Latest / Core Memory / The Future Of Fighter Jets - EP 93 Hermeus With Zach Shore And A.J. Piplica

Transcript

The Future Of Fighter Jets - EP 93 Hermeus With Zach Shore And A.J. Piplica · Core Memory

• 0:00
  SPEAKER_02: Okay, we're doing supersonic planes today.
• 0:04
  SPEAKER_02: This interview took place a couple of months ago in New Mexico at Spaceport America.
• 0:09
  SPEAKER_02: I was hanging out with Hermes, which is building an autonomous fighter jet.
• 0:15
  SPEAKER_02: We're with Zach Shore, the CEO, and A.J.
• 0:18
  SPEAKER_02: Piplica, who used to be CEO.
• 0:20
  SPEAKER_02: He's co-founder.
• 0:21
  SPEAKER_02: And chairman of Hermes.
• 0:24
  SPEAKER_02: Awesome day.
• 0:25
  SPEAKER_02: We will have a video on our main YouTube channel of hanging out with AJ and Zach,
• 0:30
  SPEAKER_02: seeing their plane go supersonic,
• 0:33
  SPEAKER_02: hanging out in Truth or Consequences, New Mexico, all kinds of stuff.
• 0:38
  SPEAKER_02: But in the meantime,
• 0:39
  SPEAKER_02: this is our main sit-down interview with them where we obviously talked
• 0:44
  SPEAKER_02: about going supersonic.
• 0:46
  SPEAKER_02: Hermes has plans to go hypersonic.
• 0:48
  SPEAKER_02: At some point right now, they're making military craft.
• 0:51
  SPEAKER_02: One day, they might make passenger aircraft.
• 0:55
  SPEAKER_02: They've gone pretty quick as far as getting planes designed, flying them, testing them.
• 1:02
  SPEAKER_02: They receive, I would say, less attention than Boom.
• 1:06
  SPEAKER_02: Supersonic, which Blake, who is a friend, he's quite aggressive with his PR and marketing.
• 1:12
  SPEAKER_02: Good for him.
• 1:13
  SPEAKER_02: Hermes has stayed a little bit quieter, but they're now...
• 1:18
  SPEAKER_02: Out there making a splash because they're doing these tests all the time at
• 1:21
  SPEAKER_02: the spaceport in New Mexico and they're moving fast with new iterations
• 1:27
  SPEAKER_02: of their aircraft.
• 1:28
  SPEAKER_02: It was incredible.
• 1:29
  SPEAKER_02: The plane did what it was supposed to do in this conversation.
• 1:34
  SPEAKER_02: We get into aerospace,
• 1:35
  SPEAKER_02: we get into the state of the American defense industry, all kinds of things.
• 1:41
  SPEAKER_02: AJ and Zach are a good hang.
• 1:44
  SPEAKER_02: You will enjoy this.
• 1:45
  SPEAKER_02: Please, please leave us a like or a review.
• 1:52
  SPEAKER_02: Not a subscription, although you can subscribe to anything you like.
• 1:56
  SPEAKER_02: On Apple,
• 1:57
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• 1:57
  SPEAKER_02: please leave us a review or some stars or tell your friends
• 2:00
  SPEAKER_02: that you enjoy this podcast.
• 2:02
  SPEAKER_02: It would make such a huge difference to more people finding the show.
• 2:06
  SPEAKER_02: Bless you.
• 2:07
  SPEAKER_02: I am Ashlee Vance.
• 2:09
  SPEAKER_02: This is Core Memory.
• 2:11
  SPEAKER_02: Here we go.
• 2:12
  [music]
• 2:27
  SPEAKER_02: Gentlemen, hello.
• 2:28
  SPEAKER_02: Hello.
• 2:29
  SPEAKER_02: Howdy.
• 2:30
  SPEAKER_02: Thank you for having us out here.
• 2:31
  SPEAKER_02: This is exciting.
• 2:32
  SPEAKER_02: So, I mean, real quick, just to let people know, we're at a spaceport in New Mexico.
• 2:38
  SPEAKER_01: Truth or Consequences, New Mexico.
• 2:39
  SPEAKER_02: Truth or Consequences, which we could get into the day.
• 2:41
  SPEAKER_02: I learned the history last night.
• 2:42
  SPEAKER_02: It's sort of not what I expected.
• 2:45
  SPEAKER_02: I thought it was tied to some aliens or,
• 2:48
  SPEAKER_02: you know,
• 2:49
  SPEAKER_02: some of the deeper,
• 2:50
  SPEAKER_02: weird points of New Mexico, but it's just named after a radio game show.
• 2:56
  SPEAKER_02: Do you guys know this history?
• 2:57
  SPEAKER_02: No?
• 2:57
  SPEAKER_02: Yeah, there was a guy, he had a, like in the 50s, I think, maybe?
• 3:01
  SPEAKER_02: He had a radio show and he put out a contest because it was called Truth or Consequences.
• 3:07
  SPEAKER_02: If some city would change their name to his game show.
• 3:11
  SPEAKER_02: So it used to be called Hot Springs and then the city actually did it.
• 3:15
  SPEAKER_02: And then for 50 years, he would come back for this party they had every year.
• 3:20
  SPEAKER_02: That's great.
• 3:21
  SPEAKER_02: About the name change.
• 3:22
  SPEAKER_02: Yeah.
• 3:23
  SPEAKER_02: Okay, so we're at the spaceport.
• 3:25
  SPEAKER_02: Virgin's back there,
• 3:27
  SPEAKER_02: obviously interesting things have been happening here for decades around new space
• 3:31
  SPEAKER_02: and aerospace and you guys are like this exciting chapter of this.
• 3:36
  SPEAKER_01: Talk history, the Trinity site is
• 3:39
  SPEAKER_02: just over there.
• 3:39
  SPEAKER_02: Just over there, yeah.
• 3:41
  SPEAKER_02: So, okay,
• 3:42
  SPEAKER_02: so today,
• 3:44
  SPEAKER_02: Right behind us is a plane, and we're going to see it go supersonic, hopefully.
• 3:49
  SPEAKER_02: That's the plan.
• 3:50
  SPEAKER_02: And it's going to be unmanned.
• 3:53
  SPEAKER_02: That's right.
• 3:53
  SPEAKER_02: So the pilot's going to fly it remotely from this station over here.
• 3:57
  SPEAKER_02: Okay.
• 3:58
  SPEAKER_02: So yeah, tell me about this plane.
• 4:02
  SPEAKER_01: Yeah, so it's called Quarter Horse Mark 2.1.
• 4:05
  SPEAKER_01: It's our first supersonic jet.
• 4:08
  SPEAKER_01: It's about the size of an F-16, same engine as an F-16, but yeah, no pilots on board.
• 4:15
  SPEAKER_01: The goal today is hopefully get up north of Mach 1.5,
• 4:19
  SPEAKER_01: so we're pushing the boundaries of how fast we've flown before as a company,
• 4:22
  SPEAKER_01: which is exciting.
• 4:23
  SPEAKER_01: A couple other objectives to catch on the way down, but yeah, hopefully a nice uneventful day.
• 4:29
  SPEAKER_02: And this is the third time you've flown it?
• 4:32
  SPEAKER_01: Fourth.
• 4:32
  SPEAKER_01: Fourth time.
• 4:33
  SPEAKER_01: Okay.
• 4:33
  SPEAKER_01: So each one you're just proving new things out.
• 4:36
  SPEAKER_01: Yeah.
• 4:36
  SPEAKER_01: First flight was get off the ground, come around for a little bit, come back and land.
• 4:41
  SPEAKER_01: Second flight, get the gear up, get it back down, make sure that's all good.
• 4:44
  SPEAKER_01: Then third flight was supersonic.
• 4:45
  SPEAKER_01: Okay.
• 4:45
  SPEAKER_00: That's a pace that is not a thing that happens anymore.
• 4:49
  SPEAKER_00: In the aerospace.
• 4:50
  SPEAKER_00: Yeah.
• 4:50
  SPEAKER_00: That aircraft had 45 minutes of flight time on it before it went Mach 1.21.
• 4:54
  SPEAKER_00: Yeah.
• 4:54
  SPEAKER_00: You know, you're looking at programs that'll do years.
• 4:59
  SPEAKER_00: In incremental, like notching up by, you know, 0.1, 0.1, 0.1 before they even attempt that.
• 5:03
  SPEAKER_02: Yeah.
• 5:04
  SPEAKER_02: So even, I mean, I've been out with Boom doing their supersonic plane.
• 5:07
  SPEAKER_02: I mean, they're a startup.
• 5:08
  SPEAKER_02: They're trying to move fast, but they did do many of these incremental steps.
• 5:12
  SPEAKER_02: Is this, this is like just a different philosophy you guys have?
• 5:15
  SPEAKER_00: Part of the truth in lending, unmanned, right?
• 5:18
  SPEAKER_00: So you can, you can, It can take a lot more.
• 5:20
  SPEAKER_00: So Boone's got a manned aircraft and you do want to be mindful of that.
• 5:24
  SPEAKER_00: But I do think this also is the anchor of iterative design and the idea of being hardware rich.
• 5:28
  SPEAKER_00: So right behind us is another hangar and our Mark 2.2 plane will arrive here on Monday.
• 5:33
  SPEAKER_00: So, you know, you're able to push the envelope to accelerate the business.
• 5:37
  SPEAKER_00: So if I lawn dart that plane, I just roll the next plane out.
• 5:40
  SPEAKER_00: And so we are willing to take more risk.
• 5:42
  SPEAKER_00: I mean, this is sort of what Elon's done in blowing up rockets in the pursuit
• 5:45
  SPEAKER_00: of accelerating the programs and learning that are much easier to do
• 5:48
  SPEAKER_00: with unmanned systems and to be much more risk forward.
• 5:51
  SPEAKER_01: Yeah, yeah.
• 5:52
  SPEAKER_01: You reduce the stakes.
• 5:53
  SPEAKER_01: You reduce the consequences of something going wrong, something unexpected.
• 5:58
  SPEAKER_01: And typically, those are things where you're actually going to learn something quite meaningful.
• 6:02
  SPEAKER_01: So if you backstop that,
• 6:03
  SPEAKER_01: and from a company's perspective,
• 6:04
  SPEAKER_01: it's maybe a handful of weeks or even a few months before you can get back
• 6:08
  SPEAKER_01: into flight, that's something that can be managed.
• 6:11
  SPEAKER_01: Now, if you have one plane, it's got to work.
• 6:15
  SPEAKER_01: Same kind of thing in the space world.
• 6:17
  SPEAKER_01: Why does SLS take as long as it does versus Starships?
• 6:21
  SPEAKER_02: Yes.
• 6:22
  SPEAKER_02: All right,
• 6:22
  SPEAKER_02: let's take a step back for a second just to let everybody know what Hermia is doing
• 6:26
  SPEAKER_02: and the point of all this, and then we'll nerd out in all the spots I want to go.
• 6:30
  SPEAKER_02: But AJ, I've known you at least kind of virtually for a long time and following you guys.
• 6:35
  SPEAKER_02: It was about 10 years ago.
• 6:38
  SPEAKER_02: You put a flag down.
• 6:39
  SPEAKER_02: You're like, we're going to go hypersonic.
• 6:41
  SPEAKER_02: At times, you guys have emphasized hoping to get even commercial planes hypersonic.
• 6:47
  SPEAKER_02: Wow.
• 6:51
  SPEAKER_02: And then obviously doing stuff for the military as well on part of this journey.
• 6:55
  SPEAKER_02: But clearly, since the Concorde retired, we haven't even had supersonic flight.
• 7:00
  SPEAKER_02: And so we've got attempts to try and do that.
• 7:02
  SPEAKER_02: And supersonic, I think the Concorde tapped out at like Mach 2.2, somewhere around?
• 7:08
  SPEAKER_02: Around two.
• 7:09
  SPEAKER_02: Around two.
• 7:10
  SPEAKER_02: And then hypersonic is, by definition, that's above five?
• 7:13
  SPEAKER_02: Five.
• 7:14
  SPEAKER_02: Okay.
• 7:14
  SPEAKER_02: And so...
• 7:15
  SPEAKER_02: If all that worked on the commercial side,
• 7:18
  SPEAKER_02: you would get London to New York in about 90 minutes and you would have it
• 7:22
  SPEAKER_02: with like,
• 7:23
  SPEAKER_02: I think,
• 7:23
  SPEAKER_02: I don't know if this still,
• 7:24
  SPEAKER_02: we'll get into it,
• 7:25
  SPEAKER_02: but if this still holds true, but like 20 passengers doing that kind of journey.
• 7:29
  SPEAKER_02: And then obviously on the military side,
• 7:33
  SPEAKER_02: We're kind of in a race with China around hypersonic everything and
• 7:39
  SPEAKER_02: the military wants planes that are fast and maneuverable, right?
• 7:43
  SPEAKER_02: And so is that fair?
• 7:45
  SPEAKER_02: Like the company's whole goal is to kind of do new things with hypersonic flight.
• 7:51
  SPEAKER_01: Yeah, I think when we founded the company, the core focus was certainly on hypersonics.
• 7:56
  SPEAKER_01: You know, this is 2018 timeframe, so about seven and a half years ago, almost eight now.
• 8:03
  SPEAKER_01: You know, we were clearly behind as a country.
• 8:07
  SPEAKER_01: We're going to spend a bunch of money trying to catch up.
• 8:09
  SPEAKER_01: We're going to do the same way we always did with big cost type contracts, prime contractors.
• 8:12
  SPEAKER_01: And, you know, we saw like, we're probably not actually going to solve this problem.
• 8:17
  SPEAKER_01: And here we are, like,
• 8:17
  SPEAKER_01: lo and behold,
• 8:18
  SPEAKER_01: we've spent Huge amounts of money,
• 8:20
  SPEAKER_01: tens of billions of dollars, and really haven't fielded anything yet.
• 8:23
  SPEAKER_01: So part of the reason for that is modern aerospace development,
• 8:28
  SPEAKER_01: complex systems,
• 8:29
  SPEAKER_01: big things that fly that are challenging,
• 8:32
  SPEAKER_01: they take a huge amount of time and a huge amount of money to develop,
• 8:35
  SPEAKER_01: which really prevents you from doing a lot of them,
• 8:39
  SPEAKER_01: kind of put all your eggs in one basket And go from there.
• 8:42
  SPEAKER_01: So we knew we needed to change that.
• 8:44
  SPEAKER_01: And we'd seen a change in the space world.
• 8:47
  SPEAKER_01: SpaceX, many others,
• 8:50
  SPEAKER_01: building a lot of hardware,
• 8:51
  SPEAKER_01: doing things that people thought were impossible
• 8:52
  SPEAKER_01: on arguably incredibly fast timelines.
• 8:58
  SPEAKER_01: And that iterative development approach that Zach mentioned is the core to that.
• 9:01
  SPEAKER_01: So bringing that in,
• 9:02
  SPEAKER_01: that allows us to shrink time,
• 9:04
  SPEAKER_01: shrink the amount of capital that's necessary to do some of these things.
• 9:08
  SPEAKER_01: And then on top of that,
• 9:10
  SPEAKER_01: produce capabilities that are quite asymmetric in some ways,
• 9:19
  SPEAKER_01: but highly capable systems that actually deliver on the deterrence outcome
• 9:24
  SPEAKER_01: that defense is intended to be.
• 9:27
  SPEAKER_02: Yeah, so you guys kick off, I guess it's, it is funny.
• 9:31
  SPEAKER_02: I mean, I guess the rocket end of things,
• 9:35
  SPEAKER_02: Commercialized,
• 9:36
  SPEAKER_02: pushed some of these limits a little faster before guys like you
• 9:38
  SPEAKER_02: and Boom started appearing, but it was bringing the same mentality.
• 9:42
  SPEAKER_02: We don't have to do things the same way.
• 9:44
  SPEAKER_02: Aviation used to be this way, right?
• 9:45
  SPEAKER_01: Like where's the kind of architecture?
• 9:48
  SPEAKER_02: Exactly.
• 9:49
  SPEAKER_01: Exactly.
• 9:50
  SPEAKER_01: You know,
• 9:51
  SPEAKER_01: like the forties,
• 9:52
  SPEAKER_01: fifties,
• 9:52
  SPEAKER_01: sixties,
• 9:53
  SPEAKER_01: like you look at how many planes we developed and put into production back then.
• 9:56
  SPEAKER_01: It was just crazy.
• 9:57
  SPEAKER_01: Nowadays it takes 20 years to put a new aircraft into production.
• 10:01
  SPEAKER_02: Yeah.
• 10:01
  SPEAKER_02: It was like Bert Rutan off by himself.
• 10:04
  SPEAKER_00: I mean, and this informs the business today.
• 10:08
  SPEAKER_00: And so hypersonic is certainly still a north star for the business.
• 10:11
  SPEAKER_00: But as we've continued to mature and build over the last seven and a half years,
• 10:16
  SPEAKER_00: I think one of the things we've unlocked is the ability to design,
• 10:18
  SPEAKER_00: build, and test aircraft, period, full stop, right?
• 10:20
  SPEAKER_00: So you talked about Skunk Works.
• 10:22
  SPEAKER_00: Kelly Johnson did 41 aircraft into production in 40 years.
• 10:25
  SPEAKER_00: And that, especially today, Is a superpower all its own, right?
• 10:29
  SPEAKER_00: If we need producible systems in any domain,
• 10:32
  SPEAKER_00: surface, subsurface, space, you know, land, they have to be producible.
• 10:36
  SPEAKER_00: And this is being talked about across the defense industrial base by the secretary
• 10:40
  SPEAKER_00: and the unders and the chiefs.
• 10:41
  SPEAKER_00: And so, you know,
• 10:42
  SPEAKER_00: you look at Mark II as an example,
• 10:45
  SPEAKER_00: and this is a vehicle that is a clear stepping stone for us into hypersonic.
• 10:50
  SPEAKER_00: And, not or,
• 10:51
  SPEAKER_00: and it unlocks a capability today for the department that is mass producible,
• 10:56
  SPEAKER_00: that drives value, saves dollars, saves lives, and meets those needs.
• 11:00
  SPEAKER_00: And so for us, as we start thinking about going forward, hey, where do we take this business?
• 11:05
  SPEAKER_00: We started to open the aperture to say, I've got a machine that builds machines.
• 11:08
  SPEAKER_00: That is actually the utility of this.
• 11:10
  SPEAKER_00: We started with the hardest problem, the high speed systems problem.
• 11:13
  SPEAKER_00: And we're going to continue to pursue the Mach 5 vehicles.
• 11:16
  SPEAKER_00: And we can chew and walk at the same time.
• 11:17
  SPEAKER_00: There are other vehicles.
• 11:18
  SPEAKER_00: There are other problems that we can pursue.
• 11:21
  SPEAKER_00: That allow us to, you know, meet the needs of the warfighter and to create a robust business.
• 11:25
  SPEAKER_00: Because the reality is if you really want to go
• 11:27
  SPEAKER_00: after sustainable commercial flight operations,
• 11:29
  SPEAKER_00: the economic hurdles you have ahead of you mean you need to create
• 11:33
  SPEAKER_00: a stable cash flowing defense business first, period.
• 11:36
  SPEAKER_01: This is why you haven't seen a major successful large aircraft manufacturer,
• 11:40
  SPEAKER_01: especially in the military side, founded in this country since like the 1950s.
• 11:44
  SPEAKER_01: Yeah, I mean, it's
• 11:46
  SPEAKER_02: So much, it's kind of beyond venture capital.
• 11:48
  SPEAKER_01: It's beyond venture capital.
• 11:49
  SPEAKER_01: You have to build a real business that at the same time is de-risking all
• 11:53
  SPEAKER_01: the technology and the regulatory pieces to actually make an airport business work.
• 11:57
  SPEAKER_02: So we're like in this moment where we're trying to re-industrialize
• 12:01
  SPEAKER_02: the Defense Department,
• 12:03
  SPEAKER_02: the Department of War seems to,
• 12:05
  SPEAKER_02: at least parts of it, finally cottoned on that we're behind.
• 12:08
  SPEAKER_02: A lot of ways we're moving too slow and is trying to like adjust to some of this.
• 12:12
  SPEAKER_02: I guess it's,
• 12:14
  SPEAKER_02: I always get a little nervous, though,
• 12:15
  SPEAKER_02: that the whims change,
• 12:17
  SPEAKER_02: administrations change, geopolitical things change, and some of that air comes out.
• 12:23
  SPEAKER_02: But it does feel to me like
• 12:25
  SPEAKER_02: the Defense Department overall is probably making some kind of lasting shift.
• 12:31
  SPEAKER_00: I think they are.
• 12:31
  SPEAKER_00: I mean, if I just go back to, you know, when I started in this sector, it's come very far.
• 12:37
  SPEAKER_00: And I also think one of the things you're starting to see in particular
• 12:41
  SPEAKER_00: with this admin is they're making some bets.
• 12:44
  SPEAKER_00: And as some of those bets hit and deliver, people are going to double down.
• 12:47
  SPEAKER_00: Like the nature of a bureaucracy is people want to glom onto the winner.
• 12:51
  SPEAKER_00: They want to ride the horse that's delivering.
• 12:54
  SPEAKER_00: And so I don't think you're going to see if there's an admin change
• 12:57
  SPEAKER_00: or even depending on what happens in the midterms,
• 12:59
  SPEAKER_00: these huge rudder steers,
• 13:00
  SPEAKER_00: especially because defense continues to be the most non-political part of
• 13:05
  SPEAKER_00: the ecosystem.
• 13:05
  SPEAKER_00: And so...
• 13:07
  SPEAKER_00: Everybody wants cost savings.
• 13:09
  SPEAKER_00: I don't care where you are.
• 13:10
  SPEAKER_00: Everybody's like, this is all too expensive.
• 13:11
  SPEAKER_00: And there's just a bunch of different ways you can tell that story in terms of like,
• 13:14
  SPEAKER_00: how do you drive value in this?
• 13:15
  SPEAKER_00: Is it for other programs in the federal government that you have more money for?
• 13:18
  SPEAKER_00: Is it for the ability to create more masks within the department?
• 13:21
  SPEAKER_00: You can figure out a way to To drink that Kool-Aid that makes sense to your angle
• 13:27
  SPEAKER_00: because it's good for everybody.
• 13:28
  SPEAKER_00: So I don't think we or many of the other folks in
• 13:31
  SPEAKER_00: the defense tech community are overly concerned about that.
• 13:35
  SPEAKER_00: I think the real risk is we have to live up to our end of the bargain.
• 13:37
  SPEAKER_00: They're giving us a chance.
• 13:38
  SPEAKER_00: They're throwing us the ball.
• 13:39
  SPEAKER_00: You got to hit it, right?
• 13:41
  SPEAKER_00: And not everything's going to succeed and that's fine,
• 13:43
  SPEAKER_00: but we have to succeed at least in the binary.
• 13:45
  SPEAKER_00: Like there have to be some programs that deliver so that,
• 13:48
  SPEAKER_00: you know,
• 13:48
  SPEAKER_00: the people who took the risk in the department,
• 13:50
  SPEAKER_00: the people who took the risk on the Hill to support us have a flower to hold up
• 13:53
  SPEAKER_00: to say, hey, it was worth it.
• 13:54
  SPEAKER_00: Yeah.
• 13:54
  SPEAKER_02: Okay.
• 13:56
  SPEAKER_02: We should explain to you guys' background a little bit, too.
• 13:58
  SPEAKER_02: So, AJ, I mean, you co-founded the company.
• 14:00
  SPEAKER_02: You were CEO for a long time.
• 14:02
  SPEAKER_02: You've got an aerospace engineer-style background.
• 14:06
  SPEAKER_02: Yep.
• 14:07
  SPEAKER_02: And then, Zach, you came on a few months ago as CEO and now you're chairman.
• 14:11
  SPEAKER_02: That's right.
• 14:12
  SPEAKER_02: And so, I mean, your background really is you've been working on...
• 14:16
  SPEAKER_02: Aircraft of different flavors.
• 14:18
  SPEAKER_01: Yeah, I grew up through the hypersonics world.
• 14:19
  SPEAKER_01: I got lucky enough to work with like the one tiny 10-person team in the Air Force
• 14:23
  SPEAKER_01: that was still working on hypersonics through sequestration and all that.
• 14:27
  SPEAKER_01: So I got to work on the early stages of all the hypersonic weapons programs
• 14:30
  SPEAKER_01: that we have today,
• 14:30
  SPEAKER_01: see what was going on,
• 14:32
  SPEAKER_01: what direction we were going,
• 14:33
  SPEAKER_01: where the challenges were, where the roadblocks were going to be.
• 14:36
  SPEAKER_01: And then, you know, I've been building aerospace companies for, you know, probably 15 years now.
• 14:41
  SPEAKER_02: Yeah.
• 14:42
  SPEAKER_02: And did you come out of,
• 14:43
  SPEAKER_02: I should have, I checked this and I forgot as like a, Aerospace Engineer, Physicist.
• 14:48
  SPEAKER_02: Aerospace Engineer.
• 14:49
  SPEAKER_02: Yeah.
• 14:49
  SPEAKER_02: Okay.
• 14:49
  SPEAKER_02: Okay.
• 14:50
  SPEAKER_02: And then you were in the military.
• 14:51
  SPEAKER_02: You served in the military.
• 14:52
  SPEAKER_02: Is that how you... Yeah.
• 14:54
  SPEAKER_00: That's sort of how I got into this.
• 14:55
  SPEAKER_00: So I was a Marine.
• 14:56
  SPEAKER_00: I was a SIGINT officer by trade.
• 14:57
  SPEAKER_00: So I did two tours in Iraq as a SIGINTor.
• 14:58
  SPEAKER_00: Then I tour in Afghanistan as an infantryman.
• 15:00
  SPEAKER_00: Got out.
• 15:01
  SPEAKER_00: God bless the GI Bill.
• 15:02
  SPEAKER_00: The kind of classic junior military officer story back then in 2011.
• 15:05
  SPEAKER_00: Grad school.
• 15:06
  SPEAKER_00: Some time in consulting, some time in private equity.
• 15:08
  SPEAKER_00: And then I was really early at Anderil.
• 15:09
  SPEAKER_00: And that's sort of how I got into the space.
• 15:11
  SPEAKER_00: Lattice program at Anderil.
• 15:12
  SPEAKER_00: And so as a signer,
• 15:13
  SPEAKER_00: command and control was a very natural place for me to sort of plug in
• 15:16
  SPEAKER_00: and use my subject matter expertise.
• 15:19
  SPEAKER_00: And, you know,
• 15:20
  SPEAKER_00: I've been in defense for about a decade at this point and joined Hermius a little
• 15:24
  SPEAKER_00: over four years ago on the go-to-market side.
• 15:26
  SPEAKER_00: And then, you know, grew up into the CRO and the president.
• 15:30
  SPEAKER_00: Yeah, as you said, I took over as the CEO position about six weeks ago.
• 15:32
  SPEAKER_02: Okay, six weeks, yeah.
• 15:33
  SPEAKER_02: That was quicker and sooner than I remembered that.
• 15:36
  SPEAKER_02: And are the tattoos from the military days?
• 15:38
  SPEAKER_00: Some of them, I mean, it starts there for sure.
• 15:41
  SPEAKER_00: There's some other ones,
• 15:42
  SPEAKER_00: you know, I've got like my UFO one, my favorite one, and the ad can go on and on.
• 15:46
  SPEAKER_00: But yeah, I definitely got my first tattoo in the Marine Corps, 21, and now I just can't stop.
• 15:50
  SPEAKER_02: Okay.
• 15:51
  SPEAKER_02: I'm going to mess up some of the hypersonic history here, but I know...
• 15:56
  SPEAKER_02: In the past, I mean,
• 15:57
  SPEAKER_02: I think we've gotten up to something like Mach 9 by dropping things from a plane in
• 16:02
  SPEAKER_01: the air.
• 16:03
  SPEAKER_01: That would be the X-43 that NASA did in the late 90s, early 2000s.
• 16:09
  SPEAKER_01: Okay, and then we've had the fastest passenger would be the
• 16:13
  SPEAKER_02: SR-71, right?
• 16:14
  SPEAKER_01: Fastest crewed aircraft.
• 16:17
  SPEAKER_02: Yeah, passengers probably, not the right word.
• 16:20
  SPEAKER_01: You had the X-15 back in the 50s, rocket plane, not an airplane, rocket plane.
• 16:25
  SPEAKER_01: So airplane, SR-71.
• 16:26
  SPEAKER_02: Yeah.
• 16:26
  SPEAKER_02: Okay.
• 16:27
  SPEAKER_02: Okay.
• 16:27
  SPEAKER_02: And that, I mean, and so in the goal, You mentioned rocket plane.
• 16:31
  SPEAKER_02: I mean, the goal is you kind of maybe don't want a rocket plane, right?
• 16:34
  SPEAKER_02: Because you want more flexibility.
• 16:36
  SPEAKER_01: There are lots of reasons,
• 16:39
  SPEAKER_01: mostly operational, but also cost and get into scaling and producibility.
• 16:44
  SPEAKER_01: Same kind of thing with the airplane.
• 16:48
  SPEAKER_01: Especially in the Air Force and the Navy,
• 16:50
  SPEAKER_01: the way they use those platforms,
• 16:51
  SPEAKER_01: you need operational flexibility to fit into airspace and
• 16:58
  SPEAKER_01: Loiter around, marshal around, do all those things that rockets are not great for.
• 17:02
  SPEAKER_02: Okay,
• 17:03
  SPEAKER_02: and I get your earlier point that maybe you guys will be making different kinds
• 17:05
  SPEAKER_02: of aircraft as needed,
• 17:07
  SPEAKER_02: but just for a little bit on what you guys have been talking about for a few years.
• 17:11
  SPEAKER_02: This has, it's got a Pratt & Whitney engine on it.
• 17:14
  SPEAKER_02: The F-100.
• 17:15
  SPEAKER_02: Designed to go supersonic.
• 17:17
  SPEAKER_02: Yes.
• 17:18
  SPEAKER_02: And then your overall architecture is this hybrid design where you have that,
• 17:24
  SPEAKER_02: this more traditional, what, like turbine engine, and then you...
• 17:30
  SPEAKER_02: At some point when you're flying, you switch over to a ramjet.
• 17:33
  SPEAKER_02: And so you're getting up to, we talked about earlier, was it like Mach 3?
• 17:37
  SPEAKER_02: Mach 3 is where that transition is.
• 17:38
  SPEAKER_02: And so you have to like turn one engine off,
• 17:41
  SPEAKER_02: turn the other one on and walk people through the physics of this.
• 17:44
  SPEAKER_02: So like when you're going fast enough, the turbine engine, you just can't.
• 17:51
  SPEAKER_01: Yeah.
• 17:51
  SPEAKER_01: So as you increase in speed and altitude,
• 17:55
  SPEAKER_01: The performance of the gas turbine engine drops off a cliff to the point
• 17:59
  SPEAKER_01: where it can't generate enough thrust to accelerate the airplane anymore.
• 18:02
  SPEAKER_01: So that's why you see kind of the speeds that these kinds of airplanes fly already.
• 18:06
  SPEAKER_01: So there's lots of ways to help them go faster.
• 18:10
  SPEAKER_01: Some are more efficient than others,
• 18:11
  SPEAKER_01: but the architecture that we've taken here is to put a pre-cooler in front of
• 18:16
  SPEAKER_01: that engine.
• 18:16
  SPEAKER_01: So it cools down in the air.
• 18:18
  SPEAKER_01: That allows the engine to operate at higher speeds, higher altitudes.
• 18:21
  SPEAKER_01: And then once we get to where Ramjet can operate efficiently around Mach 3, we switch to that.
• 18:25
  SPEAKER_01: And now you have a very efficient high-speed cruise propulsion system.
• 18:29
  SPEAKER_02: And on both sides, would you...
• 18:32
  SPEAKER_02: Are you building the Ramjet part from scratch?
• 18:35
  SPEAKER_02: Yes.
• 18:35
  SPEAKER_02: But you're kind of using a tried and true engine for the turbine.
• 18:38
  SPEAKER_02: Exactly.
• 18:39
  SPEAKER_01: We chose to not bite off the clean sheet gas turbine engine development.
• 18:44
  SPEAKER_01: Okay.
• 18:45
  SPEAKER_01: That's actually turned into a really important piece of the customer story because,
• 18:48
  SPEAKER_01: you know, as you,
• 18:49
  SPEAKER_01: you know,
• 18:49
  SPEAKER_01: Jack talked about how this airplane is very much
• 18:51
  SPEAKER_01: a product that's missed all some problems during the new term.
• 18:54
  SPEAKER_01: You rip the skin off of that airplane,
• 18:56
  SPEAKER_01: it's effectively an S-16 underneath,
• 18:58
  SPEAKER_01: which means You know,
• 18:59
  SPEAKER_01: not only do you plug into some similar supply chains,
• 19:01
  SPEAKER_01: at least at the early stages,
• 19:03
  SPEAKER_01: same maintenance repair and overhaul,
• 19:05
  SPEAKER_01: same logistics, same, you know, at least similar operations and training.
• 19:09
  SPEAKER_01: So it makes integrating a new product to the scale of a new airplane into
• 19:13
  SPEAKER_01: the Air Force, the Navy, Foreign Air Forces, much more straightforward.
• 19:17
  SPEAKER_01: And building an engine from scratch is expensive.
• 19:22
  SPEAKER_01: It takes a lot of time.
• 19:23
  SPEAKER_01: Building it from scratch, but probably more importantly, getting your customer to trust it.
• 19:27
  SPEAKER_01: That takes a long time.
• 19:28
  SPEAKER_01: Yeah.
• 19:29
  SPEAKER_01: So at some point you might do that.
• 19:31
  SPEAKER_01: I would love to.
• 19:32
  SPEAKER_02: Yeah.
• 19:33
  SPEAKER_02: If it makes sense, we'll do it.
• 19:35
  SPEAKER_02: Yeah.
• 19:35
  SPEAKER_02: Yeah.
• 19:35
  SPEAKER_02: Because this engine's what?
• 19:36
  SPEAKER_02: It's like 50 years old.
• 19:38
  SPEAKER_02: Yeah.
• 19:39
  SPEAKER_01: I don't remember which generation this is,
• 19:40
  SPEAKER_01: but it's been through a number of upgrades over the years.
• 19:42
  SPEAKER_01: This is the most recent one.
• 19:45
  SPEAKER_02: This episode is brought to you by Brex.
• 19:48
  SPEAKER_02: I spend all of my time inside of
• 19:50
  SPEAKER_02: the world's most ambitious companies making rockets, semiconductors, robots.
• 19:55
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• 20:01
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• 20:04
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• 20:06
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• 20:07
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• 20:09
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• 20:12
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• 20:53
  SPEAKER_02: This is like breaking news.
• 20:54
  SPEAKER_02: Are we about to pull this out?
• 20:55
  SPEAKER_00: Yeah, it looks like we're going to tow around the ramp.
• 20:58
  SPEAKER_02: So what time is it?
• 20:59
  SPEAKER_02: It's like 10, 15, and we're trying to take off around noon, right?
• 21:04
  SPEAKER_02: Yeah, that's right.
• 21:04
  SPEAKER_02: Okay, so it's going to taxi out.
• 21:06
  SPEAKER_02: And then just do some pre-flight checks.
• 21:08
  SPEAKER_01: Yeah, we'll tow out to the end of the runway,
• 21:10
  SPEAKER_01: lots of pre-flight checks,
• 21:14
  SPEAKER_01: all our comp checks, range integration checks, all those types of things.
• 21:17
  SPEAKER_01: And then once the airspace goes green, weather looks good, we'll rip it.
• 21:22
  SPEAKER_01: All right.
• 21:22
  SPEAKER_02: So if you're listening to this podcast, you're kind of missing out.
• 21:25
  SPEAKER_02: You should definitely be watching this on YouTube or Spotify because I think
• 21:28
  SPEAKER_02: the plane is going to come on as you guys might hear some noise at some point
• 21:32
  SPEAKER_02: in this.
• 21:33
  SPEAKER_02: So on this path to the hybrid, what's our tie?
• 21:37
  SPEAKER_02: What's the timeline now as to when you might be testing the hybrid design?
• 21:40
  SPEAKER_01: Yeah, so this 2.1 airplane is just a straight stock F-100 engine.
• 21:44
  SPEAKER_01: The Mark 2.2 that Zach mentioned is arriving here at Spaceport on Monday.
• 21:47
  SPEAKER_01: We'll hope to fly that one in the next month or so.
• 21:51
  SPEAKER_01: That one will have the pre-cooler on it for the first time.
• 21:53
  SPEAKER_01: So it'll be the first time we're flight testing the pre-cooler and demonstrating
• 21:56
  SPEAKER_01: the ability to push the engine up above its normal operating bounds.
• 21:59
  SPEAKER_01: We've done it on the grounds multiple times.
• 22:01
  SPEAKER_01: Now we'll go do that in the air.
• 22:03
  SPEAKER_01: And then the next step from there will be to get the airplane and the engine up into
• 22:08
  SPEAKER_01: the ramjet operating envelope around Mach 3.
• 22:11
  SPEAKER_01: So we'll do that with the Mark 2.3 aircraft, maybe like middle of the next year.
• 22:14
  SPEAKER_01: And then the next step after that will be to start flying ramjets.
• 22:18
  SPEAKER_01: Okay.
• 22:19
  SPEAKER_02: Okay.
• 22:19
  SPEAKER_02: And what's like from a military standpoint, What makes that type of aircraft useful?
• 22:24
  SPEAKER_00: Yeah, there's a couple of things.
• 22:26
  SPEAKER_00: Before I even get into that,
• 22:26
  SPEAKER_00: I think one of the key pieces on that roadmap is,
• 22:29
  SPEAKER_00: so as AJ said, right, we get up to Mach 3 and there's a very specific reason, right?
• 22:33
  SPEAKER_00: Demonstrate that you can get a turbine engine to operate stable in the air at
• 22:37
  SPEAKER_00: the ramjet transition speed, right?
• 22:39
  SPEAKER_00: That's not a thing that's been done.
• 22:40
  SPEAKER_00: Then the next thing is do the ramjet transition.
• 22:42
  SPEAKER_00: So this aircraft,
• 22:43
  SPEAKER_00: these three aircraft we're building,
• 22:45
  SPEAKER_00: designing, we're always on our roadmap for the hypersonic aircraft.
• 22:49
  SPEAKER_00: But what we've realized is,
• 22:50
  SPEAKER_00: to your question,
• 22:51
  SPEAKER_00: there is utility right now for these platforms that we are going
• 22:55
  SPEAKER_00: to start supporting some demand on.
• 22:57
  SPEAKER_00: So it's not, you've pivoted, it's not an either or, it's a yes and, right?
• 23:00
  SPEAKER_00: We were always here and we've discovered a branch.
• 23:02
  SPEAKER_00: So there's a couple pieces of utility.
• 23:04
  SPEAKER_00: I mean, the very first one is, think about Operation Epic Fury, the F-15 that was shot down.
• 23:09
  SPEAKER_00: This is of that class, right?
• 23:11
  SPEAKER_00: Even before you get into the high-end,
• 23:13
  SPEAKER_00: high mock flight profile,
• 23:14
  SPEAKER_00: this is a supersonic unmanned aircraft that carries useful payload.
• 23:19
  SPEAKER_00: So instead of having to choose between an MQ-9 that carries like 3,000 pounds
• 23:22
  SPEAKER_00: of payload and an F-15 that's got two pilots,
• 23:24
  SPEAKER_00: costs $140 million, et cetera, et cetera, That's the future, right?
• 23:29
  SPEAKER_00: So I have a very mass producible, high end, high payload vehicle that you can start putting in.
• 23:34
  SPEAKER_00: Because the reality is when we fight,
• 23:36
  SPEAKER_00: the fifth gen platforms are really going to dominate the first few days.
• 23:40
  SPEAKER_00: And then the entire air wing engages.
• 23:43
  SPEAKER_00: All the fourth gens are still flying and fighting and we're still buying them.
• 23:46
  SPEAKER_01: If you look at the Iran conflict,
• 23:50
  SPEAKER_01: the percentage of sorties that were done by fourth generation platforms,
• 23:52
  SPEAKER_01: so like F-15s, F-16s, probably F-18s in the mix there too, it's like 85 to 90%.
• 23:59
  SPEAKER_01: Okay, okay.
• 24:00
  SPEAKER_00: And so this is now a low-cost unmanned alternative to create that mass in the sky, right?
• 24:06
  SPEAKER_00: I can have seven hardpoints on this vehicle.
• 24:08
  SPEAKER_00: And the other thing that's beautiful about a platform like this is one
• 24:11
  SPEAKER_00: the biggest chokepoints in the Department of Defense is integrating new weapons
• 24:14
  SPEAKER_00: on unmanned platforms.
• 24:16
  SPEAKER_00: And it's for good reason, right?
• 24:17
  SPEAKER_00: Like you've got a human being in a cockpit and you're going to put an explodey thing
• 24:20
  SPEAKER_00: on the wing.
• 24:21
  SPEAKER_00: You want to massively reduce the risk before you do it for the first time.
• 24:24
  SPEAKER_00: That's a technical term.
• 24:25
  SPEAKER_00: Yes, Marines here talking, right?
• 24:27
  SPEAKER_00: And that creates chokepoints.
• 24:29
  SPEAKER_00: When you have a high payload unmanned aircraft,
• 24:33
  SPEAKER_00: I can take way more risk to accelerate integrating weapons and figuring out,
• 24:37
  SPEAKER_00: hey, can this work?
• 24:38
  SPEAKER_00: The store separation,
• 24:39
  SPEAKER_00: all the things to take that weapon from tier all three to seven to
• 24:42
  SPEAKER_00: then more quickly, more stably put it on a manned air for it.
• 24:45
  SPEAKER_00: Aircraft at the same time,
• 24:46
  SPEAKER_00: the platform then becomes the de facto spinning wheel of its integrated everything.
• 24:51
  SPEAKER_00: So you've got unmanned fighter, man fighters.
• 24:53
  SPEAKER_00: Not every man fighter can carry every weapon.
• 24:56
  SPEAKER_00: There are huge trades and risks.
• 24:58
  SPEAKER_00: It's like, I need now the F-15 It's not certified to carry.
• 25:01
  SPEAKER_00: So you can more rapidly certify insert new weapon onto this plane than you can any man platform.
• 25:07
  SPEAKER_00: And one of the things General Wilsbach,
• 25:09
  SPEAKER_00: Chief of Staff of the Air Force,
• 25:10
  SPEAKER_00: testified to recently when he was asked, why does he want more F-15s?
• 25:13
  SPEAKER_00: He goes, well, that's my bomb truck.
• 25:15
  SPEAKER_00: It's the most flexible platform to carry the most diverse range of payloads,
• 25:19
  SPEAKER_00: but it's expensive, it's manned, it's not necessarily mass producible.
• 25:24
  SPEAKER_00: So why not think of that type of capability as an unmanned system
• 25:27
  SPEAKER_00: that is mass producible,
• 25:28
  SPEAKER_00: and when you lose it, instead of having the risk You know, two down pilots in Iran.
• 25:32
  SPEAKER_00: Okay, we treat it like an MQ-9, move on to the next one.
• 25:34
  SPEAKER_00: And so that is one huge use case for this vehicle.
• 25:37
  SPEAKER_00: And the other is,
• 25:38
  SPEAKER_00: as you start getting vehicles into the higher Mach regimes,
• 25:40
  SPEAKER_00: our ability to add range to any system, this becomes a first stage booster, right?
• 25:44
  SPEAKER_00: So if I am releasing a payload at Mach 2, Mach 3,
• 25:48
  SPEAKER_00: I am the first stage before that engine lights and I can double,
• 25:52
  SPEAKER_00: even maybe triple the ranges of some standard munitions without having to add costs
• 25:56
  SPEAKER_00: to them.
• 25:56
  SPEAKER_00: And so you get a lot of operational flexibility,
• 25:58
  SPEAKER_00: high producibility,
• 25:59
  SPEAKER_00: low cost,
• 26:00
  SPEAKER_00: and you take the human being out of the engagement envelope that allows you
• 26:03
  SPEAKER_00: to be more aggressive in how you apply those systems against an adversary.
• 26:07
  SPEAKER_02: And the government's been having this, what is it, the Commercial Combat Aircraft?
• 26:11
  SPEAKER_00: CCA, yeah.
• 26:11
  SPEAKER_02: Contract.
• 26:12
  SPEAKER_02: And so what, Andrel?
• 26:14
  SPEAKER_00: Andrel and General Atomics have the two Inc. 1 prototypes.
• 26:16
  SPEAKER_02: They moved on to this next level.
• 26:18
  SPEAKER_02: And so Andrel's, I've seen Fury.
• 26:20
  SPEAKER_02: I haven't seen the General Atomics as much.
• 26:22
  SPEAKER_02: Yeah, they're small, right?
• 26:24
  SPEAKER_02: They're smaller than this, yeah.
• 26:25
  SPEAKER_02: Okay.
• 26:25
  SPEAKER_02: So,
• 26:25
  SPEAKER_00: I mean,
• 26:25
  SPEAKER_00: if you think,
• 26:27
  SPEAKER_00: for the longest time,
• 26:29
  SPEAKER_00: the way the United States military talked about unmanned systems was groups,
• 26:32
  SPEAKER_00: groups 1 through 5.
• 26:34
  SPEAKER_00: And Andruil is a Group 5, so is General Atomics Group 5.
• 26:40
  SPEAKER_00: Technically, we are also a Group 5.
• 26:42
  SPEAKER_00: But really we have broken the group sale with this aircraft because the scale
• 26:48
  SPEAKER_00: of group five ends up being,
• 26:49
  SPEAKER_00: I mean, shoot, it's like 7,000 pounds or something of that nature to N, right?
• 26:54
  SPEAKER_00: Everything else below that is, you know, integrated up to 7,000 pounds.
• 26:57
  SPEAKER_00: And so nobody's really been conceptualizing unmanned high speed aircraft of this scale before.
• 27:03
  SPEAKER_00: So this is truly like breaking the paradigm.
• 27:05
  SPEAKER_00: The combat collaborative aircraft program is a great program.
• 27:08
  SPEAKER_00: I mean, we are huge supporters of it.
• 27:10
  SPEAKER_00: We're not a part of it.
• 27:12
  SPEAKER_00: And those aircraft in the Fury and the Ghostbat,
• 27:15
  SPEAKER_00: which is Boeing and Gambit for General Atomics,
• 27:18
  SPEAKER_00: are trying to solve a bit of a different problem.
• 27:20
  SPEAKER_00: It's sort of this like near wingman with the stealth fighters.
• 27:23
  SPEAKER_00: We are more of an independent platform that would be doing some stuff out and about.
• 27:28
  SPEAKER_00: So the way I think about CCA is it's the beginning of
• 27:31
  SPEAKER_00: the Air Force conceptualizing unmanned aircraft.
• 27:34
  SPEAKER_00: High thrust platforms.
• 27:36
  SPEAKER_00: And that's where they get into, you know, they want to do an increment approach.
• 27:38
  SPEAKER_00: So this is increment one with Andrew and General Atomics.
• 27:40
  SPEAKER_00: There'll be an increment two and increment three and so on and so forth.
• 27:42
  SPEAKER_00: How that plays out with us,
• 27:43
  SPEAKER_00: you know,
• 27:44
  SPEAKER_00: to be determined,
• 27:44
  SPEAKER_00: something we're very closely watching and engaged with the department on.
• 27:47
  SPEAKER_02: So I might,
• 27:48
  SPEAKER_02: I'm getting out of my depth in a second,
• 27:49
  SPEAKER_02: but I mean, that's considered a program of record, right?
• 27:52
  SPEAKER_02: And so, and that's kind of what you want in some of these cases,
• 27:54
  SPEAKER_02: if you're trying to get serious, consistent funding.
• 27:58
  SPEAKER_02: So are you guys...
• 28:01
  SPEAKER_02: Does that mean you're outside of that and life is hard for you or you're in
• 28:05
  SPEAKER_02: a totally different...
• 28:06
  SPEAKER_02: Both and.
• 28:07
  SPEAKER_00: I mean, we are not... We're ruining our own story.
• 28:09
  SPEAKER_00: Yeah, we are both and.
• 28:11
  SPEAKER_00: I mean,
• 28:12
  SPEAKER_00: it gets really nuanced in the sensitivities around whether you're in or out of
• 28:15
  SPEAKER_00: the program.
• 28:15
  SPEAKER_00: What I would say is the way we've approached this is our anchor partnerships with DIU.
• 28:20
  SPEAKER_00: And that has been a real boon, I think, for us.
• 28:22
  SPEAKER_00: I think it's been a boon for DIU.
• 28:24
  SPEAKER_02: Which, just to fill people in, is this sort of like a R&D startup funding?
• 28:27
  SPEAKER_02: Startup funding, right?
• 28:28
  SPEAKER_00: It's the window, right, into the Pentagon.
• 28:31
  SPEAKER_00: For things that don't fit cleanly.
• 28:33
  SPEAKER_00: I think we are absolutely the biggest physical item they have worked on.
• 28:37
  SPEAKER_00: And certainly on the contract side of like DIU focused
• 28:40
  SPEAKER_00: the biggest things they've sort of bet on.
• 28:43
  SPEAKER_00: But you can't do that level of work even with DIU if you don't have some level
• 28:46
  SPEAKER_00: of concurrence for the Air Force, right?
• 28:48
  SPEAKER_00: So the Air Force is highly engaged and watching.
• 28:50
  SPEAKER_00: What we have to keep doing is delivering our technical milestones
• 28:53
  SPEAKER_00: to help them figure out how do they want to adopt this.
• 28:56
  SPEAKER_00: And it's a chicken egg problem.
• 28:57
  SPEAKER_00: You know,
• 28:57
  SPEAKER_00: defense innovation,
• 28:58
  SPEAKER_00: That inherently is more commercial in that I'm going to have a thesis
• 29:02
  SPEAKER_00: on your problem and I'm going to build to it ahead of you telling me what you want.
• 29:06
  SPEAKER_00: And so it's the iPhone scenario of like Steve Jobs isn't going to go to Joe Person
• 29:11
  SPEAKER_00: or Joe Industry and say, what is your requirement?
• 29:14
  SPEAKER_00: He's going to look at the world and say,
• 29:16
  SPEAKER_00: I have a thesis based on the information I have available and where I see
• 29:20
  SPEAKER_00: the world going and I'm going to take risk.
• 29:22
  SPEAKER_00: And if that risk is right and I deliver you a product that is delightful
• 29:25
  SPEAKER_00: and creates value, my risk will be rewarded with the outcome.
• 29:29
  SPEAKER_00: The Department of Defense historically does not build products that way.
• 29:32
  SPEAKER_00: They go the other way.
• 29:33
  SPEAKER_00: And so this is the sort of impedance mismatching that we work on.
• 29:36
  SPEAKER_00: And how do you kind of bring those two worlds together?
• 29:39
  SPEAKER_00: CCA is a little bit more of a traditional approach,
• 29:42
  SPEAKER_00: but they are trying to open the aperture to say,
• 29:44
  SPEAKER_00: okay, We're going to do an increment approach, right?
• 29:46
  SPEAKER_00: We're going to keep evolving that.
• 29:47
  SPEAKER_00: And as these increments go live,
• 29:48
  SPEAKER_00: we, the department, are going to look up and say, what else is out there?
• 29:51
  SPEAKER_00: And how do we want to use the knowledge of what else is happening to inform what we want to do?
• 29:55
  SPEAKER_00: And so that's why it's kind of a non-answer because everybody's still figuring it out.
• 29:59
  SPEAKER_00: And the best thing that we can do for ourselves is have a strong thesis,
• 30:02
  SPEAKER_00: be tied in with the end users, and deliver what we say we're going to deliver.
• 30:06
  SPEAKER_00: Because the only thing that's really going to guarantee
• 30:08
  SPEAKER_00: a negative outcome is Be PowerPoint deep, because that doesn't help anybody.
• 30:13
  SPEAKER_00: Nobody's going to write you a $100 million check for a PowerPoint,
• 30:16
  SPEAKER_00: unless you're,
• 30:16
  SPEAKER_00: you know,
• 30:16
  SPEAKER_00: Lockheed Martin gets that and Boeing and some of the bigs historically,
• 30:20
  SPEAKER_00: but not for a new entrant.
• 30:22
  SPEAKER_00: So you really need to put it out there and build your version.
• 30:25
  SPEAKER_02: And AJ, for you, I mean,
• 30:26
  SPEAKER_02: like, unless I'm wrong, I mean, I remember the commercial side, the passenger side.
• 30:31
  SPEAKER_02: Wasn't that sort of the point of emphasis when you first started?
• 30:33
  SPEAKER_02: Is that where you really wanted to go?
• 30:35
  SPEAKER_01: The military and defense piece was always there.
• 30:37
  SPEAKER_01: We didn't talk about it a lot out in the open in the early days.
• 30:40
  SPEAKER_01: I've been in the early days for a number of reasons.
• 30:42
  SPEAKER_01: But the beauty about building an airplane business is
• 30:45
  SPEAKER_01: that it is fundamentally dual use in that if we are successful
• 30:49
  SPEAKER_01: in building this military aviation business and scaling it,
• 30:53
  SPEAKER_01: that kind of earns us a right to try to enter,
• 30:56
  SPEAKER_01: take that same technology into the commercial world down the road.
• 30:58
  SPEAKER_01: So, you know, people ask, like, is this a dual use company doing defense and commercial?
• 31:03
  SPEAKER_01: Yes, but they're temporarily separate.
• 31:05
  SPEAKER_01: Defense first, earn our right to enter the commercial piece later.
• 31:09
  SPEAKER_02: So you're saying there is a possibility I will fly Hypersona in my lifetime.
• 31:14
  SPEAKER_00: I want to be on the plane last, so I have a lot of motivation to make them faster.
• 31:19
  SPEAKER_02: Will it always be?
• 31:20
  SPEAKER_02: When I was doing my reading,
• 31:22
  SPEAKER_02: coming to see you guys, I mean,
• 31:23
  SPEAKER_02: it was talking about flight from London to New York,
• 31:25
  SPEAKER_02: but the mileage, I think it was somewhere around like 4,000-ish or 4,500 miles.
• 31:31
  SPEAKER_01: Well, that's like 3,400.
• 31:32
  SPEAKER_02: And if this works, would it always be limited to that range?
• 31:38
  SPEAKER_01: For like a single hop, yeah.
• 31:41
  SPEAKER_01: With fast airplanes, it's pretty tough to make them work more than maybe 5,000 miles.
• 31:50
  SPEAKER_01: They just get incredibly big.
• 31:52
  SPEAKER_01: So this is not like a pathway around the world tripper.
• 31:55
  SPEAKER_01: It's an ocean crosser.
• 31:56
  SPEAKER_01: Okay.
• 31:56
  SPEAKER_01: Yeah.
• 31:57
  SPEAKER_02: Okay.
• 31:57
  SPEAKER_02: Okay.
• 31:58
  SPEAKER_02: Well, that would be fantastic.
• 32:00
  SPEAKER_01: If that could happen.
• 32:01
  SPEAKER_02: Yeah.
• 32:02
  SPEAKER_02: So like working at this spaceport,
• 32:04
  SPEAKER_02: why did you guys,
• 32:05
  SPEAKER_02: I'm used to going to Mojave to see things like this typically,
• 32:08
  SPEAKER_02: although obviously this same White Sands has this long history of breaking
• 32:13
  SPEAKER_02: in all kinds of aircraft.
• 32:15
  SPEAKER_02: But yeah, why did you guys pick here?
• 32:16
  SPEAKER_02: And then because you're moving your headquarters to Long Beach
• 32:20
  SPEAKER_02: or El Segundo, right?
• 32:21
  SPEAKER_02: So El Segundo,
• 32:23
  SPEAKER_02: all that collection of companies,
• 32:24
  SPEAKER_02: they like to hop two hours out to Mojave a lot of the time.
• 32:27
  SPEAKER_02: So yeah, why pick New Mexico?
• 32:29
  SPEAKER_01: Yeah, I'll hit that when you get the LAPs.
• 32:32
  SPEAKER_01: A couple of reasons.
• 32:33
  SPEAKER_01: Number one, commercial airfield, fully unrestricted airspace is what we have here in New Mexico.
• 32:39
  SPEAKER_01: I don't think there is a place like that anywhere else in the country.
• 32:44
  SPEAKER_01: And what that does for us is it really heavily shrinks the scope of our kind
• 32:50
  SPEAKER_01: of safety analysis that we need to do.
• 32:52
  SPEAKER_01: Because in restricted airspace, there are no other aircraft.
• 32:55
  SPEAKER_01: So for the FAA to allow us to fly,
• 32:57
  SPEAKER_01: they need to be happy with the level of safety we're providing to
• 33:01
  SPEAKER_01: the national airspace,
• 33:02
  SPEAKER_01: so airplanes in the air, and the uninvolved public, people on the ground.
• 33:05
  SPEAKER_01: The airspace is by inspection.
• 33:08
  SPEAKER_01: Zero airplanes, zero risk.
• 33:10
  SPEAKER_01: Done.
• 33:11
  SPEAKER_01: And in the ground area here,
• 33:12
  SPEAKER_01: there's much more space for us to operate that way that is completely unpopulated,
• 33:17
  SPEAKER_01: like literally zero people.
• 33:19
  SPEAKER_01: So it makes the safety case, again,
• 33:21
  SPEAKER_01: And that's allowed us to get into flight much faster
• 33:27
  SPEAKER_01: than we would have otherwise been able to.
• 33:28
  SPEAKER_01: Now, as we move forward,
• 33:30
  SPEAKER_01: as we continue to iterate,
• 33:31
  SPEAKER_01: as we bring more products online,
• 33:33
  SPEAKER_01: they will operate more like traditional airplanes,
• 33:36
  SPEAKER_01: where you're flying in the national airspace at similar levels of safety
• 33:39
  SPEAKER_01: and those types of things.
• 33:40
  SPEAKER_01: But instead of that being the binary zero to one bar you had to get over,
• 33:44
  SPEAKER_01: we moved that bar way down here.
• 33:46
  SPEAKER_01: And that's part of why we've been able to move as fast as we have.
• 33:50
  SPEAKER_02: Still, even though we're in this testing ground,
• 33:54
  SPEAKER_02: and okay,
• 33:54
  SPEAKER_02: the military has stuff to do,
• 33:56
  SPEAKER_02: but they're giving you guys what, like a two-hour window today to get everything in?
• 34:01
  SPEAKER_02: It still feels like we have some of this tension between the military and
• 34:06
  SPEAKER_02: the bureaucracy and the way things have always been done and startups
• 34:11
  SPEAKER_02: that are trying to, you know, it feels like they could give you a day if you,
• 34:16
  SPEAKER_02: What I'll
• 34:17
  SPEAKER_01: say about them, so we're operating within the confines of a federal test range.
• 34:21
  SPEAKER_01: And that's also another important piece.
• 34:23
  SPEAKER_01: It's their responsibility as the kind of unevolved third party
• 34:26
  SPEAKER_01: to make sure our airplane doesn't leave the confines of the restricted airspace and
• 34:29
  SPEAKER_01: the controlled ground area.
• 34:30
  SPEAKER_01: And the FAA puts their trust in them.
• 34:32
  SPEAKER_01: So again, that's another element of the, you can do this quickly.
• 34:36
  SPEAKER_01: That said, the test ranges across the country have been underfunded for years.
• 34:41
  SPEAKER_01: They are wicked old with all their infrastructure,
• 34:44
  SPEAKER_01: so the challenge that they're dealing with is really, really challenging.
• 34:48
  SPEAKER_01: Plus, you had a huge element of the workforce,
• 34:51
  SPEAKER_01: take the deferred retirement piece,
• 34:52
  SPEAKER_01: so now they're strapped just for experienced bodies who understand how to do these.
• 34:59
  SPEAKER_01: The constraints they have on top of them are really rough.
• 35:05
  SPEAKER_01: Now from our side,
• 35:07
  SPEAKER_01: we've done everything we can to make their problems as easy as possible,
• 35:11
  SPEAKER_01: as simple as possible.
• 35:13
  SPEAKER_01: Keep all the hard stuff on our side.
• 35:16
  SPEAKER_01: We try to take the fewest resources possible for the shortest amount of time.
• 35:23
  SPEAKER_01: The demand for those test resources is huge.
• 35:25
  SPEAKER_01: I mean, there's so many programs across the department that need these things.
• 35:29
  SPEAKER_01: However,
• 35:30
  SPEAKER_01: I think all the test ranges can operate in a much more efficient way to get more out
• 35:36
  SPEAKER_01: of these national jewel resources that
• 35:38
  SPEAKER_02: we have.
• 35:38
  SPEAKER_02: I run into this a lot, man.
• 35:39
  SPEAKER_02: I remember Varda was trying to land their capsule,
• 35:42
  SPEAKER_02: again, sort of in the middle of nowhere, although it was in Utah.
• 35:46
  SPEAKER_02: I'm not trying to just totally bag on everything because safety is important on all this stuff.
• 35:51
  SPEAKER_02: But it feels like at some point if the US wants to be serious about this stuff,
• 35:58
  SPEAKER_02: it's got a lot of competition.
• 35:59
  SPEAKER_02: China would be giving you probably as much time as you want.
• 36:02
  SPEAKER_00: China launches overall rockets over villages all the time.
• 36:04
  SPEAKER_00: I'm not as generous as AJ on this.
• 36:07
  SPEAKER_00: I mean, look, I think everybody wants to do the right thing.
• 36:09
  SPEAKER_00: So there's not like some nefarious decision here.
• 36:11
  SPEAKER_00: The test and evaluation community to me is one of the last bastions
• 36:14
  SPEAKER_00: that has not really faced the innovation pressure.
• 36:17
  SPEAKER_00: Yeah.
• 36:17
  SPEAKER_00: And some of this is how you have to understand, like,
• 36:19
  SPEAKER_00: if you look at defense tech and venture in particular,
• 36:22
  SPEAKER_00: the hardware is relatively small and inexpensive.
• 36:25
  SPEAKER_00: There's not a lot of companies that are building at this scale
• 36:27
  SPEAKER_00: for venture backed companies, period.
• 36:28
  SPEAKER_00: Yeah.
• 36:29
  SPEAKER_00: Or it's software.
• 36:29
  SPEAKER_00: And there's a reason for that.
• 36:30
  SPEAKER_00: And that's because the S&T component,
• 36:33
  SPEAKER_00: the science technology component of the DOW,
• 36:36
  SPEAKER_00: Historically, does not work with startups.
• 36:38
  SPEAKER_00: And that is the entree point to prototyping and to the program offices.
• 36:43
  SPEAKER_00: And so what happens is the defense tech companies exist in parallel to the AFRLs and
• 36:49
  SPEAKER_00: the ONRs and they compete.
• 36:51
  SPEAKER_00: Frankly, with them.
• 36:52
  SPEAKER_00: And so you go out and you have to build a prototype as quickly as you can.
• 36:55
  SPEAKER_00: And then you show up at the program office with a working prototype
• 36:58
  SPEAKER_00: that you've used all iRad on and you try and sell it.
• 37:00
  SPEAKER_00: That has a huge price pressure and cost pressure down on the complexity you can build at.
• 37:04
  SPEAKER_00: And so the big hard systems are still like the domain of the incumbents.
• 37:09
  SPEAKER_00: And that means that like business as usual is the only way you can do it.
• 37:11
  SPEAKER_00: So as an example, to really get range space, program a record.
• 37:15
  SPEAKER_00: That's it.
• 37:15
  SPEAKER_00: But that brings you back to the chicken egg problem.
• 37:17
  SPEAKER_00: So if we look at companies that are innovating in autonomous systems that are not in
• 37:23
  SPEAKER_00: the air, in part it's because they don't have the same range risk.
• 37:26
  SPEAKER_00: So if you're going to do a boat, you could start with a lake.
• 37:28
  SPEAKER_00: You could put it on the water.
• 37:29
  SPEAKER_00: I'm not saying you don't have to coordinate,
• 37:30
  SPEAKER_00: but it does not have the degrees of controls and constraints that you're going
• 37:34
  SPEAKER_00: to have for high altitude, high speed flight.
• 37:36
  SPEAKER_00: Same for a ground system.
• 37:37
  SPEAKER_00: Go Find 1,000 acres and you can just drive your thing around.
• 37:41
  SPEAKER_00: Space, I mean, you go on and on.
• 37:42
  SPEAKER_00: And so aviation in particular is this sort of last bastion.
• 37:46
  SPEAKER_00: And if you look at the CCA program, why is Anderil and General Atomics getting the flight time?
• 37:51
  SPEAKER_00: They're in a program of record.
• 37:53
  SPEAKER_00: But that completely shuts the door on private industry from being like, I got an idea.
• 37:57
  SPEAKER_00: I'm willing to take risk.
• 37:58
  SPEAKER_00: I'm going to build something and fly it.
• 38:00
  SPEAKER_00: But I need you to help me get in the air.
• 38:01
  SPEAKER_00: And this is where the ranges are just sort of like, I don't know how to.
• 38:05
  SPEAKER_00: And it's business as usual.
• 38:06
  SPEAKER_02: I mean, I remember SpaceX going through all the same stuff, trying to get a pad.
• 38:10
  SPEAKER_02: It was a mixed bag, though.
• 38:13
  SPEAKER_02: They were trying to fly from Vandenberg at the start and Boeing
• 38:16
  SPEAKER_02: and Lockheed were blocking them and making life really tough on them.
• 38:21
  SPEAKER_02: And you have this wild card of like, do you guys even know what you're doing?
• 38:25
  SPEAKER_02: We can't have you fly a rocket in Southern California.
• 38:28
  SPEAKER_02: And then it is funny that they, I mean,
• 38:29
  SPEAKER_02: rockets seem so much more explosive and everything,
• 38:31
  SPEAKER_02: but they did manage to get through a lot of this stuff.
• 38:35
  SPEAKER_02: And then it was this,
• 38:37
  SPEAKER_02: it's been like a give and take,
• 38:38
  SPEAKER_02: but I have seen the government Try to get launch licenses quicker.
• 38:44
  SPEAKER_02: I would give them a decent amount of credit for moving as
• 38:47
  SPEAKER_02: the commercial space industry has taken off.
• 38:49
  SPEAKER_02: But then if you look at like even consumer drones,
• 38:53
  SPEAKER_02: you know,
• 38:53
  SPEAKER_02: you can make a pretty strong case that the FAA sort of killed the US industry
• 38:59
  SPEAKER_02: and right when we were head of DJI and everyone.
• 39:02
  SPEAKER_02: And so, yeah, I mean,
• 39:03
  SPEAKER_02: this kind of like frustrates me and especially in something like Aviation, I mean,
• 39:10
  SPEAKER_02: where you guys will be in El Segundo is like a hundred years history of us,
• 39:14
  SPEAKER_02: of the US being ahead on all this and doing the most interesting, Stuff.
• 39:19
  SPEAKER_02: So it's kind of sad to get to a point where you really have to beg to be able to do this.
• 39:22
  SPEAKER_02: I mean, I think that's why you
• 39:25
  SPEAKER_01: beg or you break the rules that don't actually matter.
• 39:29
  SPEAKER_01: Yeah.
• 39:30
  SPEAKER_01: And like we've we've done that many times.
• 39:33
  SPEAKER_01: And I think that has helped push the government forward in a lot of different ways.
• 39:36
  SPEAKER_01: I mean, you talk about the FAA, they've like.
• 39:41
  SPEAKER_01: Actually made some strides over the past couple of years as we've been working
• 39:43
  SPEAKER_01: with them to move some of these things a lot faster.
• 39:47
  SPEAKER_01: Yeah.
• 39:48
  SPEAKER_01: With, you know,
• 39:48
  SPEAKER_01: congressional authorities that are granted them that were just kind of sitting there
• 39:51
  SPEAKER_01: on somebody's desk that nobody kind of picked up and figured out what to do with.
• 39:53
  SPEAKER_01: Well, we just kind of read the law.
• 39:55
  SPEAKER_01: We're like, you don't actually need to do that.
• 39:59
  SPEAKER_01: And made a safety case that they believed in, again, leveraging these kinds of things.
• 40:03
  SPEAKER_01: And yeah, now we've got a path that can move a lot faster, but there's so much more work to do.
• 40:08
  SPEAKER_02: So you guys...
• 40:10
  SPEAKER_02: You'll stay unmanned for a while.
• 40:13
  SPEAKER_02: For a while.
• 40:14
  SPEAKER_02: Okay.
• 40:15
  SPEAKER_02: And even though today,
• 40:16
  SPEAKER_02: so it'll fly out and it'll, yeah, like walk us through today a little bit.
• 40:19
  SPEAKER_02: So around noon, this will be sitting out on the pad.
• 40:23
  SPEAKER_02: You go through the pre-flight checks and then somebody in this trailer
• 40:27
  SPEAKER_02: over here is going to fly it.
• 40:29
  SPEAKER_02: Yep.
• 40:31
  SPEAKER_02: What's kind of the mission today?
• 40:32
  SPEAKER_01: Yeah, so we'll take off heading south,
• 40:35
  SPEAKER_01: head out over the white sands part of the range,
• 40:39
  SPEAKER_01: do some inflight checks on the way out.
• 40:42
  SPEAKER_01: If everything looks good and we're ready to go,
• 40:45
  SPEAKER_01: we'll go for a supersonic dash, hit our top speed.
• 40:49
  SPEAKER_01: Slow down,
• 40:50
  SPEAKER_01: turn around,
• 40:50
  SPEAKER_01: come back down south,
• 40:53
  SPEAKER_01: hit our other test points that we want to hit for handling qualities and comms
• 40:59
  SPEAKER_01: and controllers and things like that.
• 41:02
  SPEAKER_01: And then we'll come back and land here northbound.
• 41:05
  SPEAKER_01: And how long would
• 41:06
  SPEAKER_02: that take?
• 41:06
  SPEAKER_02: Roughly?
• 41:07
  SPEAKER_02: I don't know, 30-ish minutes.
• 41:08
  SPEAKER_02: And it's roughly autonomous most of the time?
• 41:11
  SPEAKER_02: No, it's being flown.
• 41:13
  SPEAKER_01: Plenty of controllers, there's plenty of automation, but yeah, it's really not autonomous.
• 41:16
  SPEAKER_00: But we're building,
• 41:17
  SPEAKER_00: like in parallel, all the integration layers for the Air Force, they call it AGRA.
• 41:22
  SPEAKER_00: So that's the sort of API connection layer to all the autonomy stacks.
• 41:27
  SPEAKER_00: So our view is, hey,
• 41:27
  SPEAKER_00: we're building planes,
• 41:29
  SPEAKER_00: I'm not in the business of building high-end mission autonomy.
• 41:31
  SPEAKER_00: We'll have basic flight autonomy.
• 41:32
  SPEAKER_00: Any unmade aircraft will need to have that, and we'll build that in-house.
• 41:35
  SPEAKER_00: But the sort of high-end mission autonomy that Andruil works on,
• 41:38
  SPEAKER_00: that Shield works on,
• 41:39
  SPEAKER_00: that Northrop works on, there's plenty of people working on that.
• 41:42
  SPEAKER_00: We want to just be able to adopt whatever the customer wants.
• 41:45
  SPEAKER_00: And the department has been very clear.
• 41:46
  SPEAKER_00: They want to buy the autonomy and the vehicle separate.
• 41:50
  SPEAKER_00: So that's great for us.
• 41:51
  SPEAKER_00: So we build the aircraft.
• 41:52
  SPEAKER_00: We have the integration stack,
• 41:54
  SPEAKER_00: so I can plug in whatever they choose, and then these vehicles will be autonomous.
• 41:58
  SPEAKER_02: And it has what's called FTS or flight termination system, just like a rocket.
• 42:02
  SPEAKER_02: Sometimes rockets have a explosive charge.
• 42:06
  SPEAKER_02: And if the people watching the launch see it go out of a certain zone,
• 42:11
  SPEAKER_02: they just blow it up before something serious happens.
• 42:14
  SPEAKER_02: We were talking earlier.
• 42:15
  SPEAKER_02: So this one, there's another option, which is just like cut off the fuel.
• 42:18
  SPEAKER_02: And that's what we'd be dealing with on this.
• 42:21
  SPEAKER_01: Yep.
• 42:21
  SPEAKER_01: That's right.
• 42:21
  SPEAKER_01: So the airplane will not explode.
• 42:23
  SPEAKER_02: Is it just you guys or do you have a federal official?
• 42:26
  SPEAKER_01: The range at White Sands Missile Range,
• 42:28
  SPEAKER_01: they monitor the flight termination system and they are the ones who make the choice
• 42:32
  SPEAKER_01: to terminate if necessary.
• 42:32
  SPEAKER_02: So they're just making sure you're on the right flight path,
• 42:35
  SPEAKER_02: everything's going according to plan.
• 42:36
  SPEAKER_02: Yep.
• 42:37
  SPEAKER_02: Okay.
• 42:38
  SPEAKER_01: Yeah, we have a little bit of a sandbox to work in.
• 42:41
  SPEAKER_01: If we find something we don't like, we can operate in there.
• 42:43
  SPEAKER_01: We can kind of circle, loiter.
• 42:46
  SPEAKER_01: If we lose link with the aircraft,
• 42:48
  SPEAKER_01: there are built-in behaviors that the aircraft will conduct by itself to kind
• 42:52
  SPEAKER_01: of station keeps in the same place, and we can troubleshoot and go from there.
• 42:55
  SPEAKER_02: Does the military get excited about this stuff?
• 42:58
  SPEAKER_02: Yeah, they would, right?
• 43:00
  SPEAKER_02: But then part of them, I guess it's more the...
• 43:03
  SPEAKER_02: We should try to see if they, I mean,
• 43:04
  SPEAKER_02: it wouldn't be competition because all the aircraft are getting built
• 43:08
  SPEAKER_02: by some company, right?
• 43:09
  SPEAKER_02: But yeah, so there's no, they all want, or is there a tension?
• 43:15
  SPEAKER_01: Most of the military aircraft today,
• 43:17
  SPEAKER_01: and for a Like a number of decades in the past,
• 43:20
  SPEAKER_01: they didn't come from a company developed a product and sold that product into
• 43:24
  SPEAKER_01: the department.
• 43:24
  SPEAKER_01: They were born out of the science technology community that Zach mentioned.
• 43:29
  SPEAKER_01: So in a way, this is quite different.
• 43:32
  SPEAKER_00: Yeah.
• 43:32
  SPEAKER_00: Okay.
• 43:32
  SPEAKER_00: I mean, that's why you're called a contract.
• 43:34
  SPEAKER_00: It's just like an architect brings the drawings for your house,
• 43:37
  SPEAKER_00: the contractor builds the drawing.
• 43:38
  SPEAKER_00: Now, that relationship has gotten very intertwined for good reasons over the years.
• 43:42
  SPEAKER_00: And that's why I gave the example for the S&T world is kind of completely locked, right?
• 43:46
  SPEAKER_00: Those groups exist together,
• 43:48
  SPEAKER_00: the primes in the S&T world and the requirements flow down and
• 43:51
  SPEAKER_00: the contractors are great with them and the contractor takes the requirement
• 43:53
  SPEAKER_00: and builds the thing.
• 43:54
  SPEAKER_00: That would be like somebody telling Steve Jobs, here's the design.
• 43:57
  SPEAKER_00: For the iPhone.
• 43:58
  SPEAKER_00: Innovation doesn't occur that way.
• 44:00
  SPEAKER_00: It completely closes off the idea of asking a question and challenging.
• 44:02
  SPEAKER_00: And so, you know,
• 44:05
  SPEAKER_00: there's sort of two communities that I think about in the DOW warfighting world.
• 44:09
  SPEAKER_00: There's the operator community.
• 44:11
  SPEAKER_00: Actually three, really.
• 44:11
  SPEAKER_00: The operator community,
• 44:12
  SPEAKER_00: the acquisition community,
• 44:14
  SPEAKER_00: and the S&T community, as far as to make it really simple.
• 44:17
  SPEAKER_00: And the acquisition community is trying to do the right thing.
• 44:20
  SPEAKER_00: They're sort of pulled between the two sides,
• 44:21
  SPEAKER_00: and they're going to follow the orders of the commanders in Congress and be like,
• 44:25
  SPEAKER_00: this is what we want to buy.
• 44:26
  SPEAKER_00: And then you have literally competition.
• 44:29
  SPEAKER_00: I'm not breaking any news here that the S&T world often is more in competition with
• 44:34
  SPEAKER_00: The defense tech community than it is in concert with them.
• 44:37
  SPEAKER_00: And I think actually the existence of DIU is a great example of that.
• 44:41
  SPEAKER_00: I mean, DIU wouldn't necessarily need to exist if that wasn't the case.
• 44:46
  SPEAKER_00: And I think the continued growth and success of DIU and projects like ours
• 44:50
  SPEAKER_00: and many others is a reinforcement of that, that it is a kind of...
• 44:56
  SPEAKER_00: A little bit of a competition and friction point.
• 44:58
  SPEAKER_00: I think nobody is trying to do this intentionally.
• 45:00
  SPEAKER_00: Again, this is not a function of individuals.
• 45:03
  SPEAKER_00: This is a function of vestigial structures and bureaucracy setups over years
• 45:07
  SPEAKER_00: and years and years in two communities that are very foreign to each other trying
• 45:10
  SPEAKER_00: to figure out how to work together.
• 45:12
  SPEAKER_02: It's not to open us up to like a nine hour podcast,
• 45:15
  SPEAKER_02: but I need to go from like the Kelly Johnson era.
• 45:19
  SPEAKER_02: It's like we used to do a rocket every couple of days.
• 45:21
  SPEAKER_01: Yeah, so here's the thing that I think some people miss about the Kelly Johnson piece.
• 45:26
  SPEAKER_01: So you can build Skunk Works the way he built Skunk Works with all the culture and everything.
• 45:32
  SPEAKER_01: If you're a customer, If it doesn't operate that way, it doesn't work.
• 45:36
  SPEAKER_01: And that's part of why you don't,
• 45:38
  SPEAKER_01: like the skunkworks of today is not the skunkworks of Kelly Johnson's time.
• 45:41
  SPEAKER_01: It's the customer has changed.
• 45:42
  SPEAKER_01: I mean, when he did some of these crazy airplanes,
• 45:45
  SPEAKER_01: whether it's SR-71 or U-2 or whatever,
• 45:48
  SPEAKER_01: the program office on the military side was not, It was like six people.
• 45:54
  SPEAKER_01: And I think that's something that DIU really has the ability to do right.
• 45:58
  SPEAKER_01: Pull in the actual necessary and sufficient set of stakeholders across
• 46:02
  SPEAKER_01: the communities that Zach talked about and run a very...
• 46:08
  SPEAKER_01: Minimalist office that can move very quickly.
• 46:12
  SPEAKER_01: And those two things together,
• 46:13
  SPEAKER_01: industry operating this way and the government teams operating this way,
• 46:16
  SPEAKER_01: that's how it works.
• 46:16
  SPEAKER_00: I mean, Kelly specifically talked about the three things you need is like,
• 46:20
  SPEAKER_00: you need your team operating that way.
• 46:21
  SPEAKER_00: And then in the room, he's like, you need to have direct access to the decision maker.
• 46:25
  SPEAKER_00: So who is the acquisition decision maker and who's the operation?
• 46:27
  SPEAKER_00: And the three of you need to be able to,
• 46:29
  SPEAKER_00: in today's parlance, be on a text chain so you can iterate rapidly.
• 46:34
  SPEAKER_00: The test case for this is Elon and Elon's discussions around interfaces.
• 46:37
  SPEAKER_00: Interfaces are where risk resides.
• 46:38
  SPEAKER_00: And what we've done is built a bureaucracy predicated on more and more interfaces.
• 46:42
  SPEAKER_00: And that obfuscates the clarity of just the three principles being in the room.
• 46:46
  SPEAKER_00: And so, you know,
• 46:46
  SPEAKER_00: just to reiterate what AJ said is you could you can create
• 46:48
  SPEAKER_00: a Skunk Works type business,
• 46:49
  SPEAKER_00: but if there's not a Two or two other people at the table to interact
• 46:53
  SPEAKER_00: with very quickly.
• 46:54
  SPEAKER_00: You know, hey, we have an issue.
• 46:55
  SPEAKER_00: Can we solve that issue?
• 46:56
  SPEAKER_00: Oh, no, you got to talk to the staffer.
• 46:57
  SPEAKER_00: Who's going to talk to the staffer?
• 46:59
  SPEAKER_00: Three weeks later, you're like, we've missed the window.
• 47:01
  SPEAKER_00: That is what we've had a lot of success with DIU doing and have been really energized by.
• 47:06
  SPEAKER_02: And how do you imagine this plays out for the U.S.?
• 47:08
  SPEAKER_02: Like if I compare SpaceX,
• 47:11
  SPEAKER_02: You know,
• 47:11
  SPEAKER_02: China was very far behind in space and then SpaceX has lapped the entire world
• 47:16
  SPEAKER_02: in many ways, both in satellites and rockets.
• 47:19
  SPEAKER_02: Now China's spending tons of money catching up in a lot of ways,
• 47:23
  SPEAKER_02: even exceeding the ambitions of the US in some of the lunar stuff and other bits
• 47:27
  SPEAKER_02: and pieces.
• 47:28
  SPEAKER_02: But, you know, they have like They got like six or seven SpaceX competitors, you know?
• 47:34
  SPEAKER_02: And like everything they do,
• 47:35
  SPEAKER_02: even if it's brain computer interfaces, there's like eight companies, you know?
• 47:39
  SPEAKER_02: And humanoid robots, there's like 20.
• 47:42
  SPEAKER_02: And it feels like we're dependent on singular companies like you guys I mean,
• 47:48
  SPEAKER_02: look, it's a hell of a
• 47:55
  SPEAKER_00: prognostication to make to say what will or won't.
• 47:58
  SPEAKER_00: I will say, you know, I'm obviously a homer for America.
• 48:01
  SPEAKER_00: And I think it's not necessarily a volume question.
• 48:03
  SPEAKER_00: It's a culture question too, right?
• 48:04
  SPEAKER_00: So, you know,
• 48:05
  SPEAKER_00: Elon's talked about,
• 48:06
  SPEAKER_00: you can put the drawings out,
• 48:07
  SPEAKER_00: but that doesn't mean you're going to be able to understand how
• 48:09
  SPEAKER_00: to problem solve your way through the execution.
• 48:11
  SPEAKER_00: And that's a cultural piece.
• 48:13
  SPEAKER_00: You see this certainly in the Chinese military and the way they're trying to learn
• 48:16
  SPEAKER_00: about what the U.S.
• 48:17
  SPEAKER_00: military does with strategic NCOs, so the non-commissioned officer.
• 48:21
  SPEAKER_00: And the real superpower of the American military is not the technology.
• 48:25
  SPEAKER_00: It's the ability to conceptualize and empower decision making at the lowest levels
• 48:30
  SPEAKER_00: to reduce interfaces, reduce handoffs.
• 48:33
  SPEAKER_00: So, you know,
• 48:33
  SPEAKER_00: as a Marine,
• 48:34
  SPEAKER_00: you're on a patrol,
• 48:35
  SPEAKER_00: you're in a squad and you get attacked and the squad leader is there and he's
• 48:38
  SPEAKER_00: a sergeant.
• 48:39
  SPEAKER_00: In the sort of Russian communist doctrine,
• 48:41
  SPEAKER_00: they get on the radio and they ask permission and what do I do?
• 48:43
  SPEAKER_00: And that's interfaces.
• 48:44
  SPEAKER_00: In the American doctrine, that Marine knows what he is authorized to do right there.
• 48:48
  SPEAKER_00: He's got creativity.
• 48:48
  SPEAKER_00: He's going to problem solve it.
• 48:49
  SPEAKER_00: And you actually saw this in World War II.
• 48:50
  SPEAKER_00: People would talk about the Germans.
• 48:52
  SPEAKER_00: What's it like fighting the Americans?
• 48:53
  SPEAKER_00: It's crazy.
• 48:53
  SPEAKER_00: It's so easy because we never know what they're going to
• 48:55
  SPEAKER_00: because you just problem solve on the spot versus everybody else would have
• 48:57
  SPEAKER_00: a doctrine.
• 48:58
  SPEAKER_00: We know that if you do this, they're going to do that.
• 49:00
  SPEAKER_00: So applying that to China, hey, China can apply volume to these problems.
• 49:03
  SPEAKER_00: But if you're just applying a top down approach, I'm not sure.
• 49:06
  SPEAKER_00: I mean, you'll brute force these things.
• 49:08
  SPEAKER_00: That's not to say it's not going to work.
• 49:09
  SPEAKER_00: But does innovation and acceleration come from brute force?
• 49:12
  SPEAKER_00: Time will tell.
• 49:13
  SPEAKER_00: I think in some cases it can.
• 49:14
  SPEAKER_00: But the American way of innovating is really the questioning of why not.
• 49:21
  SPEAKER_00: You have the technical piece here for sure,
• 49:23
  SPEAKER_00: but just like Elon, we're trying to challenge the bureaucracy.
• 49:25
  SPEAKER_00: We're trying to challenge the regulatory environment,
• 49:27
  SPEAKER_00: not to say it shouldn't exist, but to say it should evolve.
• 49:30
  SPEAKER_00: And those are the things that allow us to have one or two companies that have
• 49:34
  SPEAKER_00: a higher probability of succeeding against eight companies
• 49:36
  SPEAKER_00: that are just top-down copying.
• 49:38
  SPEAKER_02: Yeah, which I get, and I for sure buy into on some level.
• 49:43
  SPEAKER_02: I don't know, it was like two weeks ago, I think we saw the...
• 49:46
  SPEAKER_02: China catching a rocket different than SpaceX and getting rid of the fins and a lot
• 49:50
  SPEAKER_02: of the weight that would have been,
• 49:52
  SPEAKER_02: you know, I mean, it feels like, yeah, I don't know.
• 49:54
  SPEAKER_02: I mean, I'm patriotic in that this country's been really good to me.
• 50:00
  SPEAKER_02: I'm not really like some China warmonger or anything.
• 50:04
  SPEAKER_02: I just, it just feels like they're, it feels like they're.
• 50:06
  SPEAKER_02: We can do better.
• 50:07
  SPEAKER_02: There's no doubt about that.
• 50:08
  SPEAKER_00: And I think...
• 50:11
  SPEAKER_00: We're breaking our backs to try and deliver and hopefully see more companies follow,
• 50:15
  SPEAKER_00: certainly in the aviation side.
• 50:16
  SPEAKER_00: The success of Hermia should not be, we're the only company.
• 50:19
  SPEAKER_00: It should be, it mows the lawn for somebody else to try and come and build something.
• 50:23
  SPEAKER_02: You guys,
• 50:24
  SPEAKER_02: you kicked off in Georgia for the most part and now shift in to El Segundo and just
• 50:29
  SPEAKER_02: because it's the aerospace capital.
• 50:31
  SPEAKER_02: It's the aerospace capital.
• 50:32
  SPEAKER_00: You nailed it.
• 50:32
  SPEAKER_00: Talent is king.
• 50:34
  SPEAKER_00: The talent that we really lean on to Design,
• 50:38
  SPEAKER_00: build, and test these systems as a resident out there.
• 50:40
  SPEAKER_00: Back to Kelly Johnson, you can't hire that team.
• 50:43
  SPEAKER_00: That team doesn't exist.
• 50:44
  SPEAKER_00: You have to recreate that team.
• 50:45
  SPEAKER_00: And so you really are taking a lot of particular new space folks and
• 50:49
  SPEAKER_00: then teaching them aircraft.
• 50:50
  SPEAKER_00: And as we continue to grow this business,
• 50:52
  SPEAKER_00: the only place you could get Hermia's talent is going to be from Hermia's, right?
• 50:57
  SPEAKER_00: And so it's part of the reason why people are like, oh, it's taking you so long.
• 51:00
  SPEAKER_00: Like, yeah, we're not just creating the technology, which has been done.
• 51:02
  SPEAKER_00: We have to recreate an entire technical team, an entire way of doing business.
• 51:05
  SPEAKER_00: And even when they say that, Elon was six and a half years to orbit.
• 51:08
  SPEAKER_00: We were seven and a half years to supersonic flight.
• 51:10
  SPEAKER_00: And we didn't have, you know, the hundred million dollars to start with even.
• 51:12
  SPEAKER_00: And so, you know, we think we've done well.
• 51:14
  SPEAKER_00: We can certainly do better.
• 51:15
  SPEAKER_00: But going out there is the key to sort of unlocking the next stage growth.
• 51:20
  SPEAKER_02: Seems to me every,
• 51:21
  SPEAKER_02: the most significant companies I've covered,
• 51:23
  SPEAKER_02: it's usually like 12 years in when things start to, I mean, this stuff is hard.
• 51:28
  SPEAKER_02: It's when things like really start to click.
• 51:30
  SPEAKER_02: And then, I mean, SpaceX is pretty, you know, it was interesting, man, because what is it?
• 51:35
  SPEAKER_02: It was like, go from like 2001 to...
• 51:41
  SPEAKER_02: You know, it took them till like 2014 to start getting Falcon 9 going a bit more.
• 51:45
  SPEAKER_02: And then they had two explosions and that like threatened to undermine
• 51:49
  SPEAKER_02: the whole thing really for a minute.
• 51:51
  SPEAKER_02: And then they kind of like turned this corner and then it was like overnight, right?
• 51:55
  SPEAKER_02: You go from, then you're launching Falcon 9 a lot.
• 51:58
  SPEAKER_02: Now you're doing reusable rockets and nobody even has anything that can compete.
• 52:02
  SPEAKER_02: But I mean, that was like a 16 year journey.
• 52:04
  SPEAKER_02: But then the...
• 52:05
  SPEAKER_02: The entire world flipped, right?
• 52:07
  SPEAKER_02: Almost.
• 52:07
  SPEAKER_02: It felt like almost overnight.
• 52:09
  SPEAKER_02: Yeah.
• 52:10
  SPEAKER_01: But, like, it doesn't happen magically.
• 52:13
  SPEAKER_01: I mean, Blue and SpaceX started at the same time.
• 52:16
  SPEAKER_02: Yeah, it's wild.
• 52:17
  SPEAKER_02: Yeah, I'm sure.
• 52:19
  SPEAKER_02: Way to ask Jeff about that for a long time.
• 52:22
  SPEAKER_02: It is wild.
• 52:25
  SPEAKER_02: And both commercial, you know what
• 52:27
  SPEAKER_01: I mean?
• 52:27
  SPEAKER_02: Yeah, yeah, yeah.
• 52:29
  SPEAKER_02: All right, well...
• 52:30
  SPEAKER_02: The plane did not come out yet, but we're going to have a video for this.
• 52:34
  SPEAKER_02: So I'm sure this podcast will probably air before our episode on the launch,
• 52:38
  SPEAKER_02: but I'll put in the links,
• 52:41
  SPEAKER_02: the flight, and everybody can see what takes place this whole day.
• 52:45
  SPEAKER_02: And we've been talking about this for ages, so thanks for letting us come out.
• 52:50
  SPEAKER_02: Yeah, super cool.
• 52:51
  SPEAKER_02: And then I hope I get the first ride when you guys go.
• 52:53
  SPEAKER_01: Absolutely.
• 52:56
  SPEAKER_02: But yeah, thank you guys so much.
• 52:57
  SPEAKER_02: Thank you.
• 53:00
  SPEAKER_02: The Core Memory Podcast is hosted by me,
• 53:03
  SPEAKER_02: Ashlee Vance, and or Kylie Robison, or both of us together.
• 53:07
  SPEAKER_02: It is produced by me and David Nicholson.
• 53:11
  SPEAKER_02: Our theme song is by James Mercer and John Sortland.
• 53:15
  SPEAKER_02: And the show is edited always by these.
• 53:21
  SPEAKER_02: Thank you so much to Brex for all your support.
• 53:24
  SPEAKER_02: And thank you most of all to everybody for listening or watching.
• 53:28
  SPEAKER_02: We love you.
• 53:29
  SPEAKER_02: Please leave us a like, a review, a subscribe, all those tremendous things.
• 53:35
  SPEAKER_02: Thank you and we'll see you again.