| Hello, and welcome to this week’s installment of The Future In Five Questions. This week I spoke with Trae Stephens, a partner at Founders Fund and co-founder and executive chairman of defense tech company Anduril Industries. Private defense firms have increasingly attracted the attention of world governments, and Stephens has been making the media rounds to tout Anduril's work as it picks up contracts from the U.S. Navy, Air Force, and more. We discussed the shortcomings of “digital communities,” the heroism in “Lord of the Rings,” and the changing attitudes in both Washington and Silicon Valley toward defense tech. An edited and condensed version of the conversation follows: What’s one underrated big idea? I wrote a blog post about this with one of our portfolio founders, Markie Wagner, a couple of years ago: It's the idea that choosing good “quests” is a moral obligation. And it’s especially a moral obligation for people who have done things that have generated returns before, and they're in their second act. In Hollywood, Ryan Reynolds, or George Clooney, start tequila, or rum brands, or whatever, and they sell these commodity goods on the back of their personal brand. We do this too often in Silicon Valley, where we start silly enterprise, SaaS or dev tooling companies that don't really make an impact but generate a fair amount of revenue. I think it's important to work on things that have a real impact on the world and help us progress forward into a better future. Oftentimes people see this as a morally neutral decision, and I think that's incorrect. It is not morally neutral for someone that's really talented to work on something that is not important. What’s a technology that you think is overhyped? We often said when we were starting Anduril that the alternative for most talented engineers is optimizing ads. There’s this idea historically, and especially over the last 20 years in tech, that digital communities are this thing that will make society a better place, like with social media and online dating. It is just blowing up in the face of Western society. It's, like, a total disaster. It's not only bad because it distracts us from things that are potentially more important, but it also is a lie. We've been sold a dangerous lie about our ability to connect with other people, to hold critical conversations, to be able to hold truths in tension, all of these things that are important to a functioning society completely melt down when you don't have real intimacy in those relationships. You see this reflected in sexual partners and conversion to marriage, and the incel phenomenon. I don't think it's easy to draw a straight line back and say that it's directly the fault of Tinder or something like that, but I think that it's undeniable that the way people have shifted these relationships to anonymous accounts online is dangerous for a well-functioning society. What book most shaped your conception of the future? This is going to be the most ridiculous, cliché answer I could possibly offer as someone sitting in my seat at Founders Fund, but “Lord of the Rings.” In this world, there are heroes. In the world, it is possible that there are heroes, and that systems and bureaucracies don't matter as much as people think that they do. At the end of the day, the world moves on the back of people with agency, and that's really what “Lord of the Rings” is all about. It's about people with agency doing heroic things, and we don't talk about this enough as a society anymore. In fact, we intentionally downplay this, and pretend that it's not real. But the reason we're called Founders Fund is that we're a fund that believes that founders start companies, not institutions or bureaucracies. If we don't believe that the founder is the right person to start these businesses, then we shouldn't be investing in the company, and it's not about whether we like the idea, and that's what “Lord of the Rings” is all about. What could government be doing regarding technology that it isn’t? I’d like to turn this question on its head a bit – what is the government doing regarding technology that it shouldn’t be doing? In recent years, a bunch of “software factories” have been popping up across the government. There are likely cases where this could make sense (to try to fix broken programs, to do integration tasks, etc.), but more often than not, they are building things that they should just be licensing commercially. There is a persistent fallacy present across much of the government that their needs are incredibly unique and special, and this cognitive bias needs to be broken. The challenge with any “professional” (whether in sports, medicine, or software engineering) is that they believe they are paid to do what they are professional in, which has a tendency to lead to poor decision-making when you have to make tough calls about things that you shouldn’t be doing for the good of the end user, the taxpayer, etc. What surprised you most this year? Back in 2017 when we started Anduril, defense tech was kind of anathema. That's completely shifted. Now, it's like a hype category and all of a sudden everyone from every background and political persuasion thinks that we should be spending time and effort on defense tech. I think that's potentially great, and has the ability to transform an old-line industry that hasn't been touched by recent innovations and technology. At the same time, like most things that become hype categories, there's a question about whether it's too late. If you were an investor in space and you didn't invest in SpaceX, you probably would have lost money. If you're an investor in social media and you didn't invest in Facebook, you probably would have lost money.
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