00:13:19 · Ethan Thornton
If I was having to buy down all of the risk on building a 100,000 unit a year solid rocket motor facility on just let me go sell darts and pikes, it'd be very hard to do so from a capital perspective. And so they kind of feed on each other in that way because then I can afford to build excellent components for my platforms, and it... It's positive feedback loop. And then you're also double dipping on an investment into the product, and you're also hitting rate using one of the two. So if I hit rate on components, my platforms get better, and I can afford to sell cheaply. If I hit rate on my platforms, I can also then afford to go and out compete the folks that haven't hit rate yet on on the component side. So that's the first thing. And then I think over time as a business, there will be a very, very similar thing for us that I don't talk about publicly publicly yet. I have a reputation for for distraction. I think that is, like, very, very fair for anyone who, like, objectively looks at the business. I'll say on that front, like, we're doing well. Like, we ship products. I think you earn the right to do more things as you deliver, and we're delivering on time at cost. But I do have a reputation for distraction. Not now, but at some point in the future, there's a lot to be said for taking the excellent industrial base and the excellent technology that you've developed through defense back into commercial. It is where I will sound like most ethereal and probably nonsensical. I I do think it's important that I say this early on. I expect people to not really believe me or think I have a plan right now. But when you look at technology, really since the start of humanity, a lot of the best technology that ends up defining, like, epochs of tech come from defense. Like, there's this famous Elon quote, like, I don't do science. I do engineering. And that is that is unfortunately true of most businesses. Most of the science that actually leaves the lab and gets productized happens for defense. This is like a bold claim, but you can go as far back as iron. You can go as recently as rocketry, fixed wing air travel. In in some ways, semiconductor, lithium ion batteries for aerospace, like, a lot of stuff comes from here. And so my job is to be the absolute best company at developing technology to give the West asymmetry.
00:15:16 · Ethan Thornton, Ty Morse
On the heels of doing that, I think we'll have a lot to push back into commercial industry. Now the reason to do that is not to make money. The reason to do that is that that then goes and feeds the defense business. The thing about defense is it is actually hard to make significant amounts of money to keep the investment machine going. It's great at getting stuff out of the labs, and at a time like today, it is not optional. You just have to push as hard as you can on it. But at some point, it would be incredible to take this technology back into commercial industry. One, to get to make people's lives better with all the incredible things we do. Right? Two, to have a lot more capital to invest back into the defense business. [00:15:53] S0: One of the things that I think is, like, incredibly important is speed and, like, iteration time. And when I was just walking around and going into your meetings today, one of the things that you were doing was making very fast decisions. And I think that's important. But the other thing too is when you're like testing some new design or some new engine, you don't want to just test it once. You wanna have like four in a six day period. Most people would have like an iteration loop that might be like a week or two weeks or a month or longer. You wanna have like six iterations in two weeks. Yeah. How do you think about that keeping super fast iteration loops and constantly updating things so that you can actually get new useful information at every single one of those iterations?
00:16:33 · Ethan Thornton
[00:16:33] S1: I think this is a balance, not a maximization. So folks see SpaceX blow up rockets, and they think that, like, the engineering approach should be like spaghetti at the wall. And I've operated that way before. I actually think you have to start deeply, deeply analytical. Like, you have to start, and it's fine if your feedback loops are three months, but you have to build excellent, excellent simulation. Right? You have to do it. You have to have, like, a very, very good design review process. There's, like, a a handful of... And I'm happy to go into them, but, like, engineering processes that go into just stuff not falling into the gaps. Because the the thing is, there are literally a million things that can go wrong when you're flying a vehicle. And if you don't have a system to, like, derisk each of them and check them 10 times before flight, you're going to fail. And so I think there's this misperception that, like, flight is where you learn. Yes and no. By the time you're flying, you've analyzed every ounce of the system to the greatest degree. You've Monte Carlo ed it. You've simulated it, like, the sim... Like, software SAM hit all these different things, and then you can fly. That said, you don't want to get stuck in analysis paralysis, and as soon as you build up that simulation pipeline, you want to redline that machine as much as you can. So it's not like you get to do that and then slow down. You do that to earn the right to move quickly. At that point, you wanna move as quickly as you can, but there is still this balancing function past that of how much tech debt do you allow to accumulate in the program. And this is this is one of the hardest balances to find in engineering, and I I still don't think I'm excellent at it. I have I have engineers who are a lot better than me at it. But, basically, in the process of those iterations, like, we'll take Pike. Right? We had a flight test of pike today. We'll likely have one tomorrow based on learnings we had today. The vehicle is being reworked in that time period. So we're literally taking parts off, remachining parts, putting different parts on, changing software. Vehicle is not changing a bunch, but let's say 5% change. We're flying... We'll end up flying 10 Pikes in the next two weeks, and no two flights will look the same.
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.