00:43:05 · John Collison, Scott Nolan
[00:43:05] S1: Yeah. So there's a gloss moment in The US basically? [00:43:08] S0: It was, yeah, why are we running these more expensive plants when we're now in a world of free trade and we can trade for this? At the same time there were efforts inside The US to develop new technologies, but they didn't really hit the cost structure required to compete internationally and they're still in development to some extent to try and get on that curve and so I think it's simply a you know we used to do it, we then relied on free trade and then only more recently does this seem like an issue and the issue is really around HALEU availability for advanced reactors and low uranium availability for the larger reactors given the ban on Russian imports. So if you tried to start a company like this ten years ago you know you might say what's what's the market? Yeah. The utilities are fully contracted. There's no gaps. Why would they leave gaps? They're going to make sure that they have reliable source and then there is not a really big advanced reactor market that you could sell into. And so both on the LEU side and the HALEU side it would have been much more challenging to get to some critical mass that could support a new entrant today that window is open. [00:44:19] S1: Classically cost advantages in manufacturing come from scale. That's that's one common one. Or simplicity in design. It feels like... I mean, the market is what the market [00:44:34] S0: is.
00:44:34 · Scott Nolan, John Collison
[00:44:34] S0: is. [00:44:34] S1: I mean, it'll grow, hopefully, but it's not like you guys are going to come out of the gates, you know, targeting 10 x or a 100 x larger scale than the incumbents. And then also when you say simplicity, like, as you described, there's a few approaches that everyone knows here, and so you don't get to have, like, a radically simpler process. And so how do you plan to have a cost advantage versus all the incumbents? [00:44:55] S0: I'd say you missed one more. So there's economies of scale, there's simplicity, and then the third honestly is decades of technology improvement that no one's captured. So the last time anyone to our knowledge reinvented enrichment, at least if you look at the incumbents, the incumbents being Russia, China, and two European firms that use the same underlying technology. The last time anyone sent a clean sheet redesign was decades ago and so if you think of all the progress in technology over the last few decades there is a lot you can do in addition to economies of scale and simplification. Meanwhile there is no public domain technology in this space since the 50s or 60s and so you know you look at those few decades of technology that have that you could leverage, then you do a clean sheet redesign, doing something very novel, and you can end up somewhere pretty different.
00:45:52 · John Collison, Scott Nolan
[00:45:52] S1: Okay. I wanna try something on. It feels like sometimes you have a trend that sweeps an industry that takes place at many companies at once. And so in The US, in the seventies and eighties, this happened with lean manufacturing, where a lot of the success of private equity firms at that time or, you know, early Danaher were there were all these US firms that had not embraced lean manufacturing. And so you can buy a manufacturing firm, just adopt the lean stuff about better inventory management and everything like And, yeah, you can make the business much better because it turns out these are like... This is a a technology, managerial technology that had not been adopted by a whole bunch of firms. [00:46:31] S0: Right. And maybe there's people doing this today with AI, applying it to services industries. [00:46:35] S1: Exactly. That would be another example. It feels like there's maybe another trend that you're a part of in hardware, which is there is this stasis in companies where there was stasis in launch until SpaceX came along and targeted much lower cost launch. There was stasis amongst the primes, and then Anduril and now kind of a whole bunch of other neo primes are coming along. And, similarly, you're identifying stasis in the existing companies that enrich uranium that you can very... Do... Does that does that resonate with you as a trend where, you know, there's something that has not been adopted amongst a whole set of companies and entrepreneurs are coming along and finding those weak spots and building better competitors?
00:46:35 · John Collison, Scott Nolan
[00:46:35] S1: Exactly. That would be another example. It feels like there's maybe another trend that you're a part of in hardware, which is there is this stasis in companies where there was stasis in launch until SpaceX came along and targeted much lower cost launch. There was stasis amongst the primes, and then Anduril and now kind of a whole bunch of other neo primes are coming along. And, similarly, you're identifying stasis in the existing companies that enrich uranium that you can very... Do... Does that does that resonate with you as a trend where, you know, there's something that has not been adopted amongst a whole set of companies and entrepreneurs are coming along and finding those weak spots and building better competitors? [00:47:18] S0: Yeah, it seems like it. It seems like it. Although these are like... Each of those three examples is like at least a decade apart, I'd say, on average. Yes SpaceX, Anduril, Us would be on average a decade in between. The only way that those opportunities were found were by people trying to actually go deep into space. And so nobody really thought that like space launch was a thing until Elon tried to launch something realized it was the cost of the launch. You know Trae at Founders Fund was looking for a defense company, couldn't find someone that was taking this holistic approach. Then we only discovered this because you know I knew many or virtually all of the advanced reactor producers, and they had the same issue.
00:47:18 · Scott Nolan, John Collison
[00:47:18] S0: Yeah, it seems like it. It seems like it. Although these are like... Each of those three examples is like at least a decade apart, I'd say, on average. Yes SpaceX, Anduril, Us would be on average a decade in between. The only way that those opportunities were found were by people trying to actually go deep into space. And so nobody really thought that like space launch was a thing until Elon tried to launch something realized it was the cost of the launch. You know Trae at Founders Fund was looking for a defense company, couldn't find someone that was taking this holistic approach. Then we only discovered this because you know I knew many or virtually all of the advanced reactor producers, and they had the same issue. [00:47:58] S1: Is the thing that all of the incumbents miss? Like, why do they become slow and stodgy? Presumably, like, it's not a problem for you yet, but it will be a problem when you're successful that you'll also need to avoid becoming slow and stodgy. [00:48:11] S0: Yeah. Yeah. You definitely want to avoid that. How do [00:48:14] S1: you avoid becoming ULA or Lockheed Martin or... [00:48:16] S0: You know, I think all those industries, not to, you know, not to single them out, but they were all cost plus industries. That was my experience. So you know before SpaceX I did work at one of the aerospace incumbents as did? An [00:48:31] S1: Which one? Boeing. Okay.
00:48:31 · John Collison, Scott Nolan
[00:48:31] S1: Which one? Boeing. Okay. [00:48:34] S0: And I worked on a military program it was cost plus. You know there was a big project. There was a goal of getting online and so you know at some point while I was there it felt like more and more people were working on the project and it just didn't feel like we were going faster and you realize like that is one tool. Put more people on the project and if there's not strong downward pressure on cost your incentives are just not aligned with like moving fast and doing it in a lean way. And so I think these industries that end up getting stagnant often have that same characteristic. Now people assume once a company gets to a certain size that it becomes that way. I think it doesn't have to at all. I think the best companies that get large even like tens of thousands of people always have that new project, that new thing that's like borderline existential where if they mess it up they're gonna be in a much worse place than if they never tried it. And it almost risks the business and I think that's almost the thing to stay to like stay young as a company you just have to keep doing that next project and not just say, well I have this nice business, I'm just going to earn my economic rents and do nothing else ever again. You have to actually have a vision for the future of what you want this industry to be. [00:49:45] S1: What were your other takeaways from Boeing?