Military Defense Has Taken Over The Tech Industry | PIRATE WIRES EP#9
52:10 Share

To be honest, I don't think that there was ever like a real opposition at any scale um to working on defense programs. Um as I mentioned earlier, silicon valley was built on defense contracts um and I think tech people at their court just want to work on a hard problems and IT turns out that a lot of the most interesting hard problems have strategic relevance to our nation security apparatus.

Let's talk about defence technology. Welcome back to the pod. I've got my two good friends from founder. One here we've got john cougar, who are just produced a documentation on his podcast, an overall which is the leading defense technology company. And silent valley.

silicon valley has always been the global hub of innovation, but the real action is actually happening. Four hundred miles self, in a nondescript estimates, the industrial district, the tech coming out of this tiny warehouse will impact the food you can buy or how much gas you can put in your car. If they're successful, they may prevent the USA from going to war.

And the crazy part is that he was all started by the guy who founded oculus. You are. This is the story of andal .

back on the pod after his incredible takes on open hymir. Just I mean, we've been getting emails for weeks now. Trace Stevens, partner at founders fund and cofounder of overall, we kind of got into IT when we were talking through the open hymir stuff that was you IT was tray IT was you me and kind of our review of that movie.

And we like danced around, I think, a pretty a very interesting topic, especially right now in silicon valley, which is just know the state of defense technology. This is now like A A space in tech. And IT wasn't that way ten years ago.

John, you just did a document on IT as I sort of opened up at the top of of this of this show. And I just want to have that conversation. I want to talk about the state of defense generally in america.

I want to talk about the state of defense technology. And I want to talk about um honestly, tray you in a bit of you you're background. I think it's central to all of this is really exciting.

And I think it's A A story it's not really been told yet. If someone has been in tech for, I mean, all of us now, it's been like ten plus years. I mean, one of the more interesting things that has been happening, I guess one of the more interesting things that exists right now in tech is this sort of new defense thing.

There's like new defense technology thing. You can say, you know, i'm working in defense within the tech industry and that IT IT used to be like defense technology ment lockey or something. I didn't mean you want to silicon valley and join to start up.

Um maybe you were working on something that would be used by the government with the with the defense industry but not like this. It's not like IT IT was not a part of not like A Y combination company um and uh in in starting defense technology, you know that's new is interesting. I think a lot of people listening probably have no idea what i'm talking about.

Maybe you've heard about IT. Maybe they've they have friends who are working in no defense in some capacity in tests, are investing in that. You hear that a lucky investing in that.

What is IT paint? This is like corner of the industry to paint a picture um of that for us. Who are the major investors? What are the major companies, you know, who are the major players and how do they interact with the government today?

Yeah let me start with doing a little bit of history. So i'm going back to that again. The end of the coward um you had this massive consolidation of industry. Um you ended up with effectively five really big defense companies lucky, Martin rayon, geno dynamics, north grammer in boeing in is the only one of those five that has like a massive commercial industry as well. Obviously, they sell airliners to commercial jets like that.

Um and so if you think about all the platforms that we built from the you know fall over the berlin wall until um let's say like the early two thousands, um you had that like um the f thirty five which we the that program started in one thousand nine ninety four um and I like didn't fly in the rain until like a couple years ago so like that took almost three years and then you have like tanks and missiles many of which were developed in the cold war. The patriot IT was originally released in the one thousand nine hundred and sixty javelin stinger also came from the coward. So really not a whole lot happened, but we had tremendous dominance coming out of the coward.

And so when we roll into you know the first sculp war or uh bozen her skulda or um you know the more on tar like we already had established a massive kind of like backlog of dominance from the cobb and the really wasn't a whole lot of new technology that our adversary had access to the chAllenge that dominance in any real way. But fast forward to today, we're talking about conflict with russia. We're talking about conflict with ukraine.

In ukraine we're talking about, uh, geopolitical conflict with china. We're talking about the risk of nuclear war with north korea, the rise of, uh, comic azi drones that are being provided by irri. Our adversary are introducing new technologies to the battle field that didn't exist in the ninety eighties the last time we had like a real span.

And the first two companies like modern companies that we're pushing to do work with the U. S. Department defense for space x to do reusable launch vehicles uh, are going directly competing with the united launch alliance, which is a an alliance of the big crimes um to compete for for launch um impalement which was doing uh day in latics before.

That was like a cool thing dealing with big data, artificial intelligence, machine learning, things like that. Both of those companies had to sue the united states government to get access to contracts because the primes had built this like defensive all around themselves to say, yes, duty. We're doing what you said.

We're consolidating. We're limiting margins, were living in a world of reduced budgets. But the agreement that we have with you attacked ally is that you won't let any new players come in to the ecosystem to canabal ze our profits in our access to these contracts. And so both piller in space ics had to sue the united states government to even get access to bid on .

those contracts. I remember the space ex suit IT just is so an elon thing to do you know, I just feel like, well, then I will see the government and thought you to work with us, but I don't. Member, I don't remember the talent one. I did not remember that happened.

Yeah I mean, there was A A huge lawsuit with um the army where the army had basically decided that they were going to build their own intelligence infrastructure um and IT was like very like directly, we're going to rebuild plentier from scratch on the tax as time.

So basically after years of this sort of oligopoly defense tech thing, very much sure totally outside of the realm of what happens in silicon valley, california type investing in our teacher system. Um you have these two entrance and they is that those lawsuits that blow open A A path for for new companies, for new players?

Yeah I mean, there is existing law in the federal acquisition in federal acquisition law called title ten us twenty three seventy seven. It's a commercial preference authority that says if something exists commercially, you cannot build IT from scratches. And so space x suit the air force on the basis of this law.

They said you can compete this out to U L A and not give us access to IT um because we we are a commercial product that exists here is the exact same thing um and really what I did is a establish the legal precedence that now the government, the acquisition officers inside the government, no we can. We can just like hire lucky to to build andero stuff from scratch. We can hire a northern to build manager stuff from scratch, things like that.

And so um there's obviously still a lot of cultural chAllenges, but the law is not the problem here. The like the the preference in the law exists. We have the legal precedents to actually enforce um you know doing the right thing when IT comes to buying products rather than services from contractors.

right IT doit hasn't existed. The law hasn't been in the way for but still it's not in that long. We're talking like .

five years about yes, mother is mostly just a cultural thing like they just decided not to enforce that aspect of acquisition law until space ex took them to cotton and said, this is a lot exist, you must comply.

So now, before begin to this sort of a more detailed history of onder al, which I consider, you know, the central company in in the space today. What is the space today? So now, you know, you have a space sex in poland who have kind of help pave the way to working with the government in this manner. Um not only culturally or not only legally, but but I do think culturally, I need a lot of excitement around both of those companies. A talent here.

I remember first because IT seemed like um less of a moonshot ten years, even ten years I mean was like your rope walk around with saved the shy t shirts um at the airport right you saw that everywhere uh space that was always exciting but IT seemed like, you know oh ever gonna to mars I on sure and now it's like, you know you have starlink and it's like he's setting up rockets constantly made missions um IT IT happened. So both of those companies have changed the culture as well as the law, but we're still not quite in the realm of like pure defense technology. Um that brings us to, I think, Andrew and a whole other like paint the on of those companies. What is that paint that picture for us?

Yeah so kind of in the wake of that movement that plentier in space, I started um IT became clear to the department defense and to federal enforcement, national security, human security type stuff, they they needed to be more of a focus on innovation uh to get things right moving forward.

Um and so they set up a of innovation organza organizations like in you to um which is like the C I has been true capital firm, essentially the defense innovation unit. Um f works, soft works, uh like all nail x there are all of these like little innovation officers that exists. Um and when I started poking around in the early my earlier that found the one, I found that there was a lot of money going out the door to non standard defense companies.

The problem was is that all that money was being directed towards research and development IT was, you know, pilots and prototypes and the primes, the big primes. They love this because it's basically like a great distraction, like when someone comes and they like, uh oh no, no, no, where we're giving a tony money to small businesses um and as long as to the Price, as long as businesses, say state small businesses, that's great. Give them all the small business funding you want, just don't transition them to meaningful.

And so in um twenty sixteen I started having conversations with uh with A A few folks in our network. Obviously I know paleo lucky you were the first institutional investor oculus. He and I had had been hanging out and found as one of talking about the difficulties of Operating a national security environment or something he had been interested in for a long time um and uh I kind of came to this this point where I like, look, i've met with all of these companies that are doing federal contracts and we're they're not making any progress and not like breaking through this glass ceiling.

Um and I think what we really need is a 2Y4 centry defense prime。 We need like A A next generation defense contractor that isn't competing for research and development contracts, is a company whose entire purposes to go and win long term platforms. Head head against north of rocky racy on gd boeing um and that like conceptually is super different than all of these very like single product kind of companies that had existed until then.

Um notably though, this is incredibly hard, like there's the idea that you can pull together like a head to head competitor for know one hundred billion dollar defense company is kind of crazy. Um and you we're still kind of like playing through that right now even though the company has been quite well. It's like, you know, nothing's guaranteed.

Well, there's a court I want to get the Johnson didn't know, yes, this entire documentation that he just did on the company. And I want to tell the story of, uh, I want to give a chance to do that for us to kind of pick a party, consider here and be like the fact checker and make sure the jaws not lying to us. But before we get into all that, I mean, you know you're talking about competing head on with major defense primes there, you know hundred billion plus market cap. They do things .

differently though.

right? Fundamentally, this is the I remember when you were first getting uh, on all of the ground, IT was like, this is a laman when IT comes to defense. But do they not they get like a contract to build like a jet or something and they all bid on IT or whatever and they build this thing, right? Can you explain the difference there between that and what what order does?

Yeah, there is this concept of a cost plus contract, which means that the government hands you, you know, a thousand page with requirements document. And then your job is to go and build every single requirement into that product um and then you get remembers for your cost plus some agreed upon fixed margin ahead of time. That's usually somewhere between seven and two percent.

And so really, there's no intent of to go faster. There's no intent of to spend less because you only make money when you spend money um and so you mind as well spend as much morning as you can uh to unlock uh additional a margin um at the at the end of the the programme time mine. And so uh this process hasn't work particularly well for the U S.

Tax pair. The f thirty five is a great example of this. Like there's no shortage of content out on the internet about how poorly that program has been managed over the last twenty nine years now.

Um and and I think our approach was, look, we're going to self fund our own research development. We're going to build products that we believe uh, meet the demands of our customers and the federal law for cement, uh department of defense, international partners and allies space. And if they want to buy IT, they can buy IT, and we're not doing that by a listed requirements. They can just buy the thing that we built or they can not.

So IT involves you sort of sitting there. I mean, maybe it's like I actually image it's like palmer sitting there being like what would be like a cool thing that would help us win wars and he's leg IT would be like this crazy drone that does X, Y and z and then you has just spin IT up and then you take you to the government. You're like, hey, are you interested in this like crazy drawn that is X.

Y, Z and they're like, yes, that's like stark industries from our members of the story. I'm not sure that's actually how plays out really more. How plays out is like we know what the needs are going to be for the next five years, that the duty tells you through a what's called the palm, like all of the stuff that they're going to acquire and that they've like kind of slaughter the budget for the next five years.

And like what we're doing is we're picking the programs that we think we can add a bunch of advantage through text priority, things like artificial intelligence, things like autonomy, things like next generation sensors, where we can show up with a product when that thing is, when that specific platform demand exists. And we can say, look, you could go and buy this from the primes and give them a bunch of requirements, but we've built that IT exists today. And oh, by the way, there's like all these additional capabilities that are built into this platform that you you might not have even conceptualized from a requirements perspective, but you have to have that starting point of like you know that they're going to buy this specific like you know requirements set because if you just like walked them with an iron man suit, it's like where are they going to buy the airman sout? That's not their budget, like it's much more difficult to make that work.

John trace sort of danced around IT for a minute. Can you give me the echo system? Who are who are the players in the space right now? Yeah and what does that look like today?

Yeah, I mean, I I I think this is something that we talked about when I was joining founders found couple months ago um that he would be interesting to focus on defense tag for the first couple months of me working there and uh IT was something that obviously was top mind because of underworld but once I got inside of founder fund and really put the pieces together, I didn't realize IT from the outside.

But founders found is just had a profound impact on defense stack like founders s fund is defense tech. When you trace the the only major venture successes in the space have all come very directly from founders, from activity at a very, very early stage, that being pantier er than space acx. And then and all in people often don't think of space sexes like a defense to company because its space exploration. But when you look at the the effect that start link and star shield having and right, I mean, it's getting so it's getting so big. We went from SpaceX being not thought of his defense to now there's a new york times hit piece on e life is too much .

power that's too big .

and he one man shouldn't be able to decide our industrial policy. It's like, okay, well, we can solve that with A D D contract here, which is probably what where this will go. But um regardless, you look at the Linda of these companies and and there's founder funds know fingerprints are all over these companies. And so um with and all, I think the the I wanted to know I I wanted to go to layer deeper into the into the company because most of the content around the company has centered on palmer.

And two years ago, I had actually made a video telling the story of palmers you know entire journey through plentier or through oculus and then at the end IT kind of goes into you oh and he's also starting the new company and the old school um it's kind of a foot note um and when I started talking to people internal to founder fund about the story of andal, IT kind of unlocked this this concept that maybe the company wouldn't work unless you had this incredible founding team and so my my goal with the documentary was to highlight all of the founders and also some of the key leaders of the company and tell kind of a broader story. But that creates kind of a little bit cognizance with the traditional narrative of, know, I love palmer, he's amazing. But the fact of the matter is that he doesn't build everything in his garage and there is defense technology is so complex that you do need to have a presence in washington, D C. You you do need to have experience, you know, working with the military. And that's why the talent to your side of the andero team, IT seems so critical to that.

Um and we have to go into a little bit more about talking about point IT is weird. No one ever thinks about IT the importance of talk and in fact I ve ever reading uh uh he was at less IT was IT was Alice rugged and .

um so there are so class here .

I am working for Peter reading at this rug in like we never heard of IT all vanishing .

and you don't know where they are going ah they're off of .

the gulch and they're a couple remaining and and they're realizing like theyve been like um aggressively persuaded to get these washington men uh to go and like do stuff in washington for them to keep them a liver whatever. I really is just an extremely suspicious of this and he thinks just it's all bullshit. And if you have a man, a quote, man washington um they're just like going they're drinking Martini.

I is on company money and they're quietly selling you down the river and I just kind of absorbed that and believed IT because I united and been right about everything else and and then I got to know a little bit of the history of not even in the history just I got to wash tray, I got to watch you work with the honorable stuff and I saw how important that was. Um just the actual relationship between a company and the government um or Angels maybe like an industry in the government. When did those talks begin for you in in the process of building this company? When did you guys start talking to government? What was the strategy there? Why was that important? Um I think it's a part of of the story that maybe people are a little bit in .

the dark on really early. There is really no alternative to to like incorporating that into initial discussions even. Um so we started the company on uh the adverse ve d day on june six um and that was on monday twenty seventeen.

And then on a tuesday of that same year, so of that same week, we IT with our first customer。 And then on wednesday, we were lobbing on capital hill. That was like the first three days of the company. So i'm not saying IT like has to be that intensely program.

but you lobbying it's like it's you and and of colleague of yours in D C. Just talking a congress man in saying you need this. Is that when what does that look like?

Yeah I mean, we we had retained a firm to help us with like going in and doing these meetings, kind of chatting with people about what we were thinking about building and how they would think about funding that and things like that. So you're meeting with members of congress and their staff um and IT was me, palmer and brian. So we were just trying to figure this out on the customer side, on the government relation side and then on the company building side as well all in that first week.

What about I mean, is that standard? What what are the other companies out there? Are they doing the same thing? Like have you have you noticed an increase? And I guess new tech lobbies there? Or is IT is like not just you guys anymore, right?

totally. I think the people are starting to grow. Uh, how complicated this is. Um there's obviously a lot of people that have been involved in the paleo story, both from the like contractor consulting lobby's side of the house but also from paleo that have gone on to do um do things that are relevant to the sector. Um so the infrastructure has certainly built out. Um you know we probably took too long at palencia to really rap our G R, our government relations engine internally um and that contributed to how slow IT took to a rap revenue to a meaningful place. Um and so I think the new lessons that have come out of that experience of poetry in space sexes, you got like there are people that know the story, that understand the complications in the acquisition process, the culture um how to push budget through to get things approved um all that stuff is like you can you can hire help to to do that now that you could not have hired. Even when we first started the company in two thousand seventeen.

i've noticed lot of different companies building this or that piece of technology that you know ostensibly defense it's like within this sort of defense tech realm. Is this is that really a new part of the ecosystem? Or is that a little bit of a of a merage? Like is perhaps is andros perhaps very exciting right now? And you see a lot of things that are sort of like that. Like is gonna be something where there are many players in the space like consumer uh like like enterprise software or something or is is a kind of like a one company wins all situation.

I I hope that there more I hope that there's a whole set of companies that up doing important work for the dude, we can do all of IT, obviously, like we're nowhere near that where you know one one hundred of the size of lucky Martin right now from revenue perspective.

So like you know like you guys have already want some like a lucky like there are those putts is over there a building like I don't know a billion dollar or tank or something, don't need them. It's over from mike. There is an .

interesting that you talked about like the ecosystem with talented er IT wasn't as much of a whose who of silicon valley investors that made a lot of money off of plentier. But certainly with andal, they've done a great job of bringing different funds at different stages. So looks capital and don horwitz.

A lot of different firms have built positions in andal. And and then now that I think everyone seeing like oh, we can make money in this industry, they're starting to flow more into other other concepts and other smaller companies. There is a big question like as digging into andero. Um I had a couple people asked me like, oh, would you ever started to defense that company as like after seeing what he took to get that company of the ground and the dream team that had to assemble to make that work? IT feels like it's incredibly efficient to start something at that scale, but maybe there's a different way to attack the problem.

You raise an interesting point, john, I guess an interesting topic um when you talk about all the different investors that are are involved in under at this point, that would have been very strange ten years ago. In fact, even IT found was fun.

I remember tray, one of the earliest things, I guess not that we did because I was like, you know, years after you and I started working together, but I remember working with you, at least talking to you about like language potentially because we we didn't have me to change something like structurally. There had to be structural changes to find us fun for for us to do this. Um IT was a very IT was a very new kind of thing and now is just default.

And in fact, there was criticism. People don't remember this now, but early on, there was criticism of the company. There was criticism of this kind of thing. Um the culture of silicon valley was so different back then uh and in fact, it's so different.

I think it's easy for us to just forget what I was like but um maybe john, can you talk a little bit about project made than in google because I think that is really important part of of the journey of of tech to to defense because right now, it's like you're think every major investors involved, every Young kid wants to involve the defense tech. Working for the military seems cool or at least acceptable. And how could I not when there, as we you know talk about earlier, just so many new threats that we're facing. But but just a few years ago, it's like there was basically amounted me at google for us to not this time of thing.

yes. Before before johna does that and I I do want him to do IT. But to the question about changing things that founder find, there was A A kind of slight light complication not only for founder some but for many our investors in that uh the limited partner agreements that govern the relationship between the investors and adventure fine and the venture fund have these things called vice causes that say there are certain things you're not allowed to invest in um founder one had one of these vice causes that said that we wouldn't invest in you know lethal weapons essentially um and so as I was kind of noodles over this this idea starting at all and they had been talking to a lot of rather defense companies, I basically went and told lorn growth R C O O at founder stand like, hey like if there's any reason that there will there will be chAllenging to invest in the company that builds defense technology that could include weapons.

Um we should maybe take a look at revising that as we raise our next fund. And so SHE was out raising raising capital for um fund six founded on six and um basically red red line to the limited partner agreement. The only red line on the l pa was this one vice class and so SHE had to have these conversations with like every single one of our L P S about why we had this one random red line on our L P.

A. And so SHE was pulling me into the calls. And I like, oh yeah, no real plans, but i'm spending a lot of time in national security.

Just want to make sure that we have the ability to do something before to find something interesting. And you know the questions didn't really push back that hard, but they are like, okay, fine, yeah we accept IT. We raise the fund the first investor out of on six so was like, yeah, no plans. We're just know that.

that is IT. Was that a pretty standard? Is that a standard clause? A lot of firms i'm .

not sure how standard IT is. IT wasn't non standard. But um yeah I was a thing that I think there were other firms that had to deal with some variation .

of that for further and al investment yeah i'm john you .

to you provide yeah .

yeah so try. And around the time I mean google is has staff rebellion.

yes yeah exactly. So so tray mentioned the do use technology that goes on and a lot of the big tech company is microsoft selling windows licenses. And uh, that was basically what project maven in was.

There was a path finding initiative by the deer d to bring artificial intelligence tools to the military. And IT sounds like killer robots and crazy stuff, but I was extremely money. IT was essentially just using, uh, computer vision to tag drone imagery.

So uh the the the drones they go up from the air force, they pull down Terry bites of data gigs and gigs of video files. We need to understand what's a building, what's a road, what's a car is a perfect problem for machine learning. And google obviously has some great machine machine learning software and hardware.

So the the initial google commitment to project maven in was just to allow the dog and the other contractors on the project to use their TensorFlow aps, which is a machine learning framework that allows you to train kind of a custom model. So the'd feed IT some data. So this is what a car is, this what a building is.

And then we'd run that on google's cloud. So IT was really just a google cloud enterprise contract. Um google was not really developing even that much new code that was being handled by other partners in the project mavor team um but nevertheless the google employees revolted and it's interesting because all the press there is a massive revolt.

But um I think less than ten people quit over this. There were a few thousand signatures, and I think google had one hundred thousand employees at the time. So we're talking about maybe one percent of the company really being upset about this.

And the number of employees that quit because of the worker product maven was less than just the average number of employees that quit google every single day because they have you know average turn on a daily basis of dozens of employees quitting because they're such a large company. So IT was really, really blown up by the media and they shot down yeah, and they did actually pull out. IT was very poorly handled.

They they wound up creating some new guidance for how they would work with the military um and then eventually brought in a new head of cloud, Thomas korean, and he has started to work with the military a little bit more. So I think there's cause for optimism that things are looking up and hopefully, we'll see the warm ukraine is is IT has been a big catalyst for a lot of tech workers to start taking great power competition more seriously. So i'm optimistic about this, but i'd love to hear how tray feels about IT.

Yeah to be honest, I don't think that there was ever like a real opposition at any scale um to working on defense programs. Um as I mentioned earlier, silicon valley was built on defense contracts um and I think tech people at their core just want to work on hard problems and IT turns out that a lot of the most interesting hard problems have strategic relevance to our nature security apparatus.

Um and so you know if you think about like the talent distribution um as a traditional distinction gozen belk f um you have like the people on the on one end that are like super patriotic, that like they're probably already working for palette spaces. S um like they they want to work on these problems, not a huge number of people. Is that trail on the on the far right of the curve? You have people on the far left of the curve that are like marathi ticker at google.

It's like they're just never onna work on these things and you you shouldn't waste your breath trying to convince them. But the vast majority of people are in that. You know the bulk of that curve um and they could be convinced you might have to try to convince them.

But um you could get them to alignment pretty easily if you had a compelling argument and and all for the first year, like man, we just like crushed on the right side of that curve, like IT was very, very easy to get the initial set of of people to come work because they are banging down the door trying to get access to the company. Now we're like we've shifted somewhat into that middle of the bulk of like we we have to go and tell our story. We have to be really good at telling the narrative and convincing people of the importance of what that is that we're working on. And that doesn't I won't say that creates recording problems because there are still tons of people out there that even that you know where two thousand people, that's one tenth of the size of google. We have a lot of head space to go from here.

So yeah the size .

of a not one tent.

And also just the culture of the technology industry in general, I think, has changed significantly since the project made in stuff. Um you see at that time, I mean, that came out and they had support online. I was like every tech outlet, every tech influencer. I mean the the idea of of working for the government was still seen as really not just working with the government.

I don't want to say I do I don't want to seem hyperbolic but IT does feel to me like the problem was working with america, not just the government but amErica itself was seen as this instrument of chaos and um and that was just a Normal standard belief there a lot of crazy standard beliefs at that time. I think we are not paying attention to just like how dramatically tech culture has shifted in the last few years. Um throughout covered in in in the follow of covered and now I think probably just there's incorrectly from wrong care time. You just think about this but they seems like there's just a new .

year like we .

don't want politics at work and um we just want to, I guess, trace sort of like what you are saying, like we want to work on answered like meaningful cool stuff I think. Brown, yeah.

I mean that but that was not the case in twenty sixteen. Like I mean, let's be honest, like a lot of IT was just trump and a lot of IT was that people didn't want a cel fax machine to the trumpet administration and other bands in it's like, yeah the nuclear weapon every like IT doesn't .

matter because it's like the good what do you guys think about? I mean, what happens? Trump is running for election right now. Um I don't see how he loses the nomination on the republican side.

And looking at these polling numbers, IT looks really bad for the scientists and obviously ly not winning so uh it's like key wins. If you wins the president see what does that mean for the companies interact that are working with the government? I mean, is there another culture shift? Like how do you guys see that playing defense is super bipartisan?

And like the national defense authorization ation act is like the one bill that specially what about the industry? What the inside is? Maybe a separate question. I think recruiting probably comes harder um but not like meaningfully like I don't think that IT will be impossible for Andrew to grow at a pace that IT needs to grow.

Um but you know anecdotally, um I was a like doing this letter at stanford um early in the trump administration and I there like no one hundred fifty kids or something um I think they're like fashion and soft mars and I ask them, like would you work for a government agency that was responsible for enforcing policies you didn't agree with and only like one or two kids, rather your hand and so the vast, vast majority of people were like, if there was a policy I didn't agree with, I would not work for that organization. The reality is there are thousands and thousands of policies that every federal agency is required to are responsible for enforcing and the chances are is like any given point, we probably disagree with a double digital percentage of those policies. Um but that's not what civic duty is.

Civic duty isn't like activists you know employment where you just like do the regardless of congress says you just do IT you you want, it's, you know, making sure that you have a functioning democracy. And having a functioning democracy sometimes means that you don't get what you want. And I think that there is something really concerning about the the culture in the tech community of not feeling any sense of civic responsibility or duty as like a core part of their career aspiration ordinal.

You see this in local politics and how that plays out in sanford. Cisco, right? Like people often ask why the tech industry has no power.

It's like every other city that has one in hollie wood D I mean, imagine los Angeles with no imagine a version of los Angeles where the entertainment industry doesn't have power or like where in new york where bankers don't have power. Like actually in both in if colleges don't have, they all have power. All industry towns, the industry as power in canford, cisco, the industry is just for endlessly shot on.

It's like whose fault is that? That's tax fall. They have.

There's not there's not much a pacific. There's not much of a sense of pacific. There's not much of a sense of like permanent. There is like a pretty transient and group of people there. They flow through, they work on stuff, they float out. Um what do you think cause I mean that's a huge question like what causes that? But I mean is that even right you guys and I like misdiagnosing tech workers are first.

I I refused all them tech workers that makes is like a very march term to apply to, like people with the tremendous amount of agency. The idea that a tech worker doesn't have agency IT is just like total absurdity. Like go back to your massage in your free lunch, stop complaining um so I I refuse use that term, but really privileged people who work at tech companies and make a tremendous amount of money OK what what motivates them.

Um I think part of IT is having like a really homogenous political identity. Um you know most places where you get a sense of robust civic duty are places where debate is encouraged, where you have like a bay partial attention I think gets no wonder that like some of the most well functioning cities in amErica are red cities in blue states are blue cities in red states where there is like a necessary tension that happens um that doesn't happen in the cisco. And so when there is no political dialogue to be had, what's the point of engagement? Like why would you even bother? It's just to it's it's going to go one way every time.

And I think that is really demotivating for both people who might disagree. The rare, you know one of the thirty thousand republicans or whatever in the city of M S O. But even more so maybe on the on the left where they just don't feel particularly motivated to engage because what are they going to do like.

but separate from left right, separate from left right, like the tech industry, even if IT was the left wing side of the tech industry, should have had more political control of the city, then IT does today doesn't make any say all of the money. I mean, the city budget know of more than doubles in ten years because of tech money. Like what where is the political power there? And I wonder if it's like there's just something about working in technology that is it's like more cerebral and um I don't know internal than IT is uh externally motivated or even just like engaging in the real world or something is he just doesn't make sense to me that you would have this many smart people regardless of politics um who have money, who don't have power at this point.

Mean near the billion or disco I don't tell us.

I know LED to me i'm .

part of the problem. I mean speaking fleeing IT seems like a lot of the more successful older tech, you know a litter tech get know what we're using the term now, not tech workers, but tech folks. They they move to suburbs so they move outside of sciences go and they don't have as much of an impact there.

And when I think of the the median techy and service ago, I think of somebody who's like twenty two, twenty three and they're there and maybe they are commuting to google or facebook or something, but they're not really politically active at all. And then by the time that there that they made money and they become politically active, they can afford to live in the suburb. And so then they're not having an impact on seven ago. That seems like the bigger problem to me. People people .

stay you are. I am back to the defense tech now. Um we had conversation uh the two pocket ago when train community joined us on the great man theory and give you an interesting question portray I do have phrase IT out you know here yeah .

so uh my question for tray is that I when I dug into andal, I found that everyone I talk to was like the company is successful because they built a dream team. And when I talk to you, you said that individually, any one of the founders could go off and build a great just, you know, vanilla tech business sensor. Some sort of listy le business or something can be fabulously successful.

But only with everyone coming together could you actually go and take on the defense industry because he was so so such a difficult industry to breakthrough and build that new defense prime. And so as we, you know, tell the story of andor, how much focus should we be putting on palm mer as. Great man.

And or should we be more realistic and kind of tell the story of the whole team? I thought he was interesting to hear from all the voices and that kind of my reality and what I experienced. But there is a world where maybe we want to just alleviate just a single person because that you know helps kind of up regulator breed individualism.

Yeah we talked about responsibility and I was like, who's taking responsibility for this? Open hymir took responsibility. Who's taking responsibility, uh, for animal?

I think the founder narrative is really important. Um I think having palmer there, as you know, the the front man for what we're doing um in putting his brand h to work, putting his money to work, you know a taking his private success at oculus and bringing that to breathe new industry and breathe new life into an industry um that is really important.

And so I went for a second, downplay palm's contribution to this and think that like that is the story that we've been telling from the beginning and that's a story that we will continue moving forward. Um the one of the unique things about the dream team is that we don't have two pommers, right? That's like kind of a key.

If you had you know jack dorsey or elon or someone else that was coming in and you had like a dream team of palmers, well then IT doesn't work because everyone's trying to posture for attention and things like that. Um brian, me, joe, Chris 的 math teman bolic ossie。 Um like we're not attention seeking, like we're Operating in our lanes to make sure that the company can be successful.

And I honestly think if you like, had a ticker take parade for brian shift, he would be so crying that he would be often like he would be hiding in the in the wagon or in the car that, you know, is going down the tiger tape parade. He doesn't want that. And I think flag.

But at the next event.

but I I think I think like I think palmer would agree with this. It's like the most unique thing about our dream team is that like everybody knows how they fit.

And um this is one of the places I think a lot of these other defensive companies is get things wrong as they're like you have this like you soul kind of like technical founder or something that's like I had this vision for a product that I want to build and it's like, all right, who is your like hot shot general council that knows contracting, who is your like brilliant COO that knows how to build, like an a org that has a facility security clearance and like manages like complex government requirements for their internal Operating systems. Um like do you have an like an organizational manager? Um they can like build ah and manage multiple product thing into the same time.

Do you have someone is really good at funding raising and you have someone is really good at corporate development? And it's not one of these industry is like you can build out over time like you you just kind of have to be good at that from the beginning. Um and that's I think that's the secret behind why why we've been able to make this work in android is that you have that singular founder and then you have a team of people who aren't looking for the spotlight that that are .

working around that. So as we wind down towards the end of the conversation here, I want I want to speculate on on sure of what's to come. Want to get your your sense of this uh, over the last, let's say, five, seven years IT feels like it's been the stark sort of difference.

Um you've seen illegal change by way of space x and uh in palette you've seen a cultural change in two ways. One, you've seen the culture change because of the success of companies like space ex and plentier. But then two, you've seen a broad tech cultural shift. Partly perhaps that is because of just the difference in politics right now. Things are different now obviously the day and there were four years ago um but that is all to this one singular point where you know you guys have been at andera, you've been building like we're latus over the last five years of this great company.

There is a new defense technology sort of, I don't know, like almost like an industry with in the tech industry right now, the people are talking about, the Young people are excited about um five years out, where do you see that? Where do you see new defense? Like what what does that look like? Is IT A A bunch of companies? They're still working with the government.

Do you think the tech industry generally is still on board? You know google on board. Is microsoft on board? Obviously, eyes on the horizon. What does the future look like?

I'm cautious ously optimistic like I would I would love to see you know two or three Andrews that are all working on core platforms that are going to be relevant to the duty moving forward. And by the way, that that might involve just close ties with space x plantar andero as well. You know there are contracts that we're working on with both of those companies in partnership.

Um so we're building our kind of own alliance um uh sham sanker the the president at plentier just waited out uh that we are the coalition of the competent which I I was a really funny way to phrase that. So there could be like combinations of these companies that are working in partners with that each other uh, in order to build some some of these really core platforms. Um at the same time, the the cautious part of that optimism is that uh the like the crypto space a couple years ago, like the A I space maybe today, the hype is running out ahead of traction in a pretty real way.

And some of these companies have gone and raise enormous amounts of capital at really high Prices. Uh, and you can cobble together research and development contracts in the small single digit million range, maybe even like the low double digit million range, but at some point, you have to convert into like a major program. And when that doesn't happen, these companies find themselves way out over the skills.

And I think another kind of thing we will see over the next five years is that there's going to be a pairing back of, uh, these companies that get way too aggressive on fundraising in the midst of the hype. And they're either going to collapse and see so exist or they are going to have to do downwards and recaps and all source of stuff. And so for for any like VC that's out there like you, you really can't think of these research development contracts as revenue. Um so you should Price the company is accordingly. Um and I think that's not only good for you and the economist who we are fun, but it's also really good for the company um to make sure they are not getting themselves into a position that they won't able to recover from due to the sonnets of production transition.

There is one other area that I think um might be interesting as if I think about plentier um if I think that you know plentier really was responsive to department from my security and then uh SpaceX obviously had a big impact on NASA and with andero it's a big impact on D O D. Um there is a question, if we zoom out from defense tech, just is there another company of that scale that could work alongside a different department? Like what would a space sex of the department of energy look like? I don't know that we've seen that yet or anyone's even really tried that, but I am of a maybe more optimistic about someone running that style of playbook for an entirely different h industry in a different department as supposed to just run the andal playbook again and compete with andero to service the D O. D.

Maybe I wonder if IT has to be just a really essential department like I was just imagining what would that look for the department of education? And it's like what I couldn't happen because the department education not real right to exist and if they vanished tomorrow would matter and it's run by labor anyway. And so they probably the incentives aren't aligned, but for whatever reason, and I see i'm coming you off your trade, but IT seems like there is just a lot of alignment, the defense that they actually do want to improve things and keep amErica safe.

I think there are real opportunities that exist. I mean, there's a imagine if you build a massively scalable portable nuclear reactor company like that would have implications across a bunch of these different sectors.

Um the dog has been looking for that for a while as well like instead of trucking a bunch of diesel across the kivo pass, like what if you just had a shipping container that had a nuclear r reactor in IT and you could power an entire ford Operating this indefinitely like that would be that would be really cool. Um I think there there are a bunch of shots on goal in space as well. New technologies that um are delaying new types of satellites or new type of new types of national security technologies and connections.

Jack, whatever, there is a huge opportunity there for a space prime uh to to come up um cy security in some ways, like if you can build something that had like a major application for anal security on the cyber side like that, that's a potential area. So it's all about figuring out what that domain is and then building a dream team of people. They can go and tackle that specific domain.

cool. I have a pretty much raped and up guys. Thank you both for joining me. Um cooking where can people find your documentary .

and uh you can search and old john cogan on youtube .

the easy way to find IT and h trace Stevens on twitter and also just on twitter, right in resort. We love IT then you guys, we love IT not for the .

sharing of its blade that which should protect.

There is another .

quote .

I ever go on later.