00:26:36 · Soren Monroe-Anderson
[00:26:36] S0: It's piling up, but it's just like you can't operate a factory that's not... Or you you can't sustain a factory that's not producing. You can't... It's just like that's how you that's how you ruin your your ramp. So those have been some of the hardest moments that we dealt with in 2025. We we... That didn't happen to us a lot, but there were certain times where supply chain really limited the amount of drones that could go out the door, and drones that could be built and go out the door. We've tried to spread out sort of the ramp of assembly capacity reasonably, so it's not like these huge jumps. It's like a pretty even build up, and that helps a lot. You know, we can sort of can, like, staff more and more over time. We are consistently driving tact times down across the line, and and having a smooth ramp is just just makes everything so much easier. This is also why we do wanna be sort of ahead in capacity from where we think the contracts are gonna be, because the worst... The the way you really get into trouble is by signing up for a contract that you don't already have the capacity for on a timeline that is too quick. Like impossible to meet. Yeah. And that sounds obvious, but there's a lot of companies that do this. Actually, I'd say the majority of defense companies do this or like new defense startups do this is is like, kind of speak in the manner, like, say you have the capacity, but have not actually proven it, get a contract, have a delivery window, try to go through the production ramp, realize that it's actually really hard, and then fail to deliver on time. That's like the classic story, and I just wish that people would speak a little bit more honestly about the the production capacity they hold today, like what they've actually proven because, you know, the point I was making here is like, yeah, we've got a big empty box that have, you know, in a few years can hopefully produce a million drones per year, but the the, you know, the space isn't everything, the equipment isn't everything, the team isn't everything, it's it's the whole combined thing working together correctly, actually producing the stuff, that's how you measure capacity, and a lot of people don't don't understand that and get themselves into trouble. And then that leaves a bad taste in the mouth of the customer.
00:29:00 · Soren Monroe-Anderson, Ty Morse
So for us, it's figuring out how we can, while still being, you know, financially smart, build capacity ahead of demand, and try to match those two things closely together. [00:29:11] S1: How successful have you been, like, to date on when you say you have a timeline that can work, that it actually does, and then if things do go wrong, how do you kind of rapidly course correct that?
00:29:22 · Soren Monroe-Anderson
[00:29:22] S0: That's a good question, because we've not been perfect. You know, there there have absolutely been failures in in our history of thinking we could do something faster and making a commitment, and then, you know, realizing we can't. I think we've done a very good job of maintaining high communication with the customer, like, you know, balancing... Understanding what is actually mission critical for them versus, you know, what is their sort of desire versus, you you... Like, a lot of it is about the relationship and communication with the customer. I've seen that go really wrong for other companies, just making these commitments burning bridges. We try really hard not to do that. So, like, being... Yeah. Being very honest and and then just getting better, building the muscle of, you know, engineering and production time lining, we started with a team that had, you know, great experience from other verticals and and, you know, have have done parts of this before, but it's clearly a learning process doing it for the first time as as Neros, and so we've we've, I'd say, gotten much better at it. And there there was a time, like, 2025, you know, we're trying to ship our ground station for the first time, ship like production units of it for the first time, and that was really biting us, just getting everything functional and reliable and sort of, you know, working the way we had promised to people, and that was one of the hardest pushes of like, we we just didn't give ourselves enough time to to finish the engineering and then hand it off to production. So, you know, you learn by making mistakes, but I think the severity of those mistakes are seriously defined by, like, how well you communicate externally, and then make it up to people or or, you know, figure out like, what can you do for them, you know, your customer typically, that is solving some of the issue, even if you're not ready to solve all of the issue.
00:31:37 · Ty Morse
[00:31:37] S1: Elon has this idea where I think in the past he had timelines slip a lot more than he does today, and now he's got some idea where he's trying to do roughly like 50% of the time. He wants the maximally aggressive timeline that 50% of the time they can actually hit and that by definition means that half the time they won't. But without that, there's not the same level of, like, urgency. How do you kind of think about maintaining just extreme urgency while also making sure that you're not, like, committing things that are impossible?
00:32:07 · Soren Monroe-Anderson
[00:32:07] S0: I think maintaining urgency comes a lot from the mission and the sort of, like, broader timeline that the company is thinking on. And that's why we're, you know, right now is a 120 person, you know, tens of thousands of drones per year company talking about a million drones per year. In some ways, that's ridiculous, but this is also something that Elon seems to do extremely well, is look into the future and say, here's what needs to exist, and here's why it's existential for it to exist, so we're gonna push as hard as possible to get there. So that's what I believe drives urgency, sort of at the the broadest level within the company. Then you have these sort of events, and rocket launches are a great thing to drive urgency, right? You have a launch date, and it's very binary if it if it succeeds or fails. So we sort of have that when there's a contract opportunity that we're getting ready for, you know, a fly off to go and prove that we're the best, that we should win the contract or, you know, really important test event or, you know, delivering some big milestone to the customer. There's again, it's the careful balance, right? Because those have high risk if you you you mess up, if you over commit, sometimes it's not the it's not a penalty on the customer, but it's really a penalty on you if you just like are going off to try to win a contract and you try to build too much new stuff and then it doesn't work the day of, you know, they're not... It's not like the customer needed it because they're gonna go and and deploy with it shortly, like we we deal with those situations too, but that's more like, okay, the company just failed on that on that goal. So that's where I'd say the time lining piece is really important. And we we we have what we call fly off mode at the company. So if we're getting ready for one of these these testing events or fly offs, you know, we're buying dinner for everyone in the office, we're we're doing these things that help just keep people at the office longer, because, I mean, even if we weren't buying people dinner, engineers are gonna be there till 10:11PM at night. It's not the dinner that keeps them there, but it's the recognition that we're pushing really hard, that's important, and so we we were like quite intentional with with when we do that. You can't do that all the time.
00:34:46 · Soren Monroe-Anderson, Ty Morse
You can't ask people to go, you know, that absolute maximum effort. [00:34:50] S1: By definition, sprint has to be for a short Yes. Period of [00:34:53] S0: Exactly. But, yeah, it's weird in software development, they say like, you just go from sprint to the next sprint to the next sprint, that's it's not how it works. You get, you know, I think you get a couple good sprints a year in a company, that we try to use them sparingly. [00:35:10] S1: Interesting. What what have been the sprints over the past 12