Ian Cinnamon: Welcome, Trae.
Hey, guys. Thanks for having me.
Thanks so much for being here. So I’ll go ahead and kick it off with the first question, helping everyone who’s listening get a little bit of a better sense of your background. Given you’re both an operator at Anduril and an investor at Founders Fund, what drives you to do both of these things instead of just picking one?
Yeah. So prior to joining Founders Fund, I was one of the early employees at Palantir, where I worked on the business development team. And prior to that, I actually worked in the US intelligence community. And I never thought that I would be working in venture. In fact, I can honestly say that prior to working at Palantir, I didn’t even know what venture capital was.
I remember there was this trope in the movie Wedding Crashers where they were pretending to be venture capitalists, and that was literally my entire exposure to this industry. I had no idea what it was beyond that kind of joke. But after I joined Founders Fund, it occurred to me that I still had this real and kind of very present emotional energy around the national security space and the kind of the mission orientation of my career to that point.
And so, I ended up spending the first two and a half years at Palantir… Or sorry, Founders Fund, just looking at every national security-facing company I could find that was interested in raising venture, and didn’t really find a whole lot worth investing in. One great example of this is actually Ian’s prior company, Synapse, which was one of the few companies that I found that I got really excited about and ended up writing a check into in the security space, but there weren’t dozens of these worth investing in.
And so, I went back to the investment team and I basically said, “Look, what we need is we need a 21st century defense prime.” If you were to build Lockheed Martin from the ground up today, what would it look like? Well, it certainly wouldn’t look like Lockheed Martin. It wouldn’t look like Northrop Grumman. It wouldn’t look like Raytheon.
It will probably be a software-first kind of function, where you’re building capabilities that are relevant in artificial intelligence, computer vision, autonomy, things like that. And then you’re wrapping the metal around it, so software-defined, hardware-enabled rather than the historical way. We do this with hardware-defined, software-enabled capabilities. And my team challenged me. They basically said, “Look, if you know what this should look like and you can’t find it, go ye therefore and start a company.”
And so, I guess the long roundabout way of answering your question is that my intent was never to do both of these at the same time. In fact, my intent was never to work in venture capital at all. And yet, just kind of the way that it worked, I ended up finding a problem set that I cared about deeply. And I really couldn’t imagine going another day without trying to build this thing that has now turned into a really cool company, but could really not have done that without support of Founders Fund.
Incredible. And I think a lot of people are also curious, what does a day in the life look like for you? How do you balance both of these? Are you splitting your time each day, half year, half there? Is it one day a week?
What does that balance look like?
Balance. What an interesting word. I don’t really feel like I’m balancing anything. I feel like I have two jobs. So it’s more ad hoc. It’s not as simple as like one day here, one day there, one day here, one day there. It’s much more just like a really complicated negotiation of time and effort, depending on what’s going on in any particular day.
It kind of jumps all over the place. There are some weeks where I’m 70% Anduril and 30% Founders Fund, and then the next week, I’ll be 70% Founders Fund and 30% Anduril, and that’s okay. It’s just a matter of figuring out where the burning fires are that need to be put out and focusing time and attention on those priorities.
And Trae, given your background both at Anduril and Founders Fund but also your previous experiences at Palantir, you have a network and you’re constantly looking at very specific and super interesting programs and projects that relate to the US government and the defense sector. When you look at the United States today, what keeps you up at night, and what are problems that you’re worried about that you think the average person, perhaps listening to the podcast, may not know of or may not be top of mind to them?
Yeah. I call this the crazy uncle problem. So almost all of us have a crazy uncle that you’re always a little bit afraid of what they’re going to say around the table on Thanksgiving. And I think most crazy uncles think that there are all of these top-secret laboratories underground where we have captured alien spaceships and all of this absolutely unbelievable technology, and that the United States is basically like a guaranteed global hegemon for now and ever.
It’s like, we have this incredible infrastructure that no one knows of that’s just going to keep us in power, and that’s just wrong. It is foundationally wrong. We are vulnerable. There are top-secret programs, but they aren’t things that are orders of magnitude beyond the technologies that you know about today. And we are in an arms race of some sort with our great power adversaries, where they have capabilities that we don’t have and we have capabilities that they don’t have, and we’re constantly playing those off against each other and trying to figure out how we would do if a war did break out.
And I’ll be honest, the thing keeps me up at night is that when we wargame a conflict between US and China, we lose almost every time. And this is something that I feel like most Americans just don’t really have a good grasp on is that… There’s of course really important things that we need to be doing diplomatically from a foreign policy perspective to keep us out of war. But you have to both work to prevent war as well as work to prepare for war, and those things work hand in hand actually. Deterrence is a critical aspect of national security and foreign policy.
And can you talk a little bit more about, on how you think we got here in the first place? Do you think we had a sense of arrogance or superiority that over the last 20, 30 years, the United States was untouchable and somehow things have changed and we just didn’t notice? How do you evaluate the situation?
Yeah. I mean, the Cold War was an existential threat between the United States and the Soviet Union, and risk of nuclear war. And in many ways, during the Cold War, the former Secretary of Defense, Robert McNamara, believed that the United States had all the technology it needed to win. It was just a question of making sure we had enough of the tools that we owned to win a conflict with the Soviets.
And you often hear of references like the bomber gap or the missile gap or whatever, which was really a justification to spend more money on existing systems. However, today, by contrast, it’s actually a race for new technology. Everyone recognizes that brute force isn’t going to determine the winner in a future conflict. It’s really about like, how can we take advantage of the advances in predominantly software-driven fields and apply them to the battlefield to advantage the warfighter? And China, Russia, or other adversaries, Iran, North Korea, they’re leaning into new tech to win that asymmetric advantage over the United States.
But the Department of Defense is still kind of bizarrely locked in like a Robert McNamara frame where it’s like, how can we build these huge, exquisite systems like aircraft carriers and nuclear submarines and fifth or sixth-generation fighter planes? And then how do we acquire enough of them to overwhelm the enemy? And it’s like, wow, that’s not actually the strategy that’s going to win. And the culture and the policy, regulatory infrastructure that has gotten us to where we are today is still the one that’s being enforced, and it’s not set up to kind of bring those new ideas to the battlefield.
And when you think about funding new technologies, I think in a foreign policy context, a lot of people think about funding submarines or funding missiles and things like that. But there is a lot of application for technology that is being developed at startups and big companies that can also be applicable in a foreign policy context. Can you talk a little bit more about that, that most people may not know of?
Yeah. I mean, I think this kind of begins and ends with software. A lot of this is not big, expensive, exquisite hardware systems. It’s kind of moving rapidly, and being bold in our deployment of new capabilities that are driven by primarily like the increased compute power, our ability to operate at the edge in ways that we’ve never been able to before, the realities of autonomy and how that changes the way that we engage in warfighting.
And so yeah, I don’t think that it’s all about building aircraft carriers. It’s not all about building really complicated submarines. That said, there are… In those different domains, if you’re talking about satellites in space or next-generation aircraft, which by and large are… I think you’re seeing a vast increase in unmanned systems in the air. You’ll have unmanned ground systems as well. Things like Next Gen Combat Vehicle that are optionally manned.
And there’s a lot of investment that’s going into the small autonomous drone space as well, like for underwater vehicles. So I think that we’ll still build the same types of systems largely for these conflicts, but they won’t look the same. It won’t be like a $13 billion aircraft carrier. It’s a much less expensive, almost attritable-in-nature system that is very likely to kind of augment or replace some of these more expensive things.
So given all of that and the importance of building kind of these more nimble, maybe software-first products as opposed to building another giant aircraft carrier, a lot of this boils back to, yes, the technology side, but then also the procurement side and what is the government actually going to pay for. What do you think needs to happen to wake the government up a little bit faster around, maybe it’s not just about building a bunch of aircraft carriers, but we need to focus more on better procurement options, better R&D, things like SBIRs, AFWERX, mechanisms like that to kind of help make more of this software innovation occur?
I think it’s really just like a leadership culture. There’s literally dozens, if not hundreds, of reports and commissions that have been executed in the last decade, like calling for revisions to the federal regulations around acquisition law and ways to structure programs and new pathways to acquire software. I mean, there’s thousands and thousands and thousands of pages of reports that have talked about this.
But at the end of the day, I believe we have all the authorities that we need to do the things that we need to do. We just don’t. It’s just bad decision-making. And I think we have to hold our leaders accountable for doing the right thing and for getting educated on the kind of gaps that they have in their understanding of how these things are shifting in the future.
And I don’t think these are bad people. These are patriots, like people that care deeply about US national security. It’s just, after the Cold War, we had kind of a brain drain of technical talent out of the department, where the most aspirational, technical people realized that they could go and move a lot faster in the private sector. We didn’t have that existential threat. That was kind of motivating progress, and they didn’t come back.
And so, we have legions of people who have no exposure to technology development on an absolute basis. They only have the on-a-relative-basis exposure inside of the Pentagon, and so they get stuck making all these decisions that are just based on their prior experiences, which is not the way to disrupt in the future as like… Probably anyone listening to this podcast knows that that’s not how disruption works. So I think that’s kind of the… We’re stuck in a loop.
So if you were in a position to become any of these leaders that we talk about where it’s a failure of leadership to point in the right direction, what role would you take? Would it be President of the United States or something else? And what would you do to actually fix this? Right? Can one person fix this, or does it require a fundamental mind shift in how people think?
No, I don’t think one person can fix it. I think there’s layers and layers of people that you just have to have a kind of organizational cultural movement to get this right. There are all sorts of things that you could do that would be totally illegal that would be great. One thing that you could do is you could say, “For this contract, we are going to award it to a non-top five defense company.” So it’s like, Lockheed cannot bid or participate in this. Raytheon cannot bid or participate in this.
Again, these aren’t bad people at Lockheed or Raytheon. It’s just, they’re not incentivized or motivated to do things the way that we probably need to do them in certain contexts. And so… But that’s totally illegal. You can’t intentionally exclude people from competition. But we need acquisition leaders or budget owners that are willing to say, “I’m going to go with this non-traditional company or this new entrant to the defense space to build a capability because I believe they have the right people to execute the mission.”
And you have to believe that, fundamentally, that there is a talent gap in these core capability areas, and then you have to make decisions that are based on your understanding of that core talent gap.
So Trae, to go back to the analogies that you’re making to the Cold War, one of the things… And correct me if I’m wrong, but one of the things that I think we definitely did not do back then was to actually fund cutting-edge Soviet technology. Is your view, when you look at the… Be it the venture capital landscape today, that somehow we’re funding both sides of this arms race?
Yeah. I think that’s actually happening in a variety of different ways. But certainly, we spent 20 years, more than 20 years, 30 years building out kind of the broad Western liberal idea of globalization, where we were manufacturing goods in foreign countries, and that was good. We were investing in foreign assets, that was good. We allowed foreign investment in the US economy, that was good, until it wasn’t.
And there came a point where, I think, people started realizing that we were kind of being sold a false bill of goods on unbridled globalization, and there’s still a hangover that’s kind of like bubbling as a result of that. And that includes things like kind of the civil-military fusion aspect of what the Chinese economy is doing, to say… Companies like Huawei or DJI or SenseTime, or you can name the company.
They have not only an interest in having the government work with those commercial entities, it’s actually an obligation. And so, they’re kind of on the hook. And the US consumer, in many ways, has facilitated that by buying consumer products or participating in that economy. You could say the same thing about TikTok. I’m not accusing TikTok of violations of national security norms. But when we interact with that ecosystem in a world in which there is civil-military fusion on the other side, we don’t necessarily know how our consumer behaviors are going to impact their ability to fund internal research and development for technologies that could work to negative ends for the US foreign policy position.
So yes, I think the consumers are on the hook. The investors who have put money into these companies are on the hook. And certainly, at a geopolitical level, this is something we have to think about. I think the Defense Department, the Department of Commerce, the Department of State, we all need to be thinking very carefully about like, how do we not… We don’t want to provoke war, but how do we set up rules and boundaries around foreign investment in both directions? And how do we not make our foreign policy position more difficult so that we can deter conflict and prevent gross violations of human rights?
And that’s something that we haven’t been thinking about probably deeply enough in an appropriately nuanced way for the last 30 years.
And how do you think that this is going to play out over the next five or so years? Do you think we need a new sort of a Sputnik moment to wake everybody up to the challenge? And if so, what could that be?
Yeah. I mean, need is a dangerous word here. I don’t think we need a Sputnik moment, but I think we’re going to get them, whether or not we want it. I mean, by the time this podcast is published, it seems very likely that Ukraine will have been invaded by Russia. Who knows how they’re going to frame what exactly happened, whether they’re going to say that the Ukrainians instigated it and deepfake those things that are happening, which is what the State Department has been saying that they are preparing to do.
But one way or another, I think it is increasingly clear that our ability as a world power to deter our great power adversaries from taking action in places where we would like for them not to is going to be significantly weakened. I don’t think anyone actually believes that we’re going to go into sending ground forces to wage a campaign against a great power, and I think that they’re going to behave with that understanding in the back of their mind.
So does that mean that Taiwan is going to be invaded by China or is going to be retaken by China? If that happens, what are the geopolitical implications of that? Obviously, people have talked about like, are we going to Operation Paperclip TSMC executives out of Taiwan? Man, my answer is, I hope so. Otherwise, I think it’s going to be a really messed up supply chain for sub-7 semiconductors. Anyway, there’s a lot of things that we need to be thinking about. And I truly don’t think globally, anyone is taking our position of power as seriously as they used to.
And just to double-click on something that you said, how do you evaluate the threats coming from Russia and China differently?
Yeah. Well, I would add other adversaries to that equation as well. There’s… North Korea is a real threat, regionally as well as globally. Iran is a huge financer and a weapons provider to many of adversarial regimes that we’re fighting in conflict with our allies and partners. That matters. Russia, we could talk about as well. Same for China obviously, which is the elephant in the room.
But then you have smaller players like Turkey, is conducting arms deals with countries that I don’t think a lot of us would be comfortable with. The TB2, the Bayraktar drone is being seen flying in all of these global conflicts that we’re getting mixed up in, and that sort of stuff matters. So there’s a lot of nuance and complexity to how these things are done and what sort of threats these countries present to us and our allies.
But we could spend way more than the length of this podcast talking through those individual differences. But the important thing, I think, to remember is that this isn’t just about the United States versus China. It’s certainly not about the United States versus the Chinese people. We should keep in mind that the Chinese people are under the authority of an authoritarian regime, and the Chinese Communist Party is, in many ways, responsible for what’s happening there, not the people of China itself. And the same goes for these other powers that we’re concerned about.
And when you see things like what we saw last week with China and Russia signing a most friendly nation alliance with one another, it’s like an emerging new Axis in the world. And I think that changes everything. It changes the way we think about geopolitics. It changes the way we think about resource acquisition. It changes the way we think about acquisition of critical materials like semiconductors and things like that. And this is tough. It’s not as simple as whatever political, tribal soundbite you saw on Twitter yesterday. It’s like, these are really complicated issues.
So given everything that you’re describing, as somebody who went through this and created a company trying to help and solve some of the issues that we’ve played out, it’s obviously very compelling. It’s something where if you’re able to build technology to assist with any of these kind of Western ideals and help protect America, whatever it may be, there’s a lot of desire to do that.
However, traditionally, it’s significantly easier to raise capital as somebody doing a B2B SaaS company, as opposed to somebody building a frontier tech company or a company with software who might be dual-use but has a heavy focus on government or another large customer like that. How do you think that dynamic has evolved over time? And do you think entrepreneurs who are focused on frontier tech, hard tech ideas or ideas that are catering towards government or DOD are now having an easier time getting funding?
Yeah. I actually kind of reject this idea in principle. Oftentimes, companies that have a hard time getting funded, the first thing they do is they just blame the investment community, and they’re like, “It’s very hard to raise money as a frontier tech company,” when really the reality is, it’s really hard to build a business in frontier technology, and investors follow business success.
And so, maybe if investors aren’t willing to invest, the reason is that you can’t actually sell the product, or it’s going to take too long for you to roll it out, and getting the capital that you need becomes a massive skillset gap. Oftentimes, we see academics, just pure academics that come in with these very cool ideas, and they’re like, “Yeah, I need to raise $100 million over the next five years to do this,” but they’re bad at fundraising. They don’t have any sort of concept of how they’re going to build a business model. They’re not very good at pitching, which means that it’s going to be very hard to recruit the people they need to succeed in this mission.
And so, it’s less about like… It’s hard to raise money because VCs don’t like frontier tech. It’s actually that… It’s really hard to build these businesses, and VCs know that. They know that it’s really hard to build these businesses. And so, I think part of it is just getting really talented people, really talented entrepreneurs, really talented people that might otherwise go and build boring enterprise SaaS companies to go and commit themselves to doing something that’s way harder.
And this is the reality about defense tech, is that the three biggest defense companies in the last 20 years, new entrants, venture-backed, are Palantir, SpaceX, and Anduril, and one commonality between those three is they were all founded by billionaires, like serial entrepreneur billionaires. The reason that they were able to build these businesses, Anduril included, or they, I’m referring to myself in some ways. The reason that they’re able to build those businesses is because they have the capital under their belt. They have the business acumen under their belt. They have a track record of delivering results.
And so, it’s significantly easier to run the business, to recruit the talent, to raise the capital. And that sort of thing often goes unnoticed. So truly, I encourage people to go and build frontier tech companies to do the harder stuff, but you should have a strategy for doing that and understand what your advantages are, and you need to realize that raising capital is a skillset. And if you’re having a hard time raising capital, there’s a chance that you’re just not good at raising capital, which means you need to go and find someone that is good at raising capital to help you build your business.
And Trae, I’m sure you could write a whole book about this, but when you talk to founders who want to build in this space, what are the most common mistakes that they make and the things that they don’t know when you talk about selling to the DOD or working with the government?
Yeah. There are a lot. I think one of them is, assuming finding someone on the ground that thinks your idea is good, establishing a belief that that is relevant to the future business success of your company. There is no tie between feedback from an end user to a pilot and a prototype, and there’s no tie between a pilot and a prototype to production contract. There’s almost no tie between a production contract and a long-term program office with sustainment funds attached to it.
It’s very, very hard to actually build the thing that your customer wants, convince the customer to pay for it, convince Congress to appropriate funds to pay for it long-term, and do that without any prior experience working in the market, which is just kind of lame, to be honest. It would be way better if the government was good enough at evaluating this that a very smart kind of person could come in with a great idea and be successful. But the reality is, you have to be able to do the inside baseball thing to work.
And I think this is where a lot of these companies kind of go sideways, is they get $500,000 pilot funded through an SBIR contract or something like that, and they’re like, “This is it. We’re going to be big.” And it’s like, “Oh man, do you have any idea how low of a percentage there is from a transition from SBIR to production?” It’s minuscule. It almost means nothing.
In some ways, it’s been easier than at any point in history to get pilots and prototypes with the DOD, and it’s never been harder than at any point in history to get a production contract. It’s unbelievable. I’ll go back and look at the decks of companies that come in to pitch, and their projections are just… I mean, they’re off by multiple orders of magnitude, and it’s not their fault.
If you were interacting with a rational customer on the other side of the table, you could easily draw these projections. But what ends up happening is, it’s like, they can get 100 SBIRs but they can’t get a single production contract, and it just doesn’t scale. And so, when you tell your investors a dozen times that you’re going to have $100 million of revenue in two years and you come back to them every time and you have one one-hundredth of that, it’s like, it’s pretty hard to keep things going when that’s the case.
And it sounds like that’s a mix of, one, having the entrepreneurs understanding how to take that feedback from the end customer and then turn those SBIRs into actual program of record or production contracts. It also sounds like, just going back to what you hit on earlier, there’s something from the acquisitions arm of the government that if it were built differently or if there was a slightly different mindset, perhaps that would be a bit easier.
Obviously, people can hire in people who are experts at the program of record side of things, getting you to that. What do you see as more likely to kind of change first? These companies who are trying to do this, realizing the sales are actually different and adapting to that, or the government actually waking up and adjusting maybe how they’d do procurement for certain areas?
I mean, cynically, I don’t actually think either of them are likely to change. I think, like any area of technology, there are going to be very few winners and a lot of people that don’t win, and that’s not necessarily bad. This is kind of the way that things go, especially in venture capital. But I mean, my kind of advice would be, you should go and work. If you’re interested in this space, you should go and work for a company that has figured it out first. Go and work at SpaceX. Go and work at Palantir. Go and work at Anduril.
If you’re super hellbent on doing your own thing, then you need to get smart on congressional appropriations and how you can get contracts issued through OTAs and SBIRs and In-Q-Tel work programs. And you have to get smart enough that you can educate the program officers and the acquisition officers about how transitions are done and how to do sole source contracting and engage with innovation entities, like DIU and SOFWERX and AFWERX and things like that.
I mean, you basically have to become an insider. And I think it’s genuinely very, very hard. And the only reason that we were able to do what we were able to do at Anduril is because many of us came from Palantir, and we had already done it. And sadly, I think that that’s probably a prerequisite from doing a good job at this.
So Trae, we’ve spent the last few minutes talking about the bottoms-up, the entrepreneurs who want to start the new companies in this space. If you look at it from the top down, over the last 50 years, we’ve seen the market for defense companies go from 100 to five. And Anduril is the first successful startup in the defense industry, you correct me if I’m wrong, but I think in many, many, many decades. How did we get here? For someone that is not as deep into this space, what happened?
Yeah. Well, for what it’s worth, Palantir and SpaceX are also both huge defense companies that are very successful that have been founded in the last 20 years. But yeah, I think Anduril is one of the few, I guess, is what I would say.
How did we get here? So after the Cold War, there’s this kind of insider famous. It’s not famous in a normal societal way, but it’s like an insider famous story about what’s called the Last Supper, where the Secretary of Defense sat down all of the defense industry CEOs, and he said, basically, “Consolidate or die. Defense cuts are coming. We need to keep a vibrant and competitive landscape, but we can’t do it with 100 companies, so we’re going to need to narrow this down.”
And so, you saw massive consolidation in the ’90s and into the 2000s, and even in the 2010s, whatever we’re calling that 10-year period. The aughts? Is that right? No, that’s 2000 to 2010. And there were some good aspects of that. It enabled the government to keep talent invested into these areas. It provided enough competition to get multiple options when they went out to bid these exquisite systems.
But in a lot of ways, it made it more or less impossible for new entrants to come in, so it just kind of cemented a quasi-monopoly of the industry. And I always think it’s shocking. As much money that there is flowing into these companies, congressmen, all their time, criticizing technology companies for being monopolies, but they’re not looking internally to be like, “Oh, crap. Actually, Lockheed, Raytheon, Northrop, these are our monopolies,” and we’re defending them, literally with the law. We’re making it more or less impossible for new companies to break in, and that’s not good.
I think that this is… We’re starting to break through with Congress. SpaceX and Palantir both sued the government for a violation of Title 10, US 2377, which is the commercial preference law in the acquisition regulation. It says like, “You can’t build something from scratch if it exists off the shelf commercially.” So I think we’re starting to break through by kind of pushing the acquisitions ecosystem to lean back into industry to provide them with capabilities, but it will take time, and it won’t be easy. There will continue to be lawsuits and protests and everything like that. But I think we’re closer today than we were five years ago, by a lot, actually.
So given all of that, I am curious, looking at some of the examples that you listed, right? So you have SpaceX, you have Palantir that, as you said, were both founded by billionaires. And then at the same time, you also have companies like Anduril that were co-founded by a billionaire, but also incubated and somewhat spun out of Founders Fund. Similarly, Varda has followed that same trajectory.
I’m curious how you think about that dynamic. Are there other companies that might be spinning out of Founders Fund in the near future? Is that something that you and your team are actively thinking about, or does it just sort of happen where you say, “Hey, we’re looking to invest in a company that does X. Why has nobody done this yet? Oh man, maybe we should do this ourselves”?
Yeah. No, it totally just sort of happens. There’s no build program inside at Founders Fund or anything like that. We don’t encourage people to go and start companies, but we also don’t tell them not to, if there’s something that scratches an itch. So obviously, Peter was at Founders Fund when he launched Palantir. Keith Rabois, one of my partners here, started a company called Opendoor a couple years ago. Delian started Varda. I was behind Anduril.
So we’re very open to it. And I think that there are some skillsets that VCs bring to the table that can be really helpful, particularly at the early stages of a company to understand how to structure the company and how to incentivize people appropriately and how to raise capital and do a good job building kind of a war chest for these really complicated, expensive, capital-intensive sorts of businesses.
But I don’t think it necessarily has to be intentional, and I don’t think that all of the big successful companies are going to come out of those sorts of ecosystems. It’s just kind of something that we’re open to here at Founders Fund.
And Trae, if you think about the future of the United States, for people who are listening to this who are interested in technology, and if you care about the future of America and American values, what do you recommend them to do? What are things that one can do that you think are actionable and that can help the country given the challenges that we’ve discussed today?
Yeah. I think, just thinking really intentionally about career choices. And unfortunately, I think, if you were to separate things into very mission-positive companies or even morally bad companies or whatever, there’s this huge category in the middle of things that are just kind of neutral, like boring kind of inconsequential things that maybe have really material financial gains that could be associated with it, but it doesn’t move the needle for advancing humanity.
If someone’s really motivated by that, I would encourage them to just run at it full steam. It doesn’t have to be defense. It could be some other kind of critical mission. But we need good people working on these problems. We need good people in government. We need good people building technology from America. We need good people working on fixing the policy problems that exist, and there are many, many, many paths available.
And there are a lot of people who are going to be happy to help you get there. But I think step one is just saying like, “I’m not going to go work on this kind of boring, neutral thing. I’m going to dedicate myself to working on something that actually matters and moves the needle.”
Anduril had a huge contract in the news last week or a couple weeks ago. So first of all, congratulations about that. So as Anduril continues to buy more in innovative defense technology companies, which you also had an acquisition last week, what are the core elements you followed to prevent you from becoming a sleepy prime?
Yeah. No, it’s a great question. So far, we’ve acquired three companies. We bought a company called AREA-I that builds air-launched effects, so basically drones that are shot out of common launch tubes on helicopters and other aircraft. Copious Imaging, which makes these really cool passive sensors, like non-single amending sensors. And most recently, we just acquired a company called Dive Technologies that makes underwater autonomous vehicles.
So we’re kind of constantly looking out for companies that are great culture fits for Anduril, where they can come in and kind of integrate very seamlessly into our team, that are super motivated around the mission and really ambitious. And we’re not really interested in acquiring companies that are looking to get through their golden handcuffs and then, “Peace out!”
I think that this has been kind of the model that’s been taken by, as you say, the sleepy primes over the years, is that they acquire companies for IP or for contracts or something like that, and like, they’re genuinely not surprised if big chunks of that company just leave after a year once they hit their vesting cliff or whatever. This is not at all what we’re trying to do.
We want to buy companies that provide us with capabilities, technology that are advancing the mission of the business and are interested in doing that as a big bet on the future in a way that is persistent and sustained outside of that initial stock grant or whatever.
Awesome. So Trae, to wrap us up, we started this by talking a lot about the things that kept you up at night in the issues that you deal with in this universe that you’re in. Given everything that we talked about here today, what makes you optimistic and what gives you hope about the future of the United States?
I still believe deeply in democracy. I believe in the incentives of a well-governed capitalist economy. I believe in liberal values of free speech, free dialogue. And I believe these things are worth defending. And I think one of the things that has emerged particularly over the last couple of years is that I think the vast majority of Americans also believe those things are worth defending.
And our allies and partners internationally look to us for setting a model of what it looks like to carry forward that vision for humanity. And I think we have a tremendous opportunity to continue kind of leading the free world into a brighter future where we’re revitalizing and enriching human civilization. And I think that it’s never been more clear that there is a credible and somewhat terrifying alternative to this that’s arising out of these authoritarian governments.
And I think as a nation, we have to really fight hard against that. Not only externally in a geopolitical sense, but we also have to fight hard against that internally, because I think there’s simultaneously this growing kind of tribalism that is validating these authoritarian tendencies with all sorts of really feel-good reasons. But I think we have to push back against that and really lean into the values that have made us who we are today, which are… Obviously, we’re not perfect.
The United States people, the United States government, we’ve made a lot of horrible decisions over our history, and there’s no arguing against that. But liberal democratic ideas, I think, are just so core to the future of humanity, and we have a role to play in ensuring that for not only ourselves, but also our allies and partners internationally.
That’s right. We can’t afford to lose, right? And the rise of authoritarians on the inside is a victory for the authoritarians on the outside.
Exactly. And they have every incentive to want to elevate and highlight those voices that are telling us that we should lean into these brutalist tendencies. And I think we’re better than that. I think we’ve learned our lessons about why the systems that are admittedly flawed on our end have led to better results for human flourishing, and we need to keep telling that story over and over again.
And I think this is something that like… It’s so easy. It’s so easy. So easy, especially for people in the mainstream media to critique defense companies as being some sort of like warmongers or unethical arms dealers or something like that. But it’s just such a farce. The idea that we don’t need to care about defending our values and doing it in a way that prevents war and preserves peace and it increases human flourishing is just dishonest.
And I think this is something that I’m constantly reiterating to people when we have conversations about ethics. It’s like… The ethical thing to do is not to abstain from making an ethical decision. It’s just not an ethical decision if you’re abstaining from making it. And I am leaning hard into this idea that I haven’t abstained.
I’m going to make the decision to care about people who are being oppressed. I’m going to make a decision to care about Western liberal democratic values. I’m going to make a decision to care about my interest in enriching humanity, and I think this is a part of it. It’s not the only part of it, but it is a part of it. And I think a lot of people do agree with that, more people than the media would have you believe, for sure.
Right. And Trae, so since you touched on that, I wanted to double-click on something that you said about abstaining from these decisions. Last week, we saw Ben & Jerry’s, the ice cream company and great political commentator, talk about how you can’t simultaneously prevent and prepare for war. What do you think about those comments? The very common criticism that you can’t actually be funding defense companies, that you can’t be working for defense companies, and doing all of these things to actually increase deterrence, and that, in and of itself, is an act of war or an act of animosity.
Yeah. I mean, my response to the… And yes, I did see the Ben & Jerry’s tweet. My direct response to the Ben & Jerry’s tweet is like, “No, you actually can.” You can prevent and prepare for war. In fact, that is the only way to prevent war, is to prepare for war. And so, the premise that they were introducing is fundamentally flawed.
But at the same time, I love that we can engage in discourse around this. I would go to war to protect their right to have that opinion. And I want that conversation to happen. And if sending out that tweet in saying something that is… Anyone that has studied political science for more than four minutes in their life would obviously know as ridiculous, I want…
If that was what engaged people and caused them to have a conversation about what preventing war actually looks like, then good on them. I’m glad they did it. I’m glad they said it, because it was probably netting out positive for our ability to engage on these admittedly complicated topics. It’s not… None of this is super obvious. It’s like, these are complicated.
Right. Love that. And then, do you think… A couple years ago, we saw Google canceling the contract that they’re going to do with the DOD. Satya Nadella actually wrote a great essay on why Microsoft should work with the DOD. Do you think we’re going to see a backlash against the idea that these companies should not be doing contracts with the US government? Are we going to see startups and companies be proud and be open to work with the US government the way that Anduril has?
Hmm. Well, I certainly don’t think that it’s the majority of these companies, Google included, that has a problem with working with the United States government. I think in the case of Google, it’s a very, very small minority of incredibly vocal people who are creating problems for the organization, which led to them initially bowing out.
Google does a ton of work with the US government. I want to make that very clear. So does Microsoft, so does Dell and Cisco. Every major tech company is more or less doing business with the US government. In fact, we should… I think as a general rule, if we want our government to work for us as citizens, if we want good governance, it would be unethical to not, if you’re a really talented technologist. It would be unethical to not want to help and work with our government to help it govern better. That seems like a fairly obvious statement.
At the same time, do I think that there’s going to be this reinvigoration of interest around working with the defense community? Maybe. I mean, we saw this after 9/11. There was a huge influx of interest in helping the national security community. That was a Sputnik moment, as you referenced before, Lucas. I would love for there to not be a Sputnik moment that seems like… Reintroducing existential threat is never fun. Maybe it shakes loose the cobwebs of stagnation in society, but it’s not the best way to motivate change from a psychological perspective.
But I do think that there is an increasing awareness of the fact that the world is not a simple place, and we should do what we can to protect. And at the same time, we are all free citizens. And if we don’t want to work in defense, we don’t have to. And you know what, that’s great. I love that. I don’t want civil-military fusion in the United States. If somebody wants to build cat NFTs, that’s great. They should go and build cat NFTs. I love that. I’m totally okay with that.
But if you are the type of person that wants to be motivated by this mission and wants to work day-to-day on this mission, I want there to be places where you can go, aspirational places where you can go to work on the problems that matter most to you, and I think that’s what companies like Palatir, SpaceX, Anduril, and so many others that have started to enter this space are really providing. So I want that optionality to exist. And I think the most vocal minority shouldn’t have a say in whether or not you can go and work on this if it’s something that you’re motivated by.
I love that. Trae, thank you so much for being here with us today.
You bet. Thanks for having me, guys. Take it easy.
Yeah, this is great. Trae, thank you so much.