01:28:47 · Ty Morse, Ethan Thornton
[01:28:47] S0: For, like, 12 times at this point. Yeah. Over three months. [01:28:50] S1: Yeah. People knew this was the dynamic. I think they probably knew it was better for the business, but they also had kids here and liked the company. And then some of them wanted to move and couldn't move. And I walk into the room and I'm like, okay. We're gonna make a decision. Raise your hand if you wanna stay in Austin. And I was trying to, like... I expected everyone to say based on how abundantly obvious it was based on data that we should be in LA. Every hand went up to stay in Austin. Raise your hand if you think it is in any world the right decision to move to LA. No hands went up. And in that moment, I was, like, very clear I had, like, executed super poorly as a leader. And you can't excuse these things. Like, I should have done better back then, but also this is, like, nine months into the company building process. I had no idea what I was doing. My only real job had been as an auto tech, and this is all unfolded really quickly. If I had to do that again, I would deeply deeply bring people along for that journey and convince them along the way, hear their input along the way, but make it very clear that this is a decision I own. Like, is not a committee decision. But I was I was trying to be a good leader and try to make it seem like a committee decision, expecting the decision to go my way. So then, like, I was crushed. I had to come back the next day and be like, alright. We're moving to LA.
01:28:50 · Ethan Thornton, Ty Morse
[01:28:50] S1: Yeah. People knew this was the dynamic. I think they probably knew it was better for the business, but they also had kids here and liked the company. And then some of them wanted to move and couldn't move. And I walk into the room and I'm like, okay. We're gonna make a decision. Raise your hand if you wanna stay in Austin. And I was trying to, like... I expected everyone to say based on how abundantly obvious it was based on data that we should be in LA. Every hand went up to stay in Austin. Raise your hand if you think it is in any world the right decision to move to LA. No hands went up. And in that moment, I was, like, very clear I had, like, executed super poorly as a leader. And you can't excuse these things. Like, I should have done better back then, but also this is, like, nine months into the company building process. I had no idea what I was doing. My only real job had been as an auto tech, and this is all unfolded really quickly. If I had to do that again, I would deeply deeply bring people along for that journey and convince them along the way, hear their input along the way, but make it very clear that this is a decision I own. Like, is not a committee decision. But I was I was trying to be a good leader and try to make it seem like a committee decision, expecting the decision to go my way. So then, like, I was crushed. I had to come back the next day and be like, alright. We're moving to LA. [01:30:07] S0: At that point, did you have to basically let everyone go or how did that work?
01:30:11 · Ethan Thornton
[01:30:11] S1: No. And I would not do this again this way. Like, this is... The biggest reason for action is to learn. You and I talked about that earlier. So, like, I learned how to do stuff like this. It's been several years since this happened. I wouldn't do that again. But in the in the process, basically, it was... We had to be in LA. Like, we're hiring, like, an engineer a month in Austin, which, again, when you have to create deterrence in three years, that is that is not okay, which is import... Again, why it is important to make these decisions based on mission. Like, if this were, like, a money based decision, I'd be like, well, my odds of building... Making x money here versus y money here. It's a very muddled decision. It's like, I need to deliver capability on this timeline to prevent what might be either a world war or a loss of the AI race. The idea of having to have this hard conversation with, like, 40 people and say, you know what? I'm really, really sorry. But, like, for the sake of the world, we have to move to LA if we want engineers. It does get easier. The decision and the explanation process. So I ended up getting most of them to move. So there... That kicked off this whole, like, two month process of, like, convincing people to move. This is also at a very hard time in the company. Like, today, this would be very different. This is when we had, like, five months of runway. Stuff was kind of a a shit show because we just spun down hydrogen. I frankly was not doing a very good job executing in the company. I think there were, like, two people on that team that we wanted to stay with the company that ended up not leaving Austin. And we picked up and we moved to LA altogether, which was such an incredible moment for the company. Like, that's the weird thing. These things are objectively mistakes, but you also look back and they're very important for how you got to where you are. Like the hydrogen thing, if I had to do it over, I wouldn't go to execute the hydrogen thing. But also don't think we ever would have been able to raise capital or win contracts or attract talent without it. Same on the awesome thing. Getting to LA, it was this interesting moment as a company where we all showed up in this factory. Very, very, very few of us in this wide open factory, a bunch of Texans that didn't know anyone in California.
01:32:12 · Ethan Thornton
They knew nothing about California. All we had was, like, the ability to, like, hang out with each other and, like, work together, and it was a great positive filter. The only people that picked up and moved across two time zones were the people who fundamentally wanted to be there for the mission. Because it also certainly wasn't for the money given the stage of the business. So ended up being people who are there for the mission. Right? And you... You'd burn the boats. Like, I I read... And Cortez is not someone to to emulate in anything he does, but, like, burn... Burning the boats is is is a good strategy on occasion. I would have liked to have executed it on purpose. And don't get me wrong. It's hard to predict. I think the company would certainly be in a much better spot if we're in LA. So I'm not saying I'd do it again, but it did have this benefit of all of us just being so obsessive for such a period of time and forming this very, very distinctive pocket of culture in California that has actually scaled a lot with the business.
01:33:07 · Ty Morse
[01:33:07] S0: When you think of this transition from moving from an old business in Austin to a completely new business in LA, I'm kind of reminded of almost like a heroin addict, where if you take a heroin addict and you put them in rehab and then you put them directly after they get clean, you put them back in the environment that they were in. There's all this like history and they'll basically fall into old patterns. Whereas if you take the heroin out and you put them into rehab, they get clean and you put them into a new environment, they can, like, rebuild these patterns. Do you think that that almost had a similar effect where you, like, culturally and spiritually leave this old idea behind in Austin in this different place and actually refound yourself and the company in this new place?
01:33:46 · Ethan Thornton
[01:33:46] S1: First of all, I I respect you calling us all heroin addicts. It's a strange metaphor, but it works. It actually works. No. The the, like, the ability to create... Like, clean out your cognitive biases along the way is so important. Actually, these things can't be artificial. Right? If you artificially put these things on your company, these periods of reinvention, it's super, super, super painful. But over time, institutions do bloat and become sclerotic. So you want the right kind of change, but you need change in an institution. Like, if a company is shipping the same type of product for several years at a time, I don't care how much money that product is making. And in many cases, it's more acute the more money that product is making because you get more more complacent. You just lose excellence. And so... No. Am I in the game of, like, scheming, okay. How do I put the peer... The company through one of these periods? Absolutely not. I think these periods happen best when you add a new hard challenge. Could be winning a giant product con... Or giant contract that, like, is an order of magnitude bigger than what you've delivered before could be doing a fundamentally new type of thing. Like, Pike for us, it's funny because it feels not that exciting now. Like, it's it's it's cruise missile. It's a great long range, super cheap cruise missile. But for us at the time, just getting off Viper, Pike was this crazy thing to go and do. Like, an order of magnitude more complexity. And so you wanna feed new product challenges. Yeah. You wanna constantly be... You need you need to constantly be reinventing the company. But you... That needs to happen the right way.