00:33:52 · Ethan Thornton
[00:33:52] S1: One, I'll say being good at that is probably the most important thing you can be as a defense company, given how unclear stuff is right now where tech is heading and how long it takes to engineer one of these products and stand up a pipeline. So you wanna obsess over it. I think you wanna start with geopolitics. So everyone's mind instantly goes to, like, hyper specific conflicts at their certain period in the way you think about design programs. You have the Taiwan situation of how do you deter Taiwan. You have the Ukraine situation of how do you win the current war in Ukraine. You have the Iran situation. What you find is that the the golden rule of aerospace is very, very specifically design your vehicle to do what it needs to do. So you have to start with, like, at a geopolitical level, how am I looking to provide advantage to the West, and what sort of mission sets will that require? And sometimes this is, like, top end kinetic. Like, I need to go and shut down a near peer competitor's ability to fight a war if they choose to invade. Sometimes it's actually very, very low end. Right? It's it's light force per... Projection. So you start with geopolitics. Next, you really, really, really wanna obsess about logistics. Like, even before you know what the product looks like, how how is this thing gonna be launched? How is it gonna be... Like, how is it gonna be fueled? How is it gonna be manufactured? How is it gonna be maintenance? At that point, then you get into actual, like, product requirements. You still don't actually know that. You know nothing about what the aircraft looks like, but you go in war game. So you look at these are the capabilities the adversary has or can be expected to have for this specific mission set. In our case, here are the capabilities we have. One of the things I'm trying to do is kind of close the loop where you're actually wargaming against yourself. And that's how I think one of the key things it will take to just rapidly accelerate.
00:35:32 · Ty Morse, Ethan Thornton
[00:35:32] S0: What do you mean close the loop on [00:35:33] S1: So like Dart, we literally designed Dart as a means to shoot down our own products by the time they're copied. And then I will design an asset to bypass Dart. And, of course, if you knew how to do this, you just shoot to the end of that. But you learn in the process, the world changes, and then ideally technology is getting a lot better along the way. And so there is just some speed you can do these things, but you're kind of closing that loop. And so you're literally in software running engagements. Like Dart, we built like a full six off model to like war game against our own products. You look at the economics, you look at the types of mission sets. You do that against other people's assets as well. Viper and Pike are very, very, very hard to shoot down right now compared to a Shahed. And the pricing ratio on them is better than the Shahed, so we chose that as the hard one. But then you anchor kind of the the requirements of the product. And then you take a a full pass on, like, okay, what are the creative techniques I can do to squeeze out this performance? When you think
00:36:28 · Ty Morse
[00:36:28] S0: of, like, asymmetry, this idea of trying to house, like, 232 to one shipbuilding capacity to The United States. But if you're able to go build a new system that like takes out their shipbuilding capacity, suddenly it's even the playing field. Or, you know, if you're able to take out ships. When you kind of have some problem like that and you don't know exactly what, you know, no one's asking for a system that's able to take out those things. How do you figure out here's the actual product that you should build in order to achieve some mission that people don't even realize is the actual mission when there's like other missions that are more obvious but are not the right ones?
00:37:04 · Ethan Thornton
[00:37:04] S1: I think... So look. There are things I'm quite bad at, and I'm I'm happy to get into those and discuss those. I think I... I've been obsessed with thinking about this for a while. So I have... I talk about this a lot. Have two family members who... Whose job this was largely in the air force, this is, like, dinner table conversation my entire life growing up. I'm pretty obsessed about it. And one, like, this is principally one of my things to own is, like, what does this future look like in the limit? I think it's easier to extrapolate than people expect. Like, I'll give you an example on balloons. And I shouldn't touch too deeply on the specific reasons, but, like, in high school, at the farm with my uncle, my uncle and I were talking and we're, like... We started thinking about balloons for some reason. We're, like, wait, balloons are actually very, very likely gonna be super, super important for unmanned warfare. This would have been circa like 2018. And we we go on this long long discussion. I get to thinking about it. I get like massively obsessed with balloons. And I... This is long before Mach, everyone's like, dude, why are you so obsessed with balloons? Like, I'm in high school, I was like... I wasn't a nerdy person, but I had, this very specific obsession that was strange. I went and patented, like, a balloon navigation design, like, was obsessed obsessed with it. Well, probably three years later, China flies a balloon above The US, and we have to spend like a million dollars shooting it down. And then suddenly, this is in the middle of a fundraising process where everyone was actually critiquing me for being too obsessed with balloons. Suddenly, even though that's way out of left field and you wouldn't have considered that, physics is physics. Like, if I put something up for, like, a couple thousand bucks at 80,000 feet and you have to go scramble a fighter jet to go shoot it down or launch a big surface to air missile, the unit economics there just don't work. And I can go and put millions of balloons up. And so this is like an example of, like, a really, really weird out of left field asymmetry that I think myself and my uncle have been passionate about for a while. Ukrainians are waking up to balloons, which is which is quite exciting. I think I think they'll be able to deliver massive asymmetry through that.
00:39:00 · Ethan Thornton
But now I've got to figure out a way to shoot balloons down, which I'm working quite hard on. And so the other nice thing is once you have these bets and these bets are generally proven true, two things start to happen. One, you're already thinking about the future and you're anchoring that in conversations with the Pentagon every day, with your engineers every day, with the Ukrainians quite often. And so you you understand what the future looks like, and as these things are proven true, you start to war game against what you know to be true. So, like, I've been building this for for for several years now thinking balloons are important. It's being proven true. Well, I I have an advantage of already sort of positioning to... Okay. China will have balloons. Russia will have balloons. How do we go and treat these things down at scale? The second thing that happens is the government starts to trust you on these things. And when they see a hard problem, you get called into the room to talk to them about how to solve it. And frankly, as a patriot, there's like no cooler thing than to be asked like, hey, this is the this is the existential problem. Can you help us solve it? And when you develop that trust, you get to see a level deeper and and think a level deeper about all these things.
00:40:04 · Ty Morse, Ethan Thornton
[00:40:04] S0: I think a lot of companies stay in this like design phase and testing phase for way longer than maybe they should, and you are very focused on actually like getting it end users hands and like at least showing them what the capabilities are. Yeah. How do you decide when the right time is to go do that and then make sure that it works? Because that's like the highest stakes. It's like you send the rocket up and if it blows up, you're just lighting a bunch of money on fire and also a bunch of trust. [00:40:28] S1: So it's two things. I think you test like crazy internally. I mean, we're... We run mini flight tests every single week. And then two, you're honest with your customers. I think so many people are like, the customers have seen development programs. Like... And their development programs usually take, like, a decade plus. And so saying, do you wanna see this thing? It's more... It's, like, 40% gonna work, but you... You'll at least get to see that I'm, like, running a testing campaign, testing every day. Would you like to come out to this? You just, like, set a trust level with the customer. Just be, like, fully transparently honest. They know it's a hard thing. They've seen people struggle with it for decades. And see, you also just like let the customer in and give them as much info as you can.