00:59:35 · Chris Power
[00:59:35] S1: So I'll say two things, is lower cost of capital or large quantum some capital are a derivative of being better at executing than anybody else. I don't think there are actually good fundraisers or bad fundraisers. There are better storytellers. But I think people that actually end up with large amounts of capital have better businesses. In terms of the things to not optimise for, and one of the things that I was wrong about is speed. So we started off with the theory that... So there there are there are two markets in American manufacturing very broadly, at least on the technical side. And one is print, no print. And our good friend Jim Belozic runs an incredible no print business, and there's nothing wrong with it. It's amazing. Were always in the print business. Technology's harder. It's higher compliance. And we picked our first customer, which is a very large rocket company with the theory that they're the toughest customer. And if we built a thing they were vaguely happy with, we could sell them the primes. Which is a pretty standard design venture pattern. Anyway it turns out that when we expanded to other customers, you know, the theory being that there were many other growth companies and they would pay for speed at this complexity, high tolerance print level. Anyway, turns out that two things were wrong. Thing number one that was wrong was there were no other companies in that rocket company of any sort of scale, at least at that time. So there were no other startup customers. And that everyone else's business model, they didn't care about speed at all. And this particular rocket company I think is best summed at is they're the only space or defense prime that can convert speed to value. So now there's there's an outer limit to this statement, which is like you can't be slow, but the engineering or manufacturing cost and complexity of being everyone else is at twelve weeks and you're at eight and you're cheaper versus you're at two and everyone's at twelve weeks is orders of magnitude. So most of the market just doesn't value speed. The market very much values flexibility, scale, total program cost, a lot of other things, but that that was one thing I got wrong in the early days that we pivoted into. When you
01:02:08 · Ty Morse, Chris Power
[01:02:08] S0: think about the government side, one of the main inputs to having the contract in two years is having people that trust you today. [01:02:16] S1: Yes. [01:02:16] S0: How did you learn to build the relationships where the government wants you to win and is like incentivized for you to win?
01:02:23 · Chris Power
[01:02:23] S1: I will tell you how we build trust, but it is an inverse of what you just said. Because what you just said was we want government contract, therefore, would wanna build trust. And I have found in my personal relationships, venture investors, certainly the government, certainly large enterprise customers, that if you are serious about the mission and you are serious about creating value, the first thing you should do is create value and then be so trusted that people come to you with your hardest problems, that if you design a solution that can credibly execute them, you will receive a contract, instead of trying to fake trust or credibility in order to win a contract. The tactical answer is we spent two and a half years telling the government in Biden one, we're not ready to tackle any of these problems, but here is our advice on how we think you should think about policy and manufacturing to the point of near frustration. And it was real because we could've probably won contracts earlier but there was no way we were even close to the line of execution or scale. There's a lot of stuff that had to be worked out. Right? And I think when you do that honestly, not as a sales tactic because people do this as a shucks, we're not really ready for this. Know? If you do it honestly, you build so much credibility over the time that when you do say we are ready for this, people do trust you. And equally we have built a reputation of saying no to many contracts because we don't think they're gonna create value to the customer. And that is I think a slow way to build a billion dollar company, but it is a very fast way to build a $100,000,000,000 company. Like, do you wanna go on a date and kiss the girl by like acting like you're rich and taking photos with your Porsche on TikTok, or you're looking for a wife. And we are just the type of people that we're not happy to wait, but we are honest actors. And by being honest and execution driven, you build credibility versus I want credibility and therefore I'm like marketing to credibility.
01:04:54 · Ty Morse
[01:04:54] S0: One of the things I really like about you is I think you have like a slightly different world view than most people that I've met. And I'd almost like to use a metaphor, which is, like, imagine someone starts a company defense and they're like, we are going to have contracts next year. And you, knowing what you know, are like, well, there's just no way that you're not gonna have contracts before twenty months or, like, thirty six months. But people kind of believe that because they just don't know. Sure. What are the biggest areas where conventional wisdom in your experience is just completely wrong and you figured out some unknown truth?
01:05:31 · Chris Power
[01:05:31] S1: In any industry, there are many false doors. And what I mean by that is... I'll use an analogy. Let's say you go into a party, and it's a really great party full of really great people, and you really... You're, you know, you're young and 22, you wanna make friends, and you really wanna have cigars with the people at the, you know, in the balcony because that's where the cool people are. Many people I think manipulate the social sphere or you can stand next to a certain person and signal some friendship or insider basis and and then you get invited to have drinks with the host, for example. And you're fully convinced that you're like in the club now. In reality, you've taken door number b. Because most long value families, the government, enterprise customers, people that you wanna hire, people that you wanna be friends with, at a certain point of scale or success or credibility, you are forced to build these trapdoor immune systems such that you're catching disingenuous people. And I think an unspoken reality is that most people who are disingenuous and are trying to seek power genuinely believe they are in the room, and they have simply just fallen into the abstract door number b trap. And once you really understand that and come to terms with the fact that the only people who should be in the room are the genuine people who are not seeking power, they just wanna do the thing, and you just do that, you will accidentally find the right people who you wanna be with, or the right customers. So when anything is going on, I I think if you're a truth seeking organization, if you're a honest broker, and your job your job in enterprise sales is to advise and provide solutions to the customer as an expert and only bid on contracts that you genuinely believe that you are the best to deliver to and you act like it, then the market will adopt your vision for the world Versus, hey, we're gonna throw up all the marketing copy like we're the thing, but we're not really the thing. Again, I think it's a very fast way to build a billion dollar company or a fake marriage. I think it's a very slow way to build something real. Because I do think that honesty and seriousness compounds in strange ways that are not... You can't write down on paper.
01:08:13 · Ty Morse, Chris Power
[01:08:13] S0: Do you have any examples of an experience that occurred due to this compounding? The entire company. [01:08:21] S1: Every round gets easier for us, not because we're good at fundraising, because in every round we have provided more objective data and more honesty around what is gonna happen the next time around. That people pass on rounds and then they come back around. It's not because of the hype cycle, it's because they realize like what you said you would do in the last twelve months seemed like absolute horseshit, and 80% of it came true. So because what you're ascribing to in capital allocation or large government contracts through talent is trust. That gets built over time. What people mispredict is how fast that compounds. And like there are no hacks. You just gotta do the right thing. And generally the market will work that out. [01:09:12] S0: Ideally, you spend almost all your time on, like, the highest leverage activity that you possibly can be working on. But at least in my own experience, I've only been able to really understand what the high leverage activities were by doing a bunch of stuff that wasn't high leverage Yeah. And then realizing in hindsight that is not what I should be focused on. How has your kind of, like, time and focus shifted over the past couple years to the things that are actually high leverage versus the things that you thought were high leverage?