00:33:40 · Olaf Hichwa, Ty Morse
[00:33:40] S1: Yeah. They'll find out there's jamming in certain areas and then pick a certain mode. There are manual modes to things that you want to use sometimes. You might wanna change your car to to to manually shift gears, as an example. Or really, you should have a stick by default. But anyway, just how those how those, like, menus work out, they're so important. Like someone's life is in a balance on whether this menu is a good user experience or not. So we care so much about every every page. And that's just like one tiny example. How the drone interfaces with various other systems, like what battlefield management softwares we interface with make make all the difference in the user experience, and we care a lot about it. [00:34:21] S0: Is there anything that you can see is a product or project that you're definitely going to wanna tackle in the future, but are not going to tackle today because you just don't have the bandwidth or the necessarily, like, technical know how yet? [00:34:35] S1: Yes. Consumer photography drones. Okay. Right now, of American weapon systems, like, obviously... It's gonna sound obvious, but they're funded by taxpayers. Thank you, Ty, for your support of Bandit and Archer. You know, it is your dollars that you... [00:34:53] S0: I actually don't make money, so I don't pay taxes.
00:34:55 · Olaf Hichwa
[00:34:55] S1: Okay. Fair enough. Well, thank you my other friends for paying taxes. That sounds very obvious, like weapon systems are funded by the government. China has kind of like, transcended this to a certain degree. I, as a DJI customer, am funding China's military industrial base. You know, they make in China cargo ships. They're required to meet the PLAN, People's Liberation Army Navy, standards for military vessels. So when I buy that thing from China, I'm actually funding their navy. So it's crazy that they have, their entire military budget, but a good chunk of their military budget is actually funded by like American and other western taxpayers. That is is smart. We should start doing that. We've fallen so far behind that it's it's almost impossible. Competing with DJI, the world's largest drone producer, is nearly impossible. They own 70 plus percent of the world consumer drone market, and I don't know of another consumer company with a bigger advantage on all the competition than DJI. Like you look at an iPhone and, I don't know, a Samsung, and like you could see the difference in quality of product is like this much. To DJI, it's... DJI is the next competitor. It's insane. They're just so far ahead, and kind of building an American competitor to that takes time. We're we're not ready for that yet. I think it's gonna take a million drone factory first to get to the unit economics where that makes sense. But, yeah, my my answer to that is consumer drone products. That will will be a challenge one day. It's a great way to have credible deterrents. China will start buying them. They'll start putting cameras, pointing at their critical infrastructure, and that'll be a really interesting data source. Maybe I'm dreaming there, but having a consumer product is is is critical to maintaining credible deterrence.
00:36:51 · Ty Morse, Olaf Hichwa
[00:36:51] S0: One of the other things I heard you talk about today was the different suppliers that you guys are going to work with. And I was kind of thinking to myself, there's enough of them where clearly you have like a strategy versus just fully vertically integrating every single thing that you're gonna do. Why not vertically integrate everything? [00:37:07] S1: You can never be a 100% vertical. Right? We're not designing our own screws. We should probably use the same screws that SpaceX uses and everyone else. So there... There's a big strategy. The make versus buy strategy is very important. The way we think about vertical integration, it's first about, like, well, if nothing exists, like when we started, we wanted a drone radio for $50. We reached out to the existing players and we heard, 2,000, 3,000, $5,000. So, okay, go vertical. Easy easy answer. Next, it's about, like, does this have a massive impact on the quality of your product? For example, like, if we were using someone else's flight computer, and their flight computer was a little worse, it had a little bug, like all of a sudden our phone... Our drone flies like crap, and our user's life is at risk, we should make that ourself. We wanna control every variation of that thing. We wanna make sure every defect is like directly reported and not hidden because contract, you know, [00:38:11] S0: And also it's like on you if, you know, thing fucks up.
00:38:11 · Ty Morse, Olaf Hichwa
[00:38:11] S0: And also it's like on you if, you know, thing fucks up. [00:38:14] S1: Yeah. If someone fucks up, it's on our team and they get let... You know, they they get to see what happened to the production line and, you know, they don't get to say, oh, well, we will just work with other people. Like, it's their job to be full time. So when it's important to have control, that's important. It's also like there's a there's a financial aspect behind it. Like, let's say the radio example. If there's one very low cost piece of a radio and that has a really long lead time, that needs to be stockpiled. It's much more efficient to just stockpile that one, two, or three small parts of the radio instead of stockpiling a ton of fully assembled radios. When there's some sort of like supply chain advantage you can do there, that's another great reason to vertically So, like, on our radio, there's a few chips that are long lead that we care a lot about making sure we have a lot of. So we'll stockpile those, you know, couple dollar chips in massive, massive volumes. And then the other, like, super common, you know, parts, we will... We won't stockpile in such large volumes. If we were buying off the shelf radios, we'd have to stockpile entire radio assemblies. It's it's really expensive. There's a bunch of reasons to vertically integrate. If if you don't tick any of these boxes or others, that's when you get to, like, just don't worry about it and focus on other stuff.
00:39:33 · Ty Morse, Olaf Hichwa
[00:39:33] S0: When you think about, like, the first version of the Archer or the first version of your drone versus the one today, and you also think about, like, the amount of time... I think I saw the statistic that most of the like drone competitors that are selling a similar product take like twelve hours to make one unit. Yeah. And then you're taking something like forty five minutes. Yep. And I imagine that a huge part of that is literally just ringing out a bunch of like just deleting parts, you know, just making it a simpler thing. [00:39:59] S1: Reality forces the Elon algorithm. It's crazy. [00:40:02] S0: How much, like, more efficient have you been been able to make the production of drones through just constant iteration over the course of the last three years? [00:40:09] S1: Oh, man. We spent, like, the better part of a month or maybe more in Soren's parents' basement building the first 30. And those were, like, those were long days. [00:40:24] S0: So a day per drone.
00:40:24 · Ty Morse, Olaf Hichwa
[00:40:24] S0: So a day per drone. [00:40:26] S1: Yeah. Minimum. And there were a bunch of people there. So, like, many man days per drone. And I thought that design, that first design was like... I thought, at the time, that was a really designed for manufacturing design as a, you know, engineer that thought they knew what they were doing. But nothing teaches you how to make a design manufacturable except having a production line that you can test it on. So, you know, production techs here go up to engineers. They're like, why is this painful? Engineers come to the production line, they watch. Oh my gosh, a technician has to route this cable underneath because it's more comfortable? That's ridiculous. We should have designed it differently. There's just this like constant back and forth that needs to happen domestically. Like, we need to have the line here right next to the engineers to really keep that loop tight. And I think that is what gives us the kind of hope to get to a million drones per year. Like, we have learned so much by producing 37,000 archers, and every lesson is is captured and is going to go towards that million drone design. [00:41:32] S0: There's different levels of scale. And so certain techniques for building the drones at, you know, 5,000 drones a year won't scale to like 50,000 drones a year, won't scale to 500,000 drones a year. What things have you guys had to stop doing or, you know, massively improve efficiency on in order to actually scale production.