00:18:24 · Ethan Thornton
But throughout that process, you build technical debt because you just don't have time in that process to analyze all the second, third, fourth, fifth order effects. That's good, because if you wait to analyze all those things, it'll take you years to get through a test cycle. But you also need to collapse that tech debt on occasion. And that's why I'm huge on literally basically restarting programs on some timeline. So there's... As you go through time, tech that accumulates, accumulates, accumulates. You can't let it accumulate too quickly. And I think it usually usually it is easier to have too much tech debt than too little tech debt by a lot. But you want it to accumulate to some degree because you're moving fast, and you're making fast gut calls to get the next thing in the air and learn more and learn more. And you've got to be willing to blow up hardware to do this. This is why you actually start by building the production for the thing. I mean, we're... We'll be doing basically a pike a day by the time we get through this test campaign. That's actually decent rate for a cruise missile and defense. And so you you also have to be able to make the things to execute this way because you have to be willing to just throw the throw the hardware. Again, you're learning along the way. Like, you know exactly what you're testing. You're ideally surprised, and it's not like we'll put it in the air and see what happens. You've analyzed the HUD thing, but you are throwing out hardware. But as that expands, you want to reach a point where you say, okay, I've learned everything I can from this airframe. Let me collapse that again and restart and reincorporate all of these learnings. And so that's why we do so many block redesigns as a company. Our average block redesign cycle is, like, three months, four months depending on the program. And then, I mean, we'll have done three or four blocks of each vehicle by the time we get into production.
00:19:58 · Ty Morse, Ethan Thornton
[00:19:58] S0: And do wanna explain what a block redesign is? [00:20:01] S1: It's a completely new aircraft. [00:20:02] S0: Yep.
00:20:03 · Ethan Thornton
[00:20:03] S1: So, I mean, I tend to think about it in like three major types of aircraft. In a great aircraft process, you end up doing three blocks. Of course, along the way, sometimes you'll do two blocks in a specific phase. For the first block of an aircraft, I love just getting something in the air that roughly resembles the platform. Like, learn how to do the flight ops for this thing. Convince your customer that you can fly something that generally looks like that. Get hands on hardware. Learn. You don't care about performance or cost. You're literally just trying to get something that looks like your thing in the air. That is usually super super light. Super light work insanely fast. The next is your block two. This... So maybe that's 1% of the effort. Maybe this is, like, 40% of the effort. And this is where you want to be somewhat manufacturable. You want to be able to make hundreds to low rate thousands of this thing, but your only optimization is performance. This aircraft has to be able to complete the full mission set. So most of the aircraft you'll be looking at behind us are version, like, type two aircraft essentially, where at the end of this process, you can deploy it in the war zone. You can ship the product. You can actually scale the product, and you're at you're you're at okay cost and and okay margins. So you could theoretically scale it. But, again, engineering is a game of, like, what are you focusing on today? And you want your engineers to be focused Now you have to set the rule that they are not allowed to focus on something that would break rate in the long term. But if you're gonna say, hey. I'm gonna three d print this thing and I'll injection mold it later, you wanna do that. Because something about manufacturing, I think too many people think manufacturing processes are maximizations. Almost every manufacturing process has its place. No manufacturing process has its place everywhere. So, like, three d printing, great in prototype. I'm very anti three d print in scale, like castings and injection moldings. But if you're trying to iterate with castings and injection moldings, your feedback loops are gonna be months.
00:21:53 · Ethan Thornton
And so Rev two, whatever you want to call it, we have internal nomenclature type two aircraft, will generally be super flexible manufacturing processes that don't scale so well, but you'll get to a full performed mission. And usually, we'll do, like, one or two blocks during this process. So cascade, learn, learn, learn, collapse, cascade, learn, learn, learn. And then a type three vehicle is when you really truly start to optimize the thing for rate. And that... When you understand the system deeply, like, very, very, very deeply, the level of DFM you can do with that thing at the end of the day is so much higher. I mean, for Glide right now, in this factory, we're bringing up a machine that would be able to make 40,000 Glide airframes a month for, like, $7 a piece at an airframe level. Now I'll be clear that product will be a lot more expensive than that because of warheads, because of amniotic, because of different things. You want to do that on the airframe. You want to do that on the the solid rocket motor. You want to do that on the jet engine, but you want to do it in due time. Because at any given point, you only want to be optimizing around one thing in the engineering process. And then your job is to collapse that cycle as much as possible. Because in a lot of companies, that style of execution could take five years. Like, are plenty of companies where whiteboard sketch to first flight is like twelve to eighteen months. And so for us, it's like, how do I get that down to two, three months? I'd say for us right now, that full process for us on average for a product, a year ago, it probably took us on average two years. Right now, we're at about a year. I wanna get that whole process down to, like, two months. And also, along the way, you earn the right to cut out steps of that process, but right now, we gotta, like, eat our vegetables on actually taking the steps. But, yeah, right now, if if we can get it down to a few months over the next eighteen months, we'll be in a good spot. And I'm happy to talk about why that matters. Like, product iteration specifically in defense is the thing that matters more than cost or performance. Go me
00:23:45 · Ty Morse
[00:23:45] S0: to Yeah.
00:23:45 · Ethan Thornton
[00:23:45] S1: Go off on that? So... Yeah. Look. Generally, I think the optimization for The US needs to be asymmetry. I think product performance is great. Scalability is necessary. But, really, what we need to be doing is running math on dollar to dollar, more importantly, CNC machine to CNC machine, technician to technician. How do we stack up in a scaled conflict against Russia, China, Iran? Like, that is the way things will look in this incoming future. And so as we look at China specifically, and your playbook here changes depending on the adversary. And I'll say, I I don't expect us to go to war with China. I think there are plenty of people who work in defense that are super, super hawkish on this conflict happening. I don't think it'll happen, but if we don't deter it, it will happen. And so the reason to do this is you need deterrence, but to achieve deterrence, you have to be able to win a war. And so winning a war does become sort of the optimization function. As you look at this, China, especially in this sort of thing in consumer electronics, has somewhere between three times and two orders of magnitude more of this sort of manufacturing skill. And so what that means is if you're manufacturing the same thing as China, they will win. They will just outproduce you. And so for us, I think the style of winning really comes down to shipping products that for some period of time on the battlefield before China can copy them or engineer a solution against them, can do a specific mission set that creates asymmetry. So if... Let's... Actually, good example, pike. So China right now outbuilds us on shipping tonnage by roughly 232 times. Right? There's a world where we could try to increase the number of ships we build 232 x in the next three years, I would love to see that world. And I think anyone working on that world is fighting the good fight that needs to be fought on some time horizon. I don't think it will close in time. That's where you start to look at something like Pike. One one shipping container can deploy a good number of Pikes from a very decentralized fashion in theater, and I will be able to make many, many thousands of pikes a month. Well, if each pike can take out a small ship and a three pikes can take out a big ship, suddenly, have created asymmetry against China's advantage of building more ships than us.