Steven Simoni Built a $2.2B Company to Reinvent the Way Wars Are Fought

0:00Alexa von Tobel: This is the World War Three. This is where I think we're headed and we're in it, but it's just getting started.

0:03Charlotte Ross: What does like 2035 look like?

0:05Alexa von Tobel: Precision strikes, strikes from space, a lot of space weapons in 10 years. After like three years of development, we're shipping Bullfrogs onto the battlefield now.

0:12Charlotte Ross: What are you guys building in plain English?

0:14Alexa von Tobel: One of our taglines is, if it flies, it dies, which we take seriously. Basically, it's a robotic gun that can auto target and shoot drones. Bullfrog is, at the core of it, it's a computer vision tracking software. It uses modern computer vision techniques coupled with modern day neural nets to identify, detect, and track targets.

0:31Charlotte Ross: How do you think about responsibility that you have at the business?

0:34Alexa von Tobel: I think this is a pretty dark industry. When I'm joking, it's really just hiding sadness sometimes.

0:40Charlotte Ross: Hi, everybody. I'm Alexa von Tobel. I'm so excited to be joined by my fellow partner, Charlotte Ross here, and one of our most energetic founders, Steve Simone, the co-founder of ACS, Allen Control Systems. Steve, thrilled to have you.

0:57Alexa von Tobel: Thanks for having me on.

0:58Charlotte Ross: We've now, Charlotte and I both together, have now known you truly since the beginning of Inspired, which is almost seven years. I want to just quickly talk about the first time we met you. Do you remember this, Charlotte? No, I totally do. Yeah. You came in to, we didn't even have an office yet. We were barely up and running. You came to present to us under BeBot, and I very clearly, BeBot was a restaurant tech that you sold to DoorDash for$150 million. And I remember really clearly Charlotte and I being like, man, great team, incredible team. These three co-founders are special. There's something incredible here, but it's restaurant tech and we just don't think it's big enough.

1:35Charlotte Ross: And we ended up not investing. That's probably a good idea. And fast forward, you took the same technology and strategy and everything and same three people and then decided to build ACS, Allen Control System, and came back to us. And actually, we got to be one of your first investors. And I remember when Charlotte called me and was like, hey, Steve called. And on that minute, we're like, yes, we're going to invest. It's a much bigger idea. It's defense tech. So thank you so much for letting us be your phone call.

2:09Alexa von Tobel: You guys were very nice to me, even in rejection. So, you know, had to be the first call.

2:14Charlotte Ross: We love you for that. We take that seriously. Okay, in plain English, let's just start with your background. Steve, who are you?

2:20Alexa von Tobel: uh well i'm a kid from small town pennsylvania like 2500 person town up stortstown pa joined the navy uh to pay for college and was electrical engineer so like always look a little nerdier growing up um and always was into robotics uh i mean that's that's like kind of the core of where it is i mean that's why bbot was a robotics company first before we pivoted and that's why acs is a robotics company it's the common thread and in the navy i worked on uh nuclear reactors

2:50Charlotte Ross: so those were kind of like big robots how'd you meet your two co-founders um so luke allen i met

2:57Alexa von Tobel: in the navy the first day of the navy and actually it's a really funny story where uh i didn't remember the story my old boss in the navy told me this but i talked to him for like nine minutes at his cubicle sort of like in a cubicle farm it's nuclear engineering so it's very serious and i like nine minutes into the convo i started running around the office screaming i'm gonna get rich off this guy i recognized i may be on the original vc i recognize i recognize that 21 years

3:24Charlotte Ross: this sounds like a 21 year old me by the way by the way i'm tracking this over and i i like i

3:29Alexa von Tobel: saw him and i just i was like i know this guy's a genius and i knew he was a better electrical engineer than me and i'm a very competitive person so i was like i told him when i was younger i was like whatever you make i'll sell bro i'm gonna stop being an electrical engineer after i met him because he's just like 10x better than me at it yeah and then my other co-founder mike we met in restaurant tech. So like he was the CEO of Omnibore, which is like a restaurant middleware that Bebot integrated with. And we always just liked working with his company. And when he sold his company to Olo, right when we sold to DoorDash, we had the opportunity to bring him on for ACS.

4:00Alexa von Tobel: And so that's why the three of us are together here.

4:02Charlotte Ross: It is very smart when you know and recognize exceptional talent. Let's talk a little bit about ACS. What are you guys building in plain English?

4:11Alexa von Tobel: Yeah, so we're trying to become the air defense prime. So like the one stop shop for all things air defense. So like one of our taglines is if it flies, it dies, which we take seriously, like if it's in the air, we're shooting it down one way or another. So our flagship product Bullfrog is an autonomous what's called an autonomous weapon station. That's what the military would call it. Basically, it's a robotic gun that can auto target and shoot drones. and also ground targets as well, which is important for the military's mission set. So that's our first product. But the vision where we're taking it is all things air defense, targeting the small drones up to the bigger drones.

4:50Steven Simoni: I was going to say, going back to VBOT for a minute, like, you know, obviously you did a successful exit there. You didn't raise a ton of capital, like capital efficient business. You, you know, got a, got a nice acquisition from DoorDash. Like going from restaurant tech to this, like walk us through that thought process. That even seemed like a leap for you.

5:07Alexa von Tobel: Not a leap as an electrical engineer. Like robotics is the same, you know, regardless of the industry, you know, different use cases, but still the same principles of electrical engineering apply across industry. You know, we started in the military, Luke and I. So we had a good kind of landscape of what products and what things were being built for the military. So we kind of entered the market like with some history. And we saw an opportunity in particularly in weapon stations, which hadn't been upgraded since Operation Iraqi Freedom and Operation Enduring Freedom. Those were the last time those were upgraded.

5:41Alexa von Tobel: So obviously with the venture hat on, you think opportunity to upgrade that before other companies start doing it is really where we entered the market at.

5:48Charlotte Ross: I want to just quickly step back and really describe the bullfrog to somebody who, and keep in mind, I also want to describe how is a war fought these days? And obviously none of us want war to happen, but if war does happen, you want to protect as many lives as humanly possible. And the bullfrog does that, which I think is a really important part of your mission. But let's just talk, what is the bullfrog and just kind of give everyone a visual.

6:16Alexa von Tobel: Yeah. Starting with the bullfrog, a couple of questions there, but also, by the way, we're in war right now. Like it's, it's just, it's everywhere. And it's scary, but bullfrog is a, the core of it is a computer vision tracking software. So it uses modern computer vision techniques as well as original legacy computer vision techniques. So just like straight signal processing techniques coupled with modern day neural nets, kind of like a layered computer vision stack to identify and detect, detect, identify and track targets. So once we have a track of where the target is, imagine a drone flying in the sky.

6:53Alexa von Tobel: It's moving laterally or it's coming at you like with a constant bearing or something. we detect and uh and know where that is in 3d space um the way we know in 3d space where it is is we actually hit it right before we shoot with the laser rangefinder so we have the distance and position wow um and then right then we then bullfrog will on on the edge do a ballistics computation so we know the physics of a bullet and lead the target in the right amount of lead time based on its speed and fire the shot so it's like there's basically a lot of math happening all at once on the edge and this wasn't really possible until you know basically like nvidia thors came out like the the newer nvidia cards in 2017 2018 so like you could actually build bullfrog like this until you know about six years ago or seven years ago or so like to kind of maybe

7:43Steven Simoni: go back to your comment on on war like yeah obviously like it doesn't feel like we're in war i mean we are and we're with our own but like it you know it doesn't like say more about what you see out there that maybe we don't see.

7:57Alexa von Tobel: Yeah, I mean, like, I'm sure it didn't feel like, you know, if you're like a citizen of Rome during the Roman Empire, it probably didn't feel like you're in war in Germania. Yeah. But we're in war, you know, the world's at war right now. And war is, we're seeing two very different wars. The Ukraine-Russia front of the war has a much different landscape than the Iran war. In the Iran war, what we're learning is kind of how war is changing, especially for the american empire i would say which is that it's all about long-range standoff now you know what standoff is no standoffs like a military term for like the distance you want to engage at so like you can imagine in i just watched the movie troy with brad pitt he's hot um they're like fighting sword hand to hand so the standoffs like zero meters right that's what they're fighting correct that's not modern war no one wants to see the whites of anyone's eyes anymore like you don't want to actually see the person you're killing yeah so now war especially for the u.s where we have really no appetite for troop loss at all anymore that's zero appetite wars are now which is a good thing which isn't like a thing god obviously potentially yeah potentially good i mean we can debate that that's a that's a deeper topic but on the surface good so you have like basically you want to have miles and miles of standoff like we're talking five six you don't want to see any you don't want to see humans on either side that's like how the U.S.

9:20Alexa von Tobel: is fighting war now. So you're in Iran too. So you're seeing like Iran has these missile launchers underground. They bring them up off ground. They fire off a bunch of missiles at our bases, bring them back underground. And then we respond by firing some missiles back or trying to intercept those missiles. And it's basically this very long range, long standoff battle in the air. And that's kind of modern war. And then the way it works is it's all about what's called escalation dominance. so that means like first you do a round of barrages on each side and then you go on twitter and you're like okay leaders of iran if you don't you know surrender now or make a deal we're gonna blow up your bridge and then they respond like blow up my bridge bro i don't care and that's kind of so it's like twitter twitter like those heads of state aren't flying back and forth like they're on twitter discussing this and they're using like long range you know arsenal to like see who's going to take a beating harder and that's kind of like that's modern that's like

10:20Steven Simoni: modern warfords are seen playing which has a lot of implications i would say okay so like what like

10:25Alexa von Tobel: yes it has a lot of implications for like what is getting procured like what the military procures so like you don't really want to like spend a ton of money and this is where it's kind of this is more of a hot take you don't really want to spend a ton of money augmenting soldiers like you know with like i don't know the ivass program or something like giving them like heads-up displays or new armor packs or there's like products that you can like wear that it's like a soldier infantry drone detector. So like when you're like on patrol, you can like, it'll like tell you there's a drone in the area.

10:56Alexa von Tobel: Interesting. These products don't matter as much because we're not fighting hand to hand combat, you know, like it's, that's not, that's not modern warfare. And even in Russia and Ukraine, those products matter a little more, but even there, there's the front line is a five mile wasteland on each side. And like, if you go into that, if you're a human that goes into that five mile wasteland, a drone will find you and probably kill you. So like you're seeing just the standoff extend very far. And that's, that's pretty new.

11:27Charlotte Ross: Can we just to give people a sense of these budgets? Like, obviously we know, uh, the United States spends a ton of money on defense. And my expectation is that those budgets only continue to grow. Give people a sense of what the budgets are coming towards a company like ACS.

11:45Alexa von Tobel: This all, all the budget gets generated on the, on the Hill with Congress, right? Like they, they have the power of the purse. That's what the constitution says. It's still true to this day. So, and a lot of those budgets are actually, a lot of the existing budgets are allocated to the primes like the like the legacy primes like the older companies lockheed northrop boeing raytheon um to get budget to your company as a startup in this space you have to create it on the hill um and right now there is a ton of appetite for them to pass a reconciliation bill um but congress has not so actually while there is like a lot of money allocated to defense right now because of politics um you're not really seeing a lot of it actually get allocated like all the way you know we've been around for a few years so we've had other budgets that have passed so like we're fine but like if you're a new startup entering today it can be a very challenging environment even though there's a lot of top line number you'd see in the press yeah there's like that's what the executive branch wants you know but doesn't necessarily mean that's ever happening if it doesn't get passed on the hill but isn't it kind of a purple issue right now It's tough.

13:02Alexa von Tobel: It is bipartisan. Defense is typically bipartisan. However, it gets tied up in other politics. So like, right now, a lot of these companies are waiting for reconciliation.

13:10Steven Simoni: So like, would you say if you look at the headline numbers, which what, I mean, what are the headline numbers? I mean, trillion dollars, 4.5 trillion dollars. So like out of the trillion dollar headline budget, like what do you think actually it ends up being?

13:21Alexa von Tobel: I mean, I would call those headline numbers aspirational. That's what they want. I think that what it ends up being, if I had to look back at the envelope, I don't have any real data behind this but back of the envelope let's say let's say all 1.5 trillion passes i would say that's 1.2 trillion to existing primes and like wow and like 300 billion to the rest of

13:41Charlotte Ross: us oh one important data point for this conversation so you guys have raised 242 million yeah we've been really a capital at a 2.2 billion dollar valuation most recently and um charlotte and i were lucky to invest in your equivalent of a pre-seed um yeah congrats i We love you, Steve. Thank you. You, in so many ways, the bullfrog and defense in general is a hit business, right? It's like you need a hit, meaning you need a product that works not just so well and slightly better than other things, but it's a breakout product that dramatically works and that everybody wants, and it works incredibly well.

14:23Charlotte Ross: And as a result, you've just seen exceptional demand for this product for armies.

14:32Alexa von Tobel: Pretty rare. I guess patting ourselves on the shoulder, it's been a lot of work. But it's pretty rare to, within like three years, after like three years of development, to be on the battlefield. Like actually on the battlefield and in the fight. Like with a product, with a defense product. That's kind of an exceptional thing. like in R &R and we're shipping bullfrogs onto the battlefield now, like as we speak, as we do, as we record this. So that's pretty rare. You need a, you need a hit product now. Um, I would say you didn't necessarily need it if you started in like 2017. Um, you know, a lot of it's like a lot of companies kind of started with just like a vision and like was able to raise a ton of money early.

15:10Alexa von Tobel: And now they're starting to build many different products. But I think if you're entering the market when we entered it, or if you're entering it today as a new startup founder, you need to have something they're going to want to put on the battlefield within 24 months to 36 months. Or the company just won't work.

15:24Steven Simoni: And so when you say put on the battlefield in 24 to 36 months, it sounds like this, obviously drones are something people care about, this long-range...

15:33Alexa von Tobel: Yeah, like if I were to start a company today, like right now, another defense company, I'd probably do, and even though it's going to be a crowded market soon, it would be like a jet-powered interceptor. The Iranian, the main Iranian attack drone is called the Shahed 136. That's a propeller guided, it's a propeller propulsed drone. They're now making jet powered ones that go much faster, you know, talking like 500 kilometers an hour versus like the 200 kilometers an hour to 300 of a propeller version. And so these jet powered drones are coming. The next where the puck is moving is jet powered interceptors.

16:09Alexa von Tobel: so like you could probably if you're a good team make a jet powered interceptor in 24 months you know 12 to 24 months likely 24 months to be real um but that's like a market that's going to be large um and you know acs obviously has an air defense prime is looking heavily into that market

16:25Steven Simoni: and how do you think about making a jet powered interceptor versus just a jet powered drop it's

16:30Alexa von Tobel: always easier to attack so yeah so i mean the interceptors are harder to make um or harder to be reliable um the skills have to be but it's a similar skill set you so many aerospace engineers so many computer vision engineers still need electrical engineers so same engineers just harder to defend this stuff um which is why you're seeing in the iran conflict like we don't we can't really defend our bases so we've you know that the reports are different but a lot of our bases are being really damaged because of this new asymmetric warfare like we can only fire so many patriot missiles at these shaheads, you know, before we just run out.

17:07Alexa von Tobel: And we don't really have like an arsenal of jet-powered interceptors and interceptors to like send out there. So you're seeing like a pretty large retreat from the U.S. and these bases.

17:17Charlotte Ross: How quickly did this shift? And obviously at Inspired, we care deeply about humanity and we would like there to be no war. It does feel precarious as though the world is heading towards more conflict, not less right now. yeah um which i would love your thoughts on that um but in the last 15 years it feels like we went from physical combat of humans to more of this to your point of like technical war really yeah

17:43Alexa von Tobel: um is that right is it when it happened yeah the uh the historians would probably say 2017 um the armenia azerbaijan war was the first drone war first full drone war 20s if i could call it seven seconds to die that describes it um that's probably the start of modern drone warfare that's

18:03Charlotte Ross: what people would agree on how to think and just say more how has that evolved everyone's thinking and i get your point of it's like five miles between people you see no eyes um but what else

18:15Alexa von Tobel: what are the other well i mean that's like to be to be real like that was in 2017 and we saw the azerbaijan is just completely crushed the armenians like well they use drones and there's just no stopping it um no one really took a lesson from that it's 20 it's almost 2027 so it's been a decade and our procurement apparatus is still behind like they they had that in the ukraine war and we're still buying patriots and we're still you know we just spent 68 billion on patriots again we just bought a bunch of you know we're gonna replenish our fat with the patriot patriot missiles like the premier defense missile like it's very expensive but it works like it works all the time.

18:55Alexa von Tobel: It's a very great product, but it's just not the right.

18:57Steven Simoni: Is it made by a brand?

18:59Alexa von Tobel: Yeah, Lockheed. You don't want to use Patriots on a Shahed, though. Just the cost is bad. It's just like they neutralize each other. Well, the Patriot costs 10 times more, though. So you lose money every defense. But we continue to still buy this expensive stuff. We're not really procuring a lot of the startup's products at a rate that we should be. And it's been about 10 years since the first drone war so i would say we're really not fully learning it as a country

19:29Charlotte Ross: basically what you're saying is that i the technology shift is pretty significant and that and that the u.s as an incumbent has not evolved as quickly as is needed to be able to play offense

19:42Alexa von Tobel: yeah yeah to play defense i mean to play defense we can't protect our bases like it's obvious and so yeah i mean we'll we'll probably like i think we'll probably lose most of those bases and we'll we'll probably retreat from the region, but we'll see how it goes. But I think that we didn't necessarily learn any of the lessons from the Armenian war or from Ukraine-Russia.

20:04Charlotte Ross: As somebody who's watching the front lines of war, can you just give us a sense of how you think about where the world is trending in terms of stability? Just clearly as somebody who served in the Navy, you are truly a patriot and love this country. Can you just give us a sense of, as you think about the next decade, and defense tech spend and everything coming how do you process what's coming i think that or this

20:30Alexa von Tobel: is my take like personal take not the take of acs but i think if we don't kill ourselves in the next world war three which we're going to have which we're in then we're gonna have an ai utopia and like be a very rich in society like i'm coming out of it but i think we're headed into five of

20:47Charlotte Ross: the darkest years in world history say more just like i mean this is work this is the every every

20:53Alexa von Tobel: story needs a trilogy this is the this is world war three this is where i think we're having interesting yeah and we're in it but it's just getting started you just said we're in it what do you mean you know like the opening gambit like the you know now you know that at the start of you know in world war ii you started seeing like um you know the u.s before pearl harbor we started like freezing the assets of the germans so you know freezing like being like okay we're gonna economically crush you. We're going to possess your homes and do all this stuff. You're seeing that now with Secretary Besson.

21:23Alexa von Tobel: We're going to hunt you down economically. We're going to seize your home in the Caymans. These aren't some... That's not some victory. Those are just the opening stages of more conflict. You're seeing some of the same similarities there. You have nations with huge amounts of debt that can't be reconciled. The best way to reset... If you read the dalia book like um what's the principles no the other one about the cycles i kind of follow i subscribe to his theory there like it's it's kind of independent of administration or anything it's just like the natural ebb and flow of humanity like when you that you know wars follow the big cycle so like we're on huge debt the debts all get reset after a war because like the you know to the victor does the spoils so we're just like in a natural part of human cycle where it my my indicators would say i think we're headed headed to full-scale conflict i remember when we spoke

22:16Steven Simoni: again like at the beginning of all of this of all acs and this was 2023 or yeah 2023 like right right as ukraine and that conflict was starting you were talking about china and how like if the u.s were to enter war with china tomorrow we would lose like talk more about like where is china china

22:31Alexa von Tobel: is in the war like yeah yeah they're you know they're supplying satellite information they're supplying targeting information we're blowing up their satellites yeah like you know it's china they don't they're not gonna like fight a hot war head-on they're gonna fight it through their proxies you know north korea iran russia um but how does china compare to us from a like

22:51Steven Simoni: you know tech perspective and obviously they're they controls the drone economy but like

22:57Alexa von Tobel: same where like ecs i think that we have like a better software apparatus here like i would say our software engineering and i would say like our exquisite weapon manufacturing is better so like our patriot missile they don't really have an equivalent to like the tomahawks and patriots like we do so we have a lot of advantages there i think their ship building capacity that's very good compared to ours like you i mean have you seen the sironic talking points on that big ships yeah they're just making ships like this is why i think sironic as a company is so important yeah um i know on my podcast i make fun of like the what was called unmanned surface vehicle industry a lot.

23:31Alexa von Tobel: I'm not really making fun of it. It's super important. There's just like 50 companies and it's like a very crowded space, but it appears like Cerronic has kind of taken the mantle there. And that's, it's a very important company. It's in Austin. It's our neighbor in Austin. I think they're going to be critical in world war three, um, because it's going to heavily be who controls the seas. And we're going to not really do that with traditional Navy as much we're going to need unmanned vessels because it's really hard that age of drones to defend

24:01Steven Simoni: a carrier strike group will bullfrog be on boats yeah bullfrog will be on these unmanned vessels um so so blue frogs and on top of psoronics i would say like on top of in general usbs yeah

24:11Alexa von Tobel: uh i can't talk about any partnerships or anything yeah um so but yeah so like we're like first we have another bullfrog variant we're coming out with is an anti-usb bullfrog so like instead of shooting drones it shoots unmanned boats and blows them up because it's going to be like an unmanned boat battle in the war. And this is all happening now.

24:30Charlotte Ross: Can I ask a question? You said like seas will be more important in future wars. Why?

24:38Alexa von Tobel: I mean, you're seeing it right now. Like the Strait of Hormuz is like a huge checkpoint. We can't get oil through it. It's kind of making a lot of countries upset. And we can't take it with our traditional navy, or else we would have. But we can't just drive a carrier strike group into the strait. Same word line. Well, because the strait is surrounded by a mountain region. And in the mountain region, there's a ton of drones hiding in there. So if you get the ships close enough, they're just going to send 100 drones at it. And those ships will get overwhelmed with these cheap drones. So then you'd have to have a, you'd see out of CNN, like, they sunk a battleship.

25:14Alexa von Tobel: And if they sunk a battleship, all hell would break loose. So we don't get our ships close to the strait. We don't even, we know. like we know better to like then go up into the strait and take it we can't and obviously taiwan will be fought by sea you know i'm not with china art of war yeah i think they're actually mostly more palace intrigue like they're taking it internally like through marriages and stuff yeah like i don't it might it might not be like china's they have different strategies they're smart it's an art of war like you don't like all war is built on deception so like taiwan could be totally fake.

25:50Alexa von Tobel: Like, they might not even want that. Like, you don't even know. You know, like, it's the art of war. They wrote the book. After Sun Tzu. Like, you know, like, they're not going to...

26:00Steven Simoni: So it's just like a... Is a head fake? So, like, it's a stretch show, basically?

26:04Alexa von Tobel: Potentially. Like, they... I mean, they're the Chinese. Like, they got... They're sneaky.

26:09Charlotte Ross: I remember, like, really climbing in the head of, like, someone who sat at, you know, defense and out of think and...

26:16Alexa von Tobel: Like, if I'm playing a board game with you and I was like, I'm going to take your territory. I'm not going to tell you that. I'm going to tell you something else.

26:23Steven Simoni: I'm curious, going back to the$1.5 trillion and that$300 billion of that is now allocated to people like ACS.

26:31Alexa von Tobel: That's a back of the hour.

26:32Steven Simoni: Yeah, back of the hour. Yeah, it's useful though. Because I think having that number of trends over the next decade, and also how does ACS become a prime?

26:41Alexa von Tobel: Yeah, I mean... Which we know is your goal. Yeah, the goal is to be an air defense prime. I think that that's very... I mean, I have a strategy to do that. It involves some acquisitions, a couple of new products. I think to be an air defense prime, what you really want is like some sort of electronic warfare division. You want a weapon station division that does kinetic plus laser. You want a jet powered interceptor. And there's kind of that product family would be like an air defense prime. And I'm heavily looking at the best way to make the company that. What was the other part of the question?

27:11Alexa von Tobel: The budget?

27:11Steven Simoni: Well, just, yeah, like how does that go for?

27:12Alexa von Tobel: Oh, yeah. The reason the reason to do that actually is because the government wants to like buy a full solution. So like Bullfrog is part of a layered defense, whereas the customer, you know, it's like do what your customer wants type thing. Like they would prefer to like be like, OK, I can buy this whole family of things from one vendor and I get like a full solution against shaheads. So like you want to you want to help the customer do that. And so that's the natural reason to become like a multi-product defense business versus like kind of more of a singular product.

27:48Charlotte Ross: It's simply just easier go to market.

27:50Alexa von Tobel: I mean, if you want to get like real like VC on it, it's like it's sales efficiency. So like if you're already sending your sales guys to the Pentagon, you may as well be like have a couple more products because they don't save money on it.

28:01Steven Simoni: Well, it also goes to show you, I think, how valuable the government deems your product that you guys have gotten so far with one product.

28:08Alexa von Tobel: yeah and they also have um you know they've given us money for other products to build like they want us to build like you know a laser variant of bullfrog and they paid for this like they're just they know our tracking the core is our tracking and pointing software yep like being able to track and point so like they're extending that to other things they want um so we have to do that um and that's regardless of if we even think like honestly a lot of times like we try to work with them if it's like something that we think could be like maybe not work that well on the battlefield um so we try to work with them and like modify it a bit but you know we're doing what the customer

28:44Steven Simoni: is asking for why do they want laser out of curiosity um so like laser um the main reason

28:48Alexa von Tobel: is because um collateral damage so if a laser misses which they do often it's just going into the it's going to hit like a in space it may have a satellite but there's a lot of satellites um whereas a bullet falls to the ground so that's why i prefer it however the problem with laser is mostly if they ever do proliferate lasers on the battlefield it's very trivial to like um to to put a reflective coating on the Iranian shahad and so like it's not yeah yeah it's not actually like i don't believe lasers are actually like like gonna change the battlefield that much i do think there's a place for them because like not everything's gonna have reflective coating on it um so i think they're like they're somewhat important i've just i'd rate them like like a B minus of importance for the battlefield.

29:35Alexa von Tobel: Got it.

29:36Charlotte Ross: Um, as we think about the next five years for ACS and just, you know, Charlotte and I both can speak to your ambition. You're one of the most ambitious founders that we we've met in the last now almost decade. And your ambition is to build and become a prime. What, what is the next five years look like for ACS? Yeah.

29:54Alexa von Tobel: So I think it's highly dependent on my call and what the world looks like. Yeah. You know, I think it, I think it might be, you know, I turned 40 this month, but if what I'm saying is going to happen is happening, it'll be a very busy five years because, you know, it won't be like I have a choice to even work here. I have to work here for the country. You know, it's like I get to like, I can start a new company. Like I have to do this. And I think that's where we're headed. So I think it's going to be five very long years of very hard work to help defend this country. and I think that you know while I'm doing while we're scaling Bullfrog and doing that you know I think that it'll be important to you know try to make the company for after the war be defensible for like the next 40 years 50 years 100 years so that's that's why I'm trying to take it to that multi-product air defense prime and maybe on that note like could you talk a little bit about like

30:46Steven Simoni: how you think about building teams and your philosophy on on hiring a given and how important this mission is and how intense the mission is and also you're building the team out of Austin

30:55Charlotte Ross: in Texas. And so a little bit of like how, how, how that plays into the strategy. Yeah.

31:01Alexa von Tobel: I've been learning a lot about this over like the last 10 years. Um, I would say it really has to like, it has to be like a sports team, like a sports team doesn't have all all-stars. Like, you know what I mean? Like you have like the star shooter and the people who score and they got like the point, you have people who assist, like you really do need like a team and he's a gel um i don't think we even invest enough in like leadership team offsites and management team offsites um so i do think a lot about that like that was mostly my what i think about these days is like is the team working together in like an efficient manner where they like don't want to rip each other's throats out like that's like that i think the founder team is at least at the stage where i need to spend a lot of time on that so i do think of it like that it's not all a players to be honest like you need you need like people to like utility players position players you know stuff like that and and i spend a lot of time making sure that that's happening and then the problem is the hardest part of it all is like when you get someone who doesn't fit in the team and getting them out of the business is actually in defense is really challenging because of the government regulation like if they can claim retaliation or like an eoc complaints like it it's actually it's much harder in defense than it is in b-bot and b-bot you can let someone go it's easy non-defects doesn't work like that so like if you get a bad leader it might take nine

32:23Charlotte Ross: months it might take nine months yeah which means hiring and it's five is the team right now so i'm

32:28Alexa von Tobel: about 380 but a lot of it's manufacturing okay steve let's talk a little bit about the next

32:33Charlotte Ross: decade and you know i think as we're watching the breakneck pace of ai and even just last week talking about the need to manage some regulation so that we ideally don't end up with a lot more conflict in this world. How do you think about the next decade? If you fast forward, you're someone who has served for our country, is now serving in some ways again for our country by making sure ACS can build some of the best defense weapons humanly possible. When you fast forward a decade and you think about what you see and you know penning pritzker and i've talked a lot about this where the future of defense is just becoming something that matters a lot more in the future this spend trending towards the investment spending towards it multiple multiple tens of billions of power businesses will be built what does the world look like in a decade like if we were stopped stopping you know 2017 you know became drones what does like 2035 look like yeah

33:34Alexa von Tobel: I think it's even even longer range standoff more standoff fewer humans almost no humans in the no man's land between the two enemies like the two countries like it's good that's where it's headed

33:47Steven Simoni: I mean I it gets you to long range meaning like across no long range meaning like you know just

33:54Alexa von Tobel: hundreds of miles hundreds of miles um precision strikes strikes from space a lot of space weapons in 10 years like a lot of space wow um and i think the only time you're gonna see like close quarters combat is maybe like i don't even know if you will see it to be honest but if you have to be in the final part like like taking a city like taking kiev or something like for russia but you're not i don't think you're gonna see a lot of that and that that's in 10 years but i do think it's a lot of i think it's a lot of space what's to see more what is it like lasers in space guns in space satellite, anti-satellite on satellite warfare.

34:32Steven Simoni: So how do you consider ACS for that future?

34:34Alexa von Tobel: I mean, we have products in the works on that now, so we're doing that now, yeah.

34:38Charlotte Ross: Just out of sheer visualization, what does a weapon in space look like? It looks like a satellite.

34:45Alexa von Tobel: Watch the show The Expanse.

34:47Charlotte Ross: The Expanse, okay, that's a little more. The Expanse, on 18, that's a little more.

34:51Alexa von Tobel: Yeah, the A in ACS actually comes from that show, I stole it.

34:55Charlotte Ross: So, yeah, it's beautiful i'm like i've got i've got my weekend it was like a sci-fi thing and we're into sci-fi luke and i so that's fun that's where the acsa comes from yeah yeah uh okay so space weapons uh i uh how much do you think cyber plays into war and quantum computing and somebody you In some ways, it's like an LLM could be part of a weaponry.

35:26Steven Simoni: Also, agents hacking into drones and telling the drones to kill people that we shouldn't be killed.

35:31Alexa von Tobel: Well, that's not going to happen. That's crazy. I mean, there's some Israeli startups that sell that they do that, but there's no way. Yeah, agents. So what was the question?

35:42Charlotte Ross: No, just like how we think about technology and the tremendous advancements of agentic AI. Oh, yeah. And how you think about that as being part of warfare.

35:55Alexa von Tobel: Yeah, I mean, cyber warfare is a huge part of warfare. I think it's a very boutique part. I don't think it's necessarily a venture-backable part of the warfare apparatus. Like, there's hundreds of red team offensive cyber firms that sell to the government and have for the last 20, 30 years. It's like a very bespoke industry because it's like, you know, niche. it's like it's like this yeah one of the agencies will be like i have a mission like i need you guys to hack into this like foreign embassy and do this thing for me and it's like a like it's very best it's like mission-based and it's not like there's like yeah it's like it's not at least from my perspective now i have some sort of like scalable product there you know it's very mission based and that's why the government pays a lot of money to these firms to do missions like that and i think um you're going to continue to see more and more of that i think that market will grow like the CAGR or whatever the term is I'm not an investor but you know whatever but that market grows but it grows like kind of proportionally across all the firms gotcha um let's

36:58Charlotte Ross: quickly talk about the category you're in uh where seriousness and credibility matter a lot like these are um not just pieces of technology they are dangerous pieces of technology and so how do you think about that as you guys are building the brand of ACS and you've obviously had incredible interest from investors almost perpetually since day one. How do you think about the responsibility that you have at the business?

37:28Alexa von Tobel: Honestly, I tend to joke around a lot because I think it's dark. I think this is a pretty dark industry. I know people say, oh, it's actually for just deterrence. We need to be the superpower. We need to keep peace abroad. And I get all the arguments of why someone in our country would say this is not dark. This is just patriotic. But like, it's still people dying and stuff like that for me. So like when I'm joking, it's really just hiding sadness sometimes. I think it is a very tough topic. You know, I think I, you know, at the end of the day, though, obviously, Luke and I started this in 2022.

38:06Alexa von Tobel: We started it because we thought the drone threat was going to be very serious, which it is serious. and it still is and we're still unprepared and we're still not precarious stuff at the right rate and so like i don't know sometimes i get a little sad because you know i just don't think we're we're really doing it right and i think that we're in a very precarious position as the world

38:25Charlotte Ross: superpower i appreciate your point which is that sometimes you're and and keep in mind we've been to know you really well so we know how extremely responsible you are um but that it's it's like a it's not just a normal tech startup. It's heavy. It's heavy. I mean,

38:41Alexa von Tobel: yeah. And like, that's why I got to delete Twitter. Cause like there's so many like, I was like founders and BC is that just like a constantly warmongering and shit. And it's just like drives me nuts.

38:50Charlotte Ross: No, I, I appreciate that as like an extra lens of foundership, which has been your founder in the space and defense tech. You're literally talking about lives.

38:59Alexa von Tobel: Yeah.

39:00Charlotte Ross: And so the, the weight of what you carry every day isn't just being able to pay your employees and make sure your product and revenue grows. it's different I I so appreciate that and then I mean obviously in this category is probably one

39:14Steven Simoni: of the most hyped categories in DC right now like you know you talked a little bit about some opportunities that you see I guess maybe like space yeah interstate yeah they're jet powered interceptors yeah and but then tell us a little bit about things that you're just like

39:31Alexa von Tobel: this is overhyped and and like we don't need what capital does there i mean i think i think hypersonics are a bit overhyped and i don't think that necessarily they're the right weapon for the chinese threat um in general though i don't in general i don't think defense is overhyped because unlike what unlike pure ai companies that are all just like selling to themselves like you'd see like in the sass bubbles defense is a little different in that i fundamentally believe we're headed to war so like it doesn't matter not enough money is in defense right now like i think we wait like i don't know about the returns profile but i'm just saying as a general block of category like it's just i would say one of the safest places to put your money um because i mean just of what's happening in the world.

40:21Steven Simoni: And I'm curious, like, obviously, you guys have a world-class technology team. Luke, I know, is a phenomenal engineer, and so you have some really proprietary technology. I know you've spent a ton of time in the hill building relationships and all that. Like, I'm curious, you know, even though you guys have both, I'm curious what you felt has been more. And, like, the relationships matter more than the tech. How tech sophisticated is a government?

40:45Alexa von Tobel: I think, I mean, I think Andrew can probably take a little bit of credit for changing what's happening now. Like you used to be able to like go on the Hill and get lobbying money without a product. But now, I mean, they've kind of moved, they've kind of changed the game a bit of like, you have to have somewhat of a working prototype before you can really get any traction here. So they've kind of raised the barrier to entry. Like you can't be like a couple of smart PhDs with a good idea and a white paper anymore. like you have to show them something now like they're just pretty crazy if you think about is that true when you guys started yeah like we had to we had to raise roughly i don't know 20 30 million dollars and make a product it took like 18 million of those dollars to build bullfrog like the b1 and that's a lot of high barrier that's why you really can't start it if you don't have the ability to raise money without like basically without traction we had no traction when you guys invested.

41:46Alexa von Tobel: There's no instruction.

41:47Charlotte Ross: No, we invest on the team.

41:48Alexa von Tobel: Yes. And you can't, and like if you can't raise on team, then you can't really enter this market, which is like a kind of a barrier. It's actually kind of, it's probably a bad thing in some ways because like the smart, like real smart kids that are like young, that have a good idea, they really can't get the capital to build these things.

42:04Charlotte Ross: No. Oh, I was going to say, knowing that we don't have that much time left, I just want to ask kind of a, you know, 30 ,000 foot question of, as Charlotte said, defense tech, I think, is going to be a category that over the next decade, unfortunately, only continues to grow.

42:19Alexa von Tobel: Yeah, it is.

42:20Charlotte Ross: What is one area right now that you think is underhyped, and what's an area that's overhyped?

42:25Alexa von Tobel: Yeah, I think overhyped would be the hypersonics missiles. I don't think necessarily those are going to be that important. Are those competing with the Patriots? No, they're just long-range attack missiles that move really fast. the reason being is like and i've had the thing i've had a couple think tank guys on the podcast but like china has a very distributed command center apparatus so like a cost of the hypersonic missile is like more than the target you're gonna hit in china and they have a thousand redundancies and also like the range on them isn't long enough like you're not gonna even get close to the chinese border to like really target those so like while hypersonics are cool i think it's an overhyped area it's expensive it's not really in line with the my vision of drone warfare um there's me a lot of messers that will hate me for that saying this by the way um underhyped i mean underhyped i still think i think interceptors are under i think that when you talk to most people they would say oh everyone's making an interceptor well where are i don't see him i see a bunch of drones killing our bases in the middle east i think interceptors are for some reason being like whipped over.

43:38Alexa von Tobel: And I think the reason, I mean, I know why, because the investors think that they're already being built by the winning companies. Oh, interesting. But it's not true. Like no one's doing it. Like people, everyone says everyone's doing it. Well, where are they? Interesting.

43:53Charlotte Ross: I want to end on, and then Shirley can have the last question. I want to announce one thing you're optimistic about, knowing that this is just like an incredibly heavy category and topic. what's one thing you're optimistic about for america optimistic about well no in general i

44:08Alexa von Tobel: think i i get on a 20-year horizon i think we're going into the greatest bull run in human history if we don't kill ourselves in the next three years in world war three like i honestly generally think like with where ai is at i think we're luke and i always say we're probably two or three more scientific breakthroughs away from agi like i don't think it's there with just lms like there's and you see a lot of research you see a lot of research labs that aren't going the lom route now um like there are there's a couple there's a couple more scientific breakthroughs left to super intelligence i think that'll bring about the greatest productivity growth in human history i think a lot of like jobs are going to be going things are going to be so cheap like like i not to overshare like i recently got divorced we did it without a lawyer we used chat gpt like with like you don't need to you don't need to spend on stuff anymore like things are getting cheaper.

44:58Alexa von Tobel: Doctors will get cheaper. Lawyers will get cheaper. I think all that's going to become incredibly easy and accessible for a lot of people. So I think we're headed towards this really abundant period of society if we get over this final hump.

45:13Charlotte Ross: I hope you get us through this final hump.

45:15Alexa von Tobel: I hope. I mean, it's not just me. I'm a small part of this. Let's be real. We need to just get through.

45:20Charlotte Ross: You need ACS to protect it.

45:22Alexa von Tobel: But then on the back side of this, I do think it will be the greatest 20 years of my life.

45:29Steven Simoni: Well, I'll just end on a fun note, which is as a former founder of a restaurant tech company who is a new resident of New York City, what's your favorite restaurant in New York?

45:39Alexa von Tobel: Favorite restaurant in New York?

45:41Charlotte Ross: This is a really sad question. That's the hardest question we've given you. That's the hardest question. P.F.

45:48Alexa von Tobel: Chang's.

45:49Charlotte Ross: No, I'm not going to do it. Can we give our friend Simon a shout out?

45:53Alexa von Tobel: No, it's code. It's code. it's code it's code it's simon i mean we love you he's an investor in acs as well disclosure but also it is like my favorite so i love hanging out there with him nice yeah pf changs i do live by the pf changs though it is good i do go there a lot i'm not kidding i love it it's not crowded it's not yuppity you know i get my lettuce wraps it's a wine boom well thank you for continuing to

46:19Charlotte Ross: serve our country we're so so grateful you're welcome thank you appreciate it thanks each

46:23Alexa von Tobel: I did it.