Defense Tech Day, Delian Asparouhov, Dhruva Rajendra, Steven Simoni, Chris Power, Aaron Slodov, AJ Piplica, Connor Love, Cameron McCord

TBPN.com is made possible by: Ramp - https://ramp.com Eight Sleep - https://eightsleep.com/tbpn Wander - https://wander.com/tbpn Public - https://public.com AdQuick - https://adquick.com Bezel - https://getbezel.com Polymarket - https://polymarket.com Follow TBPN: https://TBPN.com https://x.com/tbpn https://open.spotify.com/show/2L6WMqY3GUPCGBD0dX6p00?si=674252d53acf4231 https://podcasts.apple.com/us/podcast/technology-brothers/id1772360235 https://youtube.com/@technologybrotherspod?si=lpk53xTE9WBEcIjV (03:34) - Trump Vehicle Tariffs (07:28) - Ferrari to Raise Prices (11:51) - Pat Gelsinger Joins VC (15:35) - Flexport Misses Profitability Target (17:52) - Defense Tech History Deep Dive (31:15) - Delian Asparouhov (01:03:02) - Steven Simoni (01:16:54) - AJ Piplica (01:31:57) - Connor Love (02:00:58) - Chris Power (02:17:03) - Aaron Slodov (02:32:10) - Dhruva Rajendra (02:46:36) - Cameron McCord

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

• 0:00John Coogan?

  You're watching TPN. 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 it, Jordy. Defense, defense, defense. Defense wins championships, and we're breaking it down today on TPN Live, talking to a bunch of people in the defense world. Delian, ACS, AJ from Hermes. 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 broadly, talking about tariffs, talking about what Pat Gelsinger is up to now that he's out of Intel. And then we'll take you through some history of defense tech, how we got here,

• 0:43John Coogan?

  and then we'll talk to the builders that are actually doing the good stuff. So let's take it with the news first. First, I noticed you are, you could say you're verticalizing orange today.

• 0:55Jordi Hays?

  I'm going big. I'm going long orange.

• 0:57John Coogan?

  Going long orange.

• 0:58Jordi Hays?

  I'm shorting. I want to go on record. I'm shorting. It's March 27th, 2025. I'm short.

• 1:14John Coogan?

  Yep.

• 1:14Jordi Hays?

  And it's downhill from here.

• 1:16John Coogan?

  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 very fascinating time on the internet yesterday. Obviously, there was eventually a backlash to all the gibblification, all the gibblys going out.

• 1:34Jordi Hays?

  But the slop lords cleaned up yesterday.

• 1:36John Coogan?

  They did. I posted one that was just, I know it was framed from Oppenheimer, gibblified, 30K likes. Jordy had another 25K or something on.

• 1:45Jordi Hays?

  Morning routine.

• 1:46John Coogan?

  Morning routine. Just take the viral meme, make it ghibli, and it was easy money on X. Those Elon bucks were flowing yesterday.

• 1:52Jordi Hays?

  I can't wait. For the payouts, there's this sense, maybe, for people that aren't in the Creator Revenue Sharing Program, that the payouts are big. They are not.

• 2:03John Coogan?

  They're not.

• 2:04Jordi Hays?

  We could maybe pay for a week's supply of Saratoga Water.

• 2:10Jordi Hays?

  With the X payout from this entire month.

• 2:13John Coogan?

  But it was a fun day. I think, I think a lot of the criticisms were correct that, you know, this, this is a degradation of aesthetics in some way. It's a collapse of aesthetics. It's this all consuming meme. Everyone was obsessed with the exact same image, exact same look. And it was a little odd, but you know, it was, it was a very peaceful time on X yesterday. There was no politics, no wars, no fighting. It was just people posting anime, having fun.

• 2:39Jordi Hays?

  Heskel in the chat says, Lisan Al.

• 2:41John Coogan?

  Ghibli, yes, of course, of course. And so 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 about more of the tech that went into developing that model. How narrowly is it trained on Studio Ghibli 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 interesting to dig into. I'm sure we'll talk to a lot of folks. We have Christabel Valenzuela coming on in a few weeks.

• 3:26John Coogan?

  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. 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 potash, which received a 10% tariff. A little bit more critical.

• 3:55Jordi Hays?

  What is potash?

• 3:58John Coogan?

  You look that up. I think it's an industrial fertilizer.

• 4:03Jordi Hays?

  Potassium containing salts that are mined and manufactured. It's used as a fertilizer. It's a key nutrient for plants. So bad news for the potash industry.

• 4:15John Coogan?

  Didn't get the, oh, the domestic potash industry, you mean? Because the domestic, the US domestic potash industry, they want the highest tariff possible.

• 4:22Jordi Hays?

  Yeah, yeah.

• 4:22John Coogan?

  But there's a smaller tariff, 10% on, on potash and energy, 25% on goods. Trump administration later suspended those tariffs until April 2nd on autos and all other goods that are eligible for duty free trade under the US Mexico, Canada agreement or USMCA. 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. Canada also said it would tariff an additional $20 billion of US goods in response to Trump's steel and aluminum 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% tariff on global automotive imports

• 5:05John Coogan?

  to the US. That's all cars that are made internationally. Doesn't matter if it's a BMW or a Han Chinese EV, like that's the brand, Han.

• 5:16Jordi Hays?

  Oh, really?

• 5:17John Coogan?

  Yeah.

• 5:17Jordi Hays?

  Even though Han is like

• 5:18John Coogan?

  Yes, yes, yes. It's the most dominant ethnicity in China, the one of the

• 5:23Jordi Hays?

  That's cool. That's like calling your bank Bank of America.

• 5:25John Coogan?

  Yeah, basically. And of course Huawei also, is Huawei or?

• 5:31Jordi Hays?

  Big Alpha and somebody making a political podcast called Podcast of America.

• 5:36John Coogan?

  Podcast of

• 5:37Jordi Hays?

  Pod Save America.

• 5:38John Coogan?

  Pod Save America.

• 5:38Jordi Hays?

  But just the Podcast of America.

• 5:39John Coogan?

  Of America. Yeah, like Bank of America. I like that. It's good. And so auto stocks have been in turmoil since this happened. 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 levied 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

• 6:24John Coogan?

  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 manufactured goods, basically. There's also some reciprocal tariffs going on over in Europe in the EU. 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 in-house by Bezel's team of experts. That's right. Great time, because a lot of things, if you buy something before the tariff comes in, the price goes up. You know, like the free market will reward you for that.

• 7:09John Coogan?

  That's 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 FP Journeaux, hoping that tax tariffs hit and they strike it rich. Many ways to make a buck around here. Always a bull market somewhere. That's right. Well, speaking of luxury goods, Ferrari is set to raise prices on some models in response to US tariffs. This is the big question, who really pays? The external revenue service is levying tariffs. Will the foreign countries pass that through to the consumer by raising prices? In the case of Ferrari, it certainly seems like they are. They're raising it, they're seeing a maximum 10% price increase on the Purosangue, which is their SUV.

• 7:54John Coogan?

  And the Dolce Chilindri. That was pretty good. Normally you really box those, but I'm proud of you. I'm working on my Italian accent. Yeah. Yeah. The 12-cylinder, which, very controversial car. I think it's beautiful. Not many people agree with me. It's the wheels, John. It's the wheels. Oh, I always thought it was the front, the front hood, that black stripe, which is also a design element in the F80. The wheels on the Do they go round and round? Chilindri are just, they go round and round, but they're very bad. Oh, okay. I didn't know that. I mean. I mean, I'm still partial to the, to the rear engine Ferraris. The SP3, even the SF90, the 296, I think those are all fantastic cars, but.

• 8:40John Coogan?

  In terms of, you know, what does Ferrari really do? Well, front engine V12s and the Dolce Trilindi is still in the game, but it's 10% more expensive now. So.

• 8:50Jordi Hays?

  And Ferrari was already having issues with pricing. People, it seems that the true market value of a lot of new Ferraris is simply less than what Ferrari is charging.

• 9:03John Coogan?

  Yes.

• 9:03Jordi Hays?

  And so having to increase prices and pass those on to, you know, basically pass the tariff cost on to consumers.

• 9:12John Coogan?

  Yep.

• 9:13Jordi Hays?

  Is not going to have a positive impact on sales.

• 9:15John Coogan?

  And so we've covered this before. Ferrari's changed 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 had 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 taken a lot of depreciation on the chin with that one. And also just from a design standpoint, the SF90 296, they look pretty similar.

• 9:49Jordi Hays?

  Stories of people buying SF90s, you know, putting up a lot of equity and then still being down.

• 9:56John Coogan?

  Underwater.

• 9:56Jordi Hays?

  In the red.

• 9:57John Coogan?

  Yep. It's very rough.

• 9:58Jordi Hays?

  Having to pay to sell their car.

• 10:01John Coogan?

  Well, the good news is the 296, the SF90 and the Roma will all remain unchanged in price regardless of the import date. This implies that Ferrari will cover the cost of any duties due on such models imported to the US after the April 2nd deadline.

• 10:15Jordi Hays?

  Let's hear it.

• 10:16John Coogan?

  So it's truly an external revenue service event.

• 10:19Jordi Hays?

  Yep.

• 10:20John Coogan?

  You said you wanted to hear it for someone?

• 10:22Jordi Hays?

  Well, let's hear it for the Ferrari management for taking one for the US consumer.

• 10:26John Coogan?

  Thanks.

• 10:27Jordi Hays?

  US consumer is undefeated.

• 10:28John Coogan?

  Yep, they really are. Anyway, you know who drives for Ferrari?

• 10:34Jordi Hays?

  Charles Leclerc.

• 10:36John Coogan?

  And you know what bed he sleeps on? He sleeps on an 8-sleep, baby.

• 10:40Jordi Hays?

  There we go.

• 10:41John Coogan?

  He's an 8-sleep brand ambassador and today we're telling you about 8-sleep nights that feel your best days. Turn any bed into the ultimate sleeping experience. Go to 8sleep.com/tbpn.

• 10:50Jordi Hays?

  Just do it.

• 10:51John Coogan?

  Just do it.

• 10:53Jordi Hays?

  Code TBPN, $350 off. And you can compete with John and I. We've both been putting up big numbers this week.

• 11:01John Coogan?

  I woke up at 4 a.m. but I still put up a big number last night, something like 90, 94.

• 11:06Jordi Hays?

  And we were hanging with...

• 11:07John Coogan?

  And once you get really into it, you can go deeper. We're learning this. We're gonna dive into this later, but 8-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.

• 11:20Jordi Hays?

  As well as your breath rate.

• 11:21John Coogan?

  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

• 11:31Jordi Hays?

  Across the board.

• 11:32John Coogan?

  Across the board. There's always a bull market somewhere in your health.

• 11:34Jordi Hays?

  Always a bull market somewhere. We got to hang on Zoom a bit with Mavi and Alexandra over at the 8-sleep team this morning, which is fun. We got some cool stuff cooking. But back to the show.

• 11:46John Coogan?

  So Pat Gelsinger, former Intel CEO, absolute legend.

• 11:51Jordi Hays?

  He's an absolute dog, John.

• 11:53John Coogan?

  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 love this. I was thinking about this the other day that, 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 gonna 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 gonna figure

• 12:38John Coogan?

  out. And it sounds like that's what Gelsinger is gonna do. And I mean, he's a legend. He's been in the industry forever and he would be... Probably a fantastic board member. I mean, I don't know exactly how good he is at startup governance, but I imagine he'd be very knowledgeable and he'd be someone who you would want as an advisor.

• 12:55Jordi Hays?

  I'm over here on LinkedIn where he's putting up some big numbers. He hasn't shared this news yet, by the way, so it's breaking news. He calls himself an electrical engineering expert with four decades of technology experience.

• 13:09John Coogan?

  Just a couple of decades.

• 13:11Jordi Hays?

  But I love that he's leading with his expertise. Got to be cracked to go on a run like he did. And excited to have him on the show at some point.

• 13:20John Coogan?

  He started a brief stint at VMware, the Intel veteran, came back home to the chip giant in 2021. This time as 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. But his turnaround strategy focused both on designing and manufacturing chips, which was controversial. Remember, a lot of people were saying Intel should split those two businesses up, become two different companies. This round ran counter to the direction that the industry had taken over previous several decades with rivals like AI chip designer Nvidia and chip manufacturer Taiwan Semiconductor Manufacturing, TSMC, setting the pace.

• 13:59John Coogan?

  And so the whole market and the big power law companies were all saying, you gotta be a pure play. Intel, you're trying to do two things at once. You're neither Nvidia, you're not Nvidia, and you're also not TSMC. So you're falling behind. Everyone was saying, hey, just go pure play. 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 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 I'm sure we'll be talking to more folks about Intel in the coming weeks. Stay tuned.

• 14:40John Coogan?

  But I was thinking, if he wants to just get a couple of deals under his belt, maybe he takes a, you know, this is his first time really being a VC.

• 14:51Jordi Hays?

  Saquon.

• 14:51John Coogan?

  Saquon.

• 14:52Jordi Hays?

  He's been very active over the last couple of months.

• 14:55John Coogan?

  Yeah, maybe Saquon could be like his junior partner. Yeah, just like, or venture partner.

• 14:59Jordi Hays?

  Honestly, Saquon, at least over the last two months, is getting into the higher profile.

• 15:07Jordi Hays?

  Companies and companies that have 10x the demand for their equity. So it's possible that, you know, they could, I'm sure they could both learn a thing or two.

• 15:16John Coogan?

  Be great. So hopefully he, he like Saquon gets into ramp. Of course, you know, ramp. Time is money. Save both. Easy to use corporate cards, bill payments, accounting and a whole lot more all in one place.

• 15:28Jordi Hays?

  And as Saquon says, keep your team focused on the game, not expenses.

• 15:31John Coogan?

  I love that. It's great. Let's move on to some news in the Wall Street Journal about Flexport. Ryan Peterson's a good friend. He's been on the show. This, this article is kind of deep diving into their, their profitability and revenue. The title is freight startups, Flexport misses profitability target. We're going to give you the details and then give you our take. So 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.

• 16:07Jordi Hays?

  So that's the real story here, folks.

• 16:09John Coogan?

  For Ryan, he's been working really hard on this.

• 16:11Jordi Hays?

  Billions of revenue and 2025 profitability. If we were writing this headline, we would have led with that.

• 16:16John Coogan?

  Yeah, exactly. Exactly. Yeah. So in 2023, Flexport did 1.6 billion in revenue. Last year, the 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.

• 16:36Jordi Hays?

  Taken like four or five flights a day.

• 16:38John Coogan?

  Yeah. You, I mean, you've seen him. He called in from Texas because he's traveling like crazy. He is, he is doing everything necessary to make this company work and successful.

• 16:45Jordi Hays?

  And it's an interesting thing where.

• 16:47John Coogan?

  More than I possibly can.

• 16:49Jordi Hays?

  Yeah. Flexport is, is in this position where Flex, many of Flexport's customers have gone through the craziest last six months

• 16:57John Coogan?

  Oh, yeah.

• 16:57Jordi Hays?

  of their time as, you know, companies, right? With, you know, trade wars, tariffs, you know, all this. Crazy stuff happening and it's almost like they need to kind of thread the needle on making sure that you know they're building a great business, but also not putting too much pressure on their customers who are already seeing their costs rise in various ways.

• 17:17John Coogan?

  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-grade amenities, dreamy beds, top-tier cleaning and 24/7 concierge service.

• 17:30Jordi Hays?

  I remember you saying that word for word.

• 17:32John Coogan?

  Yeah, I was saying it's a vacation home, but better go to wander.com, use code TVPN. And so, check it out. Let's, let's run through a little bit. So, so we're doing Defense Day today. We're taking you through 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 of 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.

• 17:58Jordi Hays?

  I want to know, at what point did they decide to call it Defense Tech versus Offense Tech? Because that would have been.

• 18:07John Coogan?

  It is the time for offense. Well, you know that the Department of Defense used to be called the Department of War.

• 18:11Jordi Hays?

  Yeah.

• 18:12John Coogan?

  Because it was just like, yeah, it's the guys who we handle war.

• 18:15Jordi Hays?

  It is a better.

• 18:17John Coogan?

  But we've toned it down now. We're focused on defense because defense wins championships, of course. And it really all, this whole idea of like, before, you can't call like the Civil War like defense technology really, because they weren't using electronics back then.

• 18:33Jordi Hays?

  Yeah.

• 18:33John Coogan?

  World War II was the first electronic war. And so, this all started during the Blitz in 1940. The Germans were bombing Britain and there were these series of radars called the Chem-Huber Line, and they were decimating our bombers. They had something called the Messerschmitts 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 radio systems and then counter radar systems and all these different things.

• 18:59Jordi Hays?

  Crazy lore. My great-grandpa was shot down twice.

• 19:02John Coogan?

  Twice.

• 19:03Jordi Hays?

  In a, in a, he was the rear gunner in a B-52, sort of long-range bombers.

• 19:10John Coogan?

  Wasn't his dying wish not to mention that on a podcast?

• 19:13Jordi Hays?

  No, he said, he said, talk about this forever, to the loudest, you know, in the loudest possible way to the most number of people.

• 19:20John Coogan?

  It's legendary to survive to.

• 19:22Jordi Hays?

  Survive to, and then he was redeploying to the Pacific to be a fighter pilot when the war ended, but anyways.

• 19:28John Coogan?

  And so, so the solution was Vannevar Bush, the science legend. I think he worked alongside Oppenheimer. 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 there's, he brings this one page memo to FDR outlining a plan. Hey, we're gonna use our best scientists at universities to, to build defense tech. And FDR approves it in 10 minutes. Talk about like founder mode, like it's like really, really great. So this creates the NRD, the NDRC, the National Defense Research Committee in 1940. And they work on the bomb, which you know from Oppenheimer, but they also work on radar.

• 20:11John Coogan?

  And so 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 advisor to Fred Terman, and Fred Terman 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. There's a whole bunch of different things. They invent chaff, 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 tinfoil. But it's just chopped up tinfoil, but if you chop the tinfoil at a certain size, it messes with the radar.

• 20:56John Coogan?

  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're just in so much signal that they get confused. And this contributed to major successes of bombing raids like Operation Gamora in 1943. Now, the radio research lab gets disbanded in 1946, and they needed something new. So, Terman 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, Hewlett-Packard, General Electric, Lockheed Martin, they all had offices there. And so, it was this crazy interface between science and business, basically.

• 21:40John Coogan?

  And this is all pre-transistor, but it led to all of Silicon Valley, basically. So, then, you go on to the 50s. So, we'll go decade by decade. That was the 40s. In the 50s, DARPA obviously speeds up. This is all because of Sputnik. October 4th, 1957, it was the Sputnik moment of the Cold War.

• 21:59Jordi Hays?

  Of Sputnik.

• 21:59John Coogan?

  Yeah, exactly. It was just a radio 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 gotta be able to do that. And so, Sputnik's a huge deal. The New York Times published 279 articles about it in one month. It's like crazy. It was like total wall-to-wall coverage. It was crazy. It was like the Sputnik moment really was real. And so, the Cold War was heating up.

• 22:26Jordi Hays?

  The Ghibli moment.

• 22:26John Coogan?

  Yeah, the Ghibli moment of the Cold War.

• 22:29Jordi Hays?

  It was the Ghibli moment of space or the Cold War.

• 22:31John Coogan?

  And so, the Soviet Union took huge World War II casualties, but they were strong in tech. And Sam Rayburn, the Speaker of the House of 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 gonna happen, but Americans were scared because they didn't know. And the solution was, we responded with the Vanguard TV-3, launched two months later, but that crashed. And then, Explorer 1 worked in 1958. So, the pace of play was really fast. Sputnik, 1957.

• 22:59John Coogan?

  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 ARPA net. 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 gotta talk about.

• 23:38Jordi Hays?

  Sean McGuire was at DARPA himself for, I think, a year and a half.

• 23:43John Coogan?

  That's right. So 1960s, Skunk Works, the DOD was 36% of all R and D spending, not in the US, in the world. The DOD was spending so much on R and D, really like tech race. And so Harvard Radio Research Lab and DARPA were very government driven. Skunk Works marked a shift into proper research and development being done at companies. And so Skunk Works is all led by Kelly Johnson. He's designing planes at age 12. At age 23, he goes to work at Lockheed as a tool designer. He's super confident. He tells, he goes into the chief designer, chief design engineer at Lockheed and just, and just says, "Hey, our, our best aircraft, it's flawed. I'm going to go fix it and then give me a wind tunnel."

• 24:27John Coogan?

  And he does it. And so then he designs the Hudson bomber, the Model 14. It's more maneuverable, important in World War II, the jet-powered Messerschmitt 262 that obliterated us in World War II. 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, but it's a recon plane that can fly at 70,000 feet. Lockheed 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. The initial bid for the F-35 was in 1992, just started flying. Just to show you like the pace of things like the F-35 took 30 years and they did the like

• 25:12John Coogan?

  the pace of play around the SR-71 was like insane. So the U-2 was great, but Francis Gary Powers got shot down by a Soviet surface-to-air missile and they needed something faster, supersonic. And so then they build the SR-71. 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 hurrah. And then of course, we go into like the decline. In 1970s, there's this like, this is when stagnation starts. This is like the TL thesis. All the Bitcoiners say like, what happened in 1970, that whole thing. And so there's a lot of different reasons for this. Economics, the Bitcoiners say like, it's the broken dollar

• 25:55John Coogan?

  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. Nuclear plants cost billions and laws change while they're building 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 that's kind of what's going on in the 70s. Then the 80s, there's like this fake solution to stagnation in the form of globalization. Henry Kissinger just went to China, opened up that relationship post-Cold War. US manufacturing employment actually peaked in June of 1979 at 22% of total

• 26:39John Coogan?

  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. But this was the idea of like the multinational corporation. America was good at bits. It's only rational to prioritize that. And of course, this is all capped with China's rise. They joined the World Trade Organization in 2001. And of course, there's been a lot of problems with the China relationship over the last few decades. 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,

• 27:22John Coogan?

  Hey, maybe I don't want to spend like $20 of every 100 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. Dick Cheney said, because we now face neither a global threat nor a hostile, non-democratic power dominating a region critical to our interests, we have the opportunity to meet our requirements at lower levels and at lower costs. So everyone was on board with this. Now, the source of the problem was that this all leads up to the Last Supper turning point. The Pentagon says the US doesn't need so many defense companies. There were like 50 at the time. And so Secretary of Defense Leslie Assman-

• 28:05Jordi Hays?

  Let's be clear, those 50-

• 28:07John Coogan?

  They consolidated-

• 28:08Jordi Hays?

  But they also had thousands and thousands of tiny subcontractors-

• 28:12John Coogan?

  Oh, yeah, tons, tons. It was a massive, massive organization. And so William Perry brings all the defense tech companies together in the fall of 1993. He encourages mergers, says you got to cut costs. We expect defense companies to go out of business. There's dozens of mergers. Hughes Electronics and McDonnell Douglas ceased to exist. General Electric and Chrysler sold their defense subsidiaries. At one point, the industry was shedding 1,000 jobs a day, and it was the Francis Fukuyama 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. Lockheed Martin, Raytheon, General Dynamics, Boeing, and Northrop Grumman. Then, of course, there's the war on terror. A wake-up call. You get Palantir. It was

• 28:55John Coogan?

  really tough to get started, but Incutel steps up, the CIA funds, the VC farm of the CIA funds Palantir. And they actually had to sue the government to allow them to, to win an army contract, and they won. And then, interestingly, SpaceX used the same lawyer to sue the government, because again, there was like, okay, is this-

• 29:18Jordi Hays?

  You gotta have that lawyer on.

• 29:19John Coogan?

  Yeah. Yeah, he might actually do it. I'm connected, so maybe we should reach out to him. 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 lawsuit, but- The 2010s are the era 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 crewed ISS flight happens in 2020. And there's the SpaceX lawsuit, of course. And so, there's a bunch of key moments here. Ash Carter creates the Defense Innovation Unit. Eric Schmidt is the inaugural chairman of the Defense Innovation Board. And Trey Stevens

• 30:04John Coogan?

  founds Anduril, and he also changes the LP agreement at Founders Fund to allow for defense investing in weapons, basically.

• 30:11Jordi Hays?

  Yeah.

• 30:12John Coogan?

  And they just went to their LPs and were like, hey, we're just gonna like, remove this one clause. Like, don't worry about it. Like, we don't really have any plans. And then like, the first investment that they made was Anduril right after that.

• 30:22Jordi Hays?

  Yeah.

• 30:22John Coogan?

  But it's a funny story. And that caused like, a cascade in Silicon Valley where every firm can now invest in defense tech.

• 30:29Jordi Hays?

  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, period.

• 30:38John Coogan?

  Yep.

• 30:38Jordi Hays?

  In the same way that Founders Fund at one point had it. And what that just meant is if you had, it's already hard enough to raise money, right?

• 30:47John Coogan?

  Yep.

• 30:47Jordi Hays?

  There's only a few, you know, maybe it's a couple thousand companies a year that raise like, anything close to like, traditional venture capital.

• 30:54John Coogan?

  Yep.

• 30:55Jordi Hays?

  And imagine doing that when 95%, imagine raising when 95% of the funds just say like, I think you're smart. I like what you're doing. It's good for the country, but you still can't.

• 31:06John Coogan?

  I legally can't do it.

• 31:06Jordi Hays?

  Legally can't. And 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 gonna do this.

• 31:14John Coogan?

  Yeah, totally. Well, we got Delian in the house. Welcome to the Temple of Technology.

• 31:19Jordi Hays?

  He's back.

• 31:20John Coogan?

  How you doing?

• 31:20Speaker 02

  Oh, yeah. Delta V. And I heard today was the day where we were all supposed to call from the factory floor. So I

• 31:25John Coogan?

  Oh, yeah.

• 31:25Speaker 02

  Moved downstairs.

• 31:26John Coogan?

  Rumors gotten around. I like it. It's a beautiful background.

• 31:28Jordi Hays?

  Proof of work.

• 31:29John Coogan?

  Proof of work.

• 31:30Speaker 02

  Nothing in the background is ITAR control. That's just sitting in one place. So unfortunately, it's the least interesting view of the factory floor.

• 31:36John Coogan?

  We got a nice logo back there. It's great.

• 31:38Speaker 02

  Yeah, exactly.

• 31:39John Coogan?

  I was just given a little bit of a history of kind of how we got here and the evolution of defense tech. Can you walk me through kind of like, I literally just ended at 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?

• 32:06Speaker 02

  Yeah, I'll use a funny analogy to describe the various generations of defense tech and how it's evolved over time. If you look at the basically 2003 through 2015, call it time period, in order to start a successful company and like defense aerospace thing that basically worked with the government, you both had to be a billionaire co-founder and you had to be willing to sue the US government in order to, you know, have any success. And so, you know, both SpaceX and Palantir in the 2010 through 12 time period basically had to sue the government in order to win contracts. 2015 to call it roughly 2019.

• 32:44Jordi Hays?

  We're gonna sue our customers. The playbook is like, we're gonna sue our only customer.

• 32:49John Coogan?

  That doesn't apply anywhere else. You don't hear about like, oh yeah, like the, you know, the C, this B2B SaaS company had to sue Nike to get them to use their SaaS products.

• 32:58Jordi Hays?

  We really wanna, we really want Ramp to sponsor us.

• 33:00John Coogan?

  So we're gonna sue them. Yeah, yeah, yeah.

• 33:02Speaker 02

  Exactly, exactly. And so it gives you a sense of like how difficult it was for 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, you know, so 2015 through 2020, at that point, you no longer have to be a billionaire and sue your customers, you can at that point just be a billionaire. So it's still like very hard, but you no longer have to sue them. And so then, you know, Palmer Lucky, you know, sort of starts Andorl. 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, generally the US government is ready to work with startups. And so you no longer have to be a billionaire suing the government, you no longer have to be a billionaire.

• 33:45Speaker 02

  At this point, you can just be friends with a billionaire and that's sort of close enough to, you know, you having the appropriate level of power and wealth, you're able to do that. And so people like me, who are just, you know, merely lowly friends of 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 school students can now start defense companies that raise, you know, a hundred million dollars. And that's obviously a logical conclusion of that trend.

• 34:14John Coogan?

  Yeah.

• 34:14Jordi Hays?

  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.

• 34:25John Coogan?

  I dabble.

• 34:25Jordi Hays?

  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, FOMOed in in like 2023, got over my skis and I'm back to, you know, back to AI."

• 34:41John Coogan?

  Just skiing, just skiing.

• 34:42Jordi Hays?

  Skiing and AI.

• 34:43Speaker 02

  They're back to skiing.

• 34:44John Coogan?

  They're back to just skiing, not being over their skis on the defense.

• 34:47Speaker 02

  Yeah, I mean, I think, I think I heard you guys talk about this when I, you know, sort of hopped on, but, um, you know, back when Andrel started in the, you know, 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, porn, and defense. And it was like put as one of those top three effectively like vices, it was in like the vice clause. I think it's pretty likely that, you know, over the next decade, some of those LPAs end up going back to having defense in the vice clause. You know, and all these people that, you know, YOLO'd in, their LPs are like, "Fuck off, like, we don't want you doing this again. You were clearly terrible at it. You had no idea what you were 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.

• 35:30Speaker 02

  Like, leave that to OnlyFans and the Foundry fund, find and figure that out.

• 35:35John Coogan?

  That's great. Uh, well, I, the, the reason I wanted to have you on mostly was, uh, to kind of restate and restart the debate around the continuing resolution. We put out a clip from you, we got a lot of text messages, I got a couple essays delivered to me, a lot of ChatGPT stuff coming my way. Can't say I read it all, but, uh, 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 pushback? What's, what have the good responses been and what has been like the cope?

• 36:15Speaker 02

  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 know, some defense contracts, you know, Tim Hughes at, you know, sort of SpaceX, uh, you know, Matt Graham, Trey Stevens, et cetera, that whole crew at, you know, uh, Androll, you know, Shamsan Krypant here. Somehow, none of those people, um, you know, some critiques, you know, sort of my framing of it. I admit my tweet was a little more pithy, but it was funny seeing some of the critiques where I'm 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 in saying that like there are no net new starts. There are going to be some that are potentially allowed, but it all still, you know, it needs to be, um, uh, paralleled to the original, basically, you know, Congress, congressional, um, you know, and, uh, House and Senate, you know, sort of bills that were passed in, you know, sort of late February.

• 36:59Speaker 02

  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 rose colored 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 when the F-47 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. 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, Putin, was like, uh, around the NASA administrator. It's obviously more on the civil space side than the defense side, but like, you know,

• 37:38Speaker 02

  Elon tweeted out like, you know, basically FBI SASS, we should de-orbit 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 slapped a little bit. He also got his wrist slapped when he like went to the Secretary of the Air Force. And then two hours later, you know, the F-47, you know, based on contract on announce, even though Elon's been on this rampage against just some human rated fighter jets for a long time. So it's like, look, like even Elon isn't able to convince the Air Force that we shouldn't have human rated fighter jets. Like, you think your fucking thing that's like a mediocre copycat of Androll is somehow going to convince them that they should spend like, you know, money on your fucking Ponzi coin? Like probably not. Like I think there's a lot of copium, uh, that's going on there. So it's like, and people are like trying to cite these like super, it's like, look, I read the CR, like I know the section that's in there.

• 38:21Speaker 02

  What matters is not like the exact legal lease that is in the continuing resolution. It's like how that's going to be interpreted both by the warfighter and by like Congress that ultimately is going to, you know, sort of go, you know, uh, uh, uh, approve. But like, you know, sort of reprogramming and then the, you know, um, uh, you know, budget, uh, you know, reconciliation, you know, sort of, you know, uh, the old sounds. Anyways, uh, I have more that I can go into there, but it was like lots of copium and all the sophisticated players didn't say anything.

• 38:45Jordi Hays?

  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 Anduril 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 is like aspiring to be a founder. Uh, it, it, you know, because I think probably at least the three of us and many other people like the, the Anduril of Anduril is Anduril is sort of like, you know, uh, uh, probably going to play out, right?

• 39:27Speaker 02

  The Anduril folks will probably be Anduril rather than a different company, you know?

• 39:31Jordi Hays?

  Yeah. But, uh, but yeah, do you see?

• 39:33John Coogan?

  Except for Anduril of bears. I think bear domestication is very important and I think that is a white space that Anduril's weak on. And so.

• 39:40Speaker 02

  We're announcing Coogan's new incubation.

• 39:42John Coogan?

  Yes.

• 39:43Speaker 02

  Ready to go. Go find with some Ruskies.

• 39:46John Coogan?

  Yes.

• 39:46Speaker 02

  Those guys know how to handle their bears.

• 39:47John Coogan?

  We're domesticating bears and you're going to 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.

• 39:55Speaker 02

  Yeah. Um, you know, Keith used to always talk about how, um, one of the things I felt like I learned from him was that some of the best companies are actually founded in some of these more like recessionary periods where it's not hot to be a founder because then it's like a lot easier to aggregate talent. Like I think about that even, you said with Varda 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 that founding team, would just like refuse to be on the founding team and instead split up and all raise 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 22 year old Sanford kids are getting like 10 million thrown at them. Like the current like conceived ecosystem for all things like frontier tech, AI, et cetera, is like in such a crazy

• 40:40Speaker 02

  bubble right now. Um, and that actually just makes it really hard for generational companies to be founded. Like a part of why Anduril almost certainly was successful is like everybody that like chose to go work with Anduril from 2017 to 2022.

• 40:52Speaker 02

  Before they call the Ukraine war was like choosing a very contrary and field to work on. Nobody else is going to be go funding those people to be either starting companies anytime soon. And so they aggregated a bunch of talent where it's like, okay, yeah, now defense is hot. But Andrew is already off into the races.

• 41:04John Coogan?

  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 want, just take a taxi or take an Uber over to Sand Hill Road and you got $10 million like next week.

• 41:24Jordi Hays?

  Well, the other thing is we've been trained for 20 years, this sort of like dream big.

• 41:30John Coogan?

  Yep.

• 41:31Jordi Hays?

  You know, call your shot. I'm going to build this amazing CRM. And then you can like put together a team and you can build the amazing CRM.

• 41:39John Coogan?

  You can actually do it.

• 41:39Jordi Hays?

  But the thing in hard tech, 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.

• 42:01Speaker 02

  Dude, this feels like it's like literally like you described my edge, basically, and like the investing in this sphere where it's like, look, I think there's some amount of like, I'm decent at the founder, you need 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, et cetera. I just, I walk the line. I like, you know, go and I talk to like the technician doing assembly. I talked to the thermal engineer, the thermal model. I talked to like, yeah, mechanisms engineer, structures engineer, software engineer, firmware, et cetera. 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 words that you hear that can kind of gauge like, is this person at like the Varda quality bar? And like, you know, doesn't have to mean that like literally everybody you can tell there is, but if like half the people are looking kind of like schmucks.

• 42:43Speaker 02

  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 a customer that works. And so it's been fascinating to me to watch investors pony up like 100 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? Like, you know, if you've given them fifty million dollars and the hardware's failing nonstop, a hundred million dollars isn't necessarily going to be the thing that solves the problem. Like, they've already got cultural rot to the level that it's like basically going to be impossible to backtrack.

• 43:11Jordi Hays?

  Yeah.

• 43:11Speaker 02

  But there are so many people, they 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 to like, you know, you know, I'm probably on like, when I think about amount that I wait 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, some investments where like, you know, we debated making a series A investment and then you watch the companies like they have like six projects in a row fail. Now, people are for some reason rescuing those companies and still giving them a hundred million bucks. But like at some point, I'm like, how long does that go for? I was literally texting with our colleague John Luda yesterday. I was just like, he was like texting me, he's like three or four companies like, God, it's really like crazy, like it must be like going really well, right?

• 43:56Speaker 02

  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 path to 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 the success of 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, in the course of the next year or two, where it's like, there's gonna be like, you know, fifty to sixty percent of this field, which is gonna have to die off or get acquired for pennies on the dollar.

• 44:30Jordi Hays?

  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've seen.

• 44:57Jordi Hays?

  You know, I've made a number of, I think, smart investments in this space and I'm sure like just sort of hard tech broadly and I'm sure like some that will zero out. But I try to pay attention to like, you really have to pension 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 as an 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 specialist funds and like not, like, nothing happened.

• 45:39Jordi Hays?

  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. So.

• 45:53John Coogan?

  Anyway, can we move on to the Cygnus spacecraft? Can you break down? 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?

• 46:02Speaker 02

  Yeah, I mean, I brought it up because I think it was like two weeks ago that we chatted about like the astronauts being stranded and then, you know, sort of SpaceX going to, you know, bring them back down. This past week, it was revealed that the Cygnus spacecraft, which is a spacecraft, I'm pretty sure made by Northrop Grumman, that originally was awarded basically a commercial cargo contract for the ISS. This was like back in like 2010, 11. It was basically you had Cargo Dragon, which was done by SpaceX and then the Cygnus spacecraft done by Northrop Grumman to basically deliver cargoes like food, water, et cetera, to the International Space Station. It generally performed, you know, so 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 ISS, it docks, drops off its things and then it just like burns up in orbit.

• 46:45Speaker 02

  So it's like the epitome of just old school, you know, sort of aerospace. 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, et cetera. But like, we don't know what happened in the drop. We need to basically send this thing back and run it 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 ISS via Northrop, Northrop Grumman now is yet again going over to SpaceX. And so it's just like one of these moments where it's like, if SpaceX does not exist right now, like the United States would neither have like Boeing able to take crew to the ISS, nor would have Northrop Grumman able to take, you know, basically

• 47:26Speaker 02

  cargo to the ISS. And so it's like, you know, without SpaceX, the astronauts would not only be stranded, but also starving.

• 47:33John Coogan?

  What do you mean they dropped? They dropped it? Does that mean dropped the program or physically dropped?

• 47:37Speaker 02

  No, no, no. They like physically dropped it. Like spacecraft like, like fell.

• 47:41John Coogan?

  It just fell?

• 47:42Speaker 02

  Yeah.

• 47:43John Coogan?

  Had an accident? A little oopsie, a little oopsie in the spacecraft.

• 47:47Speaker 02

  How much like, you know, the pulley could hold and they fucking dropped it.

• 47:53John Coogan?

  I hope we're, is there like security camera footage we can find somehow?

• 47:57Speaker 02

  I think that Northrop is gonna try and control that real tight, avoid anybody saying that.

• 48:01John Coogan?

  We gotta call our friends over at the CIA, NSA, the deep state, you know, really get them to fork that over.

• 48:06Jordi Hays?

  We need the blooper reel.

• 48:07John Coogan?

  We need the blooper reel. We've seen the SpaceX crashes. I need to see the pod dropping, crashing.

• 48:13Speaker 02

  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.

• 48:21John Coogan?

  Wow. I have not been to Varda HQ recently. It looks like you have a lot more equipment. That is filling up. Congratulations.

• 48:28Speaker 02

  We are packed in like sardines. We've got, you know, 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 airshow. Third one's currently up in orbit. Fourth and fifth are off to the side of me right now. And so, yeah, this place is, uh, you know, turning into an operation.

• 48:43John Coogan?

  Yeah.

• 48:43Jordi Hays?

  Real operation.

• 48:44John Coogan?

  You have a follow up? I have another one after.

• 48:46Jordi Hays?

  Go for it. I, I want to cover in the, maybe the last five minutes, uh, like slop as a trend.

• 48:51John Coogan?

  Oh yeah, that'd be fun generally. But, uh, yeah, let's, 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 Isaacman to become NASA administrator. What are the dynamics? What should we be reading into this? RFK got confirmed. Is it a similar process? Like, and what does this mean? Like, what's the vibe around him generally?

• 49:12Speaker 02

  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 a phenomenal entrepreneur, a 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's the first private astronauts to ever do a spacewalk. I don't think I saw that, you know, live stream from, I'm forgetting the exact time, but it's like sometime.

• 49:34Speaker 02

  That was him? That was him, Jared Isaacson. He like, literally like, he's the first private citizen to like fucking go out into the vacuum of space and like key routes out of the spacecraft and look at Earth.

• 49:36Speaker 02

  No way. I did see that.

• 49:42Jordi Hays?

  He walks live streaming so we could run?

• 49:45Speaker 02

  Exactly, exactly. Uh, so you know, hopefully we get to space run one day. Exactly. Wow, okay. Uh, yeah, he looks like he's super legit, you know what I mean? Like he is literally, you know, a like, like privately himself sponsored astronaut, you know, putting his real like life on the line. That mission could have gone poorly, could have died on it, etc. And you're like, obviously he didn't. So really beloved. Um, but he is like affiliated, you know, for sure with Elon since like, you know, his entire Polaris, you know, sort of a, a set of missions was all contracted with SpaceX. He obviously 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, de-orbit the ISS sooner than their original plan. So the current plan is basically out of the decade. Elon was pushing for like, let's just de-orbit it next year.

• 50:28Speaker 02

  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. Uh, you know, what's the point of, you know, sort of these like human rated stations, both run by the government toward these private ones? Um, and there was a bit of a slap on the wrist, you know, for that via, you know, basically Ted Cruz. Um, you know, sort of the Senator from Texas that is the, you know, senior, uh, Chair of the House, I'm sorry, uh, the Senate Science Committee, which basically controls the NASA budget. And is also, you know, basically responsible for, you know, sort of voting and, um, confirming the schedule for the NASA administrative 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 Isaacson.

• 51:11Speaker 02

  A bunch of space entrepreneurs, I could like, you know, sort of send Cruz's letter. He's finally relented and okay, said, fine, I will set a date, but I want Jared Isaacson, you know, sort of coming out and explicitly saying that he's in support. The ISS going through the end of the decade in support of these commercial space stations. And so why is, you know, sort of Cruz 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 a district and it's, you know, sort of his constituents. And so, you know, you're starting to just see these tensions of like, you know, 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.

• 51:52Speaker 02

  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, I'm again going to point out, it's like, you know, Elon is phenomenally successful, super powerful, rich, et cetera. 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 fuck with my ISS? Like, I'm going to fuck with your administrator and, you know, I'm going to delay his confirmation hearing. And I'm going to 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 reorganization bill, which basically sets NASA's budget for the next like, you know, sort of, you know, five to seven years.

• 52:31Speaker 02

  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 it says 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 Mars program, you know, sort of looks like. And so it's just like a reminder to people that like, you know, us in tech have to always remember that like, there are also jobs that Senator Cruz is going to be, you know, sort of, you know, making sure to stick around too.

• 52:57John Coogan?

  Uh, follow up, I mean, the ISS budget is, uh, three billion a year. Crazy idea, we get a couple of our buddies together, make it into a casino or something like, could we not privatize this thing?

• 53:09Speaker 02

  You know, Jed McHale, uh, Mr. Crypto, uh, you know, sort of man is, uh, 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, uh, you know, all he needs to do is, you know, maybe it's not at craps tables, but it's, uh, you know, a couple of Coinbase servers up there that are, uh, you know, getting you hooked right into the, you know, sort of live stream of trading shit coins.

• 53:31John Coogan?

  I guess you can't really roll dice in zero G because the dice never fall.

• 53:35Jordi Hays?

  Well, yeah, if aliens are ever gonna come and assimilate on Earth, we should have a like a space casino where they could kind of like learn the American way of life.

• 53:43John Coogan?

  It's like an LSI like for aliens to gamble.

• 53:45Jordi Hays?

  Because if the culture shock, if they came here and they never done sports betting or gambling.

• 53:47John Coogan?

  They have to know how to gamble if they're gonna integrate for sure.

• 53:50Jordi Hays?

  They would just like probably kill us all.

• 53:52John Coogan?

  Exactly.

• 53:52Jordi Hays?

  You guys like, I don't even know what you guys are doing.

• 53:55Speaker 02

  Or that's our planetary defense. We just get the aliens hooked on gambling. They become total degenerates. They're mortgaging their home planet in order to be able to afford it. And we're like, actually, you thought you were coming to conquer us, but sorry, we're sending our bookies back over your planet. We're gonna fucking break all your kneecaps and take it.

• 54:11John Coogan?

  Yeah.

• 54:11Speaker 02

  You know, that's maybe the best planetary defense scheme. Who needs asteroid deflection? You've got space casinos.

• 54:15John Coogan?

  Yeah, we got five minutes. What you got?

• 54:17Jordi Hays?

  Big. What's your take on yesterday? I was joking around earlier. I said, in hindsight, Sputnik really was the Ghibli moment of the Cold War. But yesterday felt like a big moment. It just, I did, John and I had a couple of 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 don't, they don't know.

• 54:44John Coogan?

  They didn't know that it was OpenAI, like ChatGPT. They're just like, oh, there must be a new app out there that does this.

• 54:50Jordi Hays?

  Yeah.

• 54:51John Coogan?

  And yeah, very funny.

• 54:52Jordi Hays?

  What's your reaction? Are you long? I'm personally, I'm short the word slop, but I'm long the underlying trend, but I'd love to hear your take.

• 55:01Speaker 02

  Uh, you know, I'm gonna relate it back to defense, which is, you know, sort of marker maps are no good. Focus on a long tail winner. There's like a whole fucking set of like a hundred like AI image generation companies that all just got, you know, fucking Sherlock by OpenAI and are gonna be totally irrelevant. Cause 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 gonna 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. There's things that it's not perfect at, it probably never will be like quite perfect at. But if you wanna start like throwing together like rough draft, vision board, et cetera.

• 55:39Speaker 02

  And then what you 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 stuff.

• 55:53John Coogan?

  Yeah, it's like bullish for OpenAI and also bullish for Jason Carmen, right?

• 55:57Speaker 02

  Yes.

• 55:58John Coogan?

  But you just don't wanna be in the middle.

• 56:00Speaker 02

  But it's like short all the dues. They just invested like $500 million into like these like slop companies, basically. And it's just like, good fucking luck. And it's the same thing with defense. It's like, you know, bullish on Andorol, bullish on the warfighter that gets new tools.

• 56:11John Coogan?

  Totally.

• 56:12Speaker 02

  Don't recommend being anywhere in between those two.

• 56:14John Coogan?

  Yep, exactly. Don't get stuck in the middle. The barbell.

• 56:17Speaker 02

  Don't get just out in the messy, the sloppy middle, as we like to call it.

• 56:21Speaker 02

  It's, you know, the, the, the white lotus, you know, sort of reference there is be careful of the sloppy middle between the brothers.

• 56:27John Coogan?

  Oh, I haven't watched the latest episode, but I, I've heard enough that I get it and it's not good.

• 56:33Jordi Hays?

  Yeah, you can skip that one. White Lotus is funny because, White Lotus is funny because like it starts the season. It's like kind of relaxing because it's like these resort settings.

• 56:41John Coogan?

  Yeah, you're just hanging out.

• 56:42Jordi Hays?

  And you're 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.

• 56:49John Coogan?

  I want nothing to do with any of those people.

• 56:51Jordi Hays?

  Yeah. What, what, you know, so, so somebody that launched an image generation tool is like Mike Spizer over at Sutter Hill Ventures, like they've done, didn't they do like Palo Alto?

• 57:02John Coogan?

  Snowflakes?

• 57:03Jordi Hays?

  They, they like, they're like the goats of, 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 it just feels like maybe there is no edge and distribution, you know, relating back last week.

• 57:24John Coogan?

  Well, mid journey is not in the conversation because they haven't raised money. And so it's like,

• 57:28Jordi Hays?

  True, but they're, they're dependent. They raise money every day from their customers.

• 57:32John Coogan?

  I guess, I guess, but just like in terms of the business.

• 57:34Jordi Hays?

  So the funny thing is, is we talked 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 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, set up shop here in Hollywood and just work with all the studios and say, like, you spend billions a year on filmmaking.

• 58:10John Coogan?

  What would you do if you were actually running a $50 million series B stage image generation company?

• 58:16Speaker 02

  Yeah, I mean, look, this is very top of mind. Like, I literally met up with Mike, I think it was like two weeks ago, to like, talk about, you know, what he was, you know, sort of working on. And I'm like, I'm a huge fan of Mike's. We've worked together on, you know, sort of a handful of things. Obviously, he's like, crushed it with Snowflake. He's like, clearly one of the Valley's, you know, sort of best incubator entrepreneurs, investors, you know, you know, execs, leaders, et cetera. 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 dart around the, you know, sort of 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.

• 58:55Speaker 02

  And like, you know, stomping out a bunch of, you know, other, you know, sort of mice in there, the elephant, what Andrel's 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 Altman. 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, they're 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-length 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.

• 59:33Speaker 02

  Go where the ma- 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, sort of, hey, look, if you start using, you know, sort of chat GPT, et cetera, for this stuff, they're gonna use you for training data. We're gonna make like proprietary models that like, you know, fine-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 in-house, right? Like, you just need to like, just constantly be thinking about like, yeah, what is your, you know, sort of angle that is super unique. But also, those are like, all really constrained Tams.

• 1:00:03Speaker 02

  Relative to like, the thing that, you know, I think OpenAI is, you know, going off and capturing. And so, 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 fucking 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, twenty fourteen, like, happened over the course of like, eighteen-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 disrupt how to build like a series B company. Whereas in twenty fourteen. That new technology is disrupting like a late-stage Series B company like didn't honestly happen that often, like never happened. You kind of had like your stable growth. Like

• 1:00:46Speaker 02

  you know, Vardo and stuff that we do is like, super hard, long timeframe, 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 fuck China is sort of doing. It's like, god, man, it's such a dynamic world and you know, the like, you know, wealth accrues to the sort of riches. So, good to be Peter, good to be Sam. You know, I don't envy myself or Spizer.

• 1:01:12Jordi Hays?

  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 felt like there was a world where Sam was like, alright, team, like, we know Ghibli 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.

• 1:01:35John Coogan?

  Also, Google had 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 gonna break containment and it was gonna be a Google story and Sam was just like, not today. I love it.

• 1:01:47Speaker 02

  And 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 was just like a little too convenient.

• 1:01:54John Coogan?

  We need to get a tinfoil hat over on your side.

• 1:01:56Jordi Hays?

  Yeah, we got it, we got it right here. Yeah, the exciting thing, bringing it back to hard tech and defense is like, we need, we need better science fiction, we need the next generation of science fiction and if we can kind of like open source that and everybody can create inspiring visions of the future.

• 1:02:11John Coogan?

  Someone has a good idea and they can instantiate it. That's amazing.

• 1:02:13Jordi Hays?

  You shouldn't need $200 million to like imagine the future and like convey that idea and that seems like the biggest opportunity to take away if you're not.

• 1:02:22John Coogan?

  Even if it's a little sloppy right now, the art will come.

• 1:02:24Jordi Hays?

  Yeah. Anyways, great to see you. Thank you for having us.

• 1:02:27John Coogan?

  Thanks for stopping by. Good luck with the rest of your day.

• 1:02:29Speaker 02

  Later, boys. See you for the rest of the day.

• 1:02:31John Coogan?

  Always a fun.

• 1:02:32Jordi Hays?

  All right, we got.

• 1:02:34John Coogan?

  We got back to back to back to back to back to back calls. Is he in the building?

• 1:02:39Jordi Hays?

  He is in Florida right now.

• 1:02:41John Coogan?

  Public.com investing for those who take it seriously because 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.

• 1:03:01Jordi Hays?

  Boom. And now we got Steve Simone, the man himself.

• 1:03:07John Coogan?

  How you doing, Steve?

• 1:03:07Jordi Hays?

  What up, Florida man?

• 1:03:08Speaker 03

  Oh, my God.

• 1:03:09John Coogan?

  Florida man.

• 1:03:11Jordi Hays?

  He's in Florida today. He's not actually a Florida man. But it's great to have you.

• 1:03:15Speaker 03

  Yeah, look at me. Yeah, thanks, guys. Thanks for having me on. It's an honor to be here.

• 1:03:19John Coogan?

  So describe the company in three, in exactly three words. I've heard it described as gun on truck. Is that accurate?

• 1:03:25Jordi Hays?

  That's, that's right.

• 1:03:26Speaker 03

  AI, AI robot gun.

• 1:03:29John Coogan?

  Okay, there we go.

• 1:03:29Jordi Hays?

  AI robot gun.

• 1:03:31John Coogan?

  Shooting down drone swarms. If I see a light show with a dragon swarming towards me, I call you. You're gonna throw a hail of gunfire at it and take out all of them.

• 1:03:41Speaker 03

  Well, you know, we're 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.

• 1:03:48Jordi Hays?

  Okay, precision. Well, I always love talking to Steve. A while back, he was in LA and we like, we're, we're, 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 of rounds from Kraft now, one of which he's announcing today. And I, and we just had this awesome meeting where I was like, you gotta think bigger. You gotta think bigger.

• 1:04:07John Coogan?

  You were that guy?

• 1:04:08Jordi Hays?

  Yeah, I was the guy, I was like the got it, you gotta think bigger guy.

• 1:04:10Speaker 03

  No, he's, Jordy is the, Jordy, you're the ultimate hype man. You, you made me think bigger, bro. You made me think bigger.

• 1:04:16John Coogan?

  That's great. Well, speaking of bigger.

• 1:04:18Jordi Hays?

  Yeah, yeah, talk about the news today.

• 1:04:21Speaker 03

  Oh, yes. Today, we just announced our $30 million Series A led by Kraft Ventures.

• 1:04:25Jordi Hays?

  Let's go.

• 1:04:26Speaker 03

  Again, they did give out 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?

• 1:04:32John Coogan?

  Keep it going. Ride your winners. It's in the All In intro.

• 1:04:37Speaker 03

  Yeah.

• 1:04:37Jordi Hays?

  We're going All In.

• 1:04:39John Coogan?

  Let your winners ride and Sax is true to his word.

• 1:04:42Speaker 03

  But I gotta ask you guys, how much does it cost to like get my logo on the ticker symbol at the bottom?

• 1:04:47Jordi Hays?

  You're gonna have to wait till the B, you're gonna have to wait till the B buddy. I'm sorry.

• 1:04:51John Coogan?

  Is that a series A company?

• 1:04:53Jordi Hays?

  I can. Yeah, yeah, yeah, I can.

• 1:04:54John Coogan?

  But we can talk about it, we can talk about it.

• 1:04:57Jordi Hays?

  I have a rough sense of your balance sheet, but you're here, you got your face, you got your face here and that's priceless.

• 1:05:02Speaker 03

  I mean, how much did Wander pay for that back there?

• 1:05:06Jordi Hays?

  We can't get into specifics.

• 1:05:08John Coogan?

  We're very against building in public.

• 1:05:10Jordi Hays?

  Yeah.

• 1:05:11John Coogan?

  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 a total Cold War arms race for the best and most aggressive daily

• 1:05:29Speaker 03

  Yeah, I mean 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.

• 1:05:42Jordi Hays?

  Uh, talk about, uh, yeah, just talk about the process. We were talking with Delian earlier. There's this phenomenon within 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 DoorDash, 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

• 1:06:27Jordi Hays?

  way back to the Navy days.

• 1:06:29Speaker 03

  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 we met in the Navy.

• 1:06:40Jordi Hays?

  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 gonna basically like sound like it's been around for decades already? And I think it's working. I really like the counter positioning.

• 1:06:54Speaker 03

  You got a counter position. That's all marketing, baby. Um, no, 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. I had a couple that failed and then the one we sold to DoorDash. And now this is our technically my fourth startup. It's a way of life, you know, it's a journey. I've been doing this for about 11, 10 years now.

• 1:07:16Jordi Hays?

  So cool.

• 1:07:17Speaker 03

  Yeah.

• 1:07:18Jordi Hays?

  And then coming together, like give the, you know, the company's two and a half, two years old now.

• 1:07:24Speaker 03

  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, right when we sold the company to DoorDash, Putin actually invaded Ukraine the same week when the deal closed. And we were reading articles about Ukrainians 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. 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.

• 1:08:08Speaker 03

  So we thought this is a really good idea, went after it.

• 1:08:11Jordi Hays?

  How's it been? You guys spend a lot of time on the range, like actually shooting down drones. 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, you know, spend a lot of time just out in the field.

• 1:08:33John Coogan?

  Getting the boots dirty.

• 1:08:33Jordi Hays?

  Yeah, getting the boots dirty.

• 1:08:36Speaker 03

  Wait, say that again. That's the question.

• 1:08:39John Coogan?

  Just how's the culture different now that you're out on the range, actually? Out of an office, you're not in a cubicle all day.

• 1:08:44Speaker 03

  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. 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 of months are the most fun when you have no customers. Cause 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. 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, getting out of like the main corporate office and, you know, doing our thing.

• 1:09:25John Coogan?

  I mean, Delian said this on the show before, like, you know, the Anduril of Anduril that is Anduril, and maybe Anduril's the power law winner, you're going to do all this stuff. How you've obviously counter positioned with the name. You didn't pick another name from Lord of the Rings, thank God. But how are you thinking about how the product fits into the defense tech ecosystem? Palantir 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 Anduril take the kind of the AI connective tissue and you're a partner? Or are you really just trying to grow and add so many more products? Where does long term go from here?

• 1:10:07Speaker 03

  Yeah, our product, you know, so autonomous guns are when they hit the battlefield, they're going to change a lot of the battlefield economics. 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 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 we actually mostly focus our time is you see all these autonomous vehicle companies, USVs. Yeah, like companies like Sironic, a bunch of USV makers, these unmanned surface vehicles. And then you got like the land ones, like Overland or Forterra, there's a number of these. And so all of these autonomous vehicles need an autonomous payload.

• 1:10:46John Coogan?

  Sure.

• 1:10:46Speaker 03

  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, you make money via bundling in the game.

• 1:10:57John Coogan?

  Makes sense.

• 1:10:57Jordi Hays?

  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 the Ryan Matal's of the world, right? It's probably fun being a team of 34, you know, competing against some of these giants.

• 1:11:14Speaker 03

  Yeah. Oh, go ahead. Sorry.

• 1:11:16John Coogan?

  No, go.

• 1:11:16Speaker 03

  Interrupted you.

• 1:11:17John Coogan?

  No, go for it.

• 1:11:18Speaker 03

  I was gonna, I was gonna say, um, it's the lag on the Zoom, but I was gonna say, yeah, like Ryan Matal, Kongsberg, you know, a lot of, I don't know if a lot of the 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. 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.

• 1:11:57Jordi Hays?

  What's, what's the vibe on the ground in the DC area right now? You, you obviously like, you know, have an office out there. What, what's, you know, is it chaos or people running around?

• 1:12:09John Coogan?

  I mean, 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? Obviously, you know, chaos can be a ladder and an opportunity for new companies, and it can also be a consolidation force for the ones who already have programs. What, what's your take?

• 1:12:31Speaker 03

  I think the, um, well, if you look at what like Doge is doing and stuff, I think it's, you know, sending shockwaves to the DoD. 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 Hegseth 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 FY25 bill, we were somewhat impacted because they didn't do a bill. And so that's like, I think Adelion 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 could see if you were really banking on that, that that could be tough.

• 1:13:16Jordi Hays?

  What are you hiring for right now? What kind of people are you looking to recruit into the team? You've got 30 million of fresh capital. I imagine a lot of that will be going to bright technologists.

• 1:13:29Speaker 03

  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 vision system to detect stuff. You have the fire control to track and shoot. 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 it. 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.

• 1:14:04John Coogan?

  Makes sense.

• 1:14:05Jordi Hays?

  Amazing.

• 1:14:06John Coogan?

  Yeah, on computer vision, is the job getting easier with new models? I mean, we just saw an amazing demo yesterday from OpenAI. 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 OpenCV and it's enough?

• 1:14:40Speaker 03

  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 in self-driving. Like, 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 on kind of the bleeding edge of some of the research. 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.

• 1:15:18Jordi Hays?

  Yeah. When you think about the opportunity to go work at in computer vision at ACS where there you're like, you know, getting like, 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.

• 1:15:43John Coogan?

  You gotta give the robots guns. You gotta give the robots guns. This is what makes it fun.

• 1:15:48Jordi Hays?

  Yeah. And all our only request is get some unitry robots at some point and just put some bullets in them.

• 1:15:55John Coogan?

  Yeah.

• 1:15:55Speaker 03

  I know. I want to have them running over the hilltop like an army of unitry robots and then bullfrogs sniping them all, headshotting them all.

• 1:16:02John Coogan?

  Oh my.

• 1:16:03Jordi Hays?

  No, I want to see. Here's the other challenge. 360 noscopes.

• 1:16:06John Coogan?

  360 noscopes on the turret. I want to see that.

• 1:16:09Jordi Hays?

  Our audience loves 360 noscope.

• 1:16:11Speaker 03

  You guys, will you guys do like sweep sniping? You know that from Halo 2? You do that?

• 1:16:15John Coogan?

  Oh, yeah, yeah, yeah.

• 1:16:16Speaker 03

  Sweep snipe? Yeah.

• 1:16:17John Coogan?

  Oh, yeah. You can do that.

• 1:16:18Speaker 03

  I think JD Vance did that a lot. I think he played a lot of Halo 2.

• 1:16:21John Coogan?

  Okay. Awesome. Awesome.

• 1:16:22Jordi Hays?

  Crazy Lord.

• 1:16:23John Coogan?

  Well, thanks for stopping by. This is fantastic.

• 1:16:25Jordi Hays?

  Congratulations. I'm going to play a quick song for you on the way out.

• 1:16:30John Coogan?

  Yeah, you got that.

• 1:16:32Jordi Hays?

  There you go. Congratulations to you, the team at Saks. Great one.

• 1:16:37John Coogan?

  Yeah. Congratulations, Saks. That's fantastic. Well, we got AJ Peplicke coming in the Temple of Technology from Hermes. 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.

• 1:16:58Jordi Hays?

  Boom. With the hat.

• 1:16:59John Coogan?

  With the hat. Welcome to the show. How you doing?

• 1:17:02Speaker 04

  I'm good. How are you all doing? Good, John? Good to see you.

• 1:17:04John Coogan?

  Yeah. Good to see you again. You're still in Atlanta?

• 1:17:08Speaker 04

  Yep, yep, that's right here at the factory. Still wearing this stupid hat.

• 1:17:12John Coogan?

  I love it.

• 1:17:12Jordi Hays?

  Do you have like a rule, is it like you're not taking the hat off until, you know?

• 1:17:16John Coogan?

  The plane flies.

• 1:17:16Speaker 04

  Yeah, so I, I, I, well, I wore it one day because I was making fun of one of my co-founders who wore a fedora out in the field where 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. Like really great friend gave it to me a long, long, long time ago.

• 1:17:44John Coogan?

  It looks good.

• 1:17:45Speaker 04

  Whatever. So I like, I had to make sure that like it doesn't get Marie Kondo'd out of my house. I have to wear it like once a year. So I'd always incorporate it into my Halloween costume. Little did I know I'd be wearing it for like, you know, six months now. But so now, now I hate it. And nobody else has worn hats every single day. That lasted for about three days. So yeah, when we, when we fly our first airplane, as soon as it lands, we're gonna, I'm gonna stick this thing on a stake behind the airplane and burn it in the afterburner and I'll do something with the ashes.

• 1:18:14John Coogan?

  There we go. That's amazing. I want to hear a little, little backstory on the company, little company update. I want to hear your take on the F-47 and the DOD continuing resolution. But let's just start with overview of the company and where you guys are at.

• 1:18:27Speaker 04

  Sure. So yeah, at Hermes, we build very fast airplanes and we build them fast. So long-term vision of the business has been to radically accelerate air travel with Mach 5 aircraft, so hypersonic, hypersonic passenger aircraft. But 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, you know, try for that, that really long-term future of, you know, adding a couple percentage points to global GDP. Company's about six years old now. We've, we've done a ton of development on the propulsion systems, engines necessary for these kinds of vehicles. And now over the past couple of years, as you mentioned, we've been starting to get into our aircraft development cadence. So a lot of the blood

• 1:19:11Speaker 04

  here comes from SpaceX. So the way that we've kind of designed our, our program for how do you build fast airplanes is to build a lot of prototypes and build them on a very fast cadence. So really bringing iterative development to aircraft for the first time in a very, very long time. So that's resulted in 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, but ready to fly in, in about 15 months, which as far as I've found is like the fastest jet aircraft development in about 50 years. So this is like back to the Kelly Johnson's Concord days. So we've proven we can.

• 1:19:51Jordi Hays?

  Right, right away. My first question is you're going from, you know, zero to a real product in 15 months. That's intense speed even for somebody building like a robust CRM, right? You guys gotta do something a bit more, just you gotta be a bit more than just robust, right? If you're gonna like fly something through the air, but where do you even start with this? Like, is there, is there like effectively like open source, kind of like designs, information, schematics, et cetera, that you can kind of pull from to like, pull forward that development timeline? Or is it just like? It's actually chat GPT. I'd like one blueprint for a hypersonic.

• 1:20:30Speaker 04

  We're a Grok company here.

• 1:20:33Speaker 04

  No, like the, the place that you start is fundamental physics. That's it. 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. 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. So like really simplifying the problem, making the problem a little dumber than you, so that you're not trying to outsmart it. And 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 and can we do it fast enough to support this development cadence?

• 1:21:11Speaker 04

  So like this, you know, quarter horse mark one, which is the first aircraft, it really only has to do like two things, take off and land. That's it. And we've, you know, we've learned a ton already that we've already integrated into like how we're building the second aircraft. So our second aircraft quarter horse mark two. Super Sonic, so it's you probably hear it being put together, literally right behind me.

• 1:21:32John Coogan?

  Yeah.

• 1:21:33Speaker 04

  So that that one should be ready to fly later this year, probably early fourth quarter, which is super exciting.

• 1:21:39John Coogan?

  Can you give a quick overview of the actual tech, ramjet, scramjet, all this mumbo jumbo? Can you break it down?

• 1:21:45Speaker 04

  Yeah.

• 1:21:45John Coogan?

  What you're doing?

• 1:21:46Speaker 04

  Yeah, so we we don't use we don't use scramjets here. It's all ramjets. So it's like it's literally the simplest propulsion concepts that that there is out there for everything propulsion. Like when you when you're in aerospace engineering school and you're learning through all these different engine types. The very first one you start with is a is a ramjet because there's there's no moving parts. It's just compression, add fuel, burn it, exhaust through a nozzle, generate thrust. So those engines can't really run efficiently until you get up to somewhere between Mach two and a half and Mach three. So you have to use a gas turbine engine, turbojet, turbofan to get up there. So we've we've put those two types of engines together into a single engine. We've demonstrated that on the ground, transitioning from a precooled after burning turbojet to a pure ramjet and then back again.

• 1:22:30Speaker 04

  So we've we, you know, we have an engine capable of of doing that. And and now it's a matter of iterating through the aircraft side to be able to do that in the air.

• 1:22:41Jordi Hays?

  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 FAA 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?

• 1:22:57John Coogan?

  Yeah, we've SpaceX do Quadeline.

• 1:22:59Jordi Hays?

  Yeah, because there's a there's a nuclear company out of El Segundo that like just in the Philippines.

• 1:23:04John Coogan?

  Philippines, yeah.

• 1:23:05Jordi Hays?

  And I was just sort of wondering, is there something you could do there to kind of like, you're building so quickly? Ideally, you could test quickly and not get held up by.

• 1:23:13John Coogan?

  Antarctica.

• 1:23:14Jordi Hays?

  Yeah.

• 1:23:14Speaker 04

  Yeah, I think we'd have to be incorporated in a different country fully to be able to do that. So that has that has other implications. But yeah, like even even if we took the aircraft to, you know, Australia or, you know, Quadeline or somewhere out there. We're still an American company, so we're still under the jurisdiction of the FAA, even though we're some other country. And, you know, and the reason for the reason for that is because like, yes, other countries have their own versions of the FAA. There's an international body called ICAO. But generally, since the US has pretty much always been the leader in aviation and technology and, you know, especially come the commercial side. Everybody just kind of defers to what the FAA does, so it kind of just trickles back to them at the end of the day as well.

• 1:23:54Jordi Hays?

  You talked a little bit about your technology one day being able to increase global GDP. I assume that if you can just move stuff around the world faster, move people and products around the world faster, that will just sort of accelerate growth, but could you extrapolate that on that a little bit?

• 1:24:11Speaker 04

  Yeah, I mean, it's a historical trend that you can see in a number of different things over the course of human history where you've accelerated the rate of transportation within a network and that has increased trade. So trade and like cost and therefore like distance are proportional to each other. So if the kind of unit that's used in these type of analyses is called economic distance. So it's a mix of like actual distance and cost and time and all of those things kind of wrapped into a single metric. So if you can shrink the economic distance between two economies, you will increase the trade between them. It's a gravity model.

• 1:24:53Speaker 04

  So like you have two bodies, the closer you bring them together, the stronger the force of gravity is. So trade is like gravity in this case.

• 1:25:01John Coogan?

  Can you talk a little bit about your reaction to the F-47 program? Boeing won a $20 billion contract for the sixth gen fighter. It's a nod, the design is a nod to the P-47 fighter and there's competition between the major primes, but I'm sure you have some insight into what's going on here. Can you break it down?

• 1:25:21Speaker 04

  Yeah, I certainly have no insight behind closed doors. So I guess I can make up whatever I want, but I think from the outside, you know, I think it's clearly a capability that the US Air Force really thinks that we need to solve some really, really tough challenges. When you look at what the Air Force is tasked to do, you maintain air superiority basically globally, you know, all the places where we have interests and one of the most important one of those places is, you know, in the Pacific and maintaining freedom of navigation. We're already, I mean, we're seeing how that's going in the Middle East right now. We all got a nice inside look to some of that this week, but.

• 1:26:07Speaker 04

  It's a it's a really hard problem. You know, the distances are really long. And you know, our, you know, current fleets of fighters, be they fourth gen, fifth or gen. You know, they they really don't have the legs to cover the kind of ground that's that's required out there. So. 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. That's just kind of the nature of the the problem that's out there.

• 1:26:32Speaker 04

  But.

• 1:26:34John Coogan?

  Twenty million feels low to me, since I. In the in my mind, it's like F thirty five. It's a trillion dollar program. Is this one of those things?

• 1:26:41Speaker 04

  Yeah, I mean, this is this is like just for the the EMD phase, engineering.

• 1:26:46John Coogan?

  Got it.

• 1:26:46Speaker 04

  Manufacturing development. So it's like it's like the R and D phase. Like, so you built the prototype. Now, like, go. Turn that prototype into a production.

• 1:26:52John Coogan?

  This is like the chat GPT prompt phase, right?

• 1:26:56Jordi Hays?

  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? Because like over the last couple of 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 gonna go like, take this flight with Airbus or whatever. But like clearly, the government has like confidence in. 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 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.

• 1:27:34Speaker 04

  Yeah, I mean, I I think each each of the primes have their advanced development groups, you know, Lockheed Discunk Works, Boeing has Phantom Works. You know, Northrop has their own and so forth. They kind of do these, you know, early stage development programs that that precede production. But frankly, I think all of them have like really grown like pretty old and sclerotic, to to use a Trey Stevens term. And I think the the evidence of that is like how long it has taken to develop a new aircraft in in the modern day. There's this this chart that I absolutely love. It's a timeline on the bottom. And then how many years from like program start to initial operational capability for aircraft from nineteen forty five?

• 1:28:16Speaker 04

  Through twenty twenty two thousand five to ten, something like that? So between 1945 and 1975, the average time to bring a new aircraft from like the beginning of the program into an operational capability was five years. And then since 1975, that duration has gone up linearly to the point where I think the F-35 was like a 25-year program. And even even this one, you know, the next generation Air Dominance fighter is already like 10, 12 years into its program. Like, sure, we flew a prototype five years ago, but that was that was maybe already 10 years into the program.

• 1:28:56John Coogan?

  It's like the opposite of the $100 million ARR graph where it just keeps getting shorter and shorter. It's like our aircraft development is getting longer and longer.

• 1:29:03Speaker 04

  Exactly. It's exactly the opposite in airplanes. And so like

• 1:29:06John Coogan?

  It's too bad.

• 1:29:07Speaker 04

  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.

• 1:29:15John Coogan?

  Literally just one guy.

• 1:29:17Speaker 04

  You can't make this stuff up. So, yeah, like the F-17 happened like five years after that. So that was like Ben Rich and his group. So like very much, you know, still of that of that culture. But, you know, iterative development, like the way that SpaceX develops rockets now, the way that we're building airplanes here now, this like one aircraft per year cadence, we haven't done that in decades. And the result is the development timelines for, you know, solving hard problems, they just they just go out and to the right. And then you stack on top of that cost type contracting and incentives and all those kinds of things. And, you know, the lack of, you know, like founder-led companies building fighter jets today, that that happens.

• 1:29:59John Coogan?

  Yeah, no, it's a really great point. Do you have a last question?

• 1:30:02Jordi Hays?

  Is there camaraderie in this sort of supersonic startup world?

• 1:30:06John Coogan?

  It's a bit of rivalry. I've been trying to get Boom to do a footrace 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.

• 1:30:16Speaker 04

  So I'm finally having knee surgery.

• 1:30:18John Coogan?

  Okay.

• 1:30:19Speaker 04

  To fix my ACL.

• 1:30:20John Coogan?

  Okay.

• 1:30:20Speaker 04

  It's specifically for this reason, so I can run this race. This is why I'm doing it.

• 1:30:23John Coogan?

  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?

• 1:30:41Jordi Hays?

  Well, I was looking at it as like, it's good for the industry overall.

• 1:30:44John Coogan?

  Exactly.

• 1:30:45Jordi Hays?

  For like, hey, we just, we just want to fly at hypersonic speeds.

• 1:30:48John Coogan?

  Yeah.

• 1:30:48Jordi Hays?

  Like we all, we want to be able to do it in every application.

• 1:30:50John Coogan?

  I want to see t-shirts, just random normies are wearing like Hermes merch because they're so invested in the drama, like straight up Vanderpump Rules level, like People Magazine, paparazzi photos of you anytime you go outside. This is my dream for what tech can be.

• 1:31:05Speaker 04

  Yeah. Yeah. Well, I mean, we, we got a little bit of a race, right? So Boom flew supersonic this year and we're building an airplane right behind me that hopes to do the same.

• 1:31:13John Coogan?

  Well, good luck.

• 1:31:14Jordi Hays?

  Well, we're rooting for you and everybody.

• 1:31:16John Coogan?

  I'm especially rooting for you.

• 1:31:17Jordi Hays?

  We just want to pod, we, we, we have a pretty fast pace at the show, but we're not hypersonic yet.

• 1:31:23John Coogan?

  Not yet.

• 1:31:24Jordi Hays?

  And being able to do that, do this show from the air with you, do the, do an interview in the future.

• 1:31:29John Coogan?

  Yes.

• 1:31:29Jordi Hays?

  From the plane would just be incredible. So thank you for coming on.

• 1:31:33John Coogan?

  Yeah.

• 1:31:33Jordi Hays?

  Always welcome.

• 1:31:34Speaker 04

  Thanks so much for having me, guys. Appreciate it.

• 1:31:35John Coogan?

  Yeah. Have a great rest of your day.

• 1:31:37Speaker 04

  You too. See ya.

• 1:31:38Jordi Hays?

  I love, uh, how everybody's just calling in from the floor.

• 1:31:41John Coogan?

  Oh, yeah.

• 1:31:42Jordi Hays?

  It's fantastic.

• 1:31:42John Coogan?

  Uh, well, speaking of love, our next guest is Connor Love.

• 1:31:46Jordi Hays?

  Connor Love.

• 1:31:48Jordi Hays?

  They named, they named love after Connor.

• 1:31:51John Coogan?

  Did his family create love?

• 1:31:52Jordi Hays?

  Yeah. They productized, they productized.

• 1:31:55John Coogan?

  IP.

• 1:31:56Jordi Hays?

  They made their money in love.

• 1:31:57John Coogan?

  They made their money in love.

• 1:31:58Jordi Hays?

  There he is.

• 1:31:59John Coogan?

  Hey!

• 1:31:59Speaker 04

  You did it.

• 1:32:00Jordi Hays?

  What up?

• 1:32:01Connor Love?

  Guys, I mean, I, I wanted the chatter to go on. I feel like I'm on sports talk radio, you know?

• 1:32:05Jordi Hays?

  You are.

• 1:32:06Connor Love?

  Longtime listener, first time caller, right?

• 1:32:08John Coogan?

  Yeah. Well, good to have you here.

• 1:32:10Jordi Hays?

  No, 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.

• 1:32:16John Coogan?

  Uh, well, let's start with that thoughtful comment. I mean, first introduce yourself, break down who you are, but then, uh, yeah.

• 1:32:21Connor Love?

  No, happy to. I help lead our national security and defense investments here at Lightspeed. Been here for five years, you know, used to sit on that side of the table, actually served in the military for about a 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 Delian to death, but uh, let's, let's get into it.

• 1:32:38John Coogan?

  Uh, and set the table for us on like size, scale of Lightspeed and then is defense tech like its own fund? Or are you just making investments?

• 1:32:46Connor Love?

  Yeah, obviously. So, so you know, history at Silicon Valley firm, been around for 25 years. I mean, we talk about ourselves 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 Silicon Valley, but have offices and reach, you know, globally. I sit on the frontier tech team. So myself, Ravi and Ravi Raj and Taggart really invest in, you know, we call frontier tech. 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. It's, it's really kind of up to the team and up to how we see the ecosystem.

• 1:33:28John Coogan?

  Cool. That's very helpful. Uh, let's go to the drama. You, you and Delian, break it down.

• 1:33:34Jordi Hays?

  No, no, before, before the drama, I'd love, uh, you know, we were actually talking with Delian how, you know, the last two years, a lot of VCs, 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 bets. Uh, everybody realized it was cool to be a patriot.

• 1:33:54John Coogan?

  Yep.

• 1:33:54Jordi Hays?

  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 Simone 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?

• 1:34:13Connor Love?

  Yeah.

• 1:34:13Jordi Hays?

  Because you actually have, have, you know, lived, uh, on the customer side.

• 1:34:17Connor Love?

  I mean, like, like most things in life, uh, if you haven't lived and breathed the problem, it's really hard to rope your sleeve and understand like what's real and what isn't. I think the thing that's quite obvious, though, is the fundamental pace of change of technology is happening so quickly that even what I was talking about 10 years ago, and you know, 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 worked directly for the kind of the four-star command of the Pacific, and like, we were talking about basic shit back then. Like, we just didn't have enough mass on systems. So, I do think there's this clear edge of understanding who the customer is. More importantly, like, you know, the

• 1:34:59Connor Love?

  crazy thing about defense tech that I think not a lot of people realize is there's really not the concept of product-led 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 gonna buy $100 million this thing." I mean, it's not how it works. I mean, Congress has to 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, that, you know, again, the edge isn't enough. Like, you know, you need to get lucky 100 times. I mean, what does Trey say all the time? Like, they got kicked in the face for, what, seven years straight at Anduril before coming today? So, it's not easy. Like, to be clear, I'm not pounding the drum that,

• 1:35:43Connor Love?

  like, there's gonna be 100 Andurils. Like, I hate to break it to you, there's not. There's gonna be a lot of investors who are gonna lose their shirts, there's gonna be a lot of entrepreneurs who are gonna try and fail, but as the cold-blooded American who's that, who's served and been on that side of the, like, this is all not good for us. More people building new technology to get into the hands of warfighters, the question is, like, are as we as a DoD, are we gonna get out of our own way and buy the right stuff at the right timeline?

• 1:36:09John Coogan?

  Yeah, 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, like, it falls out, and then what were, what are your durable skills, just like? Shilling meme coins and that's what you're gonna 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 all to Facebook, they went into buying manufacturing capacity, maybe that manufacturing capacity didn't produce profit, so it's gotta get rolled into other stuff, but at least we have more machines in America. So I was always like, the, the, there could be like a piece dividend

• 1:36:51John Coogan?

  from a bubble, even if there is a bubble and there's a washout. Anyway, do you have a next question, or you want to move on to the continuing resolution?

• 1:36:57Connor Love?

  Yeah, let's get into that.

• 1:36:58John Coogan?

  So, so yeah, can you start by like breaking down just how you processed the information and the news around the continuing resolution, maybe restate what you feel like is going on, and then your take on it?

• 1:37:14Connor Love?

  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, ah, 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 our needs, what are requirements? And then what they do is they, they pass a law very clearly that says, here are the

• 1:37:58Connor Love?

  budget tables, here are the things that we're gonna be spending money on. And it's this like, you know, I, I give the Andro guys a ton of credit here, like, you know, 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 J-books 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 a hundred million dollars, go buy space lasers. And, and when that happens, you get this really predictable nature of what's gonna be bought, when it's gonna be bought, and the quantity. The problem is, when you have disruption like we have right now, like politically in,

• 1:38:42Connor Love?

  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 Delian 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 giddy, and like, to Delian's point, like, yeah, like, the, the, the Matt Steckmans 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 how to sell the government, they're actually texting their co-founders,

• 1:39:27Connor Love?

  and they're sprinting that shit right now. And that's what's happening. So this continuing resolution, the nuance here that happened is, again, like, you know, go read the section, go read the bill yourself, but effectively, 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 rescissions, 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 minnows in this, you know, in your budget, you know, happening right now, is the sharks, you know, the guys like Brian Hargis, you know, who's done this at SpaceX, and is that Castilian now, like, you know, the, the, the Steckmans,

• 1:40:11Connor Love?

  and, and the list goes on and on. 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 of 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 shit, like, there's, there's 200, there's $300 million that, you know, again, it's a big F right now, but there's a lot of money being moved around.

• 1:40:54Connor Love?

  And so when I made that comment, and when I look at, you know, kind of this brooch of probably, like,

• 1:41:01Connor Love?

  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, 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

• 1:41:45Connor Love?

  real production, real OT contracts that has never happened before in a CR or non-CR.

• 1:41:53Jordi Hays?

  Very cool. I got a bunch of follow-up questions. 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,

• 1:42:13John Coogan?

  You're saying the CIA's black budget should be 100% of tax revenue?

• 1:42:17Jordi Hays?

  Yeah, but no, no.

• 1:42:19John Coogan?

  I like that.

• 1:42:19Jordi Hays?

  No, but like, how does China approach all this stuff? Like, I have no idea, and maybe you don't either, but maybe you have insight. Like, it seems like they wouldn't be like, yeah, we're going to just like air our dirty laundry out of here and like, be like, well, we, you know,

• 1:42:31John Coogan?

  It's America, baby.

• 1:42:32Jordi Hays?

  Yeah. Is that, is it, you know, break, break it down?

• 1:42:36Connor Love?

  Yeah. I mean, 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 is in, you know, like, nothing in compared to the amount of money that China as a state entity is putting behind. Everything from rocket launch systems to missiles, autonomous systems, to AI ecosystem. And, and, you know, what you don't have, obviously in the United States, is you don't have this massive, kind of call it industrial complex where it's like, yeah, you know, we have this thing called CIBRs, these small business innovation research grants that like are two, three, four million dollars that help people get off the ground.

• 1:43:20Connor Love?

  So there's this huge like parity of just R and 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 cold-blooded American as opposed to a doomer and gloomer, is I actually think the competitive ecosystem we have, and I've told this to everyone in government who listened to me. And again, this might be controversial, but like, we need to stop funding a single CIBR in our, in our DOD and in our federal government. And, and the reason I, I think that is like, in a historic world,

• 1:44:03Connor Love?

  CIBRs 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 believe in your vision and 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, Delia and, you know, GC, 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.

• 1:44:46Connor Love?

  Because I think this is more efficient and I think the cream's going to rise to the top of like, You're going to see, again, not 100 and rolls, I hate to say it, but you're going to see some pretty large companies that are solving real problems for the Department of Defense.

• 1:44:58John Coogan?

  There's you, you mentioned space lasers randomly.

• 1:45:02Jordi Hays?

  Yeah.

• 1:45:02John Coogan?

  Sorry, is that like?

• 1:45:03Jordi Hays?

  This ties into kind of a question I had, which is within defense tech. 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. Cause 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 would, you can't actually sell through. But the, on the tying off 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 better suited for skunk works in the government? And, or do we need to get weird?

• 1:45:43Connor Love?

  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 atoms thing. Like if, if a fusion reaction doesn't take place, like you don't have anything, like there's nothing there. 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 go to market risk. I think the holy grail, and again, we take this approach at light speed is like, number

• 1:46:28Connor Love?

  one, like you need to build a portfolio that's really thoughtful about the type of risks that you take. So on one end of the spectrum, I wouldn't take fully science and technology risk. On the other end of the 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 the, to the government. 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's a clear software kind of component to what they do. They're going after end systems. They're building really hard shit that's hard to do. There's some physics kind of, you know, like barriers to kind of figure out. But the beauty is each new system you add as a systems company only makes that flywheel on go to market

• 1:47:13Connor Love?

  that you've secured, you know, before easier. Like, again, when you're a multi-product company and like, you know, Sironix getting there now, like other, you know, Cassillion will get there eventually, you know, K2 in space will get there too. Like, once you've made one sale and made one customer really happy, you show up with the next 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 Andro is like, the acquisition machine that they are with like APP and Grim and Babac and the team there is like, they're taking things that are cool pieces of technology and they're 10, 100 X-ing them. And it's like, nobody else can do that. That is such a unique kind of ability as one of these systems companies.

• 1:47:58Connor Love?

  So I think if you're a venture capitalist here, number one, like I 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 shit 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's what I'm in the business, that's what we're in the business of doing at Lightspeed.

• 1:48:32Jordi Hays?

  Great, uh, great insights. Do you think there's, uh, our show is oriented around venture, but in order for some of these, you know, venture-backed 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. Do you think there's an opportunity for like basically SMBs to pop up to service some of these venture-backed 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 missile, right?

• 1:49:09Connor Love?

  Yeah. I mean, let's be clear, and I'll actually be really blunt about this. I think how this entire ecosystem, both from an entrepreneurial and a VC 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 with efficiency in the scopes that we say they were going to do it, and for better or 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.

• 1:49:53Connor Love?

  I've 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? How is this going to fail? It's if we, if companies, like those systems companies, can't find a way to vertically integrate themselves, or they can't figure out a long tail supply chain of how to produce not just a couple hundreds of these systems, but 1,000, then I think we're in real deep doo-doo. And you've been in the situation where you've oversold and under-delivered, and you don't keep billion-dollar contracts if you do that.

• 1:50:37Connor Love?

  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 long-tailed Defense Tech. I mean, I don't know. I mean, we'll find out very, very soon.

• 1:50:48John Coogan?

  Yeah, I was, I was going to ask about that. In terms of, you know, there's this meme of like, you know, maybe it's very risky to directly compete with Anduril on a program that might, they, they might be launching, like, next month, like, they launch very quickly. But what, what is interesting to you? Where do you see the opportunities in hard tech, but non-competitive with Anduril? We talked to AJ at Hermias. I don't think Anduril has plans to work on a Mach 5 autonomous plane or passenger. Airliner, uh, Hadrian and

• 1:51:18Connor Love?

  Yeah.

• 1:51:18John Coogan?

  And even like a Rainmaker, like, you know, it's, it is like Anduril hard tech coded, but it's so far afield that it feels safe to work on. What would your advice be for the next generation of, uh, hard tech managers?

• 1:51:30Connor Love?

  I mean, I mean, again, like, I'll start with the same through line I said before, there's not going to be a hundred Andurils. Like Anduril 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.

• 1:52:13Connor Love?

  So if you can be unique enough, and, and part of this is like, yes, looking at what the large guys are doing, like Anduril and SpaceX and et cetera. 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, ah, well, you know, like, uh, you know, Anvil is kind of doing that or, or, you know, Roadrunner is kind of that thing. So I might as well just buy that because, you know, Anduril's 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, Anduril might be in the ecosystem, um, there's still a really massive opportunity to be built.

• 1:52:55Connor Love?

  I mean, Sironic's a great example of that, like Sironic 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, Anduril's underwater, like Anduril's 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. This goes wrong in a way where, um, Both Anduril, but also these companies start to build kind of stovepipes around what they're doing. And, and you know, there's like, there's like really basic examples like, you know, we want to get to a world where we have Skynet, where these systems are kind

• 1:53:40Connor Love?

  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 Anduril and other big guys. So in my opinion, like, working with Anduril as opposed to working against Anduril is, is, is the answer here.

• 1:53:59John Coogan?

  Jordi?

• 1:54:00Jordi Hays?

  Uh, this has all been great. I don't think I have any, um, I think that covered. The one thing I was wondering how you're advising portfolio companies right now, 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 invent, 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

• 1:54:44Jordi Hays?

  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 do you advise?

• 1:54:58Connor Love?

  Yeah, I'll actually take it one step further, which is like, if you believe you're gonna 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 gotta 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 advice that I give portfolio companies is there becomes a terminal value or a value of your business that you only have one path to go. You know, and again, this number has made me moving a little bit, but it's like the second you start to raise above 500 million, both early, you know, maybe early investors will

• 1:55:43Connor Love?

  get a good outcome, but but near term investors and you as a company, like you're either going to be a public company or you're going to be bought for a private equity multiple. 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 a founder of like, do I have line of sight to that? Do I believe that will happen? And if the answer is yes, then again, like you're going to need the money, then I advise founders is like, 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 Lockheed 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

• 1:56:28Connor Love?

  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 going to win the contract. So let's do it. And so it's, I don't know, you put your pillow down, you know, head on your pillow at night when you're 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 real production contract value, then raise the money. I think I think the time is right.

• 1:56:55John Coogan?

  Can you give me a little bit of a crash course on KPIs, multiples, like what stats are important for defense tech companies as they're growing? Obviously, in SaaS, we know triple, triple, double, double, double. We know ARR and churn. What are you looking at in a growth stage?

• 1:57:12Connor Love?

  I mean, the geometry of defense tech, you know, company growth looks unlike anything else. Like, it doesn't look like software. It doesn't look like consumer. What it looks like, nine times out of 10, and there are some anomalies here, and I actually think there are going to be some anomalies during this continuing resolution. But nine times out of 10, you get this really small like CIBR revenue. Like, I don't have a system yet. I gotta develop the thing. I gotta go get someone to pay me for some small, like 2, 3, 4, 5 million dollar R and D money. And, and as an investor in this ecosystem, I actually discount all of 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.

• 1:57:53Connor Love?

  And then you see, again, this just stepwise change in 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 this 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 dollar contract. And so the, the KPI that I always think about is like, there, there's a separate technical timeline of de-risking your system. And like, it's, it's our job as investors to roll up our sleeves and be like, is there real progress? Can we see this? Is there more testing, like, like what's happening from an iteration perspective?

• 1:58:36Connor Love?

  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, 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. Cause the beauty is, you win a 200, you win a 300 million dollar production contract. Yeah, maybe it's over a couple of 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 venture dollars to develop the next thing, to build the next factory. So to me, it's like, you, you, 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.

• 1:59:20Connor Love?

  Oh, you know, you're, you're doubling year over year, tripling year over year. You just gotta be nuanced and you gotta know what the hell, uh, you know, program offices care about and, and how they move.

• 1:59:30John Coogan?

  That makes a lot of sense.

• 1:59:31Jordi Hays?

  I've loved having you on.

• 1:59:32John Coogan?

  Yeah, this is great. Thank you so much.

• 1:59:33Jordi Hays?

  This is fun.

• 1:59:34John Coogan?

  This is really.

• 1:59:34Connor Love?

  Yeah, guys.

• 1:59:35Jordi Hays?

  Any, any, you know, when you're, when you're, you know, next time you're putting 500 million dollars into a cool company, join with the founder.

• 1:59:43John Coogan?

  Yeah.

• 1:59:44Jordi Hays?

  We'd love to have you both on.

• 1:59:44John Coogan?

  That'd be amazing.

• 1:59:45Connor Love?

  Yeah, guys. Well, I appreciate it. Love what you guys are doing. Huge fan.

• 1:59:48John Coogan?

  Thanks so much.

• 1:59:49Connor Love?

  All right. Chat soon.

• 1:59:49Jordi Hays?

  Talk soon.

• 1:59:50Connor Love?

  Bye.

• 1:59:51John Coogan?

  And we got Chris Power coming on the show next from Hadrian. He got a little mention in that neck in that earlier interview. Connor mentioned it. I'll be right there. And Jordy is taking a break.

• 2:00:04John Coogan?

  Well, we will be back in just a few minutes, folks. But in the meantime, let me tell you about Adquick, adquick.com. Out of home advertising made easy and measurable. Say goodbye to the headaches of out of home advertising. Only Adquick combines technology, out of home expertise and data to enable efficient, seamless ad buying across the globe. Go to adquick.com, 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 on 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 Solana did a Pirate Wires billboard for Adquick. They have a partnership together and he got like 100,000

• 2:00:47John Coogan?

  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, right in Times Square. And speaking of the moon, we got one of my good friends who's obsessed with the moon, Chris Power. Welcome to the show. Jordy's slacking off. He's, he's taking a break. He'll be back in a couple of minutes, but good to have you. Welcome to the show.

• 2:01:11Chris Power?

  Thanks for having me. It's a pleasure to be in the capital of the capital.

• 2:01:14John Coogan?

  Thank you. Yeah, it's good to have you here. How has life been? You've been traveling. You were spotted on a flight to Washington DC a couple, a couple of weeks ago. The paparazzi caught you.

• 2:01:27Jordi Hays?

  Yeah, that was crazy.

• 2:01:28John Coogan?

  Yeah, that was crazy. I didn't realize that there are so, so many spies out there in Silicon Valley. But how was your trip to DC?

• 2:01:35Chris Power?

  It was incredible. Obviously can't talk about most of it. Some of it's classified. Very impactful, especially with the new administration coming in, wants to fix American manufacturing and yeah. The Vice President gave an incredibly rousing speech about reindustrialization at the Endracing 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 little defense tech founders, but you know, you've got to be careful these days.

• 2:01:58John Coogan?

  Yeah, yeah, you've got to be careful. Maybe wear like a full beard and glasses next time, full disguise.

• 2:02:04Jordi Hays?

  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.

• 2:02:09John Coogan?

  It's a fantastic office.

• 2:02:10Jordi Hays?

  What a view, unless it's a green screen.

• 2:02:12John Coogan?

  It's not. I've been there. It's real.

• 2:02:14Chris Power?

  It's not a green screen, real factory.

• 2:02:16John Coogan?

  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 are we looking today?

• 2:02:25Chris Power?

  Very, very green, fellas.

• 2:02:26John Coogan?

  Very green, that's great.

• 2:02:27Chris Power?

  Just like, just like the Ramp logo, everything's going up.

• 2:02:30John Coogan?

  Fantastic. That's great to hear. Well, anyway, you didn't even get a chance to introduce yourself. Can you just give us like the high level pitch for Hadrian, what you're building and where it's going?

• 2:02:39Chris Power?

  Yes, I'm Chris Carr. Hadrian builds autonomous factories. So, you know, we deindustrialized the country from the seventies through the nineties and gave all our industrial power to China. And now 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 and a new manufacturing workforce.

• 2:03:09John Coogan?

  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?

• 2:03:18Chris Power?

  No, we're, we're, we're lights out today. We run 24/7 with a handful of really smart people running the fleet. The lights are on now because we're all here. But yeah, we're 24/7, seven day a week operation.

• 2:03:30John Coogan?

  Wow, that's awesome.

• 2:03:30Jordi Hays?

  Can the robots save us, right? It's a very scary time right now. We're, China's producing a lot of robots that have, can be used for a lot of things, you know, flying, you know, maybe over your kid's birthday party to get fun footage, or they can, you know, be

• 2:03:45John Coogan?

  Kamikaze.

• 2:03:46Jordi Hays?

  Used in kamikaze ways. But it feels like automation and advanced robotics led 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 you're, you're betting that the company on that. But, but maybe kind of talk a little bit more about that specifically.

• 2:04:12Chris Power?

  Yeah, I mean, our goal with our software and robotics is to make it so easy to be highly skilled that anyone can do it.

• 2:04:18Jordi Hays?

  Um.

• 2:04:20Chris Power?

  And one hundred percent of our workforce are people who have never set foot inside a factory before. They're just ten times more productive, uh, because we're getting them superpowers with software robotics, right?

• 2:04:30Jordi Hays?

  Um hum.

• 2:04:31Chris Power?

  And I would, you know, you guys are big fans of Formula One. So like a lot of what our software does is, you know, imagine if your uh son or daughter who was learning to drive. They had Tesla autopilot on an F1 car that can just, you know,

• 2:04:42Jordi Hays?

  Um hum.

• 2:04:43Chris Power?

  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 ten times more efficiency with superpowers, you know, versus like replacing them entirely, you know?

• 2:04:59Jordi Hays?

  Yeah. And so is this the same way, like, uh, to compare it to yesterday, uh, anybody can can do, uh, Ghibli, Studio Ghibli animation. So like, anybody should be able to make like, you know, the the most, you know, advanced aerospace, you know, parts, et cetera.

• 2:05:13Chris Power?

  That's exactly right. That's exactly right. Yeah.

• 2:05:16Jordi Hays?

  Uh, uh, is is, do you think we can get to the, like, wh- what was impactful yesterday is that over the past, maybe a couple of 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 into these models and they wouldn't have any success, right? They tried a couple of 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 one-shot it?

• 2:05:51Chris Power?

  I think eighty percent of our processes were at that point where we're in Ghibli mode, one-shot. Uh, there's some really deep digital manufacturing stuff that you still need an expert to do. So we're in the like software engineers, ten times more productive land versus anyone can code. But I would say eighty percent of our factory is like anyone can code today.

• 2:06:08John Coogan?

  Are are there a, the the specific programming languages like CAM programming, right? Isn't that it?

• 2:06:14Chris Power?

  Yeah.

• 2:06:15John Coogan?

  Um, is there, is there like a? Are there L L Ms 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?

• 2:06:27Chris Power?

  No, so we had to build that full stack ourselves.

• 2:06:30John Coogan?

  Okay.

• 2:06:31Chris Power?

  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.

• 2:06:40John Coogan?

  Yep.

• 2:06:41Chris Power?

  But because American manufacturing is largely regulated in ITAR, there is no training data on it.

• 2:06:46John Coogan?

  It's on the web. Yep.

• 2:06:47Chris Power?

  So 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 labeled data set because we're creating it daily in the factory.

• 2:06:58John Coogan?

  Yep.

• 2:06:58Chris Power?

  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.

• 2:07:05John Coogan?

  Interesting.

• 2:07:07Jordi Hays?

  I imagine that every hard tech, defense tech, frontier tech founder eventually has to come through and kiss the ring at your, at your factory, just because it's like, hey, you know, 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. How many, how many companies right now do you have that are like, they're going out there promising 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.

• 2:07:36John Coogan?

  The king thing is so funny.

• 2:07:37Jordi Hays?

  Because I imagine you, you, you work with some of the, like, 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.

• 2:07:53John Coogan?

  Someone's got to make the parts for the F47.

• 2:07:55Chris Power?

  Yeah. And, 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 entrants or for new programs, we are becoming a like code prime where the DOD. Hey, hey, John, you can definitely make 50 drones or 50 of this product, but we'd really love you to partner with Hadrian because we think they should build your Tesla Giga factory for this product line. There's really this partnerships model of helping them prototype and then scale rapidly. But yeah, we're like, you know, we can only build so many factories a year. So the waiting list of everyone wants a Hadrian factory to deploy their products at scale in the US is growing quite a lot, which we're very lucky.

• 2:08:37Jordi Hays?

  What do you, what do you think about 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 EBITDA and they've done so for 30 years. So they're just gonna, are they like buying like sort of an aging asset or is it worth, is there sort of like value in sort of like understanding what they're doing and sort of upscaling it?

• 2:08:59John Coogan?

  The machine shop roll up idea?

• 2:09:00Jordi Hays?

  Yeah, the machine shop roll ups of the world.

• 2:09:03Chris Power?

  I think in general, it's a terrible idea. And the main reason is, is like, you want to run a factory, you gotta, you gotta be leading the people and you gotta have that credibility and no master machinist or welder is going to respect a kid who's got a suit and a Harvard MBA on coming and telling him what to do. I think it's a really tough gig.

• 2:09:21Jordi Hays?

  Is it also one of those things where you want to?

• 2:09:23John Coogan?

  Chris actually tried to do this like years and years ago.

• 2:09:25Jordi Hays?

  Yeah, but is it also?

• 2:09:26John Coogan?

  Before it was a trend.

• 2:09:27Jordi Hays?

  No, 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 Dhruva on from deterrence later and he's got all these crazy stories where 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.

• 2:09:55John Coogan?

  Keep using it.

• 2:09:56Jordi Hays?

  And so I 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.

• 2:10:06Chris Power?

  Yeah. And a lot of the capital equipment in all 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 gotta, you really gotta build these factories from scratch with new technology and new workforce.

• 2:10:26Jordi Hays?

  How do you think about when you're setting up one of these new factories and for companies that are in defense at all? Are there the actual machines themselves that then sit on the factory floor? I imagine a lot of the best ones are built and designed and manufactured, you know, everything like in China. So how do you, how do you think about sort of the supply chain for the autonomous factories that you guys are building and sort of, you know?

• 2:10:54Chris Power?

  It's a very hard question that the country's got to answer. So the machinery market, so we invented, Air Force invented CNC machine. And we no longer make CNC machines in the US. And I think you saw this article about, you know, Haas white labeling some China ones and selling to the Russians. 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 Alfa Romeo and it's really fast, but it's gonna, it's, you're gonna be in maintenance hell forever. The German ones are really stable and the Korean ones are quite good. So, you know, if the balloon goes up with the conflict, you know, can we even buy the amount of capital equipment to put in the factories?

• 2:11:39Chris Power?

  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 and make sure it's in the US. But yeah, we no longer make the underlying machines in the country anymore.

• 2:11:53Jordi Hays?

  Can you talk, can you talk a little bit about the continuing resolution? You're not a company that's going directly for program of record, but obviously your faith is kind of tied to that. I mean, I, yeah, I know that you probably can, but can you talk about like, how did you interpret the news? There's been a lot of chatter about this is a bear case for the entire industry. Maybe there's green shoots of opportunity. How are you processing it? What's your strategy?

• 2:12:20Chris Power?

  So we're in a really lucky position where we're everyone's factory. So as long as we have enough customers who are winning and losing, like we're growing at a rapid clip rate. Cause we're kind of the index of the market, right? Which is a really lucky position to be in. We also partner with a select few companies, again to co bid 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 nine months. Your burn rate's through the roof, you're canceling your ramp credit card, you know, you can't put ads on ad quick anymore. You're in a really tough position.

• 2:12:54Jordi Hays?

  No eight sleep? Brutal.

• 2:12:56John Coogan?

  No, no, no. I mean, if you've paid for it, eight sleeps not leaving you.

• 2:12:59Chris Power?

  But for larger, for larger companies like Andro, you know, they're working on 10 programs at once. So if a couple of them get delayed, it's not a huge issue. I think Delian's 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 in a really good position where we can eat those long continuing resolution cycles. Because our core business is growing like 10 times, you know, 10x year on year. 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? Cause everyone's using AWS. We certainly don't. Uh, and we try not to have favorites, you know? We'd love to manufacture everything for everybody.

• 2:13:45Jordi Hays?

  What, uh, what, what does success look like, uh, just purely from a, you know, the, 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 didn't think it was quite true, but is the future of Hadrian, it's like 30% of hard tech dollars just go straight to Hadrian 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.

• 2:14:13Chris Power?

  Yeah. I, I think the most successful companies that are continuing to raise huge growth rounds are building faster and better with Hadrian.

• 2:14:21Chris Power?

  You know, and 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 factories and components. So yeah, we, we believe that we will are quickly becoming the index of the market and you know, everyone needs a giga factory, right?

• 2:14:40Jordi Hays?

  That's right. What's going on? What's your thoughts on Europe broadly? We've covered the automotive market quite a lot on the show, just, you know, Germany's kind of thrown in the towel, some manufact, you know, sending their manufacturers, you know, it was even Porsche is setting up US manufacturing. I think it's a bit of a shame. Do they, is there a world in which Hadrian, 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?

• 2:15:17Chris Power?

  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 the same kind of core skilled labor problem. 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 warring tribes. One is the people that are, 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. And then you've got your kind of Richard the Lionhearts, 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.

• 2:16:02John Coogan?

  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.

• 2:16:06Jordi Hays?

  It took way too long to get you on the show.

• 2:16:08John Coogan?

  I know, I know. We messed up, but this is the perfect day. It was a great day for this.

• 2:16:12Chris Power?

  It's a perfect day. I'm happy to, happy to be at the Capitol, the Capitol anytime. And, uh, you know, God bless the United States of America and, uh, you know, the financial system of the US economy. Thank you, gentlemen.

• 2:16:21Jordi Hays?

  It's just fantastic. Thanks for coming on. Great to see you.

• 2:16:24John Coogan?

  Bye.

• 2:16:25Jordi Hays?

  Early supporter.

• 2:16:27John Coogan?

  Yeah.

• 2:16:27Jordi Hays?

  And I'll always remember that.

• 2:16:28John Coogan?

  Yeah. He texted me once. He was like, I'm working 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 I mean, maybe we could run it back public.com, baby. We've already done the, we're doing another.

• 2:16:51Jordi Hays?

  We're doing it again.

• 2:16:51John Coogan?

  For those who take it seriously, multi asset investing, industry leading yields. They're trusted by millions, folks. Get over on public.com.

• 2:16:57Jordi Hays?

  Ben.

• 2:16:58John Coogan?

  Do we need to do some timeline? Or do we have a guest? We have a guest in the Temple of Technology.

• 2:17:03Jordi Hays?

  Can I get another?

• 2:17:03John Coogan?

  Welcome to the stream. How are you doing, Aaron?

• 2:17:06Jordi Hays?

  There he is.

• 2:17:07Aaron Slodov?

  Boys, how are you? How are you?

• 2:17:10John Coogan?

  We're great. I think if you turn your camera horizontally, we'll have a little bit better frame over here. Is that possible?

• 2:17:17Jordi Hays?

  That might be tough. He's on an iPhone.

• 2:17:18John Coogan?

  No, that looks great.

• 2:17:20Jordi Hays?

  Thank you.

• 2:17:20John Coogan?

  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. What's new? Can you introduce yourself? What do you do? Where are you, et cetera?

• 2:17:32Aaron Slodov?

  Sure. Aaron Slobodoff, CEO of Atomic Industries, and we're, we're teaching AI how to do mass production. We're in Detroit.

• 2:17:44Aaron Slodov?

  Let me, can I turn my camera around?

• 2:17:46John Coogan?

  You should. You can do anything on the phone. Yeah, there you go.

• 2:17:49Aaron Slodov?

  Oh.

• 2:17:49John Coogan?

  There we go.

• 2:17:51Aaron Slodov?

  All right.

• 2:17:51John Coogan?

  Is that a Cheeto?

• 2:17:53Aaron Slodov?

  Yeah, this is the Cheeto. This is a, this is a very, very big boy. This machine is 18 feet tall.

• 2:17:59John Coogan?

  Okay.

• 2:18:00Aaron Slodov?

  And right now we're loading in that job that's going there. We can go down there, take a little walk.

• 2:18:08John Coogan?

  Cool.

• 2:18:08Jordi Hays?

  This is great. This is a great, this is our Detroit correspondent.

• 2:18:11John Coogan?

  Yeah.

• 2:18:12Jordi Hays?

  Aaron Slobodoff.

• 2:18:13Aaron Slodov?

  From, from the front lines.

• 2:18:15John Coogan?

  Why not?

• 2:18:16Jordi Hays?

  For anybody out there who gets motion sickness.

• 2:18:18John Coogan?

  Yeah, maybe go audio only right now.

• 2:18:21Aaron Slodov?

  Behind me.

• 2:18:22John Coogan?

  We need to get you a gimbal.

• 2:18:24Aaron Slodov?

  In these boxes right here, we've got a huge production program going to the New York City Subway Transit Authority.

• 2:18:32Aaron Slodov?

  Lots of work happening, obviously. Reindustrialize, right?

• 2:18:35John Coogan?

  Cool.

• 2:18:36Aaron Slodov?

  So.

• 2:18:36Jordi Hays?

  So wait, you're doing the meme.

• 2:18:39Aaron Slodov?

  I am doing the meme. I am doing the meme.

• 2:18:41John Coogan?

  You created the meme.

• 2:18:43Aaron Slodov?

  This, this is a, this is a very, very large, uh, mill and drill machine, uh, that we use for mold making. It's not super apparent here, but like, this is gonna be a mold for a drone ultimately.

• 2:18:57John Coogan?

  Cool.

• 2:18:58Aaron Slodov?

  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.

• 2:19:06John Coogan?

  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?

• 2:19:26Aaron Slodov?

  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 tradespeople. 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 factory 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

• 2:20:12Aaron Slodov?

  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. But.

• 2:20:24John Coogan?

  No idea what those are, but they look cool.

• 2:20:26Aaron Slodov?

  Yeah, yeah.

• 2:20:27Jordi Hays?

  Have you ever done any like microphones, mic stands, like any national security critical stuff, podcasting equipment?

• 2:20:34Aaron Slodov?

  Yeah, it's all, all, all national security, all ITR all the time.

• 2:20:37John Coogan?

  Yeah. 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?

• 2:21:03Aaron Slodov?

  Yeah. So, um,

• 2:21:06Aaron Slodov?

  Basically, what we're doing is kind of similar to how self-driving cars were built a long time ago. 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 to do something. And then, obviously, you have a factory to help you like close the loop on the prediction ability, right? So the idea here is that, you know, with the solvers and kind of like the models that we build on top of this, you have a factory that generates all this awesome data. Ultimately, what we're trying to do is just like predict the physics of a mold and the design of it as fast as you can. So in terms of like LLMs and how they play a part in this stuff,

• 2:21:47Aaron Slodov?

  it's, it'll become more apparent over time, I think, but you know, on the physics-based side, very little.

• 2:21:54John Coogan?

  Yeah.

• 2:21:54Aaron Slodov?

  And then, like, in terms of like coordination and, I think, like execution of said designs and kind of like factory operations, it's huge. A lot of that stuff can be really great, like, you know, agentially for helping, you know, the efficiency here.

• 2:22:11John Coogan?

  Yeah, there's a little bit of like, 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 in everything. And it's like, there are other, there are other algorithms, in fact, that might be useful. And that's okay. You don't need to be embarrassed. Yeah.

• 2:22:26Jordi Hays?

  I imagine when you guys are, you know, in the customer development process, like you're oftentimes, there we go.

• 2:22:33John Coogan?

  That's the poop. That's the machine poop.

• 2:22:35Jordi Hays?

  I imagine you're competing with, with, with kind of companies in China 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.

• 2:22:51John Coogan?

  This is Chinese New Year.

• 2:22:52Jordi Hays?

  It's, yeah, don't even think about doing anything around that. But, but like, is that something like, do you, do you respect their game when it comes to just like being like really fast, really clear, like focusing on cost reduction, scale, et cetera? Like, do you think we can learn from them?

• 2:23:11Aaron Slodov?

  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 gonna 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 gonna 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?

• 2:23:52Aaron Slodov?

  Like, figure out how to do that stuff, and then you can work around that stuff, right? Like, this, I don't think there's a shortage of grit here, but like, 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, because somebody else is out there doing it for cheaper. So, yeah, I think this is kinda like, where we have to focus.

• 2:24:13John Coogan?

  I, I had kind of a hot take a while back, and I wanted to run it by 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. But how does that hot take resonate with you? Do we need to be able to make Happy Meal toys in America?

• 2:24:42Aaron Slodov?

  Yeah, I mean, a lot of people don't wanna do like, commoditized, classic stuff like that, right? Because it's, it's not gonna 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 kinda 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, a hundred 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 kinda 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.

• 2:25:26John Coogan?

  I'm upside down now. This is an experiment. It looks fine.

• 2:25:32Jordi Hays?

  There we go.

• 2:25:33Aaron Slodov?

  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. Uh, and then, you know, obviously 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.

• 2:25:54Jordi Hays?

  I mean. All right, I want some, uh.

• 2:25:56Aaron Slodov?

  Yeah.

• 2:25:57John Coogan?

  You are sideways, by the way.

• 2:25:58Jordi Hays?

  I want, you are sideways.

• 2:25:59John Coogan?

  That's, that's better.

• 2:26:00Jordi Hays?

  Uh, I want some hot takes. How do you feel about?

• 2:26:03John Coogan?

  Good.

• 2:26:04Jordi Hays?

  How do you feel about Waymo, uh, you know, buying cars, uh, from China?

• 2:26:10John Coogan?

  Oh, they are?

• 2:26:11Jordi Hays?

  Yeah, they are.

• 2:26:11John Coogan?

  I didn't know this, huh?

• 2:26:12Jordi Hays?

  They are. Uh, how do you feel? How does that make you feel?

• 2:26:17John Coogan?

  Yeah, they should have gone to Detroit.

• 2:26:19Jordi Hays?

  I know.

• 2:26:19John Coogan?

  You're in the capital, Motor City. Come on. They could have bought the whole town with like one, one dividend payment.

• 2:26:26Aaron Slodov?

  Yeah, basically. I mean, that's kind of, that's kind of how I feel, honestly. Uh, but ultimately, I don't know. I used to work at Waymo like 15 years ago. It was crazy. Uh, and I've seen that company, you know, like grow over time, but it's, uh, yeah, I mean.

• 2:26:41John Coogan?

  It's a great product.

• 2:26:42Aaron Slodov?

  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.

• 2:26:55John Coogan?

  Yeah.

• 2:26:55Aaron Slodov?

  This is.

• 2:26:56John Coogan?

  No, no, you're sideways again. Uh, can you talk a little bit about, um, just the on-ramp 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?

• 2:27:19John Coogan?

  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 been studying CS for four years?

• 2:27:51Aaron Slodov?

  Yeah, um, I think it's two things, like incentive, obviously, right? 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. 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 at Google or something, right?

• 2:28:35Aaron Slodov?

  Like, if you're productive enough, I mean, it kind of speaks for itself. And like, beyond that, I think also, you know, training wise, exposing people to this kind of stuff is ultra important. Being able to do factory tours, right? Like our buddy Zane, 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 going from like the, 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

• 2:29:16Aaron Slodov?

  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.

• 2:29:35Jordi Hays?

  I want one more spicy, fresh, hot off the grill, hot take from you before you leave. And we'll have you on again because it's been great. We'll have you on with a stable camera too. So you can see that handsome face.

• 2:29:50Aaron Slodov?

  I had to walk around, right?

• 2:29:51John Coogan?

  We're gonna get you a selfie stick straight from Shenzhen on Timu.

• 2:29:55Jordi Hays?

  A Timu selfie stick.

• 2:29:56John Coogan?

  The Timu selfie stick is in the mail. Expected in six weeks, but we paid $1 for it.

• 2:30:02Jordi Hays?

  Uh, last, last question. Is there a world in the future where you got humanoid robots walking around that factory floor? Or are they unnecessary with the other forms of automation that you have going on?

• 2:30:16Aaron Slodov?

  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 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.

• 2:30:34Jordi Hays?

  There we go. I like the sound of that.

• 2:30:37John Coogan?

  Yeah, that actually sounds pretty good.

• 2:30:39Jordi Hays?

  Give the robots guns.

• 2:30:40John Coogan?

  Yeah, give the robots guns.

• 2:30:41Jordi Hays?

  Give the robots guns.

• 2:30:42John Coogan?

  Yeah, security.

• 2:30:44Aaron Slodov?

  Detroit first, baby. Let's go.

• 2:30:46John Coogan?

  For sure.

• 2:30:47Jordi Hays?

  Uh, Aaron, it's been fantastic having you on.

• 2:30:49John Coogan?

  This is awesome.

• 2:30:49Jordi Hays?

  Looking forward to the next one. Keep, uh, keep pounding the table. It's working, I think.

• 2:30:54John Coogan?

  Yeah, good luck.

• 2:30:54Aaron Slodov?

  Thank you, guys.

• 2:30:55John Coogan?

  I'll talk to you soon. Bye. That was great. And, uh, we're staying on manufacturing, right? Deterrence, Dhruva? Yes. Can you break it down? What does the company do?

• 2:31:06Jordi Hays?

  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, Dhruva's 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, Dhruva. So let's get him in here. Uh, but yeah, uh, Deterrence is leveraging 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.

• 2:31:50John Coogan?

  I got some breaking news. My mom is watching and she sent me. A foghorn sound effect and said, ran across this and thought of Jordy.

• 2:31:58Jordi Hays?

  No way.

• 2:31:59John Coogan?

  Yeah, and so I'll have to send it over to you. You can add it to the soundboard.

• 2:32:04John Coogan?

  That's great.

• 2:32:05Jordi Hays?

  Well, this is a foghorn.

• 2:32:06John Coogan?

  A lot of people are into the soundboard. Uh, and let's bring on Dhruva. How you doing?

• 2:32:10Jordi Hays?

  What's going on?

• 2:32:11John Coogan?

  Great to see.

• 2:32:12Jordi Hays?

  Look at that hat. He's got Aaron's hat on.

• 2:32:14John Coogan?

  Oh, you got Aaron's hat on. That's great.

• 2:32:15Speaker 08

  I got my hat on. Yeah, I heard, I heard Aaron talking and I decided to bring the meme out of my backpack.

• 2:32:20John Coogan?

  That's amazing. Uh, can you do a quick?

• 2:32:22Jordi Hays?

  Aaron's doing the meme, you're doing the meme. Pretty much everybody today is doing the reindustrialized meme.

• 2:32:27John Coogan?

  I love it.

• 2:32:27Jordi Hays?

  Thank you for what, for what you do.

• 2:32:29John Coogan?

  Yeah, it's half Defense Day, half reindustrialized day.

• 2:32:32Jordi Hays?

  Yeah.

• 2:32:32John Coogan?

  Eventually we'll split these out, but, uh, much like Intel.

• 2:32:35Jordi Hays?

  Both important. And what Dhruva can talk about is how industrial capacity historically has been a deterrent.

• 2:32:42John Coogan?

  Yep.

• 2:32:42Jordi Hays?

  It's no longer a deterrent, but, but before we get into that, uh, or maybe like the US doesn't have like the actual capacity to be an industrial deterrent anymore. But before we get into that, Dhruva, uh, I know you very well, but, uh, introduce yourself for, uh, the show.

• 2:32:57John Coogan?

  Yep.

• 2:32:58Speaker 08

  Yeah, absolutely. Um, well, first off, uh, I'm really appreciative to be here. It's been my, uh, dream since I was in high school to be on the Technology Brothers, uh, podcast. 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. Started the company with a couple of 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.

• 2:33:44Speaker 08

  And, uh, yeah, we, we, we sort of started to dive in. We, we heard the headlines of like, you know, the US isn't able 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 D I B like what they thought and you know, we found a lot of technology there that was from the like nineteen thirties and forties, 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 multi-generational. So, you know, their grandparents are maybe the ones who started working on the machine and they're still there. Um, so yeah, we felt like-

• 2:34:21Jordi Hays?

  Yeah, talk about, talk about the dynamic even in, 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 because 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 this broader safety issues? Because that was a big kind of part of the, the genesis of the company as well.

• 2:34:53Speaker 08

  Yeah, safety is a big thing. I mean, just to start with that, you know, we've been really diving in the problem for the last, you know, it's called a couple of years and roughly every two to three months, there is 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- re-energize this industrial place. And yeah, I've, I FaceTimed you for some interesting places. I mean, I would say like safety standards, 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 nineteen thirties, forties and fifties, but also like the safety protocols just haven't been updated to modern standards.

• 2:35:37Speaker 08

  And so to give you like a little bit more news, so like a lot of our team, uh, worked on like E V batteries at Tesla and Rivian and some other places. And so like when they go into these places, you know, a lot of E V 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, and 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 P P E and 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, in some ways you have to like respect the art a little bit, but yeah, there's definitely improvement.

• 2:36:14John Coogan?

  Yeah, I like that with your company, like it's so easy in defense tech or anything just to be like, we're going to be Anduril 2. 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 forget that like before Anduril was Anduril, they were like the sensor tower company. And they were working, they had a small beachhead 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?

• 2:36:54Speaker 08

  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 end weapon systems and munitions 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 like 100. 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 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 store, 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 disciplines

• 2:37:35Speaker 08

  or three maybe things. So which is always fun. Two robotics. And then the third thing is like chemistry. So a lot of 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. We've met a lot of people who have not all their five fingers, let's say, doing this work. And 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 like to tell the team

• 2:38:18Speaker 08

  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 in robotics, AI, and all these other places that, you know, we're hopefully able to lean into for the next couple of decades here.

• 2:38:29Jordi Hays?

  Talk about the continuing resolution, which has been kind of an ongoing topic. And then what's been your strategy as a CEO of Deterrence and kind of navigating that?

• 2:38:41Speaker 08

  It's definitely been an interesting time to be in DC. I think this may be the most obvious thing that's been said all day.

• 2:38:46Jordi Hays?

  Well, you live in, you like, live in the DC area and you've been there for years. So it's, it's, it's, 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.

• 2:39:01Speaker 08

  Yeah, no, totally. And I also have encouraged some founders lately, like especially if they're small, not like, I mean, Andrel 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 bring across, bump into someone we had met before and like get a completely different perspective on it. 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, uh, 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.

• 2:39:43Speaker 08

  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'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.

• 2:40:25Jordi Hays?

  That's great.

• 2:40:25Speaker 08

  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 to, 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. And then the last thing I'd say is like, you know, 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 the 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

• 2:41:10Speaker 08

  all those under secretaries and stuff like that, like a lot of them start quote unquote in the seat. So there's kind of an opportunity to be like a strategy shaper. So, you know, Longwood always saying like chaos can be an accelerant for a startup and like that's kind of the situation in DC right now.

• 2:41:24John Coogan?

  Do you have a follow up?

• 2:41:25Jordi Hays?

  Yeah, I have a more of like historical question.

• 2:41:28John Coogan?

  I was just gonna ask for like, can you zoom out and just give me like the really basic, like explain like I'm five on energetics, primers, explosives. You said the army's 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 how does, how does your product actually get into a, you know, like a weapon system?

• 2:41:55Speaker 08

  Yeah, yeah, yeah.

• 2:41:56John Coogan?

  Exactly like I, I'm thinking at the level of like, I'm seeing cartoon TNT right now, but I want to go deeper.

• 2:42:02Speaker 08

  Not far from the truth. All that, all that time I spent on Cartoon Network as a kid is finally playing off.

• 2:42:07John Coogan?

  Yeah.

• 2:42:08Speaker 08

  Just avoid all the things with big red boxes on them or whatever.

• 2:42:10John Coogan?

  Yeah, exactly.

• 2:42:12Speaker 08

  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.

• 2:42:25John Coogan?

  Yep.

• 2:42:25Speaker 08

  So that, that means like, so if you think of explosives, like fireworks, pyrotech stuff, propellants, like those all kind of fall in energetics. The specific stuff, I'll maybe start with primers that is, which is what we're starting with. So we're starting with primers for small caliber rounds.

• 2:42:41John Coogan?

  So actual like bullets in a rifle that a, that a soldier would shoot.

• 2:42:46Speaker 08

  That's right.

• 2:42:47John Coogan?

  Got it.

• 2:42:47Speaker 08

  So.

• 2:42:47John Coogan?

  Inside the bullet.

• 2:42:49Speaker 08

  That's right. So standard bullet is four parts, right? So you've got the brass, which is what falls to your feet when you shoot it. Projectile, the little powder in there too. So again, growing up on on Cartoon Network, I assumed that like the gunpowder was the part that went boom or whatever. It's like not actually true. It's actually the primer. So the primer is in the back of the bullet. When 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. And so what it does, it creates a mini explosion in the bullet and then it burns off the gunpowder to start an explosive train. And that's what shoots the bullet out, essentially like a little rocket, right?

• 2:43:27Jordi Hays?

  Yeah.

• 2:43:27Speaker 08

  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 and 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 wedded in like on strip, it's like wedded floor, 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 cheese.

• 2:44:08Jordi Hays?

  That's helpful.

• 2:44:09Speaker 08

  Yeah. And then from there, there's like a, there's a pressing process that happens. So, you know, my head, my co-founder Henry likes to say it's like a lot of what we're doing is this is rubbing and smushing. Material, 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 second. The last step, 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.

• 2:44:36Jordi Hays?

  Yeah, there's a lot of stuff you can do with like computer vision here where before it was like a human like looking at it being like, alright, like looks good. And now, you know, deterrence is basically able to leverage like. And the thing that, you know, when when Drew, you know, first kind of like pitched me this sort of the high level vision for deterrence. And we started talking about it. What I thought was appealing is it felt like every defense. That company was going after these super sort of like sexy like, oh, we're gonna, you know, the sort of F47, like these sort of big programs with this futuristic tech. And Dhruva was basically like, had been sort of touring these facilities and saying like,

• 2:45:13John Coogan?

  I like bombs.

• 2:45:14Jordi Hays?

  Yeah, yeah, more so like, are we even doing the basics?

• 2:45:18John Coogan?

  Yeah, sure, sure, sure.

• 2:45:18Jordi Hays?

  Like, if you walk around these facilities and they're, if we were to get into, you know, a 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 warfighters.

• 2:45:31John Coogan?

  It's less sexy, but it's just as important.

• 2:45:33Jordi Hays?

  Yeah.

• 2:45:33John Coogan?

  Makes sense.

• 2:45:35Speaker 08

  That's right. And these markets are pretty big, right?

• 2:45:36John Coogan?

  Yeah, totally.

• 2:45:37Speaker 08

  At the 155 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.

• 2:45:47John Coogan?

  The glue, wow.

• 2:45:49Speaker 08

  The sealant, basically.

• 2:45:50John Coogan?

  Well, we gotta go shooting. We, we, are there some good ranges out in DC? We, we gotta go out there and have a, have a range day.

• 2:45:56Speaker 08

  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 job.

• 2:46:00John Coogan?

  Oh, yeah, for sure, for sure. Well, well, maybe we can livestream it. Either way, we'll definitely have you back soon. Congratulations on all the progress.

• 2:46:08Jordi Hays?

  Our DC correspondent.

• 2:46:10John Coogan?

  Yeah, and we'll talk to you soon.

• 2:46:12Jordi Hays?

  Look forward to the next one.

• 2:46:14Speaker 08

  Thanks, guys. Take care.

• 2:46:15Jordi Hays?

  See ya.

• 2:46:16John Coogan?

  Cool.

• 2:46:16Jordi Hays?

  I wanted to ask about the history, we can do it another time, just kind of 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 outproduce you. And it's sort of flipped around and now China's in a sort of similar position, but.

• 2:46:35John Coogan?

  But we got Cam coming in the temple of technology. Welcome to the show. How are you doing?

• 2:46:39Jordi Hays?

  What's going on?

• 2:46:40Cameron McCord?

  Good to, good to be here.

• 2:46:42John Coogan?

  Yeah, thanks so much. 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. Could you do like, just a quick intro on who you are, what your company does, just set the table for us?

• 2:46:54Cameron McCord?

  Yeah, awesome. 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. So we're all about helping people test and validate their hardware products faster. So I was just, I was just listening to you guys talking, like, we, we're very much a. Like the unsexy, very, very important, you know, very specific thing, which is, which is helping people move faster.

• 2:47:19John Coogan?

  Can you give me a little bit of like history and progress of the company? I know that there was a big fundraiser recently. How big is the company? When did it start? That type of stuff.

• 2:47:26Cameron McCord?

  Sure. Yeah. So we are, we just had our three year old, yeah, our third birthday as a company. We're about 55 people.

• 2:47:36John Coogan?

  Cool.

• 2:47:37Cameron McCord?

  And yeah, I mean, our, our kind of like the, the origin story a lot was like, we have, you know, folks who, um, my former employer, Anduril, right? Like we had folks that come from Anduril, from SpaceX, from, uh, applied intuition, companies like this that have seen, you know, everyone building this amazing, uh, you know, amazing tech. 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.

• 2:48:01John Coogan?

  And the recent fundraiser, did you break?

• 2:48:03Cameron McCord?

  Yeah. So we, um, we, uh, we announced it a little bit late, but yeah, we, we did a, a series A, we raised 20 million. It was, uh, led by General Catalyst. That was, uh, a year ago now, which is like, God, times moving quickly. So yeah.

• 2:48:18John Coogan?

  Well, so yeah, I mean, what, what's the next milestone? Is the program of record framework SBIR then program of record? That's kind of like the meme pathway in defense tech. Does that apply here or do you have a different customer?

• 2:48:31Cameron McCord?

  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 you haven't heard of, but Test Resource Management Center, right? So it's a OSD, uh, Office Secretary of Defense program, but they govern all of the like test infrastructure for, for the US. So, um, if you're, you know, folks, if you're a Hermius, 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 nominal, 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 collaborate, um, and do data. So for us, that's, that's the end goal.

• 2:49:14Jordi Hays?

  Yeah. How hard is, uh, hardware? 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 it doesn't work. Or, you know, they, they struggle and it's like, You had so much money, you had such a great team, but it's like, I feel like the average person doesn't appreciate just how hard it is to build a single, like, just the engine of a rocket, or a missile, or whatever.

• 2:49:49Cameron McCord?

  Yeah, it's so, it's so true, and I think like, we, you know, a lot of the value that we try to like, provide for customers is, you know, it's like, you're doing so much if you're a hardware 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 additive to my software-defined hardware product? If I'm, you know, if you're Dhruva Deterrence, you're like, I want my software engineers building the like, robotic, you know, systems to do energetics. I don't necessarily want them building, you know, data analysis and management and kind of like, visualization infrastructure, because it's already hard enough.

• 2:50:32Cameron McCord?

  And so, our big bet, like, the bet we are making is, there's this massive re-industrialization movement. We are solving, as a nation, incrementally, the different bottlenecks, whether it's rare earth, 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 very specific vertical slice of it, which is like, I need to use software to test all those things before I field them and deploy them. And making this big bet, like, all that, those trends, are going to really condense on like, the area that nominal is trying to build in.

• 2:51:06Jordi Hays?

  Can you talk about your experience using maybe alternatives to nominal, or just building the, basically, the product, you know, internally back at AndroL? Like, I think a lot of, you probably have the benefit where like, your competitors to nominal now are like, 40 years old, very like, you know, super, super clunky, like, maybe don't even run on Mac OS.

• 2:51:30Cameron McCord?

  Yeah, it's so true, like, we think about, you know, the actual, the sort of competitor scenario, like, National Instruments is a massive one, like, Emerson, Siemens, like, those types of technologies. So, they, they did this massive industrial software land grab, you know, 40 years ago, and they have not been innovated again since. So, they've like, in this world, like, they established best in suite, and so there's huge network effects of like, All of the different pieces of software you want for testing and 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, grabbed this territory and they've owned it since. What's happened in the last, like, I don't know, 15 years, and saw this at Andro and other places, is

• 2:52:13Cameron McCord?

  the software world solved this problem for software. So continuous delivery, you know, linking, testing and operations and observability, like all the Datadog, Splunk, Grafana, you know, different pieces of technology like that. So it's been happening in the industry as people have been, you know, trying to basically use those to get rid of the old, you know, NI or Emerson type tools. But those don't work for a variety of reasons. And so with, you know, startups and scaleups, I say we often replace someone trying to use, yeah, like a Grafana and a MATLAB and maybe some Python scripting analysis kind of holding all together, maybe like Databricks or something on the backend. Pieces of technology that are good, but they're not for this like industrial operations world. And then at

• 2:52:54Cameron McCord?

  our, the bigger, you know, the big five type, type customers, like it is a lot of that really, really old software that we're displacing.

• 2:53:02Jordi Hays?

  Do you even care to go after like the actual primes right now? Or 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?

• 2:53:19Cameron McCord?

  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. And excitingly, we asked 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. So we've been doing that with this, these like startups and scaleups. 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.

• 2:53:44Jordi Hays?

  Yeah, yeah, I can imagine if, if Boeing is signing up for something that, that the, what they'd be willing to pay for the software is like a pretty big number. So.

• 2:53:56Cameron McCord?

  No, it's, 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. But for these big, big programs like 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 hundred million, 200 million, 500 million dollar like program, 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 were getting into now, which are very exciting. So.

• 2:54:34John Coogan?

  Can you talk a little bit about dual use? I mean,

• 2:54:37Cameron McCord?

  Yeah.

• 2:54:38John Coogan?

  Is, are we going to see like Ford Motor Company making cars with this? Like, how, how, how, how niche are you? And how does that expand over time?

• 2:54:46Cameron McCord?

  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. And so we are, we're focused a lot on the, the A and D market, but on the B to B side and the direct to, you know, federal side. It's very dual use in that nature within companies that are doing aerospace. But yeah, we work with, I mean, we work with some of these like advanced nuclear, you know, companies, building microreactors, like people as well. So yeah, we're planning strategic flags, you know, some of these robotic, like foundational robotic model companies, like they use nominal as well. I think we're kind of planting these flags in these other robotics, transportation, energy as well. So.

• 2:55:26John Coogan?

  Very cool. Jordy, you have anything else?

• 2:55:28Jordi Hays?

  I don't have anything else. I'm just extremely bullish because we just got on, on you and what you're doing, just because every single person, it seems like we talked to today, like either needs this or their customers need it. So I'm sure you're pretty busy and I appreciate you, 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?

• 2:55:49Cameron McCord?

  Yeah, hiring across the whole, hiring across the whole company. Like for us, it's like, you know, folks that, folks that understand software, but if done, done hardware is like the sweet spot for us. So a lot of those customer, customer success is like the old, you know, type, well, but we call it mission operations. But yeah, people that are, people that want to go. You know, it's one of these hardware companies and help like deploy the nominal software suite like that is um it's a very special skill set. But if that's you, if you worked at a hardware company and uh and were the software person there, you know who you are.

• 2:56:19Jordi Hays?

  Yeah, do you guys think you benefited from Palantir having so much success with the sort of forward deployed engineered model where it used to be so much pushback against that, 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. Did they, did they sort of give you guys, were they a catalyst?

• 2:56:53Cameron McCord?

  Yeah, absolutely. Jason, my uh our co-founder and CTO is uh was an early Palantir employee, worked on Foundry and like um, you know, we we take a lot of that, that DNA. 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 week 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. 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.

• 2:57:29John Coogan?

  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 those governments. Like, it's less of a priority that, you know, steep in the supply chain. It's different, the difference between like buying a DJI drone and buying a GoPro that was manufactured in China. Like, people have different aesthetics around that. But we, how are you thinking about that?

• 2:58:03Cameron McCord?

  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. 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 suite and sort of seeing like these folks are, um, generally speaking, like pretty enamored with the Anduril, the SpaceX way, the Palantir way of doing stuff. And so I actually think like, there's just, is it 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

• 2:58:42John Coogan?

  That makes sense.

• 2:58:43Cameron McCord?

  The AUKUS 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.

• 2:58:56Jordi Hays?

  Do you think?

• 2:58:57John Coogan?

  It's only a short flight. I'm sure you're over there back and forth every other week.

• 2:59:00Cameron McCord?

  Yeah, yeah, yeah.

• 2:59:01Jordi Hays?

  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?

• 2:59:25John Coogan?

  Oh, like forward deployed engineers who don't speak the native language, but it doesn't matter anymore.

• 2:59:29Jordi Hays?

  A lot of engineers end up speaking English, but like, is that even a part of the calculus? Like, do you think?

• 2:59:34John Coogan?

  Most engineers don't even speak English, only code.

• 2:59:36Jordi Hays?

  Yeah, yeah, yeah.

• 2:59:38Cameron McCord?

  Yeah, exactly. Yeah. Um, no, I love the question. I've, I've never been asked before. Um, but I think it's like this, this initial, you know, 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 make that easier. Cause, um, there is a, you know, there is an implementation sort of like, you know, phase and, and yeah, that'd be a huge, yeah.

• 2:59:57Jordi Hays?

  Well, if you ever want to get into testing live stream, uh, infrastructure, we live stream three hours a day. We're always trying to

• 3:00:04John Coogan?

  We're looking for the best.

• 3:00:05Jordi Hays?

  We'll be the first customer.

• 3:00:07John Coogan?

  We'll be the first customer.

• 3:00:08Jordi Hays?

  We'll be your design partner on it and, uh,

• 3:00:10John Coogan?

  And you can bring a forward deployed engineer into the studio here.

• 3:00:12Cameron McCord?

  Yeah. They'll just like, they'll sit, they'll just like sit under the table.

• 3:00:15Jordi Hays?

  Yeah, under the table. With all the wires there. There's so many wires. Uh, it's great having you on. Uh, I have no doubt that, uh, yeah, next time you raise, come on the show, break it down, uh, or, or any other reason. It's great to have you.

• 3:00:30John Coogan?

  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 of minutes. Give the fans what they want. I mean, most of the timeline today is just endless Ghibli back and forth, which we kind of already covered.

• 3:00:44Jordi Hays?

  I wanted, let's do the David Perel one.

• 3:00:46John Coogan?

  Yeah.

• 3:00:47Jordi Hays?

  Because he's gonna be coming on the show next week. He says, "The Ghibli-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 in my timeline, uh, live.

• 3:01:13John Coogan?

  Maximal, maximal slop.

• 3:01:15Jordi Hays?

  Yeah.

• 3:01:15John Coogan?

  It's great.

• 3:01:16Jordi Hays?

  No, I think it's, I think it's totally cool.

• 3:01:18John Coogan?

  I like this take 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 Ghiblies. They're amazing. I'm just posting all these, getting all these likes. Then there were a lot of people who were just total backlash mode, saying like, oh, this is terrible. What would Hayao Miyazaki say? But now, this is a more nuanced take. It'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.

• 3:01:46Jordi Hays?

  I mean, there's so-

• 3:01:47John Coogan?

  Maybe that's good, maybe that's bad, but it's gonna look different.

• 3:01:49Jordi Hays?

  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.

• 3:02:01John Coogan?

  Totally, totally.

• 3:02:02Jordi Hays?

  Or make this 3D asset.

• 3:02:03John Coogan?

  I use, I actually use Photoshop a lot to make these memes, but now it's like way easier and way faster. And I saw-

• 3:02:08Jordi Hays?

  And it's so crazy. Even, even a month ago, I was thinking, you know what? I need to go on Fiverr, 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.

• 3:02:21John Coogan?

  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 gibblified, 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. And it's just, it's just very interesting to see that like it's now left the just, hey, take an iconic image and give it the filter. And he's already using it to express a different commentary.

• 3:03:04Jordi Hays?

  The thing is, so much of creativity is just taking an idea from one place and applying it somewhere else.

• 3:03:11John Coogan?

  Mixing two ideas together, changing things around.

• 3:03:14Jordi Hays?

  And so AI just allows you to do that so efficiently.

• 3:03:19John Coogan?

  Yeah. Well, honestly, there aren't that, there aren't that many other news stories here. Arc AGI two dropped. If you've been following the AI benchmark, why are you laughing?

• 3:03:31Jordi Hays?

  I just saw this picture of Jar Jar Binks.

• 3:03:34John Coogan?

  Oh, the Jar Jar Binks one is fantastic.

• 3:03:37Jordi Hays?

  This is all time. We gotta zoom out a little bit somehow.

• 3:03:38John Coogan?

  Yeah, you gotta zoom out. Okay, so.

• 3:03:40Jordi Hays?

  Because it's a Northrop Grumman.

• 3:03:41John Coogan?

  You want to read it? Are you gonna do the voice?

• 3:03:43Jordi Hays?

  Mesa is.

• 3:03:44John Coogan?

  Mesa is detecting threats like never before. Learn how recent combat ID enhancements are evolving missions. So Northrop Grumman has a program called M E S A, Mesa. And of course, that sounds like the way Jar Jar Binks starts every sentence in, in the early Star Wars movies. And so they just put Jar Jar Binks' face with the little caption and it's making it sound like Jar Jar Binks is, is talking about Northrop Grumman's program. A man, not, not a native posting group, the Northrop guys. It's a very different vibe at Northrop from Andor.

• 3:04:23Jordi Hays?

  This is like candidate for post of the week.

• 3:04:25John Coogan?

  This might be, this is such a good post.

• 3:04:27Jordi Hays?

  I'm gonna put that in banger archives.

• 3:04:29John Coogan?

  You really should. It's great.

• 3:04:32Jordi Hays?

  The chat wants us to cover the Fannie Mae IPO that Wall Street Journal is reporting on. At this point, we should probably cover it tomorrow.

• 3:04:39John Coogan?

  Yeah, that makes sense.

• 3:04:39Jordi Hays?

  Thank you for the suggestions, but this was a super fun day.

• 3:04:43John Coogan?

  This is great. Yeah, 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, a 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, you know, more of these defense days, maybe a crypto day even, anything. Be very interesting. Anyway, thanks for watching.

• 3:05:06Jordi Hays?

  Thank you.

• 3:05:07John Coogan?

  Fantastic show. We will see you tomorrow.

• 3:05:08Jordi Hays?

  Thank you to our wonderful sponsors.

• 3:05:10John Coogan?

  Tomorrow is Intellectual Day. We got two authors, two Stripe Press authors.

• 3:05:15Jordi Hays?

  Yeah, a little sneak peek.

• 3:05:16John Coogan?

  Already booked. We got Dorakeesh Patel coming on.

• 3:05:19Jordi Hays?

  Coming tomorrow.

• 3:05:19John Coogan?

  And, uh, and I, I think I'm going to send out emails to a bunch of other Stripe Press authors now and try and get, get stacked with the, with the Author Day.

• 3:05:29Jordi Hays?

  Let's do it. I have the mind of a gold retriever, but I'm excited for it to be an intellectual mind.

• 3:05:35John Coogan?

  Tomorrow will be an Intellectual Day.

• 3:05:37Jordi Hays?

  Yeah.

• 3:05:37John Coogan?

  We'll put on our thinking caps. Put on our thinking caps. Take off the tinfoil hat, put on the thinking cap.

• 3:05:43Jordi Hays?

  I should pull up the whole, all, every guest with the tinfoil hat on, but don't comment on it at all.

• 3:05:52Jordi Hays?

  Thank you, everyone, for watching. Have a great rest of your Thursday. We will see you tomorrow.

• 3:05:56John Coogan?

  Goodbye.