The Exchanges

Q When you say it's changed them, do you mean it's confirmed them?

A It's confirmed them, but it's confirmed them in such a way where it feels wholly different. You know, I think the original theory was we have to get low cost, we have to get more ubiquitous, um, we have to have a mix of exquisite systems and mass. Um, like all of these kind of major theories of warfare are kind of all converging at the same time. Um, we have to be able to build, uh, something that takes advantage of commercial supply, uh, and commercial manufacturing techniques as opposed to aerospace and defense supply and technique. You know, this kind of like crazy crystallization of a lot of things at the same time. And now, okay, we, we, there, There's a war in Iran. We, we fire a lot of our arsenal, you know, and now there's public reporting that, um, you know, large percentage of our offensive and defensive missile systems have been expended and they're, Really hard to replace. They take a really long time and they're very expensive, uh, because they take advantage of parts of the market that are kind of strange and very specific and very exquisite. You know, just to give you an example, the cruise missile we build, the, the actual airframe is built like you build a bathtub. Um, and so we can take advantage of tons of contract manufacturers in the United States that can actually build a bathtub, right? So just thinking through the design differently from the very beginni…

AI assessment note: “It's confirmed them, but it's confirmed them in such a way where it feels wholly different.”

Q at my companies going from one to four million in ARR for an HR software company, and the whole team's like, ah, bugger. Uh, my question to you is, What's actually entailed in the twenty billion dollars? Was it like an accumulation of all the little contracts bringing together? Because it's a big headline number, but I didn't actually get it and I don't think a lot of people did.

A Yeah, yeah. So let's, let's like actually define it because The stuff I saw posted about it was all over the place. It was like a rainbow of interpretations. So this is, think about this as like a, um, a credit card limit. Um, so the government has said up to twenty billion dollars they can spend on a class of Andurl's commercial technology. Um, there's no obligated money, but it basically creates A process that reduces a ton of friction that you would ordinarily see in defense procurement, where each individual office would have to go through financing and contracting and evaluation. Um, and all of these repeatable things now can now only have to happen once, and they did, and they just did. And so, um, Maybe a fast track is probably, probably the wrong word. It's more like in the arduous process to actually get something contracted. We've cut a lot of the first steps out. Um, there's still a lot of hard work. We've just made it slightly easier for the government to access all of our gear.

AI assessment note: “think about this as like a, um, a credit card limit.”

Q I don't know how to say with, I upset everyone these days. I just get used to it. The French military spend less than I do in Chanel for my mother. I mean, it's like, fuck all. And so my point is like, can you be a European only next gen prime? Or do you have to be selling to the US as well? How do you think about that?

A Yeah, I mean, you basically can't have a defense company if you don't have a large US business. Right? So, 50% of defense spending is in the US and 50% is in the rest of the world. And so, if you are cutting off half of your market from the get-go, that's, that's probably a big problem. The, the challenge in Europe is it's not, it's not like a European Union in defense spend, right? Each country has its own sovereign, uh, companies and has its own sovereign agenda. And so, you, you keep getting winnowed and winnowed and winnowed and you're like, oh, well, Europe is my market. Well, if you're a French company, it kind of isn't, right? France is your, Your market. Um, and so you have to be really careful around how you're actually analyzing who your ultimate, ultimate customers can be.

AI assessment note: “you basically can't have a defense company if you don't have a large US business.”

Q I don't know how to say with, I upset everyone these days. I just get used to it. The French military spend less than I do in Chanel for my mother. I mean, it's like, fuck all. And so my point is like, can you be a European only next gen prime? Or do you have to be selling to the US as well? How do you think about that?

A Yeah, I mean, you basically can't have a defense company if you don't have a large US business. Right? So, 50% of defense spending is in the US and 50% is in the rest of the world. And so, if you are cutting off half of your market from the get-go, that's, that's probably a big problem. The, the challenge in Europe is it's not, it's not like a European Union in defense spend, right? Each country has its own sovereign, uh, companies and has its own sovereign agenda. And so, you, you keep getting winnowed and winnowed and winnowed and you're like, oh, well, Europe is my market. Well, if you're a French company, it kind of isn't, right? France is your, Your market. Um, and so you have to be really careful around how you're actually analyzing who your ultimate, ultimate customers can be.

AI assessment note: “you basically can't have a defense company if you don't have a large US business”

Q at my companies going from one to four million in ARR for an HR software company, and the whole team's like, ah, bugger. Uh, my question to you is, What's actually entailed in the twenty billion dollars? Was it like an accumulation of all the little contracts bringing together? Because it's a big headline number, but I didn't actually get it and I don't think a lot of people did.

A Yeah, yeah. So let's, let's like actually define it because The stuff I saw posted about it was all over the place. It was like a rainbow of interpretations. So this is, think about this as like a, um, a credit card limit. Um, so the government has said up to twenty billion dollars they can spend on a class of Andurl's commercial technology. Um, there's no obligated money, but it basically creates A process that reduces a ton of friction that you would ordinarily see in defense procurement, where each individual office would have to go through financing and contracting and evaluation. Um, and all of these repeatable things now can now only have to happen once, and they did, and they just did. And so, um, Maybe a fast track is probably, probably the wrong word. It's more like in the arduous process to actually get something contracted. We've cut a lot of the first steps out. Um, there's still a lot of hard work. We've just made it slightly easier for the government to access all of our gear.

AI assessment note: “think about this as like a, um, a credit card limit.”

Q When you think about your kids, what do you tell your kids or kids graduating college about the world when it comes to career advice, knowing and seeing all that you do?

A Yeah, I mostly say, um, A couple of, of things. I think it's about the community that you surround yourself with. Um, I, and that, that's a reflection on sort of my own personal story. I mean, everything that I've done in my career, um, has been the community of people around me that Um, have helped me, have gotten me jobs, have afforded me responsibility. You know, it's not like some big machine or process. It's, it's really just the people you surround yourself with. And, um, I like to think I made some pretty good choices early on that helped. And then the other piece would be, I think people tend to overthink a lot of their steps. And don't appreciate how much you just can learn along the way. Um, you know, I, I talked to a lot of, um, military folks that are transitioning out into the commercial world. And I, I would say for the most part, they, they kind of like hem and haw over what company they should go to. And I, you know, my main advice is I actually think you just need to start, and you're actually a really smart person. Um, if you don't like it, you can leave. If you like it, you got lucky, and you should talk to a lot of companies. You should pick, and you should change your mind when you need to, and I think Oftentimes there's a hesitance to change your mind, right? And I, I don't think that's actually true. It doesn't need to be true.

AI assessment note: “it's about the community that you surround yourself with”

Q Can I ask a weird one, but Matt did say I could ask it. Is there either like an ethical question of like, do we agree with sending thousands of missiles to Iran? I'm not saying right or wrong, but is there either an ethical question of how your products are used? If you, um,

A If you work in defense, and if you start a defense company, your moral compass tends to be pretty clear on this question, which is, we have a democratically elected set of governments that represent the US, the Alliance, NATO, all of the countries participating. They set the rules, uh, and we abide by those rules. Um, and if you start to mess around with anything within that framework, You create a, a pretty dramatic set of slippery slopes that, that if you play the actual thought experiment to its end, um, end up in a pretty messy situation. And so the, the key here is people that live in the world that I live in, we, we tend to think a little bit differently than, um, a person not connected to the national security community on this front. We tend to think a bit more long-term as well. Um, where I'm building missile systems that might only field in 2035, right? And so, if you fundamentally lack a trust in democratic institutions, this is not the game, and this is not the business for you.

AI assessment note: “your moral compass tends to be pretty clear on this question, which is, we have a democratically elected set of governments”

Q things I most look for, honestly, is like GTM experience and ability in a team that I'm looking at in defense. Um, how should we think about analyzing teams for their ability to actually sell and go through procurement? Does it matter if you've got technologists and people with military and combat experience, but no one with GTM experience? How important is that? I know procurement better than fucking anyone.

A It's multidisciplinary, right? So The, the challenge becomes in defense that if you're missing any of the 12 different types of disciplines it takes to really capture a large program, you will fail. Um, and so one of the things that we've done is over the years, we've built up a pretty sophisticated apparatus to kind of round out these teams with all of the various skills in acquisition and budgeting and technology. Um, and then Again, mission and operational analysis and doctrinally how these types of technologies will integrate into the military. You have to have it all. I think the one, uh, maybe, uh, interesting piece here is there aren't actually a lot of big programs in government, and so one of the things you don't need to necessarily look for, I think what you would, in a traditional hiring process, you would look for someone who has demonstrated the ability to Capture a large program in the past. But, but since there's so few of these things, you can't really look for that. Sometimes you luck into it and like, great, you should certainly hire people who have shown to be able to capture large programs. Um, you generally don't actually have that in the hiring pool. And so you ultimately have to do is piece together the right puzzle for everything that you're going after.

AI assessment note: “if you're missing any of the 12 different types of disciplines, you will fail.”

Q me if this is good. No, I really do. Ask Matt about it. It's very funny. He sees everything in Europe because of me, um, and tells me that it's shit. Um, But like, when you look at them, what is the most common red flag that you see when you look at the emerging class of defense companies trying to be, as awful as it sounds, the next Andrew?

A I think it's basically two things. It's, um, uh, not realizing that what they are doing, uh, Already exists. There's too much hubris, I think, in the technology market that, um, you know, as high tech people, we can, we can do everything better than everybody else. I think, um, that causes, uh, some companies to think they have an idea that isn't actually an idea because it already exists, and that's pretty common. Uh, I'll give you an example. I, years and years ago, I, you know, was looking at a pitch or I forgot, maybe I was advising someone and Here's my idea. And I said, well, the thing you don't know is in the 19 sixties, we invented that. And so, so there's a, there's kind of a hubris to thinking like, um, the technology sector has all the answers when like, actually since the fifties, we've had the most brilliant people in the world working on these problems and a heck of a lot already exists. And this is sort of the point of like, if you don't actually have the inside knowledge, you don't know what mistakes you're making. So that's one. The second, which will be more familiar to you, is, is addressable market. Um, I think there's, uh, in many cases an overestimation of addressable market, where like actually what ultimately they're going after is a very small sliver of a problem, um, which Might materialize in a single large contract, but a single large contract is not…

AI assessment note: “I think it's basically two things. It's, um, uh, not realizing that what they are doing”

Q So we should invest in, you know, offensive cyber and defensive cyber. How do we think next then? Your CBO, your president, are you like, great, we should put a billion dollars against it and build that out as a separate business unit? And please tell me where I'm primed too much, right? What's the subsequent thought to that?

A Yeah, so the way that we do this is, um, when we have a new idea, um, we basically start a really small Tiger team that we generally piece together from various parts of the business. Um, and we, we kind of match our own internal motivation and, and spend our own IRAD, um, to what the market is whispering to us. So in government, what this generally looks like is you, you piece together, uh, some tech really, really quickly so that you have a demonstrator or at least a dart to throw. And then you start to pulse the market and you see how, how close was that dart throw to what the customer actually cares about, how they think about the problem. Do you modify it? Were you totally off, and you just need to scrap it and start over again? Um, and I think in government, uniquely, you know you have something when the customer's excitement starts to match your own, and all of a sudden, you're kind of walking down a path together as opposed to this weird, like, vendor customer relationship. But that's always how we kind of identify that we're on to something. I would say, All of these things can be characterized by Like a singular champion on the other side of the table that gets it, that believes in it, that wants to shepherd it. Uh, actually you mentioned Shyam. He talks a lot about this kind of like heroism. Like it actually comes down to a single person in government. A lot of times…

AI assessment note: “when we have a new idea, um, we basically start a really small Tiger team”

Q We spoke about, like, what did you not do? And you said, like, offensive cyber and the cyber that we discussed earlier. What did you do that you shouldn't have done? And what do you learn from that?

A That's a good question. Um, Way early. I mean, we, we got into some tech that we weren't ready for. Um, we got into some markets that we weren't ready for. We tried to early on build a pretty sophisticated, uh, aerial system. We didn't have the core building blocks. We didn't have the core team. Uh, I think we were twenty million or forty million in before we kind of realized that it was a, it was a scrap. We didn't have the sophistication with the customer. We didn't know how the customer was going to buy, uh, Uh, vehicle of that sophistication. The kind of crazy part about all of this is like, well, okay, given all of that, and given that that was not a good business decision, like clearly by most metrics, Do we even get to build the autonomous jet fighter if we had never made that mistake? And so like, it's hard to replay history sort of perfectly, right? And it's like, I don't think so. I, I think part of that failure was a stepping stone to getting to success. Um, yeah, we probably spent too much money on it and could have gotten out quicker, but like, I think we had to learn that lesson in order to then re-approach the aviation market in a new way, which obviously has, has been quite successful for us, um, You know, in recent history, and so if you look at a lot of these failed things that we've done, it's hard to separate that from what came after it.

AI assessment note: “we tried to early on build a pretty sophisticated, uh, aerial system.”

Q could raise, I mean, you don't, you don't need to comment on the fundraisers, but like, it's reportedly raising four or five or six billion, whatever it is, at sixty billion. The amount of SPVs for Andrew, Matt Grimm tweets about it all the time. I see it. Like, you could raise another billion or two billion on some crazy price and go and buy these companies. Why don't you?

A It's not the company we want to run. We want to create an enduring public company, and so we're running it like that, and we're running it like that right now, even, even though we're pre-public. And so, um, I think protecting the valuation is important. Uh, not getting over our skis is important. The work is still hard. We will get knocked back if we make a mistake. We don't have the luxury of making mistakes. You know, a lot of our competitors, the really big ones, if they make a mistake, They get paid to fix it. I think if we make a mistake, we lose money, and we, we lose contracts, so. There is a bit of conservatism on the team, but I, I think it's warranted in terms of the market, and, and overall, right, it's like, we want to be a company in twenty-fifty and twenty-sixty, um, and we're already thinking like that.

AI assessment note: “It's not the company we want to run. We want to create an enduring public company”

Q In terms of the team itself, I have so many defense companies pitch me, and I think, bluntly, the team is always lacking. What do you think it is about the team that Angerol has in terms of founding team that has made it so successful?

A Well, first, like, There's kind of some magic in the fact that it's the same leadership team today as it was when we started the company. Um, that, that implies a whole lot of things. I think, um, mainly it's that we're all friends, so I think that's actually pretty critical. Um, there's, there's a bond there that, that basically can't be separated by business or stress, uh, or life. Um, we, we all know each other really well. Uh, but then on top of that, um, We all come at the industry from really different backgrounds and lenses, and especially in defense, which is Uh, it's like everything works against you to get into the defense market there. It's like every headwind you could possibly imagine. If you don't have a lot of perspective and knowledge about what's about to come, it's hard to think around corners and you get yourself kind of mixed up and gummed up a lot. Founding teams, one of the most important things in, in defense is some of them can be outsiders and, you know, brilliant technologists, um, and thinkers. Um, it does take a lot of inside knowledge, um, and I think that one of the things we got right and keep getting right is that blend of, um, Like the outside inside process, um, who can think differently, um, and bring in sort of commercial perspective, uh, high tech perspective, uh, add kind of entropy into the system. Um, and then who can really deeply repres…

AI assessment note: “one of the things we got right and keep getting right is that blend”

Q Can I ask a weird one, but Matt did say I could ask it. Is there either like an ethical question of like, do we agree with sending thousands of missiles to Iran? I'm not saying right or wrong, but is there either an ethical question of how your products are used? If you, um,

A If you work in defense, and if you start a defense company, your moral compass tends to be pretty clear on this question, which is, we have a democratically elected set of governments that represent the US, the Alliance, NATO, all of the countries participating. They set the rules, uh, and we abide by those rules. Um, and if you start to mess around with anything within that framework, You create a, a pretty dramatic set of slippery slopes that, that if you play the actual thought experiment to its end, um, end up in a pretty messy situation. And so the, the key here is people that live in the world that I live in, we, we tend to think a little bit differently than, um, a person not connected to the national security community on this front. We tend to think a bit more long-term as well. Um, where I'm building missile systems that might only field in 2035, right? And so, if you fundamentally lack a trust in democratic institutions, this is not the game, and this is not the business for you.

AI assessment note: “we have a democratically elected set of governments... They set the rules, and we abide”

Q When you think about your kids, what do you tell your kids or kids graduating college about the world when it comes to career advice, knowing and seeing all that you do?

A Yeah, I mostly say, um, A couple of, of things. I think it's about the community that you surround yourself with. Um, I, and that, that's a reflection on sort of my own personal story. I mean, everything that I've done in my career, um, has been the community of people around me that Um, have helped me, have gotten me jobs, have afforded me responsibility. You know, it's not like some big machine or process. It's, it's really just the people you surround yourself with. And, um, I like to think I made some pretty good choices early on that helped. And then the other piece would be, I think people tend to overthink a lot of their steps. And don't appreciate how much you just can learn along the way. Um, you know, I, I talked to a lot of, um, military folks that are transitioning out into the commercial world. And I, I would say for the most part, they, they kind of like hem and haw over what company they should go to. And I, you know, my main advice is I actually think you just need to start, and you're actually a really smart person. Um, if you don't like it, you can leave. If you like it, you got lucky, and you should talk to a lot of companies. You should pick, and you should change your mind when you need to, and I think Oftentimes there's a hesitance to change your mind, right? And I, I don't think that's actually true. It doesn't need to be true.

AI assessment note: “I think it's about the community that you surround yourself with.”

Q things I most look for, honestly, is like GTM experience and ability in a team that I'm looking at in defense. Um, how should we think about analyzing teams for their ability to actually sell and go through procurement? Does it matter if you've got technologists and people with military and combat experience, but no one with GTM experience? How important is that? I know procurement better than fucking anyone.

A It's multidisciplinary, right? So The, the challenge becomes in defense that if you're missing any of the 12 different types of disciplines it takes to really capture a large program, you will fail. Um, and so one of the things that we've done is over the years, we've built up a pretty sophisticated apparatus to kind of round out these teams with all of the various skills in acquisition and budgeting and technology. Um, and then Again, mission and operational analysis and doctrinally how these types of technologies will integrate into the military. You have to have it all. I think the one, uh, maybe, uh, interesting piece here is there aren't actually a lot of big programs in government, and so one of the things you don't need to necessarily look for, I think what you would, in a traditional hiring process, you would look for someone who has demonstrated the ability to Capture a large program in the past. But, but since there's so few of these things, you can't really look for that. Sometimes you luck into it and like, great, you should certainly hire people who have shown to be able to capture large programs. Um, you generally don't actually have that in the hiring pool. And so you ultimately have to do is piece together the right puzzle for everything that you're going after.

AI assessment note: “if you're missing any of the 12 different types of disciplines... you will fail”

Q me if this is good. No, I really do. Ask Matt about it. It's very funny. He sees everything in Europe because of me, um, and tells me that it's shit. Um, But like, when you look at them, what is the most common red flag that you see when you look at the emerging class of defense companies trying to be, as awful as it sounds, the next Andrew?

A I think it's basically two things. It's, um, uh, not realizing that what they are doing, uh, Already exists. There's too much hubris, I think, in the technology market that, um, you know, as high tech people, we can, we can do everything better than everybody else. I think, um, that causes, uh, some companies to think they have an idea that isn't actually an idea because it already exists, and that's pretty common. Uh, I'll give you an example. I, years and years ago, I, you know, was looking at a pitch or I forgot, maybe I was advising someone and Here's my idea. And I said, well, the thing you don't know is in the 19 sixties, we invented that. And so, so there's a, there's kind of a hubris to thinking like, um, the technology sector has all the answers when like, actually since the fifties, we've had the most brilliant people in the world working on these problems and a heck of a lot already exists. And this is sort of the point of like, if you don't actually have the inside knowledge, you don't know what mistakes you're making. So that's one. The second, which will be more familiar to you, is, is addressable market. Um, I think there's, uh, in many cases an overestimation of addressable market, where like actually what ultimately they're going after is a very small sliver of a problem, um, which Might materialize in a single large contract, but a single large contract is not…

AI assessment note: “I think it's basically two things. It's, um, uh, not realizing that what they are doing, uh, Already exists.”

Q So why specifically is it hard in between? Is that morale? Is that revenue predictability? Is that what is it that's hard in between?

A The government can sometimes tell you where they want you to go, but oftentimes they don't. And so a lot of this, um, is trying to predict an unpredictable system, right? So how many lenses can you look at At sort of the next couple of years. I can look at it through what the government is saying through their rhetoric and through their budgeting. I can look at it through a warfighting lens and what general officers are saying and what, uh, military theorists are saying. I can look at it through a technology lens, like what technologies do I, I think are going to influence the battlefield in the future. And I need to kind of blend all of that together today to make decisions on what I want to build that will be available, you know, five to seven years from now. Um, no one is saying today, this is what I need five to seven years from now. It's, it's all sort of a educated guessing game over time.

AI assessment note: “a lot of this, um, is trying to predict an unpredictable system”

Q So we should invest in, you know, offensive cyber and defensive cyber. How do we think next then? Your CBO, your president, are you like, great, we should put a billion dollars against it and build that out as a separate business unit? And please tell me where I'm primed too much, right? What's the subsequent thought to that?

A Yeah, so the way that we do this is, um, when we have a new idea, um, we basically start a really small Tiger team that we generally piece together from various parts of the business. Um, and we, we kind of match our own internal motivation and, and spend our own IRAD, um, to what the market is whispering to us. So in government, what this generally looks like is you, you piece together, uh, some tech really, really quickly so that you have a demonstrator or at least a dart to throw. And then you start to pulse the market and you see how, how close was that dart throw to what the customer actually cares about, how they think about the problem. Do you modify it? Were you totally off, and you just need to scrap it and start over again? Um, and I think in government, uniquely, you know you have something when the customer's excitement starts to match your own, and all of a sudden, you're kind of walking down a path together as opposed to this weird, like, vendor customer relationship. But that's always how we kind of identify that we're on to something. I would say, All of these things can be characterized by Like a singular champion on the other side of the table that gets it, that believes in it, that wants to shepherd it. Uh, actually you mentioned Shyam. He talks a lot about this kind of like heroism. Like it actually comes down to a single person in government. A lot of times…

AI assessment note: “we basically start a really small Tiger team that we generally piece together”

Q How do you know when you have something really special and when you should concentrate capital? Again, as a, I think the best founding teams are the best resource allocators. When do you unleash the funding tab and open it up versus constrain and move from little lily pad to lily pad?

A Yeah, there's a lot of ways to look at our business, but, but one way I think you hit on it is we've been very good at allocating capital. Like we, we basically guess right most of the time. If you do this correctly, you have enough data to Develop conviction to open the tap, right? And so I think in the beginning we were working in areas where if we made a mistake, um, it wasn't, we weren't like too far in on spend that if we pulled back, it wasn't like a disaster for the company. I think a lot of the stuff we're building now is, is quite sizable and expensive. And so you're looking for certain proof points along the way, and that can be, um, Formal, uh, feedback from a customer that can be informal, that can be, um, um, successful operator, uh, feedback that can be, um, successful engagements, um, uh, with the legislative branch. Like remember in the U S like your funder is, is the Congress, right? And so they have a say in all of this. What actually it is, it's all of those things pieced together. And so we run like basically an investment committee internally. Where, um, these Tiger teams ultimately have to present, here's what we did, here's what we discovered, here's what we want to do next, here are the gates, here's what it'll cost. Um, and very similarly to how, you know, most financial institutions do it, um, the investment committee says go, and I, I think maybe uniq…

AI assessment note: “you're looking for certain proof points along the way, and that can be”

Q When you say it's changed them, do you mean it's confirmed them?

A It's confirmed them, but it's confirmed them in such a way where it feels wholly different. You know, I think the original theory was we have to get low cost, we have to get more ubiquitous, um, we have to have a mix of exquisite systems and mass. Um, like all of these kind of major theories of warfare are kind of all converging at the same time. Um, we have to be able to build, uh, something that takes advantage of commercial supply, uh, and commercial manufacturing techniques as opposed to aerospace and defense supply and technique. You know, this kind of like crazy crystallization of a lot of things at the same time. And now, okay, we, we, there, There's a war in Iran. We, we fire a lot of our arsenal, you know, and now there's public reporting that, um, you know, large percentage of our offensive and defensive missile systems have been expended and they're, Really hard to replace. They take a really long time and they're very expensive, uh, because they take advantage of parts of the market that are kind of strange and very specific and very exquisite. You know, just to give you an example, the cruise missile we build, the, the actual airframe is built like you build a bathtub. Um, and so we can take advantage of tons of contract manufacturers in the United States that can actually build a bathtub, right? So just thinking through the design differently from the very beginni…

AI assessment note: “It's confirmed them, but it's confirmed them in such a way where it feels wholly different.”

Q Do you think you took advantage enough of the opportunity in Ukraine?

A We were still a baby company when the conflict started. Um, so, you know, just as a reminder, we were zero people in 2017 when we started the company. Uh, we're about 8000 people today. Um, we were quite small, a couple of hundred people when, um, when the war in Ukraine started. Um, and just sort of as a reminder, and now this is kind of lived experience for me and my colleagues, you go to war with what you have. Like that, that saying is very, very true. Like you do, you do not invent new stuff along the way. Um, you, You take what you have and you, you see if it works and then you adjust. And so we, we had some stuff in Ukraine, but we were just too small. Um, I think if, um, uh, I think if you play that forward to today, we're heavy participants in the current conflict in the Middle East. Uh, mainly on the defensive side, we build, um, um, some pretty sophisticated air defense systems that are widely deployed. So it's a wholly different experience because we're a wholly different company.

AI assessment note: “we had some stuff in Ukraine, but we were just too small.”

Q could raise, I mean, you don't, you don't need to comment on the fundraisers, but like, it's reportedly raising four or five or six billion, whatever it is, at sixty billion. The amount of SPVs for Andrew, Matt Grimm tweets about it all the time. I see it. Like, you could raise another billion or two billion on some crazy price and go and buy these companies. Why don't you?

A It's not the company we want to run. We want to create an enduring public company, and so we're running it like that, and we're running it like that right now, even, even though we're pre-public. And so, um, I think protecting the valuation is important. Uh, not getting over our skis is important. The work is still hard. We will get knocked back if we make a mistake. We don't have the luxury of making mistakes. You know, a lot of our competitors, the really big ones, if they make a mistake, They get paid to fix it. I think if we make a mistake, we lose money, and we, we lose contracts, so. There is a bit of conservatism on the team, but I, I think it's warranted in terms of the market, and, and overall, right, it's like, we want to be a company in twenty-fifty and twenty-sixty, um, and we're already thinking like that.

AI assessment note: “It's not the company we want to run. We want to create an enduring public company”

Q We spoke about, like, what did you not do? And you said, like, offensive cyber and the cyber that we discussed earlier. What did you do that you shouldn't have done? And what do you learn from that?

A That's a good question. Um, Way early. I mean, we, we got into some tech that we weren't ready for. Um, we got into some markets that we weren't ready for. We tried to early on build a pretty sophisticated, uh, aerial system. We didn't have the core building blocks. We didn't have the core team. Uh, I think we were twenty million or forty million in before we kind of realized that it was a, it was a scrap. We didn't have the sophistication with the customer. We didn't know how the customer was going to buy, uh, Uh, vehicle of that sophistication. The kind of crazy part about all of this is like, well, okay, given all of that, and given that that was not a good business decision, like clearly by most metrics, Do we even get to build the autonomous jet fighter if we had never made that mistake? And so like, it's hard to replay history sort of perfectly, right? And it's like, I don't think so. I, I think part of that failure was a stepping stone to getting to success. Um, yeah, we probably spent too much money on it and could have gotten out quicker, but like, I think we had to learn that lesson in order to then re-approach the aviation market in a new way, which obviously has, has been quite successful for us, um, You know, in recent history, and so if you look at a lot of these failed things that we've done, it's hard to separate that from what came after it.

AI assessment note: “We tried to early on build a pretty sophisticated, uh, aerial system.”

Q one, before we do a quick fire. I always think to this question of like, the biggest challenges in life are not like, it sounds so corny, but like, not iron or gold, but unmade decisions. I never made the decision to move to Silicon Valley, and everyone always reminds me, That it will be the decision that haunts my career. Is there an unmade decision that ever haunts you?

A No, but I'm kind of weird that way. I have trouble separating indecision and failed decisions From the current success that we're actually seeing as a company. I, I just do. And so people talk a lot about, um, I, I think like these overblown, uh, sort of ideas around like, oh, you have to learn from failure and, and fail fast. Like, yes, all that's true. Most people suck at actually doing that. And, you know, so, so for me, it's, I deeply learn from indecision and from bad decisions. Um, but it doesn't like haunt me and it doesn't like, I'm not gonna like, Kill myself over it, right? I'm gonna, I'm gonna move on and I'm gonna make the next best decision.

AI assessment note: “No, but I'm kind of weird that way.”

Q When you look at the software and the hardware element, how do you guys sit internally? Are you a hardware company? Are you a software company? Are you a services company?

A There's a lot of ways to look at it. So I think one of the things we've done maybe uniquely is we've given our customers a lot of ways to access our company. So what I mean by that is, um, Uh, we've been very creative in, okay, a customer wants a piece of software, uh, but it's difficult in government to contract for software, and so we can wrap it in a hardware appliance, right? Or they want a piece of hardware, but they know the software is the sophisticated piece of it, uh, and so they're willing to pay more for it because of that sophistication. Uh, in government, um, you get these weird things where, uh, money is, it's called, uh, the color of money. So money is obligated to certain types of spend. So maybe a customer only has money that they can spend on services. Well, okay, can I do an as a service product? Um, and actually one of our, our first major contracts was with, uh, US special forces, uh, for, uh, all of their counter UAS Uh, systems. That started as an as a service contract where they weren't buying hardware. They weren't buying software. They were literally buying a service that obligated us to defend certain sites from certain types of threats. And as long as we were meeting the KPIs on the contract, um, we were fulfilling the obligations of, um, of the agreement. Um, so quite novel, uh, and that contract has You know, since gone in a lot of different direct…

AI assessment note: “we've given our customers a lot of ways to access our company.”

Q When you look at the software and the hardware element, how do you guys sit internally? Are you a hardware company? Are you a software company? Are you a services company?

A There's a lot of ways to look at it. So I think one of the things we've done maybe uniquely is we've given our customers a lot of ways to access our company. So what I mean by that is, um, Uh, we've been very creative in, okay, a customer wants a piece of software, uh, but it's difficult in government to contract for software, and so we can wrap it in a hardware appliance, right? Or they want a piece of hardware, but they know the software is the sophisticated piece of it, uh, and so they're willing to pay more for it because of that sophistication. Uh, in government, um, you get these weird things where, uh, money is, it's called, uh, the color of money. So money is obligated to certain types of spend. So maybe a customer only has money that they can spend on services. Well, okay, can I do an as a service product? Um, and actually one of our, our first major contracts was with, uh, US special forces, uh, for, uh, all of their counter UAS Uh, systems. That started as an as a service contract where they weren't buying hardware. They weren't buying software. They were literally buying a service that obligated us to defend certain sites from certain types of threats. And as long as we were meeting the KPIs on the contract, um, we were fulfilling the obligations of, um, of the agreement. Um, so quite novel, uh, and that contract has You know, since gone in a lot of different direct…

AI assessment note: “we've given our customers a lot of ways to access our company”

Q In terms of the team itself, I have so many defense companies pitch me, and I think, bluntly, the team is always lacking. What do you think it is about the team that Angerol has in terms of founding team that has made it so successful?

A Well, first, like, There's kind of some magic in the fact that it's the same leadership team today as it was when we started the company. Um, that, that implies a whole lot of things. I think, um, mainly it's that we're all friends, so I think that's actually pretty critical. Um, there's, there's a bond there that, that basically can't be separated by business or stress, uh, or life. Um, we, we all know each other really well. Uh, but then on top of that, um, We all come at the industry from really different backgrounds and lenses, and especially in defense, which is Uh, it's like everything works against you to get into the defense market there. It's like every headwind you could possibly imagine. If you don't have a lot of perspective and knowledge about what's about to come, it's hard to think around corners and you get yourself kind of mixed up and gummed up a lot. Founding teams, one of the most important things in, in defense is some of them can be outsiders and, you know, brilliant technologists, um, and thinkers. Um, it does take a lot of inside knowledge, um, and I think that one of the things we got right and keep getting right is that blend of, um, Like the outside inside process, um, who can think differently, um, and bring in sort of commercial perspective, uh, high tech perspective, uh, add kind of entropy into the system. Um, and then who can really deeply repres…

AI assessment note: “There's kind of some magic in the fact that it's the same leadership team”

Q So why specifically is it hard in between? Is that morale? Is that revenue predictability? Is that what is it that's hard in between?

A The government can sometimes tell you where they want you to go, but oftentimes they don't. And so a lot of this, um, is trying to predict an unpredictable system, right? So how many lenses can you look at At sort of the next couple of years. I can look at it through what the government is saying through their rhetoric and through their budgeting. I can look at it through a warfighting lens and what general officers are saying and what, uh, military theorists are saying. I can look at it through a technology lens, like what technologies do I, I think are going to influence the battlefield in the future. And I need to kind of blend all of that together today to make decisions on what I want to build that will be available, you know, five to seven years from now. Um, no one is saying today, this is what I need five to seven years from now. It's, it's all sort of a educated guessing game over time.

AI assessment note: “a lot of this, um, is trying to predict an unpredictable system”

Q How do you know when you have something really special and when you should concentrate capital? Again, as a, I think the best founding teams are the best resource allocators. When do you unleash the funding tab and open it up versus constrain and move from little lily pad to lily pad?

A Yeah, there's a lot of ways to look at our business, but, but one way I think you hit on it is we've been very good at allocating capital. Like we, we basically guess right most of the time. If you do this correctly, you have enough data to Develop conviction to open the tap, right? And so I think in the beginning we were working in areas where if we made a mistake, um, it wasn't, we weren't like too far in on spend that if we pulled back, it wasn't like a disaster for the company. I think a lot of the stuff we're building now is, is quite sizable and expensive. And so you're looking for certain proof points along the way, and that can be, um, Formal, uh, feedback from a customer that can be informal, that can be, um, um, successful operator, uh, feedback that can be, um, successful engagements, um, uh, with the legislative branch. Like remember in the U S like your funder is, is the Congress, right? And so they have a say in all of this. What actually it is, it's all of those things pieced together. And so we run like basically an investment committee internally. Where, um, these Tiger teams ultimately have to present, here's what we did, here's what we discovered, here's what we want to do next, here are the gates, here's what it'll cost. Um, and very similarly to how, you know, most financial institutions do it, um, the investment committee says go, and I, I think maybe uniq…

AI assessment note: “we run like basically an investment committee internally. Where, um, these Tiger teams ultimately”