(Transcript) Renegades of Defense — Palmer Luckey // Anduril

As anyone visiting this website knows, I’m a huge fan of Josh Wolfe (Lux Capital) and Peter Thiel (Founders Fund), and their focus on deep tech and defense. Previously, I’ve written a tweetstorm sharing my favorite takeaways from season 1 of Lux Capital’s web series Futura. I initially wanted to wait till season 2 wrapped up so I could binge watch the whole thing.

However, after re-reading some of Teledyne’s old annual reports, I kept thinking of Anduril, the subject of this episode and in my opinion the spiritual successor to Teledyne. It didn’t help that Anduril is backed by BOTH Lux and Founders Fund, or that the interview was conducted personally by Josh. Lux has a Medium Page where they share transcripts of all the Futura episodes, but they haven’t published this one yet, so sharing it here first. You can watch the full video here.

*Any transcription mistakes should be attributed to me.
*Transcribed 5/11/2020

Josh: Hey everyone, I’m Josh Wolfe, Managing Partner and Co-founder of Lux Capital, a firm that invests in emerging science and technology ventures at the outer most edges of what’s possible. We’re back with season two of our new web series Futura, where you’ll be meeting the rebels of science and invention. We’re turning Sci-fi, into Sci-fact. This season we’re taking you inside with the futuristic founders and inventors who are bringing their cutting-edge ideas to life.

Today I’m here with Palmer Luckey, founder of Anduril, who is developing some of the most cutting-edge technology in both hardware and software specifically for the defense sector.

So, one of the things that we absolutely love is this decreasing gap between science fiction and science fact. And I feel like a lot of the things that you’ve invented and created as an entrepreneur have been premised on sci-fi. What is — is that true?

Palmer: Everything I’ve ever built has been something that has been in dozens if not hundreds of sci-fi novels, movies, comics, you name it. The things that I’m building are mostly a matter of knowing when to take an idea that used to not be feasible, and then say, “hey, it’s finally feasible. We can finally work on it.” I mean, Oculus wasn’t about new science, new materials, new physics. It was about things that already existed being put together in a smart way.

Josh: I love the idea that new things come from the combinations of old things. How do you decide the priority of the portfolio that you’re building? Because I know the pipeline is really rich, with some really cool things. But the first few things that you decided to emphasize and prioritize?

Palmer: Well, the core thing that we’ve build is called Lattice. It’s an AI-powered sensor fusion network that can take data from thousands of different sources, merge into a real-time 3D-models of very large areas, and then tag everything in that model with metadata. So you can sort it, filter it, run predictive analytics on it.

Most of the products that we build are either feeding data into Lattice, or they’re taking data from Lattice and acting on it. For example, our sentry towers. They have a 2-mile range where they look around themselves and they detect all the people, all the vehicles, all the animals that are moving through that space. And they identify them, track them, and can tell you what they’re doing and where they’re going.

An example of a product that acts on data from Lattice would be Anvil, which is our counter drone system. When one of our towers detects an enemy drone that is in an area it shouldn’t be, it can send a notification to a human operator. The person can push one button, and Anvil will take that information, fly out, reacquire the target with its own terminal guidance sensor, accelerate, run into it, and destroy it.

Both of those products are far more valuable because of the other. So what we’re really trying to build is the tool that allows people to do what people do best and machines to do best. And for humans and machines to work side by side very effectively.

Josh: Was there some technological breakthrough that occurred in the past 5-7 years, whether it’s at the cloud layer, infrastructure layer, hardware, or software, that *this* made it possible today that it would have been impossible a decade ago?

Palmer: Machine learning. Machine learning has become incredibly powerful over just the last few years. The ability to train it quickly and efficiently has made all of our products possible.

Josh: One of the things that we love at Lux is backing rebel scientists, entrepreneurs, and founders, which you embody. What are some of the rules that you had to throw out, either technologically or systematically, with Anduril?

Palmer: I mean, when we started the company, we basically threw out the rulebook on how defense procurement is normally done. You know, it’s normally very much focused on cost-plus contracting, where a company gets paid for time and materials — like a fixed cost. And then a fixed profit margin on top of that. The problem is, that incentivizes companies to spend as long as they can doing something. And I didn’t want to start a company that had those natural incentives.

The problem is that they say “How can we develop this product in such a way that congressmen can’t vote to kill it?” And the answer of us is, “Don’t rely on money from congressmen to get the thing built.” Use your own money.

Josh: This is rational and rare and risk-seeking, because — if I may — it’s sort of like the big old contractors are basically saying, “We will bid in the hopes of building.”

Palmer: Yup.

Josh: Whereas you guys are saying, “We will build, in the hope that the government, our customer, DoD, is going to buy.

Palmer: I want to set up a company so that when we fail to make a product that works, we don’t get paid. That seems obvious, but it is not the way that it works in the defense space.

Josh: What are some of the technological things on your wish list? Things that don’t yet exist for a variety of reason, either technologically they haven’t been invented or too expensive, that you wish existed?

Palmer: First, I’d say high-energy-density battery systems. Another thing on my wish list is just cheaper access to space. I think there’s a lot of applications for things that will be in low-earth orbit, geosynchronous orbit, and then out beyond into the solar system, that today are totally cost-prohibitive, and are going to change the way that we use technologies.

Josh: I love the idea that you were talking about before, which I call the adjacent possible, where something is being innovated or developed in a different area, and then smart guys like you are able to go and reach in, be like “Oh, I can use that for my—”

Palmer: And that’s why I keep my eyes on everything. Because a lot of times, the things that make our products possible come out of new advancements in those other fields.

Josh: There’s this directional arrow of progress in technology, where you get higher and higher resolution, and higher and higher precision. And I’m of the view that the greater your technological precision, the greater your moral precision — particularly in defense. What’s your view on this?

Palmer: I mean, in defense, it’s obviously true. The more options you have, the more likely you are to be able to take the right option. And so, I’m a big fan of not trying to limit the military through crippling them, and saying “I don’t want you to have that technology because it *could* be used for bad.” It’s like “no, no, no.” Build the technology, and just make sure hat we have the strict controls in place to make sure that it’s used for good.

Josh: The diversity of the technologies you work on is very impressive. The diversity of the people that are here is very impressive. Tell me about their backgrounds and where they come from and why they’re here joining you in this mission.

Palmer: We hire people from all over the place. We hire people from large tech companies that want to work on defense problems. We have people coming from the defense space, that want to work faster than they’ve been able to work. We get a lot of new grads. I will say, the common trend between almost all the people in our company, is that they are people who are interested in working on things even outside of school. Even outside of their job. And when I hire people, that’s the first thing I look for.

Josh: Well, you embody this in that you were technologically extraordinarily successful, financially extraordinarily successful. You didn’t have to go and start another company. But you were driven by this passion to do this. But you’re also driven by a philosophical mission around this. What — what is the purpose of Anduril?

Palmer: The purpose of Anduril is to build a next-generation defense company that fills the holes left by all the other people that should be filling it. For the first time in history, the most innovative, most talent-dense companies in the United States are refusing to do work with DoD. The rest of the world is smart. They know what technologies are coming next.

Josh: And they’re racing ahead.

Palmer: And they’re racing ahead. With or without us. I want to make sure we have a seat at the table so that we’re the ones that are defining the rules of how this game is played.

Josh: Palmer, absolutely thrilled to be partnered with you on this mission. I’m really proud of the work you’re doing.

Palmer: We love working with you too, Josh.

Josh: That’s it from us today. I want to thank the rebel inventors at Anduril for giving us a sneak peak of the future. And if you want to get in touch with us, reach out to futura@lux.vc. We’d love to hear your crazy ideas and inspirations.

If you enjoyed this, and want to learn more about Josh, check out my compilation of him. And if you want to keep up with what I’m reading, you can find me on Twitter at @kgao1412.

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