#24 - Zane Mountcastle, Co-Founder & CEO of Picogrid

0:00Right before Russian Ukraine drones were using a tiny tiny tiny scale. They didn't just ramp up production. They invented an entirely new wave of operating conflict. We realize, well, look, like that could happen to us. When we look at our arsenal, realize we wouldn't be ready for something like that today. Let's start off with, you know, you're just moving into this new place. Tell me about like the past year or so and what's been happening. Yeah, a lot's been happening. We just moved into a new 25 ,000 square foot facility here in El Segundo. About two miles from our previous spot. um team has grown pretty dramatically just about 30 folks now um and continue to ramp up the business yeah what's the latest on as far as like how many you know uh like helioses and landers and stuff a lot of focus in the past year or so has been on supporting a lot of the more sensitive missions the u.s military works on um which limits a lot of what i we've been able to say publicly on on this but um you know i think what that means is we get to support some of the most most important missions the u.s military is working on today um some of the most cutting stuff they're doing you know we're fortunate enough to be able to support them um on that uh and so it's less so you know looking at at numbers of of things and more so looking at the impact of the things we are deploying yeah what are you like super excited about right now there's a lot of things right like on a lot of different fronts and that's one thing that's happened in the past year is like business has expanded in in many different directions um uh one of the things that i'm really excited about more recently is we're we're just starting to do a little bit of work with the intel community um so breaking out of out of just dod um and supporting some of their missions um that gets even more sensitive so there's even less i can say, um, on that front.

1:53But I think, uh, the point is right. The, the, the problems that we solve with helping connect systems of all types, right. Um, uh, sensors, drones, robots, cameras, even satellites. Um, it's becoming more and more and more important over time. Um, as it becomes the way the military, the future of the way the military is operating. Um, and I think, you know, we, we sort of saw that coming even a couple of years ago. and i think it's becoming even more and more um pressure as time goes on yeah how how are things like uh changing i know that we were talking earlier and i think like over the past 12 months um or maybe even like 16 months it's gotten a lot easier i believe for smaller players to come in like i think when you did your interview with jason carmen you said effectively you just took the most painful route of you know uh you're basically not being like a subsidiary of one of bigger bigger guys um like why did you take that path how's that going for you um i mean i wouldn't say it's easy um but by any measure um we certainly took the the chew glass approach um i think it was the right approach um you know i think a lot of this kind of backs backs to sort of traces back to where you know the company started the first place where i was doing some work with the army corps the navy it was um rented to college and uh you know work with some very early stage autonomous systems tech and and you know the tech worked and the question was okay now how do we scale this and the answer i got sort of multiple times was go work with the raytheon small business program the lockheed small business program right um and who is giving you that advice a lot of folks on the government side right because the idea of of taking small companies seriously was very foreign um uh it's not to say like small businesses haven't existed before right that the the defense industrial base has a very long and excellent history of of small businesses supporting all types of of of defense but they've always played a very small part um in terms of of the missions that actually matter right you know they'll be making the screw but lockheed is making the aircraft right it was part of it just like the built-up trust over many years of operation and stuff with those bigger players or i think the saying like nobody gets fired for hiring ibm very much tracks in defense right where you know if you're a contracting officer you can give the contract to one of the primes and like you know they're probably not going to do the best work but they're going to do something they're going to get the job done right they're not incompetent right they actually do a very good job with a lot of the stuff they do they're just large load organizations and so they operate like ibm operates right they're they're more expensive they're slower, they're less cutting edge, they'll get it done now.

4:39And so I think what we've seen in the past, I mean, up until very recently, in the past couple of decades, is there was a shift away from supporting the newer players in the space and moving towards the trusty old guys. That's shifted a lot, really, and I think even more so since we last chatted a year and a half ago or so um where the the dod has now in real ways started to take new companies seriously um and what do you think catalyzed that shift i think there's a few things i think primarily it was the fact that the large primes that they're shifting away from uh they they just under delivered for so long that it started to become uh uh something you couldn't ignore right you mentioned that like uh a lot of the technology that like the military uses and stuff is the same stuff that they use like 10 or 15 years ago which is crazy still the case still i think people you know they see the the the big fancy flashy programs and like that that there's some really amazing technology that's out there including from the large primes right like um uh but i think you look at sort of the underbelly of how the day-to-day you know personal military operates the systems they use the computers they use the software they use um it's still just astonishingly out of date um and um you know to the previous part right that the government's not taking small companies seriously these are the companies that are that are willing and able to actually address these problems in real ways and i think it's happening you're seeing um uh just an explosion of types of companies that are serving the dod of all types right software companies hardware companies combinations um uh across every layer of the stack i think it's it's a very healthy development of of the defense industrial base and how it needs to be to be to be healthy and I think a lot of that's been pushed along by both from the technology side of I think that this sort of tech world has realized that this is actually one a big market but two a really important market right there's a lot of money to be made I think a lot of talent is kind of getting fed up with working on you know a large like b2b SaaS application and instead you know kind of to put their talents to better use.

7:10The capital community followed that, where now there's billions of dollars being put into defense tech, where even a couple of years ago, right? It was a tiny, tiny fraction then. What were those early conversations of you trying to raise money for a defense contractor that you're going to take the painful path? It was really tough. Raising money when we first started was incredibly hard. um how many conversations do you think you had before the first person was like yeah i'll back you and what was that check i i really don't even know at this point a lot um i mean it was it was kind of the the pushback um was like you know look defense we just don't do defense like a lot of the firms was like yeah it seems like a good idea but it's like in our lp agreements we cannot fund defense tech it was something they agreed on with their lps right they have to go back and change and a lot of them have since done that they've since gone back and changed that because they realized that that clause cost them a lot of money um because that kept them from actually investing in defense and defense has exploded in the last couple years um i think a lot of it was sort of this you know history is over mentality that you see in san francisco there's still a lot of that around right it's definitely not not not gone um a lot of that's kind of tampered down and quieted down since since the the the war in ukraine but um there's still a lot of that right um has that seriously shifted like the ability for new companies to get funded as well as uh i don't know the like military to adopt new technologies it's a bit of both yeah i think it's it's um you know that sort of quieting down of the war is over has made a lot of a lot of the sort of capital community that was otherwise resistant to funding defense because if you look back over the over sort of the lifetimes of most um you know gps at vc firms it was the wars in iraq and afghanistan right it was it was these long drawn out wars that really didn't go anywhere just an end right like it was just lives and money and it was just you have to ask yourself like what were we there for and so you know i think it's not entirely without reason right that there's this kind of mentality of like you just want to be part of that right like there's there it was not an inspiring thing to do there was you know the the internet kind of world was so so separate and like there was so much opportunity there.

9:27And I think we realized was, sure, those were really drawn out, awful conflicts, but conflicts still happen, including conflicts that we don't want to happen, but will happen anyways. When Russia invaded Ukraine, what do you expect the Ukrainians to do? Right? Like roll over and let it happen or fight back? And I really hope that if the u.s was in a similar position we would do exactly the same as what ukraine did right which is fight back across every layer of society right you know people are making drones in their garages and shipping them to front lines like that's still happening um and and do you know people that did that not personally not personally it's it's it's how ukraine has actually been able to manage the production rate they've hit it's because it's a lot of it's done by like regular people regular people assembling drones in their homes um is it is it one of those things like if there is actually a conflict then all the regulations and stuff just get peeled back to just let people rip and like just build the thing that we need i mean and that okay that that skill it's like you know the regulations like come after me right like you know i mean what are you gonna do right um uh and so you know i think in that kind of case you have a little bit more freedom but i think you you know ukraine has it serves a ton of credit ukrainian people deserve a ton of credit, right?

10:45They didn't just ramp up production. They invented an entirely new way of operating conflict. Before Russian-Ukraine, drones were used on a tiny, tiny, tiny scale. Yeah. Almost never for direct strike purposes, except for the switchblade and larger munitions like that. But in terms of treating it like a day-to-day munition, that was unheard of. And the Ukrainians essentially invented that right at the scale like small thousand dollar drones and stuff are taking out tanks yeah exactly so and it just completely changes the way that that that a conflict can operate um and that was like that like that was a big development and that big development then trickled over to to the us where on one sense we realize well look like that could happen to us right might not be russia um but it could still happen right and and we look at our arsenal realize we wouldn't be ready for something like that today right um and that's not that's just such sort of well-accepted um uh sort of belief in the pentagon today um it's changing it says we're not prepared yeah it's it's just sort of the broad realization like we're not prepared for what a future conflict looks like it wouldn't look like ukraine um you know if there'd be a war in taiwan it'd be a war pacific like it wouldn't look like ukraine directly but it would be it look a lot more like that than it looked like iraq or afghanistan yeah right and we're not ready for for that right basically new wars are going to be completely different than the last one they will right yeah they'll be different than the wars of us far like that's always the case right you know throughout history it's not a new thing but like you always fight the last war until you realize you're not like it's not i know it's like the it's like the same you know insurance thing where people insure for the the last disaster you know like like you know home insurance or like fire insurance goes up like crazy right after a forest fire and that kind of thing yeah exactly it's just i mean it's reactionary sort of approach and um i think you know it's hard to imagine where things are going but i think you look at the throughout history there's this pattern that repeats itself and um i think you know we're in a spot right now we realize that because there's a conflict happening elsewhere that we would not be ready for we have to look at our own arsenal and realize yeah that we wouldn't be ready for the same conflict much less a conflict against even more sophisticated um um you know adversary um and that's really sparked a lot of uh the the impetus on on the government side to realize that we need to to fund these new technologies we need to to buy them at scale we need to deploy them we need to train with them we need to build them into our tactics um we need to develop new strategies um and and that's i mean really in the past past i would even say like 12 18 months that's i've seen it just a real shift in how has that shifted your strategy as well yeah yeah how has that changed over the last like 12 months so i think one thing to understand about song to the government is is you're you're in a very sort of i guess how you describe this like there's just sort of culture that you're selling to and different services have different cultures different branches within the dood have very different ways of operating um for a while the the air force was sort of seen as the cutting edge like they were the ones that were buying the best new technology trying things on scale even if it's not sort of directly air force related, but they were the ones who were kind of pushing the envelope.

14:07Right. Why do you think that is? It's just a culture thing. They've always been a little bit more forward looking, a little bit more. Like adventurous almost. Yeah. Yeah. It's hard to kind of pin down exactly why. I'm sure there's some kind of, you know, historic reason as to why, but it's a culture thing. Right. You know, culture matters. What I've seen happen more recently. And then of course, so calm as well as like always very cutting edge, always very like willing to try things like much more sort of cowboy mentality. For a long time, Army was like a lot less receptive, right? They were like, okay, show me how you're going to make my gun that much more efficient or jam that much less or like make my tank fuel that much.

14:46Like that was kind of the extent of the innovation on the Army side. And really, that's shifted a lot in the past year. we've seen just an absolute ton of inbound and an interest from army units across the spectrum that realize that they need to modernize how they operate and it's not just with drugs and that's like kind of a big big bleeding edge thing and i think there's been a lot of attention to that but it's everything under the hood as well how you you both do electronic warfare defensively and offensively how do you detect and track electronics and devices of all types how do you integrate that into weapon systems how do you build new tactics around that how do you uh you know how do you how do you change how the army operates um i think the army is going to be the ones that are that are adopting you know in the long term a lot of the new technology is being built out today um so we're very much at the forefront of of pushing that forward how do you think about um like figuring out which products to like focus on versus others yeah there's always more I wish we could do, right?

15:54With more, you know, with more time and more people, with more, more capital, there's always lots more to do. Um, but I think the way we've always operated just being very, very close to the end user. Um, and I think oftentimes a lot of people in the tech world, when they come to the, the, the DOD space is they, they take a very sort of, they have a lot of hubris. Um, we're like, well, this should be better. Um, well, sure. Maybe it needs to be better, but why? What is the actual reasoning it is how it is? What are the actual constraints we're operating under? And how do we factor those into the better solution?

16:27If you're gonna build and actually deploy a real solution at scale, you have to understand the entire context in which it's going to be deployed, or it's just not gonna be successful at scale. And so how do we kind of go about building those next things is really just being listened to what the end users are asking for. And what does that mean to like listen to an end user in your case? Like go talk to them, right? Like go out to an army base and talk to the guys on the ground who are struggling with whatever sort of their problem set is. I think, you know, we've seen recently both drone swarming and counter swarming is a big sort of area of interest.

17:14Electronic warfare is another big area of interest. and a lot of people on the government side, it's like they don't have any way to handle that, right? They understand in the abstract, they understand like these are things that need to happen, but what does it actually mean, right? Day to day, what does it actually mean to do electronic warfare at scale, right? Not talking about these massive, you know, semi-truck looking things that have all the equipment, like that's how it was done before, but now we're talking like backpack scale, okay? What does that mean? How does the individual to operate at that scale um to to do that kind of uh to do that kind of thing right it's just it's just new new things you need to train with um and so listen to that right understand where the where the problems are and sometimes that's a big new technology a lot of times it's just making things easier to use right it's like simple things um making the software like a little more clear making the hardware interface like simpler right the small things but they add up um and And, you know, I think it's true as in every other industry is like, just listen to what the customer is asking for.

18:15Like, they'll tell you what they want. It's up to you to like actually listen to them, right? Yeah, I know. So like for that first, you know, few interactions or whatever. Okay, what is the first contract or, you know, how do you get that first contract with the government? How did you do it? yeah um I was fortunate where our first contract for Pico grid was we wanted because we're very close to a couple units that I was working with right into college from building these autonomous systems programs that was kind of a very very first contract it was very small we definitely did not make any money on it but it was now is that first lander yeah well the first reverse or a couple a couple landers or prototypes like the the what became was before lander we deployed out out on an air force base um and that was gonna work for right that allowed us to prove out the tech to to demonstrate it in a real operational environment to fix the bugs that did come up and just really learn right um and then that kind of spotlight you know the government's still a very small space and people move around a lot and like there's some bad sides to that but one good side of that is like it's also a very small community you just build a relationship with one guy and yeah like it was to the next oh yeah my last you know my last you know the last installation i was at uh uh they had this other problem you should talk to this guy okay well like it doesn't like you kind of like run this network and and so it's very relationship driven it's very uh um trust driven right like they're they want to put their own reputation on the line if the tech works And, you know, you have to, to, um, you know, not make them look bad.

19:53Yeah. How do you go about like building that trust with, I mean, they have to be able to rely on your like systems and they want to rely on, you know, their partners, right? Yeah. Um, how do you build that trust? I mean, it's a very hard thing to build. Like it's, it's very personality driven. It's who the people are, um, on the other side of the table is what they care about. Um, I mean, like they want to see it operating in other environments. right and so it's your job to to show that to show it operating to show it working well to show how it works to show like you know to even be to be you know i think they're used to saying like seeing hey this works 100 of the time perfectly every time right be honest about where like where it fails right where the limits are where you're building out today what are the next generation things like bring them into the the roadmap um is something that i've seen very few companies do in this space that we do all the time all right why do you think like people avoid doing it i think again it's a culture thing where you know there's this culture in the tech community of sort of move fast and break things right go to a demo that's totally fine if the demo doesn't work like it's kind of expected right if it works it's it's it's like probably didn't ship hard enough exactly so there's that sort of expectation which um that there's some people on the government the side that are open to that but the bar is quite a bit higher yeah we're you know if you're going to a demo they expect it to work and expect it to to to do function and do what you told it exactly yeah and like and if it doesn't like that looks really bad right obviously like it's a different way of looking at things like the you know the truth is right they needed to know that they can rely on this tool this thing on their worst day right that is the bar you need to cross so you know of course i understand like a lot of new tech doesn't it's not going to get there on day one but um you know when you bring that to the customer it needs to be that much further along right um so it takes a little bit of extra work and extra effort and diligence to get to that level um but uh you know once you do and it does work and you have sort of the kernel of what is working for saying a new product bring them into the roadmap you know have them suggest what new features need to be built or how you can change the physical layout or how you can you know make it better faster integrate a new thing like all of that like you should be able to bring them in for um and not everyone's going to be receptive to that like a lot of people are you know want to clock out at you know 4 30 and go home and that's fine right you're going to see that it's your job to like find the the person inside that doesn't want to do that yeah and and like you'll know when you see it right like like these people that actually see their job as as of of you know supporting the military and helping do them make military the best fighting force you can they can make it um and and like you'll definitely know when you see it like they're they're they're few and far between but they're they're there and i think they're they're getting more and more bold as time goes on because like we're seeing just the urgency pick up um and you need those kind of people to to actually address that what's been the most challenging thing over the past year or so Oh boy.

22:58Oh boy. Like a lot of things. What's the first? I think one thing like that sort of comes to mind is just scaling business and all that goes into just scaling the organization is always hard. It's perennially hard. Right. I think the human brain is not good at understanding exponential growth very well. Right. Even when you look at paper, you see, okay, that is like that is an exponential graph is going up. yeah like it's hard to wrap your mind around well like i already i changed how the organization operates three months ago how do i why don't you it's because you know that's how special curves work right like um and things like have to change at a really fast clip and so just really um continue to build that out and be efficient um and and operate like operate the organization um as it should be operated uh with the right people uh with the right structure with the right communication paths with the right sort of levels of autonomy it's tough um is it hard to like not only have to do this yourself but also you know you you have to find people and like you have to stay ahead of the curve so that when you know if it's growing you know and becoming a different company every three months you have to be growing into that yeah yeah i mean personally have to go into that like in terms of all that goes into running a company of you know exponential larger scale every couple months um it's you have to kind of stay ahead of that curve you have to be very much this is not unique to defense right this is any any sort of company as it grows is if you want to be operating efficiently you have to consider um a lot of these things who are the next hires the next positions that will open up in the next couple months that we should start hiring for today to be prepared to be because like a lot especially for like more senior hires like they will take a couple months to find the right person right you're going to interview a lot of people um to find the right person for that role and so it's like it's a multi-month journey and so if you start that process when you need that person you're already late right you need to yeah you you basically uh are on the back foot and you're always you're always on the back foot and so you're always trying to try to like stay ahead of the curve in whatever way and as a company you know it grows um there's just lots more levels of complexity and lots more things to to to build out And so I think that's one of the hard things that, that, uh, you know, I, um, I think people talk about, but you know, I think it's, it's one thing to talk about, one thing to experience.

25:15Yeah. What's been the biggest thing for you, uh, over the past, you know, a year ago, you have some mental models and after a year worth of growth and all this stuff, you think to yourself, oh man, I really under indexed on that. Or, you know, I'm going to change what I'm doing in the future. Yeah.

25:35I mean, honestly, I think I probably under indexed on, on the importance of really, really high quality people. How did that manifest? Um, I think in a couple of ways, but like, so you don't, when you see it, right, where you have, you bring someone on the team who's just an absolute, you know, killer, who's, um, uh, you know, going far above and beyond, like thinking three steps ahead and like, kind of you know not not like waiting for like a plus player yeah and like you know we have a lot of those on the team but like you kind of you hire that next one you're like wow like like we're so much further ahead than i could have thought of because this person like went off in that whole new direction even consider right um it's like you're almost moving so fast like you're succeeding too much that it's like hard to keep on succeeding everything's breaking and and so and like i think the thing is like as you grow a company as you grow any sort of system of any type you will have bottlenecks, you will have things that are broken, you will have things that need to repair, you will have things that need more, they can be operating more efficiently.

26:35And I think as you grow as a company, it quickly becomes too much for one person to handle, right? Like I can't be in every part of the company all the time. But, you know, hiring really good people means that you have really good representatives in all those parts of the company that are identifying those bottlenecks, that are identifying those inefficiencies, that are identifying new growth paths that we hadn't considered before new opportunities um and so i guess you know previously i guess i didn't i didn't really appreciate or value the importance of that um and what that actually people always talk about you know hiring good people but like what why like what does it actually mean oh is it like do really good work like write really good code not not really right um it's it's all the other things around the business and like around the operations around the system um that that's what really good people are really good at is everything else right not just the tech like you need really good people on the technical side for sure we need people who like think like founders and we hired a guy recently who was a former founder and and you know it's it's funny to see like the just the mental gear it changed like I don't know how it works but like the very different company and business as well but like um somehow being a founder like you know permanently scars you in certain ways but in a good way in a good way you learn to to really cut through the very quickly um and not get bogged down by by details and um one thing i've noticed is that if you like hire former founders or if you bring out former founders they just have way higher agency they don't they don't require a whole bunch of micromanagement they're just doing their own thing and they're kind of like thinking in that mode of you and they're saying like in your shoes like what should we be doing and they're trying to take those next steps without being told yeah no exactly and it's it's really hard to train people like i i i don't know why um because i think like former founders of all types of businesses have that sort of agency maybe they completely fail yeah even more if they fail yeah right because they like they've learned lesson the really hard way like they chew the glass they chew the glass and like gone through that that pain like they understand why did it fail right what what are the inefficiencies what could have changed before that that that that fixed it and how can we apply those lessons today right um so it's really hard to train people like you know people can kind of be be trained up to to to get to that on some small scale but i think you kind of get a chew glass to to to really get it on on on any sort of large scale are you trying to be really conscious about like who you hire right now because you know you are growing very quickly and you want to make sure that you're not like you don't have to make the decision twice i assume we made some higher mistakes um previously you know really smart really good people who just culturally weren't a good fit um and i think you know sort of you know learn learn the hard way with a lot of these things um i think we have about been hiring um at filtering out the right people not just technically but also those other sort of skills that really matter when you're at this stage of a company because you're not just going to throw someone at a problem you want the person like solve that problem very quickly and then figure out the next three or four problems that are beyond that that i hadn't considered right if that person solves a problem and sits there and waits like you can't be able all the time right um and so it's hiring the people that can do that um and unfortunately a lot of really good engineers are are the latter not the former um where like they could do they could crank out you know awesome awesome like project but then you ask like why did you do this because it was awesome yeah because it's hard because they're like doing hard things like that's not in this space it's like not a good answer right they don't have as much of the why yeah and like really get into the why um is really important so in our space like hiring people who were formerly the military very very important who understand things in different ways that um and sort of understand like the the multi-level multi-level sort of implications of a decision um that someone who is that from outside the space doesn't necessarily sort of understand how do you like um so i know it's a little bit hard to filter on the like going inside but like what does your hiring process look like to filter for those high agency you know go-getters um for for one role we hired or we really needed a personal fire agency we just did not respond to anyone who didn't reach out to us separately from the application like we didn't even talk to them right it's like if you need like if you actually have agency for this role you 100 email the ceo or something yeah exactly and like every time it happens and probably i'm gonna regret saying this but every time it happens like i will push that to the team right even if the person's resume like isn't super stellar um i think it shows a degree of agency which is like that's hard to train like teaching teaching technical skills it is trainable teaching those like the agency is really really really hard to train almost impossible right um i've had i had another person um that i interviewed say that basically if they if someone wrote a hand you know this is the towards the end of the interview so if they were watching through that maybe they cared um right but like if they wrote a handwritten letter and sent it to him they'd go straight to the top of the stack oh yeah you know yeah and and uh I think it's really important um and unfortunately I think a lot of companies disincentivize that right especially larger companies like oh you have to go through the right channels like the channel yes exactly the opposite the channels like I never had any respect for channels like they're stupid um they generally really are like they're just ways to build in more bureaucracy um you know find the quickest path to solving the problem right yeah I like the uh isaiah taylor's you know saying like attack the critical path right if you're a person without a job your critical path is to get a job how do you do that like who's decision maker who's going to get they get the job it says yes it's not like the third tier hr person like who just is like basically ai reading different like different resumes like that is not the critical path right find the critical path and solve it um um yeah so it's hard to train and and but i think we've in terms of the process um i still do the intro calls for pretty much every role today um very short like 10 15 minute intro calls you can tell a lot in 10 or 15 minutes of how someone operates how they think how they do they actually care um and from there i kind of push on to like the tech screen assuming they pass that like then do another round of of of coming up to meeting the team doing uh you know talking sort of more in depth and like what the problems are solving why they solved them on the engineering side i think you know one one you know excellent sort of piece of advice that i received is just ask them like what they did like 10 times like what's probably giving you different answers no no no like like in terms of like tell me a project you worked on your most product right it's like is a common question i'll ask okay what do you do on our projects like usually there's multiple people the product what did you do no no not like the what the product does like what specifically did you do right uh and then you drill down like what are some what's like a non-obvious problem that you had to solve when you were doing that every problem is going to have some kind of thing that's not obviously one and two you realize if you can't answer that you probably didn't like i don't know too much or maybe just like didn't like you were just kind of taking credit for yeah you didn't care like you were just kind of like you know cranking cranking things away um and you keep asking questions like that like really i think the candidates who who really excel are the ones who like get excited about that like oh this person actually cares about this weird little technical detail that you know there was some like weird kernel bug it had to fix and like this like uh uh that like you know kept this whole thing working like that's the kind of stuff that like wow like that person really cares and like they actually went to that next level rather than like oh yeah i just did it because i was told to like okay yeah and so you can you can tell it pretty quick yeah um what is the thing that's like weighing on your mind the most right now

34:51I think there's a lot more we could always be doing right there's always a new use case or mission set or problem to solve um and there's only so many resources we have to give it time right so many people to to to manage these things so it's constantly the the tension between spreading ourselves too thin and really concentrating on the opportunities that matter right um and this is a very relationship driven game it's very sort of intensive game that these the sales cycles for some of these contracts especially like the larger ones like a year multi-years yeah like going from like like completely new sort of ideation all the way through like large program like these things are multi-year efforts.

35:35And so they take a lot of intensive work to get right. And so I think one of the things that's constantly battling is how do we best deploy the resources we have, the people we have, the engineering we have to tackle these problems? And what What are the problems that, um, you know, are good opportunities, but we just, you know, we want to refocus on other things. And what are those like future things we haven't like, you know, unlocked yet? Like that's always is a very gut wrenching feeling when like you, you, you find, you know, the day after like the industry day for a large program, like the sale thing is happening.

36:17Right. Um, I think we've gotten much better at that in the past year, but like, it's still like these things still happen. I think it's just such a, such a large space. and so i think the thing that the ways on my mind is just like how do we um how do we manage that growth um and really capture the opportunities that will be transformational um which ones would be behind which ones do we go after um it's it's uh it's not easy it's like no it's a constant it's a constant struggle right it really is yeah um you have a very unique uh i mean i don't know if unique is the right word but your method of operating your business and growing your business is very different than the traditional playbook uh well like vc and startups yeah in the vc world yes but yeah who's who's like the the role model in your head for the type of business that you want to run like everyone builds every founder builds their business in a slightly different way and they have some idea of like the the company that they're excited to wake up in the morning to build.

37:15Yeah. Who's that for you? Funny with my grandfather. So, um, my grandfather, uh, told a story a few times. I don't know if I told the last one, but, um, you know, he ran businesses kind of his entire life, like small, so small businesses. And, um, he eventually, you know, had a farm in Ohio that was sort of a small, you know, did like, uh, cows and sort of small, some crops, like, you know, very, very sort of small business, um, middle-class, uh, kind of, uh, existence. And when he was sort of on his deathbed and, and, um, my dad who just started a business at the time, um, so one time I was like, you know, Hey, what, like, what's the secret, right?

38:02You know, you were very successful. You've had a lot of failures, a lot of successes. And he goes, son, got more money coming in than going out. Which sounds so, so like, yes, of course. But you'd be surprised at how, how infrequently like that's considered. Right. And of course you can make investments and you can kind of, you can have, you know, sort of lost periods where, you know, you're going to, of course you can do that. but on net at the end of the day in the long term you got to have more money coming in than going out or there's a path to get there right um and you know i very much you know am subscribed to to to grow very fast like a move very aggressively like really build a really big business um but like you can always sell you know dollars for 90 cents and you'll be you'll be you'll grow fast if you can supply the dollars right exactly like revenue wise you'll be you know like you can sell it all day right um but that's not a business right that's that's just uh like that's just a loss making enterprise yeah and and so you have to consider how that's going to operate um i think it's funny how how infrequently like that is considered um among a lot of sort of the venture space, especially in sort of like the hard tech or defense tech space, right?

39:31These are hard businesses. They're very capital intensive. They take a long time to grow. Of course, they can grow very, very large. And when they work well, they work very well.

39:42But you have to be incredibly driven by the finances behind it for you to actually build a sustainable like a sustainable long-term business right um i think people often scale too quick uh where they actually don't have that under the hood right they don't have any sort of scalable uh you think it's scaling too quickly or do you think it's like building not really like fully knowing what to build and like who wants to buy it or i think they're both sort of the same problem um where even if you have sort of like a good sort of product or a good sort of way of selling it. What does a business model look like and where is it?

40:22How do you, how do you adapt that for the given customer and how do you, how do you change it over time? And, um, you know, I think one of the things that becomes harder and I've even noticed this, you know, even as a 30 person company, it's like the way you're able to move as a, you know, three, four person company is astonishing. Right. Um, how long were you at that stage of just a few people? uh probably about nine twelve months or so and like are you glad that you didn't just like start hiring oh yeah oh absolutely like we we probably would have been dead at that point if we if we did um i was i really wanted to it was painful um but in hindsight that was definitely the best thing to not you wanted to hire people but yeah you decided not to we just didn't have the money was this one of the one of the symptoms of you know no one wanted to like fund you yeah yeah no i think and then they like that made us a much better business right because a lot like it forced us to really focus on how do we have cash has to be coming in the door yeah cash rest we're coming in the door we have to find a way to actually operate um as a business yeah right you can always burn money you can only sell dollars around you sentence you can always do that but i think a lot of founders are very like won't admit it to themselves when like that's what they're doing where they're just selling dollars for 90 cents, um, with good branding.

41:44Um, and you know, I, I always encourage founders to, to, you know, at least be cognizant of that. Right. Uh, which seems so obvious, like that's what a business has to do, right. If there's going to be any sort of, of success in the future, you have to have more money coming in and going out like that, like that is how businesses operate. Like it's how you do that or you eventually fail or get acquired. Like there is no path to long-term sustainability sustainability without that like it's just obvious right it seems obvious um and it's not to say like you know raising ventures is a really good tool for growing quickly you know assuming you have like a really good business under the hood that you can you can scale and even if you scale unprofitably you're ramping up your engineering you're ramping up your bd team you're ramping up a lot of the company and that will pay off like that's why venture is there that's why capital is there um it's not there to go burn a bunch of money and then ask yourselves like why you know when i finally increase my prices to be profitable nobody wants to buy it anymore like you got it you got to get to that point before you start scaling or you're going to sort of paint yourself into a corner that will be very hard to get out of as you scale and as you know it becomes just harder to to shift on a dime has the so has the like the frugality just been absolutely baked into your DNA as far as far as like a company and yourself because you just didn't have any money at the beginning.

43:11Yeah. And like, I know the last time that I came by PicoGrid, I was coming by the other location. The first, was that the first like actual factory? Yeah. Okay. There was people working like on the sidewalk outside because there was no space inside. I mean, there's a, you have like an extreme, you know, the utility per square foot was very high in that location. um at what point were you like okay it's time to expand as far as like actually getting this larger factory what what did you have to see business-wise and stuff uh to make that decision it's less it's very subjective um i mean literally like within three months we moved into there we had you know a couple hires recent hires be like we need to find a bigger spot like do we well that's what i heard it's like yeah people immediately were saying they always i I mean, like, I think people mean very well, and, and, and, but I think people always want to hire another person.

44:06They always want to have more space. That's always the case. Right. And so some healthy pushback on that is, is important, right? Um, to find this place, like it did take us to take us a while. Um, that what were you searching for? We want to stay in also going to know, um, which is hard to, to, to, to expand square footage and also going to, um, there's aren't that many places that are on the market at any given time. um we wanted a place that wasn't stupidly expensive um uh there were some larger places at the time that i just started looking that were like that were good size but um they were way way more expensive once i was on a purse purse where for basis where it just didn't make sense uh and so i ended up finding this place and jumped on the day we toured it um this used to be castellian's um uh office their first office they recently relocated to torrance to a much larger space in torrance um they sort of got sort of grew out of else you're gonna they they wasn't sort of space at that scale they could operate in um it kind of seems to be the theme yeah starting else you know as a small company and then by the time you scale up to like 100 plus people you kind of have to leave you kind of have to you know go to torrance or go to one of the industrial parks nearby um which is you know not great and like there are some places there's like don't come up at enough of the clip where sometimes you're going to get pushed out or some other requirements like i know isaiah ended up in in hawthorne not because of square footage but because of height requirements and like the the height for the reactor of the building um they couldn't find a spot in australia that had enough height in the building um i know teddy feldman's kind of dealing with some similar problems right now um there's huge you know drill with those drill rigs right like like these things are you know 20 30 feet tall um like you couldn't you couldn't really fit it in here without with it would barely barely yeah it'd be very tough um so yeah so like you want to find a spot that was like you know a good size um that was reasonable on like a dollar basis um i think like fit the fit the company which i think was one of the surprising things that we toured a lot of places they're like this is it just doesn't feel right it just doesn't feel right right it just doesn't feel like this is the place for the company to grow um and i feel like this place really really did feel like that yeah um was it just like instant you walk in here and you're just like this feels good yeah yeah it felt good i mean it's kind of uh funny enough like very similar in terms of layout to a previous spot just much larger in every dimension so previously had like one little like office in the front uh in like the front space um and now we have sort of entire like you know built out um office space a bit up here in the front we had the whole warehouse and space in the back like that's much much larger now um in all dimensions so uh just felt like a really good sort of uh scale for the company to grow into and i mean if all things go well give it a completely filled up in like a few months yeah give it give it a year or two and We'll be we'll be you know burst of the seams here will look like an Amazon warehouse Just yeah, I mean you start at some point you got to go vertical right exactly.

47:15I'm not going vertical I'm not yeah If you're not going vertical, you don't actually need the space exactly sorry You know we started like storing things on top of the bathrooms That was when we started to I was like, okay, maybe maybe we actually do need more space What are you waiting until people were like pounding on your door saying like we have to do something? There's not enough space Yeah. I mean, like, yeah, like, like what, I think what, what really kind of did it for me is when production started to take a hit because we didn't have enough space. And for us, as a lot of companies in defense, you can build multiple products because you're trying to serve different missions.

47:48You're trying to serve different use cases in different ways. So you end up building multiple products to that. So we have three different hardware products. Um, and one of the challenges of manufacturing on what they call like a high mix manufacturing line is uh sort of tear down and set up so you have different parts for different products um different ways they need to run through the production line different different tools there's different things right you can you can be smart about that used by reusing the same tools or using the same sort of fasteners across different things um but there's still sort of some tear down some setup for any production line and so what we got to with the previous spot is we We were trying to move production to such a clip that we would do a production run of product A, then do a teardown, which took a good day or two to fully get things reorganized, get everything all set up, then try to do another production line of another thing.

48:40It's almost like a chef's kitchen, and you have to use the exact same line for five different main things that take six or eight hours to prep each time. and so that was i think the big thing that that was a forcing function for me is realizing that like like there's actually a real hit to to production and and downstream of that to sort of revenue growth like it just dampen around growth and also just people being able to be effective yeah and so like we were we were we were late on like delivering hardware we were like falling behind on things like it was just really hard to keep up um and how long were you in that space was it like two years about a little over two years a little over two years moved in February of 23.

49:21If you had to guess, how long are you going to stay here? I think, I mean, again, like, human brain's really bad at understanding exponential curves, so, you know, I would say about the same time as the last place, but I think, you know, there's certainly a chance that with even like 12 or 18 months, I think there's, we might be kind of bursting at the seams with this current spot. So it's hard, it's really hard to say. I think when it starts to cause production capacity you to fall behind um where it needs to be for us to grow um so even if it costs more to be in somewhere else like it it makes like financial decisions yeah i mean you you want the space to grow just ahead of the company right and so i mean this place right now feels really big for previous but the last place we moved into felt really big for where we were when we moved in there right but it allows you to kind of ramp up um and uh you know be the business that you want you want the company to be and um when you're building physical things like a lot of that is constrained by by space um space multiplied by usage of space yeah um what is your typical like day look right now um kind of all over the board um still very involved in product um very involved in the engineering of of all the things we're sort of building out right now internally um which i you know i still love to do um like that's what my background is is on is on really software but on product more generally um still involved in that less so than you know used to be driving a lot of the BD sales and growth conversations and kind of stepping in when it makes sense for me.

51:09Do you try to be as close to the customer as possible, like personally? I try to. There's still a couple of customers that I'm on a texting basis with, especially some of our earliest customers that are still sort of sticking around, which is good. And when I can, trying to get to the level with other folks as well, for new customers and and understands what their problems um it's tough now because to get to that level you need a lot of like dedicated hands-on time which is hard to to you just have don't have all the hours in the world kind of thing yeah you just don't have the time to to to dedicate that that amount of attention to it to a given unit so oftentimes like um other folks on the team will have those kind of relationships with different folks um so do it do quite a bit of that.

51:55Of course, hiring and just like building out the company and the operations of the system as well. So split kind of across the board. And I think I was asked recently, like, but one of the new hires, like, you know, what do you, what do you do? It's a fair question. It's a fair question. Like, you know, I think my, you know, as I see my job is, is sort of twofold, right? so primary focus is identifying and putting out fires right like be the firefighter right and and fires aren't necessarily always uh uh like the company will end tomorrow if if if we don't solve this but they'll get there right if you if you let them sort of smolder for long enough also partially like figuring out if even if there is a fire like is it worth actually spending time I'm on and trying to put it out in the first place so I the weeks where I'm the most nervous and most on edge is or weeks where I don't see a fire because I know it's burning I know there's something burning so you're you're you just got like anxiety in the back of your mind like sleep you know yeah I will sleep at night I'm just trying to fucks going on truly like honestly when when when when uh when everything's going right you get nervous I mean I'm more nervous than when things are going wrong um which is which is a really funny thing I've sort of discovered um so like that's that's one which i think is like and that's like the so keep the business running keep it operating keep it operating efficiently uh the other one is is is growth right not just growth in terms of like new new customers but what are the new products what are new angles what are new like avenues to um to go down that are building ahead of the curve right um that is a big part um it's what you know i've always done but but i think even more more recently that now we have teams that are handling the engineering, we have teams that are, we have teams that are handling operations.

53:46We have teams that are handling a lot of the, the, the, the broader functions. I still have to be involved on some level with that, but it's, you know, it's growth, right? It's, it's, it's, um, moving in the right direction, moving the right direction, you know, trying to see around corners, trying to, you know, like I was saying earlier, right? Like who are those people we need to be hiring three months from now based on our current trajectory and our current challenges that right now are like yeah it's a little bit uncomfortable in three months it'll be like this is a real like limitation to growth solving that now like total bottleneck yeah trying to figure out what the bottleneck is trying to figure out not what the bottleneck is today but where the bottleneck is in a couple months from now what's your hit rate like on figuring out those bottlenecks like has has there been any in the past you know 12 months where you just didn't see something coming and you know three months goes by you should have been working on that and it just absolutely crushes things it's a good question it's hard to say it's really hard to say right I think there's there's plenty of cases where I wished I I'd move faster or sort of moved earlier to to hire someone or make a change or whatever everything's clear in hindsight so it's hard to you know beat yourself up about it um yeah you shouldn't even necessarily beat yourself up about it it's just like you know if you hit if you get like 12 out of 13 you've done a great job yeah i wouldn't i wouldn't say it's that high um again like human brain's really bad understanding one extra maybe yeah um but you know anything reasonably well um but it's always balancing it right against like where we are as a company like you know the more senior the higher like these people get very expensive right and um but it's not just that it's also how we operate right a lot of really senior people cannot operate by themselves they need a team to operate efficiently and effectively so you're not hiring one person you're hiring five right the person and like sort of you're hiring the guy that can control or like manage those yeah but like they won't be able to operate until they have that team under them or like they're just paying a lot of money for someone who who cannot operate we we made a sort of hiring mistake at the end of last year where we hired somebody who's very very senior very experienced like very um paper on paper exactly who we we needed um you know i think unfortunately and and you know i think it's just really like just not a not a good fit um he just had a hard time you know meeting the culture the pace and like the way we operate um and and would have been really good if we had a team around him for like this role we didn't right he was he was the person for that for that that space you kind of want to build like have him build out the function yeah yeah um and i think it just didn't just didn't work he came from some larger companies um i think was really interested and sort of mission driven about working in this in this space but um at the end of the day you need people who can operate and who can who can um who can work well so you know unfortunately had to had to cut him loose um how fast do you make those uh decisions when someone's not working like is it does it take a week two weeks when you know it's not working it takes like you know just you just make the call instant yeah um but sometimes it does take a while to know that it's not working right people need time to ramp up like they're not gonna be good perfectly day one so when do you call that right it's it's it's tough um sometimes you just know right um sometimes it does take a little bit of extra time um there was a case last year um really amazing engineer but just was not fitting with the team wasn't it wasn't just not a culture fit not a culture fit um i think took a lot of baggage from like the previous industry um he was working in uh that was not a good fit for how we operate um and i i wish i i'd cut it earlier for for both for him and for us as well um because it just wasn't wasn't a healthy um healthy thing so um you know had to come i probably waited a month too long on that front um but uh was it kind of like thumb sucking where you just like know what you should be doing but you just don't want in hindsight in hindsight yeah like in hindsight like yeah i was like this this guy's just not working out and i think i just gave him too many too many chances um did you update your model at all or did you yeah no after that week i got much more sort of like trust my gut um uh but you know everything is clear in hindsight yeah okay let's end on you know what over the next like six to 12 months what are you most excited about um it's a great question i i there's a lot of things um i mean we get to support some of the most critical missions for the u.s military um which is there's a lot of really exciting work on that front um of course it means it's very difficult to share publicly um but i think seeing the culture shift on the military side now change um and kind of being ahead of the curve on that front has has put us in a really really strong spot um that there's a lot of opportunities that are kind of opening up now um for us to grow that i'm you know i'm very very excited to to move into and support um and really help the our customers kind of meet the needs that are that they know they need to hit and don't really have a good way to hit them and so there's a lot along that front of course like that comes down to product and product is kind of an enabler for that but I think what I'm most excited about is helping actually drive those missions forward and do what we can and adapt the product whatever way we need to adapt it to to help them operate