Better Tools, Bigger Companies
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Better Tools, Bigger Companies
Defense, like all technology sectors, is ruled by the power law: a single, prime mover will claim the vast majority of profits even after the sector has reached maturity. The company that carves out a new investment category usually stays on top.
Better Tools, Bigger Companies
Techno-Industrials are addressing larger markets than most software companies can.
They use whichever tools they need to provide better solutions to key bottlenecks with better unit economics than incumbents.
They are more capital efficient than most investors expect.
And they have to be more strategically sound than the average software company.
B... See more
They use whichever tools they need to provide better solutions to key bottlenecks with better unit economics than incumbents.
They are more capital efficient than most investors expect.
And they have to be more strategically sound than the average software company.
B... See more
Better Tools, Bigger Companies
• Cracks. The old system is showing cracks. The grid is struggling. Planes are falling apart. Carbon emissions have to go. Healthcare costs are through the roof. Metals discoveries are declining. Supply chains are breaking down. America’s industrial base has atrophied. The biggest systems in the world need to be rebuilt.
• Enormous Markets. Most of
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Toolmakers operate at the very bleeding edge, coming up with brand new science and technology, with a primary focus on the science and technology themselves.
Techno-Industrials start with the challenge they want to solve, and use every tool at their disposal, including some at the cutting edge and even some that they have to create themselves, to... See more
Techno-Industrials start with the challenge they want to solve, and use every tool at their disposal, including some at the cutting edge and even some that they have to create themselves, to... See more
Better Tools, Bigger Companies
I want to study the specific companies to understand the category more generally.
Better Tools, Bigger Companies
The more and better tools, the bigger and harder challenges builders can address with them.
Better Tools, Bigger Companies
Other industries, though, are matter industries .
Think energy or agriculture. These things are necessarily physical. Electricity requires electrons. Digital food doesn’t fill bellies.
For the past few decades, as software has eaten the world, entrepreneurs and incumbents alike have attempted to fix these industries with software. They’ve made them... See more
Think energy or agriculture. These things are necessarily physical. Electricity requires electrons. Digital food doesn’t fill bellies.
For the past few decades, as software has eaten the world, entrepreneurs and incumbents alike have attempted to fix these industries with software. They’ve made them... See more
Better Tools, Bigger Companies
Anduril and Power Laws
When Anduril launched in 2017, it was famously met with a ton of skepticism. Some of it came from the fact that investors found defense distasteful, but a lot of it came from a lack of knowledge about the defense industry.
Competing with the five Defense Primes? Yuck. Hardware? Yuck. Selling to the government? Yuck.
What
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Toolmakers are closer to what I’d categorize as actual deep tech. They are solving deeply technical problems in order to give humanity fundamentally new capabilities. They’re often the ones pushing the exponential curves. A company developing a new type of semiconductor, new materials, or more efficient solar cells might fit into this category.
Tech... See more
Tech... See more