Contrasting Drone Strategies: From Predator to Ghost

Today, we are running a special episode of Business Breakdowns. With geopolitics playing an increasingly important role in society again, this episode with Anduril’s CEO offers an inside look at the state of the defense industry and how it is changing. If you enjoy this episode, subscribe to Business Breakdowns on your preferred podcast player, where you’ll find past episodes on Block, Goldman Sachs, AutoZone and many others.

Today, we are breaking down Anduril. Anduril builds high tech defense systems for the US Department of Defense and its allies. Crucially, it does so with speed that emanates from Silicon Valley. Founded in 2017 by Palmer Luckey, who previously built and sold Oculus to Facebook, Anduril has achieved the rare feat of challenging the established order in the defense industry.

To break down Anduril, I’m joined by the company’s CEO and co-founder, Brian Schimpf. We discuss the history of the defense industry, how Anduril’s business is counter positioned against the legacy cost-plus model, and what Brian has learned about selling to the DoD. Please enjoy this breakdown of Anduril.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

-----

This episode is brought to you by Tegus. Tegus is the new digital hub for market intelligence. The Tegus platform empowers Investors and Corporate Development teams to invest smarter by pairing best-in-class technology with the highest quality user-generated content and data. Find out why a majority of the top firms are using Tegus on a daily basis. If you're ready to go deeper on any company and you appreciate the value of primary research, head to tegus.co/breakdowns for a free trial.

-----

This episode is brought to you by Daloopa. Daloopa streamlines a major pain point for investors. By capturing all of a company's KPIs and adjusted financials into their database - Daloopa makes it easy to quickly update your models for what matters. Daloopa uses AI to find every KPI disclosed - from charts, to text, and even from footnotes of investor presentations. Daloopa updates these KPIs and data points in your existing Excel models in one click, regardless of your source or format. Test Daloopa for free at daloopa.com/Patrick.

-----

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here.

Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss

Show Notes

[00:02:52] - [First question] - The history of defense technology and the technological and competitive landscape when he set out to build Anduril

[00:08:22] - What the early experience was like when approaching the government and finding an early adopter

[00:12:44] - Necessity being the mother of invention when it came to developing drones

[00:16:37] - What it’s like to develop hardware and software products at the same time 

[00:24:44] - The state of military technology and military conflict today writ large

[00:31:10] - Are we heading to a future where warfare is mostly machine against machine? 

[00:33:34] - Comparing the ghost drone system to predator drones

[00:38:40] - Guiding principles as a firm and deciding on their product roadmap

[00:43:25] - An overview of their product lineup and what they’ve built so far 

[00:51:56] - Most difficult decisions he’s had to make through Anduril’s history 

[00:53:51] - How he overcame Anduril’s lowest points and biggest challenges 

[00:58:38] - Thoughts on effectively compounding hardware innovation 

[01:02:23] - A moment he’s most proud of and regrets most in Anduril’s history

[01:04:20] - Lessons learned from observing Palantir and SpaceX 

[01:08:37] - The kindest thing anyone has ever done for him