The Exchanges

Q like this boat marina thing. I'm like, that's a whole conversation. Like how on earth do you discovered that? And then I'm sure you have strong opinion. You just have Uh, very, and then now obviously you're doing government stuff and you've done, uh, and you have no bunch about politics, whatever. How are you becoming so well versed and also so opinionated on such a broad set of topics?

A Because you have to most of the time, like the best things that I've done that I have done in my career have not been going super, super deep on one vertical and then finding the really, really hard gains that are at the end of a long fight that everyone's made. Like an example here would be, uh, with just like optics technology. Most people are fighting way at the end of the spectrum where they're trying to like, oh, we're using new cutting edge materials that increase The ability to control light more precisely by two percent. And we're trying to figure out the physics of how we can manufacture these polymers. Most of my best ideas have not come from that. They've been from knowing things in totally different fields that have nothing to do with the field, or at least people don't think they do. And then pulling ideas from those fields and applying them in a new way. Like the, the, the really key thing that made the Oculus Rift work is just one example, rather than focusing on trying to make these Optical stacks that cost thousands of dollars and weighed a bunch. And that was really what was making these headsets, uh, weigh many pounds and cost tens of thousands of dollars. It was the high end optical stack that was able to project images on your retina with minimal distortion, but you needed, you know, a bunch of lenses. They're all very, very expensive, very high precision. …

AI assessment note: “knowing things in totally different fields that have nothing to do with the field”

Q Oh yes. Good. You have got a good memory. Do you, do you fly coach? Oh, you, you do fly coach. You said that you're an idiot. What are you doing? J. Cal was right.

A I mean, so, so I, I, I, the reason I wanted to chat about it is cause yeah, I, I think I responded and I told you like, Hey, you're wrong. Like I, I actually do. I don't fly private and I do fly coach. Uh, for me, it's, it's a, it's a, it's a reasoned thing where, uh, we, we, with exceptions for long term, like long, long international travel, we only cover coach travel for our employees. It's like, look, it's only a few hours. Like it is a very bad use of company money for us to be buying business or first class for people because we have so much travel at the company. We could easily spend a very serious fraction of our, of our, uh, of our resources on just people traveling in slightly better seats. And so, and it's especially, especially bad when it's like, oh, am I really going to pay you to like, you know, fly business class for three hours to a place where you're then going to like sweat it out in the desert for, for a week. Like, you know, it's, it's only like, you know, so, so you and your coach seats better than the desert.

AI assessment note: “I don't fly private and I do fly coach. Uh, for me, it's, it's a reasoned thing”

Q Cause you were fixing iPhones and like scrubbing boats or something I read. Is that what you were doing?

A Yeah. I mean, when I started working on VR stuff, I was, I worked for a few years in a boat yard. So yeah, scrubbing boats, repainting, repainting the, the, the, the, the bottom paint, uh, sweeping the boat yard, you know, that, that, that type of stuff. Um, so, so, so to me, the money was not, was not a huge motivating factor also because maybe, maybe too optimistically, I believed Oculus was going to be worth tens of billions or hundreds of billions of dollars. So it really wasn't the, I know this is what contrary to what I said before, but it wasn't the money that was motivating me to make the sale. The, it was the pitch. Hey, we're going to get you billions of dollars right now. Like not, not the, not the compensation for the, for the, for the acquisition, but we're going to give you your, your organization billions of dollars a year to go out and make virtual reality actually happen. And that's what you're going to need to compete with Google, to compete with Sony, to compete with Microsoft, all of which have seen what you're doing. Bought in, like, they've drunk your Kool-Aid, but they're gonna try to kill you over it. Uh, that, that was kind of the situation we were in, and Facebook was one of the very few companies that had a strong incentive to make virtual reality and immersive computing writ large to come about as quickly as possible, because unlike Google, unlike Mi…

AI assessment note: “So yeah, scrubbing boats, repainting, repainting the, the, the, the, the bottom paint”

Q I'm like, is that what Andrew does? And how on earth does even a rich guy who's 28 in his apartment or his big house come up with this? This is crazy. Like, who do you call? You call it? Hey, uh, Hey, Brock, uh, I was thinking, you know, maybe we could try this, like, MVP, you know what I mean? I don't even know how you start that.

A I mean, it, it's tough, and it is such a big problem, and so unapproachable, that very few people do approach it. I mean, like, very big picture. Anderle is trying to build the next major defense prime, meaning we were the prime contract holder. We're not a subcontractor to existing primes, like Lockheed Martin, or Raytheon, or Northrop Grumman, or Boeing. And, uh, you know, I, 80% of the U S defense budget goes to just a handful of companies, these big primes that just completely dominate the industry. And they get paid on what's called a cost plus basis. They get paid for their time materials, fixed percentage of profit on top, which means that they're incentivized to move slowly. They actually make more money when they come up with more expensive systems, more money, when they sell more of something, more money, when it even breaks more often because they get to sell more parts for it. I mean, It's, it's a, it's a really bizarre contracting system that we created in world war two to basically take over the U S war machine or sorry, the U S industrial machine, turn it into a war machine because companies like Ford were saying, Hey, I, I can't even quote you what it's going to cost to make a tank because I've never really, you know, this has never really been my business. And, uh, they said, okay, fine, we'll pay you whatever it costs. And then a fixed percentage of profit on …

AI assessment note: “Anderle is trying to build the next major defense prime, meaning we were the prime”

Q How much did you make off the Oculus cell?

A Oh man, I probably shouldn't say, cause this is also one of those complex things where, you know, there was the, there was the sale. So there's what they believe they called the merger consideration form of, uh, you know, proportion of the, of the, of the, uh, compensation. And then they, you know, you cut an employment deal where they say, we're going to pay you, you know, this much for five years. I can say that I was locked. I was locked up on a five-year vesting schedule. So typical would be for, Most of our employees were four. I got locked up for five cause I was a key guy. And, uh, that, that money technically is not for the acquisition. It's just what you're being paid for. Um, yep. So, and of course, you know, you, you can't, you can't pretend you can't say they're the same thing or they, they're supposed to be treated differently tax wise, compensation wise. And then of course there's the bonuses we had, we had an earn out. That was a, it was a, it was a huge earn out. It was hundreds of millions of dollars for the founders of the company. If we could hit certain sales targets, And user, uh, user, like hours, hours of time targets. And we actually had four years to hit those targets and we, we hit them within less than two years. So we actually did. It's kind of funny when people are like, oh man, the acquisition must not be going as well as people expect is like, no,…

AI assessment note: “it was in the hundreds of millions of dollars. I can tell you that”

Q the government. How do you work up like the, the huevos, the confidence to think like, I'm going to go in against all these gray haired suits and like, they're going to, the government's eventually going to take me seriously. I'm going to sell this, uh, sell this thing. I mean, or do you have people selling on your behalf? But like, that's just a reach for me to understand.

A Some people think that I should, that I should dress differently and try to kind of, you know, appeal to the government sensibilities and like, You know, I should be dressing in a suit and I should be very, very straight laced and, you know, be very, very serious all the time. But I think that one of the most important things that Andrew is doing is not just building technology ourselves, but it's inspiring other companies to work in defense, not just company like inspiring companies that aren't in defense to pivot in defense and inspiring people to start new defense companies. And if they see me like becoming a boring guy, who's Who's, you know, has to make himself super lame to sell to the government. That's not a lifestyle that they're going to want to lead, you know? And so we need to show that they can be successful and show them that it's, that it's going to be fun. Now, I also want to keep, uh, wearing flip-flops and Hawaiian shirts. So maybe I'm, maybe this is just, you know, post-facto justification. I feel like I'd be doing everyone a disservice if I were to change.

AI assessment note: “if they see me like becoming a boring guy... That's not a lifestyle”