The a16z Show
00:00:47 · Erin Price-Wright, Erik Torenberg
[00:00:47] S1: I don't think that that is a technology problem. I think that that's a [00:00:52] S4: For decades, America moved much of its industrial capacity overseas. Now a new generation of founders is trying to build it back. In this episode, a sixteen z's Elena Burger sits down with Erin Price-Wright and Connor Love to unpack this year's eighty fifty, our list of companies shaping American dynamism. They look at the industrial base from end to end, the critical materials and energy that go in, the factories that turn those inputs into products, and the defense, robotics, and other systems that come out on the other side. Erin and Connor explain why those pieces are increasingly connected. A defense contract can help finance a new American factory, which drives down the cost of components that can later go into robots, cars, medical devices, and other commercial products. And AI is giving workers new ways to reconfigure production lines and rethink processes that have barely changed in decades. They also get into the rise of founders coming out of companies like SpaceX, Anduril, and Palantir, the flood of private capital into physical industries, and why rebuilding America's industrial base is increasingly becoming both a national priority and a major economic opportunity.
00:00:52 · Erik Torenberg, Elena Burger
[00:00:52] S4: For decades, America moved much of its industrial capacity overseas. Now a new generation of founders is trying to build it back. In this episode, a sixteen z's Elena Burger sits down with Erin Price-Wright and Connor Love to unpack this year's eighty fifty, our list of companies shaping American dynamism. They look at the industrial base from end to end, the critical materials and energy that go in, the factories that turn those inputs into products, and the defense, robotics, and other systems that come out on the other side. Erin and Connor explain why those pieces are increasingly connected. A defense contract can help finance a new American factory, which drives down the cost of components that can later go into robots, cars, medical devices, and other commercial products. And AI is giving workers new ways to reconfigure production lines and rethink processes that have barely changed in decades. They also get into the rise of founders coming out of companies like SpaceX, Anduril, and Palantir, the flood of private capital into physical industries, and why rebuilding America's industrial base is increasingly becoming both a national priority and a major economic opportunity. [00:02:00] S3: Connor and Erin, thank you so much for joining the podcast today. We're here to talk about eighty fifty and this year's list, And let's just get straight into things. I know a big theme of this year was the American industrial base. Can you talk about what we've learned this year and why that's such a big important theme right now?
00:02:00 · Elena Burger, Erin Price-Wright
[00:02:00] S3: Connor and Erin, thank you so much for joining the podcast today. We're here to talk about eighty fifty and this year's list, And let's just get straight into things. I know a big theme of this year was the American industrial base. Can you talk about what we've learned this year and why that's such a big important theme right now? [00:02:23] S1: We've been saying for a while, you don't have a defense industrial base without an industrial base. And I think this year really put that into perspective with conflicts going on in the world and realizing that the hollowing out of our industrial base that's happened over the last several decades actually has real consequences on the battlefield for soldiers, both American soldiers and our allies. And I think it's been a real wake up call in The United States that we need to get building again.
00:02:48 · Connor Love
[00:02:48] S2: Yeah. I mean, I think it's also something that is not just one factor, but it's multiple factors that are all kind of happening at the same time, and when you take a step back and you say, okay, world conflict, you have kind of a continued evolution of the capital markets, which I'm sure we'll talk about a bit later, about capital flowing into this ecosystem, but I think one of the bigger things is you actually have an entrepreneurial base right now, who is effectively raising their hand and saying, I'm gonna build in this ecosystem, that's incredibly important, not just for our nation, but also, you can build really valuable companies in. I think it's just this conglomeration of geopolitical factors, of capital markets, and then entrepreneurs that are all just coming together, and I think it's a really interesting time to be building, and it's a good time for us to be investing. When we looked at eightyfifty this year, we thought about where we're at in the history of American dynamism. And we're still early, but I think one theme that has evolved is you really need to start looking at American dynamism companies as a totality from end to end, from the input that comes out of the ground to the factory that makes the thing to the end system. So that's how we set up eighty fifty this year to think through those three lenses. Each one of those pillars is uniquely important to the end product or the end system. But in the end, like, I don't think people think that way. And a lot of the companies that are addressing, you know, things in our portfolio have thought from a inputs perspective, from a factory's perspective, and now from a systems perspective.
00:04:07 · Elena Burger
[00:04:07] S3: So one theory that a person could develop after looking at the list is, okay, we built out this industrial base for defense like building missiles and drones. But it's actually a tailwind now that's helping a lot of different industries So in there's energy, there's robotics, there's AI. Can you kind of talk about how all of these things fit together?
00:04:30 · Connor Love
[00:04:30] S2: Yeah. I mean, it's funny because if you look back in history, I mean, even seventy, eighty, almost a hundred years ago, if you look at how we've developed technology in America, a lot of times it's very much been from the government. If you look at how we went to space for the first time, if you look at how we developed the Internet, how we developed nuclear energy, it was the government saying, we're gonna do this for the purpose of the government, and then the long tail of that technology was super valuable for, you name it, the Internet being created, energy being proliferated across the world. What's different now to some extent is now private industry as well as private capital is saying, we're actually gonna be the impetus that develop something. And so to your point, many of these markets is to serve the federal government, to serve the Department of War in some way, but the beauty about these things is when you build an industrial base either down the supply chain or end systems itself, those inherently have many use cases. I mean, the term dual use is talked about a lot in investing, to some extent, I think it's a little bit of a folly, like focusing on too many things at once is not good for a startup, but it is 100% true of what's happening with any factory that's being built today, any neo factory being built, any energy production, anything we touch in kind of minerals or materials from the ground, it's not just going into a defense system. It's gonna go into my uncle's car. It's gonna go into my kid's future toy that they have in some way shape or form. So I do think the tip of the spear is focused on the government, but I think in the long run to your point, like, what's happening is these systems will be used in the waymo that we took today or anything else.