of the day you too always a fun always fun time we got we got back to back to back to back to back back to back calls is he in the building about public.com investing for those who take it seriously cuz they got
multi-asset investing industry-leading yields they're trusted by millions get on Public public earns High marks for ease of use and investment selection they got stocks bonds treasuries options download the app they got great charts they got great graphs they got great functionality folks boom and we got a great guest we got Steve Simone the man himself up what up Florida man Florida Steve flid what's up he's in Florida
today he's not actually a Florida man um but it's great to have you look at me yeah thanks guys thanks for having me on it's it's an honor to be here so describe the company in three in exactly three words I've heard it described as gun on truck is that accurate that's that's true that's ai ai robot gun okay there we go AI robot gun shooting down drone swarms if I see a a light show
with a dragon swarm towards me I call you you're going to throw a hail of gunfire at it and take out all of them is that well you know well well it's more Precision you know we're sniping these drones we're not just throwing bullets in the sky you know it's precise Precision well I always love talking to Steve uh while back he was in LA and we like were we were I forget there was something I think it was like
actually the weekend that all-in Summit was happening because Steve's raised a couple rounds from Craft now one of which he's announcing today and I and we just had this awesome meeting where I was like you got to think think bigger you got to think bigger yeah I was I was like got you got to think bigger guy the Jord you're the ultimate hype man you you made me think bigger bro you
made me think bigger that's great we speak bigger yeah about the news today oh yes today we just announced our $30 million series a led by Craft Ventures um again they didn't give the seed they're back at the a you know maybe they'll do the B we'll see we'll keep it going you know keep it going ride your winners it's in the Allin intro yeah let let your winners ride and saaks is tr's word hold on I gotta ask
you guys how much does it cost to like get my logo on the ticker symbol at the bottom you're have to wait till the B you're gonna have to wait till the B buddy I'm sorry it's series a companies is tough yeah yeah yeah I can I I have we talk about it we can talk about have a rough sense of your balance sheet but you're here you got your face you got your face here and and that's and that's
worth pric thous I mean how much how much did wander pay for that back there is that we can't disclose we're not we're very against building in public because and it's not it's not because of like the flex culture any of that it's specifically because of our near-peer adversaries copying us if if the CCP got a hold of how the business really works they could clone this show and then it would just be cold war arms race for the
best and uh most aggressive daily podc Ian CCP is a big threat I mean why we started ACS is because you know we're at a Manufacturing deficit with China and we need to do something about it so that's why we you know making these gun turrets to be able to shoot down their drones uh talk about uh yeah just talk about the process we we were talking with Delian earlier there's this phenomena within uh startups broadly
where there's a culture of having a big vision and fully believing it yourself and assembling people and talent and then sometimes you you have this vision and then it ends up being exceptionally difficult to actually execute you're working in this case with the so for those that don't know Steve sold his last company to Door Dash had a great exit and then you know basically brought
together uh did it you know round two uh with his co-founder and so you had that like intense trust uh with your with your co-founder you also were in the military yourself so maybe maybe give like kind of the full background on on you guys together all the way back to the Navy days so the company's called Allen control system named after Luke Allen our CTO and you know we have a proprietary control system that's why
you know thus the name just right on the nose but met the name too is very cool Steve was like everybody's calling their stuff like Lord of the Rings like what's the most Boomer tagline that's going to basically like sound like it's been around for decades already and I think it's working I I really like the counter positioning yeah you got a counter position that's all marketing baby um no
so we met in the Navy we were nuclear engineers in the US Navy met like 16 years ago and you know then we moved out to San Francisco as one does tries to start startups had a couple that failed and then the one we sold to Door Dash and now this is our technically my fourth startup um it's a way of life you know it's a journey I've been doing this for about 11 10 years now so very cool
yeah and then uh coming together like give the or you know company's two and a half two years old now it's yeah two and a half yeah well look it takes to build a complex Precision robotics product it takes about three years like from whiteboard to like really good product so like we're almost you know there on that Journey but when we started it um right when we sold the company to Door
Das Putin actually invaded Ukraine the same week when the deal closed and we were reading articles about Ukrainian shooting guns in the air at drones and you know Luke called me up and was like this is a really good robotics problem you know we should start looking at this um and when we kind of surveyed the landscape of the industry of like you know interceptors and electronic warfare
and microwave technology and lasers and all these other counter drone measures but didn't see a lot of like really Precision applications around using guns and ammo which you know guns and ammo are widely available in the military so we thought this is a really good idea went after it how's it been uh you guys spend a lot of time on the Range like actually shooting down drones uh talk about kind of how this maybe company's
been different to the last one which was you know in a totally different you know vertical and you were probably comfortably in San Francisco now now you guys uh you know spend a lot of time just out in the field uh get the boots dir yeah getting the boots dirty um wait say that again miss the question just how's the culture different now that you're out of the range actually like out of an office you're not in a
cubicle all day oh you know I'll tell you I for me it's like I feel most at home in the startup life you know as the companies get bigger and scale uh it it changes things but in the early days it's the most fun actually Luke and I always joke like when you first start a company the first couple months are the most fun when you have no customers because then once you you know start
getting customers and you have responsibilities you have to you know deliver their requirements make you know have great customer service and all that so in the very early early days you have to cherish those moments um but then as you know it's a life cycle so as you scale up things get different you become different and the whole company changes but you know right now it's still at a
fun size around 34 people still enjoying out of getting out of like the main corporate office and you know doing our thing uh I mean Delian said this on the show before like you know the Ander roll of Ander that is Ander roll and maybe Ander is the power law winner going to do all this stuff how you obviously counterposed with a name you didn't pick another name from Lord of the Rings
thank God uh but how are you thinking about how the product fits into the defense Tech ecosystem paler has their AIP program they're openly planning to work with other companies and develop Partnerships is there a world where this plugs into lattice and you let andal take the kind of the the AI connective tissue and your and you're a partner or is are are you really just trying to grow and add so many or more products
where does longterm go from here yeah our our product V you know so autonomous guns are when they hit the battlefield they're going to change a lot of the battlefield economics um so you know a lot of these like more expensive Interceptor products or you know some of the you know big laser beams or you know missiles and stuff like um autonomous guns are going to you know put a lot of
downward pressure on products like that I think so I think we're pretty well positioned from a product strategy perspective but where where we actually mostly focus our time is you see all these autonomous vehicle companies USBS you companies like ceranic bunch of USV makers these unmanned surface vehicles and then you got like the land ones like Overland or for Tera there's a number of these and so all of
these autonomous vehicles need an autonomous payload sure um and so we're positioning ourselves we're mostly focused on great Partnerships with companies like these positioning our product there and then you know kind of bundling you know that you make money via bundling in the game makes sense yeah makes sense talk about competing you know a lot of your competitors are these sort of old slow moving you know
I'm thinking about like uh the rhy metals of the world right uh it's probably fun being a team of 34 you know competing against some of these Giants um yeah oh go ahead sorry no interrupted you no go for it I was gonna I was gonna say um it's the lag on the zoom but I was gonna say yeah like Ryan matal kbur you know a lot of I don't know if lot of you listeners know this but in the in
the gun turret market so these are called remote weapon stations in the RWS Market a lot of the providers are foreign there so the US buys a lot of their stuff most of it from you know companies that aren't based in the US so from this standpoint we're kind of bringing this back home it's a new American startup building you know new Modern Age remote weapon stations and so I think we're pretty well positioned
there from like a congressional standpoint too because like a lot of people in Congress didn't even really realize that that these like slower dinosaurs are actually not even us companies that are doing this for us uh what's what's the vibe on the ground uh in the DC area right now you you obviously like you know have an office out there uh what what's you know is it chaos or people running around there's
just to set the table we've been talking about the continuing resolution there's a lot of questions about if DOD budgets aren't increasing will there be net new projects new programs of record uh obviously it you know chaos can be a ladder and an opportunity for new companies and it can also be uh a consolidation Force for the ones who already have uh programs what's your
take I think the um well if you look at what like doge is doing and stuff I think it's you know sending shock waves to the dod um and I do think that they're trying to cut things that they don't want anymore and then they have a carve out list and secretary heg has this like list of like 14 technology fields that he's not wanting to make cuts to luckily counter small drone is one of those so we're not impacted
really by that now obviously for the fy2 bill we were somewhat impacted because they didn't do a bill um and so that's like I think there Delan was on you were saying talking about that so I don't need to rehash it but basically that that does put some pressure on some startups for us it wasn't too big of an issue because you know most of our stuff is in is in 26 and Beyond but I can see
if you were really banking on that that that could be tough uh what are you hiring for right now uh what kind of people are you looking to recruit into the team you got uh 30 million of fresh Capital uh I imagine a lot of that will be going to Bright uh technologists Engineers you know if you're a computer vision engineer and this is like one of the most fun computer vision problems to
work on I would say of the different parts of our product you got the the vision system to detect stuff you have the Fire Control to track and shoot um and you have all the hardware and the mechanical stuff the vision part is one of the most challenging parts and so we're looking for you know people coming out of universities that really love this problem they want to see they want to try to find small drones moving
against cluttered backgrounds and so you know we're always looking for that kind of talent but you know across the whole engineering Spectrum we're looking for everyone but I would say this is a dream job for a computer vision engineer makes sense uh yeah I on computer vision um is the job getting easier with new models I mean we just saw an amazing uh demo yesterday from open aai it seems like
computers are generally getting better at doing stuff with images I would hope that that benefits not just memes and Anime but also self-driving cars and also what you do is there a bridge from that Tech and what's going on there in terms of scaling and improving the underlying models to what you do or are you just kind of like hey we got open CV and it's enough um yeah I mean we're a
little bit on The Cutting Edge of you know we're trying to see a very small drone like a DJI mavic on a cluttered background moving very quickly it's not it's not the same exact application as like you know some of the stuff they're doing and self-driving like um we're trying to put a bullet through this drone too to be honest and so like that's another kind of a novel use case
and so we need a little bit more out of the computer vision than you know industry is really providing so we're we're on kind of the bleeding edge of some of the research uh around this obviously I would love to just ride the wave and be able to use what's already built and what these guys are all doing but it doesn't quite you know exactly work for what we're doing so yeah there's there's a little bit of like
researchy stuff there that we're working on yeah when you think about the opportunity to go work at in computer vision at ACS where they're you're like you know getting the like I I've seen a lot of the videos and you guys have some of these videos like you know public on your YouTube channel and stuff like that but you know getting to work on something where you're actually taking a
gun and like taking a drone out of out of the sky the alternative is like you could go work at you know some high-profile you know humanoid robotic companies that are just like you know looking at the laundry or whatever you got to give the robots guns you got to give the robots guns this is what makes it fun this is dy and all our only request is get some unry robots at some point and just put some bullets in them
yeah I know I want to have them running over the hilltop like an army of unry robots and then bullfrog sniping them all headshotting them all my I want to see here's the other challenge 360 no scopes 360 no scopes on the turret want to see that would be viral you guys you guys do like sweep sniping you know that from Halo to do that sweep snip yeah yeah you can do that I think JD Vance did that a lot I
think he played a lot of awesome awesome crazy lord well thanks for stopping by this is congratulations conrat I'm going to play a quick song for you on the way out you got that congratulations the team and saaks great one yeah congrats to Sachs that's fantastic well we got AJ pipa coming in the temple of Technology from hermas he's coming in in just a second are you familiar with this
company very cool building a supersonic plane and their goal has been to build one plane per year and we'll hear the full breakdown from him he's here he's in the factory Bo with the hat with a hat welcome to the show how you doing I'm good how are youall doing good John good to see you yeah good to see again uh you're still in uh Atlanta yep yep that's right here at the factory still
wearing this stupid hat I love it you have like a rule is it like you're not taking the hat off until you know we're I I well I I wore it one day because I was making fun of one of my co-founders who wore a fedora out out in the field when we're testing the airplane I was like yeah you look silly I got a hat I can make I can look even sillier and then I was like I want to do something like until we fly and like not
everybody can grow a beard not everybody can grow their hair up but anybody can wear a hat so I'm like all right I'll wear this you know I'll wear this silly hat until we fly which is actually one of my favorite hats a like really great friend gave it to me a long long long time ago it looks good whatever so I like I I had to make sure that like it doesn't get Marie condo out of my house
I have to wear it like once a year so I'd always incorporate into my Halloween costume little did I know I'd be wearing it for like you know 6 months now but uh so now now I hate it um and uh nobody else has worn hats every single day that that lasted for about 3 days um so yeah when we uh when we fly our first airplane uh as soon as it lands we're going to I'm going to stick this thing on a stake behind the airplane and burn
it in the After Burner and I'll do something with the ashes but there we go that's amazing I want to hear uh little little backstory on the company little company update I want to hear your take on the f47 and the dod cons continuing resolution but let's just start with the overview of the company and where you guys are at sure so yeah at hermas we build very fast airplanes and we build
them fast so uh long-term vision of the business has been to radically accelerate air travel with Mach 5 aircraft so Hypersonic Hypersonic passenger aircraft um but uh as we build the technology along the way deliver products that solve some really pressing National Security challenges here in the near- term that build us a strong growing Financial foundation and kind of give us the right to go uh you know try
for that that really long-term future of um you know adding a couple percentage points to Global GDP um company's about six years old now um we've uh we've done a ton of development on the propulsion systems engines necessary for these kinds of vehicles now the past couple years as you mentioned we've been starting to get into our aircraft development Cadence so um a lot of the
blood here comes from SpaceX um so the way that we've kind of designed our our program for how do you build fast airplanes um is to build a lot of prototypes and and build them on a very fast Cadence so really bringing iterative development to aircraft um for the first time in a very very long time so that's resulted in um us being able to develop our first aircraft from setting requirements to being ready to
fly minus the FAA so here's here's the Hat still um but ready to fly in uh in about 15 months which uh as as far as I found is like the fastest jet aircraft development in about 50 years so this is like back to the Kelly Johnson's skunk work days so we've proven we can right right away my first question is you you're going from you know zero to a real product in 15 months uh that's
intense speed even for somebody building like a a robust CRM right you guys got to do something a bit more just you got to be a bit more than just robust right if you're going to like fly something through the air uh but uh where do you even start with this like is there is there like effectively like open source kind of like designs information schematics Etc that you can kind of pull from to like pull forward that
development timeline or is it just like it's actually chbt I'd like one blueprint for a BL no we're a we're a Gro company here uh no like the the place that you start is fundamental physics that's it um like there's there's plenty of stuff in the supply chain where you can you can you can buy parts and components and things where you don't have to reinvent the wheel um but if you are not starting
with the fundamental like understanding the problem and simplifying it as much as possible there's no way you'll ever meet a timeline like that um so like really simplifying the problem making the problem dumber than you uh so that you're not trying to outsmart it you're only doing the things that really go to answer the questions that you're trying to answer which for us for this first
airplane isn't like can we build a Hypersonic airplane it's can we build an airplane um and can we do it fast enough to support this development Cadence so um like this you know quarter horse Mark 1 which is the first aircraft uh it really only has to do like two things take off and land that's it um and we've uh you know we've learned a ton uh already that we've already integrated into like how we're building the second
aircraft so our second aircraft quarter horse Mark I is suponic so it's you can probably hear it being put together literally right behind me um so that uh that one should be ready to fly uh later this year probably early fourth quarter which is super exciting can you give a quick overview of the actual Tech Ramjet scramjet all this mumbo jumbo can you break it down what you're doing yeah so
uh we uh we don't use we don't use scramjets here it's all Ram Jets so it's like it's literally the simplest um propulsion concept that that there is out there for air breathing propulsion like when you uh when you're in airspace engineering school and you're learning through all these different engine types the very first one you start with is a is a Ramjet there's there's no moving
Parts it's just compression add fuel burn it exhaust through a nozzle generate thrust um so uh those engines can't really run efficiently until you get up to somewhere between Mach 2 and a half and Mach 3 so you have to use a gas turban engine turbojet turbo fan uh to get up there so we've uh we've put those two types of engines together into a single engine uh We've demonstrated that
on the ground transitioning from a a pre-cooled after burning turbo jet to a pure Ramjet um and then back again so we've we you know we have an engine capable of uh of doing that and and now it's a matter of iterating through the aircraft side um to be able to do that in the air you talked a little bit about FAA sort of approval delay that cycle was there ever a possibility or is this
even something that you would consider to say like you know the fa is going to take a long time why don't we just ship our you know plane to some other country that will approve it quickly SpaceX do quadine yeah because there there's a there's a nuclear company out of El Segundo that like just in the Philippines phpp yeah um and I I was just sort of wondering is there Sim something you could do there to kind of
like you're building so quickly ideally you could test quickly and not get held up Antarctica Moon yeah I think we'd have to be incorporated in a different country uh fully to be able to do that so that has that has other implications but um yeah like even even if we took the aircraft to you know Australia or you know quadraline or somewhere out there we're still an American company so
we're still under the jurisdiction of the fa even though we're some other country and you and the reason the reason for that is because like yes other countries have their own versions of the FAA um you know there's an international body called IO um but generally since the US has pretty much always been the leader in in aviation and technology and and you know especially on the commercial side
everybody just kind of defers to what the FAA does so it kind of just trickles back to them uh at the end of the day as well you talked a little bit about uh your technology one day being able to uh increase Global GDP I assume that if you can just move stuff around the world fast move people and products around the world faster that will just sort of accelerate growth but could you extrapolate that on on that a little bit
yeah I mean it's it's a historical Trend that that you can you can see in a number of different uh things over the course of of human history where you've accelerated the um the the rate of Transportation within a a network and uh that has increased trade so trade trade and um like cost uh and therefore like distance are are proportional to each other so if uh the the kind of unit that
that's used in these type of analyses is is called economic distance so it's a it's a mix of like actual distance and cost and time and all of those things kind of wrapped into a single uh metric so if you can shrink the economic distance um you know between two uh economies um you will increase the trade between them it's it's it's a gravity model so like you have two bodies the closer you bring them together the
stronger the force of gravity is so trade is is like gravity in this in this case so can you talk a little bit about your reaction to the F40 7 program Boeing won a 20 billion contract for the six gen fighter it's a nod the design is a nod to the p47 fighter uh and uh there's there's competition between the major primes but I'm sure you have you know some insight into what's going on
here can you break it down yeah I I certainly have no inside behind closed doors so I guess I can I guess I can make up whatever I want but um I think from from the outside you know I think um you know it's it's it's clearly a capability that you know the US Air Force uh really thinks that we need um to solve some some really really tough challenges you know um when you look at what the Air Force task to do maintain
air superiority basically globally you all the places where where we have interests and one of the most important one of those places is you know um in the Pacific and maintaining freedom of navigation um we're already I mean we're seeing how that's going in um you know in the Middle East right now yeah um we all got a a nice uh inside look to to some of that week but um it's a it's a
really hard problem you know that the distances are really long um and you know our our you know current fleets of Fighters be they fourth gen fifth or gen um you know they they really don't have the legs to cover the kind of ground that's um that's required out there so um you know I would not be surprised if if this aircraft was significantly larger than than what we've seen before
increased range those kinds of things uh that's just kind of the nature of the the problem that's out there um but uh I feels low to me since I in the in my mind it's like F35 it's a trillion dollar program is this one of those things you just for the the EMD phase engineering um manfacturing development so it's like it's like the R&D phase like so you built a prototype now like go turn that prototype into this like
the chat GPT prompt phase right do these do these companies get do these companies get so big that there's just like you know massively massive variance in terms of like competency right cuz like over the last couple years I think a lot of people that I know are like I don't want to fly on this like you know Boeing jet I'm going to go like take this flight with an Airbus or whatever
but like clearly the government has like confidence in uh in Boeing is that is that just like the norm for all these contractors once they get to a certain scale like there's certain teams that are just like highly competent and uh sort of at the Forefront of some of this stuff and other teams that just have you know maybe leadership issues or you know more cultural issues ETC yeah I mean I I think each each of the
primes have their Advanced development groups you know locky Des Skunk Works Boeing has Phantom Works um you North has their own and so forth that kind of do these you know early stage development programs that uh that precede production um but frankly I think all of them have like really grown like pretty old and and sclerotic uh to to use a Trey Stevens term um and I think the the
evidence of that is like how long it has taken uh to develop new aircraft in in the modern day there's this this chart that I absolutely love um it's a timeline on the bottom and then how many years from um like Program start to initial operational capability for aircraft from 1945 through 20 20 2005 2010 something like that um so between 1945 and 1975 the average time uh to bring a new aircraft from like the
beginning of the program into an operational capability was 5 years and then since 1975 that duration has gone up linearly to the point where I think the F35 was like a 2 year program and even even this one you know the Next Generation air dominance uh fighter is already like 10 12 years into its program like sure we flew a prototype five years ago um but that was that was maybe already 10 years
oppos of the $100 million ARR graph where it just keeps getting shorter and shorter it's like ourcraft development exactly the opposite and so like too bad this all changed in 1975 like it's blatantly obvious where the knee and the curve is so you know what happened in 1975 Kelly Johnson retired from Skunk Works literally just one guy you can't can't make this stuff up so uh yeah like
the f-17 happened like five years after that so that was like Ben rich and and his group so like very much you know still of that of that culture but um you know uh iterative development like the way that SpaceX develops Rockets now the way that we're building airplanes here now at this like one aircraft for year Cadence we haven't done that in in decades and the result is the development timelines for um you know
solving hard problems they just they just go out and and to the right and then you stack on top of that cost type Contracting and incentives and all those kinds of things and um you know the uh lack of you know like founder Le companies building fighter jets today um that um that happens yeah no it's a really great Point uh do you have a last question is there is there camaraderie
in this sort of supersonic uh you know it's a bit rivalry I've been trying to get boom to do a foot race with you we're going to find out who has the faster plane I want to find out who the faster founder is break it down so I'm I'm finally having knee surgery okay to fix my ACL specifically for this reason so I can run this race this is why I'm doing it so anyway for those who don't
know Blake Scholl is over at boom also building Hypersonic technology very different application very different path very different Scale company and stuff but uh but I I love the idea of there being like serious drama in this space and like we can track it day by day oh what's AJ doing are you on Blake's team or AJ's team I think be I was looking at is like it's good for the industry overall we're like hey we just
we just want to fly at Hypersonic speeds like we we want to be able to do every application like I want to see t-shirts just random normies are wearing like hermus merch because they're so invested in the drama like straight up Vander pump rules level like People magazine uh paparazzi photos of you anytime you go outside this is my dream for what what tech can be yeah yeah well I mean we we
got a little bit of a race right so boom flew suic this year um and we're building airplane right behind me that hopes to do the same well good luck I mean I'm rooting for both of you but I'm especially rooting for we just want a pod we we we have a pretty fast pace at the show but we're not Hypersonic yet and being able to do that do this show from the air with you do the do an interview in the future yes
from the plane would be fantastic incredible so thank you for coming on always thanks so much for having me guys appreciate it have a great rest of your day you too see you I love uh how everybody's just calling in from the floor oh yeah fantastic uh well speaking of love our next guest is Connor love Connor love they named they named love after Conor did his family create love yeah is
that they prod they productized it IP they made their money in love they made their money in love there he is hi guys I mean I I wanted the chatter to go on I feel like on Sports Talk Radio you know long time listener first first time caller right yeah well good to have you here oh it's great to have you you had a thoughtful comment I just said come on the show you were like I'm game let's do it so here we are uh well
let's start with that thoughtful comment I mean first introduce yourself break down who you are but then yeah no happy to um I I help lead our national security and defense Investments here at light speed been here for five years you know used to sit on that side of the table actually served in the military for a better part of the decade so uh so yeah excited to chat I think there's
there's a there's a lot of spice I mean love Delan to death but uh let's let's get into it uh and and set the table for us on like size scale of light speed and then is defense Tech like its own fund or are you just making investment yeah obviously so so you know history of Silicon Valley firm been around for 25 years I mean we talk about oursel like a platform so we'll write you know a million dollar check early or we'll
deploy a billion dollars late so so have the full you know kind of Stack platform uh obviously based here in in Silicon Valley but have offices and reach you know globally um I sit on the Frontier Tech Team so myself Ravi and Ravi Raj um and and tager really invest in you know we call Frontier Tech um what I lead a lot of is all our national security all of our defense stuff um and it comes out
of the same core fund so it's not a separate thing where we have to deploy $500 million a year in this um it's it's it's really kind of up to the team and and up to how we see the ecosystem cool that's very helpful uh let's go to the drama you you and Deli break it down no before before before the drama I'd love uh that you know we were actually talking with Delan how you know the last
two years a lot of VC's you know went amended their LP agreements and said well actually I fancy myself a bit of a defense investor myself you know I think we all did that I did that as an angel right I've got my I've got my bets everybody realized it was cool to be a patriot uh do you think that do you think that it's are there real blind spots for investors that don't have
military backgrounds we just had uh Steve Simon on the show from Allen Control Systems he was a nuclear engineer in the Navy like that clearly sort of informs how he thinks how much of an edge do you think you have because you actually have have you know lived uh on the custom side I mean like like most things in life uh if you haven't lived and breathed the problem it's really hard to roll up your sleeve and
understand like what's real and what isn't um I think the thing that's quite obvious though is the fundamental pace of change of technology is happening so quick that even what I was talking about 10 years ago and you know I I sat out in the Pacific kind of before the Pacific was cool I wrote a million memos about hypersonics and space-based systems and I work directly for the kind of the
fourstar command of the Pacific and like we were talking about basic [ __ ] back then like we just didn't have enough Mass on system so I do think there's this clear edge of understanding who the customer is more importantly like you know the crazy thing about defense Tech that I think not a lot of people realize is there's not the concept of product Le growth like you can't just dog food something with a customer and then all
of a sudden the colonel or the general out in the Pacific is like great I'm going to buy a hundred million do this thing I mean it's not how it works I mean Congress has a say we have program offices we have this complexity of just utter chaos that makes this really hard so you know long story short it definitely gives me an edge I just think things are evolving so quickly um that
you know again the edge isn't enough like you know you need to get lucky a hundred times I mean what does Trey say all the time like they got kicked in the face for what seven years straight at andral before coming today so it's not easy like to to be clear I'm not pounding the drum that like there's going to be 100 andrs like I hate to Brak it to you there's not there's going to be a lot of investors who are going
to lose their shirts there's going to be a lot of entrepreneurs who are going to try and fail but as the cold buted American who's that who served and been on that side of the like this is all in that good for us more people building new technology to get in the hands of War Fighters the question is like as we as a DOD are we going to get out of our own way and buy the right stuff at the
right timeline yeah I was I was always bullish on that with the hard tech even if it was a bubble it's like it's so much better than some of the other Tech booms where yeah like it falls out and then what were what are your durable skills just like Shilling meme coins and that's what you're going to do next it's like at least if you like you know graduated college went to work for some
hard tech company it fails but you learned like system design like welding like you know DOD you learned so much of these like tangible skills like at the very least like okay yeah the VC dollars they didn't just go out to Facebook they went into buying manufacturing capacity maybe that manufacturing capacity didn't produce profit so it's got to get rolled into other stuff but at least we have
more machines in America so I was always like the the the there could be like a piece dividend from a bubble even if there is a bubble and there's a wash out uh anyway do you have next question or you want to move on to the continuing resolution just yeah let's get into that so so yeah uh can can you start by like breaking down um just how you process the information and the News around the
continuing resolution maybe restate what you feel like is going on and then your take on it well and I think this is you know I won't get too in the weeds but I think this is really important to fundamentally understand how Congress and how our Department of Defense spends money and I think like people just read the headlines the defense news and they're like uh elon's cutting budget ah
continuing resolution and yet all these companies are being funded like what's going on like there's this clear misalignment I I think the reality sits actually a bit more nuanced than that and when you look at how the Department of Defense spends money and and Congress allocates money we we pass this thing called the National Defense authorization act and this is literally the president Congress both sides of
Congress sit down and they say what are needs what are requirements and then what they do is they they pass a law very clearly that says here are the budget tables here are the things that we're going to be spending money on and it's this like you know I I I the Andro guys a ton of credit here like you know it's it's it's rocket science and literally what you're building but it's
not rocket science to figure out what the federal government actually wants like we publish these things called jbooks every year we pass laws and so historically if Congress and government works the way it's supposed to work every year we have this new National Defense you know authorization act that gives the Department of Defense a budget table to say hey Air Force here's $100 million go buy space lasers um and and
when that happens you get this really predictable nature of what's going to be bought when it's going to be bought and the quantity the problem is when you have disruption like we have right now like politically in in in the government and you can't pass an NDA and let's be honest like this has happened a lot in the past you know you do this thing called A continuing resolution and a continuing resolution just as Delan said
is this like blanket Band-Aid where you just set an arbitrary period of time in the future and you say hey just keep the thing going let's keep the thing afloat Let's Kick the Can down the road and this is like let's be clear like this is not bad like this is not good like not how a functioning government should should should run but I think the Nuance here and this is like what gets me so
gidy and like to Dean's Point like yeah like the the the Matt stman of the world and you know those guys aren't like tweeting at him saying like you're wrong it's it's it's because like those guys who really understand what's happening and and how to sell the government they're actually texting their co-founders and they're sprinting that [ __ ] right now and that's what's
happening so this continuing resolution the the Nuance here that happen is again like you know go read the section go read the bill yourself but effectively you the rule was changed where you're allowed for new starts and new starts is just what it sounds like it it means that you can start a new program and allocate you know money towards something new and again like there's also a ton of bad in there
there's recisions there's like hey you can no longer have $100 million for space based lasers you can now just have 90 but but where the like and I made this like you know there are there are sharks and there are mennow in this you know in- your budget you know happening right now is the Sharks you know the guys like Brian haras you know who's done this at SpaceX and is at castian now like you know the the the the Stans
and and and the list goes on and on um what they're doing right now is they're looking at each of these new rescinded budget lines each of these new minimum lines that that Congress has gone back and forth on the CR and they're going to those program offices and they're saying you know hey maybe you don't need 90 million maybe you need 80 and and the Nuance here why this is important is
each one of these new budget lines are theoretically and the key word is theoretically allowed to be moved around now and so what I'm seeing in my signal chats in my my discussions with both people in government and those what I would Define as like tier one Founders and go-getters is like holy [ __ ] like there's there's 200 there's 300 million dollar that you know again it's a big F
right now but there's a lot of money being moved around and so when I made that comment and when I look at you know kind of this Broach of prodly like there's so much disruption and there's so much variation of what could happen one way or the other is like I actually think you're going to see one of two things happen this year you're going to see a small amount of companies and and and timing like anything in
Venture and and and starting a company is really important here if you're in the right spot of the kind of growth Journey with your product and again like this is the beautiful thing about hard tech if your product doesn't do what it says it can do like who cares like you know move on type thing and that's the the beauty where the chickens are all going to come out to roost for all of us
at some point but again I just think there's so much in your money up for grabs that I think by the end of the year and hold me to this um you're going to see one two three companies that will get I mean High hundreds of millions of dollars of in-year Revenue grabbed for real production real OT contracts that has never happened before in a CR or nonc uh very cool I I got a bunch of follow-up questions uh it feels like the
United States does our defense budgeting and planning we're like building in public and like we joke about this all the time like building in public for most people like sure share maybe some progress like get excited on the timeline a little bit but generally like you're just sort of inviting like you know C black budget should be 100% of tax revenue essentially yeah but no no I
like that no but like how does China approach all this stuff like I have no idea and maybe you don't either but maybe have Insight like it it seems like they wouldn't be like yeah we're going to just like air our dirty laundry out here and like be like well we you know we're going tell you is that is you know break break it down yeah I mean at at a high level what what we have working against us is for a
Better or For Worse the Chinese government is pumping an insane amount of state and federal dollars towards these critical Technologies like yeah there's a VC ecosystem that exists obviously but like it it is in you know comp like there nothing in compared to the amount of money that China as a state entity is putting Beyond everything from rocket watch systems to missiles uh to autonomous systems to a
ecosystem and and you know what what you don't have obviously in the United States is you don't have this massive kind of call it uh industrial complex where it's like yeah you know we have these thing called cbers these small business Innovation research grants that like are two three four million dolls that help people get off the ground um so there's this huge like parody of just
R&D spend that is happening and when it's coming from the government it might not be efficient but it's so large in a way where you're just able to fail 500 times and like you know it's not like the VC fund goes out of business and you know it's like the government will keep existing and keep pumping dollars into it I think the edge we have here because I'm an optimistic coldblooded American
as opposed to a Doomer and gloomer is I actually think the competitive ecosystem we have um and I've told this to everyone in government who listen to me and again this might be controversial but like we need to stop funding a single siber in in our in our DOD and in our federal government and and and the reason I I I think that is like in a historic world cbers have been this
thing to get a company off the ground to like hey I need some money to develop something and it's like net good for like entrepreneurs and people but now you have this wonderful thing called you know Venture Capital ecosystem who's now said hey I'm actually really interested in the risk in this and I I I Believe in Your Vision I want to back you you actually get the right incentive
alignment here where if we do our job right and I say collectively like me Delian you know gc's quite the whole list of folks then we're going to be funding the right things that that you know have true technology behind them have the right entrepreneurs and Founders who get what they're doing and so I would much rather take our system just to be totally blunt and honest than this Chinese like let's pump trillions
of dollars and they're doing that um because I think this is more efficient and I think the cream is going to rise to the top of like you're going to see again not a 100 andrs I hate to say it but you're going to see some pretty large companies that are that are solving real problems for the Department of Defense there's you you mentioned space lasers randomly sorry is that this
ties into kind of a question I had which is uh within defense Tech uh there's technical risk and then there's distribution risk and it's almost like the distribution risk kind of weighs over the technical risk because even if you're building like you know autonomous submarine products well then it's like yeah like you could build the amazing product maybe you you can't actually sell through but the on the
tying off of the space lasers thing like because there's so much distribution risk are we taking enough technical risk are we funding enough sort of like weird science fiction or is that suited for Skunk Works in the government and or or we need to get weird I I I actually think it's the right question and and it you know I'm biased obviously and I see how we do things at light speed I I
think about things in a spectrum of like on one end of the spectrum you have what I call like true Science and Technology risk like this is the like bits and Adams thing like if if a fusion reaction doesn't take place like you don't have anything like there's nothing there um on the other end of the spectrum you have the the kind of commercial products that we know exists like we can get a car to drive we can get a software
system to kind of you know be a CRM or whatever you know it's like you know you have no you have arguably no Tech risk on that end but you have huge kind of product Market fit like customer going to Market risk I think the holy grail and again we take this Approach at light speed is like number one like you need to build a portfolio that's really thoughtful about the type of risk that
you take so on one end of the spectrum I wouldn't take fully Science and Technology risk on the other end of spectrum you're not going to have big enough outcomes if you're just making another CRM to or a software tool to apply to to the government the The Sweet Spot in my opinion is what I Define as these like systems companies and again like you know Andro I'll use Andro as an example here because everybody knows
them but it's like you know there there's a clear software kind of component to what they do they're going after end systems they're building really hard [ __ ] that's hard to do there's there's a there's some Physics kind of you know like barriers to kind of figure out um but the beauty is each new system you add as a systems company only makes that flywheel on go to market that you've secured you know before
easier like again when you when you're a multi-product company and like you know cic's getting there now like other you know casilan will get there eventually you know K2 and space will get there too like once you've made one sale and made one customer really happy you show up with an x four five six different products and you you know you have credibility you have contract history
you have the ability to actually deliver and do what you said you would do I mean the Dirty Little Secret that everyone knows about andril is like the the the the the acquisition machine that they are with like AP and grim and bobc and the team there is like they're taking things that are cool pieces of technology and they're 10 100x in them and it's like nobody else can do that
that is such a unique kind of ability as one of these systems companies so I think if you're if you're a venture capitalist here number one like I come go back to my statement before you need to know what real problems are if you don't know what real problems are and if you don't know where government is spending money you're [ __ ] out of luck you're just going to be wandering and throwing money at the hot thing but if
you know where the pots of money are if you know what the needs are and you do this really balanced approach of some Physics risk you know some you know kind of go to market risk and then you just have a bunch of these systems companies that can get really really big I mean again I think that's how you return Venture funds I mean that that's what I'm in the business that's what we're in
the business of doing at light speed great uh great insights uh do you think there's uh our our shows oriented around Venture but in order for some of these you know Venture back companies to actually do what they need to do they need to partner with a bunch of small businesses to actually produce you know everything from Individual parts and things like it uh do you think there's an opportunity for like basically smbs
to pop up to service some of these Venture back companies that want to focus on the technical risk and selling but then they have to produce a bunch of components as well and they can't you know make 2,000 parts for a single you know missile right yeah I mean uh let's be clear and I'll actually be really blunt about this I think how this entire ecosystem both from an entrepreneu and a
VC you know perspective like defense Tech how this goes wrong is we actually cannot deliver on the systems that we are selling the government I actually think the snowball of like accepting new tech while it's still small in the grand scheme of things of the budget I do fundamentally believe that snowball has started to move and so how we fail to be clear is that if we cannot produce at
scale uh with efficiency in the in the Scopes that we say they were going to do it um and and you know for better for worse like we don't have an industrial base in the United States to solve that like we don't have I mean the mom and pop shops are dying I I visited them you know like you know from Southern California initially you go out into the kind of desert there and you know it's
like one guy after one guy after one he's built like a $7 million business doing this one thing over and over again those guys are dying we do not have an industrial base to serve this so the question and this is like the real big like you know people push me all the time like how is this bubble going to pop where how's this going to fail it's if we C if if companies like those systems companies can't find a way to
vertically integrate themselves or they can't figure out a longtail supply chain of how to produce not just a couple hundreds of these systems but a thousand then I think we're we're in real deep dooo and and you've been in this situation where you've oversold sold and underived um and you don't keep billion doll contracts if you do that so I think we have to like can smbs do it I don't know you know maybe it's Chris at
Hadrian like maybe it's the the longtail defense Tex I mean I I don't know I mean we we'll find out very very soon yeah I was I I was going to ask about that um in terms of you know there's this meme of like you know maybe it's very risky to directly compete with Ander roll on a program that might they they might be launching like next month like they launch very quickly um but what what is
interesting to you where do you see the opportunities in hardtech but non-competitive with Ander we talked to AJ at hermus I don't think Andel has plans to work on a mock five autonomous plane or passenger airliner uh hadrien and and even like a rain maker like you know it's it is like andral hardtech coded but it's so far fielded that it feels safe to work on what would your advice be for the next generation of uh
hard techers yeah I mean I mean again like I'll start with the same through line I said before there's not going to be 100 Andals like andal has a clear unique Market positioning of how they build different products into their family of systems I think the way to think about it both as an entrepreneur and as an investor is I I actually think about like unique fences you can draw
around not just around like a technical product you know a system but also a customer and I think this is like really important when you know if you don't understand how the dod works like the Navy has all their different program offices that like some for underwater some for surface some for missiles and and you know those program managers like they want their solution to to build the better thing to then you know deliver
better tools to the Navy so if you can be unique enough and and part of this is like yes looking at what the large guys are doing like andril and SpaceX and Etc um you you need to be nuanced enough initially with your product that that you're you're showing up to the table with something new where it's like uh well you know like uh you know Anvil is kind of doing that or or you know road
runners kind of that thing so I might as well just buy that because you know andril has been already there they're already in the room they already have the need but but I but I think the Nuance here is like if you can make a leap from a customer and a system to an adjacent enough thing where where you know andr might be in the ecosystem um there's still a really massive
opportunity to be built I mean Sonic is a great example of that like sanica is like Off to the Races now and building a bunch of autonomous boats and like it's going to be amazing to see what Dino does but like you know andr is underwater like andr is building autonomous systems and I do think there's a world where both of these companies actually work really well together and you know in this wonderful
world where we're doing teaming and orchestration a bunch of multiple autonomous systems you want as many people orchestrating on the same platform as possible I think the last thing I'll say is just like where this goes wrong um this goes wrong in a way where um both andril but also these companies start to build kind of uh stove pip ppes around what they're doing and and you know there's like there like
really basic examples like you know we want to get to a world where we have Skynet where these systems are kind of talking to each other and playing out and if you don't allow your infrastructure your software infrastructure to work with other things then number one like you're creating a really adversarial environment with andreil and other big guys so in my opinion like working with andreil as
opposed to working against andreil is is is the answer here M Jordy what you got uh this has all been great I I don't think have any um I think that covered the the one thing I was wondering how you're advising portfolio companies right now uh uh we're in a we're in a sort of Defense Tech bubble we've we've sort of aligned on that and it can be a good thing and so there's a there's definitely a push for companies to take
advantage of that and say like you have a short period of time potentially before you know there's a cooling off period and maybe there's less inv investor interest and certain investors maintain long-term conviction but then certain others you know pull out or pull back um how are you advising portfolio companies on like you need to move super quickly because you know there there are
these sort of behemoths that are going to be built in the next few years but at the same time you want to be conservatives because if a contract if it takes you an extra year and a half to get a contract and then you run out of money like it just doesn't matter so like how how do you advise you know yeah I'll actually take it one step further which is like if you believe you're
going to win win a contract in the near future and you don't make that decision to raise more Capital now you actually can't deliver on the contract like back to my comment of like you got to produce real things and if you don't have Capital to build out the factory to build out all the testing infrastructure like you can't do it so I I again like like most things it's a bit nuanced I mean the the advice that I give
portfolio companies is there becomes a a a terminal value or a value of your business that that you only have one One path to go um you know and again this number is maybe moving a little bit but it's like the second you start to raise above 500 million um both early in you know maybe in early investors will get a good outcome but but near-term investors and and you as a company like you're
either going to be a public company or you going to be bought for a private Equity multiple and and and I think the level of conviction that Founders have internally on the ability to win real production contracts or the ability to deliver and get to a technology Milestone should be that like internal like test of of a founder of like do I have line of sight to that do I believe that will happen and if the answer is
yes and again like you're going to need the money then I advise Founders is like what let's take the swing like we're in this to build massive companies I'm not in this to build a company that gets sold to locked for parts like you know whatever maybe good outcome for a Founder but I that's not what we all play for in this ecosystem we want to build generational companies and I want
to back generational Founders so it's really just that internal sense of like all right like this is the product we believe we're going to win the product or we're we're going to win the the the contract um so let's do it um and so it's it's I don't know you put your pillow down at you head on your pillow at night when you're an a founder and if you know even all the risk and all the being punched in the stomach that
there's true line of sight to to real production contract value um then raise the money I think I think the time is right can you give me a little bit of a crash course on kpis multiples like what stats are important defense Tech compies as gr obviously in SAS we know triple triple double double double we know AR and churn what are you looking at in a growth stage defense I
mean the geometry of Defense Tech you know uh company growth looks unlike anything else like it it doesn't look like software it doesn't look like consumer um what it looks like n nine times out of 10 and there are some anomalies here and I actually think there are going to be some anomalies during this continued resolution but um nine times out of 10 you get this really small like cber Revenue like I don't
have a system yet I got to develop the thing I got to go get someone to pay me for some small like two three four5 million R&D money and and as an investor in this ecosystem I actually discount all that Revenue to zero I I don't you know whatever it's not like we're applying multiples at the early stage but you know you see this like middling and then you see again this just
stepwise change and Improvement where you know people call it people overuse the term you know program of record you know most times it's actually not a true program of record like you know it's it's actually either just a really large OT other than transactional Authority or something like that but then you see the stepwise change of like okay you got you know children dollars and then you got
this massive kind of call it 200 300 $400 million contract and so the the kpi that I always think about is like there's a separate technical timeline of der risking your system and like it's it's our job as investors to roll up our sleeves and be like is the real progress can we see this is there more testing like like what's happening from an iteration perspective but then the Holy
Grail is like and this is where you're either really smart as an investor or you're really dumb is you know you make the the you lead with the preemptive term sheet you make the investment actually right before that tick and right before that big production because the beauty is you win a 200 you win a $300 million production contract yeah maybe it's over a couple years but like that's the base Cash Line of your
business and that's the like get out of jail free card of like hey now we're not using a ton of enture dollars to develop the next thing to build the next Factory so to me it's like you you you get that internal feeling of where we are like how close we are to those those programs and like you know um it's it's it's not a clean you know oh net dollar retention is this oh you know you're you're
doubling year-over-year tripling year-over year um you just got to be nuanced and you got to know what the hell uh you know program offices care about and and how they move that makes a lot of sense I've loved having you on yeah this is great thank you so much this is really yeah guys any any you know when you're when you're you know next time you're putting $500 million into a cool company join with the
founder we'd love to have you both on that'd be amazing yeah guys well I appreciate it I love what you guys are doing huge fan all right talk soon bye bye and we got Chris power coming on to the show next from hadrien he got a little mention in that NE in that earlier interview Connor mentioned it I'll be right back and Jordy is uh taking a break well we will be back in just a few
minutes folks but in the meantime let me tell you about ad quii ad quick.com outof home advertising Made Easy and measurable say goodbye to the headaches of outof Home advertising only ad Qui combines technology out of home expertise and data to enable efficient seamless ad buying across the globe go to adquick domcom sign up run a campaign and get some beautiful Billboards out there then take some photos send out a
photographer take some photos get them social media put something funny on there the adquick team is really really good at coming up with kind of like viral stunts I mean Mike salana did a pirate wires billboard for adquick they have a partnership together and I think he got like a 100,000 likes on X I think Elon wound up retweeting it because it was a big milestone for the company they
put up Moon should be a state right in um right in Time Square and speaking of the Moon we got one of my good friends who's obsessed with with the moon Chris power welcome to the show uh Jordy slacking off he's he's taking a break he'll be back in a couple minutes but good to have you welcome to the show thanks for having me it's a pleasure to be at the capital the capital thank you uh yeah it's good to have you here uh
how has life been you've been traveling uh you were spotted on a flight to Washington DC a couple couple weeks ago the paparazzi caught you yeah that was crazy yeah that was crazy I I didn't realize that there were so so many uh spies out there in Silicon Valley but uh how was your trip to DC it was incredible obviously can't talk about most of it uh some of it's classified very impactful especially with the new
Administration coming in wants to fix American manufacturing and you know the vice president gave an incredibly rousing speech about reindustrialization at the inter racing conference so it was incredible and yeah look I don't know who leaked that photo to you I was a bit concerned whether it was a fan or like a communist spy tracking down a the defense Tech Founders but you know you
got to be careful these days yeah yeah you got to be careful uh maybe we like a full be weard and glasses next time full disguise I just I just got to go out and say I think you have the coolest office of anybody that's been on the show so far it's a fantastic office what would have you unless it's a green screen it's I've been there it's real it's not of green screen real factory and a lot of a
lot of Machines working constantly how are the lights today I know that on the top of each one of those machines there's a light it can turn red it can turn green how we looking today very very green fellas GRE that's just like just like the ramp logo everything's going on fantastic that's great to hear well anyway you didn't even get a chance to uh introduce yourself can you just
give us like the highle pitch for hadrien what you're building and where it's going yes on Chris power Hadrian builds autonomous factories um so you know we de-industrialized the country from the 70s through the 90s and gave all our industrial power to China and now the incredibly skilled Workforce that does incredible technical things in high Precision Machining or castings are all aging out so we really don't have an
industrial base anymore so our our mission is to reindustrialize the US by building highly automated factories that are you know as efficient as China with a lot more software robotics than a new manufacturing Workforce I see that the lights are on in that factory we're trying to get to Lights Out factories is that the goal is that is that just Chinese propaganda when I hear them talk
no we're we're we we were lights out today we were on 24/7 with a handful of really smart people running the fleet uh the lights are on now cuz we're all here yeah we're 24/7 7day a week operation wow that's awesome can the robots save us right uh it's a very scary time right now where China's producing a lot of robots that uh have uh can be used for a lot of things you know flying you know
maybe over your kids birthday party to get fun footage or they can you know be used uh in comicazi ways but uh it feels like Automation and advanced robotics Le manufacturing is the only way that like you said it yourself maybe the only way that we really reindustrialize we just don't have the sort of skilled labor force but um you're you're betting the the company on that uh but uh but maybe
kind of talk a little bit more about that specifically yeah I mean our goal with our software in robotics is to make it so easy to be highly skilled that anyone can do it um and 100% of our Workforce of people have never set foot inside a factory before they're just 10 times more productive uh because we're getting them superpowers with software robotics right and I would you know you
guys are big fans of Formula 1 so like a lot of what our software does is you know imagine if your son or daughter who was learning to drive they had Tesla autopilot on an F1 car they can just you know drive a McLaren very quickly without much training that's kind of what our software does and we really believe in using the best of software and Robotics to give the new Workforce 10 times more efficiency with
superpowers you know versus like replacing them entirely you know yeah and so is this the same way like uh to compare yesterday anybody can can do uh gibli Studio gibl animation so like anybody should be able to make like you know the the most you know Advanced Aerospace you know Parts Etc that's exactly right that's exactly right yeah um uh is is do you think we can get to the like what was impactful yesterday is
that over the past maybe a couple years if you were really really good at prompt engineering you could uh you could kind of create some outputs like we were seeing yesterday but the average person would go go into these models and they wouldn't have any success right they tried a couple times and be like this is slop are we still at the point today on the sort of manufacturing side and what
you're doing where it's like you need to be like actually like very very good but you're sort of aiming to get to that point where somebody can come in and just sort of like make make a part and and oneshot it I think 80% of our processes were at that point where we're in gibl mode onot uh there's some really deep digital manufacturing stuff that you still need an expert to do so we're
in the like software engineer is 10 times more productive Land versus anyone can code but I would say 80% of our Factory is like anyone can code today are are there a the the specific programming language is like cam programming right isn't that it yeah um is there is there like a are there llms that are good at that type of coding language like there's no cursor for Cam that you're like on top of and just
plugging in to speed things up no so we we had to build that full stack ourselves okay um and the main reason is all of those digital manufacturing tools which are super hard to use and you need to be an expert generate basically terrible assembly code that the machines run on yep um but because American manufacturing is largely regulated in itar there is no training data on internet yep so uh the one of the
reasons why our internal models actually work for manufacturing you know machine learning models is because we're the only ones with a label data set because we're creating it daily in the factory there is no stack Overflow for manufacturing data so none of the off-the-shelf models actually have ever been trained on any of this interesting uh I imagine that every hard tech defense Tech Frontier Tech founder
eventually has to come through and kiss the ring uh at your uh at your factory just because it's like hey you they're basically like Hey we're going to make we're going to make prototypes and then we're going to go sell contracts and then we're going to eventually need to deliver on those and like somebody's got to make the parts uh how many how many companies right now do you have that are
like they're going out there promis ing these big things and then you know at the end of the day they're going to come back to you and be like okay now we need to make this I imagine you you you you work with some of like you some of these sort of more established companies but then I'm sure like I'm sure there's like a hundred plus you know pretty exciting companies that are basically like in
almost like in your pipeline where they're like we're going to work with you we just need to like prove that we could someone's got to make the parts for the f47 yeah and you know someone's going to make the whole products as well so you know I would say that for a large established customers like you know we're making a lot of stuff for them for a lot of the newer entrance or for new
programs we are becoming a like co-prime where the dod hey hey John uh you can definitely make 50 drones or 50 of this product but we'd really love you to partner with hadrien because we think they should build your Tesla gigafactory for this product line there's really this partnership's model of helping them prototype and then scale rapidly uh yeah we're like you know we can only build so
many factories a year so the waiting list of uh everyone wants a Hadrian fact Factory to deploy their products at scale in the US is growing quite long which we're very lucky for what do what do you think about uh the classic Harvard MBA who's like I'm going to go buy this sort of SMB manufacturing shop that's you know putting up $5 million of iida and they've done so for 30 years so they're just going to are they like
buying like sort of an aging asset or or is it worth is there sort of like value and sort of like understanding what they're doing and sort of upscaling it or Mach sh roll idea machine shop roll of the world I think in general it's a terrible idea and the main reason is is like you want to run a factory you got to you got to be Leading the People and you got to have that credibility and no
master machinist or welder is going to respect a kid who's got to suit in the Harvard NBA on coming and telling him what to do um I think it's a really tough gig is it also one of those things where you want Chris actually tried to do this like years and years ago yeah but but is it also before it was a trend no but I imagine there's been so many advancements and everything from
robotics to AI that you would want to just think about the factory like how would you build a factory today versus sort of buying this asset that's been operational for decades because we're having um drva on from deterrence later and he's got all these crazy stories we walking around these Factory floors and there's an active machine being used that's from the 40s like the 1940s like
it was working in World War II and we're still using it today keep using it and so imagine if you have the opportunity to partner with a new defense tech company and say well like here's what's available now like you don't have to go and try to take over some old factory yeah and a lot of the Capital Equipment in all of the naval facilities or you know everywhere in machine shops is you
know somewhere between from the 1950s to the 1980s and it's just impossible to automate it because often none of them have computers on them in the first place so you really got to you really got to build these factories from scratch with new technology and new Workforce how do you think about uh when you're setting up one of these new factories and and for companies that are in defense at all uh are are there the
the actual machines themselves that then sit on the factory floor I imagine a lot of the best ones are built and designed and manufact you know everything like in China so how do how do you think about sort of the supply chain for the autonomous factories that you guys are building and sort of you know figuring out it's a very hard question that the country's got to answers so the Machinery market so we invented in Air
Force invented CNC machine um and we no longer make CNC machines in the US and I think you saw this article about you know har white labeling some China ones and selling to the Russians um but the main the main manufacturing markets where we buy from is China's number one we don't buy for them because they got spyware all over this stuff and then it's you know Germany South Korea Japan
are the best machine makers and it's kind of like the car market you know you can buy an Italian one and it behaves like an alfha Romeo and it's really fast but it's going to it's you're going to be in maintenance hell forever the German ones are really stable and the Korean are quite good so you know if the balloon goes up with the conflict uh you know can we even buy the amount of
Capital Equipment to put in the factories because we don't produce that Capital Equipment in the US anymore so you know part of my job is grow super fast and buy all the capex from our from our Allied Partners to make sure it's in the US but uh yeah we no longer make the underlying machines in the country anymore can you talk uh can you talk a little bit about the continuing resolution um you're not a company
that's going directly for program of record but obviously your fate is kind of tied to that I mean I yeah I know that you probably can but um uh can you talk about like how did you interpret the news there's been a lot of chatter about this is a bare case for the entire industry maybe there's uh green shoots of opportunity how are you processing and what's your strategy so we're in a
really L lucky position where we're everyone's Factory so as long as we have enough customers who are winning and losing like we we're growing at a rapid clip right because we're kind of the index of the market which is Lu to be we also partner with the select few companies to Co on these major programs that manufacturing is a real challenge but for our Core Business you know if you're a small defense startup that
they've got one big program of record and that gets delayed n9ine months your burn rates through the roof you're canceling your ramp credit card you know you can't put ads on adquick anymore you're in a really tough position no eight sleep brutal I mean if you paid for it sleep's not leaving you but for for Logic for logic companies like andrel you know they're working on 10 programs at once if a couple of them get
delayed it's not a huge issue I think Delan is absolutely right about like if you're a startup and you're bidding on one and that revenue cycle blows out nine months you're in real trouble for platform companies like ours where we're growing with many customers and sure some of them get delayed like it doesn't really affect us that much um and we're really good position where we can eat
those long continuing resolution Cycles because our Core Business is growing like 10 time you know 10x year on year um so it doesn't affect us as much it's kind of like you know do you guys really care whether people watch movies on Netflix or Hulu because everyone's using AWS we certainly don't and we try not to have favorites you know we love to manufacture everything for everybody
what what what does success look like uh just purely from a you know the thing that comes to mind is like there was this meme that like 30% of venture dollars go to go to meta right I I I don't think it was quite true but is the future of hadrien it's like 30% of hard dollar just go straight to Adrien is like it's like obviously like if you're just if your job is to produce products like and you need a
factory to do that like a huge part of the Cog should be the Factory and then yeah I think the most successful companies that are continuing to raise huge growth rounds are building faster and better with Adrian um you know and uh yeah I think 70% of all the Deep Tech dollars goes to you know there's some headcount for engineering but a lot of it is producing prototypes and then
scaling Factory and components so yeah we we believe that we will are quickly becoming the index of the market and you know everyone needs a gigafactory right that's right uh what's going on uh what's your thoughts on Europe Broadley we've covered the automotive Market quite a lot on the show just you know Germany's kind of throwing in the towel some manufact you know sending their manufacturers you know it was even
Porsche setting up us manufacturing I think it's a bit of a shame do they is there a world in which hadrien you know helps kind of revitalize some of these you know the German industrial economy just because maybe they they they they have this great industrial base but then haven't maybe focused as much on on sort of core Innovation around the factory yeah so we have so much work to do here
in the US that we'd love we'd love to support our Allied Partners in Europe and the you know the Middle East and countries like Japan reindustrialize as well and they often have this same kind of core skilled labor problem but we've got so much to work to do here fixing the Navy fixing Munitions production helping our customers scale I think we'll get there in a year or two I think really what you're seeing in Europe is
two Waring tribes one is the people that uh you know set their energy policy based off the poor advice of a 14-year-old Swedish girl and gave all the leverage to Russian oil and gas uh and then you've got your kind of Richard the lion Hearts you know it's like we need to reindustrialize Europe let's go make our own fighter jets and drones and naval fleets so uh you know it's it's
it's good that the English are waking up in my opinion we need we need everyone in the fight fantastic well that's a great place to wrap up thanks so much for coming on the show we'll have to have you back soon it took way too long to get you on the show I know I know messed up this great day for this you bu it's a perfect day I'm happy to uh happy to be at the capital of capital anytime and uh
you know God bless United States of America and uh you know the financial system of the US economy thank you gentlemen it's just fantastic thanks for coming on great to see you bye uh early supporter and I'll always remember that yeah he he text once he was like I'm out at the gym and I'm just cracking up laughing about your holiday guide or something like that uh we had a lot of
fun we're a lot more serious today still trying to inject some humor but having a lot of fun with it and we have another guest joining in just a minute but uh I mean maybe we could run it back public.com baby we've already done the we're doing another Investing For Those who take it seriously multi-asset investing industry leading yields they're trusted by millions folks get over on public.com Ben do we need to do
some timeline or do we have a guest have a guest in the temple of Technology welcome to the stream how you doing Aaron there he is boys how are you how are you we're great uh I think if you turn your camera horizontally we'll have a little bit better frame over here is that possible that might be tough he's on an iPhone no that looks great there go thank you that looks great I don't
know I don't know what you want to show us but we love that you're on the factory floor calling in on defense day at tvpn uh what's new can you introduce yourself what do you do where are you Etc sure uh Aeron slov CEO of atomic Industries and uh we're uh we're teaching AI how to do mass production here um we're we're in Detroit uh let me uh can I turn my camera around you should you can do anything on the phone
yeah there we go there we go is that yeah this is the cedo this is uh this is a very very big boy this machine is 18 feet tall okay wow and right now we're loading in uh that job that's going there we can go down there take a little walk cool great this is a great this is our just Detroit correspondent yeah Aaron slow from from the front lines why not for anybody out there who gets motion sickness maybe go audio only
right now we need to get you a gimbal in these boxes right here we've got a a huge production program going to the New York City uh Subway Transit Authority um lots of work happening obviously re reindustrialize right cool um so so wait you're doing the meme I am doing the meme I am doing the meme you created the meme this this is uh this is a very very large uh Mill and drill machine U that
we used for mold making um okay it's not super apparent here but like this is going to be a mold for a drone ultimately cool um wow and that thing is basically like blasting holes in the side of it to like drill in water channels and things like that to cool off the mold while it's running super interesting and so you you were talking to me early uh we we got coffee like
years ago and you're telling me about like if you need to make a lot of bumpers for cars you need a mold for that and so you make the mold but the mold gets hot and so you drill a bunch of holes in there so the heat dissipates is that still The Playbook or has it evolved a little bit yeah I mean basically what we were trying to prove out in the early days is like our Mastery over mold making right and so
like part of mass production is being able to make a mold for something you know as fast as you can and doing it really well and obviously this is like the domain of Trades people uh it takes hundreds or thousands of hours to actually engineer one of these things and you know you have to build it too so uh ultimately what we're trying to do is teach a computer how to actually engineer these things in like minutes um
instead of you know weeks and months and then have it flow through the fact more efficiently than it ever has been able to and then yeah once you actually put the mold into a production setting it runs more efficiently too because it's physics optimized you know so you can squeeze out way higher efficiency uh from these things when they're running so like here's here's a here's one of
the programs running right now uh we've got you know got some parts here can check this out W but no idea what those are but they look cool yeah yeah do you do have you ever done any like microphones mic stands like any national security critical stuff for podcasting equipment yeah it's all all all national security all itar all the time yeah uh I I I do have a question about um like how
you actually generate the designs that then you manufacture how much is you know physics-based solver deterministic Computing versus uh more like AI generative non-deterministic and then on the AI side are you getting into reinforcement learning or is this just like let's get a big pool of data and train like it's an llm yeah so um basically what we're doing is kind of similar to how self driving cars were
built a long time ago um so you do have to have kind of like numerical solvers that characterize a physics problem pretty well and then once you dial that in you can start using it to seed a model uh to do something and then obviously you have a factory to help you like close the loop on on the prediction ability right so the idea here is that you know with the solver and kind of
like the models that we build on top of this you have a factory that generates all this awesome data um all ultimately you're trying to do is just like predict the physics of a mold and the design of it as fast as you can um so in terms of like llms and how they play a part in this stuff it's it'll become more apparent over time I think but you know on the physics based side uh very little yeah and then
like in terms of like coordination and uh I think like execution upet designs and kind of like Factory operations it's huge um a lot of that stuff can be really great like you know agentically for helping you know the efficiency here yeah there's a little bit of like uh when all you have is a hammer everything looks like a nail syndrome with the llm stuff right now where people are like
let's just stuff it and everything and it's like there are other there are other algorithms in fact that might be useful and and that's okay it's you don't need to be embarrassed yeah I imagine when you guys are you know in the customer development process like you're often times there we go that's the poop uh the machine poop uh I imagine you're competing with with with kind of companies in in China for on
some of these parts like a lot of like you know when you hear about like the Chinese manufacturing culture it's like respond really quickly to emails like get pricing over you know be clear ch's New Year it's yeah don't don't even think about doing anything around then but uh but like is that something like do do you respect their game when it comes to just like being like really
fast really clear like focusing on cost reduction scale Etc like do you think we can learn uh from them um I think that yeah there's there's an interesting story there right which is like the grit the grit part of it and so I do think that like if you're highly motivated and incentivized to actually win as much work as you can you're GNA do whatever you can to do that right and so like a lot of American like high mix
manufacturing is let me just take a look at this job and see if I'm going to make enough money off of it before I actually even like talk to you so I think this is another really interesting domain of like what software and Technology will do for American manufacturing right is like absorbing a lot of that complexity being able to like quote jobs for different types of manufacturing processes like instantaneously this is
like our superpower is innovation right like figure out how to do that stuff and then you can work around that stuff right like there's I don't think there's a shortage of grit here but like we're we've been forced into you know a back alley of the value chain where we have to take a lot of high margin stuff CU somebody else is out there doing it for cheaper um so yeah I think this is kind
of like where we have to focus I I had kind of a hot take a while back and I wanted to run buy you I I was saying like maybe the secret to China's dominance in electric vehicles now and drones like actually goes back to the Happy Meal toy and the fact that America can't make something as simple as a Happy Meal toy in America is a problem that might actually be worth solving uh but how does that hot take resonate with
you do we need to be able to make hoty Meal toys in America yeah I mean a lot of people don't want to do like commoditized classic stuff like that right because it's it's not going to make them enough money but I do think to your point right like uh the amount of tribal knowledge and skill built around manufacturing something is what we've lost a lot of and so that's kind of the
whole point of this is like recapturing it somehow like let's take the dying evaporating amount of skill that we have left and transfer it into a machine and make people you know 100 times more productive than they've ever been able to be so I think like this is a really hard problem because you're trying to teach a machine how to do some kind of like yeah crazy physics based deterministic thing but
ultimately if you if you have if you have like whoops uh if you have crazy skill Mastery down now this is an experiment it looks fine there we go amazing uh yeah it's it's basically it's like it's all about like the Mastery of skill that you have and how you transfer it around so in my in my opinion it's like I think the fastest way to do that is by trying to teach a computer how to do it um and
then you know obvious like think about how long it takes to train people to do this stuff it's like a decade like do we have a decade to sit around and wait right now no I me no all right I want some uh you are sideways by the way I want you are sideways now you're back better uh I want some hot takes how do you feel about good how do you feel about wh Mo uh you know buying cars uh from China oh they are I didn't know
this H they are uh how do you feel how does that make you feel how does that make you feel yeah you should have gone to Detroit I know me you're in the capital Motor City come on they could have bought the whole town with like one one dividend payment yeah basically I mean that's kind of that's kind of how I feel honestly um but But ultimately I don't know I used to work at wh like 15
years ago was crazy uh and I've seen that company you know like grow over time but it's uh yeah I mean it's a great product it's a great product and I you know I went to San Francisco like a little tourist attraction to try to get in one finally and ride it after you know 15 years of not making it but um oh my goodness yeah this is Oh no you're sideways again uh can you talk a little
bit about um just the onramp from our current education system gen Z gen Alphas coming up how what how do we get folks to get excited about what you're doing manufacturing hard tech generally and then is there a need to change do we need to like when I went to high school like there was no machine shop class it just wasn't an option and it feels like that took my whole class off the path of
like ever pursuing anything related to machine shops now most of those people became like consultants and bankers and lawyers and doctors but uh you know do we need to bring back machine shop do we need to do more in the college circuit or is it really just great memes great conferences and people will pivot at the last second after they've uh been studying CS for four years yeah um I
think it's two things like incentive obviously right um there has to be a reason that you want to do something like this so it's either going to be pay or the glory and the reason that I wanted to do this is because this is one of the hardest you know engineering and physics problems that like I can imagine it's utterly insane how hard this is and like I think I'm probably one of the only people stupid enough to do
something like this but ultimately I think the challenge of it is incredibly rewarding you get to put your hands on steel you get to get cut and bleed uh it's awesome but beyond that right like if you turn factories like this into a Sci-Fi future like who's to say you can't pay somebody that works in here the same as they get as like an L5 of Google or something right like if you're productive enough I
mean kind of speaks for itself um and like beyond that I think also you know training wise exposing people to this kind of stuff is ultra important um being able to do factory tours right like our buddy Zayn uh that's we need to like have factory tours going on all the time but there's there's a transformation happening right from from like the dirty dangerous and dingy into like relatively you know neat and kind
of modern but like there's another version behind this too um so I think like really jazzing people up about the opportunity in terms of like Challenge and incentive um is kind of like the main thrust for this and then yeah there's memes but also I think a lot of like preeminent industrialists today could be beating that drum a lot more and you know there's super exciting companies to go work for
um it's yeah it's a big party bag full of opportunity right now I want one more spicy fresh hot off the grill hot take uh from you before you leave uh and we'll have you on again because it's been great we'll have you on uh with a stable camera too so we can see that handsome face I had to walk around we're going to get you a selfie stick straight from Shenzhen T selfie stick
weeks but we paid $1 for it uh last last question is there a world in the future where you got uh humanoid robots walking around that factory floor or are they un necessary with uh the other forms of automation that you have going on yeah I mean I would love to uh I think they could probably be pretty useful for you know little stuff that requires less precision and uh dexterity but as that
improves obviously probably some interesting work for them to do around here um but for now it's like walking around the outside with like a machine gun so um there we go I like the sound of that yeah that actually sounds pretty good the robots guns yeah give the robots gun the robots guns yeah security a Detroit first baby let's go for sure uh Aaron it's been fantastic having you on looking forward to the next one keep
uh keep pounding the table it's working I think yeah good luck thank you guys I'll talk to you soon bye that was great and uh we're staying on manufacturing right deterrence drva yes can you break it down what does the company do uh I want to kind of let him break it down but uh but yeah deterrence is a company that I have been lucky to be involved with myself since months and months and
months prior to incorporation so um Dro is texting me right now robots needs guns well you know what else uh you know what else we need we need you to join the show so let's get him in here uh but yeah uh deterrence is leveraging uh robotics to manufacture uh critical components for Munitions starting with uh something called primer uh and they're doing another a number of other things at the
moment so uh we can let him uh you know fully break it down but um I got some breaking news my mom is watching and she sent me a fog horn sound effect and said ran across this and thought of Jordy no way yeah have to send it over to you you can add it to the soundboard that's great I think a lot of people are into the soundboard uh and let's bring on drva how you doing what's going on great to
see you look at hat got aon's hat oh you got aon's hat on that's great I got my hat on yeah I heard I heard Aon talking and I decided to bring the meme out of my backpack and that's amazing uh aon's doing the meme you're doing the meme pretty much everybody today is doing the reindustrialize meme thank you for what for what you do it it's defense day half reindustrialize day eventually we'll
split these out but uh much like in both important and what Dua can talk about is how industrial capacity historically has been a deterrent yep it's no longer a deterrent but but before we get into that uh or or maybe like the US doesn't have like the actual capacity to be an industrial deterrent anymore but before we get into that drva uh I know you very well but uh introduce yourself for uh
the show yep yeah absolutely um well first off I'm really appreciated to be here it's been my dream since I was in high school to be on the technology Brothers podcast um but yeah deterrence just to kind of keep it simple we're making generalized robots that make energetics which is a fancy way to say that we're making robots that make explosives the mission of the company is to close the Munitions Gap with uh we
call them the near peer and peer adversaries that the US has around the world we started the company about a year ago as Jordy mentioned he was heavily involved in that kind of founding Journey uh started the company with a couple other guys Brian who is my co-founder at a prior company we started called Latch which was a hardware company that relied on a global uh supply chain and Henry who came over
from Tesla and had experience building kind of factories around the world um and uh yeah we we we sort of started to dive in we we heard the headlines of like you know the US is enable to produce Munitions for Ukraine at sort of an acceptable cost and rate started to try to figure out why that was started to visit factories and ask people in the dib like what they thought and you know
we found a lot of Technology there that was from the like 1930s and 40s so the last time America had to do a big buildup no you know and not a lot has changed frankly um including like the people a lot of them who a lot of the people who work in these factories are multigenerational so you know their grandparents are maybe the ones who started working on the machine and they're still there um so yeah we talk
about talk about the dynamic even in some of these Legacy factories that are producing Munitions that are sort of critical to US National Security you we've like maybe called or facetimed at different points when you're like walking out of a building cuz you're like if a single match went off in that place like everybody would be toast like these sort of uh and and kind of leading
off of that maybe like you know how how far behind some of these facilities are and then like what are some of like the broader safety issues because that was a big kind of part of the the Genesis of the company as well yeah safety is a big thing I mean just to start with that you know we've been really diving into the problem for the last you let's call a couple of years and roughly every 2 to 3
months there's an explosion somewhere that unfortunately creates a fatality in the supply chain and you know it's and so like we felt like that was sort of just like a unsustainable trajectory especially as we sort of try to uh uh re reenergize this industrial Bas and yeah I facetimed you for some interesting places I mean I would say like safety standard some places do quite a good job others don't it's like a little bit all
over the map but what's fascinating too is like a lot of people are borrowing not just like machines from the 1930s 40s and 50s but also like the safety protocols just haven't been updated to Modern standards and so to give you like a little bit more nuances so like a lot of our team worked on like EV batteries at Tesla and rivan and some other places and so like when they go into these
places you know a lot of EV batteries can in a lot of ways be more dangerous than some of the stuff we do because you walk into the wrong room you will you could inhale something that will like kill you um and so when they walk around they're like oh my goodness I can't believe people are walking around with no PPE this and that like but that's just kind of how things are done and it's worked I mean I guess the the other
side of it is it's like it's worked for quite a long time so you know you know in some ways you have to like respect the art a little bit but yeah there's definitely room for improvement yeah I I I like that uh with your company like it's so easy in defense Tech or anything just to be like we're g to be andral too and you found like a very like it feels very Niche there's probably still a big
Vision at the end of the road but you people for get that like before androll was andal they were like the sensor Tower company uh and they were working they had a small Beach head and then they grew from there and that's how these things start what have been the the pros and cons of of kind of putting yourself in a more Niche box early on and then when you're on the fundraising
Trail hiring employees pitching customers how do you still tell that bigger picture story yeah totally I mean like the the rough metaphor we sometimes use is that you know we're sort of like the Shopify right so a lot of what we're doing is we're actually partnering with companies we're building these n weapon systems and munition systems and so when you look across the entire you know spend
across the category if you will I think the Army spends about $30 billion on Munitions the Air Force is are like a hundred when you go globally that number is obviously much bigger and so we're we're sort of like in some cases like 20 30% of that spend is basically energetic uh kind of stuff so we that's how we sort of tell like call it like the the market story but I think from like a
product story when you're trying to hire Talent especially on the engineering side what gets folks excited is we're sort of intersecting two kind of interesting discipline or three maybe things so which is always fun um two Robotics and then the third thing is like chemistry so a lot like I just like a lot of this chemistry is like super old and so people don't really understand how it works and that's part of why
you'll see like people really resistant to change in this market they're like literally if you make one tweak here you might just blow your eyebrows off kind of thing we've met a lot of people who have not all their five fingers let's say doing this work and uh um anyway so like what we tell people is like you're able we're able to like maybe work on some like pretty Hardcore problems that
will probably take 10 years to fully realize I guess right and so people get excited about yeah the near-term thing I I like to tell the team internally like we have like a mission that is macro but like there's a lot of like micro things that seem to be happening right now and Robotics Ai and all these other places that you know we're hopefully able to lean into for the next couple decades
here uh talk about the continuing resolution which has been kind of an ongoing topic and then what's what's uh what's been your strategy as a CEO of deterrence and kind of navigating that it's definitely been an interesting time to be in DC um I think this may be the most obvious thing that's been said all day uh You' been you live in you live you like live in the DC area and you've
been there for years so it's it's it's uh you you've kind of lived it which is different than most people that are just kind of popping in for a week at a time or whatever yeah no totally and I also have encouraged some Founders lately like especially if they're small not like an I mean Andel has a huge team here and stuff like that but folks who are smaller to spend time here because information is moving like pretty
quickly like I've I've had things where I take like a meeting with one member and their staff and then across bumping into someone we had met before and like get a completely different perspective on it um yeah look I mean like I think every defense tech company has you know roughly three four layers of stuff they think about right so they think about you know how do I message to my direct
customers like the program office how do I message to the building which is the fancy word we use for the Pentagon and how do we mention I work on the hill I think what's unique in the last two to three months is like all three of those things seem to be moving and you've got this added component that the administration is some very specific things that they're trying to get done
and so like on the continuing resolution stuff you know what we've been doing is like it's um you know there there's money that can still move around so like our customers still have money to spend so we're in a fortunate spot where they've they're asking for the same thing and we're sort of going to the same program offices for line for stuff that hasn't been expended yet I do think there's a lot of program offices out
there just like free advice to any startup who's listening that haven't spent all their dollars It's just sometimes hard to find like you'll have to really burrow in there and you'll you know meet somebody who's like oh I got like $10 million to spend on manufacturing and I have no ideas and you can believe me you can give them new ideas um it's great so that's a component obviously the hill the there's
a Reconciliation process that's happening right now those priorities uh I think there's like four or five that have been sort of widely published those all seem to line up with what startups are doing so again my my advice is just get in front of folks and tell your story do it directly too don't always do it through a lobbyist or whatever because no one's going to be better than
a Founder at telling their story um and then the last thing I'd say is like you know uh you know the administration's only been around for what 40 50 60 days or something like that and so they've got some of the top level folks but they haven't really put people in seats at the bottom so really getting close to your customer right now is important to help them think through like what they
might do and essentially their new management layer kind of Pops in so if you think of like all those under secretaries and stuff like that like a lot of them start uh quote unquote in the seat so there's kind of an opportunity to be like a strategy shaper so you know long with always saying like chaos can be an accelerant for a startup and like that's kind of the situation that youc right now do you have a
followup yeah I have a more of like historical question I was just gonna ask for like can you zoom out and just give me like the really basic uh like explain like I'm five on energetics primers explosives you said the Army is spending something like 30 billion my conception of what's going on abroad is like a hand grenade on a DJI drone but like like like how does how does your product
actually get into a you know like a weapon system and and and exactly like I I I'm thinking at the level of like I'm seeing cartoon TNT right now but I want to go deeper not far from the truth all that all that time I spent on Cartoon Network as a kid is finally playing off um just avoid all the things with big red boxes on them or whatever yeah exactly so so I mean energetic materials broadly they're basically just a
material that has like a high amount of sort of stored energy and then when you apply some you know if you apply another sort of catalyst to it it expends more energy yep so that ex that mean like so if you think of uh explosives uh like fireworks pyro pyrotech stuff propellants like those all kind of fall in energetics um the specific stuff I maybe start with primers that is which
is what we're starting with so we're starting with primer for small caliber rounds um so actual like bullets in a rifle that that a soldier would shoot that's right got it so we're inside the bullet that's right so standard bullet has four parts right so you've got the brass which is what Falls to your uh feet when you shoot it um the projectile uh the little powder in there too um so
again growing up on on Cartoon Network I assumed that like the gun pwder was the part that went boom or whatever it's like not actually true um it's actually the primer so the primer is in the back of the bullet when uh the hammer hits it it kind of Pops like if you took the primer out and threw it at the ground it's a bit like a cherry bomb um and so what it does is it creates a mini
explosion in the bullet and then it burns off the uh gunpowder to start an explosive train and that's what shoots the bullet out essentially like a little rocket right yeah way it's made today and a lot of energetics like the the broad sort of steps that a lot of energetics are made is you start with mixing some chemicals right so we take a bunch of chemical precursors you mix them together in primers those kind of
come together and they almost turn into like a a doughy ball if you will that doughy ball is then passed to someone who is at like kind of like an application station these stations are typically in like clean rooms so think like wed did in like on St it's like wetted floor um rubber boots rubber gloves all this kind of stuff so you've got someone who's standing there all day and they're sort of rubbing up and down
on these primers like that clay ball basically it's somewhere between it's it's a bit like parmesan cheese on to be honest if you want yeah um and then from there there's like a there's a pressing process that happens so you know um my my cuffer Henry likes to say it's like a lot of what we're doing is this is rubbing and smooshing essentially material um but you want to do it in an even way right
because you don't want one bullet to work and another bullet to not work which come back to a second the last step uh obviously you know quality assurance right so just making sure that it was applied in the right way to to have the right like performance characteristic you'd be surpris lot of stuff you can do with like computer vision here where before it was like a human like looking at it being like all
right good and now you know deterrent is basically able to leverage like the thing that you know when Dua you know first kind of like pitched me the sort of the high LEL vision for deterrence and we started talking about it what I thought was appealing is it felt like every defense Tech company was going after these super sort of like sexy like oh we're going to you know the sort of
f47 like these sort of big programs with this futuristic Tech and drva was basically like had been sort of touring these facilities and saying like look like yeah yeah more so like are we even doing the basics right like if you walk around these facilities and there if we were to get into you know real hot war and we're relying on Machinery from the 40s to produce the basic bullets that we
need to you know keep our war Fighters less sexy but it's just as important yeah makes sense that's right and these markets are pretty big right like you look at the5 Shell like just some of the subcomponents we've looked at I mean they're like the contract size for like this the glue is like in the hundreds of millions right not the thing the glue wow basically well we got a good
shooting we we we are there some good ranges out in DC we we got to go out there ranges in DC are funny because you look around and you're like oh you're really good I wonder what you do for your day oh yeah for sure for sure uh well well maybe we can live stream it either way we'll definitely have you back soon uh congratulations on all the progress our DC correspondent yeah and we'll talk to you soon see you uh look
forward to the next one thanks guys take care see you cool I wanted to ask about history uh we can do it another time just sort of like the history of America's sort of industrial deterrence right this idea that like you don't want to go to war with America because we will just out produce you and it's sort of flipped around and now y China's in a sort of similar position but but we got
cam coming in the temple of Technology welcome to the show how are you doing what's going on good to good to be here yeah thanks so much uh I you know I realized we were texting to meet up like years ago and I'm glad that we finally got to make it happen uh could you do like just a quick intro on who you are what your company does just set the table for us yeah awesome uh I'm Cameron I'm the CEO and one of the co-founders
of nominal so we describe what we do is we're building software for continuous hardware test um so we're all about helping people test and validate their Hardware products faster so I just was just listening to you guys talking like we we're very much a um like the unsexy um very very important uh you know very specific thing um which is which is helping people move faster can you give
me a little bit of like history and progress of the company I know that there was a big fundraise recently um how big's the company when did it start that type of stuff sure yeah so we are uh Co we just had our three-year-old uh yeah our third birthday um as a company we're about 55 people cool um and yeah I mean our our kind of like the origin story a lot was like we have you know
folks who um my former employer andal right like we had folks that come from andal from SpaceX from uh applied intuition companies like this that have seen you know everyone building this amazing uh you know amazing Tech um but so often the problem is actually the software that's just facilitating how people are organizing that data um you know doing this so yeah yeah and the recent fundraise did you break that yeah
so we um we we uh we announced it a little bit late but yeah we we did a a series a we raised 20 million um it was uh led by General Catalyst that was uh a year ago now which is like times mov quickly so yeah yeah well so yeah I mean what what's the next Milestone is the program of record frame work sbir then program of record that's kind of like the meme pathway in defense Tech does
that apply here or do you have different customers it's really interesting Yeah we actually think more in terms of like system of record so um what that means for us is like we work with organizations like trmc it's one maybe people haven't heard of but test Resource Management Center right so it's a OSD uh off secretary defense program but they govern all of the like test infrastructure for for the US so um if
you're you know if you're hermus right like you have to be working very closely with trmc um about how you're going to like you know Define what it's like to test and validate a new Hypersonic aircraft for nomenal like that's that's our kind of like customer that's our Target we want to get to the place where they you know they say um hey everyone should should be using nominal like this
is the better way to sort of test and and collaborate um and do data so for us that's that's the end goal yeah how hard is uh Hardware it seems like it seems like your your job is to make building Hardware like quite a bit easier if you can test more efficiently but like I think people don't understand like you know they see a company raise hundreds of millions of dollars and and it doesn't work or you know they struggle
and it's like you had so much money you had such a great team but it's like I I feel like the average person doesn't appreciate just how hard it is to build a single like that just the engine of a rocket or a missile or whatever sure yeah it's so it's so true and I think like we um you know a lot of the value that we try to like provide for customers is um you know it's like you're doing so much if you're a hard
company like you have to you know you're doing all the production manufacturing you know iteration and often these teams like they will hire software engineers and they have the daily decision of like do I send those precious very valuable software Engineers to build the software that is like value addtive to my software defined Hardware product if I'm you know if you're duoa at deterrence
you're like I want my software Engineers building the like robotic you know systems to do energetics um I don't necessarily want them building you know data analysis and management and kind of like visualization infrastructure um because it's already hard enough and so our big bet like the bet we're making is um there's this massive reindustrialization Movement we are
solving as a nation uh incrementally the different bottlenecks whether it's rare earth Min you know materials it's the supply chain it's the production manufacturing it's people actually building these systems and so this Rising tide like where that condenses often is this this very specific vertical slice of it which is like I need to use software to test all those things before I Fu them and deploy them
and making this big bad like all that those Trends um are going to really condense on like the area that nominal is trying to build in so talk about your experience using maybe alternative nominal or just building the basically the product you know uh internally back at andal like I I think a lot of you probably have the benefit where like your competitors phenomenal now are like 40 years old very like you know super
super clunky like maybe don't even run on on Mac OS um yeah it's so true like we think about um you know the actual the sort of competitors phenomenal like uh National instruments is the massive one like Emerson seens like those types of of Technologies so they they did this massive industrial software land grab you know 40 years ago um and they've not been innovated again since so they've
like in this world like they established best and sweep and so there's huge Network effects of like all of the different pieces of software you want for testing and you know validating a hardware thing like it's very annoying as an organization if you have to build the connectors between those and I you know grabb this territory and they've owned it since what's happened in the
last like I don't know 15 years um and saw this at andral and other places is um the software World solved this problem for software um so continuous delivery you know linking testing and operations and observability like all data dog Splunk grafana you know different pieces of Technology like that so what's been happening in the industry is people have been you know trying to basically use those
um to get rid of the old you know ni or Emerson type tools um but those don't work for a variety of reasons and so with you know startups and scale UPS I say we often replace um someone trying to use uh yeah like a grafana and a mat lab and maybe some python scripting analysis kind of holding all together maybe like data bricks or something on the back end pieces of technology that are good but they're not for this like
industrial operations world and then at our the bigger you know the big five type type customers like it is a lot of that really really old software um that we're displacing do you even care to go after like the actual primes right now are you just happy to happy to just you know that you have hundreds of newly funded startups that are probably like desperately need your product and like
probably like much faster to close yep no exactly it's I think we're in this like exciting we're basically in this inflection moment where we've been you know building and validating the product um and excitingly we it's the second product like I think to win big in this space like you you have to build multiple products across this sort of Stack um so we've been doing that with this um these like startups and scale
UPS um but now we're moving into these yeah larger larger customers now that it works well and you kind of add you know add zeros to the the contracts if they go well so yeah yeah I can imagine if if Boeing is signing up for something that they the uh what they'd be willing to pay for this software is like a pretty big number so no I mean on that like I think um yeah like a lot of the early
conversations around like hey you'd be building this with an internal team and and paying you know you know engineering headcount to allocate against that um but for these big big programs like uh the value conversation is actually very interesting because it's like hey I if I'm you know company X and I just want a 100 million 200 million $500 million like program uh I'm very willing if
nominal can make I'm very willing to pay like half a cent on that dollar or a cent on that dollar for a piece of like test infrastructure that will manage cost performance schedule like that's the value discussions we we're getting into now which are very exciting so yeah can you talk a little bit about dual use I mean um is are we going to see like Ford Motor Company making cars with this like
like how how how how Niche are you and how does that expand over time yeah I think in like the company building thing it's like we're trying to be really really really good at the thing that we are good at now um and so we are we're focused a lot on the the a andd market but on the B2B side and the direct you know Federal side um so very dual use in that nature within companies that are
doing Aerospace um but then yeah we work with I mean we work with um some of these like Advanced nuclear you know companies building micro reactors like fusion um as well so yeah we're planning strategic Flags um you know some of these robotic like foundational robotic model companies like they use nomal as well I think we're kind of planning these flags in these other robotics Transportation energy uh as well so very
cool Jordy you have anything else I don't have anything else I'm just extremely uh bullish because we just got uh on on you and what you're doing just because every single person it seems like talk to today like either needs this or their customers need it so I'm sure you're pretty busy and I appreciate you uh you taking the time who what are you what are you guys hiring for right now across across the whole company I'm
guessing or yeah hiring across the whole hiring across the whole company like for us it's like um you know folks that um folks that understand software but have done done Hardware as like this spot for us so a lot of those customer customer success is like the old you know type well but we callion operations but yeah people that are people that want to go you know to one of these Hardware
companies and help like deploy the nominal software suite like that is um it's a very special skill set um but if that's you if you uh worked at a hardware company and uh and were the software person there you know who you are yeah do do you guys think you benefited from paler having so much success with the sort of forward deployed engineered model where it used to be so much push back against set but
now people are like oh it actually works and I imagine you guys start building nominal and you have like some you you sort of have your platform but then every company has some different implementation of it or different underlying sort of like use case for it so you do maybe need to send an engineer there for like four weeks and just like actually build it out with them um did
they did they sort of give you guys were they a catalyst yeah absolutely Jason my co-founder and CTO is was a early paler employee on Foundry and like um you know we we take a lot of that that DNA um I think the key thing is like the ability to then productize those insights is key right at scale you don't want to get too far in that but like our our folks are we do we have them on six we rotations
essentially where they'll go do like a customer customer pump customer stint right and then come back and get back in the main product org um and then it's like what did you learn like what did you learn from that customer and like what are we not thinking about because these 20 Engineers are not spending customer time and I think that's really really key to kind of closing that yeah
that Loop uh can you talk a little bit about International expansion I know there's this big movement towards you know Europe is going to nationalize they're going to want their own national champions but I have to imagine that if you're deeper in the stack deeper in the supply chain that's just less of a priority for uh the those governments like it's less of a priority that you
know steep in the supply chain like it's different the difference between like buying a DJI drone and buying a GoPro that was manufact factured in China like people have different Aesthetics around that um but we how are you thinking about that we're super bullish on International expansion I think it's a thing that we um we did for the first time like so we have international customer um it's going very well and so
um a European customer and so I think we're excited to double down on that and kind of the two like one of the reasons is um is uh you know this going there and then like deploying the nominal software Sweden sort of seeing like these folks are um generally speaking like pretty enamored with the andril the space way the pal way doing stuff and so I actually think like um there's just
there's even like kind of larger Delta in some ways where we can kind of like really wow them with with our capability and so that uh yeah we're super we're super bullish on that Australia is one where we're really excited to like Le into the Aus broadly um they're on the Aerospace thing like a lot of interesting you know stuff there and they're very you know Advanced on CCA collaboration with the US and stuff and
so there's just a lot of like interesting Trends there that that we can you know do you think it's only a short flight I'm sure you're over there back and forth every other week I'm CU we've never asked we've never asked anyone about this on the show but I'm curious since you're just starting to go through this process so a lot of the potential of some of these new AI tools is around like translation and real-time
translation and there's kind of a crazy scenario now where like you guys could sell to your product to a Spanish-speaking country and then you could have one of your engineers like you know real time is that oh like forward deployed Engineers who don't speak the native language a lot of Engineers end up speaking English but like is that even a part of the calculus like do you think most
Engineers don't even speak English only code yeah yeah yeah yeah yeah exactly yeah um no I love the question I've never been asked before um but I think it's like this this initial you International customer was like a predominantly you know conducted business in English but I think it's like totally enables that yeah I think it like absolutely does that make that easier because um there is a you know
there is an implementation sort of like you know phase and and yeah that would be a huge yeah so well if you ever want to get into testing live stream uh infrastructure we live stream 3 hours a day we're always trying to impr product be the first customer we'll be the first customer We'll Be Your Design partner on it and uh and you can bring a forward deployed engineer into the studio here
they just they'll sit they'll just like sit under the table right under the table with all the wires here there's so many wires uh it's great having you on uh uh I have no doubt that uh yeah NE next time you raise come on the show break it down uh or or any other reason it's great to have you yeah great to have you thanks so much cheers we'll talk to you soon uh do you want to rip
through some timeline get out of here in a couple minutes give the fans what they want I mean most of the timeline today is just endless gibli back and forth which we kind of already covered I wanted let's do the David Perell one because he coming on the show next week he says the gibl style memes are the beginning of something bigger the age of minimalism is over no longer is the internet stuck in the soulless Valley of
right angles and flat white backgrounds everything from anime to Art Deco is now just a clever prompt away a new kind of maximalism is here and it's here to stay which is why I post slop to my timeline uh live on the show maximal slop yeah it's great uh no I think it's I think it's totally like this because there was a lot of there were a lot of takes that were just like pure bull uh it's amazing
I I Can't Get Enough gibles they're amazing I'm just posting all these getting all these likes then were a lot of people who were just total backlash mode saying like oh this is terrible what would hayo Miaki say uh but now this is a more Nuance take that's just like it's almost uh normative not positive it's just saying hey there's a change and the internet's about to look
different I mean there's so maybe that's good maybe that's bad but it's going to look different there's so many I feel like throughout my career I've been lucky to be friends with a bunch of great designers so when I have a funny idea I can just sort of be like hey like this would be funny if like you know you you made this picture look like that this 3D asset IED I use Photoshop a lot
to make these mes now it's like way easier and way faster and I saw it's so crazy even even a month ago I was thinking you know what I need to go on F upwork and just find somebody who's a good Photoshop designer that I can just send stuff to and I don't need that anymore yeah uh yeah you can you can move a lot faster I saw uh Ashley Vance was posting these uh these memes that were like kind of gibl fied but also
making commentary on he has this one that's like the big Greek Horse Chat and it's like Troy I don't know if I can just show that but uh but basically uh you know it's like it's now layered where he's using the style but he's generating something that's commenting on a current news story uh and it's just it's just very interesting to see that like it's now left just hey take an iconic image and
give it the filter and he's already using it to express a different commentary so much of creativity is just taking an idea from one place and applying it somewhere else mixing two ideas together con changing things around I I like so uh AI just allows you to do that so efficiently yeah well honestly there aren't that there aren't that many other news stories here uh Arc AGI 2 dro uh if you've been following
the AI Benchmark why are you laughing I just saw this picture of jarar banks oh the the jarar banks one is fantastic this is all time we got to zoom out a little bit you got to zoom out okay so because it's a Northrop grman that's you want to read it are you gonna do the voice Messa is Misa Misa is detecting threats like never before learn how recent combat ID enhancements are evolving missions so
North R Grumman has a program called mea Misa and of course that sounds like the way jar jar Bank starts every sentence in uh in the early Star Wars movies and so they just put jar jar Banks's face with the little caption and it's making it sound like jar jar Banks is is talking in uh about northr grumman's program a man uh not not a native posting group the northr guys uh it's a
very different vibe at northr from and this is like canidate for post of the week this might be this is such a good post put that in Banger archive you really should um the chat wants us to cover the Fanny May IPO That Wall Street journals reporting on uh at this point we should probably cover tomorrow yeah that makes sense thank you uh for the suggestions but uh this was a super fun day this is great I like these theme
days I want to do more of these they're a little bit harder on the scheduling side but I think it's well worth it to just have a conversation that flows from one to the next bunch of different people maybe we can layer in a debate at some point I want to do an AI day I want to do um you know more of these defense days uh maybe a crypto day even anything y be very interesting anyway thanks for
watching thank you fantastic show we will see you tomorrow thank you to our wonderful sponsors tomorrow is intellectual day we got two authors two stripe press authors already already booked we got dorel coming on coming tomorrow and I I think I'm gonna send out emails to a bunch of other strip press authors now and try and get get stacked with the with the author day let's do it I have the mind of a golden
retriever but I'm excited for it to be an intellectual mind tomorrow will be an intellectual day yeah we'll put on our thinking caps put on our thinking caps take off the tin foil hat put on the thinking cap I should pull up the whole all every guest with the tin foil hat on but don't comment on it don't comment on it um thank you everyone for watching have a great rest of your Thursday