Will Hurd on Silicon Valley's Defense-Tech Gold Rush

0:00All right. Welcome, everybody. It's your weekly newcomer, Tom Doton here, joined by Madeline Renbarger, Eric Newcomer, and our guest this week, Will Hurd. Will is a former CIA officer, three-term U.S. congressman from Texas, author of the book American Reboot, and now a CSO at a defense tech startup, Chaos Industries, which we'll get into later in the episode. Will, welcome. And I think you are, Eric, correct me here, is Will the first politician we've had on the show? That's a good question. Wow. Maybe? I'm going to say the answer is yes. Okay. Yeah, he's the first politician we've ever had. It's a great honor.

0:35I have been getting it in honor of being the first politician in our midst. What a delight. This is amazing. I didn't okay this. You know, we're only entrepreneurs usually. Glad to have you. So, and I mentioned, Will, you are three term from Texas. What was your district again? You're like a border district? I was. So it was the majority of my hometown of San Antonio, where I live now, all the way to El Paso, down to the border. So it's 29 counties, two time zones. It took 10 and a half hours to drive across it at 80 miles an hour. Right. Which was the speed limit in most of the district. It was the largest border district in the United States.

1:12I roughly I had about a third of the U.S.-Mexico border. Congressman, a fun fact we discussed, you know, a little bit before recording is you were actually the congressman for my mom's hometown, where my uncle currently lives and where my grandparents are from in Uvalde, Texas. is my whole mom's side of the family is your district basically i hope they came to i hope they came to one of my dc to dqs right i would hold i would hold town halls and all the dairy queens and i hope they weren't part of the group that would protest of the dc to dqs so you know you'll have to i highly doubt they were the protesters if you're ever in valde and they maybe stopped by eric you've been to you've been to texas before my high school best friend lives in Midland, Texas.

1:53So I made the trip out there to hang out with him. I've obviously been to Austin for South by Southwest a couple of times. I'm not sure I've ever been to San Antonio. Midland was not in the district, but all the counties around it. So I would fly in and out of San Antonio back at DC at two weekends a month. One weekend I'd fly into Midland and hit, you know, hit those parts of the district. And then one time in El Paso, it was because it was so big. I had those three things. And let's dispense with the congressman as well. I don't like being in Congress. I definitely don't like being called it now that I'm out.

2:31So please just call me Will. Well, it's a good time to be out of Congress now, Will. I saw the approval ratings recently for Congress are in the low 20s. So I can see why you want to not be tagged with that moniker now, congressman. So I ran, I left the CIA to run for Congress. And I lost that first race by only 700 votes. I'm glad I don't want to tell that story anymore. Oh my God. Yeah. How many votes were there? Well, out of, I think it was like 60 ,000. Like I said, I'm glad I don't have to tell that story anymore. My understanding of Texas politics from reading the Robert Carroll LBJ books is that you can kind of fix those things, you know?

3:09Like 700 votes doesn't seem like that much. So, so box 13 and all those districts. So, so LBJ, this is, this is legit. You know, it's been documented. LBJ became a senator because by, I want to say it was like 1821 votes. And they basically stuffed the ballot boxes with people that had died. And the guy that ran this whole operation was called the Duke of Duval. And some of the areas that he was responsible for were some of the places that I represented. So it's this weird connection between all that. And one of my favorite books is about this. It's called Texas Mutiny. And it goes into this whole thing about the ballot stuffing and how it happened when they found out.

3:55It's a fascinating part of Texas lore. Yeah. But you've been out for four years now and been a civilian in the tech world, in the private world. I mean, you prefer it, right? I understand there's clowns on both sides, but you feel like you're— It's got to be fun to be a congressman. I don't know. Really? I'm surprised. You prefer—yeah, which do you prefer? What do you prefer? Of all the jobs I've ever helped, from working in a computer lab at Texas A &M University, to the CIA, to building a cybersecurity company, to Congress, investment banking, and now being at a tech startup, being in Congress was by far the worst.

4:33But I will say this, though. I enjoyed my time, right? Like, I got 21 pieces of legislation signed into law in six years, which is a lot. Most people don't do that much in two decades. I was able to do it in six years. But the thing that most people don't realize is you help a lot of people. So, for example, I have horrible allergies. And I went to an allergist this week and he comes up to me. He goes, hey, Will, I'd be getting in trouble if I don't tell you this. But my wife wanted me to thank you because he was in the military. He got posted to Iraq. They got moved from, I think, Dallas to San Antonio.

5:07All his personal effects got lost. He had to find it. DOD was saying he should pay for it out of his own money. Someone told him to be like, call Congressman Hurd's office. And we were able to sort it out. Right. And so so like the ability to help people in the district that are getting screwed by the federal government, whether it's on Social Security or helping veterans with veterans issues, you name it, like that part was awesome. And and these are people you're never going to know their names. But those those are the that's the stuff that I'm most proud of. And I miss I miss that part. I miss helping out, you know, my community.

5:42But, you know, the back and forth. And look, I saw I like solving problems and my district was 50-50. So even if I had every Republican to vote for me, I still couldn't win. And so to me, the ability to get big things done was what I liked about being in Congress. And that's getting harder and harder. I mean, we can't talk about sort of Texas and bipartisanship and not talk about the sort of gerrymandering issue right now. It looms so large. You're obviously what the Republican, the Democrats like. What is your view on sort of what Texas is doing and then whether like California should fire back or like, I don't know.

6:20Yeah. How do you how do you look at this? So I've always said redistricting and drawing lines is about incumbent protection. It always has been right now. I don't I don't agree with that. So Illinois did this right. They redrew the lines and screwed Adam Kinzinger. Let's look at a place like Maryland. Maryland had a Republican governor for a number of years, but no Republicans in Maryland. Texas just rejewed the lines to try to get five more additional seats. Gavin Newsom is going to attempt to do the same thing. It seems like, look, he's probably going to spend as much political capital as he needs in order to match what Texas is doing.

7:04So saying one group is bigger or better or worse than the other, Republicans and Democrats across the country have been doing this for a really long time. Now, if I had a magic wand, I would say no district can be more than plus six in either direction. Plus six R or plus six D, you know, a 56 % Republican district or a 56 % Democratic district, in my opinion, is a jump ball. And so that forces people to have real conversations in November. And that causes people to get problem solvers, not bomb throwers. And right now, the number of contested districts where people voted for one, for their person, for the president from one party, and the congressman from another party, it's the lowest it's ever been in the history of Congress.

7:53Was that ratio you gave, the 56 percent? Is that about what your former district was? It was. Mine was a little bit worse, right? But plus six is something that's one. I think the real problem that we often have in politics is single party rule. Right. And so so California and Texas are the converse of one another when it comes to when it comes to single party, when it comes to single party rule. And that's the part that's crazy to me. And also, not enough people vote in primaries. The number of people that vote in primaries on average in a congressional district is like 60 ,000 people. That's crazy.

8:32That means like 30 ,000 people get to decide. Majority of people that go into districts. So that would be my one suggestion, everybody, regardless of what your political leanings are. If you vote in primaries, that's where a lot of things get decided. There's usually better candidates that may not have the financial resources or the name ID. But my PSA for today is go figure out when your primary is. I mean, I mentioned it kind of in joking earlier, but like you look at the approval rate of Congress right now. Now, I imagine part of the reason you wanted to leave was that you maybe saw where things were going and someone who is a Republican that's liked by Democrats doesn't really have a future in the Republican Party.

9:11But that sort of gerrymandering and having these wildly skewed districts, do you think that's part of the reason that overall there's just such a deeply cynical and negative view of Congress from both sides right now? I think that is part of it because you have elected officials that are only speaking to a very small percentage of the population. So if each congressional district is roughly, let's call it 800 ,000 voters, right? If you take 30 ,000 voters, the people that get them elected in the primary, that's like 3%, if my math is right, 3 % or 4 % of the entire population. And so you have an elected official that is speaking to a very narrow group of people and ignoring everybody else.

9:53And that is what's creating some of these problems. What do you think about these celebrity kind of Congress people that have jumped up in the past couple of years to become these social media stars? You've got your Nancy Maces or your Marjorie Taylor Greene's, people who exist largely as kind of quasi firebrand political celebrities that matter more to people probably outside their district than the ones within it. Sure, but a lot of people continue to get elected in their districts, right? And I'm never going to criticize somebody for building a large social media following. If you don't know how to leverage that tool to connect with people, then you're not going to be able to get elected.

10:31What I would like to see is more people focusing on addressing some of these unique challenges that we're faced with today. My concern has always been that the United States of America staying the most powerful, most important economy in the world is not a fait accompli. And there's a number of issues from federal level issues down to local issues that have to be addressed. And so being able to talk and like try to solve some of these very complicated issues requires people that are willing to roll up their sleeves and solve problems. And so, look, my social media footprint would be 10x what it is if I said crazy things, right?

11:13That's just not me. And so, yeah, I would say you would see that the numbers of people that appreciate their member of Congress higher if people solve problems. And look, my time in Congress was a perfect example of that. I had a great name ID amongst all brands of folks, partly because I tried to solve problems, right? Like I was the cybersecurity guy in Congress. I was the IT procurement guy in Congress. Like nobody's ever, when they've gotten a poll, so be like, what are your top 10 most important issues in Congress? Nobody ever says cybersecurity, right? Right. Or IT procurement. But I was able to work on these real challenging problems and then articulate why a farmer in West Texas should care about something like that.

12:01And so it's hard. That has nothing to do with the Cracker Barrel logo. Do they still sell audio books at Cracker Barrel? That's my question, you know? I don't know. Did they ever? Oh yeah. I went to actually the first Cracker Barrel I went to in my life was in your district was in San Antonio. I went back a few months ago when I was in Florida and this doesn't get talked enough about, in my opinion, in the discourse, terrible food, just, just bad food. You're not running for office. Send your comment to Tom. I'm happy to do a whole Cracker Barrel food episode. This is our strategy bait, you know, elected officials, former elected officials into shitting, you know.

12:42mainstays of America. Yeah, it's no what about it, right? Exactly. There you go, Tom. That's the thing for me that more people know what Cracker Barrel is. I didn't realize it was so well known, but Madeline, to your point, when I left, so I graduated university at Texas A &M in May of 2000. And in October of 2000, I drove my car to Washington, D.C., and this was literally the day of the USS Cole bombing. This was the USS Cole, which is a destroyer in the U.S. Navy off the coast of Aden in Yemen. And this was kind of my introduction ultimately to Al Qaeda. And I was renting Clive Kessler books at Cracker Barrel, listening to them on the way to Washington, D.C.

13:23So that was my... I always did the puzzles. The puzzles are what I remember from Cracker Barrel. I think I went more as a kid. So it'd be all the weird metal things you have to unwind. Yeah, I remember the games too. Anyway, why are we having our first former politician on the podcast because Silicon Valley has identified a gold rush in Washington and literally the potential for a golden dome. Obviously, we've written a lot in Newcomer about Silicon Valley chasing sort of the defense tech opportunity. You're working at Chaos, sort of fast climbing defense tech startup. You know, there are lots of them, obviously, like Andrel looms super large, Palantir is sort of, I guess, the OG in defense tech.

14:06I mean, just to start us off, has the Trump administration been a boon for Silicon Valley's effort to get into defense tech? Or how much is it like a move from Biden, no fun, you know, Trump, lots of money for defense tech startups? Or is it muddier than that? Or what are you seeing in terms of this president and the opportunity? I think the Trump administration is definitely saying, hey, we are doing things a little bit differently, and we are willing to get rid of many of the sacred cows, especially when it comes into procurement. And there's, you know, the most recent thing that happened was there was an entity that all the senior generals across the services would work on requirements.

14:52And some of those requirements, like one simple requirement would take potentially 800 days to go through this approval process. This was recently abolished. So there's efforts like that. And 800 days, a startup might not live that long if they can sort of get signs of revenue faster than that. So, yeah, clearly hard. For sure. For sure. But I would also say that one of the things that has really changed and caused this gold rush, as you say, was the Ukraine war and is the Ukraine war. This has shown that warfare has changed, right? Warfare is now about speed. How fast can you get that autonomous thing to do something?

15:34It's about scale. You know, mass and quantity overwhelms what in DOD they call exquisite, right? These are basically, it's a fancy way to say something super expensive and took, you know, years to develop. Exquisite. I didn't know that was a term of art. It really is a term. And so this is how the changing, the way warfare has changed is what is where opportunities for people that can move fast, right? But here's the reality. Now, some would say, is there a bubble in defense tech already? You got to be able, your product has to work out of the box and it has to work every time. And you better be ready to produce a shit ton of them, you know, in a short period of time.

16:26And that is the need in our military. so so you know if you're if you're not able to operate in a place like ukraine which is the current battlefield the the electronic warfare the jamming use of autonomy the use of counter uas systems drones drones to put it i mean drones are key to this right i mean like drone warfare that's the thing we're building at scale and combating right or is that absolutely down too much no you're not that's the current thing right like that that is one element that we have to address why because of air superiority air superiority is a term that we have forgotten or taken for granted because the united states of america's military has always had air superiority since basically the end of of the korean war and air superiority allows our troops on the ground to be able to do their thing it allows commerce and commercial aircraft to travel around the world And when you lose that because of this use of drones by adversaries, this is going to be a major problem.

17:34And we've already recognized that we don't have the drone fleet necessary. We see our adversaries like Russia, China and Iran increasing theirs. And so if you see a increase in that drone activity, then guess what? You need to be able to do the counter drone as well. And you can't have a system that's one billion dollars. that shoots a rocket that's worth$600 million at a drone that costs$20K, right? So this is the asymmetry of warfare is one of the things that is changing the game. Yeah, so that seems like, I mean, I was just in Southern California last week, actually. I was over at a Day One Ventures event, but they also have a ton of portfolio companies in El Segundo right now, building things, you know, making the rounds.

18:27Yeah, I did. I did my rounds. Defense tech startups wanted you to like sign NDAs. You have to be like, oh, no, we write. We write about these. Well, you didn't come knocking on our door, you know, unfortunately, you know, I have ran out of time. I had to go to the airport, which was right there conveniently. But I was going to say I met, you know, I met some interesting founders that are taking, you know, basically beyond defense, you know, Nuclear power, Valor Atomics is doing this as AI infrastructure. Some other people are trying to get space superiority like Astro Forge. I think there's a lot of these really interesting founders in the area.

19:01But your question about if it's a bubble, I mean, I think there's tons of people doing interesting things. And you're over there too. But what kind of distinguishes, I think, a player that's early in the defense boom right now to actually make it and get procurement, even if the administration is more friendly? Like, you know, how many of these companies are going to make it to the next step? Look, your product has to work. It starts with that. You can talk a big game. You can beat your chest. You can have some great your first widget. But that thing has to work out of the box. Because if our men and women are using a tool in order to protect themselves, defend themselves, it has to work every single time.

19:39And I think that is where many companies have a problem. You do these exercises where the military basically says, give us your product. We're going to run it. They kick the tires, in essence, and the things don't work. Right. So that is, it sounds so basic. Because they're hardware companies, fundamentally, right? It's like hardware is hard in any area of tech. So why within defense tech would it be any different? I sometimes think VCs didn't understand that when they got into the space. They were like, oh, look at all this money that's here. fundamentally they're trying to build like highly technical and sophisticated drones that in any industry let alone like defense would be hard to like sell and you know promise and it's like a battlefield technology right like this is it's like the stakes are higher than it would be for like you know a wearable that doesn't work exactly the stakes are higher but but tom here's the here's the other difference where you're seeing all these companies that madeline's able to go see is because there's now private investments in this when i left when i left Congress in, I guess it was 21, January 21, I was a free agent and I joined Allen & Company, you know, the New York Merchant Bank.

20:46Nobody wanted to invest in a company that was dual use, right? Let alone Uncle Sam is customer number one and only. The ability, look, the ability for a company like us, Chaos, to have half a billion dollars, right? Is going to allow us to have a runway to produce that product in a time to meet the procurement cycles of the government, of the cutting, the evaluation, and then administering. Maybe there's a good time just to say directly what Chaos does so that people know. Yeah, look, Chaos, we are a defense tech company. We're based there in LA, technically Hawthorne. We have an office in Washington, D.C., and one of our first products is a radar.

21:29It's a counter UAS radar. One of the things that's special about us is we can see big and high and far and small, low and near all at the exact same time. We've operated in Ukraine in the cold, and it's been baked in the hot sun of the Middle East. We're in activities with the Army, and we're doing a number of projects with the Air Force. And we have figured out a way to be a fraction of the cost about 10 times less than others and see even further. The idea is, you know, if one thing is blown up, it's not going to like ruin the whole budget. Right. That's that's part of it. And sort of tracking these drones everywhere.

22:13Absolutely. It's multilateration. We use a thing called coherent distributed networking where we're able to have multiple things work with each other like like as one unit. And so we can put two systems four kilometers apart, and you basically have a radar that's four kilometers in diameter, which is really big, and it's a fraction of the cost. So it's survivable, and we can upgrade it and update it over the air and at the edge. And then we have, we're very expeditionary. So, you know, two of us on this call could carry this into a place and see further than anybody else as was validated by a combatant.

22:55And so this, it's a fascinating, you know, I didn't think for me, you know, when I was leaving investment banking, I didn't think I was going to be slinging radar. Have you carried one around with somebody? You're saying any two of us could carry it. Have you fact checked that? Like, are you? Well, no, we like that's how we put it. That's how we put it in places. But but but what was great for me was the team. You know, it's an amazing team. Our two co-CEOs, Bo Mar is is literally a genius that has leading this tech. Like John Tennant has been on the kind of one of the early godfathers of defense investing and was doing it before before anybody else.

23:33We have PhDs, folks that are mentioned in Nobel Prizes, which I think is pretty cool. We have a Navy SEAL. We have folks that have served. And then we just have some amazing engineers and operators who are been on the other edge. Right. And the thing that ultimately it's hard for many people to understand this because of our ability to see further, that gives the warfighter five to 10 more minutes. When you're getting shot at or bombs are dropped on your head, five to 10 more minutes is an attorney. An attorney to understand. It's an attorney to decide what you could do. It's an attorney to be able to give you time to act.

24:12And so so that mission of giving the warfighter additional time is has been great. It's kind of me getting back to my roots. Well, let me quickly bring it back to, you know, drones and air superiority. Now, this came up a lot in the story that Maddie and I did. We've been writing a lot of defense tech stories recently. Is the concept, is the possibility of air superiority in a time, man, we're like a military tactician podcast now. This is great. Yeah. Is it possible in a time where you can get these, you know, tens, thousands of dollars Shahed drones, you know, pretty effectively fighting people, you know, in Yemen, you know, on behalf of Ansar Allah or whatever is going on in Ukraine right now with, you know, Iranian made and Russian made drones fighting against American made drones.

24:53I guess, you know, with like Iran, there was this, you know, Israel was able to develop air superiority and that allowed them to shoot, you know, you know, their munitions at the nuclear facilities. But in general, are we like at a time where we're just post air superiority and everything is just about these five to 10 minute moments of advantage that you can get at a, you know, day by day basis? A great question. And the answer is no. The days of air superior are not over. However, the days of air superiority is not a given. And that's why we can no longer pull out$60 million systems that are defending against these cheap drones.

25:29So to be able to detect the threats is possible. And that's why we've gotten the investments we have and we've got the interest. And what do you do about the threat? What's called closing the kill chain. And this is, I'm sure, Madeline, many of the companies that you saw were trying to work on this. And so an area of opportunity is really a cheap way of destruction, of stopping those drones from happening. Now, you get into a whole nother kinds of questions. So if you have a drone that's flying around LAX airport and you take it out, when do you take it out? How do you take it out? What do you take it out with?

26:08You know, is it big enough? Is it big? Is it small? Where does it go? So there's a whole number of conversations about when you defeat that system. But to your point, Tom, one of the big topics in Washington, D.C. right now is Golden Dome. And look, Golden Dome is important. Being able to defend against ICBM, intercontinental ballistic missiles that get launched from one of our adversaries' land, go into space, come back down and hit something, right? And defending against this is important. But the reality is the real threat and the most immediate threat that's going to happen to us is that van that has a bunch of drones parked next to a power plant.

26:53It's going to be a cruise missile, which is low and slow. And I'm sure y 'all watched Maverick, Top Gun 2. Top Gun Maverick? Yeah, Top Gun Maverick. Yeah. Go on. Great movie. Speaking my language. Yeah. But that part was like they all had to fly real low under the radar. Like, that's a reality. Like, that is not just some Hollywood thing. You know, that's a reality in real life. And that's what cruise missiles and drones, you know, are able to get under and take advantage of terrain masking and fly under the radar. So you got to be able to see that stuff. And that is probably the more likely threat because it's cheaper.

27:30Our adversaries are being inventive in developing these kinds of systems. And we got to be able to protect against that. But air superiority, domain superiority is not something we can give up. And we've been talking a lot about air, space. And part of Golden Dome is defending things in space. But space is truly a contested environment now. The Chinese are building satellites that have a claw. Okay. Let me tell you, the only reason you have a satellite with a claw is you're going to grab something and knock something else out. And most people don't realize people like space, space, who cares, right?