He Came From Oz To Save American Manufacturing - EP 80 Chris Power

A few years ago, an Australian gentleman named Chris Power came to me and he told me that there were all these mom-and-pop manufacturing shops around the United States that make many of the things used by the automotive and aerospace industries, that people, these people were going to retire and this was going to be a massive manufacturing crisis for the United States, their children. Were not taking over the businesses and we were going to lose all this talent and skill. He said he was going to fix this problem by creating a company that would use software automation machines to pick up these skills and then modernize this whole industry and make parts even faster and better than they were done before. And then he went off and did this very thing. He started a company called Hadrian, We're interviewing Chris at the Hadrian headquarters for this episode.

He is a, he's a thing.

He's, he's really, he's part of this whole reindustrialization movement and he's got big thoughts on what America can do, where it's heading. And, um, and this is just a cool, cool backdrop for this interview that I think you will enjoy. I am Ashlee Vance. This is Core Memory.

Here we go.

This is cool. I don't know if you remember. I mean, I came here a couple of years ago when it was— you guys had like just acquired this building.

Yeah, completely empty.

Yeah. Now it's quite full.

Yeah.

Yeah, it's amazing, man. Well, it's been a while since we caught up. I feel like we should— you're— I also feel like I was part of this original journey. So for people who don't know, well, nobody would know this, but I think it was like, what are we, 2026? So maybe like 2019, 2020. I remember sitting with you at a lunch and you said, hey, you cover all this. Aerospace stuff. I've been thinking about this.

That's right.

Idea. And you were kind of like, you know, there's these mom-and-pop shops that serve the aerospace industry. Their kids don't want to work there. They're highly specialized. We have to find a way to transfer these skills. And you're like, I'm going to go, I'm going to go fix that. And I was like, who is this young Australian insane kid who's going to go do this? And then now here we are.

And that was, I think that was at the terrible bar next to Planet Labs.

Yeah, yeah, yeah, yeah, exactly.

This is pre-COVID. Yeah. Yes.

Yeah. And so when we were chatting, yeah, I mean, I just thought you were— well, I appreciated the energy and the enthusiasm, but I'm like, this kid, whatever he's trying to do is going to cost an incredible amount of money and be extremely, extremely difficult. How old are you now?

Just 35.

35. So yeah, you were like still in your 20s when you were mapping that out.

Yeah. And this was when there was no private equity fund and no Hadrian. And then that year, that year we raised a private equity fund and then shut it down a year later. And then it was Hadrian. So this was early days when we were all hanging out in San Francisco trying to figure out what the shape of this was.

Yeah.

Okay.

Yeah. Because for a minute it was like, maybe I go in and try to fix Yeah, these places, existing places. Yeah. Okay.

Yeah.

All right.

Well, I want to give people a little bit of your background because it is one of these amazing things about the United States, about San Francisco, that you can show up from Australia and in a relatively short time end up running like a giant factory. I mean, did you grow up in— are you from Sydney?

Melbourne.

Melbourne.

Okay. And you were kind of in the tech field, but you were just, you were this young guy in Australia and you were kind of like aspiring to get to the US really, right?

Yeah, that's right. And well, for everyone else on camera, me and Ashlee Vance know each other like very well. We won't get into half of that. No, I, so I was, okay, so I was an accountant and a lawyer.

Yeah.

Did a bunch of e-commerce in Australia, was doing product and sales at a software company in Australia, and we did blue-collar workforce scheduling. You've got 5,000 people in a warehouse. How do you manage all of that? And then I told the board they had 12 months to replace me. And yeah, we're in tech, but not like Silicon Valley. Right. Like I had no connections. And then at the end of that year, I moved Came over here for 8 weeks in San Francisco, which is when I think we first met. Moved back to Australia for 2 months to sort out my visa and then came back for good. And I guess that was 2020 because it was about 9 months before COVID I think that's about the right time.

Yeah, that seems right. It's a bit of a blur when I was trapped in spaceland. But so how did you— because we met, like you mentioned, through There's this, the founders of Planet Labs also started these communal houses all through the Bay Area. There was the Rainbow Mansion, which was kind of tied to people working at NASA Ames and beyond, and then the embassy in San Francisco. And I just kept hearing about you through them. So this is like Will Marshall, Robbie Shingler, Jesse K. Shingler, and a bunch of other people. How did you end up in there?

Sphere. So complete accident. And you know, the real— there's a lot of stories with— I mean, they're all my dear friends, but truly what happened was I called a journalist friend of mine literally 2 weeks before I came to the US and said, hey, I have no plans. Where should I stay? And for those of everyone listening that doesn't, you know, at a certain time this community and now I have run some short-term stays as well in the Airbnb days. There's a journalist friend of mine and I knew no one in San Francisco, no one in the US. And he's like, oh, you should meet my friend Zarina. And I called Zarina and said, hey, I'm coming over, can I stay for a couple of weeks? And he was like, yes. But I'm just like zero context. So I came off the flight, walked into the kitchen, ran into Will, and that was it. Complete accident.

At the embassy?

Yep.

Okay. And so the embassy is like this big Victorian house in San Francisco. People, I don't know, there's probably like what, like 14 people maybe that live in the house? 14, 16.

Yeah.

So they all live together, share things, have these big communal dinners all the time. So you just got thrown right in the—

Right into the deep end.

Yeah. And like at that time, but you already had this idea that something was amiss in this like space manufacturing. You'd just been reading about this and got fascinated by it.

Yeah, so I think the specifics came later. The like automated industrials thesis was day one. And that's if you read all the finance textbooks and all of history, and you kind of work out where you're at in the world, it's very obvious from Australia, like, I'm either going to move to China or the US. And when you read for a year, I was reading all this stuff because I primarily wanted to work on something that there was a big wave and that I'd be happy to work on it for the rest of my life. And it was very clear that manufacturing in the US had been completely hollowed out. And then a wave was going to come where it became the most important thing very quickly. And this is not that hard to figure out if you look at what happened to Weimar Germany, what happened to the British, what happened to the Dutch. And now the specifics of what industry do you start in, is it aerospace, is it defense, what type of manufacturing, that all came after I moved and I spent a year figuring that out. But the big macro thesis of, okay, you need to build automated factoring was like a day one thing.

But you were interested in this as a, like, business-minded person?

No, just historical.

Yeah. You just got into this and—

Yeah.

And could see it. Yeah.

Yeah.

Well, let's, like, for people who are less familiar, let's, like, bring them up to speed. I mean, when I, when I go report on a rocket company, it is slightly nuts because some of the companies will make a ton of stuff inside their own factory walls. But then there's incredibly important parts, things like turbopumps, which is this notoriously difficult part of a rocket that helps the mix of fuels. Even SpaceX in their early days, they contracted this out to this firm called Barber-Nichols in Colorado because they just, they were like good at this. It was, they've been doing it for decades. And there's shops like this all over the country where you do have this family-run thing and they just happen to specialize in this one area of, doesn't have to be aerospace, but defense manufacturing. And then, I mean, I always thought your thesis was right because I'd run into it again and again that kids didn't really want to keep this going. And so we have like tens of thousands of these and they're all like aging out. And so this is what was kind of like top of mind for you a little bit.

Yeah, so I think the big picture historically is every great civilization when they get super lazy outsources heavy industry. And then when you go into a great power conflict, it bites you because you're— I think people think, okay, we're the reserve currency, we can financialize everything, that's power. People forget that you only had that because you had the strongest industrial base and you won the war. And the inversion always comes back to bite you. It's kind of like a legacy software company. Hey, we're super successful because we have a great product and sales are good. And then, you know, maybe 5 years in, you've stopped innovating on product and it comes around and bites you. This is just like a multi-generational version of this. It's not unique to the US. It happens to every great power conflict. It was very obvious we're in the— even in 2020, that sometime over the next 20 years, we were going to go into this grudge match with China and that was going to set the new global world order. And also very obvious that Since '85 through to 2020, we'd offshored 90-plus percent of all US manufacturing through CCP subsidies, through our own policy mistakes, through the globalization. We can just get all manufacturing out and we can just do the high-value design stuff. This was the McKinsey-est thesis. It turns out that was a really bad idea. We basically gave the farm away to the CCP. And what you end up with is basically, okay, so from the '90s through the 2020s, you remove 9 out of 10 jobs. And because of that, there's no one that wants those jobs. And we have this huge demographic bubble where everyone with advanced manufacturing skills is basically in their early 60s. And there's no one coming behind them to replace them. And most of aerospace and defense manufacturing basically relies on— it's not systemized. It's like one, one guy or gal that knows how to do the thing. And when they retire, you're screwed. And for advanced manufacturing, which is basically space and defense and a little bit of semiconductor and a little bit of medical devices, there's kind of two big problems. One is you've got $100 to $200 billion of onshore manufacturing that's done by small suppliers and they sell components or subsystems to SpaceX and/or Lockheed, Northrop Grumman, et cetera. And all of those are less than $10 million in revenue, owned by a 65-year-old. All the technical staff are aging out as well. And they all did the right thing, which is tell their sons and daughters, you don't really want to run this company, you should get a 4-year journalism degree. No offense.

Risky move. Yeah.

But it all got hollowed out, right?

Yeah.

So now you have this just, okay, you've got this industrial base that is feeding the primes. And people don't understand this about SpaceX. SpaceX probably spends, you know, not giving anything away, proprietary, just as much as Lockheed on contract manufacturing. Yeah. And the primes are more outsourced. So really, you know, yeah, we've got all these fancy fighter jets, but I would say 85% of the productive effort is actually in this really fragile supply chain. Yeah. So macroeconomically, you have two choices. You either have to import a ton of skilled labor or you have to automate your way out of the problem. The second problem is inside the primes in their four walls, you know, SpaceX and Tesla and now Anduril and now Relativity is back. But really SpaceX and Tesla are the only ones that know how to do production hell anymore. So there's now a dual problem of there's tons of internal manufacturing to solve as well. And it all taps the same labor pool. And all of the factories, whether they're small businesses or internal to the primes, are mostly acquisitions that have been built up or small businesses that have been built up with CapEx since the '70s. So you've also got this like, why are the Germans really good at manufacturing? Well, actually because all their factories got bombed and they had to rebuild them. All of our factories, apart from the skilled labor issue, are set up from the '70s and kind of been incrementally built. So the whole thing just needs to be washed out and replaced. So that was like a known quantity going in. And it's kind of this like, once we got to the Ukraine-Russian War, Israel, you know, people started to then realize like, oh, we just shipped 3 years worth of inventory to Ukraine and they blew through it in 6 weeks. And then we went back and said, hey, can we please have some more Stingers or whatever the product class was? And they were like, ah, maybe give us like 4 to 5 years to re-ramp the production. To the point where the people that knew how to do that had retired because the DOD is only ordering 10 of them a year. Yeah. So the whole thing is just sclerotic.

This is like not hyperbolic at all. I mean, there's Lockheed, Raytheon. They're on the record in The New York Times saying for Stinger Javelin missiles, it's going to take 7 years to replace the stock. I've talked to people like, you're not kidding. I mean, there's times when they've, they've basically lost the recipe for how they make some of these parts and they're having to go find some guy that retired 15 years ago to come back and figure out how to do this again.

Yeah. And then the troubling thing is that's not, you know, kind of one-shot storytelling. That's like usually the right story. Yeah. So going back to your point, I kind of knew this macro, right? Moved to San Francisco, through the embassy, through Robbie, Will, and Jesse, started a couple of houses with them. It was another hilarious part of this story that we can get to maybe on a less professional podcast. And then spent about a year figuring out what was the right angle of attack because there's 20 different types of manufacturing. You can tackle this problem in every different ways and then got after it.

Yeah. I mean, it is weird though to There is no other, there's no other place in the world, I think. I know we're in LA, but then San Francisco, then Silicon Valley, where you can show up from nothing, Australia, different country. Yeah. Meet a bunch of weirdos in a communal house and then, you know, have this wild idea that you're going to chase, which is not only wild, but like massive, you know? And then a few years later, actually be sitting in a factory doing this.

Yeah. And not just this one, but Arizona, which launched December, is 5 times this size.

You guys have 3, 3.

So we have, we have 3 main ones.

Yeah.

Factory 2, which you see behind me, is completely max capacity. We scaled this in 18 months. Factory X, which you'll see later, is where we do all of our R&D. Because now we're building, we have the biggest automated welding team in the country. We have an additive team. We're doing sheet metal. We're building a foundry, like large format castings. And a number of other programs where, so we build all the kind of 0 to 1 Factory X and then Arizona is the second big production facility, which is about 4 times the size of this.

Okay.

Which we signed the lease on July last year and the team stood it up and ramped it in 6 months.

Yeah.

And then we'll announce one, maybe two more big ones later this year.

And for the people who are watching, I mean, behind us is what? These are like CNC machines, laser cutters.

Yeah, so FactoryTwo is all CNC. Okay. And we started off just with CNC because to build this level of workforce training and software, it's like start with one very narrow application. And now we're just massive. Like for the last 12 months, we've been launching every manufacturing category you can possibly think of, both of the component level and then the product level. So now we're, most of our contracts that we'll announce this year are like not just missile parts, but like the full missile. Yeah, or whatever.

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And you mentioned you, you either to fix this problem, one path is to automate your way out of it. And that's the path that you guys chose. The, when we talk about all these mom and pop shops, I mean, these are craftspeople. These are skills that you learn over decades. It's hard to replicate that in a machine. You get this, this knowledge about the pressures metal can take, how they like to be formed, even though you have— and then even when you get to the point where you have a CNC machine at your disposal, you have to know how to use it with all that, that built-in knowledge. And then you guys are trying to help get around some of that problem by, by adding this software layer that I guess assumes some of that knowledge and brings it into the machine. But yeah, I mean, how do you describe what you guys do to automate this machine, taking a craft and putting it in the software?

I think there's 5, there's 6 big chunks of Opus and you need all 6 to work really well. And I think when people see factories, they think that it's mostly a like next to the machine or robotics problem, and it really isn't. So the first step is, okay, the industry operates basically on PDFs full of manufacturing hieroglyphics, which tell you what's the contract with the customer. It's got to be intolerance, it's got to lose spec codes, yada yada yada.

So this is the part I want to make.

Yep.

This is what it looks like.

And then stacking parts on top of each other, you've got an assembly and whatever. That is like, just to read one of those, you need 10 years worth of experience and all this other stuff. So we built a lot of software to basically extract that data, model it, and make it so that we can say, yes, this is possible or not, what's it going to cost, convert it to a digital format, standardize all the data. And every prime has different versions of this. It's not consistent. They're super error-prone. Like just because someone gives you this PDF doesn't mean it's accurate. So there's this whole AI stack we built there. And then most of the effort in advanced manufacturing is then programming the routines that the machines run. So a whole stack around production inspection programming, where effectively what we do is for every manufacturing domain, you know, And then by alloy, there's always, you know, because steel's different than aluminum and titanium, is we hire the best experts in the country. We put them on the software engineering team and we get that automation up to say 60 to 70% efficiency. And then we hire the best operators. And so as the factories are growing, basically what they're doing in the software is if the automation has errors or, you know, because it has to be no-fail, right? So we always have human in the loop. They're then training that over time. So the faster we grow, the more training data we get. And each of these, you know, 100-hour tasks, okay, we launch it and it becomes 20 to 30 hours, but then that curve quickly comes down. And through that automation, you also lower the bar of the skills you need to be able to do that job well. Then running the production inspection equipment is this huge problem of most of why someone's standing in front of a machine is not the time cost of like loading and unloading a fixture or a part or an assembly. It's they're effectively driving the machine. And a good analogy is, you know, they're driving a Formula 1 car and there's no autopilot. So what we effectively do is take all that data, take over the machine brain, and because 90% of the work effort is like things go wrong all the time, You need to quick change, set up some stuff. And it's all actually a software problem. And the last mile, sure, is like we've got a lot of robotics that make that super efficient, but it's really a closed loop software problem because an expert has to be sitting in front of it, kind of monitoring it and literally driving it.

Yeah.

And then the fifth, the fifth big issue is part of Opus is all the coordination stuff, scheduling, inventory, supply chain, what task do I do when, you know, extremely complicated. And then this layer of compliance on top of it, which is probably half of everyone's time in advanced manufacturing is filling out paperwork or making sure the tasks are done correctly in the right sequence and all this other stuff. So, and then the sixth part of Opus, and we treat workforce development as part of kind of automation, is okay, so you've got this huge software stack that is, okay, make someone 10 times more efficient. But the human in the loop stuff and running the factory is really important. So we're at a point now where all of the human in the loop stuff is done by people that have no experience and we can train in 30 days, which is really how you rebuild the American industrial workforce. Tesla, we kind of like took this trip from Tesla of you like really over-automate everything, you're kind of screwed. It doesn't work. So it's like 90% software effort, but the 10% is really important and the 20% is really important. And we're at a point now where the workforce development team, we can take someone from Home Depot, they're a Marine, they're a bus driver, we have paralegals. And yeah, they're 10 times more efficient, but they're also highly skilled and we can spin them up really fast because they're learning our system. They're not learning how to be a welder that takes 20 years to learn everything. And that's, that's kind of the stack.

And when I— the last time I came, it was mostly around making parts for, for defense, for aerospace. And then now you're saying you guys are definitely going up and up and up to make— like if you're talking about doing a whole missile or something, I mean, that means you do all the parts of the missile and it gets assembled somewhere else or you guys want to do everything.

So we think about it as Okay, there are 8 discrete types of manufacturing you need to get really good at that have the same— everyone's late, all the quality sucks, it's really expensive, it's very hard. Machining, welding, casting, forging, a little bit of additive, wire harness welding, sheet metal, you know, so we have all these teams that are basically doing that. Okay, but to make a BSL you need, you know, Make a submarine, you need all 10. To make a missile, you need 5 out of the 10.

Yeah.

And then there's the last mile, which is integrated assembly and things like automated painting and stuff like that, which is shockingly difficult. And then you're kind of in test and inspect. And we're at a point where for our factories as a service business, if you show up with a design of a full product, we can probably do 80% of it right now. And that just comes from what does the customer need? What is the Defense Department driving us to? And what's the real mission? And, you know, in some respects, if you're really serious about ungating the production bottlenecks, kind of owning the whole problem is a little bit easier. So we're at that point now, and there'll be some big announcements this year where, you know, it comes down to the fact that like production is hard and we've got a lot of software and workforce leverage that we're better than anybody other than SpaceX and Tesla. So that's kind of our job at a scale where we're doing, I would guess, billion plus in revenue next year. So the ramp rate's increasing, but it's kind of just this like, how do you solve this production issue need when we're in like a real crisis? And that's what's happening.

And so we've been, we just went to Atomic Industries in Detroit, which is doing tool and die making. Yeah. And they're trying to same thing we kind of talked about, take these skills, the tool and die making, that's the heart of mass producing a lot of products. And they're trying to take the skills of people who've done that for decades, translate it into software, then add this other layer where maybe through AI and design software, you can actually make parts better than what a human could make because you can ship out bits and pieces. Machina Labs is not too far from here. I mean, they're focused on—

Shantung.

Yep.

So, but you guys are trying to, you see them as complementary or you guys are just like, fuck it, we're going to do the whole thing?

No, I think it's super complementary. I think it's the same thing with a lot of the additive companies. I think the, we will adopt or build the technology that's required. For some of our big government programs, we're a part, you know, if we need 30 puzzle pieces and there's someone like an Atomic that's got really shit-hot injection molding capability, we'll integrate them in. But to run these big programs with these standalone technologies doesn't really cut it. Because it's not just like you can 3D print a part. Okay, like you need to, in the traceability, you need to do digital chaining, you need like the full production stack. So I'm like really glad that all these other companies are like, you know, a Sennheiser or something are spinning up all these kind of single-threaded capability. We're partnered with a lot of them where we can, but also if there are no startups that are doing it well, yeah, we're just spinning up teams to build it because we have to. But if someone's got a great solution, we'd rather just push it into the stack than anything else. Yeah.

So, okay.

And then I've traveled, I mean, look, this is big. You're saying in Arizona, it's actually 4 times. It's just when I travel around and then I think of China.

Yeah, it's tiny.

Yeah, well, it's like, well, you have to start somewhere and somebody has to do this. But then, so I don't want to be defeatist, you know, but then it's like, yeah, I've gone to Atomic, gone to Modena, come here. I, I've just, I go to more factories than most people. And then, then I go dig into something like humanoid robots and I start talking to people about where they get their parts.

Yep.

And, you know, there's, they're all coming from China. Nobody's making their own motors. And so then I'm just like, man, I mean, is this even possible, you know, like we have to do something. But then how do you, how do you make up for this 20 years?

It's really tough. I think we— I think there are two big issues. You know, one is for the commercial stuff like robotics or consumer electronics. I think people forget that Apple invested, you know, 10 times the Marshall Plan, $500 billion in CapEx and trained 28 million people. And it turns out for the high volume stuff like an iPhone or an iPad or whatever, that's basically the sort of scale you need to operate on. Humanoid robotics, DJI drones, that sort of stuff. And then if you layer on their subsidies on top of that, it becomes a really hard cost equation. The good thing about your defense in space is that your competitive set is onshore from day one. So I think that's what we've got to solve first. The humanoid and just scale problem is so unfathomably large. You effectively, like Arizona's up and running, it feels big right now. The other one we'll announce later this year is going to be 2 million square foot, the biggest factory build out outside of Elon's Gigafactory. It's sort of like China scale. It's a drop in the ocean. Now, is it doable? For sure. You know, every one of these companies, including us, need to be literally operating on like 100, 1,000 times the scale to do it. Like, yeah. And then where's the market signal to do that? Something like humanoid robotics, you know, the problem is, do you have to do it in Mexico instead of the US just because you need some westernized capability? But for that consumer-grade stuff where it's not propped up by kind of a space or defense market, like you can get there on unit economics. It'll take us 2 or 3 years to get there on like level of automation to be there. And then, okay, like power starts to become your largest costs. Like it's tough and we're so far behind, but the choice is like you either give up or you do it. So I'm not sure if there's like kind of don't think too hard about this and just, but you need to be operating at a scale which is like unfathomable.

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But okay, I mean, I totally get your point on defense and aerospace. I mean, yeah, I mean, we— it's like, this is a national priority. There's money there to make that happen. The, um, I do get— I, I, I do feel like The other stuff, I get what you're saying, but then it's, you know, when you look at the fundamental components of these bits and pieces, I mean, it's batteries, motors, motors, stuff we need for everything, everything. And then even Tesla, you know, with Optimus is at least I know for a fact from Elon getting prototypes of actuators from China.

Like that.

Just, you know, sometimes I just know I'm I'm like patriotic in the sense that I appreciate everything sort of the US has given me, but I'm not some— I'm not like the most, you know, flag-waving kind of person. But I like— I don't think so. I say this from a place of like not coming from a real crazy rah-rah spot, but it's like, I don't think people— the average person understands like how monumentally fucked we are. If you look at the core pieces of like every technological product and how little control we have over any of that. And then sometimes I feel like, so now we're in this moment, you guys were ahead of the curve, but like reindustrialization has sort of taken off. And then I just worry sometimes that it's like, it's like theater and rhetoric and like, you know.

It's an unserious endeavor.

Yeah.

Like if, what Tesla and SpaceX did, that was a lot of effort, and I'm not convinced everybody is willing to put in that same sort of effort. Yeah.

Yeah. And I think that's the— I think there are a couple of things. One is it's unbelievably painful and extremely complicated. I think there are actually very few people that can frankly, psychologically survive it. It just sucks. Yeah. And then secondly, you're taking on these generational projects which should be done by billionaires. So people always, I think, criticize me for being like, I'm an engineer. My job is I run the production system, right? But it was like, oh, why are you spending so much time on the media? Or like, it's like a lot. Well, yeah, because you need billions in capital. So you have to generate the energy.

100%.

100%. Because it's just a massive undertaking. So I'm sorry, if you're doing a big Optimist-style competitor or something like that, or a Hadrian or whatever, Well, sorry, a big part of this is you need, I don't know, over time, $30 billion, maybe more than that. And I think a lot of the, I think unfortunately a big part of the trick is, okay, you got to be a serious operator, serious, really world-class fundraising, finance, all this other stuff. And there are just a very small number of teams that can pull that all together. I think a lot of the smaller companies kind of get stuck on like Factory One level scale. And okay, because at some point someone needs to write you a several billion dollar debt check for equipment financing. And the thing that China did, which we just can't do, is you kind of start from like BYD, like batteries for the other company, You're building up from the top or DJI. Okay, we're going to sell the American consumer like a bunch of cheap drones and you can kind of like build it up naturally and very fast. And with the Chinese work ethic in the US though, you kind of need to do this reverse strategy, which is like, all right, like we're just going to kind of start full stack from day one and catch up because you can't afford to kind of increment your way there. That's like a monster undertaking. But yeah, I think that's the biggest risk is like I think this administration's serious about it. I don't think the American people really quite grasp how far behind we are, but this is like Manhattan-level project complexity. It really is.

Yeah, but I think this is— I mean, God, I try— laughing is probably not the right thing. Sometimes I just find it comical. I do not think— I don't think people remotely get what's going on. If Taiwan actually kicked off tomorrow, just forget about all the— missiles and munitions and everything. Very quickly you just get to the point where it's like, we need batteries and we need—

Sprinter's motor—

all these basic parts. And I don't know, I mean, like, to me, from what I see when I go around, that happens in like a week or two and then we don't have the thing.

Yeah.

Yeah.

So like, I just, I find this Terrifying. It's terrifying. It's just shocking.

Yeah.

But I mean, it's like this thing that happens very gradually over a period of time, and then you wake up and you're just like—

Well, this is the underlying thesis of the company. This is why it's called Hadrian, because you're in a late-stage Fourth Turning trap where you're so successful for such a long time that you've forgotten that at some point someone needs to pave the roads. And then all of a sudden, Well, what just happened? The answer is a gradual decline in fundamental values that made you successful in the first place over 4 generations. And then the psychological part of this is the toughest bit because if you're a software engineer at Google and you're already printing money from AdWords, how do you win? Honestly, you don't have to work that hard. And humans are like dumb with this. We don't actually have to work that hard. So I think my generation, bit of your generation, certainly the younger generations, like, okay, where does the laziness come from? It's not like malicious. It's just that by default, you don't have to work that hard.

Yeah, life's been pretty good.

Generally, life's been pretty good because you're riding this huge post-World War II tailwind. Meanwhile, the fundamentals, and at a certain point that gets challenged because the rubber hits the road and we're in the rubber hitting the road. How do you pull out of that? Well, you know, we're going to find out in like the next 5 years, but like no one understands what's going on here.

Yeah.

Outside of, you know, the department.

And then if this administration gets it, obviously in the US, you know, we go with the whims every, every 4 years.

Yeah.

I mean, do you— but do you feel like— it strikes me that the Defense Department finally gets this and is like no matter what, back in the truck, absolutely. Your politics, you know, is just— is in. And so they've got a lot of money and can, can like support some of these things. But I mean, you probably deal with politicians of all stripes. Do you think this is sort of like a Trump thing and they get it and everybody else doesn't? Or do you think like the Defense Department, all the politicians have come around on this?

I think everyone's coming around on this. I think if you talk to Hask and Sask or both sides of the aisle, everyone's on the same page. I think this administration is particularly aggressive at moving fast and executing things with their own flavor, but I do think it's a both sides of the aisle thing. Now, does that continue post-4 years? TBD. But I think the decoupling's happened and you have to grapple with that no matter who's in power.

And you're saying what? People knock you for what, going on the media and trying to drum up interest in all this?

No, I think it comes off as like a, you know, I think our customers and the Defense Department and people know that we're a really serious engineering operations company. No, I just think people underweight the why behind why you have to be really, really good at fundraising or doing the external stuff. And the reason is you have to have the best people and you have to have like a ludicrous amount of capital to go even make a dent.

The biggest thing that I, every time we post a video or I write about this, I look in the comments and then the skepticism I see is like, I don't care how good the software is. This is bullshit. You cannot replicate what the, you can only automate estimate this so far. You addressed it a bit. I mean, you were saying you get like 90% of the way. Yeah. And then, but I mean, when I see the comments from people who've worked in automotive or aerospace for decades, they seem, whether it's you guys or—

Anybody.

Or Atomic or whoever.

Yeah.

That this promise of bringing this new age of software to this problem works. I guess the question would be, you know, you've been at this for a few years.

Yeah.

I mean, obviously you guys believe in it. Has it been harder than you thought? Is there truth to some of those statements or you think they're underestimating what we can do?

I think if you only— I think there's a massive underestimation of how far you can go. I also think that people probably do not understand how much of our talent is, you know, the best machinists or the best welders or whatever. I do think if you took this as like a pure algorithms company, and said, oh, we're just going to have to buy smart software engineers. No. What we are really good at is hiring the best people in the technical ability and getting their brains into the software. And then you also have to have this understanding that the first 70% comes fast. The last 30% is this enormous long tail kind of brutal problem. But that's actually fine because if you set up the production system, once you're 70% better than anybody else, on time or cost or whatever. And you've set the whole thing up as this eating long tail through algorithms and data labeling and stuff. It's super doable. But I think you got to come at it with the attitude that what we say internally is basically all the answers are out there. We're inventing a lot of new software and processes, but we're not coming up with a new forging algorithm. People already know how to do this and do it incredibly well. You've just got to scale it. And the way to scale it is with software and software-defined processes. And then the other thing that happens is everyone in the industry, even when we hire people or whatever, firstly, the people that we hire from industry are the best in their industry. So that helps. And then we're just like, okay, I don't care. Why don't you come in? And then they're like, ah, shit, they actually did it. But some of this is a little bit of a miracle. Getting it working is hard. Everything has to stitch together the exact right way. You can't make any foot faults. Like, you really got to understand, you know, metal physics. Like, this is a serious, serious, you know, it's complicated.

You guys chose to do this in LA, to start in LA. For some reason, people sort of forget LA is probably, I think it is the US's largest industrial city. It has 100-year-plus history in automotive and aerospace. And yeah, because of the wind tunnel and pulled off just miraculous things for many decades. Has, you know, if you just drive around here, you see all these shops and people still working on things. So that was that the driving.

Yeah, you can't do this in San Francisco.

Yeah.

You need to start the team with tons of great software engineers and tons of great manufacturing people. And the right way to do that is, you know, in LA. To scale production now, we can be in any state. But to get all the R&D and zero-to-one stuff done, you have to be in LA.

Yeah.

And, and I don't say this like this is not some super pro Elon thing. I know he's so controversial for many, many people, but I mean, there is a, there's like a simple fact which is like over the last 20 years, if you look at the two most successful sort of from, from nothing to giant manufacturing companies, it's obviously Tesla and SpaceX. I just don't think you can refute that. And if you're if you're in Hawthorne here in Southern California, you see not only what SpaceX has built, but this diaspora of all these manufacturing companies that have sprung up. When you go to Texas, I mean, it's pretty crazy. You drive between Austin and San Antonio, it's just Elon factories everywhere. The same thing for Nevada down in southern Texas. Like, why is it— it's not just one person because he's employing tens of thousands of people, but like, why is it that over 20 years He figured something out where you could do this not just once, but across really like almost 3 industries, multiple states. And like, if he can do this, surely other people can. But we don't see other examples of it.

I think Elon's a brilliant engineer. I think the companies are super mission-driven. But honestly, I think if you look at the first I think people forget a couple of things. How old is SpaceX now? It's got to be 22, 23.

Yeah.

Okay. So now we're launching tons of Falcon 9s and Starships, like just coming online. So I think there's a longevity thing to this. I also think like, honestly, I just don't think anyone's got the pain tolerance to do it. Like it's just hard.

Because there's clearly truth to that in that when I see some of the other billionaires break off and they start funding their side projects, flying cars. Yeah. And they always seem to fold after like 5 or 6 years.

Yeah.

So, so Elon has this one part where he's actually still showing up.

Yeah.

Then, you know, it strikes me there's another part. If you go to SpaceX, there's obviously this sort of culture, like you're in your 20s.

Yep.

You just, at least for 5 years before all your options vest, you just work your ever-loving tail off.

So, but why?

I mean, why can other people not replicate that? And if we can't replicate that, are we totally fucked? It cannot be like one guy has this figured out.

Yeah, I mean, I think what you're, you know, is it a system or is it just great man theory?

Right, yeah.

Like, I think Gwynne could do it.

Yeah, yeah, well, it has to go somewhat beyond the great man theory.

But I think there's like maybe 30 people who could do it.

Yeah, yeah, you know. Just because it takes this relentless focus, capital, you have to have like the— So yeah, I mean, again, this makes me really depressed.

But it's also like extreme technical program management. And I think you have to design the organization. Like people forget this. You can't literally— the company playbook doesn't work. Oh, I got to hire VPs at this. Don't get me wrong, our executive team are amazing, but you forget that what does Elon spend most of his time doing is solving production problems.

All the critical path stuff. Yeah.

And that's a very stylistic, not central command and control, but you're managing these Manhattan Project technical behemoths and you've got to operate like that. And it never stops. There's never a stopping off point where you're like, wow, we built the sales playbook and it just works, or we built the engineering No, no, no. You're in it every single day. It never stops.

Yeah. So what is that? How does the US actually— How does any of this work? How do we compete with China if that's the reality of the situation?

I think you can unleash a lot. I think there's a lot of talent in the primes that are so bogged down by the fact that they are 100,000, 200,000 person companies and they're impedance matched with the Pentagon. Everything's a process. Unleashing that I think is huge. I think also what this administration has come around to believing, which I think is true, is like, okay, there's 30 people. We're just going to find the 30 people and just kind of make them go as fast as possible. But I don't think we can pretend this is like an industrial playbook that we can just like, it's like a SaaS company. And then yeah, the other thing is it's going to take 10 to 20 years.

So you think you have to get started somewhere and you push it as far as you can. To get some momentum.

Yeah. Yeah.

Don't think too hard. Yeah.

When you started doing this, I mean, obviously Australia is like an ally. You were into manufacturing and things. I mean, when we walk off camera, you've got a, you've got a dartboard with Chairman Mao, you've got a J.D. Vance like family photo. I mean, were you, when you came to the US, were you left-leaning idealistic?

This is a really good question. So, okay, so I think I think the China versus the West stuff was already very clear in my mind. And you know this better than everybody, but like, I don't know, how much of a hippie am I? Like pretty extreme, like extreme actually.

For people, Will Marshall, who you would've been living with, is kind of like the opposite of all this, at least rhetorically. Yeah.

I think that, you know, I think I am apolitical in the sense that the most important thing is the, the preservation of like the core of the British and the American West, um, which is like rooted in this like Arthurian kind of stance. And I think that is objectively good. What you also have to grapple with is both sides of the aisle in some form or fashion have completely lost their way, which is also kind of like a natural late-stage empire thing because everything starts fragmenting in weird ways. But I think like if you're in it for the mission, then it's apolitical. And partnering with everybody that cares about American jobs and cares about like not losing a production fight and cares about the sort of stuff, then you kind of get it done. But it's been an interesting journey for sure. And a lot of people kind of misunderstand the nuances around this.

Yeah. Well, okay. So, but do you think you changed or then you've always had these same roots?

I don't think I've changed. I think the expression's changed.

Yeah.

But again, I think people misread a personal preference from effectiveness.

Are you able to go to China and see what they do?

Oh, I would get picked up overnight. There's no way. Hong Kong, Singapore, no way.

Yeah, because they— well, obviously, I mean, they know what you're— You just think you'd get arrested.

Or if not, then I don't know, plug your phone charger into the wall and you just— Yeah.

So how do you, how do you kind of like stay on top of the competition more or less in that sense? Or you just do what you're going to do? How do you get a sense of really what we're up against?

Well, I'm not going to say this out loud, but there are, there are mechanisms.

Okay.

Yeah.

Okay.

Yeah.

Okay. Now I'm fascinated. Do you see yourself, like, is the heart of this company ongoing in Southern California? Or now that you're like, are you going to be spending more of your time in these new factories getting them up and running?

I think the heart of engineering and R&D in Zero to One will be here in the Bay Area. Okay. Always. We're spending a lot of time in Arizona, although like the team honestly is just crushing it. The big kind of 2 million square footers, yeah. But you're more in this mode of like, again, where are the bottlenecks? Where are the rate limiters? Sometimes that's into engineering, sometimes there's a production issue, sometimes it's screaming at the Germans to get me my CapEx faster. It's wherever you need to be. Yeah.

I mean, there's things like California Forever, which I'm super into at the moment. It's an empty field. There's this thing called Prototown, which is between Austin and San Antonio. It's a bit of an effort to create what they would bill as like an American Shenzhen.

Yeah.

Yeah. I mean, do you take this again? Like, this is where I get excited, but then also, are we over our skis? Is this real? Like the idea of an American Shenzhen appearing, do you think that's possible?

I think, yeah, but I don't think you can plan these things. It's like, why did Shenzhen exist? I don't know. Some governor created the first printed circuit board facility and it just kind of went. I think the most powerful thing about a California Forever or a Prototown or even just states like Arizona, where who we partnered with, or Texas is, if they just let you do it, you kind of let it crop up. But in a certain sense, the geography and demographics are destiny. I think what's really potentially powerful about California River is the fact that you can probably get there in an hour and a half, and that's probably just on the line of someone from Apple can work there. And you're in this kind of unregulated space where you can go super fast and clean sheet it. The downside is, okay, your starting position is who's writing the $5 billion check? Because if you ask where's the new shipyard, There's 2 places that have enough deep water access. One of them's in the middle of the country and one of them in California forever. It's super doable. The starting point though is someone writing a $5 billion construction check. Then you could probably go really fast on this. I think deregulated zones and letting the economy pick up is the right way to do this. The other side of that though is it's all talent and workforce. So why is someone going to move to the middle of nowhere? This is why people misread the Starbase thing. It's unbelievably powerful that Elon centered it around a deregulated zone, but can also kind of, not force, but there's a reason why 5,000 people have to be there from day one. And you've kind of got this immediate bootstrap. Doing that not under the banner of a SpaceX or something like that, maybe us in a couple of years, we could make that sort of bet. Okay, we've got 1,000 people are going there. Now you need a bar, now you need coffee places, housing, stuff like that. But you have to start with this big anchor. And I just think without these big anchors, it's a tough kind of bootstrap problem.

Yeah. Well, does Will Marshall give you shit for being a defense contractor now?

Well, Planet's a defense contractor.

They are. Yeah.

I don't know if Will fully accepts this. But yeah, they don't— he doesn't—

I think a lot of my friends give me shit, but I also think they know I'm like, I'm in it for the right reasons.

Yeah.

You know?

Yeah.

Okay. Well, thank you for letting us come. Anything in particular I should be on the lookout for? I guess we get to go through this factory, we get to go through the new one.

Yeah.

Yeah. I just like the team's brilliant. I think the story that never gets told is like the the real workforce and like, you know, I think the biggest miracle we've pulled off is genuinely 100% of the workforce are like migrating from desk jobs to manufacturing. And you know, that's the cool bit.

Yeah.

I think in my mind.

All right. So we should be chatting the people up as we go.

Yeah. Yeah.

100%. Okay. 100%. All right.

They'll all say nice things probably.

Thanks, Chris. No, I appreciate it. Appreciate it. So good to see you again too.

Thank you. Thanks for doing this.

Ah, dude, it's my pleasure. This is cool. Yeah, I think when I walked in here, it was like, I think it was empty, or there were like 3 of these.

Yeah, and Arizona is already this scale. Yeah, they're like, the building's 5 times the size, but it's already operating at this sort of scale.

What are the white robots? Do they bring tools?

Oh, you'll see it. So this was, this is the version 2 where literally there's 2 people that can run 20 machines. And so we store parts and tools in the white thing and the robots just run everything else.

They just go pick it up and bring it around.

But again, the problem is not robotic picking up the thing. It's what machine does it go into? Like, how do you even know what? It's all like the software brain, like the coordination.

Yeah.

Yeah.

Cool.

Thanks, man.

Loved it.

Of course.

The Core Memory Podcast is hosted by me, Ashlee Vance. And/or Kylie Robison, or both of us together. It is produced by me and David Nicholson. Our theme song is by James Mercer and John Sortland, and the show is edited always by the John Sortland. Thank you so much to Brex and Send Cut Send for all your support, and thank you most of all to everybody for listening or watching We love you. Please leave us a like, a review, a subscribe, all those tremendous things.

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