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.
00:41:53 · Olaf Hichwa
[00:41:53] S1: So when when we were making like hundreds of drones a month, we got to just not use connectors and direct solder. You just take a wire and a board and melt the two together essentially. That was a huge... Like, it just makes everything simpler and tighter. You now have to train users very carefully, and they have to, you know, get lucky to make sure that solder joint is is up to quality, etcetera etcetera. Obviously, that doesn't scale, so we were like, okay, must not have any manual solder joints. That was a big step forward. Most FTVs, even today in Ukraine, have manual solder joints. So we we avoided that. When you get up to, you know, I'd say high hundreds to thousands of units a month, that's where you have to get really worried about things like Pokeyoke. You have to make sure that if you can... Like, there's no way to install a part wrong, you know. You'll notice the the two camera slots don't have the same interface because you could flip them and then things would be messed up. Little little details like that are really important. Like, the two sides of a connector, they either have to be reversible or they have to use a different connector on each side. There's all these, like, little extra gotchas. When you get up to, like, the thousands of drones per month, like, you know, five, 10,000, this is where you have to be really smart about your supply chain. Like, we could buy every chip in America of a certain part number that goes in Archer and then not have enough to sustain a month or two of production. Because it's just like all the distributors combined only have, you know, 5,000, 10,000 chips. So now you have to design around the manufacturer, the like, know, TSMC's lead time in Taiwan. Or better, you have to design two different boards. You have to design board A, do all the work to design board a, and you have to start again with board b, and it has all the same requirements as board a. It must behave exactly the same, but you have the simple gotcha of you can't use any parts from board a. You have to figure it all out again with different engineering strategies, a different microprocessor, that kind of thing. That's the kind of like hidden gotchas. The product seems the same. Hey, you know, my iPhone seems the same as every other iPhone.
00:44:05 · Olaf Hichwa, Ty Morse
But there's actually a bunch of different variants of iPhones that use different memory chips and and that kind of thing. That way you can have [00:44:13] S0: It'll have stable like almost supply exactly the same performance and stuff. [00:44:15] S1: Yep. Yeah. And they look identical. Like, you you don't even see the work that that, you know, team, the entire team of engineers put through to redo all the work of design a, have it function exactly the same, and not use any of the same parts. And these are, like, just a few of the kinda, like, really hidden gotchas that it takes to get to a million a year of something. And I think that's why, like, you know, no other defense company in America makes a million of anything that isn't ammunition. Like, make a million a year of bullets. Name another product that is made in a million units per year. Starlink terminals, think? Starlink terminals, totally. I think it's like [00:44:52] S0: 5,000,000 a year [00:44:53] S1: or something. Yeah. Mean, Starlink is is is breaking records there. Wouldn't... Well, they don't make a million star shields per year. I wouldn't consider that a defense item. The Starlink terminal production is insane. It's it's a consumer product, but it's probably the only really full fledged example of China beating consumer electronics production, like consumer electronics production that would beat China here in America. That team is incredible. We... We're very lucky to have engineers that have worked on that production line. The Starlink user terminal line is is an incredible, incredible feat for America.
00:44:53 · Olaf Hichwa, Ty Morse
[00:44:53] S1: or something. Yeah. Mean, Starlink is is is breaking records there. Wouldn't... Well, they don't make a million star shields per year. I wouldn't consider that a defense item. The Starlink terminal production is insane. It's it's a consumer product, but it's probably the only really full fledged example of China beating consumer electronics production, like consumer electronics production that would beat China here in America. That team is incredible. We... We're very lucky to have engineers that have worked on that production line. The Starlink user terminal line is is an incredible, incredible feat for America. [00:45:31] S0: For the people that come from that line and come work at Neros, how do they think differently than everyone else from everywhere else?