Mach Industries' Ethan Thornton on winning drone warfare through asymmetry, not outproducing China

yourself. Introduce the company for us.

Awesome. Yeah, I'm Ethan Thornton. Started Rock Industries. Happy to tell background on the company.

Yeah, please. I mean, we met what, two years ago or something, and you were maybe just starting the company then. Huge progress, but yeah, give us the background.

Yeah, for sure. So, I actually started the company in high school. I ran like a woodworking, metal working company in high school.

Was pretty obsessed with this turnover we're seeing towards unmanned systems. Um, and the importance that'll have on the world over the next few decades.

Went to MIT. Um, initially thought this would take a lot longer to play out than it would. So I went to MIT but around that time War in Ukraine starts becomes clear that this transition is happening very very quickly.

Drop out start mock I guess two and a half three years ago now.

Where were you studying at MIT? aerospace engineering. I was there I I I was playing football there. I dropped out during football preseason. So I can't

I can't say that I was I was there very long.

But I think I think the the mission of making sure the West wins on Systems is just so urgent.

Was the Teal Fellowship part of the decision to leave or had you already left?

I'd already left. Yeah. So that was the semester after I left.

What was the answer to your question? The main the main what's your contrarian take? What's something you believe that very that very few people agree with you on? That's the classic teal fellow question.

It's a great question. Oh yeah. I don't I don't remember what I answered with. Um I can say the thing the thing I was betting my life on at that point and if I I had to guess what my answer was. I think it was the importance of drones. Yeah.

Like I singularly think that the US is not going to be able to outmanufacture un outmanufacture China unmanned systems and that the the way to win is through symmetry.

Yeah. And at the time that was obviously a contrarian take less so now. Um the world has started to move in that direction. But I still think very few people

that sort of predated Americans have now seen how many different Chinese drone shows in the sky where they're like look at the pretty lights and the colors and then some people are like whoa that's

imagine that coming at you.

Talk to me about asymmetry. That sounds like not just going drone for drone. That seems like different capability. Unpack asymmetry. Why is that?

Absolutely. Yeah. It's a great question. I'd say that was that was probably the big big differentiator in the way we thought about the space. Yeah.

If the US is manufacturing a quadcopter and China's manufacturing the same quadcopter, if we're making a cruise missile and they're making the same cruise missile, they will outmanufacture us, right? And so the optimization becomes instead how do you take this future style of war fighting and pull it left as far as possible. And we we talk a lot about basically creating an offset to China's dominance in manufacturing, which doesn't mean we we don't focus on manufacturing. Like first and foremost we are a manufacturing company but that's not what it's going to take to win. What America has to do very very well is actually rely on unmanned systems to win which like like you mentioned America's actually been relatively slow to adopt unmanned systems. A lot of the work we're doing is is pushing to change that as much as possible and getting getting the the institution to think about unmanned systems not as something that's scary, not as something that's that's looking to disrupt the way wars are currently fought, but instead is basically our biggest advantage if we look to maintain.

What's the history of of these asymmetrical offsets? I'm trying to think of like the classic example like can one F-35 take out five MiGs and so you don't need to manufacture as many because you have a more advanced plane. So you throw 50 planes at me. If I have even 10 of my better planes, I'm good. What is

a nuke? It's like I don't care if you have a 10,000 bombs. I have one. That's a lot bigger.

Yeah, great point. I mean, a lot of the things that become the way wars are fought start asymmetric. I mean, you go as far back. It's like the American Revolution, right? You've got

Yeah. Something's not going to remain asymmetric forever.

Exactly. But over the next decade, two decades,

pushing on this new style of war fighting as much as possible to achieve that asymmetry, which is something historically America's done very well. Again, all the way back to the American Revolution,

adopting tactics to to to counter a force that at the time was obviously superior.

Um,

so, so get me up to speed on how you're thinking about the current drone landscape, even putting aside the asymmetrical thing. I mean, I've I've heard like

you you just buy a DJI drone, you fly to Ukraine and you put a grenade on it and you fly it into somebody. There's these new drones that have the fiber optic wires, so you know, you don't no electrical interference. You don't need a signal. They can't jam it. There's a whole bunch of different things. There's the shahed and like all these different tail sitters. There's 25 different types of drones. What's actually going on? What's actually making a difference? And then what are you interested?

Absolutely. So, yeah, it's obviously a super wide space. We focus most on the pacing threat which we see is China

and basically fighting a war in Indeekcom and generally speaking if you can do something in Indoaccom you can do it well in Ukraine. Okay is the way I like to think about it. We don't play in the group one group two space.

So the the quads and similar smaller drones

describe group one and then

yeah there's the formal definitions are are pretty murky like I think technically Viper is a group five based on speed, group three based on weight. It it's basically it's an old like FAA style of assessing how much damage something does if it falls out of the sky. Okay. But generally thinking you can speak speak about a group one is like quadcopter all the way up to a group five being 30 foot long kind of fighter jet.

Yeah.

Um for us where we play

the predator drone would be group five. That's the biggest we have. But it's like human manned in Las Vegas remotely or something.

Yeah. For landing and other things. Um and so where where we play is generally group three group four space.

Okay. So pretty big. pretty big. Um, and our primary focus is again on on asymmetry as it relates to Indopico. So the pacing threat for America right now is China specifically as relates to Taiwanese semiconductor access.

Yeah.

Right. A world where we lose access to advanced semiconductors because China takes Taiwan.

Yep.

Is is pretty crippling for the West. Um,

talk to me about the hypersonic missile gap. I I I had a friend who was very worried about that, saying that there's a lot of other things that are going well. I mean, we're advancing AI models. There's a lot of stuff that's happening on trade, but uh we're just not making hypersonic missiles. Is that something you've looked at or you have any sort of insight into the importance of

Yeah. I mean, we we spent a lot of time thinking about it. Ultimately, we we play in the subsonic regime.

You you focus on this.

So, that's that's where we focus. Castillian and a lot of the other folks are pushing hard on hypersonics. My personal belief, and this is again sort of a contrarian take, I think future war fighting has to be so decentralized that most of the assets used to fight wars are actually not large enough to consider taking out with a hypersonic missile.

So like a a big a big focus for our product line is having things that two operators can deploy. So you look at Viper, you look at Stratus, these are things you and I could actually put up in the field ourselves such that by the time you launch it, there's actually nothing to shoot back against. Um, I think that is very much the direction war fighting is heading.

That's what we see in Ukraine.

So, less less exquisite systems, less capital assets like you sunk my battleship becomes less important because there aren't as many battleships on them on them.

And so, I think hypersonics are are excellent at taking out existing

Yep.

large centralized assets.

But as soon as both sides have them, there's just no more large assets on the battlefield.

Exactly.

Because everyone knows, well, I'm not even going to try.

Yep. That's a contrarian take. And I'm not saying we're going to get there in 5 years. Um, but as you as you look as far into the future as you can, and a lot of what we see in Ukraine right now is this giant push towards decentralization. How do you get everything off of runway? How do you get everything off of centralized command and control infrastructure? Like how do you push to decentralization? Because the the future force structure looks a lot more like a it's kind of a buzzwordy term, but like almost like a kill web of hundreds of different systems each doing some element of sensing, communications, and shooting. Yeah.

[clears throat]

such that your forces kind of fighting from everywhere and nowhere.

Yeah. What is your like pdoom on Taiwan or or or timeline? I mean there was that book 2035 I think that was sort of talking about that timeline. At the same time you have China's thinking in 100year plans. Cining thinks he's going to live to 150. Uh maybe he's not in any hurry. Last year was pretty quiet. I mean it was a lot of trade negotiations but we didn't see a blockade. We didn't see really many major military movements. And so from my perspective, it feels like uh maybe I just wishful thinking, but it feels like things are sort of business as usual over there.

Yeah, it's it's a good question. Um look, it's it's really hard to know. I mean, the CCP obviously outlined their plan for military readiness by 2027.

Um and y'all can find public public testament to to Hexith and others talking about sort of the state of our war games right now in that theater being quite dire. Mhm.

So, look, I I can't say um when or or if something happens, but

but we need to be prepared.

We need to be prepared. I think we obviously started this year with a lot of Chinese aggression around Taiwan. Okay.

And in January, they ran

a pretty big set of set of drills and then Yeah. Look, I mean, it's just it's so catastrophic if if Taiwan falls. Yeah. For for the West. Like,

what have you learned from history about Indo-Pacific theater? It's been a while for the United States, but

there's, you know, infinite amount of kind of content on on uh what techniques worked, what are the unique challenges. It's obviously very different fighting over, you know, huge bodies of water and that kind of thing versus Ukraine.

Yeah, there's a lot of predictions about like uh if they're if they do try and cross the straight, they'll do it at certain months because the the tide's low or the waves are not as choppy. Yeah. Yeah. What are you thinking about history?

I think it's super hard to extrapolate out the the course of this conflict from history. Like we have not fought a war in the Pacific since it at scale since the area era of precision munitions. I think certain things will will continue to be true. Like it will overwhelmingly be a logistics battle.

Yeah.

And I think the the biggest problem we face right now, speaking on hypersonics, is how do you get your ships close enough to actually get into the fight is the big problem right now. Like how do you how do you secure runway access? How do you get your ships close enough?

Yeah.

And so it becomes a massive logistics battle and that's that's why you'll see us focusing on these decentralized assets that are significantly easier to get into the or that you can launch from far enough away to actually reach the fight.

Um so I think it comes down to logistics. I think getting secure comms that far forward and then more importantly getting proliferated ISR that far forward is going to be an incredibly difficult challenge.

The US conducted an operation last year called Ruff Rider. um in Sentcom and it it we lost something crazy like 30 MQs like 30 PRs and and Reapers um and that was not against as nearly as sophisticated of of an adversary and certainly not over that distance. And so I think

one of the key gaps is how do you get enough sensors forward? How do you secure communications? I think rightfully so in in in many cases the US pushes to have man in the loop for autonomous systems. But what that means, you have to have really secure comms in order to do that. And we're facing adversaries that may not look to do that themselves. And so that becomes a pretty pretty strategic vulnerability. And then right now, I mean, you can count on any conflict being

a conflict of numbers. And in war games, we run out of ammo in in literally a couple days, right? And so that's why you'll see across industry just this massive push to manufacture as many assets as possible while also making sure that those assets are

as as effective

effective and asymmetric as possible because we're just not going to catch up. I mean China makes a lot of claims. This claim is probably not totally accurate. But they have claims they have factories making a thousand cruise missiles a day. And you can go online and actually like watch videos of these factories. Now that might be 100 a day. That might be 50 a day. Regardless, you're talking about orders of magnitude more production than the US has right now,

which is serves as a wakeup call. It's why why I dropped out of MIT. Um it's it's why I think a lot of us in the space are pushing this hard. And then a world where you lose access to advanced semiconductors is is existential. I mean, our entire our entire backbone as a country is built on this sector. Um, as you look at future of of of conflict like or future of of unmanned systems, the reason you build unmanned systems and not an F-35 is advances in computation. And so if you find yourself in this arms race where the most important thing is on manned systems primarily bottlenecked by intelligence and you lose access to the semiconductors you need to power these things, it's pretty terrifying.

Yeah. Sorry to interrupt. Where are you guys partnering? Are there other uh are there are there primes that you're working with at all? anything on the uh obviously there's battlefield systems that you need to integrate with. What are you doing? What are you manufacturing in-house? Like what is kind of the web of

uh companies and and groups that you're actually connected into? That's an awesome question and and before I start like I I need to emphasize the importance of working well together as as a group of companies in the space primes neoprimes startups like when you're facing this level of difficulty at a geopolitical level you have to you have to view it as as a nonzero sum game and you have to be willing to work

have you learned any any stories from history on that front like back like I imagine in if you're actually fighting in a hot war I imagine people the whole industry and the whole country is banded together and saying like we're not competing here. We're we're fighting for our values as a country and and our way of life and all these things. So I imagine it very easily in a in a hot war clicks into that mode, but in sort of relative peace time or preparation, there's still like, oh, this this neopime just launched this thing. They're trying to kill this other neoprime. And it's like all right, we're kind of focused on yes, you know,

uh fighting for market share is important, but at the same time, the entire purpose of the defense industry is to defend the country and of which we are all citizens of.

Absolutely. Look, I I mean, unfortunately, in a modern day, I think a hot war would end relatively quickly. Like you're you're talking about a very decisive outcome when you think about cyber effects and how quickly infrastructure in both countries would shut down. when you think about the ability to do long-range precision fires, how quickly capital assets would be taken out.

And so Ukraine is Ukraine is like not a good example because it's it's effectively turned into trench

warfare, but it's a it's a battle for like territory, whereas in a conflict with China, it's more over a specific,

you know, region being

Exactly. And the style of the style of warfare that the Soviets wage versus that the West wages and that China is looking to basically base their fighting style on the west on are quite different like they always have been like the the the the Russian and because of that largely the Ukrainian way of war fighting is this sort of just mass effects war of attrition.

What you see the US doing and what China specifically architected their force structure to to also execute is these pulse strikes that are very very very quickly damaging. And so my my fear is you in World War II one we had years of ramp up where industry could start to rearm lease all these different things that got us into the fight before Pearl Harbor started. Even after that however you still had years where GM and Ford could switch over to defense production and where you could get this sort of mass rallying of cultural effects towards fighting this war. Yeah,

that is not happening today to the extent it should. And I think we have way too much confidence about this war not just happening in weeks. Like very very likely outcome is you're not you're not ready to fight a war. And so you you you seed territory, right? And so

the the way I see it that that effect you're describing has to start like today. We need to start acting like we're purely on the same team.

And then for for Mox approach specifically, a few things we do. One, our approach is quite different to a lot of the other neoprimes. So you'll see a lot of folks starting with battlefield management layer and kind of working down. Um which is a great way of doing things. You you need to have a like efficient orchestration.

Everybody everybody wants to be the platform.

Yeah.

Yes. From a business perspective.

Yeah. Purely business. If you're pitching investors, you don't want to say, "Oh, we're a point solution. We just do, you know, offer this." Even though that might be the best way to actually get in get into the game and become a business.

Yeah. and and I'm I'm happy to dig in there. I I think I think the the business tactics there are actually potentially more complex and I I'd argue that point, but I actually don't think it's super important. I think the the big thing is when we need different people doing different approaches. The way I think about it, the defense industrial base has rotted out so bad. I mean, you think about the incentive structures for the last three decades. If you're locked and I'm your supplier and you're on cost plus,

you're incentivized to have me charge you more [laughter]

for a component. And then if you're my tier 2 supplier,

yeah,

I'm I'm incentivized to have you charge me more. And so for the last three decades, 10 levels down the stack across the industry, you've just seen it rot out. And so what that means is typically like tech that you'll get for like 50 bucks in consumer electronics, you'll literally be charged tens of thousands for.

Like AirPods cost Apple like 6 to 10 bucks to make roughly.

Wow. If that's a defense product, if you're dealing with like three different radios, all these different IMUs, you're literally talking tens of thousands.

Something about like a it was like a faucet or sink on a on a battleship that cost like $200,000.

It's crazy. And so and and you look at the incentives and it's very obvious how we got here. And so the the work I'm looking to do as a company is I think that the rate limiting factor on how much you can produce and and frankly where most of the money from the budget goes is into hardware and the performance of that hardware is gated on the performance and cost of its subsystems and so we're taking a very different approach of actually working bottom up in the stack.

Most of our revenue for the record still comes from selling platforms but we've taken a very deeply vertically integrated approach and then one of the ways we look to partner is actually by selling those components to other companies.

Oh interesting. and looking to be a good partner by by basically establishing this industrial base and and and hopefully enabling people to to sell products cheaper and more performant than they could otherwise.

So that's that's sort of our approach. And then even within that like we try to be selective about the things we buy off like consumer electronics and automotive still run pretty efficiently. And so if you can if you can architect your designs to use hardware from those two industries as much as possible and to avoid hardware from the defense industry.

This is CS versus got right off the shelf versus government off the shelf.

Um

but in any case there there needs I mean this this industrial base needs to be rebuilt and that does start with your jet engines. That does start with your radar that does start with your cameras.

How are you thinking about uh moving quickly solving problems and workplace safety? there was that incident that happened that was reported. Um, and I'm just wondering about like that trade-off has got to be difficult when you have a bunch of people that want to work on a really important product, but these are big machines. There's some risk of factors. Like what does security and workplace safety look like?

That's a great question. So, I think I think there are misconceptions about that accident and I've talked a good bit publicly about it, but that was actually before we were mock.

Okay.

So, that was before we had any employees super super early. Um, and and again, I've I've talked a good bit publicly about that. I'd say today,

I don't know, there's this

move fast and break things actually doesn't work very well in like you imagine testing a Viper like you're basically putting a Ferrari on like a slingshot and launching it into the air. You don't want to be doing that every day like half-hazardly randomly. So early on, what we did like literally when we raised our our our A was invest very deeply in Siddle. Invest very deeply in HDL. Invest very very deeply in

What are those? What are those? Sorry. like hardware in the loop testing, okay? Like a simulation environment, right? How do you go and run thousands of cases of what a vehicle will look like in flight and then actually run that on representative hardware and then run that on the vehicle and then build into a test campaign.

Um, and we have five products now and the the first flight of all five of those um reached wings level steady fight flight on the first try.

Got And so I think there's this misconception that the way you move fast,

just get a test range and just start putting slapping stuff together,

which is not the way [laughter] it works.

It's actually not the way it works. And I think one of the reasons we've we've actually been quite successful at developing these things so insanely quickly. I mean, I just I kind of softreleased a product that we we went from nothing to flying in 71 days on a pretty large aircraft. And the way you do that is by building excellent excellent test infrastructure, excellent engineering process.

How do you how do you actually build the simulations? Is it are you using can you use like Microsoft Flight Simulator [laughter] to to create like a physics engine? That's a good question.

Or or are you building everything from the ground up?

Unreal. Yeah,

we we actually do use Unreal a little bit on on computer vision. Um so for GPS and navigation, you're using your cameras to navigate. You obviously need to be able to spoof some of that imagery.

Our there are a bunch of different approaches. So we we have a an arrow tool we built in house to basically run across hundreds of different aerodynamic designs and select your platform as you design out your outer mold line. Different tool chain basically allows you to do RF simulation. A lot of this stuff is industry standard for the record. Like I'm not saying we we we invented much of this stuff. I do think we're we're pretty good at it, but RF simulation to understand antenna patterns to understand all that different stuff. We we actually have four different radars in design right now as a company. So, we have a really good RF team. Um,

you work from there into basically your sixth degree of freedom physics simulator. Um, we found an open-source, it's called JSPsim, if anyone wants to go and use it that we forked a couple years back and have been doing a lot of work to basically make more robust.

That's really cool. Like you can actually simulate like specific actu actuators breaking. You can simulate wind gust

across like thousands of cases. And then from there, you then plug that into your avionics and actually spoof your avionics to think they're flying. Yeah. And so we make our own avionics and you obviously can't run hundreds of thousands of cases like the the JSPM will be running on on basically a cloud instance so that you can crank out a ton of compute and then you confirm that your actual avionics hardware is performing the way it should.

Very cool.

Uh what advice would you give to the younger version of yourself that's dropping out of MIT and going to attract hundreds of millions of dollars of capital?

It's a good question. I think I think the importance of people like all all you have at the end of the day is your team

and like as an individual the amount of work you can get done

is is tiny compared to what what can happen if you get a really really good group of of earnest mission aligned people together to go work incredibly hard. Um, and so

and did you learn that the hard way by hiring somebody that was maybe like leading expert for a specific technology but weren't perfectly missional aligned or came from kind of an old way of doing things and and then uh when you know the going gets tough on kind of an individual product level or something like that and you know it starts to unwind. How how was the

I wouldn't say we necessarily learned it the hard way. Um, I just think it it's it's very spoken about and I I I don't know. I I'd assume that saying that was more buzzwordy.

Yeah. Yeah. Yeah.

But but I actually like I I I really I don't think

but that's a that's a classic across all startups. I don't I don't even have context. I'm just saying all startups will hire somebody who like is the expert in one specific thing and then you put them into a new context and it just doesn't work. I've I've done it before. I think every founder has. I I actually don't I don't think we've necessarily done that. I think I actually was so afraid of that. Almost spun the other way and we had like too many really really intelligent, really young, hungry people. They're they're still at the company and they're like some of the best people we have, but I actually think I was almost too slow to bring that on.

Um I don't know if that was good or bad, but I I I was pretty terrified because of [laughter] because of all the horror stories surrounding stuff like that of doing that too early.

Um

yeah.

Yeah, that's interesting. Well, it's good to hear the team.

What uh what what is what does winning look like for Mach this year? Like what's what's the focus? What how do you end this year? You got 11 months left. What is coming out of this year?

Yeah.

What what's going to allow you to take like, you know, one one or two days off around Christmas? Feel good about [laughter] it.

Um look, it's it's proving proving effect on the battlefield and getting into manufacturing at scale. Like I I think we've done a great job as a company winning contracts and bringing products into a state that we can demonstrate them to customers and that we can make tens or hundreds of a thing,

but the the really really hard work starts the day you try to build a 100 thousand of something, the day you actually have something go downrange. And so for us, it's basically taking these designs that are in a good spot, taking the team that's in a really good spot, scaling that team up a ton this year to actually enter rate manufacturing, and then taking our conviction around the impact our products will have on the battlefield and actually going and proving it for the for the war fighter.

That's awesome. Well, thank you so much for everything you do. Thank you for coming on the show.

Of course,

Ethan from Mach Industries. Watch.

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