The Future Of Fighter Jets - EP 93 Hermeus With Zach Shore And A.J. Piplica

0:00Zach Shore: 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 AJ 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.

0:46Zach Shore: 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.

1:28Zach Shore: 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 subscribe a like or a review not a subscription although you can subscribe to anything you like um 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 ashley vance this is core memory here we go

2:27Zach Shore: 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. Truth or consequences, New Mexico. Truth or consequences, which we could get into today. 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.

3:11Zach Shore: 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 to 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.

3:36AJ Piplica: Talk history. The Trinity site is just over there.

3:39Zach Shore: Just over there. Yeah. 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.

4:02AJ 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. It, 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.

4:29Zach Shore: And is it the third time you've flown it? Fourth. Fourth time. Okay, so each one you're just proving new things out.

4:35AJ Piplica: 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. 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.

5:03Zach Shore: 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 just a different philosophy you guys have?

5:15AJ Piplica: Part of it, truth in lending, unmanned, right? So you can take a lot more minutes, right? So, you know, Boom'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, right, and the idea of being hardware rich. So, you know, right behind us is another hangar and our Mark 2.2 plane will arrive here on Monday. And 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.

5:51AJ Piplica: Yeah, yeah. You reduce the stakes. You reduce the consequences of, you know, 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 Starship?

6:21Zach Shore: 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 this bus. 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. That's important. 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.

7:00Zach Shore: 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, yeah. 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. 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.

7:38Zach Shore: 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.

7:50AJ Piplica: Yeah, I think when we founded the company, the core focus was certainly on hypersonics. This was 2018 timeframe, so about seven and a half years ago. Almost eight now. 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 we saw 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.

8:42AJ Piplica: So we knew we needed to change that and we'd seen a change in the space world. You know, SpaceX, many others, you know, 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 kind of amount of capital that's necessary to do some of these things. and then on top of that you know produce capabilities that are uh like quite uh asymmetric in some ways um but uh you know highly capable systems that uh that actually deliver on like the deterrence um outcome that that you know uh defenses is intended to be so

9:27Zach Shore: yeah so so you guys kick off i guess it's it is funny i mean i guess the rocket end of things commercialized push push some of these limits a little faster before guys like you and boom started appearing but it was bringing the same mentality you don't have to do things

9:43AJ Piplica: used to be this way yeah right like where's the kind of architecture exactly yeah exactly um you know like the 40s 50s 60s like you look at how many planes we developed and put into production back then it's just crazy nowadays it takes 20 years to you know put a new aircraft into production

10:01Zach Shore: Yeah, it was like Bert Rutan off by himself.

10:04AJ Piplica: Yeah, I mean, and this informs, you know, 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. You know, Kelly Johnson did 41 aircraft into production in 40 years. And that, especially today, is a superpower all its own. If we need if we need producible systems in any domain, surface, subsurface, space, you know, land, they have to be producible.

10:36AJ Piplica: 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 two as an example. And this is a vehicle that was 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 does 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.

11:10AJ Piplica: 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 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. This is why you haven't seen a major, successful, large aircraft manufacturer, especially on the military side, founded in this country since the 1950s.

11:44Zach Shore: Yeah, I mean, it's kind of beyond venture capital, really. It's beyond venture capital.

11:49AJ Piplica: 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.

11:57Zach Shore: 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 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 shock.

12:31AJ Piplica: I think they are. I mean, if I just go back to, you know, when I started in the 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 on to the winner. They want to ride the horse that's like 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 nonpolitical part of the sort of the ecosystem.

13:06AJ Piplica: 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 drink that Kool-Aid that makes sense to your angle because it's good for everybody. And 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.

13:37AJ Piplica: 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.

13:54Zach Shore: 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. Yeah.

14:18AJ Piplica: 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.

14:41Zach Shore: Yeah, and did you come at it? I should have, I checked this and I forgot. As like an aerospace engineer, physicist? Aerospace engineer. Yeah, okay, okay. And then you were in the military. You served in the military. Is that how you?

14:53AJ Piplica: Yeah, 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 SIGINT-er. Then I tore 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 this space. And I worked the lattice program at Anderil. And so as a SIGINT-er, command and control was a very natural place for me to sort of plug in and use my subject matter expertise.

15:19AJ Piplica: and you know I've been in defense for about a decade at this point and joined Hermeus 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 that is the

15:31Zach Shore: CEO position about six weeks ago okay six weeks yeah those quicker and sooner than I remember that and are the the tattoos from the military day some of

15:39AJ Piplica: 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 I can go on and on but yeah I I definitely got my first tattoo in the Marine Corps at 21, and now I just can't stop.

15:50Zach Shore: Okay. I'm going to mess up some of the hypersonic history here, but I know in the past, I think we've gotten up to something like Mach 9 by dropping things from a plane in the air.

16:03AJ Piplica: That would be the X-43 that NASA did in the late 90s, early 2000s.

16:09Zach Shore: Okay, and then we've had the fastest passenger would be the SR-71, right? is the fastest uh crude aircraft you had a pilot yeah passengers probably not the right word but

16:19AJ Piplica: but how do you have the x-15 back in the 50s rocket plane not an airplane rocket plane so

16:25Zach Shore: airplane sr-71 yeah okay okay and that i mean and so and the goal is 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

16:36AJ Piplica: there are lots of reasons uh lots of yeah mostly operational um but also also cost and and you know get into scaling and producibility same kind of thing with the airplane so yeah especially in in the air force and the navy the way they use those platforms you need operational flexibility to you know fit into airspace and and you know loiter around marshal around do all those things

17:00Zach Shore: that you know rockets are not great for 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. So 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?

17:37Zach Shore: No, 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.

17:51AJ 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, you know, 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 the 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.

18:26AJ Piplica: And now you have a very efficient high speed cruise propulsion system.

18:29Zach Shore: And on both sides, would you... Are you building the Ramjet part from scratch? But you're kind of using a tried and true engine. Exactly.

18:39AJ 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 here in the near term. You rip the skin off of that airplane. It's effectively an F-16 underneath, which means, you know, not only do you plug into some similar supply chains, at least at the early stages. is same maintenance repair and overhaul, same logistics, same, you know, at least similar operations and training.

19:09AJ Piplica: So it makes integrating a new product on the scale of a new airplane into the Air Force, the Navy, Foreign Air Forces,

19:16Zach Shore: much more straightforward. And building an engine from scratch is expensive.

19:21AJ Piplica: It's a zone.

19:22Zach Shore: It takes a lot of time. Building it from scratch, but probably more importantly,

19:25AJ Piplica: getting your customer to trust it.

19:27Zach Shore: Yes. That takes a long time. Yeah. So at some point you might do that. I would love to. Yeah. if it makes sense, we'll do it. Yeah, yeah, because this engine's what? It's like 50 years old. Yeah, it's been,

19:39AJ 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, most recent one.

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20:23Zach Shore: 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 Brexit as well, and so do tens of thousands of startups. You should use Brexit 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?

20:55AJ Piplica: Yeah, it looks like we're going to tow her out around the ramp.

20:58Zach Shore: 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.

21:08AJ Piplica: Yeah, we'll tow out to the end of the runway. Lots of pre-flight checks, all of our comp checks, range integration checks, all those types of things. And then once the airspace goes green, weather looks good.

21:21Zach Shore: We'll rip it. All right. 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's going to come on. You guys might hear some noise at some point in this. So on this path to the hybrid, what's our timeline now as to when you might be testing the hybrid design?

21:40AJ Piplica: Yeah. So this 2.1 airplane, it's just a straight stock F-100 engine. But 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.

22:10AJ Piplica: So we'll do that with the Mach 2.3 aircraft, maybe like middle of the next year. And then the next step after that will be to start flying ramjets. Okay.

22:19Zach Shore: Okay. And what's like from a military standpoint, what makes that type of aircraft useful?

22:24AJ Piplica: Yeah. So 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.

22:57AJ Piplica: 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 mq9 that carries like 3 000 pounds of payload and an f-15 that's got two pilots costs 140 million dollars etc etc 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 the entire all the fourth gens are still flying and fighting we're still buying them if you look at the um uh 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 percent okay okay and so this is now a low-cost unmanned alternative to create that mass in the sky right I can have seven hard points on this vehicle.

24:08AJ Piplica: And the other thing that's beautiful about a platform like this is one of the biggest choke points in the Department of Defense is integrating new weapons on a manned platform. 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 choke points. 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 aircraft at the same time the platform then becomes the de facto spinning wheel of its integrated everything so you've got unmanned fight or man fighters not every man fighter can carry every weapon There are huge trades and risks.

24:58AJ Piplica: It's like, I need now the F-15 to carry this weapon. It's not certified to carry. So you can more rapidly certify, insert new weapon onto this plane than you can any manned platform. And one of the things General Wilsbach, the 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?

25:28AJ Piplica: And when you lose it, instead of having the risk of two down pilots in Iran, okay, we treat it like an MQ-9, move on to the next one. 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.

26:00AJ Piplica: 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.

26:07Zach Shore: And the government's been having this, what is it, the commercial combat aircraft contract? And so what, Andrel and?

26:13AJ Piplica: Andrel and General Atomics have the two Inc. 1 prototypes.

26:17Zach Shore: They moved on to this next level. And so Andrel, I've seen Fury. I haven't seen the General Atomics. Yeah, they're small, right? They're smaller than this. Okay.

26:25AJ Piplica: So, I mean, if you think for the longest time, the way the United States military talked about unmanned systems was groups, groups one through five. And Andruil is a group five. So is General Atomics group five. Technically, we are also a group five. But really, we have broken the group sail with this aircraft. because the scale of Group 5 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.

27:03AJ Piplica: 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. Gotcha. 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 high thrust platforms. And that's where they get into, you know, they want to do an increment approach.

27:38AJ Piplica: 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

27:47Zach Shore: on 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 are you does that mean you're outside of that and life is hard for you or you're you're in a totally different i mean we are not we're on our own

28:09AJ Piplica: 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.

28:24Zach Shore: Which, just to fill people in, is it sort of like a R &D startup funding? Startup funding, right?

28:28AJ Piplica: 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 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.

29:05AJ Piplica: 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?

29:39AJ Piplica: 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.

30:06AJ Piplica: 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.

30:25Zach Shore: 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?

30:35AJ 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 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.

31:05Zach Shore: Defense first, earn our right to enter the commercial piece later. So you're saying there is a possibility I will fly Hypersata in my lifetime.

31:13AJ Piplica: I want to be on the plane less, so I have a lot of motivation to make them faster.

31:17Zach Shore: So the hypersonic, will it always be, when I was doing my reading, coming to see you guys, it was talking about flying from London to New York, but the mileage, I think it was somewhere around like 4 ,000-ish or 4 ,500 miles.

31:31AJ Piplica: Well, that's like 3 ,400.

31:32Zach Shore: And if this works, would it always be limited to that range?

31:37AJ Piplica: uh for for like a single hop yeah these as with with fast airplanes uh it's pretty tough to uh make them work more than maybe 5 000 miles they just get incredibly big um so this is not like a pathway around the world tripper it's an ocean crosser okay yeah okay okay um well that

31:58Zach Shore: would be fantastic if that could happen yeah uh 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, uh, of breaking in all kinds of aircraft. But yeah, why did you guys pick here? And then cause you're moving your headquarters to

32:18AJ Piplica: Long Beach or El Segundo, right?

32:21Zach Shore: 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?

32:29AJ Piplica: Yeah. I'll hit that when you get at the LA piece. Um, 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.

33:05AJ Piplica: 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, easy by inspection. And that allows us that's allowed us to get into flight much faster than we would have otherwise been able to. now like as we as we move forward as we continue to iterate as we you know bring more products online they will operate more like traditional airplanes where you're flying in the national airspace at you know similar levels of safety and those types of things but instead of that being the like binary zero to one bar you had to get over we moved that bar way down here and that's

33:46Zach Shore: part of why we've been able to move as fast as we have and still you know 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.

34:16AJ Piplica: Yeah, what I'll say about them, so we're operating within the confines of a federal test range. And that's also another important piece. You know, 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, like, you know, the test ranges across the country have been underfunded for years. They are wicked old with all their infrastructure. So like the challenge that they're dealing with, it's just, it is really, really challenging.

34:48AJ Piplica: Plus you had, you know, a huge element of the workforce, take the deferred retirement piece so now they're they're they're strapped just for experienced bodies who understand how to do these um you know highly complex missions in a very safe way so like the constraints they have on top of them are are really rough um now from our side uh we've done everything we can to uh make their problems as easy as possible as simple as possible um keep all the hard stuff on on our side um so we take you know we try to take the fewest resources possible for the shortest amount of time. But like the demand for those test resources is huge.

35:25AJ Piplica: 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 like national jewel resources.

35:38Zach Shore: I run into this a lot, man. I remember Varda was trying to land their capsule in again, sort of in the middle of nowhere, although it was in Utah and that 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 U.S. 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. China launches overall rockets over villages all the time.

36:04AJ Piplica: 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. But the test and evaluation community to me is one of the last bastions that has not really faced the innovation pressure. And some of this is how you have to understand, like, if you look at defense tech in 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. 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.

36:38AJ Piplica: 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 the domain of the incumbents. And that means that business as usual is the only way you can do it.

37:11AJ Piplica: 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.

37:41AJ Piplica: 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.

38:06Zach Shore: I mean, I remember SpaceX going through all the same stuff, trying to get up. had it was a mixed bag though it was like they were trying to fly from vandenberg at the start and and boeing and lockheed were blocking them and making life really tough on them and you had this wild card of like do you guys even know what you're doing we can't have you fly rocket in southern california and then it is funny that they i mean rocket seems so much more explosive and everything but they 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.

38:44Zach Shore: 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 even consumer drones, you can make a pretty strong case that the FAA sort of killed the U.S. industry 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 100 years history of us, of the U.S., 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.

39:22Zach Shore: I mean, I think that's my soapbox for the day.

39:24AJ Piplica: Well, you either you beg or you break the rules that don't actually matter. Yeah. and like we've we've done that many times and uh i think that has helped push the government forward in a lot of different ways i mean you know talk about the faa um they've like actually made some strides over the past couple years as we've been working with them to move some of these things a lot faster yeah um with you know congressional authorities that are granted and they're just kind of sitting there on somebody's desk that nobody kind of picked up and figured out what to do with well i mean just kind of read the law like you don't actually need to do that uh and made a safety case that they believed in again leveraging these kinds of things and uh yeah now we've got a path that can move a lot faster but there's so much more work

40:08Zach Shore: to do 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 and how like what's kind of the mission today yeah so we'll um we'll

40:34AJ Piplica: take off heading south um head out over the white sands part of the range um do some uh in-flight checks on the way out uh if everything looks good and uh we're ready to go we'll go for a supersonic dash um hit our uh hit our top speed uh slow down turn around come back uh down south um hit our other test points that we want to hit for handling qualities and um uh comms and uh controllers and

41:00Zach Shore: things like that um and then we'll come back and land uh here northbound and how long would that take roughly i don't know 30-ish minutes and it's roughly autonomous most of the time uh no it's it's being flown it's being flown okay there's plenty of controllers there's plenty of automation

41:14AJ Piplica: but yeah, it's really not autonomous. 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 of the autonomy stacks. And so our view is, hey, we're building planes. I'm not in the business of building, you know, 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.

41:45AJ Piplica: 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.

41:58Zach Shore: And it has what's called a FTS or flight termination system, just like a rocket. Sometimes rockets have an 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.

42:21AJ Piplica: Yep, that's right. So the airplane will not explode.

42:23Zach Shore: And who modifies? Is it just you guys, or do you have a federal official?

42:26AJ 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.

42:33Zach Shore: So they're just making sure you're on the right flight path. That's right. Everything's going according to plan. Yep. Okay. Okay. Yeah.

42:39AJ 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 um if we lose link with the aircraft there are built-in behaviors that the aircraft will conduct by itself uh to kind of station keeps in the same place and

42:54Zach Shore: we can troubleshoot and go from there does the military get excited about this stuff or the yeah they would right but then but then like part of them i guess it's more the you try to see if they i mean it wouldn't be competition because every all these all the aircraft are getting built by some company right but yeah so there's no they all want or i mean Is there a tension?

43:15AJ Piplica: Most of the military aircraft today, and for 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. I mean, that's why you're called a contractor. 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 before the S &T world is kind of completely locked.

43:46AJ Piplica: Right. Those groups exist together. The primes in the S &T world and the you know, 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, the there's sort of two communities that I think about in the in the D.O.W. warfighting world. There's the operator community, actually three, really the operator community, the acquisition community and the S &T community as far as like to make it really simple.

44:17AJ Piplica: 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, you know, the commanders in Congress. Be like, this is what we want to buy. And then you have a literally competition. This is 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.

44:57AJ Piplica: 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.

45:12Zach Shore: It's not to open us up to like a nine-hour podcast, but I need to go from like the Kelly Johnson era. You know, it's like we used to do a rocket every couple days.

45:21AJ 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 your customer doesn't operate that way, it doesn't work. And that's part of why you don't, like the Skunk Works of today is not the Skunk Works of Kelly Johnson at the time. 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 even on. It was like six people. And I think that's something that DIU really has the ability to do right.

45:58AJ Piplica: 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. 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.

46:33AJ Piplica: 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 can create a skunkworks type business. But if there's not 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've got to talk to the staff, or who's going to talk to the staff? Or three weeks later, you're like, we've missed the window.

47:01AJ Piplica: That is what we've had a lot of success with DIU doing and have been really energized by.

47:06Zach Shore: 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. It's now China spending tons of money catching up in a lot of ways, even exceeding the ambitions of the U.S. and 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. If it's even if it's brain computer interfaces, there's like eight companies, you know, and humanoid robots.

47:40Zach Shore: There's like 20. And it feels like we're dependent on singular companies like you guys and SpaceX, you know, to really just crush whatever you're working on. And I don't know. I mean, I feel like that can work, but it's...

47:54AJ Piplica: I mean, look, it's a hell of a 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. And you see this certainly in the Chinese military and the way they're trying to learn about what the US military does with strategic NCOs, so the non-commissioned officer.

48:20AJ Piplica: And the real superpower of the American military is not the technology. It's the ability to contextualize 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's 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.

48:49AJ Piplica: 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 because we never know what they're going to do 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.

49:12AJ Piplica: I think in some cases it can. But the American way of innovating is really the questioning of why not. And so 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.

49:38Zach Shore: Yeah, which I get and I for sure buy into on some level. Then 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 has been really good to me. I'm not really like some China warmonger or anything. I just, it just feels like there it feels like there we can do better there's no doubt about that um and i think we're

50:10AJ Piplica: you know we're breaking our backs to try and to try and deliver and hopefully see more companies follow certainly in the aviation side you know the success of hermia should not be we're the only company yeah it should be it mows the lawn for somebody else to try and come and build something

50:22Zach Shore: 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 it's the aerospace capital yeah i mean you nailed it talent is king

50:34AJ Piplica: 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 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 you know going out there is is the key to sort of unlocking the next stage

51:19Zach Shore: growth seems to me every the most significant companies i've covered it's usually like 12 years and when things start to go, I mean, this stuff is hard. It's the last one thing is really start to click. And then, I mean, SpaceX was pretty, you know, it was interesting, man, because what is it? It was like go from like 2001 to, you know, it took them until 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?

51:55Zach Shore: 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 entire world flipped, right? Almost, it felt like almost overnight. Yeah. But like it doesn't happen magically.

52:13AJ Piplica: I mean, Blue and SpaceX started the same time. Yeah, it's wild.

52:17Zach Shore: Yeah, I'm sure I've been waiting to ask Jeff about that for a long time. it is it is wild and both commercial it's you know yeah yeah yeah um all right well the plane did not come out yet but we will have we're gonna have video for this so i'm sure this podcast will probably air before our episode on the launch but we will i'll put in the links um the flight and everybody can see like what takes place this whole day and 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. Absolutely. But yeah, thank you guys so much.

52:57Zach Shore: Thank you. The Core Memory Podcast is hosted by me, Ashley 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 the John Sortland. Thank you so much to Brext 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.