--:-- Ashlee Vance: Okay, we're doing supersonic planes today. This interview took place a couple of months ago in New Mexico at Spaceport America. I was hanging out with Hermes, which is building an autonomous fighter jet. We're with Zach Shore, the CEO, and A.J. Piplica, who used to be CEO. He's co-founder. And chairman of Hermes. Awesome day. We will have a video on our main YouTube channel of hanging out with AJ and Zach, seeing their plane go supersonic, hanging out in Truth or Consequences, New Mexico, all kinds of stuff. But in the meantime, this is our main sit-down interview with them where we obviously talked about going supersonic. Hermes has plans to go hypersonic. At some point right now, they're making military craft. One day, they might make passenger aircraft. They've gone pretty quick as far as getting planes designed, flying them, testing them. They receive, I would say, less attention than Boom. Supersonic, which Blake, who is a friend, he's quite aggressive with his PR and marketing. Good for him. Hermes has stayed a little bit quieter, but they're now... Out there making a splash because they're doing these tests all the time at the spaceport in New Mexico and they're moving fast with new iterations of their aircraft. It was incredible. The plane did what it was supposed to do in this conversation. We get into aerospace, we get into the state of the American defense industry, all kinds of things. AJ and Zach are a good hang. You will enjoy this. Please, please leave us a like or a review. Not a subscription, although you can subscribe to anything you like. On Apple, Spotify, please leave us a review or some stars or tell your friends that you enjoy this podcast. It would make such a huge difference to more people finding the show. Bless you. I am Ashlee Vance. This is Core Memory. Here we go. [music] Gentlemen, hello. Hello. Howdy. Thank you for having us out here. This is exciting. So, I mean, real quick, just to let people know, we're at a spaceport in New Mexico.
--:-- A.J. Piplica: Truth or Consequences, New Mexico.
--:-- Ashlee Vance: Truth or Consequences, which we could get into the day. I learned the history last night. It's sort of not what I expected. I thought it was tied to some aliens or, you know, some of the deeper, weird points of New Mexico, but it's just named after a radio game show. Do you guys know this history? No? Yeah, there was a guy, he had a, like in the 50s, I think, maybe? He had a radio show and he put out a contest because it was called Truth or Consequences. If some city would change their name to his game show. So it used to be called Hot Springs and then the city actually did it. And then for 50 years, he would come back for this party they had every year. That's great. About the name change. Yeah. Okay, so we're at the spaceport. Virgin's back there, obviously interesting things have been happening here for decades around new space and aerospace and you guys are like this exciting chapter of this.
--:-- A.J. Piplica: Talk history, the Trinity site is
--:-- Ashlee Vance: just over there. Just over there, yeah. So, okay, so today, Right behind us is a plane, and we're going to see it go supersonic, hopefully. That's the plan. And it's going to be unmanned. That's right. So the pilot's going to fly it remotely from this station over here. Okay. So yeah, tell me about this plane.
--:-- A.J. Piplica: Yeah, so it's called Quarter Horse Mark 2.1. It's our first supersonic jet. It's about the size of an F-16, same engine as an F-16, but yeah, no pilots on board. The goal today is hopefully get up north of Mach 1.5, so we're pushing the boundaries of how fast we've flown before as a company, which is exciting. A couple other objectives to catch on the way down, but yeah, hopefully a nice uneventful day.
--:-- Ashlee Vance: And this is the third time you've flown it?
--:-- A.J. Piplica: Fourth. Fourth time. Okay. So each one you're just proving new things out. Yeah. First flight was get off the ground, come around for a little bit, come back and land. Second flight, get the gear up, get it back down, make sure that's all good. Then third flight was supersonic. Okay.
--:-- Zach Shore: That's a pace that is not a thing that happens anymore. In the aerospace. Yeah. That aircraft had 45 minutes of flight time on it before it went Mach 1.21. Yeah. You know, you're looking at programs that'll do years. In incremental, like notching up by, you know, 0.1, 0.1, 0.1 before they even attempt that.
--:-- Ashlee Vance: Yeah. So even, I mean, I've been out with Boom doing their supersonic plane. I mean, they're a startup. They're trying to move fast, but they did do many of these incremental steps. Is this, this is like just a different philosophy you guys have?
--:-- Zach Shore: Part of the truth in lending, unmanned, right? So you can, you can, It can take a lot more. So Boone's got a manned aircraft and you do want to be mindful of that. But I do think this also is the anchor of iterative design and the idea of being hardware rich. So right behind us is another hangar and our Mark 2.2 plane will arrive here on Monday. So, you know, you're able to push the envelope to accelerate the business. So if I lawn dart that plane, I just roll the next plane out. And so we are willing to take more risk. I mean, this is sort of what Elon's done in blowing up rockets in the pursuit of accelerating the programs and learning that are much easier to do with unmanned systems and to be much more risk forward.
--:-- A.J. Piplica: Yeah, yeah. You reduce the stakes. You reduce the consequences of something going wrong, something unexpected. And typically, those are things where you're actually going to learn something quite meaningful. So if you backstop that, and from a company's perspective, it's maybe a handful of weeks or even a few months before you can get back into flight, that's something that can be managed. Now, if you have one plane, it's got to work. Same kind of thing in the space world. Why does SLS take as long as it does versus Starships?
--:-- Ashlee Vance: Yes. All right, let's take a step back for a second just to let everybody know what Hermia is doing and the point of all this, and then we'll nerd out in all the spots I want to go. But AJ, I've known you at least kind of virtually for a long time and following you guys. It was about 10 years ago. You put a flag down. You're like, we're going to go hypersonic. At times, you guys have emphasized hoping to get even commercial planes hypersonic. Wow. And then obviously doing stuff for the military as well on part of this journey. But clearly, since the Concorde retired, we haven't even had supersonic flight. And so we've got attempts to try and do that. And supersonic, I think the Concorde tapped out at like Mach 2.2, somewhere around? Around two. Around two. And then hypersonic is, by definition, that's above five? Five. Okay. And so... If all that worked on the commercial side, you would get London to New York in about 90 minutes and you would have it with like, I think, I don't know if this still, we'll get into it, but if this still holds true, but like 20 passengers doing that kind of journey. And then obviously on the military side, We're kind of in a race with China around hypersonic everything and the military wants planes that are fast and maneuverable, right? And so is that fair? Like the company's whole goal is to kind of do new things with hypersonic flight.
--:-- A.J. Piplica: Yeah, I think when we founded the company, the core focus was certainly on hypersonics. You know, this is 2018 timeframe, so about seven and a half years ago, almost eight now. You know, we were clearly behind as a country. We're going to spend a bunch of money trying to catch up. We're going to do the same way we always did with big cost type contracts, prime contractors. And, you know, we saw like, we're probably not actually going to solve this problem. And here we are, like, lo and behold, we've spent Huge amounts of money, tens of billions of dollars, and really haven't fielded anything yet. So part of the reason for that is modern aerospace development, complex systems, big things that fly that are challenging, they take a huge amount of time and a huge amount of money to develop, which really prevents you from doing a lot of them, kind of put all your eggs in one basket And go from there. So we knew we needed to change that. And we'd seen a change in the space world. SpaceX, many others, building a lot of hardware, doing things that people thought were impossible on arguably incredibly fast timelines. And that iterative development approach that Zach mentioned is the core to that. So bringing that in, that allows us to shrink time, shrink the amount of capital that's necessary to do some of these things. And then on top of that, produce capabilities that are quite asymmetric in some ways, but highly capable systems that actually deliver on the deterrence outcome that defense is intended to be.
--:-- Ashlee Vance: Yeah, so you guys kick off, I guess it's, it is funny. I mean, I guess the rocket end of things, Commercialized, pushed some of these limits a little faster before guys like you and Boom started appearing, but it was bringing the same mentality. We don't have to do things the same way. Aviation used to be this way, right?
--:-- A.J. Piplica: Like where's the kind of architecture?
--:-- Ashlee Vance: Exactly.
--:-- A.J. Piplica: Exactly. You know, like the forties, fifties, sixties, like you look at how many planes we developed and put into production back then. It was just crazy. Nowadays it takes 20 years to put a new aircraft into production.
--:-- Ashlee Vance: Yeah. It was like Bert Rutan off by himself.
--:-- Zach Shore: I mean, and this informs the business today. And so hypersonic is certainly still a north star for the business. But as we've continued to mature and build over the last seven and a half years, I think one of the things we've unlocked is the ability to design, build, and test aircraft, period, full stop, right? So you talked about Skunk Works. Kelly Johnson did 41 aircraft into production in 40 years. And that, especially today, Is a superpower all its own, right? If we need producible systems in any domain, surface, subsurface, space, you know, land, they have to be producible. And this is being talked about across the defense industrial base by the secretary and the unders and the chiefs. And so, you know, you look at Mark II as an example, and this is a vehicle that is a clear stepping stone for us into hypersonic. And, not or, and it unlocks a capability today for the department that is mass producible, that drives value, saves dollars, saves lives, and meets those needs. And so for us, as we start thinking about going forward, hey, where do we take this business? We started to open the aperture to say, I've got a machine that builds machines. That is actually the utility of this. We started with the hardest problem, the high speed systems problem. And we're going to continue to pursue the Mach 5 vehicles. And we can chew and walk at the same time. There are other vehicles. There are other problems that we can pursue. That allow us to, you know, meet the needs of the warfighter and to create a robust business. Because the reality is if you really want to go after sustainable commercial flight operations, the economic hurdles you have ahead of you mean you need to create a stable cash flowing defense business first, period.
--:-- A.J. Piplica: This is why you haven't seen a major successful large aircraft manufacturer, especially in the military side, founded in this country since like the 1950s. Yeah, I mean, it's
--:-- Ashlee Vance: So much, it's kind of beyond venture capital.
--:-- A.J. Piplica: It's beyond venture capital. You have to build a real business that at the same time is de-risking all the technology and the regulatory pieces to actually make an airport business work.
--:-- Ashlee Vance: So we're like in this moment where we're trying to re-industrialize the Defense Department, the Department of War seems to, at least parts of it, finally cottoned on that we're behind. A lot of ways we're moving too slow and is trying to like adjust to some of this. I guess it's, I always get a little nervous, though, that the whims change, administrations change, geopolitical things change, and some of that air comes out. But it does feel to me like the Defense Department overall is probably making some kind of lasting shift.
--:-- Zach Shore: I think they are. I mean, if I just go back to, you know, when I started in this sector, it's come very far. And I also think one of the things you're starting to see in particular with this admin is they're making some bets. And as some of those bets hit and deliver, people are going to double down. Like the nature of a bureaucracy is people want to glom onto the winner. They want to ride the horse that's delivering. And so I don't think you're going to see if there's an admin change or even depending on what happens in the midterms, these huge rudder steers, especially because defense continues to be the most non-political part of the ecosystem. And so... Everybody wants cost savings. I don't care where you are. Everybody's like, this is all too expensive. And there's just a bunch of different ways you can tell that story in terms of like, how do you drive value in this? Is it for other programs in the federal government that you have more money for? Is it for the ability to create more masks within the department? You can figure out a way to To drink that Kool-Aid that makes sense to your angle because it's good for everybody. So I don't think we or many of the other folks in the defense tech community are overly concerned about that. I think the real risk is we have to live up to our end of the bargain. They're giving us a chance. They're throwing us the ball. You got to hit it, right? And not everything's going to succeed and that's fine, but we have to succeed at least in the binary. Like there have to be some programs that deliver so that, you know, the people who took the risk in the department, the people who took the risk on the Hill to support us have a flower to hold up to say, hey, it was worth it. Yeah.
--:-- Ashlee Vance: Okay. We should explain to you guys' background a little bit, too. So, AJ, I mean, you co-founded the company. You were CEO for a long time. You've got an aerospace engineer-style background. Yep. And then, Zach, you came on a few months ago as CEO and now you're chairman. That's right. And so, I mean, your background really is you've been working on... Aircraft of different flavors.
--:-- A.J. Piplica: Yeah, I grew up through the hypersonics world. I got lucky enough to work with like the one tiny 10-person team in the Air Force that was still working on hypersonics through sequestration and all that. So I got to work on the early stages of all the hypersonic weapons programs that we have today, see what was going on, what direction we were going, where the challenges were, where the roadblocks were going to be. And then, you know, I've been building aerospace companies for, you know, probably 15 years now.
--:-- Ashlee Vance: Yeah. And did you come out of, I should have, I checked this and I forgot as like a, Aerospace Engineer, Physicist. Aerospace Engineer. Yeah. Okay. Okay. And then you were in the military. You served in the military. Is that how you... Yeah.
--:-- Zach Shore: That's sort of how I got into this. So I was a Marine. I was a SIGINT officer by trade. So I did two tours in Iraq as a SIGINTor. Then I tour in Afghanistan as an infantryman. Got out. God bless the GI Bill. The kind of classic junior military officer story back then in 2011. Grad school. Some time in consulting, some time in private equity. And then I was really early at Anderil. And that's sort of how I got into the space. Lattice program at Anderil. And so as a signer, command and control was a very natural place for me to sort of plug in and use my subject matter expertise. And, you know, I've been in defense for about a decade at this point and joined Hermius a little over four years ago on the go-to-market side. And then, you know, grew up into the CRO and the president. Yeah, as you said, I took over as the CEO position about six weeks ago.
--:-- Ashlee Vance: Okay, six weeks, yeah. That was quicker and sooner than I remembered that. And are the tattoos from the military days?
--:-- Zach Shore: Some of them, I mean, it starts there for sure. There's some other ones, you know, I've got like my UFO one, my favorite one, and the ad can go on and on. But yeah, I definitely got my first tattoo in the Marine Corps, 21, and now I just can't stop.
--:-- Ashlee Vance: Okay. I'm going to mess up some of the hypersonic history here, but I know... In the past, I mean, I think we've gotten up to something like Mach 9 by dropping things from a plane in
--:-- A.J. Piplica: the air. That would be the X-43 that NASA did in the late 90s, early 2000s. Okay, and then we've had the fastest passenger would be the
--:-- Ashlee Vance: SR-71, right?
--:-- A.J. Piplica: Fastest crewed aircraft.
--:-- Ashlee Vance: Yeah, passengers probably, not the right word.
--:-- A.J. Piplica: You had the X-15 back in the 50s, rocket plane, not an airplane, rocket plane. So airplane, SR-71.
--:-- Ashlee Vance: Yeah. Okay. Okay. And that, I mean, and so in the goal, You mentioned rocket plane. I mean, the goal is you kind of maybe don't want a rocket plane, right? Because you want more flexibility.
--:-- A.J. Piplica: There are lots of reasons, mostly operational, but also cost and get into scaling and producibility. Same kind of thing with the airplane. Especially in the Air Force and the Navy, the way they use those platforms, you need operational flexibility to fit into airspace and Loiter around, marshal around, do all those things that rockets are not great for.
--:-- Ashlee Vance: Okay, and I get your earlier point that maybe you guys will be making different kinds of aircraft as needed, but just for a little bit on what you guys have been talking about for a few years. This has, it's got a Pratt & Whitney engine on it. The F-100. Designed to go supersonic. Yes. And then your overall architecture is this hybrid design where you have that, this more traditional, what, like turbine engine, and then you... At some point when you're flying, you switch over to a ramjet. And so you're getting up to, we talked about earlier, was it like Mach 3? Mach 3 is where that transition is. And so you have to like turn one engine off, turn the other one on and walk people through the physics of this. So like when you're going fast enough, the turbine engine, you just can't.
--:-- A.J. Piplica: Yeah. So as you increase in speed and altitude, The performance of the gas turbine engine drops off a cliff to the point where it can't generate enough thrust to accelerate the airplane anymore. So that's why you see kind of the speeds that these kinds of airplanes fly already. So there's lots of ways to help them go faster. Some are more efficient than others, but the architecture that we've taken here is to put a pre-cooler in front of that engine. So it cools down in the air. That allows the engine to operate at higher speeds, higher altitudes. And then once we get to where Ramjet can operate efficiently around Mach 3, we switch to that. And now you have a very efficient high-speed cruise propulsion system.
--:-- Ashlee Vance: And on both sides, would you... Are you building the Ramjet part from scratch? Yes. But you're kind of using a tried and true engine for the turbine. Exactly.
--:-- A.J. Piplica: We chose to not bite off the clean sheet gas turbine engine development. Okay. That's actually turned into a really important piece of the customer story because, you know, as you, you know, Jack talked about how this airplane is very much a product that's missed all some problems during the new term. You rip the skin off of that airplane, it's effectively an S-16 underneath, which means You know, not only do you plug into some similar supply chains, at least at the early stages, same maintenance repair and overhaul, same logistics, same, you know, at least similar operations and training. So it makes integrating a new product to the scale of a new airplane into the Air Force, the Navy, Foreign Air Forces, much more straightforward. And building an engine from scratch is expensive. It takes a lot of time. Building it from scratch, but probably more importantly, getting your customer to trust it. That takes a long time. Yeah. So at some point you might do that. I would love to.
--:-- Ashlee Vance: Yeah. If it makes sense, we'll do it. Yeah. Yeah. Because this engine's what? It's like 50 years old. Yeah.
--:-- A.J. Piplica: I don't remember which generation this is, but it's been through a number of upgrades over the years. This is the most recent one.
--:-- Ashlee Vance: This episode is brought to you by Brex. I spend all of my time inside of the world's most ambitious companies making rockets, semiconductors, robots. Very often the business is struggling and then all of a sudden things click and take off. Then the company's expenses spin out of control. They either have to clamp down, start counting pennies, or cross their fingers, hope for the best that the quarter or the year comes out okay enough. Brex was built to handle exactly these situations. It helps you move fast, spend smarter at the same time. They've got credit cards, banking, expense management all in one place. They've got AI technology looking over everything, taking care of tasks for you. No more chasing down receipts. We use Brexit Core Memory. It has been a godsend in giving me back so much time. Giants like Anthropic and Zoom. Use Brex as well, and so do tens of thousands of startups. You should use Brex, and you can find out exactly how to do that by going to brex.com slash Core Memory. This is like breaking news. Are we about to pull this out?
--:-- Zach Shore: Yeah, it looks like we're going to tow around the ramp.
--:-- Ashlee Vance: So what time is it? It's like 10, 15, and we're trying to take off around noon, right? Yeah, that's right. Okay, so it's going to taxi out. And then just do some pre-flight checks.
--:-- A.J. Piplica: Yeah, we'll tow out to the end of the runway, lots of pre-flight checks, all our comp checks, range integration checks, all those types of things. And then once the airspace goes green, weather looks good, we'll rip it. All right.
--:-- Ashlee Vance: So if you're listening to this podcast, you're kind of missing out. You should definitely be watching this on YouTube or Spotify because I think the plane is going to come on as you guys might hear some noise at some point in this. So on this path to the hybrid, what's our tie? What's the timeline now as to when you might be testing the hybrid design?
--:-- A.J. Piplica: Yeah, so this 2.1 airplane is just a straight stock F-100 engine. The Mark 2.2 that Zach mentioned is arriving here at Spaceport on Monday. We'll hope to fly that one in the next month or so. That one will have the pre-cooler on it for the first time. So it'll be the first time we're flight testing the pre-cooler and demonstrating the ability to push the engine up above its normal operating bounds. We've done it on the grounds multiple times. Now we'll go do that in the air. And then the next step from there will be to get the airplane and the engine up into the ramjet operating envelope around Mach 3. So we'll do that with the Mark 2.3 aircraft, maybe like middle of the next year. And then the next step after that will be to start flying ramjets. Okay.
--:-- Ashlee Vance: Okay. And what's like from a military standpoint, What makes that type of aircraft useful?
--:-- Zach Shore: Yeah, there's a couple of things. Before I even get into that, I think one of the key pieces on that roadmap is, so as AJ said, right, we get up to Mach 3 and there's a very specific reason, right? Demonstrate that you can get a turbine engine to operate stable in the air at the ramjet transition speed, right? That's not a thing that's been done. Then the next thing is do the ramjet transition. So this aircraft, these three aircraft we're building, designing, we're always on our roadmap for the hypersonic aircraft. But what we've realized is, to your question, there is utility right now for these platforms that we are going to start supporting some demand on. So it's not, you've pivoted, it's not an either or, it's a yes and, right? We were always here and we've discovered a branch. So there's a couple pieces of utility. I mean, the very first one is, think about Operation Epic Fury, the F-15 that was shot down. This is of that class, right? Even before you get into the high-end, high mock flight profile, this is a supersonic unmanned aircraft that carries useful payload. So instead of having to choose between an MQ-9 that carries like 3,000 pounds of payload and an F-15 that's got two pilots, costs $140 million, et cetera, et cetera, That's the future, right? So I have a very mass producible, high end, high payload vehicle that you can start putting in. Because the reality is when we fight, the fifth gen platforms are really going to dominate the first few days. And then the entire air wing engages. All the fourth gens are still flying and fighting and we're still buying them.
--:-- A.J. Piplica: If you look at the Iran conflict, the percentage of sorties that were done by fourth generation platforms, so like F-15s, F-16s, probably F-18s in the mix there too, it's like 85 to 90%. Okay, okay.
--:-- Zach Shore: And so this is now a low-cost unmanned alternative to create that mass in the sky, right? I can have seven hardpoints on this vehicle. And the other thing that's beautiful about a platform like this is one the biggest chokepoints in the Department of Defense is integrating new weapons on unmanned platforms. And it's for good reason, right? Like you've got a human being in a cockpit and you're going to put an explodey thing on the wing. You want to massively reduce the risk before you do it for the first time. That's a technical term. Yes, Marines here talking, right? And that creates chokepoints. When you have a high payload unmanned aircraft, I can take way more risk to accelerate integrating weapons and figuring out, hey, can this work? The store separation, all the things to take that weapon from tier all three to seven to then more quickly, more stably put it on a manned air for it. Aircraft at the same time, the platform then becomes the de facto spinning wheel of its integrated everything. So you've got unmanned fighter, man fighters. Not every man fighter can carry every weapon. There are huge trades and risks. It's like, I need now the F-15 It's not certified to carry. So you can more rapidly certify insert new weapon onto this plane than you can any man platform. And one of the things General Wilsbach, Chief of Staff of the Air Force, testified to recently when he was asked, why does he want more F-15s? He goes, well, that's my bomb truck. It's the most flexible platform to carry the most diverse range of payloads, but it's expensive, it's manned, it's not necessarily mass producible. So why not think of that type of capability as an unmanned system that is mass producible, and when you lose it, instead of having the risk You know, two down pilots in Iran. Okay, we treat it like an MQ-9, move on to the next one. And so that is one huge use case for this vehicle. And the other is, as you start getting vehicles into the higher Mach regimes, our ability to add range to any system, this becomes a first stage booster, right? So if I am releasing a payload at Mach 2, Mach 3, I am the first stage before that engine lights and I can double, even maybe triple the ranges of some standard munitions without having to add costs to them. And so you get a lot of operational flexibility, high producibility, low cost, and you take the human being out of the engagement envelope that allows you to be more aggressive in how you apply those systems against an adversary.
--:-- Ashlee Vance: And the government's been having this, what is it, the Commercial Combat Aircraft?
--:-- Zach Shore: CCA, yeah.
--:-- Ashlee Vance: Contract. And so what, Andrel?
--:-- Zach Shore: Andrel and General Atomics have the two Inc. 1 prototypes.
--:-- Ashlee Vance: They moved on to this next level. And so Andrel's, I've seen Fury. I haven't seen the General Atomics as much. Yeah, they're small, right? They're smaller than this, yeah. Okay. So,
--:-- Zach Shore: I mean, if you think, for the longest time, the way the United States military talked about unmanned systems was groups, groups 1 through 5. And Andruil is a Group 5, so is General Atomics Group 5. Technically, we are also a Group 5. But really we have broken the group sale with this aircraft because the scale of group five ends up being, I mean, shoot, it's like 7,000 pounds or something of that nature to N, right? Everything else below that is, you know, integrated up to 7,000 pounds. And so nobody's really been conceptualizing unmanned high speed aircraft of this scale before. So this is truly like breaking the paradigm. The combat collaborative aircraft program is a great program. I mean, we are huge supporters of it. We're not a part of it. And those aircraft in the Fury and the Ghostbat, which is Boeing and Gambit for General Atomics, are trying to solve a bit of a different problem. It's sort of this like near wingman with the stealth fighters. We are more of an independent platform that would be doing some stuff out and about. So the way I think about CCA is it's the beginning of the Air Force conceptualizing unmanned aircraft. High thrust platforms. And that's where they get into, you know, they want to do an increment approach. So this is increment one with Andrew and General Atomics. There'll be an increment two and increment three and so on and so forth. How that plays out with us, you know, to be determined, something we're very closely watching and engaged with the department on.
--:-- Ashlee Vance: So I might, I'm getting out of my depth in a second, but I mean, that's considered a program of record, right? And so, and that's kind of what you want in some of these cases, if you're trying to get serious, consistent funding. So are you guys... Does that mean you're outside of that and life is hard for you or you're in a totally different... Both and.
--:-- Zach Shore: I mean, we are not... We're ruining our own story. Yeah, we are both and. I mean, it gets really nuanced in the sensitivities around whether you're in or out of the program. What I would say is the way we've approached this is our anchor partnerships with DIU. And that has been a real boon, I think, for us. I think it's been a boon for DIU.
--:-- Ashlee Vance: Which, just to fill people in, is this sort of like a R&D startup funding? Startup funding, right?
--:-- Zach Shore: It's the window, right, into the Pentagon. For things that don't fit cleanly. I think we are absolutely the biggest physical item they have worked on. And certainly on the contract side of like DIU focused the biggest things they've sort of bet on. But you can't do that level of work even with DIU if you don't have some level of concurrence for the Air Force, right? So the Air Force is highly engaged and watching. What we have to keep doing is delivering our technical milestones to help them figure out how do they want to adopt this. And it's a chicken egg problem. You know, defense innovation, That inherently is more commercial in that I'm going to have a thesis on your problem and I'm going to build to it ahead of you telling me what you want. And so it's the iPhone scenario of like Steve Jobs isn't going to go to Joe Person or Joe Industry and say, what is your requirement? He's going to look at the world and say, I have a thesis based on the information I have available and where I see the world going and I'm going to take risk. And if that risk is right and I deliver you a product that is delightful and creates value, my risk will be rewarded with the outcome. The Department of Defense historically does not build products that way. They go the other way. And so this is the sort of impedance mismatching that we work on. And how do you kind of bring those two worlds together? CCA is a little bit more of a traditional approach, but they are trying to open the aperture to say, okay, We're going to do an increment approach, right? We're going to keep evolving that. And as these increments go live, we, the department, are going to look up and say, what else is out there? And how do we want to use the knowledge of what else is happening to inform what we want to do? And so that's why it's kind of a non-answer because everybody's still figuring it out. And the best thing that we can do for ourselves is have a strong thesis, be tied in with the end users, and deliver what we say we're going to deliver. Because the only thing that's really going to guarantee a negative outcome is Be PowerPoint deep, because that doesn't help anybody. Nobody's going to write you a $100 million check for a PowerPoint, unless you're, you know, Lockheed Martin gets that and Boeing and some of the bigs historically, but not for a new entrant. So you really need to put it out there and build your version.
--:-- Ashlee Vance: And AJ, for you, I mean, like, unless I'm wrong, I mean, I remember the commercial side, the passenger side. Wasn't that sort of the point of emphasis when you first started? Is that where you really wanted to go?
--:-- A.J. Piplica: The military and defense piece was always there. We didn't talk about it a lot out in the open in the early days. I've been in the early days for a number of reasons. But the beauty about building an airplane business is that it is fundamentally dual use in that if we are successful in building this military aviation business and scaling it, that kind of earns us a right to try to enter, take that same technology into the commercial world down the road. So, you know, people ask, like, is this a dual use company doing defense and commercial? Yes, but they're temporarily separate. Defense first, earn our right to enter the commercial piece later.
--:-- Ashlee Vance: So you're saying there is a possibility I will fly Hypersona in my lifetime.
--:-- Zach Shore: I want to be on the plane last, so I have a lot of motivation to make them faster.
--:-- Ashlee Vance: Will it always be? When I was doing my reading, coming to see you guys, I mean, it was talking about flight from London to New York, but the mileage, I think it was somewhere around like 4,000-ish or 4,500 miles.
--:-- A.J. Piplica: Well, that's like 3,400.
--:-- Ashlee Vance: And if this works, would it always be limited to that range?
--:-- A.J. Piplica: For like a single hop, yeah. With fast airplanes, it's pretty tough to make them work more than maybe 5,000 miles. They just get incredibly big. So this is not like a pathway around the world tripper. It's an ocean crosser. Okay. Yeah.
--:-- Ashlee Vance: Okay. Okay. Well, that would be fantastic.
--:-- A.J. Piplica: If that could happen.
--:-- Ashlee Vance: Yeah. So like working at this spaceport, why did you guys, I'm used to going to Mojave to see things like this typically, although obviously this same White Sands has this long history of breaking in all kinds of aircraft. But yeah, why did you guys pick here? And then because you're moving your headquarters to Long Beach or El Segundo, right? So El Segundo, all that collection of companies, they like to hop two hours out to Mojave a lot of the time. So yeah, why pick New Mexico?
--:-- A.J. Piplica: Yeah, I'll hit that when you get the LAPs. A couple of reasons. Number one, commercial airfield, fully unrestricted airspace is what we have here in New Mexico. I don't think there is a place like that anywhere else in the country. And what that does for us is it really heavily shrinks the scope of our kind of safety analysis that we need to do. Because in restricted airspace, there are no other aircraft. So for the FAA to allow us to fly, they need to be happy with the level of safety we're providing to the national airspace, so airplanes in the air, and the uninvolved public, people on the ground. The airspace is by inspection. Zero airplanes, zero risk. Done. And in the ground area here, there's much more space for us to operate that way that is completely unpopulated, like literally zero people. So it makes the safety case, again, And that's allowed us to get into flight much faster than we would have otherwise been able to. Now, as we move forward, as we continue to iterate, as we bring more products online, they will operate more like traditional airplanes, where you're flying in the national airspace at similar levels of safety and those types of things. But instead of that being the binary zero to one bar you had to get over, we moved that bar way down here. And that's part of why we've been able to move as fast as we have.
--:-- Ashlee Vance: Still, even though we're in this testing ground, and okay, the military has stuff to do, but they're giving you guys what, like a two-hour window today to get everything in? It still feels like we have some of this tension between the military and the bureaucracy and the way things have always been done and startups that are trying to, you know, it feels like they could give you a day if you, What I'll
--:-- A.J. Piplica: say about them, so we're operating within the confines of a federal test range. And that's also another important piece. It's their responsibility as the kind of unevolved third party to make sure our airplane doesn't leave the confines of the restricted airspace and the controlled ground area. And the FAA puts their trust in them. So again, that's another element of the, you can do this quickly. That said, the test ranges across the country have been underfunded for years. They are wicked old with all their infrastructure, so the challenge that they're dealing with is really, really challenging. Plus, you had a huge element of the workforce, take the deferred retirement piece, so now they're strapped just for experienced bodies who understand how to do these. The constraints they have on top of them are really rough. Now from our side, we've done everything we can to make their problems as easy as possible, as simple as possible. Keep all the hard stuff on our side. We try to take the fewest resources possible for the shortest amount of time. The demand for those test resources is huge. I mean, there's so many programs across the department that need these things. However, I think all the test ranges can operate in a much more efficient way to get more out of these national jewel resources that
--:-- Ashlee Vance: we have. I run into this a lot, man. I remember Varda was trying to land their capsule, again, sort of in the middle of nowhere, although it was in Utah. I'm not trying to just totally bag on everything because safety is important on all this stuff. But it feels like at some point if the US wants to be serious about this stuff, it's got a lot of competition. China would be giving you probably as much time as you want.
--:-- Zach Shore: China launches overall rockets over villages all the time. I'm not as generous as AJ on this. I mean, look, I think everybody wants to do the right thing. So there's not like some nefarious decision here. The test and evaluation community to me is one of the last bastions that has not really faced the innovation pressure. Yeah. And some of this is how you have to understand, like, if you look at defense tech and venture in particular, the hardware is relatively small and inexpensive. There's not a lot of companies that are building at this scale for venture backed companies, period. Yeah. Or it's software. And there's a reason for that. And that's because the S&T component, the science technology component of the DOW, Historically, does not work with startups. And that is the entree point to prototyping and to the program offices. And so what happens is the defense tech companies exist in parallel to the AFRLs and the ONRs and they compete. Frankly, with them. And so you go out and you have to build a prototype as quickly as you can. And then you show up at the program office with a working prototype that you've used all iRad on and you try and sell it. That has a huge price pressure and cost pressure down on the complexity you can build at. And so the big hard systems are still like the domain of the incumbents. And that means that like business as usual is the only way you can do it. So as an example, to really get range space, program a record. That's it. But that brings you back to the chicken egg problem. So if we look at companies that are innovating in autonomous systems that are not in the air, in part it's because they don't have the same range risk. So if you're going to do a boat, you could start with a lake. You could put it on the water. I'm not saying you don't have to coordinate, but it does not have the degrees of controls and constraints that you're going to have for high altitude, high speed flight. Same for a ground system. Go Find 1,000 acres and you can just drive your thing around. Space, I mean, you go on and on. And so aviation in particular is this sort of last bastion. And if you look at the CCA program, why is Anderil and General Atomics getting the flight time? They're in a program of record. But that completely shuts the door on private industry from being like, I got an idea. I'm willing to take risk. I'm going to build something and fly it. But I need you to help me get in the air. And this is where the ranges are just sort of like, I don't know how to. And it's business as usual.
--:-- Ashlee Vance: I mean, I remember SpaceX going through all the same stuff, trying to get a pad. It was a mixed bag, though. They were trying to fly from Vandenberg at the start and Boeing and Lockheed were blocking them and making life really tough on them. And you have this wild card of like, do you guys even know what you're doing? We can't have you fly a rocket in Southern California. And then it is funny that they, I mean, rockets seem so much more explosive and everything, but they did manage to get through a lot of this stuff. And then it was this, it's been like a give and take, but I have seen the government Try to get launch licenses quicker. I would give them a decent amount of credit for moving as the commercial space industry has taken off. But then if you look at like even consumer drones, you know, you can make a pretty strong case that the FAA sort of killed the US industry and right when we were head of DJI and everyone. And so, yeah, I mean, this kind of like frustrates me and especially in something like Aviation, I mean, where you guys will be in El Segundo is like a hundred years history of us, of the US being ahead on all this and doing the most interesting, Stuff. So it's kind of sad to get to a point where you really have to beg to be able to do this. I mean, I think that's why you
--:-- A.J. Piplica: beg or you break the rules that don't actually matter. Yeah. And like we've we've done that many times. And I think that has helped push the government forward in a lot of different ways. I mean, you talk about the FAA, they've like. Actually made some strides over the past couple of years as we've been working with them to move some of these things a lot faster. Yeah. With, you know, congressional authorities that are granted them that were just kind of sitting there on somebody's desk that nobody kind of picked up and figured out what to do with. Well, we just kind of read the law. We're like, you don't actually need to do that. And made a safety case that they believed in, again, leveraging these kinds of things. And yeah, now we've got a path that can move a lot faster, but there's so much more work to do.
--:-- Ashlee Vance: So you guys... You'll stay unmanned for a while. For a while. Okay. And even though today, so it'll fly out and it'll, yeah, like walk us through today a little bit. So around noon, this will be sitting out on the pad. You go through the pre-flight checks and then somebody in this trailer over here is going to fly it. Yep. What's kind of the mission today?
--:-- A.J. Piplica: Yeah, so we'll take off heading south, head out over the white sands part of the range, do some inflight checks on the way out. If everything looks good and we're ready to go, we'll go for a supersonic dash, hit our top speed. Slow down, turn around, come back down south, hit our other test points that we want to hit for handling qualities and comms and controllers and things like that. And then we'll come back and land here northbound. And how long would
--:-- Ashlee Vance: that take? Roughly? I don't know, 30-ish minutes. And it's roughly autonomous most of the time? No, it's being flown.
--:-- A.J. Piplica: Plenty of controllers, there's plenty of automation, but yeah, it's really not autonomous.
--:-- Zach Shore: But we're building, like in parallel, all the integration layers for the Air Force, they call it AGRA. So that's the sort of API connection layer to all the autonomy stacks. So our view is, hey, we're building planes, I'm not in the business of building high-end mission autonomy. We'll have basic flight autonomy. Any unmade aircraft will need to have that, and we'll build that in-house. But the sort of high-end mission autonomy that Andruil works on, that Shield works on, that Northrop works on, there's plenty of people working on that. We want to just be able to adopt whatever the customer wants. And the department has been very clear. They want to buy the autonomy and the vehicle separate. So that's great for us. So we build the aircraft. We have the integration stack, so I can plug in whatever they choose, and then these vehicles will be autonomous.
--:-- Ashlee Vance: And it has what's called FTS or flight termination system, just like a rocket. Sometimes rockets have a explosive charge. And if the people watching the launch see it go out of a certain zone, they just blow it up before something serious happens. We were talking earlier. So this one, there's another option, which is just like cut off the fuel. And that's what we'd be dealing with on this.
--:-- A.J. Piplica: Yep. That's right. So the airplane will not explode.
--:-- Ashlee Vance: Is it just you guys or do you have a federal official?
--:-- A.J. Piplica: The range at White Sands Missile Range, they monitor the flight termination system and they are the ones who make the choice to terminate if necessary.
--:-- Ashlee Vance: So they're just making sure you're on the right flight path, everything's going according to plan. Yep. Okay.
--:-- A.J. Piplica: Yeah, we have a little bit of a sandbox to work in. If we find something we don't like, we can operate in there. We can kind of circle, loiter. If we lose link with the aircraft, there are built-in behaviors that the aircraft will conduct by itself to kind of station keeps in the same place, and we can troubleshoot and go from there.
--:-- Ashlee Vance: Does the military get excited about this stuff? Yeah, they would, right? But then part of them, I guess it's more the... We should try to see if they, I mean, it wouldn't be competition because all the aircraft are getting built by some company, right? But yeah, so there's no, they all want, or is there a tension?
--:-- A.J. Piplica: Most of the military aircraft today, and for a Like a number of decades in the past, they didn't come from a company developed a product and sold that product into the department. They were born out of the science technology community that Zach mentioned. So in a way, this is quite different.
--:-- Zach Shore: Yeah. Okay. I mean, that's why you're called a contract. It's just like an architect brings the drawings for your house, the contractor builds the drawing. Now, that relationship has gotten very intertwined for good reasons over the years. And that's why I gave the example for the S&T world is kind of completely locked, right? Those groups exist together, the primes in the S&T world and the requirements flow down and the contractors are great with them and the contractor takes the requirement and builds the thing. That would be like somebody telling Steve Jobs, here's the design. For the iPhone. Innovation doesn't occur that way. It completely closes off the idea of asking a question and challenging. And so, you know, there's sort of two communities that I think about in the DOW warfighting world. There's the operator community. Actually three, really. The operator community, the acquisition community, and the S&T community, as far as to make it really simple. And the acquisition community is trying to do the right thing. They're sort of pulled between the two sides, and they're going to follow the orders of the commanders in Congress and be like, this is what we want to buy. And then you have literally competition. I'm not breaking any news here that the S&T world often is more in competition with The defense tech community than it is in concert with them. And I think actually the existence of DIU is a great example of that. I mean, DIU wouldn't necessarily need to exist if that wasn't the case. And I think the continued growth and success of DIU and projects like ours and many others is a reinforcement of that, that it is a kind of... A little bit of a competition and friction point. I think nobody is trying to do this intentionally. Again, this is not a function of individuals. This is a function of vestigial structures and bureaucracy setups over years and years and years in two communities that are very foreign to each other trying to figure out how to work together.
--:-- Ashlee Vance: It's not to open us up to like a nine hour podcast, but I need to go from like the Kelly Johnson era. It's like we used to do a rocket every couple of days.
--:-- A.J. Piplica: Yeah, so here's the thing that I think some people miss about the Kelly Johnson piece. So you can build Skunk Works the way he built Skunk Works with all the culture and everything. If you're a customer, If it doesn't operate that way, it doesn't work. And that's part of why you don't, like the skunkworks of today is not the skunkworks of Kelly Johnson's time. It's the customer has changed. I mean, when he did some of these crazy airplanes, whether it's SR-71 or U-2 or whatever, the program office on the military side was not, It was like six people. And I think that's something that DIU really has the ability to do right. Pull in the actual necessary and sufficient set of stakeholders across the communities that Zach talked about and run a very... Minimalist office that can move very quickly. And those two things together, industry operating this way and the government teams operating this way, that's how it works.
--:-- Zach Shore: I mean, Kelly specifically talked about the three things you need is like, you need your team operating that way. And then in the room, he's like, you need to have direct access to the decision maker. So who is the acquisition decision maker and who's the operation? And the three of you need to be able to, in today's parlance, be on a text chain so you can iterate rapidly. The test case for this is Elon and Elon's discussions around interfaces. Interfaces are where risk resides. And what we've done is built a bureaucracy predicated on more and more interfaces. And that obfuscates the clarity of just the three principles being in the room. And so, you know, just to reiterate what AJ said is you could you can create a Skunk Works type business, but if there's not a Two or two other people at the table to interact with very quickly. You know, hey, we have an issue. Can we solve that issue? Oh, no, you got to talk to the staffer. Who's going to talk to the staffer? Three weeks later, you're like, we've missed the window. That is what we've had a lot of success with DIU doing and have been really energized by.
--:-- Ashlee Vance: And how do you imagine this plays out for the U.S.? Like if I compare SpaceX, You know, China was very far behind in space and then SpaceX has lapped the entire world in many ways, both in satellites and rockets. Now China's spending tons of money catching up in a lot of ways, even exceeding the ambitions of the US in some of the lunar stuff and other bits and pieces. But, you know, they have like They got like six or seven SpaceX competitors, you know? And like everything they do, even if it's brain computer interfaces, there's like eight companies, you know? And humanoid robots, there's like 20. And it feels like we're dependent on singular companies like you guys I mean, look, it's a hell of a
--:-- Zach Shore: prognostication to make to say what will or won't. I will say, you know, I'm obviously a homer for America. And I think it's not necessarily a volume question. It's a culture question too, right? So, you know, Elon's talked about, you can put the drawings out, but that doesn't mean you're going to be able to understand how to problem solve your way through the execution. And that's a cultural piece. You see this certainly in the Chinese military and the way they're trying to learn about what the U.S. military does with strategic NCOs, so the non-commissioned officer. And the real superpower of the American military is not the technology. It's the ability to conceptualize and empower decision making at the lowest levels to reduce interfaces, reduce handoffs. So, you know, as a Marine, you're on a patrol, you're in a squad and you get attacked and the squad leader is there and he's a sergeant. In the sort of Russian communist doctrine, they get on the radio and they ask permission and what do I do? And that's interfaces. In the American doctrine, that Marine knows what he is authorized to do right there. He's got creativity. He's going to problem solve it. And you actually saw this in World War II. People would talk about the Germans. What's it like fighting the Americans? It's crazy. It's so easy because we never know what they're going to because you just problem solve on the spot versus everybody else would have a doctrine. We know that if you do this, they're going to do that. So applying that to China, hey, China can apply volume to these problems. But if you're just applying a top down approach, I'm not sure. I mean, you'll brute force these things. That's not to say it's not going to work. But does innovation and acceleration come from brute force? Time will tell. I think in some cases it can. But the American way of innovating is really the questioning of why not. You have the technical piece here for sure, but just like Elon, we're trying to challenge the bureaucracy. We're trying to challenge the regulatory environment, not to say it shouldn't exist, but to say it should evolve. And those are the things that allow us to have one or two companies that have a higher probability of succeeding against eight companies that are just top-down copying.
--:-- Ashlee Vance: Yeah, which I get, and I for sure buy into on some level. I don't know, it was like two weeks ago, I think we saw the... China catching a rocket different than SpaceX and getting rid of the fins and a lot of the weight that would have been, you know, I mean, it feels like, yeah, I don't know. I mean, I'm patriotic in that this country's been really good to me. I'm not really like some China warmonger or anything. I just, it just feels like they're, it feels like they're. We can do better. There's no doubt about that.
--:-- Zach Shore: And I think... We're breaking our backs to try and deliver and hopefully see more companies follow, certainly in the aviation side. The success of Hermia should not be, we're the only company. It should be, it mows the lawn for somebody else to try and come and build something.
--:-- Ashlee Vance: You guys, you kicked off in Georgia for the most part and now shift in to El Segundo and just because it's the aerospace capital. It's the aerospace capital.
--:-- Zach Shore: You nailed it. Talent is king. The talent that we really lean on to Design, build, and test these systems as a resident out there. Back to Kelly Johnson, you can't hire that team. That team doesn't exist. You have to recreate that team. And so you really are taking a lot of particular new space folks and then teaching them aircraft. And as we continue to grow this business, the only place you could get Hermia's talent is going to be from Hermia's, right? And so it's part of the reason why people are like, oh, it's taking you so long. Like, yeah, we're not just creating the technology, which has been done. We have to recreate an entire technical team, an entire way of doing business. And even when they say that, Elon was six and a half years to orbit. We were seven and a half years to supersonic flight. And we didn't have, you know, the hundred million dollars to start with even. And so, you know, we think we've done well. We can certainly do better. But going out there is the key to sort of unlocking the next stage growth.
--:-- Ashlee Vance: Seems to me every, the most significant companies I've covered, it's usually like 12 years in when things start to, I mean, this stuff is hard. It's when things like really start to click. And then, I mean, SpaceX is pretty, you know, it was interesting, man, because what is it? It was like, go from like 2001 to... You know, it took them till like 2014 to start getting Falcon 9 going a bit more. And then they had two explosions and that like threatened to undermine the whole thing really for a minute. And then they kind of like turned this corner and then it was like overnight, right? You go from, then you're launching Falcon 9 a lot. Now you're doing reusable rockets and nobody even has anything that can compete. But I mean, that was like a 16 year journey. But then the... The entire world flipped, right? Almost. It felt like almost overnight. Yeah.
--:-- A.J. Piplica: But, like, it doesn't happen magically. I mean, Blue and SpaceX started at the same time.
--:-- Ashlee Vance: Yeah, it's wild. Yeah, I'm sure. Way to ask Jeff about that for a long time. It is wild. And both commercial, you know what
--:-- A.J. Piplica: I mean?
--:-- Ashlee Vance: Yeah, yeah, yeah. All right, well... The plane did not come out yet, but we're going to have a video for this. So I'm sure this podcast will probably air before our episode on the launch, but I'll put in the links, the flight, and everybody can see what takes place this whole day. And we've been talking about this for ages, so thanks for letting us come out. Yeah, super cool. And then I hope I get the first ride when you guys go.
--:-- A.J. Piplica: Absolutely.
--:-- Ashlee Vance: But yeah, thank you guys so much. Thank you. The Core Memory Podcast is hosted by me, Ashlee Vance, and or Kylie Robison, or both of us together. It is produced by me and David Nicholson. Our theme song is by James Mercer and John Sortland. And the show is edited always by these. Thank you so much to Brex for all your support. And thank you most of all to everybody for listening or watching. We love you. Please leave us a like, a review, a subscribe, all those tremendous things. Thank you and we'll see you again.
