E439: Ethan Thornton: The 22-Year-Old Building a $3.7 Billion Defense Company

What if the future of warfare is determined by who can innovate faster, not who can spend more? Ethan Thornton is the Founder and CEO of Mach Industries, a defense technology company he started after dropping out of MIT. We break down how Mach went from experimenting with roughly 20 technologies to becoming a multibillion-dollar company, why Ethan believes asymmetric technology is reshaping modern warfare, and how Pentagon procurement is evolving. We also discuss China and Taiwan, lessons from Ukraine, autonomous warfare, recruiting exceptional talent, taking risk, and why Ethan believes great founders should empower their teams rather than make every decision themselves.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  The only risk in my mind and my team's mind early on was that we weren't able to get it done. Dropping out of college is not that much of a risk. The risk is that we aren't able to go and build what the world needs. Everyone thinks I was terrified to drop out. No, I'm terrified of what happens if we lose. I'd known I wanted to work on it since I was 16. So when I went to MIT, I'd actually already patented a lot of the designs, a lot of the things I thought would be asymmetric. For me, America is the greatest country on earth. And I want to make sure that we have asymmetric technology to punch above our weight class. We started the year at 470 million. Right now, we're at 3.7 billion.

• 0:34David Weisburd?

  We're in this cold war with China. It may turn into a hot war. Where are we in relationship with China? And how do you even quantify the relative military strength of the two countries? So before starting MACH, you were really a student of history, learning about modern warfare. What does Ukraine teach us about modern warfare?

• 0:56Speaker 00

  One, it teaches us that people fighting for what is right in the world can stand up very, very, very well. And can fight for years to an evil power that looks to suppress their rights. Second, it proves the asymmetry of military technology, which I think we've forgotten for a long time.

• 1:17David Weisburd?

  You mentioned asymmetric warfare. What's the clearest example of asymmetric warfare today in 2026?

• 1:25Speaker 00

  The thing about asymmetric warfare is that it's always changing around power law technologies. Asymmetric warfare by nature is sort of just the Pareto edge of technology as relates to a given fight. And so it's changed, right? Asymmetry early in the war was them adopting traditional Western singers and javelins incredibly well. Asymmetry in Ukraine, the thing that Ukrainians do incredibly well is they out innovate. They don't necessarily have better engineering. They don't have a bigger industrial capacity. They push forward and maintain that Pareto edge. And because of that, they're able to punch significantly above their weight class. And so, I mean, I can predict what the next one is. That's kind of my job and that's what we do as a company. And so, I mean, look at our product line. The Stratosphere is incredibly asymmetric.

• 2:07Speaker 00

  Hypersonics, when at scale, will be incredibly asymmetric. But it's actually really hard to define these things. Like, if you would have said two years ago, what is the next asymmetric thing? It would have been pretty difficult. I've actually been working on the Stratosphere since I was in high school. I'm incredibly passionate about that being something that will give the West. And when I say the West, I mean, the US and its allies, asymmetric. But asymmetry is the leading thing, right? The tech on the front edge of that curve changes all the time. And so you have to actually innovate to push super hard. And right now, that is deep strike. That is the Ukrainians' ability to go and pick off Russian infrastructure. Now, the Russians are doing it right back. And so that's really the scary stage of the fight.

• 2:50David Weisburd?

  Fast forward today, MACH Industries is a multi-billion dollar company. How did you go from an MIT dropout to running this unicorn company?

• 3:01Speaker 00

  I can't take much credit for it, honestly. It's all about finding excellent people and empowering them to do their jobs. I think you've got to know what you want to build. And for us, that is asymmetric technology for people fighting for their rights.

• 3:16David Weisburd?

  You were a 19-year-old and you decided to start a defense company. How did you go from idea to consumption?

• 3:25Speaker 00

  I'd known I wanted to work on it since I was 16. So when I went to MIT, I'd actually already patented a lot of the designs, a lot of the things I thought would be asymmetric.

• 3:35Speaker 00

  It wasn't really a pull, to be honest with you. It was a push. Like, I think it's incredibly important that we, as a country, are able to help our allies. There's a quote I like, "America's greatness comes from our goodness. If America ever ceases to be good, America will cease to be great." And for me, America is the greatest country on earth. And I want to make sure that we have asymmetric technology to punch above our weight class, especially given that we cannot manufacture China right now. And so that's the mandate of the company.

• 4:01David Weisburd?

  And earlier, you mentioned that you can't take all the credit for building MACH. You had this team. How did you convince people to join you in this extremely ambitious project?

• 4:10Speaker 00

  One, I told them that the chances of success were actually relatively small. So Ashton, one of my best friends who played football with me, you and I sat down. And we actually wrote a paper with each other, a one pager, about what MACH needed to go and do. And we looked at it and we said, yeah, we need to go and do this. It's going to be hard. It's unlikely we're going to be successful. But that's true buy-in from people, is whenever the mission is actually important enough to risk things. Spencer, two of my Air Force ROTC buddies, dropped out with me along the way. Spencer actually ended up going into the Air Force and helped us build a lot of our first products. I had a buddy, Dan, who he still works with the company. He's actually one of our build engineers on Pike. I'd say that the through line for all of it is, look, money's super, super important. But money comes when you focus on the right thing.

• 4:55Speaker 00

  And for us, helping the right thing is shipping asymmetric technology to help the West.

• 5:00David Weisburd?

  When you set out to start MACH Industry, was asymmetric warfare the core thesis? Was it specific technology? How did you get started?

• 5:08Speaker 00

  It was. And look, something I still get flack for, in the early days, we actually worked on like 20 products. Like, we didn't have confidence in what the Pentagon would buy. And so we ran it like a lap. And we ended up prototyping a bunch of different things. I can rattle them off if you're curious.

• 5:27David Weisburd?

  What were you working on?

• 5:29Speaker 00

  MIT has something called IAP. It's a month-long period where everyone gets off of school. And so we all got together in a small, like, 1,200-square-foot shop. And we built a quadcopter. Ashton built a quadcopter that flew, that were planted on a panel of hydrogen. And so built an oxygen gun. We went and built, and this was a dumb one, but an afterburning EDF. Went and built some aluminum fuel stuff. Went and built an electrolyzer, built a smaller quadcopter. We built a big fixed wing. It actually ended up looking a lot like a shot head as we designed it. As we actually, for that month, we worked on a bunch of different things because it was unclear what the Pentagon would buy. But in the process of that, we got good at building things. And then we were able to go out to the Pentagon with something more than a slide deck and say, hey, what do y'all actually want to dig in on?

• 6:14Speaker 00

  And we got traction based on that. And then over time, we kind of earned the right to hone our focus. Over time, we actually were able to aggregate the capital, to aggregate the team. And most importantly, to earn trust with government to work on the things that are truly asymmetric for the world.

• 6:30Speaker 00

  To me, those are the things that helped deter China from taking Taiwan. But in the process, can help the Ukrainians win, can help defend the Taiwanese, and can help make sure American warfighters have kit that works.

• 6:41David Weisburd?

  This episode is presented by Juniper Square, the operations partner for private markets.

• 6:48David Weisburd?

  I spoke to Jake Chapman from MACH and several other defense investors and the CEO of Castellian. And they talked to me about how the Pentagon is really evolving their strategy in terms of how they go about procuring the next generation of defense technologies. How did that affect you? And did you see that evolve as you were building MACH?

• 7:09Speaker 00

  One, Jake's an incredible guy. He invested in our seed round way back in the day.

• 7:15Speaker 00

  Look, it's changed. It's changed massively. Frankly, I think it's just gotten better. Now, there's still a lot of change to make happen, but I'll tell you a story. When I first pitched one of our products, Glide, to the Army, they said, hey, this is an incredible thing. We'll roll this into our 2035 plan. And now, the way this business works is they show up and they say, hey, we need you to build something. What do you want to build? What can help? And then you have this discussion, you align on what you want to build, and then you move out. And that's incredible. It's very necessary right now. It's very, very necessary. We see that our munitions or our stockpiles are diminished. And we talk about it all the time, but it sounds somewhat detached.

• 7:52Speaker 00

  I mean, think about us in context as a country in Iran, shooting a significant portion of our munitions in a handful of weeks. Now, that's not to say the Iran war isn't a war worth fighting. I believe it is. But it highlights the fact that war wasn't a near-peer, all-out conflict. And if it's going to take us many years to rebuild from that, we do have a real issue. And so the nice thing is the Pentagon's, one, they're getting faster. Two, they're getting more objective in terms of what technology will actually help folks succeed. And three, they're getting a lot more collaborative. And that's great. And it's kind of non-optional right now as a country because we do need to rebuild our stockpiles. We do need to rebuild our defense industrial base.

• 8:34Speaker 00

  Yeah, I'd say they've gotten better, those three things. Now, I expect that to continue. And I'm very excited for that. One, it's good for our business. Two, it's good for the American people. Because I also have a fundamental belief that we can actually spend significantly less on procurement if we buy the right thing. Like, the nice thing about things that are asymmetric is they're asymmetrically cheap. Now, what I'll tell you is asymmetry for us means more ability to actually manufacture the thing with fewer technicians, with fewer operators, with fewer machines. That's what I mean by asymmetry. Now, along the way, when you focus on that, things do become cheaper. And I am very confident that if we continue this focus as a country, we'll actually get to a spot where we have significant and greater financial efficiency.

• 9:16Speaker 00

  But asymmetry actually, in context, what we need to be building as a company and what we need to be buying as a country, means the ability to punch above our weight class with our industrial base relative to China.

• 9:26David Weisburd?

  I'm very curious, because it seems like only a decade ago, maybe even shorter timeframe, everything was cost plus. So you had defense contractors that their margin, their overall profit would go up as they spent more and more money on the product. So it's just complete adverse incentive. And today, you have these companies like MACH with this asymmetric warfare with very cost-effective weapons that they're being sold to the government. How did that change so quickly?

• 9:58Speaker 00

  A hundred percent. Look, cost plus contracting is another form of socialism. And that's as clear as I can put it. When you give companies a socialist incentive for decades, it's actually not like they want to perform badly. To survive, they actually have, they have to charge the Pentagon more for things that don't make sense. I love looking at incentives to understand outcomes. And when you look at the incentives of cost plus contracting, it's actually not surprising how we got here. It's uncomfortable to say you need to be deeply capitalistic to ship great technology. But the thing America continues to do incredibly well is to find the next, the next stage of tech. And forty years ago, we did have a bigger industrial base than China. We did have better, like, technology on state-of-the-art things than China.

• 10:43Speaker 00

  Now, a big thing we have as a country is asymmetry. And that's why our venture capital markets are incredibly important. That's why it's actually a very exciting thing to see retail investors getting involved in tech companies as they IPO. Now, we need to be careful, because technology is incredibly difficult to predict, and you can get booms and busts. But the history is a story of breakthroughs in technology. And frankly, most of those breakthroughs have come from defense. Like, we lived in the Iron Age for a while, like, we're in the Silicon Age now. Iron Age was defined by people first making swords. The Silicon Age was defined by Bell Labs first inventing the transistor. And so for us as a company and as a country, I guess what I'm saying to make it super clear

• 11:26Speaker 00

  is we need to bet on asymmetric technology inside and outside defense. Right now, I deeply believe that the asymmetric tech bets that need to be made are in defense. Cost plus contracting from an incentive structure is, runs counter to developing excellent new technology. It runs counter to risk. It runs counter to good incentives for companies to actually go out and innovate. That's not a surprising thing. That's why SpaceX won. You actually need to make it a more capitalistic system, which is uncomfortable, because you have to deal with the fact that the defense contractors are motivated by money. But capitalism works better than communism. We've proven this out many, many times throughout history. And so the thing that probably makes me most excited on the permanent side is that they're thinking deeply about the problems, saying, you know what? For a fixed price, this just works better.

• 12:10Speaker 00

  Our products will be cheaper, they'll be more capable, that'll be more reliable for the warfighter. And then in the act, we're going to get a lot deeper pockets involved. And so that's what you see now. That's why you see such a surge in defense tax spending from investors on the VC side. And I'm sure sometime in the next year or two, on the public side.

• 12:31David Weisburd?

  You mentioned China, we're in this Cold War with China. It may turn into a hot war. I think there's a 12% chance that China invades Taiwan one way or another by the end of next year. Where are we in relationship with China? And how do you even quantify the relative military strength of the two countries?

• 12:53Speaker 00

  For sure.

• 12:55Speaker 00

  It's actually kind of a fool's errand, I think, to deeply try and predict military strength or when China will invade Taiwan. I'm curious where you got that 12%.

• 13:03David Weisburd?

  Polly market.

• 13:05Speaker 00

  I mean, yeah, the perception is it's 12%. I think that's probably about right. I'll tell you, I mean, no one really knows what they're going to invade. It's diplomacy between Xi and Trump and whoever we elect in 28. I'll tell you that a lot of the war games don't look great for our ability to defend Taiwan. Also tell you Taiwan is really important for two reasons, and both are deeply true. First of all, the Taiwanese people, they want to be Taiwanese. They do not want to be Chinese. Second of all, as we think about AI, it is an uncomfortable truth that most of our leading-edge chips come out of TSMC. And so this is why we say deterrence is company and not winning. If that war starts, the US will be faced with an uncomfortable question of, do you go and defend Taiwan?

• 13:49Speaker 00

  Do you get involved in a hot United conflict? Or do you stand that? And, and that's the question we've been asking ourselves forever. This whole China-Taiwan thing is obviously not new whatsoever. And frankly, I don't know, and I don't think any of us know. I don't even think Trump and Xi know what this looks like. World leaders constantly reassess the state of the chessboard. And so if it happens next year, I think the war games that we run as a country don't look good.

• 14:15Speaker 00

  That is why deterrence is so incredibly important. We've been able to achieve deterrence. I don't know what happens in 28, 29, 30. All I know is that the US does need to build excellent asymmetric warfighting technology if we want a chance of turning. Because, look, on the first, on the Taiwanese people and on the folks from countries around the world that would have to pick up arms and go and fight, deterrence is the, is kind of the only option if you don't want to avoid massive loss of life. On the second, the uncomfortable truth is if that war starts, TSMC is going to be blown up. And the US and China will lose access to advanced nodes. As much as we want the Chips Act to succeed, we're a long ways from in-housing fabs on cutting-edge nodes.

• 14:59Speaker 00

  And so that's probably the next thing you go and work on. I'd say for us, though, the focus is to ship asymmetric warfighting technology that deters a war with China.

• 15:09David Weisburd?

  The game theory between China and US, the reason it's 12% and not 25% or 30% is because it's essentially mutually assured destruction at this point. Neither China nor the US could deal with the reality where there's no TSMC and there's no chips. So there, there's kind of this mutually assured destruction there that is under, undervalued.

• 15:29Speaker 00

  Absolutely.

• 15:31Speaker 00

  Yeah, but the Chips Act is in a race against China's ability to stand up fabs. And this is why TeraFab is so incredibly important for the world. So yes, there is some level of mutually assured destruction. It's always a dangerous position to count on mutually assured destruction whenever your conventional weapons are deeply behind. And I don't know if we're behind, but I will tell you that China's procurement system moves faster than ours. I'll tell you their industrial base is significantly larger than ours. I'll tell you, they have significantly more drones deployed in Ukraine. And so unfortunately, right now, the status quo belief, it would be easy to believe that China would be able to win a conventional war with Taiwan. And so, yes, you're exactly right on the deterrence piece. Nuclear deterrence, deterrence over chips, deterrence and the fact that we're still giant trade partners with each other.

• 16:17Speaker 00

  Those are incredibly important pieces of deterrence. But we do need to rebuild conventional. Because when you count too much on deterrence between two countries, you get a bunch of proxy wars. Like, the Cold War is a story of proxy war in Korea, proxy war in Vietnam, proxy wars around the world. And so, yes, there is deterrence, but deterrence doesn't mean that there won't be fronts elsewhere. There's a front in the minds of the American people with TikTok and with other platforms. There's going to be several fronts that open up if we don't re-establish conventional warfare. And by conventional, I mean drones, like asymmetric conventional warfare. The, the nice thing about shipping drones to the US partners is if we can arm Taiwan themselves, if we can arm Japan, if we can arm South Korea,

• 17:01Speaker 00

  if we can arm Australia, and do so in a way that is, that is obviously positive some with them, we can avoid proxy wars. And, and that's an incredible thing. So my dream for, for unmanned systems is a world where you have the same level of deterrence we've had on the strategic side with nuclear. For many decades, you can actually achieve tactical through drones. And if Russia had to do it all over again, knowing what they know now about how asymmetric unmanned systems are, I don't think they would have invaded. And so that's actually the best path to me is actually arming our allies directly and indirectly, and having them build stuff themselves that gives them their own form of deterrence.

• 17:39Speaker 00

  And then, yeah, and as far as China's game theory goes, it's obviously incredibly, incredibly complex. 12% is probably pretty accurate, but it's worth to remember those are just Polly market numbers. And it's really one decision maker at the table, and that's Xi.

• 17:53Speaker 00

  Their game theory is, is yeah, we have trade deterrence. We have deterrence with chips. Taiwan has been somewhat successfully adopting this Porcupine strategy for years. And we do have nuclear deterrence, but I don't think we have good enough cyber deterrence. Yeah, I think we need to work on that. We don't yet have good enough conventional warfare deterrence. And so I would say we're in a cold war with China right now. I think we're afraid to admit it. I think fronts will unfortunately continue to open up if we can't arm our allies with asymmetric conventional technology. So I hope that answer makes sense. I'm happy to break down any specific piece of it.

• 18:29David Weisburd?

  Maybe you could talk about the through line between the Chinese and the US Cold War and these other fronts like Russia, Ukraine, like Iran, US and Israel.

• 18:39Speaker 00

  Those fronts are more loosely connected than the the proxy wars we saw during the first Cold War with USSR. But it's similar things. And Ukraine, Russia, obviously Russia has its own intentions. It's not that different to World War II where Japan and Germany were actually not close allies until sort of they they became close allies, getting their ambitions. With Iran, I think it's pretty clear that the Iranians were suppressing their own people to an incredible extent. We often ask the wrong questions about a conflict. I will say Iran, the conflict in Iran might not have been focused, but it was a good war to fight if we were able to find it cleanly, which we actually generally have.

• 19:21Speaker 00

  We've, it's important to remember the fact that Iran killed tens of thousands of their own protesters. I'll say the through line is that during the first Cold War, during the Cold War with with US and USSR, it was a lot more closely connected. It was very, very clear that it was battles between basically communism and capitalism. I'd say now it's more so authoritarianism and democracy, but it's similar things, right? It's US generally actually being on the side of people that are fighting for their liberty against countries that are generally significantly more totalitarian. And so those are the fronts that have, look, history's, history is always hard to decipher. And reading history is always fun to to think about yourself in the shoes of the people making the decisions.

• 20:05Speaker 00

  It's significantly harder for it, and I won't try to predict it, but it's totalitarianism versus democracy. It's the US actually generally being on the side right now, the people fighting for their liberty, even if we're having to getting engaged in conflicts for that intended purpose. And I think it's important to realize that when you read history, nothing happens for one reason. It's all interconnected. And so you've got the capital portion, you've got the political portion, you've got the technological portion. Right now, the technological portion is very deeply coupled to to social media. It's deeply coupled to chips. It's still deeply coupled to oil.

• 20:42Speaker 00

  And and it's, if you think deeply about those three things, you can do a better job at least to predicting history. Now, I won't sit and say that I know when China will invade Taiwan or if they won't invade Taiwan, but I am confident that that we are in a cold war with China and that we're not admitting it to ourselves.

• 20:59Speaker 00

  And and yeah, we need to win. Like democracy needs to beat totalitarianism. So I know I'm going deep. I know this isn't the typical kind of VC founder podcast. I do think it's really important that we talk about history, that we talk about the mission. The mission doesn't stand at odds with capital because capitalism is, I believe, the best incentive structure to develop technology.

• 21:21David Weisburd?

  Just to tie cost plus with asymmetric warfare, it was a terrible system a decade ago where it would take tens of millions of dollars to sometimes procure the most, like a, I think there's a famous like bathroom that costs like a million dollars. And there's all these means are actually true. You could look in the public records. But today we have $10,000 drones taking out $50 million military equipment. Now, cost plus is not only inefficient and bloated and expensive to taxpayer, it's no longer sustainable.

• 21:53Speaker 00

  It always was, would I'll say. Like, end of history narratives are incredibly dangerous. After we beat USSR in a cold war, we thought that it was the end of history as a, as a country. And so we, we actually got somewhat complacent. We talk a lot about the Last Supper of Defense Contracting.

• 22:12David Weisburd?

  Yeah, tell me about that.

• 22:13Speaker 00

  We pulled hundreds of defense contractors into into a room and said, you know what? We can't keep you all alive. So I need you

• 22:22Speaker 00

  to create these conglomerations and we're going to start feeding you cost plus contracts so that regardless of what happens, you stay alive. And the thing about building technology is it's incredibly hard. You have to be willing to take risks. You have to be willing to think asymmetrically. You have to build teams that do the same. And then when you win, you need to get asymmetrically more capital to feed back into it. And that's why capitalism works. Where we are today, we need to invert it, right? We need companies that are willing to take risks with the government on products that are asymmetric. We need companies that are able to develop things with asymmetrically less capital. And in the process, you do define the next technology. And I think the through line throughout history is that technology is incredibly important. And so that usually shows in defense first. I can tell a few stories.

• 23:06Speaker 00

  I mean, we going into World War II, we had battleships and we're deeply convinced that battleships, which had been the thing for 50 years, were going to be what was important. And then when Pearl Harbor happened and all our battleships got sunk,

• 23:21Speaker 00

  we switched to aircraft carriers. But when you think about a battleship and an aircraft carrier, it's very easy to realize that the battleship is a slow moving big thing. An aircraft carrier is a slow moving big thing, but has planes that can go out and drop bombs and engage in dogfights. Now, fortunately, at that point as a country, we had an excellent industrial base. But I still think we do, by the way. I want to be super clear that I'm not a fatalist. I am incredibly convinced that capitalism and democracy are the right tools to build technology. And I'm incredibly convinced that technology is what will win.

• 23:51Speaker 00

  But yeah, the battleships got sunk and we had to switch aircraft carriers and we had to rent production of aircraft carriers. And that's not a new thing. I mean, that happened from between cavalry and tanks, right? That happened between baskets and rifles. That's the story of the history of defense. And we're living through one of those periods. It's not the end of history.

• 24:09David Weisburd?

  We are having somewhat of a philosophical discussion, but I think it's so critical as investors. When you look at a space, you have to understand the context. You have to understand the Last Supper. You have to understand the evolution, what happened in the last 10 years, how Ukraine. I don't think you could be a good investor without understanding the context within which you're investing. And then obviously you have to underwrite individual companies and individual investments. But I think it's so critical to understand the frame of where you're investor.

• 24:35Speaker 00

  Absolutely. Especially if you want to invest in technology. Like it was very unclear that like Elon, when he like rolled up the DC with with the Falcon 1, why the hell are we building rockets right now? It was like a $5 billion TAM.

• 24:50Speaker 00

  I think it's hard as humans to, for us to understand Javon's paradox. It's like, okay, $5 billion TAM. Your goal is to make it two orders of magnitude cheaper. Got a $50 million max TAM? Well, no, he went and he made the technology asymmetrically cheaper and the act he's built an incredible, incredible business.

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• 27:16David Weisburd?

  I want to talk about the Viper. What's, that's pictured right behind you. You mentioned when you started MACH, you had these 20 prototypes and now you're really focused on the Viper and other products in the pipeline. But how did you get to the Viper and double click on that technology?

• 27:36Speaker 00

  We build some products that are insanely asymmetric. So we do wargaming. We have wargaming software. We look at that. We talk to, we talk to people who do that themselves. Some things just work in in wargaming software. Now, wargaming software is never going to be perfect. The Mike Tyson quote, everyone has a plan until they get punched in the mouth. But the thing about deterrence is it is a game of wargaming. I expect to continue working on them for a while. But it's going to be a big deal.

• 28:04Speaker 00

  We have some products that are less asymmetric. And it's funny, when something is less asymmetric, it's more mainstream. And so it's our asymmetric products that take longest to get to market. Fly and Stratus are the most there. I'd say Dart and Viper are somewhere in the middle. Dart is our, basically, it's what we deeply believe will be one of, if not the most important missiles to take out future drones. Not shot heads, not quadcopters, the actual drones that are bypassing Russian defenses right now. The actual drones that are bypassing Ukrainian defenses. And then on Viper, this is one of those drones. And so for us as a company, we take some bets that are less kind of skate to where the puck is headed. Those tend to be the best revenue bets.

• 28:47Speaker 00

  And then we use those to fund some things like the Stratosphere that we're deeply convinced will be incredibly important. And in the process of being important, we'll make money for the company to fund further bets. Does that make sense?

• 28:59David Weisburd?

  One thing that I've learned from talking to hundreds of investors, founders and business leaders is that planning for the future isn't just about growing assets. It's also about protecting the people who matter most. Life comes with a lot of important milestones. Maybe you're buying a home, starting a family, planning for college, or simply thinking more intentionally about your financial future. As those responsibilities grow, it's worth making sure you protect those you love. Not sure what kind of life insurance you may need? Concerned about how much it may cost? Think life insurance is too complicated? Your local State Farm agent can help answer those questions. They can help you explore your options for life insurance and choose coverage that you can adjust as your family's needs change over time. Financial protection for your loved ones when it matters most. Learn more about life insurance at statefarm.com. Like a good neighbor, State Farm is there.

• 29:42David Weisburd?

  Support for today's episode comes from Square, the all-in-one way for business owners to take payments, book appointments, manage staff, and keep everything running in one place. Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Checkout is fast, receipts are instant, and sometimes I even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. The experience is smoother for them and it's smoother for me as a customer. Square makes it easy to sell wherever your customers are, in store, online, on your phone, or even at pop-ups, and everything stays synced in real time.

• 30:25David Weisburd?

  You can track sales, manage inventory, book appointments, and see reports instantly, whether you're in your shop or on the go. And when you make a sale, you don't have to wait days to get paid. Square gives you fast access to your earnings through Square Checking. They also have built-in tools like loyalty and marketing so your best customers keep coming back. And right now, you can get up to $200 off Square hardware when you sign up at square.com/go/howiinvest. That's S-Q-U-A-R-E.com/go/howiinvest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square. Get started today. Support for today's episode comes from Square, the all-in-one way for business owners to take payments, book appointments, manage staff, and keep everything running in one place.

• 31:09David Weisburd?

  Whether you're selling lattes, cutting hair, running a boutique, or managing a service business, Square helps you run your business without running yourself into the ground. I was actually thinking about this the other day when I stopped by a local cafe here. They use Square and everything just works. Checkout is fast, receipts are instant, and sometimes I even get loyalty rewards automatically. There's something about businesses that use Square. They just feel more put together. The experience is smoother for them and it's smoother for me as a customer. Square makes it easy to sell wherever your customers are, in store, online, on your phone, or even at pop-ups, and everything stays synced in real time. You can track sales, manage inventory, book appointments, and see reports instantly, whether you're in your shop or on the go. And when you make a sale, you don't have to wait days to get paid.

• 31:53David Weisburd?

  Square gives you fast access to your earnings through Square Checking. They also have built-in tools like loyalty and marketing so your best customers keep coming back. And right now, you can get up to $200 off Square hardware when you sign up at square.com/go/howiinvest. That's S-Q-U-A-R-E.com/go/howiinvest. With Square, you get all the tools to run your business with none of the contracts or complexity. Run your business smarter with Square. Get started today. It's such a good and obvious point, which is, what is the point of weapons? The point of weapons is to win against an enemy, and that enemy is war gaming against you. There's a game theory here. And it's essentially, there's a set amount of economic damage that both sides could

• 32:38David Weisburd?

  take. And if you could asymmetrically push that towards your advantage, you will win that war. We have the time to think about war as a battlefield between humans today. It's really a battlefield between technology and cost.

• 32:49Speaker 00

  It absolutely is. It always has been. In many ways, the human element is still just as important. It's just kind of moved up the stack. It's technology, it's production, and it is the people and how much they want to fight. And that is why Ukraine has done so well. The thing that's not alarming, it's just different now, is that we're seeing drone-on-engagement. I mean, for the first time ever, the other day, we saw drone boats actually shooting machine guns at each other. That's crazy. That was a direct machine-on-machine conflict. And folks have been saying we'll see robot-on-robot conflict for a while. We're already seeing it. It's here. And the only near-peer conflict happening right now, which is what I would qualify

• 33:30Speaker 00

  Russian-Ukraine as, with Ukraine getting a lot of our best tech, frankly, building in many cases, potentially in most cases, better tech than we have. I said earlier, it's a canary in the coal mine for where this tech is headed. That doesn't mean that it's not so important for the Ukrainians. That also means that, given that the Ukrainians are the ones fighting for their liberty, they're actually innovating better. But yeah, it's a canary in the coal mine. Like, we're seeing machine-on-machine engagements. 90-plus percent of operations are done either entirely by unmanned systems or primarily by unmanned systems. And that's going to be the way of the world. And so, look, weapons are just tools. And you want to make sure that the people that are on the side of liberty have access to those tools.

• 34:12Speaker 00

  You want to make sure those tools work for the people who stand up to risk their lives for our country, for what is right in the world.

• 34:18David Weisburd?

  If you're to take an aerial view on what's going on between Russia and Ukraine in terms of the front line, and you just zoomed in, what would you see today?

• 34:28Speaker 00

  I was spending some time there. It's hard to know unless you're there. Like, the only people that really, oh, given how fast tech is changing, are the ones who are actually fighting. My answer, though, is that you see a lot of close-end engagements. So you see basically a band where artillery and where quadcopters destroy is basically anything that moves. You can't really go in that band as a person, and so they have autonomous vehicles they send in. You then have, kind of behind that, logistics. You see folks launching longer-strike drones. These are kind of mid-strike. So you're electrically powered, in many cases, drones. That's an interesting area, because you've got basically what are called ISR, information

• 35:08Speaker 00

  surveillance reconnaissance, unmanned systems, aircraft, basically just going and collecting photos. And when they see something, Ukrainians or the Russians will go and send a medium-strike. And then frankly, the power law part of the war right now is what's happening in the deep strike. And that's folks a thousand miles away saying, you know what? If we hit this specific valve on our refinery, if we hit this specific high-voltage power transformer, this will have this economic impact. And so, yeah, I guess it's important to ask which portion of the warfare, which portion of the war. And so, to answer very clearly, it's a very complex thing. Those are kind of the three main strata. The most important of those things is the deep strike.

• 35:50Speaker 00

  That is strategic air power applied at scale with precision. That's something that we've been talking about since World War II, that is actually finally coming into light at a scale that is shutting down the Russian, the Russian oil infrastructure. It will go on to shut down electrical infrastructure. And now, that's a confident bet. But when you think deeply from first principles about what happens when people can send something for $20,000 and go and shut down a refinery for a year? I don't know if you've seen the video, the Ukrainians, and this is my prediction of what happened, but the Ukrainians sent a deep-strike drone into Russia. And you can actually see one of the Russians shooting what's called a manpad, which is

• 36:34Speaker 00

  a shoulder-launched surface-to-air missile. They actually missed the drone, and they hit their own giant oil storage drone, and it detonates. And that's going to take years to repair. And so, that's the most important part of the war. I'm happy to ask, answer any questions. I don't think that we're going to go back to the power law portion being what is happening on the front. Now, the thing I will say is, on the front, that is where most of the people are fighting. That is where most Ukrainians are stepping up and using drones. This is where the quadcopters are incredibly important. But the thing that the Ukrainians know and that the Russians know will truly impact that war is deep strike.

• 37:14David Weisburd?

  And you've used this term "power law" to explain these deep strikes that have this huge effect on the war.

• 37:22Speaker 00

  If I can explain it super cleanly, like, let's say there's a factory that makes 100,000 drones a year. And there are many of those factories throughout Ukraine. Let's say those drones need one specific part that comes from one factory. If you can strike thousands of miles away, and you can take out the power transformer, which right now in Russia is a really, really hard thing to get back. If you can take that out, and you can shut down that lock, that drone factory that makes 100,000 drones a year, it doesn't matter. Like, they can go and assemble the drone, they literally won't have the part. There's a great book on this. It's called The Bomb Mafia. The folks who understand strategic air power have been saying that this is going to happen since World War II. It is frightening, but fortunately, I know the Ukrainians have defined each of these errors and have generally won each time. But it is frightening.

• 38:07Speaker 00

  The thing is that that strategic air power is finally playing out at a scale where you can shut down a country's grid, you can shut down their oil infrastructure. And that's what the Ukrainians are currently doing to Russia. That's what the Russians are starting to do back to Ukraine.

• 38:22Speaker 00

  And it's going to be a really, really, really important thing to watch.

• 38:25David Weisburd?

  We talk about all these different battle fronts. One of the, I guess, domestic battle fronts is the war for talent. How do you recruit the best and brightest that have the chance to work at Goldman Sachs, or McKinsey, or choose XYZ tech company? How do you recruit the best and brightest to work at Mo?

• 38:44Speaker 00

  I tell them what we do and why. And the best and brightest are incredibly intelligent and they know what they want to do.

• 38:51Speaker 00

  When I recruit people who worked at SpaceX back in 2012, 2013, 2014, they describe this feeling of just like loving their job, just needing to win. And I think that feeling comes from when three things are happening at the same time. One, when you know you're doing something that's important for the world, but that is also important for the people who live in the world, that is a mission. The more tangible that mission is, the more motivated you are. Now, not everyone right now is motivated by a mission, but a lot of people, and specifically the people we want to hire, want to go and do the right thing. The second thing is you have to love your job. Like, you actually have to be working on things you're passionate about, with people that you, that are your friends, in an environment that allows you to speak truth, that allows you to push really hard.

• 39:35Speaker 00

  You need to own, you need to give people ownership. You need to give people account. You need to give people empowerment. When they have ownership and empowerment, it's their job. That's an excellent feeling to know you run your thing. And you can be an entrepreneur within a company if you have super clear ownership. And then the third thing is you need to give people sovereignty. Now, sovereignty in a capitalist system is capital. The reason equity is such an incredible tool is you can basically give people asymmetric upside of financial sovereignty in the future. People do their best work, people love their job, the right people want to join. When you give them a mission that they truly believe it's tangible to them, that's tangible to their families, it's tangible to the country, that's tangible to the people they shift the technology to.

• 40:19Speaker 00

  When they get the ownership in that job to actually set the direction, that's, I believe, where passion comes from, is you love the technology. It's something you're obsessed with. You're also working with people who are obsessed with their thing, who trust you. And then the third is when you can make money. And a lot of people actually don't care about money that much in the near term. And so, basically, my job is to make sure that those three things exist at the company,

• 40:43Speaker 00

  to prove that we're excellent as a company by shipping products that work for the warfighter and in the process, making a company that, that, I mean, it's been a great year, right? We started the year at 470 million, right now we're 3.7 billion. It is what it is, it's a great thing. We'll make money as a company, we'll make money doing the right things. And so, the right people, the people I want to hire, they chase that. The thing you want in, in, in folks who join, the thing I want in folks who join, and the thing the people I work next to want to be folks to join, is folks who are empowered, is folks who are intrinsically motivated. And now, you have to create a culture where that feels good for people. But when you do that, the right people hear podcasts, the right people go on the website, the right people think deeply about what's happening in the world,

• 41:28Speaker 00

  and they decide to step up and join. I actually think recruiting is kind of a misunderstood thing. You don't want to go and try to convince people. You just want to say what's right, and you want to be completely open. You want to say, you know, let's go walk the factory, come see the technology. And the right people, the right engineer, will look at a viper and just be obsessed. They can't stop looking at it. The right person who you want selling the tech to the government, they get it. They get it so that when they say this is the right thing, they really mean it. And so, it's actually, you want to set up negative filters so that you hire intrinsically motivated people. And the best negative filter is just to say the things that are first principles, right? And that's how we've recruited. And I'm super, super grateful for all the people who have stepped up and said, you know, I want to be a part of that, go and own it and try it.

• 42:13David Weisburd?

  There's this thin line between selling your vision and then also not overselling where you don't have the people that are actually aligned and will be aligned for years to come.

• 42:23Speaker 00

  Yeah, you just want to be authentic, right? You want to say, you know what, come see the factory. We're confident that this is good for the world. We're confident that you'll love your job. And we're confident that your equity will be worth asymmetrically more in the future.

• 42:36David Weisburd?

  You mentioned your company has grown almost 10x in terms of valuation to now over $3.5 billion. You started six years after Anduril and really the first Neo Prime and Neo Defense company. How instrumental is that towards the success of Mo?

• 42:55Speaker 00

  You're right. I mean, I was, look, I was a seventh grader when Anduril was founded. Anduril helped a lot. They got people motivated, they're incredible at marketing. And so, they got people thinking about the right things. I don't think about them much anymore, to be honest with you. Like, we sell jet engines, we sell solid rocket motors. I hope we sell some of those to them. They make excellent software. I'd be happy to plug into their software if it makes sense for the warfighter and if it makes sense for our company. But it's not negative self, right? Like, in a world where you shoot six years of your production capacity in three weeks, it's so foolish to go and compare Mo to Anduril. PCs love to think in terms of monopolies. What we realize, working in defense, is that the government's never going to let there be a monopoly. And so, Anduril is an excellent company. I have a lot of friends who work at Anduril.

• 43:39Speaker 00

  To be honest with you, though, I just don't think about it much. Like, our job is to go and do the right thing for the warfighter.

• 43:44David Weisburd?

  You mentioned media. Today, almost every CEO, every founder that I talk to thinks about themselves as a media personality, sees it as a big part of their recruiting. Do you see media being a defense company? Do you still see media as critical for your strategy?

• 43:59Speaker 00

  First of all, I'd say we are a defense company. Our job is to ship technology that defends liberty. I actually think in the next two years, and I'll make some announcements about this in the next six months, like, we're going to be making a lot of stuff outside of defense. Media is important. I mean, I'm doing media right now. Now, I don't think media has to be flashy marketing material. I don't think it has to be paid ads. I'd rather spend my money developing excellent products. So, media for me is like, get up when given an opportunity. And I really, really appreciate the opportunity, David, and just say what's right. And so, yeah, a lot about media in, in terms of thinking about what I want to do as a company. And then, media for us is just anytime someone wants to hear what we have to say, step up and say it, and I think the right people listen.

• 44:41David Weisburd?

  We started the conversation talking about you're at MIT, you're a 19-year-old, you're concerned about the future of warfare and the future of the US and allies. And you dropped out of this prestigious university to really pursue this mission. Since we chatted about a month and a half ago, I've been trying to really figure out, how do we create more Ethan? What really drives him? How do you explain this gap between you being concerned, you taking agency around this issue, and you going out and starting this very ambitious project?

• 45:17Speaker 00

  The only risk in my mind and my team's mind early on was that, was that we weren't able to get it done. Like, dropping out of college, it's not that much of a risk. Like, the risk is that we aren't able to go and build what the world needs. Honestly, that's as clear as I can say it. Like, everyone thinks I was like terrified to drop out. No, I'm terrified of what happens if we lose. I was scared to drop out.

• 45:40Speaker 00

  But we feel fear, and frankly, the balancing fear. The fear of, of being in pilot selection in 28 and being too late, if China had invaded Taiwan in 26, or 25, or 24, that fear was bigger. And so, a lot of us think about fear in the very short term, but fear is a relative thing. And frankly, my fear in life at the time, and this still is, is that like, I actually don't take the risks. The riskiest thing to do in my mind would have been to stay at it and been in college watching these things unfold, and been in pilot training watching these things unfold.

• 46:15Speaker 00

  And so, it wasn't a risk. Like, dude, worst case, I could have let Don back to MIT. It wasn't that much of a risk, and I think people don't believe me when I say that. But that's how I felt, that's how, I'll tell you a fun story.

• 46:27David Weisburd?

  Because this is before you became a Tiel fellow. A lot of people think you became a Tiel fellow, you dropped out. But you dropped out first, which is critical.

• 46:35Speaker 00

  The Tiel Fellowship had nothing to do with it, to be honest with you. I dropped out, I was already running the company. I got like 200K, I could go and dilute. I'm going to take the 100K Tiel Fellowship. It's not diluting, I put it right back into the company, and I got to work. It's a misunderstood portion of the story. Yeah, it wasn't that risky. And I think a lot of things in life just aren't that risky. I'm a unique person. I want other people to take risks like me. I'm very confident that there are people better than me that can go and start companies. I know there are better engineers than me who can join my company and get a ton of equity. I know there are better, better investors than, than I am out there who can identify when there is the right opportunity of a company that is going to call the ball and have the guts to just go and say, let's go and do that. And I want to work with those investors.

• 47:20Speaker 00

  And so, look, it's not that hard to, to take risks if you're okay being wrong. And if you take risks on a multi-decade time horizon.

• 47:30Speaker 00

  I would so much rather put on laying down to die someday than, you know, I took the hard risks. And it was hard. Like, I love my friends from school. I had a frat, I was playing football. I had a bunch of Air Force Rotse buddies. I had to step away and like go and sleep on the ground for six months in our, in our office in Charles Town. But in the long term, that's actually the easier thing to do, and I feel better for it. Plenty of people describe building a company as painful. It's not painful, it's just hard. And when you do things for the right reasons, hard things feel good.

• 48:01Speaker 00

  So I hope that answers your question. One story I'll tell you that is an important part of the story is we had like five or six interns for that month of IAP. It was just me for the semester because all my buddies went back to college. And then we got two houses and basically 40 MIT and Harvard kids. I was a kid at the time. I say that. I still am a kid. I hope I can always call myself a kid. But we literally worked out of two houses and one house was the hangout house. It was called Balcony's. So we went and drank beer and had a cookout every Friday night. And then one house was the workhouse and there's some fun stories. There's this dude, Matthew Garcia. This is like a weekend and we had two full-time employees. He literally heard about the fact that we're working on this. This is middle of nowhere Austin.

• 48:45Speaker 00

  And he literally, I had heard about this guy because he and my mom had been on the same flight and he got flagged by the TSA for bringing solid rocket motors aboard. They had like mixed himself. They didn't let him on. This is back when he's going to MIT. But he comes and just knocks up at the door and I say, hey, who are you? He says, oh, I'm Matthew Garcia. I heard this was happening. I want to come work here. Like, okay, great. Do you want to join? And I shook his hand and he was my roommate for the rest of the summer.

• 49:12Speaker 00

  Three of us shared, shared a room in that house and like 25 of us worked out of that house every day. We broke the AC because we were pulling too much power for our 3D printers. We tested jet engines in the backyard. It was fun. Like if you're doing things for the right reasons with people you respect, even if it's a scary thing, it's actually fun. And so that's a long story. That's portions of the story I've never told before.

• 49:33David Weisburd?

  If you could go back just before you started, only three plus years ago, you could give yourself one timeless piece of advice, what would that be?

• 49:40Speaker 00

  Find people you can trust and then empower them. Yeah, look, I work hard. We all work hard. I got like three hours of sleep last night. That's the way it goes. I'm not complaining. I love it. But I own like one right now, probably one 450th of the output of the company. And so I think it's very easy to put yourself up on a pedestal as a founder and to say you have some special thing. I actually don't. The only two things in my job are to, to set what the mission is, to find generally how I want to go and accomplish it. I do choose all the products we choose to build as a company. I can name you most of the components, not on this podcast because that'd be an ITR violation. I care about the details, but one is my job to set the direction that is right for the world, that will make my investors money, that will make my employees money.

• 50:25Speaker 00

  That will make sure that the good people have the tools, in this case, the weapons. And then the other half of my job is to figure out who cares enough about that to go and do the hard thing. And when you find those people, to give them ownership in their job, to trust them to do that, to speak objectively to them in an environment where feedback is not a bad thing. Feedback is a deeply good thing. I think it's been solid by HR corporate culture. It's necessary. Now, good feedback is technical. And it can happen with your lawyers. It can happen with your financiers. It can happen between some technician and me saying, hey, why did you go do this thing? When you do that, you achieve rigor as a company. Your people work super, super hard. I'm people. I work super hard because I exist in this environment.

• 51:05Speaker 00

  And then you get stuff done. And when you get stuff done for the right reasons, you make money, you get your mission done.

• 51:13Speaker 00

  And you ship awesome products that people want to work on. And so that's all I see my job as. I wish I had known that, frankly. I've made a lot of mistakes in running the company. I think it's important to realize that I did start the company when I was, when I was 18 with passion. My only real job I've ever had was an auto tech back in Texas. So it took me a while to figure out what leadership meant. I'll never know. I hope I never think I know.

• 51:37Speaker 00

  But yeah, find the people to trust, show them the mission and empower them.

• 51:40David Weisburd?

  How do you square this empowering management style with this founder mode popularized by the CEO of Airbnb, which is you go and you get shit done?

• 51:50Speaker 00

  I think I misunderstood founder mode. I think when you give people the ability to make their own decisions, you hold them accountable. You expect excellence. You're willing to dig into the details. Founder mode for me is knowing what my job is and that's my job and working incredibly aggressively on it. And we, we don't tolerate anything but excellence as a company.

• 52:11Speaker 00

  But that's founder mode is not jumping into the details and changing everything about your company. Founder mode is being super, super clear on setting the bar, on finding people you trust. It's funny. I think we go through these like hype cycles of business philosophy. We're very much in this founder mode style right now where people forget that epistemic humility is an important trait in founders, right? You need to be able to call when you're wrong and you need to empower the people around you to call it when you're wrong. My dream for a culture is one where I can walk out into my manufacturing floor. And a technician can come up to me and say, you know what? You're doing a shitty job as a CEO. You should do this, this, and this. And he and I can sit down and I can say, this is why I'm doing this. This is why I'm doing this. This is why I'm doing this.

• 52:53Speaker 00

  And I'll convince him. And if I don't convince him, it means I'm probably doing the wrong thing. And my job for the people that work with me

• 53:02Speaker 00

  on the mission, which is not my mission, is to create that level of transparency and trust. Because founder mode is important. You have to have conviction. You also can't destroy trust in people to hold you accountable. And so it sounds like a balance. It's really just not like be clear out about what you're good at, develop that, sharpen that over time. Empower your people to give you objective feedback so that you know you're not going adrift.

• 53:27Speaker 00

  Founder mode should be described, should be like first principles for an individual founder. So founder mode for Brian is different than founder mode for Elon. It's different than founder mode for Jobs. Jobs changed his founder mode over time too. Something we, we forget to mention, like he was an asshole and then he got fired and he had to go and kind of find himself and find what founder mode meant for him. And he came back to Apple when he turned 20. A lot of the folks I work with actually worked with Jobs and in his last years at Apple. Before and after he had cancer. He was actually a very kind dude. And that's when he did his best work. And so I think it's easy to assume that founder mode is asshole Steve Jobs mode. You have to have conviction, but you actually also have to make sure that the people around you hold you accountable. And that's what founder mode means for me. I hope it means something else for other people.

• 54:12David Weisburd?

  I think it really comes down to being world-class at every position. If you're the founder and you have to do all the jobs, you don't have a scalable organization. But it is oftentimes a sign that you have the wrong person in the job. Brian Chesky, the context within which he did founder mode, he had this layer of bureaucracy that a bunch of people hired during the early 2000s. And you had all these people that are basically incompetent and you needed to take over, at least temporarily take over their jobs and take the reins back because they have given up their reins. I think it's really about world-class product at every single part of the organization. And if you don't have that, you should actually fire the people, not necessarily do the job yourself.

• 54:51Speaker 00

  A hundred percent. And I want to be super clear. Like when I talk about needing, the need is a, is a, is a leader to, to have your people hold you accountable. You need to hold them accountable too. But that's a two-way door. And if you think it's one way, then lose trust and respect incredibly quickly. Brian Chesky is an incredible entrepreneur. But it's hard to say that was, it was the right thing to do in that moment. But you also have to realize that the bureaucracy gets built over time. I've had moments like this where you wake up and you're like, huh? Stuff's not going great. That's fine. It's about moving out. You do, you can't lose trust in your people along the way. He saved his company when he did that. But my job is to make sure I actually don't have that many moments where I have to switch into founder's mode.

• 55:32Speaker 00

  And that's how you can actually maintain stability over time. And I think that's one of the things Apple got incredibly right. That's why they were so innovative, especially in the later years of his life. Like Steve Jobs was a kind dude. And kind and nice are not the same thing. And so my job as a founder is to be able to be kind to my people so that they're kind to me. And part of that is telling me and me telling them stuff they don't necessarily want to hear for the sake of building an excellent team. Because my biggest goal, my biggest job is not to be able to make the decisions. Now, that doesn't mean I can't go into the details. I can go into the details with my engineers. I can go into the details with my lawyers. I'm still figuring out the finance part. I'll be able to go into the details, hopefully there in three to six months.

• 56:14Speaker 00

  But if I have to, I, I hold out veto rights to the company, but if I have to veto things too often, that actually means I'm doing a poor job building the team.

• 56:22David Weisburd?

  For people that want to create this culture of just being direct, getting the most out of people, getting the most out of the CEO as well. What are some things to do and what are some things to not do?

• 56:34Speaker 00

  There are probably two important things to do. One, love getting feedback. Like I just started CFO and one of like the best thing is on his like second week in a, in a public meeting. I said something he didn't like and he ripped me for it. And it was great. And he and I got into a discussion in public.

• 56:55Speaker 00

  Second, you do have to understand what excellence looks like and you need to empower your people and you need to hold them accountable consistently when it's not excellent. It needs to go in both directions. It's important to think about what the word feedback actually means. Like David, I'll give you an example. If you're driving your car and it's probably testy at this point, but if it weren't,

• 57:20Speaker 00

  feedback is, is your eyes and ears. And, and if you're a leader and you're driving your car, you're a leader of that car in that moment. If someone blocks your steering wheel, you're going to be a bit frustrated. And so I actually think you have to have a craving for feedback and you have to empower and frankly publicly reward people who give you feedback in public. Now, you can't be weak. You, you have to know what you think is right. And you have to be able to go into the details and have technical discussions. And so you have to get that right. You have to love getting feedback. You have to want feedback to love getting feedback. We have a, a fixed context window. My context window is like one 450th of the company. And so I have to love it when people come up to me, give me that feedback.

• 58:04Speaker 00

  Now that feedback can't be ad hominem, right? It can't be, oh, so-and-so sucks. Ask me, hey, this specific glide part that this person does own, I think this is going to cause glide to crash. And then on the other hand, you have to have confidence that you do know what your job is. And you need to know what your job is. And as a CEO, as a chief executive officer, your job is not to make every decision. Your job is to build a team that can make those decisions excellently well. And then frankly, look out for, make sure they have capital. Make sure you look out for them by, by keeping the ship in the right direction. There's a funny thing Sully said.

• 58:39Speaker 00

  The, the, the Apple dudes gave him shit for, for a while. At one hangout, he said, my job as CEO is I steer the boat. And right now the whole, the boat has a hole in it and I just have to keep steering it. You have to think deeply about like what's actually broken. That quote makes no sense. And so my job is to steer the boat. Now, when there's a hole, you have to patch that hole. But in the process of patching that hole, you have to look out for your people. Looking out for your people has been kind, by the way. It's not being nice. You have to develop trusted relationships across the company. Where I can walk up to that same 3D print technician, say, hey, you know what? That part just kind of looks wrong. This is why I think it looks wrong. Now they want, you want them to be able to walk up to you and say, hey, I think that you should have made this decision better.

• 59:24Speaker 00

  And when you do that, you can build a good team.

• 59:27David Weisburd?

  Elon talks about this, which is essentially feedback, especially when you're working on a physical product. It will be given one way or another. It could be given to the human before the Falcon 9 is launched or it could be given when it blows up. And it's just a matter of how quickly you escalate that and it could be a defensive measure as well.

• 59:46Speaker 00

  Absolutely. And one thing you are as the CEO is you're the culture setter for your company. And if you don't love getting that feedback, your people won't love hearing it and they won't listen. And so Elon's right in that decisions end up working their way through in funny ways, right? It's clear as in engineering, it's clear as to someone designs a part wrong, the thing crashes. But it's true also that if, if a lawyer has one line wrong in a contract, that that contract might not be great. That's the scary thing, right? But that's why you need to build a team of excellence and, and you can't be the only excellent person in your org.

• 1:00:20David Weisburd?

  Ethan, this has been absolute masterclass. Thanks so much for jumping on.

• 1:00:24Speaker 00

  Thank you so much for having me. I loved it, David.