YC: Requests for Startups

The defense-tech one is interesting. I wholeheartedly agree that more people should be involved in the space and it is critically important -- I think the war in Ukraine clearly shows the need for the Western world to be prepared to fight for freedom and democracy -- but as far as venturebackable business models go I don't really understand how many defense tech co's will fit. Most defense firms, other than perhaps Palantir which has a unique position as a commercial provider trade at extremely low multiples to revenue on public markets, whereas tech stocks usually have a relatively large boost. Perhaps not as much concern at early stages but not sure how the financials work out long term.

If I'm not mistaken the 'monetization model' (for founders / investors) in defense related investment looks significantly different due to the blurring of the line between public and private sector funding.

Lockheed/Boeing buys you and applies cost plus pricing.

I assume that's how Anduril is going to end up.

Palantir started with as much "seed capital" as OpenAI did, strong founder reps in tech - the one thing National Intel lacked back then, good contacts in the intelligence community and defense sector, and a practically untamed space back then. Same for Anduril. I don't see how YC's model is applicable to any of these spaces.

Palmer Luckey and Anduril have about a 6 year head start.

I agree that superiority is one of the best deterrents.

That's true. But I don't think revenue multiple is the right metric to look at.

If you just look in terms of aggregate market cap, defense companies are some of the larger companies in the world - i.e., Lockheed Martin is valued over $100B. That's a good sign that it's possible to build a big company in the space, which is all you need.

Every single defence company today is the result of decades of mergers and decades of Cold War peak defence budgets. Not even SoftBanknhas that amount of dough to repeat that.

Lockheed Martin used to be Lockheed and Martin, MDD used to be McDonnel and Douglas, Northrop Gruman, well, you get it. Those companies were built, the were merged. And they are the first on the big defence budgets, and honestly also the only ones being able to deliver modern defence and weapon systems (regardless of delays and cost over runs).

I couldn’t tell if this was because of the stable revenue stream or because they care about changing things. Not sure Palantir is the best example here as they probably need a competitor already. Palantir was also funded by the intelligence community to solve a problem for them…

> Lockheed Martin used to be Lockheed and Martin

Lockheed Martin was formed by the merger of Lockheed and Martin Marietta and Martin Marietta was formed by the merger of Martin and American-Marietta, and American-Marietta was formed by the merger of American Asphalt Paint Company and Marietta Paint and Color Company.

Thanks! Going down the rabbit hole of defence mergers is always fun!

Based on how much time he spends picking fights with randos on Twitter, perhaps so.

https://twitter.com/josephpolitano/status/175797569920841756...

https://twitter.com/palmerluckey/status/1757896863884444053

https://twitter.com/uticaeric/status/1757927405124030852?s=4...