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.

But again, it depends on the business.

No matter what challenge they’re solving or industry they’re attacking, though, it’s hard.

Techno-Industrials need to employ a variety of cutting edge technologies, build teams of experts with wide ranges of skills and orchestrate them like a symphony, produce physical products, and sell them to customers – individuals, corporations, or governments. Hardware is hard, and it will be for a very long time. Supply chain hiccups and manufacturing bottlenecks will always get in the way. Downstream capital is never guaranteed – there aren’t accepted Series B metrics for a vertically integrated mineral exploration company. On top of all that, if they get past the embryonic phase, and often before they even do, they’ll go up against deep-pocketed incumbents who have dominated their industries for decades and are willing to use every resource at their disposal, including regulation, to win.

This is hard mode. Many of these companies, even great ones, will fail!

But that’s the point. Companies that make it through all of that face less competition on the other side, and earn the chance to shape new categories and reap the power law returns that come with doing so.

Ultimately, it comes down to the team. Do the founders and employees have what it takes to win despite all of the challenges?

And here, too, Techno-Industrials have an advantage: the most talented people are drawn to the biggest challenges. As Anduril co-founder Palmer Luckey explained in a recent interview, “The way you poach people from big tech companies is you tell them that their career is meaningless and that they’re wasting their lives on something that doesn’t matter.”

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