20VC: The Future of War: Are We Ready & What Needs to Be Done | China, Russia and Trump: What Happens Now | Raising $828M to Build the Defence Champion of Europe | Torsten Reil, Co-Founder @ Helsing

23:24It's like China. North Korea. North Korea. For example, that we would agree on. Then there are others where it becomes a bit more complex. One of the main reasons we do these workshops is that we get everyone to contribute to the decision process, but also for everyone to build what we call this ethics muscle. Because for me, everything was kind of, there were bread lines, everything was black and white and it was kind of easy. The more you dive into a particular topic, the harder actually it becomes to make these calls and the more complex it becomes. And that is something that we didn't just want to decide kind of in a small group of people or some small ethics group.

23:57We wanted everyone to contribute to it so that everyone had buy in and understood the pros and cons. Not everyone may agree with the decisions that we eventually take, but everyone can see how we arrived at those decisions. What decision did you take that was most unpopular? I don't think decisions have been particularly unpopular yet. We just recently announced that we are building strike drones, we build strike drones software as well, and that is, you know, for all kinds of complexities that you have to think about around the ethics, side of it both in terms of technology usage, how it's used, etc.

24:28And that is something that everyone contributed to the thinking around this. We managed to shine a light on areas of technology development that I can't go into sadly that actually we probably didn't think about that much before. So the other important part is that if you have a lot of, I think, intelligent engaged people look at the ethics problem around technology usage, conops, the concept of operations, you just shine a light on kind of any kind of remaining area and so you just have a much better coverage of all the questions that you have to do. Before we go to this, very important news.

25:01So you don't sell to those three. Who are the ambiguous? US. Here's the light. Well, the easiest way to look at clear and not clear is to check out the economist democracy index. That's what we used initially. The economist democracy index. Exactly. So the economist releases a list every year in a ranks countries according to how democratic there are with 10, I believe, being the highest one going down to zero. And so the ones at the top are easy. The ones at the bottom are also easy. And then it starts becoming more complex in the middle because you have some countries, even in the EU, where in the past they haven't been kind of ranked that highly, but then governments have changed and they've ranked more highly again.

25:39So it basically becomes a moving target. And then there are also considerations around are they parts or are these some of these countries that are maybe in the grains, graze on part of democratic alliances that become important for democracies to survive and protect themselves for example. I think about the transience of right and wrong and what I mean by that is that, you know, when Israel, terrible, the seventh happened, it was like the world got behind Israel, and now we've seen the backlash against what's happening, Gaza, and one could argue that they fought back with too much force, and what was a worthy customer may become an unworthy customer?

26:14I think these complexities are there with any conflict, and eventually it becomes complex, and there is no right or wrong. I'm always aware that this sounds like a cop out. And this is what I've always been afraid of is that when you say it's complex, it sounds like a cop out, but it isn't a cop out. It is actually complicated and complex. And you also need to wait certain components in a way that can be arbitrary. And so every conflict, I think, has these kinds of complications. And it's our responsibility to navigate it. Again, we could just lean back and say there's export law that makes it really easy.

26:48But I think if you want to have people really engaged with these kinds of technologies and capabilities in a company, you need to go further than that, you need to build a view that goes beyond just what is quite static export law. Has there ever been a case where it's like there's European sovereignty and supporting Europe and making sure that we get great provisions of amazing equipment versus actually the money is to be made elsewhere, money is to be made selling in the US in other countries and actually you have a balance between European sovereignty and revenue optimization. Well, yeah, I mean, the housing was founded to support Europe and to be a European company also to be a European lighthouse company and a company that helps Europe protect itself.

27:27So that's always the number one thing. And if people ask like, what is it you want to, you know, where do you want to be in five years with Heltsing or what is it you want to achieve? It's very simple. We want to make Europe safer. We want to be able to point at the difference that we've made in terms of the geopolitical security of this continent. That is the goal of the company. Everything else has to follow from that. Obviously, it needs to be a company that's large enough so that it has leverage that it can deploy a lot of equipment that can work with some of the most complex systems like the Eurofighter that we're working on.

27:59But that's all the means to an end. The goal is always to protect Europe. I do want to stay on the drones because otherwise I'm going to discuss Europe a little bit later. On the drones, it's a massive introduction moving to Hardware as well. It's a big new chapter for the company. Why did you decide that now was the right time to make this big new change? Just talk to me about that. Yeah, I mean, Helsing is a software company as a software first company. It always has been and always will be. Almost everyone is a software engineer. That's what we've come from. That's how we hired. And we are in a large number of large contracts.

28:32For example, we're working with SAP on the Eurofight Electronic Warfare Upgrade program. That's pure software, our contribution. And software can make a massive difference in this particular case AI can, because we can start to read the intent of shape shifting anti -aircraft radar systems. And so software plays a huge role, and we always said it creates a 10x multiplier in terms of capabilities. That's still the case that will always be the case, and we will always do those software programs. So software and software contracts work in defense, even though some people say it is impossible, it clearly is possible.

29:06However, there are some areas where software needs to be, it needs to have a hardware carrier. With a Eurofighter, we have a combat aircraft as a carrier, that's great, and we're not building a Eurofighter. But with drones, you need to think about drones differently in order for them to have the effect that you want them to have, which is basically precise mass. So you want to be able to have a large number of drones extremely precise to provide a deterrent that doesn't exist at the moment. And so for that, you need to have large numbers of drones. You need to have the ability to manufacture those drones in a way that isn't the case right now.

29:39Most drone companies right now build small numbers of quite exquisite drones that are quite expensive. sometimes a bit of a boutique business where people really care about the hardware and the carbon and everything else, but that's not what we need, what we need is really scaled up production. And so when we looked at what's required in terms of capability, we couldn't certainly on the West America, we couldn't find anyone who was able to produce these large numbers. And so that's when we started to look at, can we build these kinds of drones ourselves and can we think about it differently from a software first point of view, meaning that But we can shift a lot of the complexity from hardware into software.

30:15We can simplify the hardware and we can manufacture it in much larger numbers at lower prices. And that's what we did with the HX2, which we just announced a couple of days ago. How does the company need to change with the integration of hardware? Respectfully, it's the software first company, where the software engine is. hardware is an entirely different rule game. It is and it isn't. So it is in that there are many areas where you need to have hardware experts. and we've built an amazing team that obviously deals with things like the design, the components, but also the supply chain. And that's different from software.

30:47But you can think about hardware as well. You can optimize a lot of parts of hardware by shifting complexity into software, and you can also test hardware in software. And so we spend a lot of time building infrastructure for the entire company around simulation platforms, for example, AI infrastructure platforms, etc. And some of that technology is also applicable to hardware. So we've developed our drones extremely fast and we've tested them extremely fast and the reason we're getting to that kind of iteration speed and it is all about iteration. It just iterate iterate iterate. It's because we can move a lot of the testing into software and only when we get to a certain point we move it into hardware.

31:24We test it in hardware and then we go back into software again. So these two things if you do it well, which we're trying to do extremely interlinked and the best hardware companies I think that software companies and vice versa. What can you not test in software that has to be tested in Hover? Software can, with the right simulation environment, go really far. But there will be some things that maybe you didn't expect that aren't covered in your simulation. That happens in particular when you deployed as our drones are in Ukraine. Then the realities of conflict with all things that you just didn't anticipate.

31:57And so that's something that you have to test. Can I ask you? I spoke to someone the other day. I was a unit defense company and they said the challenges compliance, especially around drones, that a lot of governments cannot buy single -use drones because of the single -use nature of it. My question to you is, to what extent does compliance become an inhibitor to government procurement? It is an inhibitor, like many other things as well, but for the complaints that we have about procurement everything else, a lot of these rules are also there for a reason. Are they always applied in the right way and in as timely a way as ideally would be possible?

32:31Probably not, but the rules quite often make sense. What's the craziest rule? I think there are lots of rules and it's frustrating, but if you enter the fence as a company, that is what you've signed up for. And so you'll rarely hear us complain about how slow procurement is, etc. Because people want to do the right thing. The procurement officials also want to do the right thing. And by the way, I think politicians do too. It's just that eventually you end up with a system that's going in a long time where the incentives aren't quite aligned with the realities of conflict. Well, this is my point.

33:00Are they incentivized to innovate or are they incentivized to continue long -standing relationships with primes where there is zero risk of job loss if it goes wrong? I think the system probably incentivizes the latter, but that doesn't mean that there aren't individuals actually across different forces in procurement agencies, but also in politics who really want to innovate. It does exist. How could the structure of the system be changed where innovation and procurement of new innovation is encouraged, not job loss avoided? So, they're all kinds of, I think, little things that you could do, but what we are suggesting is that you introduce a mandatory 20 % on new defense companies for defense equipment.

33:38That is the easiest way of doing it. So if you reserve of your defense equipment spend, so not the stuff on maintenance and everything else, but actually defense equipment, if you reserve 20 % of that to new defense companies, which you can define, that is a shortcut to actually re -aligning incentives. What is the current spending on new defense companies? I think it's less than 1%. it's incredibly low. And so a shift to 20%, a shift to 20 % though is just else. I mean, there are not that many other defense startups. Not at scale. No, I mean, they're smaller ones. Yeah. But not at scale. We mentioned the compliance element there.

34:11What are the other hardest elements of selling into government that are not often discussed? There are many. The first thing is that you also have to have relationships with governments, with the right decision makers. You have to have a government relations team that deals with all of that. And in Helsing's case, it's not just one country, it's several. And so we're active in the UK, in France, and in Germany, just recently opened an office in Estonia, and there'll be more over time. So we have to have those relationships with various governments. You have to then think about how do you deal with lobbying from industry?

34:44So not every prime in the defense industry is yet our friend. I think we want to reach out to all of them, but not everyone sees us friends yet. Who is your friend and who's not your friend? Well, I probably am Sab is a friend for example, we work very closely with them. Um, the shareholders in Helsing as well, okay, the close friends. Others, I think it can fluctuate. I don't mean this in just I, I think we all genuinely need to work together. I think we all have bigger fish to fry and defense primes will always have a role. We don't think that they, they will disappear. In fact, I actually, I think they will, they will grow if we do things right.

35:17The thing that we have to avoid is the Tesla moment for the defense sector. If there is a big wave coming of new technology and it's all around autonomy software and AI Essentially again precise mass if we collectively including the primes don't understand that and don't adapt The same thing is going to happen to defense as happened to the kind of street the new wave was electric software and autonomy What does that mean if it happens? And why is that such a challenge? We're going to be faced with a large number of autonomous systems from our adversaries that's going to be the focus that they're going to take.

35:51And by the way, it's quite likely that they won't have the same ethical red lines that we as democratic societies should have. So they have from a functionality point of view, I think they'll have the ability to take shortcuts that we don't want to take. We have to earn the luxury basically to be able to really care about ethics, and that means that we have to have technology leadership overall. Do we underestimate the capabilities of Russia and Iran specifically? Yeah, I think so. I mean, they're quite clear for everyone to see Iran is producing a large number of drones already. They've been using and working on the Shahid for example for a long time.

36:24They've licensed that design to Russia, Russia's now manufacturing it itself. Software is getting better over time. Russia has the Lancet, which is a capable strike drone, quite different from a Shahid, which I think they've developed themselves. And the software for all of these is getting better as well. We're going to be faced either to Russia alone or through partners like Iran with adversaries that are committing to precise mass, large number of autonomous systems that we're going to have to counter one way or the other. And you can counter them, but you can't counter them with the current systems that we have.

36:56You can't just have exquisite systems like tanks or artillery guns that are not particularly well connected that take a while to take a shot. you need to work basically at the speed of software, you need to interconnect all of these systems, but crucially you need to have precise mass on your own side as well. You need to have the ability, however horrible that sounds to have thousands and tens of thousands of strike drones, to deter. Do governments understand this? I think some governments are starting to understand it. I think governments at large probably haven't understood it. There is a big wave coming towards us, and it is autonomy and software in defense, and it's unstoppable, and we're just going to be forced into that race.

37:33When you say autonomy, software and defense, can you unpack just how you see the future of warfare and conflict with AI and autonomy in mind? We can already look at Ukraine and look at the trends there and the trend even at the beginning there were some drones that were being used. Remember the TB2s for example from Turkey over time that's evolved towards more and more drones. Initially it was to make up for lack of artillery munitions. Now actually the drones themselves have such good success that more and more are being built. And I believe Ukraine is building one and a half million FPV drones, the small first person, few drones, drones a year.

38:09I think Russia is building roughly the same. So there's already a shift towards mass and reasonably precise mass. What hasn't happened yet is that those drones are scalable, but that will happen in terms of the usage. At the moment, you have one operator operating one drone. It's going to happen quite quickly that that's going to change and you'll be able as a single operator to control multiple drones. And that trend, I think, will see playing out as early as next year. It's not long now because the algorithms are all coming. We know this because we have those algorithms too. You said there were about drones having success.

38:39How do you measure success? I think it's the ability to hit a target. It's hitting a target that itself uses electronic warfare, so it tries to jam the signal of the drone. These are some of the bigger problems right now that Ukraine is facing and that that nature will be facing in a peer conflict as well or any other country in a pure conflict. So drones themselves, if they just remote controlled drones, eventually have the problem that they can be jammed. That's GPS jamming, so it doesn't know where it is, or it comes jamming, which means that the control input to the drone or the video feed back from the drone to the operator is jammed and therefore you can't use it.

39:14So this is the problem. I mean, there's a jamming station, the front line every few kilometers right now, so it's almost impossible to get around jamming at the moment. The thing that Matt from Andrews taught me is actually the different economies of conflict. And what I mean by that is that you can send one very expensive million pound drone in and it can be shot down with a 50 ,000 pound missile or whatever that is. And you can continuously have this mis -economies or mismatching cost versus kind of breakdown. Yeah. How do you think about that? It's the same thing with strike drones and tanks and artillery.

39:46A tank costs several million pounds euros. A strike drone is much, much, much cheaper. Depending on how things play out you need one or maybe two or three strike drones even with countermeasures to actually overcome a tank. That's basically the danger, same as triphatellar systems. They become very hard to defend and the problem with mass, especially precise masses, that you can solve almost every problem with saturation. So even if there were countermeasures to say on the tank side, so what you mean you can solve every problem with saturation. It means that basically instead of sending one, you send five.

40:18If they're cheap enough, you can just do that. And at some point, you just over -saturate defenses of an expensive system and it's still very cheap to do it that way. If you just think about the economics of it, you still have a really strong asymmetry. And so it'll become harder and harder unless you find a way to really counteract these systems, which is hard to send expensive tanks and tele -systems into battle when on the other side there are striker -ons that are much much cheaper. Is the future of all contactness in terms of human contact? Ultimately, yes. I think ultimately, again, you can already see the first science in Ukraine, some areas of the battlefield are essentially no -go zones for humans because you have drones buzzing over you all the time.

40:56I think that gives us kind of a first indication how conflict is going to evolve. It'll be impossible and I think ethically extremely problematic to send humans into a battlefield that is facing large numbers of autonomous intelligence systems on the other side. What is the point of a battlefield? I know that sounds like a very strange and glib statement, but if it's just an empty landmass area where you have drones flying conflict against a lot of artillery. What are we doing here? Yeah, I mean, it's usually not done in a way that this kind of is a quested field and you know, you work it out and then whoever wins, wins the conflict obviously.

41:28It tends to be related to obviously physical proximity to errors that matter, you know, whether it's ports, certain routes obviously or other important landmarks. That's where battlefields tend to be located. Honestly, to also listen to you and I'm quite scared, like when you think about autonomous swarms of drones. It is pretty terrifying. Does it scare you and is it right to scare you? Yeah, I think it should be disconcerting to all of us. I think we should think about it and think about the implications and we should think, and I don't think this is happening enough, I think we should think about, are we want this technology to work so that we can still stay safe, but we don't have to compromise on our ethical standards.

42:04Are we seeing a change in public perception around defense spending? I think so. So if I look at polls now, I think for most countries, population agrees that more needs to be spent on defense. I think when it then comes to looking at what is going to be cut I think people probably will differ and being very concrete will make I think that kind of view a little bit harder I think overall populations get it whether politicians currently have the courage to actually implement it is a different matter I think in some countries probably that's going to happen we talked about Poland earlier in others.

42:35It's taking longer if I want to say Hey, you're UK defense budget. This is yours and you are my new defense minister How would you allocate it? Again, 20 % of new defense. It sounds self -serving, but it's absolutely required. If we just keep buying the same kind of equipment that we've bought before, if we don't network it, if we don't give it AI, if we don't produce precision mass, we won't be able to deter and we won't be able to defend ourselves in the car. The crimes delivering what they should be. And Matt, Grimm, very articulately said that they simply just take too long. They probably do take too long.

43:07I think they incentivize in different ways. The US is different to other countries. Every country is different and the various primes are different as well. In general, they're not incentivized to spend a lot of their own money on R &D. It's probably less than 5 % or so for a company like Helsing, it's almost all of it. I mean, we pre -finance almost everything. That's why we raised quite a bit of money because we need to be able to spend on developments before we actually, because first of all, we have to prove that it works and we can't wait for governments to eventually get it and then fund it.

43:38And then in eight years, we have a system. We need a system in eight months, basically. Or let's make it a year or two years. So one, we have 20 % need defense. What else? I think again, procurement needs to be reformed. Everyone knows that. The reason we don't talk about it that much is because it will take a long time to do it. It needs to be obviously faster, probably less constrained. And the incentives need to be aligned more again towards speed, which are not right now, which makes it harder for the individuals there to do what's right for that particular society speed. You're the defense minister.

44:09You will listen to this. Yeah, well, first of all, I think you simplify the processes, but you also make sure that you actually set deadline, so they're quite tight in terms of when you actually produce something. And then you try to work with companies that want to work very hard and fast, and you incentivize other companies that maybe have a different way of working to do the same. Primes and hardware need to work together with software but to be really effective for future conflicts. What is the market composition at liking the future? Because at the moment, just have primes basically. What is that market composition at liking the future?

44:41I think it will be similar. There will be primes and then there will be supplies. How many new primes will I be? Very small number, extremely small number. So for all those doing defense funds, building defense portfolios is defense in itself a category or is it the classic, but if you want to invest in housing, don't do the next housing, just do fucking housing. So I think what happened is that the VCs that really get defense and they are a number have already kind of made their bets on defense companies. There is now kind of a second or third wave of VCs that go into defense and fund technology teams which is fine in a way.

45:17But my question to those VCs would be like, wow, what is the exit route for those companies? Who's going to buy them? You or I? Yeah, but we can't buy all of those companies. And also the question is whether we would buy them at VC valuations. I mean, the exit opportunities for companies are either an IPO. For that, you need to be a prime. You need to be multi -domain. You have to have all of the foundation of having built software infrastructure, everything around security, physical security, cyber security, government relations, export law, compliance, and everything else that all has to happen.

45:49And then you have a shot of building and customer success team as well. It is, I, I, defense is so complex. I like having built a games company which I thought was pretty hard, the offense is just on a different level. Impossible, I think if you don't have a founder team that already has experience in some of the areas. All the majority of VC dollars going into the defense companies today are going to go to zero. I think for some of the more fragmented tail, maybe not to zero, but I think they're going to go down. That is the biggest opportunity to deploy dollars in defense today. I mean, I'm biased, but I think it is around those companies that have got to scale, that have programs of record and that are basically active in a conflict.

46:28The difference between a company that, first of all, maybe R &D contracts and has a program of record, that is already a big difference because getting over that hump of getting a program of record is huge. Why is it your own record? What is a program? It's an official program by a government that has a certain size rather than, I mentioned the Eurofight Electronic Warfare upgrade. That was officially awarded companies pitch for it and eventually consult your pitch for it and eventually consult you and want it which is sad in us in the end. Those happen regularly and they tend to be quite large.

46:59They run over several years. By contrast, there are innovation projects which is quite often almost a parallel track to all of this where there are smaller pots of money to prove that certain forces or nations can do innovation and defense. The problem is you may kind of get 500K from one of these projects and you win it and you show to we see with made revenues, the jump from there to actually a program of record is huge because all of the apparatus that's required to pitch for these programs to have again the government relationships, some of the lobbying that's required compliance against expo law I mentioned earlier that isn't required for these innovation projects so these kind of teams have a feeling of I've now taken the first step now the next step is a program of record not realizing it's a completely different catalog fish and again I had to learn all of this because for me it was natural to make the transition, what will be needed for them to make the transition successfully?

47:50They need to build the teams around it, and this is where one of the problems lie. There's a scarcity of talent around go -to -market government relations, even compliance and other things, even security, to be honest, in defense. So all of these companies would be competing for a very small pool of people. It's just impossible to turn them all into primes. It would just not going to happen. Coming back to the innovation side, you end up with something that looks like Product Market fit, and you think it's great technology. you've shown it and you can do something, maybe take a drone down or something.

48:17But I had to learn that that is just a very small part of building a prime. It's like one eighth maybe or something is product market fit. Then you have to do all the rest and for that you need to build the infrastructure to build a prime. Which Android has done for example, it's a good example. We've done it too. We're certainly in the process of doing it and you know still a ways to go but I think that's what's underappreciated and it's it's not underappreciated with we see that know about defense, but with I think we see that maybe as distant as I was when I was previously in the gaming industry, I think for them they quite often don't get what it takes to actually build a large company.

48:51Do you think naivety is a wonderful benefit of non -pronashhip or 80 %? 100 % and most founders will say, had I known how hard this is, I would never have tried. How do you know how hard this is? Would you have tried? Elzing? Yes. Yeah. With natural motion I went through some really tough times. Why Helsing? Yes, natural motion, no. There's several reasons, but the main reason now is that three founders, it's easier to build a company even when you go through really difficult times because you have each other to rely on, you have each other as a sounding board. Sounds a bit cumber, yeah, but it's very important.

49:24Yeah, it's what's been the hardest moment where you needed them to get through it. Well, we've been through hard moments, like throughout the company, but really difficult times were over the last few weeks when we had to will into existence a hardware platform. Having come into it, not knowing much about it, having to do it in record time, having to think about supply chains, and everything else around it, I mean, that's difficult. And you do it while there's lots of noise in the market and all kinds of other things, and you still have to build a company. And it's time consuming, there are lots of setbacks, and it is much easier to do it if you have several shoulders, rather than just one, to get through all of this stuff.

50:01And there'll be more setbacks happening, like with every startups, you just don't know what's going to happen and there'll be, you know what it's like with a startup, that's what they experience at Natural Motion. You're already on the floor, you've already been punched in the face several times, and then another one comes, and then another one comes, which you didn't expect. Those are the worst is when you're kind of already, I'm done and it's relentless. The only thing I would say is that with Natural Motion, we got out of it eventually. Even out of some situations that were very hard to get out of, we still managed to do it.

50:30And it wasn't some kind of... Now the natural motion journey's over. Can you share one that's like an oh shit. One was when we did our integration into GTA 4 with our technology Euphora, which was an animation run time engine. We had already optimized the hell out of it. And we had great optimization people for gaming consoles. But GTA 4 was an amazing game and really pushed the consoles to its limits. And now I felt the technology was great, but there was a point where we got a call from Rockstar saying we don't have the performance budget for your engine anymore. So you either run another 10 times faster or we can't use it.

51:04And I remember putting the phone down and thinking we are fact. And like I was sure we are fact because we'd already optimized everything. This was one of those moments where a number of our engineers eventually went to Edinburgh to work directly with the team there until they somehow managed to get that performance gain. And the engine stayed in there and it was the beginning kind of of natural motion proper but because it was such an important game and it made everyone proud. It's also taught me about how exceptional engineers can make crazy things happen. And I was convinced this wasn't gonna work out and they made it happen.

51:40Like to this day, I have so much respect for great software engineers. The best software engineers, they make all of us look good. I spoke to Shaq before the show and he told me I had to ask a question, really focused around a quote of yours, which is, capital isn't the problem. ambition is when it comes to Europe and our current state. Yeah, so I think people complain about all kinds of things about Europe and in general startup environments. I don't think that there is a lack of capital in Europe. Certainly not seed, series A, sometimes even series B. You could even argue this too much. What's missing is to some extent operational knowledge because we haven't had as many startups that became big as the US specifically Silicon Valley has had, but I think more important as ambition.

52:21It's ambition specifically on the side of a founder ambition combined with aggressiveness. And that aggression, that lack of aggression, that lack of ambition holds almost everyone back. And it's still acceptable to build companies and sell them at a value of 100 million. And I understand why, because it's life changing for everyone, but it's actually not what Europe needs. We need much bigger companies that actually create sovereignty around some of the key areas in ways that just currently don't exist. And for that, you need to have founders is that have that ambition. First -time founders, all you need founders, that are second -time or third -time founders, have already learned a lot and go back and do it one more time because quite often you actually much faster the second time around for reasonably obvious reasons.

53:01That doesn't happen as often in Europe as it does in the States from what I can tell. And I always wonder why that is. And sometimes maybe it's because Europe is a really nice place to retire in. Lots of things that you can do about a house, an interior, whatever and not work. But that is not good. We need all of those people back to start a second or a third company. How do we change that? The founder community needs to talk about it more. It's a mindset thing. I personally think we all have a contribution to make and a contribution to make society as founders. I think we have a responsibility to actually contribute.

53:29Some of that contribution is to help Europe become sovereign and particularly around key technologies. Do you fear that we are falling further and further behind? So I think we are falling behind, but that trend isn't new that that already started a few years ago. And part of the reason we wanted to build Helsing was to show that you can build a company in Europe fast, to scale, in deep tech, and just provide a shortcut. Actually this is doable. And we wanted to show that it's doable, including the fundraising. So I think Europe is falling behind, but it doesn't have to be that way. So the things that we have in Europe and particular talent, we have incredibly good talent, including on the engineering side.

54:06We hire almost exclusively from Europe at the moment. And the talent is amazing. The talent pool is amazing. People's attitudes are amazing. There's none of this 9 -5 mentality. People really want to make a difference and they work hard and they work intensely wherever that's required. So I think that's a myth. What role does US capital play in this journey for European companies? You have seen it money from GC, from E -Like -Gill, from some big US players, I think it's a sell as well. What role does US cash play? It plays an important role, I think later on. The ability for European investors to provide growth capital, that's lower than it is in the US.

54:41But I don't think that's the problem. In fact, in many ways, I think that's probably a feature, not a bug, because I think exposure to US culture, but also investors is extremely useful. I was lucky to have it. Natural motion benchmarks as one of our investors with Mitch Lasky as our partner. Part of the reason why we eventually took off was also Mitch and the way he thought about how big this company could be, how should I should think about portfolio, not think too small, that was extremely helpful. And so I think that injection of US mentality to European companies at the right point is extremely helpful.

55:16And the cap table, true for housing as well, it's still Europe dominated. We did our seed round entirely from European investors. Daniel and PrimaMateria came in again, European. So later on, we took American money, but the companies did a European company. Is there anything you think people don't see about Europe from the outside? We have a huge US audience. The US just loves their, hey, you guys don't work. you love to have us brassos and have what life balance, not ambitious, self -100 million. Is there anything they should know that they don't know? I think it's pretty clear that the current narrative is a caricature of Europe.

55:51There are some elements of truth in it, but they've been extremely exaggerated, particularly over the last six to 12 months. I think if you go on X. But when you look at what Europe is doing, I try and be positive. I'm in London. I build a career in London. I build business in London. I'm staying in London. And my challenge is when you look at the German government, when you look at the French, when you look at the British, we're all just becoming further and further dependent on state subsidies, increasing public employment, and we're becoming more and more uncompetitive. That is a trend right now, even three and a half years ago, when we started the company, that trend was all you there.

56:26The question, and with all of these situations, is what can we do to change it? What are you doing to change it? We felt we had agency by looking at for example the problem of European sovereignty and specifically around defense And we felt as founders you have the privilege of having a massive lever which is you can build a successful company in this space You can actually make a difference. I'm pretty sick of people just commenting I mean, there's all you know this like there's a whole LinkedIn economy built around just complaining Same as true on X and just commenting and those comments that were there with nothing none of the commentaries worth anything the only thing that matters is if people actually do something.

57:02That is, start a company, build a company, it's going to politics, start a new party, whatever it is. But the current attitude of just complaining is, dress them crazy. Right, okay, go. Point taken. Come to my studio. I can't point fingers. No, I completely agree. I was actually at a dinner at the other union. They were talking about policy and it was kind of a rich person's dinner talking about policy and it really pissed me off because it's like pontificating means nothing. Exactly. actually just build companies, investing companies, support your founders, be founders, just do it. Yeah, it's interesting.

57:33I also think that people over index on the environment and about having the right regulatory settings and tax and everything else around it, I actually think none of the stuff really matters that much. I think what really matters is founder quality and founder ambition for country to be successful. They should attract the most aggressive founders and everything else is a lot less important. I spoke to Macliffe before the show and he provided a great question. He said that I had to ask, how is one of the first deliberate European tech sovereignty companies? Which other ones do we need in which sectors?

58:05Certainly companies in energy, energy sovereignty is a huge issue. Some of that, you know, maybe in conventional technologies, some of it may be in computer, in future technologies like fusion. We need sovereignty, ideally around semiconductors. It's going to be very hard to achieve unless there are big changes in technology and various other areas. Obviously, defence is another one and a few others. I'm not sure where they will be able to create those companies kind of in the next two or three years to a point where they provide sufficient sovereignty, but I'm very sure we can do it over the next five to ten years.

58:37Where are we in three years with Russia Ukraine? Has Putin invaded Lithuania, Belarus, Finland? It is very hard to predict. We just don't know how things are going to pan out over the next few months and a couple of years, but I think we do have to take the threat to the NATO eastern and flex seriously. I think we have to take it much more seriously than we are doing it right now in the UK and in Germany and in other countries. I think Scandinavia, the Scandinavian countries take it a lot more seriously as do the Baltics take it extremely seriously. And I think we should listen to them. I think the threat is extremely plausible in the next few years.

59:10You mentioned China, Taiwan earlier. It's the second needle moving moment in the kind of inception of Helsing. What happens in China and Taiwan? Again, I think it's plausible that there will be a conflict. I don't think it's 10 years away if it happens. It's probably quite a lot sooner than that But it depends on how the next again few months in the years are going to pan out again I think there is a danger and it's obviously clearly stated goal of China to reunite as they put it does Trump Regis the potential for global conflict as people have stated there was no new conflict You know under Trump's last administration and so if you go by that then it would reduce it but there are other players obviously involved as well.

59:49We don't know what kind of capabilities are being developed in North Korea, how someone feels on a particular day. The danger that we have, and I think something that is hard to control is accidental escalation. For example, at the beginning of the Ukraine war, I think there was a danger of escalation, potentially even a nuclear escalation. I think that eventually settled. The situation became more readable for everyone involved. Why was that essential for nuclear escalation? Because we had we weren't a new conflict that was moving extremely fast, we were in uncharted territory in terms of Western support for Ukraine, in terms of what weapons should or should not be used, what would be the reaction on the other side.

1:00:26It was hard to predict and everyone was kind of feeling their way into the situation. I think those are situations that are fast moving and also whether it's limited information, where things can escalate quickly accidentally, even though neither party wants it. That is very hard to predict. These are very non -linear events when they happen. And so that's why it's hard a predict whether conflict is going to happen under a particular administration or not. What do you worry about that we haven't discussed or is not discussed enough? We are not sufficiently alerted to the danger of conflict. We've lived in conflict forever, basically, and then had a period of time where there wasn't one.

1:01:02I'm worried that we don't take it seriously because we don't want to think about it. And by the way, I don't want to think about it either. It's not nice to think about conflict, but we're not taking it seriously. There's a buggy founder, there's a defense company, that isn't it, I mean, I don't want to think about Conglick. Well, you know, that one's on you. It's day and enterprise SaaS. We're doing AI sales tools here. So, you know, find a one I just want to ask, which I always find really interesting. I hope it's okay for me to ask, with natural motion, you sold, you make a little bit of money yourself.

1:01:31I think mindset to finance is fascinating. How do you think about your relationship to money? Does money make you a better founder? Does money make you happy? I think money can give you security to me that's by far the most important thing. So not having to worry about money makes a big difference in terms of how I think you lead your life in general, but also what risks you take with it, say your next company. In order to build a successful company, you have to take risks. Being safe on the money side makes it easier. I don't know, it's not the only thing that you require, but it does contribute to it.

1:02:02What little things make you most happy? I think about this a lot and it's like an espresso in the top. I was just going to self -made espresso. We just bought a new espresso machine. A long walk every day makes me happy. Can't put a price on that. I'd love to do a quick fire round. So I say a short statement. You give me your immediate thoughts. That's not OK. Sounds great. So what do you believe that most around you disbelieve? Most people believe that the environment, in terms of taxation, regulation, et cetera, has a big impact on whether you can build successful startups in the country. I don't think it does.

1:02:32It's minor compared to attracting the right founders. So I think the discussions that people have around how can we make a particular country a better place for entrepreneurs or already there, I just don't think it makes a difference. What's the single hardest element of being CEO of Helsing? It's the fact that the company needs to shed its skin every 12 to 18 months because it's progressing at such a pace that you just have to think about the org structure again repeatedly. You have to think about whether your process is at the right ones, whether you're talking to the right people. What did you not see in all structure change that you wish you had seen?

1:03:06The biggest unlock for us was to have these quarterly founder of sites where we basically reflect and think about what's working and what isn't working and how do we change it? Never did that previously and stuff just gets warmer and warmer until it's too hot. The heaviest things in life are not iron or gold but unmade decisions. What's the biggest unmade decision? I actually, I'm not sure I agree with the even with the statement. I think it's perfectly, there's this trope that, you know, any decision is better than no decision. And I've never believed that. I think there's some times there, you have to make a lot of decisions that are found out all the time.

1:03:40I think no decision is a decision. So this is the thing. If you make conscious decision not to decide on something because you don't have the information right now that you're required to make it, I think it's totally fine. And I think people should make much more use of that rather than randomly going on. I'm going to go for this one. It's just one of the many things that LinkedIn screwed up. There's so many pieces of wisdom on LinkedIn that are wrong. You just go through LinkedIn every day and bullshit, bullshit, bullshit. All this work, work smart, not hard and stuff, being a servant leader.

1:04:08Why is work smart not hard, bullshit? Because you need to do both clearly. You're always out competed by someone who works smart and hard if you're a work smart, not hard person. Why servant leadership, bullshit? You need to lead a company and you should not be afraid to say that. If you're the founder of the company, we made the decision for Helsing as well that we are a founder, let company. And we are all here to basically serve the company to make the company successful. That's what we do. And the founders provide the vision and the direction. And if you like it, great, if you don't like it enough to work there.

1:04:42Or if you change your mind on the last 12 months, I used to think that you needed to make sure that there was always a degree of process when teams work together on something, and including something new. I have now learned that it's possible with exceptional people, just let them get on with the job without any stand -ups, any predictions on deadlines, nothing. You just let them get on with the job in a fast -changing environment that we had to deal with, for example over the last few months. It is probably the most efficient way of actually making progress rather than being structured about it.

1:05:13And then you eventually have to move to a structured job, this year, but I probably wouldn't have thought that two years ago. See of any other company for a day, which company would you choose? Probably by dance, and I would shut down TikTok immediately. It's crack cocaine for basically our societies. It is... It is badly disagree. Social media is crack cocaine, but it's also not. If you go to my social media, it's protein recipes, it's gym workouts, it's inspirational content that's made me a fit to a healthier human who doesn't drink and has a great relationship with his mum. I proactively choose the content to be good for me.

1:05:49Just like food is poisonous or very good for you But if it is very compelling which yours is it becomes a It becomes something that people will consume too much. I think same with food same with food I think food can be dangerous too, but I think TikTok is a lot more dangerous than hamburgers Large parts of society are wasting so much of their time on something that has been highly tuned I mean, I'm saying this is someone who we used to make games and we know what dopamine looks looks like TikTok loop is the best and you cannot get out of it. Why is it the best? Because it has just a right combination of timing, the flick, the content that immediately comes up.

1:06:25It's perfectly tuned. And obviously they have all the metrics to know what content to show you. It is super addictive. It's incredibly dangerous. It also obviously becomes a potential tool for manipulation, political manipulation, whether that's happening or not. But it is extremely powerful if you wanted to use it. And then thirdly, it has the same problem as all social media. The content that works the best is the content that's the most extreme. And so we have a problem of basically radicalizing political views where just almost by definition radical content will just work better. Do you believe Twitter is better on the Elon Musk?

1:06:55It's very different. I think how would you say it's different? They're different people on there now. I think other people have left. You know, maybe you get a broad spectrum of views, it's hard to tell. I think the jury is out on that, but it does feel different. Would you invest into it at $44 billion? If you care about the platform that much, then you know maybe it's it's the right thing to do if you have to cash available. What do you know now that you wish you'd known when you started health thing? I think we wish we had known that the Ukraine war was going to happen that quickly. What would you have done differently?

1:07:24We would have focused all of our efforts on specific systems to deal with the problems in hand, which are now the ones that I talked about earlier. It's electronic warfare resistance, GPS independence being resilient to comms jamming. And we were working on those systems, but not just working on other systems too. And we were building a technology foundation that we're now using, obviously in the company, and it's good that we have it, but had we known that this conflict was imminent, I think we would have shifted priorities, and I think we could have done more right at the beginning. In the end, I think we were able to contribute, but we needed to spool up all of these systems in a lot of knowledge.

1:07:58Tell us more question, have I not asked or that you're never asked, should I have asked? Well, one question I have asked myself the other day, which I don't get asked that often is, how does a founder group work together? That's equal. How do you make it work? Because as a founder almost by definition, you all have to be ambitious. Everyone is different. Everyone will always have a bit of an ego as well. How do you make it work that actually it works together? And it worked well for us naturally, but it's quite interesting to think about what are the reasons that it works. What are they? The way I boil it down is respect, is mutual respect.

1:08:33You know chemistry and everything else is important as well, but if you truly respect the quality of your co -founders and what they contribute and the job that they do in that they're, you know, 10 out of 10 people, then everyone finds their role and the roles are shifting sometimes too, right? Like, it's not like, you know, to a point of specialization early, it's not like, you know, one person has this role, the other one person has that role. We have our different emphases, but we tend to chip in and be involved in all kinds of things, including obviously in the management of the company and the scaling, we all do that together.

1:09:01Tawston, I am so grateful to you for putting up with my very prime questions across different industries. You've been fantastic, so thank you so much for joining me today. Oh, thank you. I enjoyed it. I mean, I've wanted to make that show happen for such a long time. Tawston is one of Europe's great entrepreneurs. If you want to watch the full episode, of course, you can find it on YouTube by searching for 20 VC, but before we leave you today, what the Henry Ford and AI having common? Neither could change the world without automation. In the future, there will be two types of businesses, those that have automated and those that wish they had.

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