Inside Anduril's $20BN Army Contract & Why Anduril Must Go Public

Yeah. Well, Trae and I were were classmates, met freshman year, played ultimate frisbee together. So we went on a lot of road trips with one another. I don’t think Trae has changed at all. You ever seen the movie Hot Tub Time Machine?

Yeah. Great movie. Yeah. There’s a line in it that’s like every group of friends has an asshole, but Trae is our asshole.

Yeah. That’s Trae in a nutshell.

crazy how that works. Yeah.

There’s kind of some magic in the fact that it’s the same leadership team today as it was when we started the company. That implies a whole lot of things. Think mainly it’s that we’re all friends. So I think that’s actually pretty critical. There’s there’s a bond there that basically can’t be separated by business or stress or life. We we all know each other really well. But then on top of that, we all come at the industry from really different backgrounds and lenses, especially in defense, which is it’s like everything works against you to get into the defense market.

It’s like every headwind you could possibly imagine. If you don’t have a lot of perspective and knowledge about what’s about to come, it’s hard to think around corners and you get yourself kind of mixed up and gummed up a lot. And so when you meet founding teams, one of the most important things in defense is some of them can be outsiders and, you know, brilliant technologists and thinkers. It does take a lot of inside knowledge. One of the things we got right and keep getting right is that blend of the outside inside process.

Who can think differently and bring in sort of commercial perspective, high-tech perspective, add kind of entropy into the system, and then who can really deeply represent our customers, how they think, how does that come together uniquely, that that becomes super important to having any success in the defense world.

It’s multidisciplinary. Right? So the challenge becomes in defense that if you’re missing any of the 12 different types of disciplines it takes to really capture a large program, you will fail. And so one of the things that we’ve done is over the years, we’ve built up a pretty sophisticated apparatus to kind of round out these teams with all of the various skills in acquisition and budgeting and technology, mission and operational analysis, in doctrinally how these types of technologies will integrate into the military.

I think it does. I advise a lot of companies, and if I notice the founding team, at least a portion of it or a person on it hasn’t kind of been there, done that, the first thing I recommend is that they have to find someone who represents that piece of the puzzle that that’s missing to their team.

Yeah. Basically, two things. It’s not realizing that what they are doing already exists. There’s too much hubris in the technology market. You know, as high-tech people, we can we can do everything better than everybody else. That causes some companies to think they have an idea that isn’t actually an idea because it already exists, and that’s pretty common. I’ll give you an example. Years and years ago, I’m looking at a pitch or I forgot, maybe I was advising someone and here’s my idea. And I said, well, the thing you don’t know is in the 1960s, we invented that.

And so there’s kind of a hubris to thinking like the technology sector has all the answers when like, actually since the 50s, we’ve had the most brilliant people in the world working on these problems and a heck of a lot already exists. And this is sort of the point of like, if you don’t actually have the inside knowledge, you don’t know what mistakes you’re making. So that’s one. Yeah. The second, which will be more familiar to you, is is addressable market. There’s many cases an overestimation of addressable market where, like, actually what ultimately they’re going after is a very small sliver of a problem, which might materialize in a single large contract, but a single large contract is not an enduring business.

Yeah. I mean, you basically can’t have a defense company if you don’t have a large US business. Right? So 50% of defense spending is in The US and 50% is in the rest of the world. And so if you are cutting off half of your market from the get go, that’s that’s probably a big problem. The challenge in Europe is it’s not like a European Union in defense spend. Right? Each country has its own sovereign companies and has its own sovereign agenda. And so you keep getting winnowed and winnowed and winnowed, and you’re like, oh, well, Europe is my market.

Well, if you’re a French company, it kind of isn’t. France is your your market. And so you have to be really careful around how you’re actually analyzing who your ultimate ultimate customers can be.

Yeah. Yeah. So let’s let’s, like, actually define it because the stuff I saw posted about it was all over the place. It was like a rainbow of interpretations. So this is think about this as like a a credit card limit. So the government has said up to $20,000,000,000 they can spend on a class of Anduril’s commercial technology. There’s no obligated money, but it basically creates a process that reduces a ton of friction that you would ordinarily see in defense procurement, where each individual office would have to go through financing and contracting and evaluation.

And all of these repeatable, repeatable things now can now only have to happen once. And they did and they just did. And so maybe a fast track is probably probably the wrong word. It’s more like in the arduous process to actually get something contracted, we’ve cut a lot of the first steps out. There’s still a lot of hard work. We’ve just made it slightly easier for the government to access all of our gear.

They will obligate the dollars as the products, which is hardware and software are actually materialized. So delivery is revenue DOS in our world. So when I deliver something, recognize the revenue. Same thing in government. When we deliver something, they actually then the actual procurement orders and dollars flow.

Yeah. It basically means that we have enough business with the federal government to justify putting together what is a fairly sophisticated contracting vehicle. So, yeah, the short version of it is like, yeah, the government thinks that we can deliver some pretty major stuff now and in the future. It took a lot of work by a lot of people on the government side to actually make this thing happen. They are not gonna do that unless they think that it’s worth it.

So Lockheed, think, is in the, like, 100,000,000,000 revenue a year. I think we’ll we’ll do a couple billion in revenue this year. So so we’re still, you know, small in the grand scheme of things.

of the things we’ve done maybe uniquely is we’ve given our customers a lot of ways to access our company. What I mean by that is we’ve been very creative in, okay, a customer wants a piece of software, but it’s difficult in government to contract for software. And so we can wrap it in a hardware appliance. Right? Or they want a piece of hardware, but they know the software is the sophisticated piece of it. And so they’re willing to pay more for it because of that sophistication.

Or in government, you get these weird things where money is it’s called the color of money. So money is obligated to certain types of spend. So maybe a customer only has money that they can spend on services. Well, okay, can I do an as a service product? And actually, one of our first major contracts was with U. S. Special Forces for all of their counter UAS systems. That started as an as a service contract where they weren’t buying hardware, they weren’t buying software. They were literally buying a service that obligated us to defend certain sites from certain types of threats.

And as long as we were meeting the KPIs on the contract, we were fulfilling the obligations of of the agreement. So quite novel. And that contract has, you know, since gone in a lot of different directions, and we do a lot of different things on it. Not just that, but we have been jogged in our approach to this, basically realizing that the more ways we give our customers to get at us, the better it’s gonna go.

There’s a lot of answers to this question, but maybe from my lens, it is how few and far between the large wins are and how hard it is in between those periods of time. If you look at our business, you know, this year, we’ll do a couple billion in revenue. We’ll do 600 separate contracts this year. Only 20 of those are probably of material revenue size. And so the hardest thing is like, what happens in between the 20? And what are you doing to position yourself for the twenty first?

And because it’s so concentrated, every single one of those deals is considered risk to the business. Right? If it goes right, if it goes wrong.

between? The government can sometimes tell you where they want you to go, but oftentimes they don’t. And so a lot of this is trying to predict an unpredictable system. Right? So how many lenses can you look at at sort of the next couple of years? I can look at it through what the government is saying, through their rhetoric and through their budgeting. I can look at it through a war fighting lens and what general officers are saying and what military theorists are saying. I can look at it through a technology lens, like what technologies do I I think are gonna influence the battlefield in the future.

And I need to kind of blend all of that together today to make decisions on what I wanna build that will be available, you know, five to seven years from now. No one is saying today, this is what I need five to seven years from now. It’s sort of a educated guessing game over time.

There’s been a couple of areas that have kind of emerged that maybe we were a bit slow in that we would have accelerated. I’ll give you an example. There’s a huge movement in not just in The US, but NATO and the rest of the allies into offensive cyber warfare. And you’re seeing this now becoming public for the first time, which is really, really interesting. You know, to date, this has been one of the the spookiest of all spooky things. Right? Like something that just no one ever talks about.

And now you’re you’re literally seeing public officials talking about it for the first time. We should have moved into that seven years ago and been the first the first in it. We weren’t big enough probably to really even understand it seven years ago. But, like, in hindsight, it was kind of obvious. We’ll probably try and play some catch up here and get into the game. But there’s a couple of examples like that where you see these things kind of thematically in hindsight. You’re like, well, obviously five years ago, should have done it.

Right? And you only realize that today.

Well, it’s a lot of things. So it’s both what are our adversaries doing and do we understand it? And are they asymmetrically influencing battlefield tactics? And the answer is yes, they are. And then it’s okay, well, if our capability

Yep. So one version to think about this is just cost. For a very low cost, they can create an effect that has major implications for us, NATO, and our allies. That’s asymmetric. So often people refer to terrorism as an asymmetric tactic.

is a an asymmetric battlefield tactic. Exactly. And cyber being not only asymmetric, but you’ll often hear the term nonkinetic associated with it. So I’m asymmetric as in I’m I’m cheaper and more more nimble and I can get a large effect, but I’m also nonkinetic. And why is that so dangerous? Well, when something explodes, we react to it, and we react to it with the full force of the military. When things are kind of simmering beneath the surface in sort of a cold war ish type of a way, it actually becomes really hard to react.

And so in cyber warfare in particular, if assets are affected that we care about, can we do attribution? Do we know where it came from? How do we respond? Do you respond with a nonkinetic attack by going kinetic? Is that an escalation of force? How is that perceived by the global community? Right? So you you get into all of these really challenging doctrinal positions because of just how sort of unexplored offensive cyber is. And then on the flip side, right, it’s like, do we have the ability to amass cyber effects on our own?

Right? Because what you would want to do is you would want to do tit for tat. You wouldn’t want to do it for the most part, a set of like escalatory decisions. You would want to match force with force. Do we have the ability to amass the same kind of force nonkinetically? Right? So all of these are super important questions that, in my opinion, to date have not been debated publicly and and absolutely need to to be.

Well, yeah. Well, protecting. Right? So Probably the main one is, like, the list of critical industries. The military is included on that list. But think about infrastructure or think about power or think about energy. Think about all these things. Right?

Yep. But even even now though on the battlefield, it’s a foreign adversary impacting our military systems such that we can either not mount an offense or we can not successfully defend ourselves.

Everything that they would do, we would do too. Exactly. That’s the way to think about it.

Let’s like talk about just, like, our strategy as a whole. So when we started the company, we knew we had to go really wide really quickly. Because to the point of, like, what do other defense companies or newer founders getting wrong? It’s that addressable market question. In every technology class in defense, there’s probably one, sometimes two actual programs that if you capture them, you have a business, and if you don’t, you have no business. Take small drones as an example. There are very few drone programs for small drones that would create a material enough amount of revenue to, like, actually create a real business.

Right? You’re basically shooting the moon. You you have to create a monopoly. We knew that. And so what we did is we created a bunch of fundamental technologies that are applicable to a lot of different types of problems. If you read about us, this is called Lattice in a lot of our published literature. It’s fundamental tech that allows you to consume data, make sense of it, and then manipulate robots, basically. Like, that’s what it is. And so those those technologies apply to tons of different things.

And so we have 20 different p and l’s at the company, all that are going after different parts of the defense apparatus that take a lot of these fundamental technologies that we build and kind of piece them together in different ways.

Lattice is a software platform, exactly. Like, I can talk about software platforms with you. It’s hard to actually talk about software platforms with a lot of people because it’s like, if you don’t actually understand like what we’re talking about, gets a bit weird. Yeah. Lattice is basically just a software platform that we can branch from. And it’s led us into all of these interesting places. So like as a really crazy example, the first product we built was a sensing tower that just allowed us to automatically through a bunch of computer vision technologies.

And this is, by the way, pre cool AI. This was like old school CV AI in 2017. Just allowed you to spot threats at distance, right? But automatically without a person having to look at a screen. There are pieces of that technology that are resident in our autonomous jet fighter today. Not all of it. Right? Like, there’s been a lot of advancements since then, but there are code blocks, right, that are are shared in common between all of our pieces of technology. That becomes, like, pretty magical when you approach whatever the next problem is because you’ve already got pieces of it solved.

Gives us a head start, allows us to get to market at usually reduced cost, usually a better schedule, kind of hitting all of the performance characteristics that our customers care about. Okay, so back to the actual question on cyber, right? So why go after it? Like, kind of have to go wide and we have to believe that we have parts of the problem already solved with the platform in order to even approach a market. We wouldn’t get into a market if we didn’t think we already had applicable technology or a technology tailwind.

But where we do, we’re we’re definitely gonna go after it.

Yeah. There’ll be one that wins. Right? It’s gonna be really hard to pick it, I think is the problem, but there will definitely be one winner. I think the challenge for investors is actually figuring out which one it is.

Yeah. So the way that we do this is when we have a new idea, we basically start a really small tiger team that we generally piece together from various parts of the business. We kind of match our own internal motivation and and spend our own IRAD to what the market is whispering to us. So in government, what this generally looks like is you piece together some tech really, really quickly so that you have a demonstrator or at least a dart to throw. And then you start to pulse the market, and you see how how close was that dart throw to what the customer actually cares about, how they think about the problem.

Do you modify it? Were you totally off and you just need to scrap it and start over again? In government, uniquely, you know you have something when the customer’s excitement starts to match your own. And all of a sudden, you’re kind of walking down a path together as opposed to this weird, like, vendor customer relationship. That’s always how we kind of identify that we’re onto something. I would say all of these things can be characterized by, like, a singular champion on the other side of the table that gets it, that believes in it, that wants to shepherd it.

Actually, you mentioned Sham. He talks a lot about this kind of like heroism. Like, it actually comes down to a single person in government a lot of times. Same experience for us. If you do it right, it kind of tracks similarly. You know, the first year is low dollar spend, but there’s a lot of learning. And you sort of jump from tend to use this, like, Lilypad example. You kinda jump from pad to pad. And this is what I mean by the the 600 contracts in between the 20 that matter.

You’re basically jumping from contract to contract trying to figure out, do I have it right? Is the customer excited? Are they telling me things? Do we keep going? Do we keep spending? And ultimately, the thing you’re trying to jump at is something very large.

Yeah. There’s lot of ways to look at our business, but one way I think you hit on it is we’ve been very good at allocating capital. Like, we we basically guess right most of the time. If you do this correctly, you have enough data to develop conviction to open the tap. Right? And so I think in the beginning, we were working in areas where if we made a mistake, we weren’t too far in on spend that if we pulled back, it wasn’t like a disaster for the company.

I think a lot of the stuff we’re building now is quite sizable and expensive. And so you’re looking for certain proof points along the way. And that can be formal feedback from a customer, can be informal, that can be successful operator feedback, that can be successful engagements with the legislative branch. Like, remember in The US, like your funder is is the Congress. Right? And so they have a say in all of this. What actually it is, it’s all of those things pieced together. And so we run, like, basically an investment committee internally where these tiger teams ultimately have to present.

Here’s what we did, here’s what we discovered, here’s what we want to do next, here are the gates, here’s what it’ll cost. And very similarly to how, you know, most financial institutions do it, the investment committee says, go. And I think maybe uniquely when we say go, we have the ability to do it faster and at a higher level of spend than most of our peers, which is a huge advantage. And so when we actually develop conviction in something, we pretty much believe we can get there faster than everybody else because of it.

surprising cases to the upside right now is in our missiles portfolio. So we started our missiles business a couple of years ago. The best example we call the Barracuda family of systems. So it’s basically a a set of cruise missile systems, different sizes, different shapes, things like that. We basically got into the missiles business looking mainly at the actual military warfare lens. There is clearly a gap in capability. We clearly believe that we can be ahead of everybody else if we’ve already developed it. And when the customer asks for it, we’ll have it.

And that turned out to be quite prescient. Now I don’t know if you’ve seen, but there’s, like, a war going on with Iran.

Yes. Yeah. And so it’s like, okay. So we we got into this market years ago with a certain set of theses, and geopolitics now has dramatically changed what those theses are to the upside. When you say it’s changed them, do you mean it’s confirmed them? It’s confirmed them, but it’s it’s confirmed them in such a way where it feels wholly different.

You know, I think the original theory was we have to get low cost. We have to get more ubiquitous. We have to have a mix of exquisite systems and mass. Like, all of these kind of major theories of warfare kind of all converging at the same time. We have to be able to build something that takes advantage of commercial supply and commercial manufacturing techniques as opposed to aerospace and defense supply and technique. This kind of like crazy crystallization of a lot of things at the same time.

And now there’s a war in Iran. We we fire a lot of our arsenal. You know, now there’s public reporting that large percentages of our offensive and defensive missile systems have been expended, and they’re really hard to replace. They take a really long time, and they’re very expensive because they take advantage of parts of the market that are kind of strange and very specific and very exquisite. You know, just to give you an example, the cruise missile we build, the actual airframe is built like you build a bathtub.

And so we can take advantage of tons of contract manufacturers in The United States that can actually build a bathtub. Right? So just thinking through the design differently from the very beginning has led us to build something that can just turn on. It’s like another way to think about it is you can handle elasticity of demand for the first time. That’s not really a thing that’s ever existed in the missiles business, right, where you have a fairly labor intensive process to increase or or frankly sometimes decrease demand.

We are onto something in that we’ve built kind of a first of its kind that can handle the ebb and flow of geopolitics and warfare. We can turn lines on and off. We can scale up and down based on the number of contract manufacturers that we engage. What do margins look

Yeah. As a business, we run sort of 40% plus gross margin across the board, by the way, in hardware and defense is quite good. But every product kind of lives along a spectrum, you can imagine. The best way to think about this is things that you make more of, like missiles, where you’re selling thousands and thousands tend to be a little bit lower gross margin, and things that you make less of, you can tend to get a decent price for it.

Mostly comes down to customer expectation for what these things should cost over time and then your ability to gain back margin by cost saving in the long run. Yes, you can close a firm fixed price contract. It doesn’t necessarily mean that you can fix that cost forever. And again, it’s just like another weird aspect of government business.

if you work in defense and if you start a defense company, your moral compass tends to be pretty clear on this question, which is we have a democratically elected set of governments that represent The US, the alliance, NATO, all of the countries participating. They set the rules. And we abide by those rules. And if you start to mess around with anything within that framework, you create a a pretty dramatic set of slippery slopes that that if you play the actual thought experiment to its end, end up in a pretty messy situation.

The key here is people that live in the world that I live in, we we tend to think a little bit differently than a person not connected to the national security community on this front. We tend to think a bit more long term as well, where I’m building missile systems that might only field in 2035. And so if you fundamentally lack trust in democratic institutions, this is not the game, and this is not the business for you.

I think that’s the wrong view. Again, if you look at things that span multiple decades, which is probably the right horizon to think through, everything kinda nets out. And so, yes, you’ll have spikes in conflict. But, like, as an example, there are many companies that are profiting off of the war in Ukraine. I would posit that for the most part, if those companies are myopically focused on that conflict, they will not have a business coming out the other end. You have to be very careful around over rotating on the problems of today because it can really mess up your strategic thinking.

Do you think you took advantage enough of the opportunity in Ukraine? We were still a baby company when the conflict started. Just as a reminder, we were zero people in 2017 when we started the company. We’re about 8,000 people today. We were quite small, a couple of 100 people when the war in Ukraine started. And just sort of as a reminder, and now this is kind of lived experience for me and colleagues, you go to war with what you have. That saying is very, very true.

Like, you do you do not invent new stuff along the way. You take what you have and you you see if it works and then you adjust. And so we we had some stuff in Ukraine, but we were just too small. I think if you play that forward to today, we’re heavy participants in the current conflict in The Middle East. Mainly on the defensive side, we build some pretty sophisticated air defense systems that are widely deployed. So it’s a wholly different experience because we’re a wholly different company.

I can’t speak to specific weapon systems used in specific situations, but we are, for the most part, a defensive company in The Middle East, as in we are defending against incoming threats. So if you’ve read about the Shaheed drone as an example Yeah. We’re one of the principal systems to defend against that threat in The Middle East. Yeah. Other than that, like, you know, it’s hard to get into specifics.

become you become pretty good at talking around these things when you when you do this work. Know.

a great question. I’ll give you a funny answer. I think there are some venture capitalist backed defense companies that are making some really, really awesome technology, and they are entirely unaffordable to us today.

Correct. Their their valuations are just too high for us to justify the buy. We bought, I think, almost a dozen companies, maybe more. But for the most part, they’ve been more traditional style defense companies with what you would command in the commercial market for that type of company. There are lots of VC companies I would love to buy if I had an unlimited checkbook, but right now, the multiples today are they they put it about out of reach for us.

Actually, Trae, I I will always remember when he said this that never be surprised around how long a company can continue to exist. Meaning, like, you know, I think we were sitting around a table being like, oh, like, it’s gonna come to the point where the multiples will decrease and all this stuff. And and Trae’s point was, Trae has this annoying tendency to mostly be right. I don’t know if I don’t know if you know that about him.

asshole. His point was like, we don’t know, but it might be a while before we can actually buy these companies. And so I I don’t know. There’s still a lot of investment in defense tech. Multiples are still very high. I actually think our multiple is quite low compared to most of them. Why would you say your multiple is low? Because it is.

I think we’re, like, 10 or 14 x forward, something like that. But you’re seeing deals in twenty, thirty, 40 x forward.

Who would you most like to buy Oh, man. But calm. No. That’s a tough one for me to answer. I probably either compliment or offend people that I don’t wanna compliment or offend. But I’ll give you, like, the classes of technology. Super interested in space domain. Like, there’s a a couple of companies that are doing some absolutely fascinating things, both ground segment and on orbit.

There’s this, like, interesting thing happening in space domain where you’ve got the legacy primes on the military side that have these very large contracts, but they they perform sort of traditionally. Right? So it’s gonna be very, very high performance, but it’ll come at a a cost, and it’ll probably take a while to get there. And then you have SpaceX, which is just dominating on the commercial side. And when their commercial tech applies, you know, they do a bunch of government business as well. There’s a weird kind of gap in between those two types of companies where the government wants to move really fast, but it’s not necessarily commercially adjacent to what SpaceX is doing.

And so there’s a kind of a dearth of providers, and it’s certainly something that we wanna run at. Right now, we do a bunch of partnerships. We build a bunch of our own stuff. We we integrate a bunch of really interesting technologies. But it’s a huge open hole, I think, in the market that is something we definitely would run at.

Most of the rest are like kind of uninteresting. It’s just consolidating around where we’re already winning. Do you respect housing as a competitor? I respect everybody as a competitor. I I think the worst thing you can do in this business, again, you know, I at the start of the conversation, I mentioned hubris. I think it’s like the second you think you’re better than everybody else, you’re you’re gonna get knocked in your ass. And so I think I, in particular, on our leadership team, hopefully, would agree I provide a check against the hubris.

I I you have to respect him.

forget. I am an international arms dealer, So just keep that in the back of your mind. There we go.

the company we wanna run. We want to create an enduring public company, and so we’re running it like that. And we’re running it like that right now even even though we’re pre pre public. Protecting the valuation is important. Not getting over our skis is important. The work is still hard. We will get knocked back if we make a mistake. We don’t have the luxury of making mistakes. You know, a lot of our competitors, the really big ones, if they make a mistake, they get paid to fix it.

I think if we make a mistake, we lose money and we lose contracts. So there is a bit of conservatism on the team, but I think it’s warranted in terms of the market and overall. Right? It’s like we wanna be a company in 2050 and 2060 and we’re already thinking like that.

Yeah. There’s a pedigree to it in the work that we do. And ultimately, if you are a part of the national security apparatus in The United States, I wouldn’t say it’s like an expectation and no one would ever say it out loud. But when you are a public company, there is an additional level of trust that is afforded to you that you don’t have when you’re a private company. Do want to get public in ’26? Still a couple years out, but we’re close. We’re in the window.

Like we’re already spending an insane amount of money trying to do all the internal system stuff and all that kind of stuff.

So I mentioned we have 20 products and only about a quarter of those are in any kind of rate production and throwing money back to business. Everything else is in low rate or development, meaning they’re losing money. It’s kind of your standard product J curve. So we need more of those 20 core products to come up the curve to throw money back to the business and then you trigger the pulp event.

Yeah. In defense, in a traditional sort of product curve, it’s seven to ten years. We’re doing it in three to five, which is kind of part of the magic of the company and the thing we’ve become known known for with our customers is, like, you’re effectively halving the traditional path to rate production. Roadrunner is a good example. Roadrunner was, I think, twenty four months from, like, a back of a napkin drawing to a fielded system. How much goes in in that three to five years period?

It’s crazy amount of money.

So Roadrunner is a moderately sized air defense kinetic intercept system, and that’s you’re over a 100,000,000 easily before you’re generating revenue.

Yeah. So it’s a lot of investment. Right? So you really have to believe that they’re going to come up the curve. And then to your other question about like when you when you schwack a product, the better way to think about it is like, don’t even enter the curve if you don’t have faith that it’s going to come through the other end. And so we kill a lot of developmental well before they ever get into high spend because once you get into that curve, you’re $1,020.50, $100,000,000 plus in.

It’s a good question. Way early. I mean, we got into some tech that we weren’t ready for. We got into some markets that we weren’t ready for. We tried to early on build a pretty sophisticated aerial system. We didn’t have the core building blocks. We didn’t have the core team. I think we were $20,000,000 or $40,000,000 in before we kind of realized that it was a scrap. We didn’t have the sophistication with the customer. We didn’t know how the customer was going to buy a vehicle of that sophistication.

The crazy part about all of this is like, well, Okay, given all of that and given that that was not a good business decision, clearly by most metrics, do we even get to build the autonomous jet fighter if we had never made that mistake? I don’t think so. Part of that failure was a stepping stone to getting to success. Yeah, we probably spent too much money on it and could have gotten out quicker. But like, I think we had to learn that lesson in order to then reapproach the aviation market in a new way, which obviously has been quite successful for us, you know, in recent history.

And so if look at a lot of these failed things that we’ve done, it’s hard to separate that from what came after it.

No. But I’m kind of weird that way. I I don’t know. Like, I have trouble separating indecision and failed decisions from the current success that we’re actually seeing as a company. I I just do. People talk a lot about, I think, like, these overblown sort of ideas around, like, oh, you have to learn from failure and and fail fast. Like, yes. All that’s true. Most people suck at actually doing that. So for me, it’s I deeply learn from indecision and from bad decisions. But it doesn’t, like, haunt me, and it doesn’t, like I’m not gonna, like, kill myself over it.

Right? I’m gonna I’m gonna move on, and I’m gonna make the next best decision.

I think a lot of my beliefs and our beliefs that we started the company on are now becoming a bit more commonplace. You know, when we started the company, maybe we were a bit out of on a on a limb of, could I replace every single mission that the current set of technology provides us with an autonomous system. I believe that that is true in the long run. I I also believe that we’re not even close to where a lot of people think we are on it.

Like, I I think we’re still in the early days on tons of this tech. But as time goes to infinity, like, absolutely, every single mission can be replaced with this new way of thinking. In 2017, when we started the company, not only was that not widely held, that that was a headwind for us. I think that’s changed pretty dramatically.

What are you like, oh. It’s really companies that there is only one large program to capture. That’s like fundamentally what it is. In defense, you have to be wide by the very nature of how acquisitions occur. And so I think anything is a risk where it’s like, nope, there’s kind of one program. And if you don’t win it, you’re not a good company.

Yeah. I mostly say a couple of of things. I think it’s about the community that you surround yourself with. That’s a reflection on sort of my own personal story. I mean, everything that I’ve done in my career has been the community of people around me that have helped me, have gotten me jobs, have afforded me responsibility. You know, it’s not like some big machine or process. It’s it’s really just the people you surround yourself with. And I like to think I made some pretty good choices early on that helped.

And then the other piece would be people tend to overthink a lot of their steps and don’t appreciate how much you just can learn along the way. You know, I I talk to a lot of military folks that are transitioning out into the commercial world. I I would say for the most part, they they kinda like hem and haw over what company they should go to. You know, my main advice is I actually think you just need to start. You’re actually a really smart person. If you don’t like it, you can leave.

If you like it, you got lucky. You should talk to a lot of companies. You should pick, and you should change your mind when you need to. And I think oftentimes there’s a hesitance to change your mind. Right? And I don’t think that’s actually true. It doesn’t need to be true.

I can’t I can’t take them all. No. No. Well, it’s a trick question because there’s no way that I’m starting another company after Anduril. I don’t know if you know this, but starting companies is really tiring. No. I’m

We know it’s tiring. We we we’re much wiser than you. I’m just gonna retire to the countryside and live with my family, and I’m gonna do that. Dude, you gotta choose one. Yeah. I’m not choosing. Don’t make me choose. You know, I live in Washington DC. I’m very good at not answering questions. Maybe it’s Bobak just because the contrast of his baldness in my hair would make us a pretty pretty formidable duo. Do you think Palmer’s brand is helpful? I do. Unequivocally. In defense, anything highly regulated.

Right? Every single thing is a headwind. The main thing you do to cut through headwind is you try and establish trust relationships with people who matter. Palmer is an n of one when it comes to establishing trust relationships with people who matter.

This was great. Honestly, was great to meet you. I do listen to the pod most episodes. I love listening to it. So thanks for having me on. It was cool.