Better Tools, Bigger Companies

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Instead of designing slightly better versions of old products – not better enough to displace incumbents – or fixing inefficiencies with software, entrepreneurs are designing radically better vertically integrated systems from the ground up with cutting edge hardware and software.

They’re mixing and matching whatever tools are needed to get the job... See more

Better Tools, Bigger Companies

The right lesson to take from Anduril is that it’s possible to build very big businesses by applying a suite of cutting edge tools and processes to the right bottlenecks in large, seemingly impenetrable industries.

And thanks to the power law, there will be one really big winner in each industry:

Defense, like all technology sectors, is ruled by the

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

Whatever problems face us, we have more tools in the toolbox, more building blocks to solve it. And because we have digital technologies, it allows us to search the space much faster than we could before. And hence, we can come up with solutions faster than we could before.

Better Tools, Bigger Companies

Techno-Industrials , on the other hand, are the ones riding exponential curves. They’re integrators as much as they are innovators, incorporating a number of technologies that hit just the right spot on their curves to be practically and economically useful in solving a particular challenge (new or old) in a better way.

Better Tools, Bigger Companies

Boeing is a dominant airplane manufacturer today because its 707 used a jet engine to cut travel times in half way back in 1958.

Better Tools, Bigger Companies

Analogizing the current era in tech with the recent, software-dominated era is a mistake.

A much better analogy would be the Second Industrial Revolution in America, the Gilded Age when entrepreneurs built businesses using every new technological tool at their disposal to pull humanity to a new level of prosperity and became unbelievably rich in th... See more

Better Tools, Bigger Companies

I want to study the specific companies to understand the category more generally.

Better Tools, Bigger Companies

You need to introduce an entirely new paradigm, which requires reaching much higher on the cumulative technology ladder than previous solutions. Because while the accumulation of tools is continuous, there are discrete periods in history when those tools have gotten better enough to make new solutions possible.