The Exchanges

Q Um, there's a couple of companies flying fast and, and why is ground segment and on orbit interesting?

A There's this like interesting thing happening in space domain where, um, you've got the legacy primes on the military side that Have these very large contracts, um, but they, they perform sort of traditionally, right? So it's going to be very, very high performance, but it'll come at a cost and it'll probably take a while to get there, right? And then you have, um, SpaceX, which is just dominating on the commercial side. And when their commercial tech applies, um, you know, they do a bunch of government business as well. There's a weird, Kind of gap in between those two types of companies where the government wants to move really fast. Um, but it's not necessarily commercially adjacent to what SpaceX is doing. And so there's a kind of a dearth of providers and, and, you know, it's certainly something that we want to run at right now. We do a bunch of partnerships. Um, we build a bunch of our own stuff. We, we integrate a bunch of really interesting technologies, but it's, uh, It's a huge open hole, I think, in the market that is something we definitely would run at.

AI assessment note: “There's a weird, Kind of gap in between those two types of companies”

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 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 If we think about it as an investment committee, we're speaking a language that I know now, which Tiger team was the most successful bet and which was the least successful bet?

A The most surprising, uh, cases to the upside right now, um, is in our, uh, missiles portfolio. So we started our missiles business a couple of years ago. Um, if you read about us, um, the, the best example we call the Barracuda family of systems. So it's, uh, it's basically a, uh, a set of, uh, cruise missile, uh, systems, different sizes, different shapes, things like that. We basically got into, uh, the missiles business, um, looking mainly at, um, sort of this, the actual, like, military warfare lens. Like, there is clearly a gap in capability. We clearly believe that We can be ahead of everybody else if we've already developed it, and when the customer asks for it, we'll have it. And that, that turned out to be quite, like, quite prescient. Now, I don't know if you've seen, but there's like a war going on with Iran.

AI assessment note: “The most surprising, uh, cases to the upside right now, um, is in our, uh, missiles portfolio.”

Q If we think about it as an investment committee, we're speaking a language that I know now, which Tiger team was the most successful bet and which was the least successful bet?

A The most surprising, uh, cases to the upside right now, um, is in our, uh, missiles portfolio. So we started our missiles business a couple of years ago. Um, if you read about us, um, the, the best example we call the Barracuda family of systems. So it's, uh, it's basically a, uh, a set of, uh, cruise missile, uh, systems, different sizes, different shapes, things like that. We basically got into, uh, the missiles business, um, looking mainly at, um, sort of this, the actual, like, military warfare lens. Like, there is clearly a gap in capability. We clearly believe that We can be ahead of everybody else if we've already developed it, and when the customer asks for it, we'll have it. And that, that turned out to be quite, like, quite prescient. Now, I don't know if you've seen, but there's like a war going on with Iran.

AI assessment note: “The most surprising, uh, cases to the upside right now, um, is in our”

Q Um, there's a couple of companies flying fast and, and why is ground segment and on orbit interesting?

A There's this like interesting thing happening in space domain where, um, you've got the legacy primes on the military side that Have these very large contracts, um, but they, they perform sort of traditionally, right? So it's going to be very, very high performance, but it'll come at a cost and it'll probably take a while to get there, right? And then you have, um, SpaceX, which is just dominating on the commercial side. And when their commercial tech applies, um, you know, they do a bunch of government business as well. There's a weird, Kind of gap in between those two types of companies where the government wants to move really fast. Um, but it's not necessarily commercially adjacent to what SpaceX is doing. And so there's a kind of a dearth of providers and, and, you know, it's certainly something that we want to run at right now. We do a bunch of partnerships. Um, we build a bunch of our own stuff. We, we integrate a bunch of really interesting technologies, but it's, uh, It's a huge open hole, I think, in the market that is something we definitely would run at.

AI assessment note: “There's a weird, Kind of gap in between those two types of companies”

Q This was going to be one of my questions, which is, is there a universe of buyers for the massive VC funded companies that have been generated in the last few years, and what happens to them?

A Actually, uh, Trey, I, I will always remember when he said this that, um, never be surprised around how long a company can continue to exist. Uh, meaning like, you know, I think we were sitting around a table being like, oh, like, uh, it's gonna come to the point where the multiples will, you know, decrease and all this stuff. And, and Trey's point was, and he, you know, Trey has this annoying tendency to mostly be right. I don't know if, I don't know if you know that about him. Um, Yeah, exactly. He's our asshole. Uh, his point was like, we don't know, but it might be a while before we can actually buy these companies. And so I, I don't know. Uh, there's still a lot of investment in defense tech. Uh, multiples are still very high. I actually think our multiple is quite low compared to most of them.

AI assessment note: “his point was like, we don't know, but it might be a while before”

Q spend with the greatest of respects. We have a twenty billion dollar spend. We're nowhere in offensive cyber. Fuck it. Let's not try and catch up. I mean, in a nice way you can laugh at me and maybe I'm going to get killed for this, but I don't really care. Uh, like, let's just accelerate where we're doing great. Like why bother catching up when you're seven years behind?

A Let's like talk about just like our strategy. As a whole. So when we started the company, we knew we had to go really wide, really quickly, right? Cause to, to the point of like, what do other defense companies or newer founders getting wrong? It's that addressable market question. So in every technology class in defense, there's probably one, sometimes two actual programs that if you capture them, you have a business. And if you don't, you have no business. Um, so take small drones as an example. There are very few drone programs for small drones that, uh, would create a material enough, uh, amount of revenue to, like, actually create a real business, right? And so, like, you're basically shooting the moon. You have to create a monopoly. We knew that, and so what we did is we created a bunch of fundamental technologies that are applicable to a lot of different types of problems. Um, if you read about us, um, this is called Lattice in a lot of our, like, published literature. It's fundamental tech that allows you to consume data, make sense of it, and then, uh, manipulate robots, basically. Like, that's what it is. Those technologies apply to tons of different things, and so we have 20 different P&Ls at the company, uh, all that are going after different parts of the defense apparatus that take a lot of these fundamental Technologies that we build and kind of piece them togethe…

AI assessment note: “Let's like talk about just like our strategy. As a whole.”

Q This was going to be one of my questions, which is, is there a universe of buyers for the massive VC funded companies that have been generated in the last few years, and what happens to them?

A Actually, uh, Trey, I, I will always remember when he said this that, um, never be surprised around how long a company can continue to exist. Uh, meaning like, you know, I think we were sitting around a table being like, oh, like, uh, it's gonna come to the point where the multiples will, you know, decrease and all this stuff. And, and Trey's point was, and he, you know, Trey has this annoying tendency to mostly be right. I don't know if, I don't know if you know that about him. Um, Yeah, exactly. He's our asshole. Uh, his point was like, we don't know, but it might be a while before we can actually buy these companies. And so I, I don't know. Uh, there's still a lot of investment in defense tech. Uh, multiples are still very high. I actually think our multiple is quite low compared to most of them.

AI assessment note: “we don't know, but it might be a while before we can actually buy these”

Q spend with the greatest of respects. We have a twenty billion dollar spend. We're nowhere in offensive cyber. Fuck it. Let's not try and catch up. I mean, in a nice way you can laugh at me and maybe I'm going to get killed for this, but I don't really care. Uh, like, let's just accelerate where we're doing great. Like why bother catching up when you're seven years behind?

A Let's like talk about just like our strategy. As a whole. So when we started the company, we knew we had to go really wide, really quickly, right? Cause to, to the point of like, what do other defense companies or newer founders getting wrong? It's that addressable market question. So in every technology class in defense, there's probably one, sometimes two actual programs that if you capture them, you have a business. And if you don't, you have no business. Um, so take small drones as an example. There are very few drone programs for small drones that, uh, would create a material enough, uh, amount of revenue to, like, actually create a real business, right? And so, like, you're basically shooting the moon. You have to create a monopoly. We knew that, and so what we did is we created a bunch of fundamental technologies that are applicable to a lot of different types of problems. Um, if you read about us, um, this is called Lattice in a lot of our, like, published literature. It's fundamental tech that allows you to consume data, make sense of it, and then, uh, manipulate robots, basically. Like, that's what it is. Those technologies apply to tons of different things, and so we have 20 different P&Ls at the company, uh, all that are going after different parts of the defense apparatus that take a lot of these fundamental Technologies that we build and kind of piece them togethe…

AI assessment note: “Let's like talk about just like our strategy. As a whole.”