Building Defense Technologies to Protect Democracies | Torsten Reil, Helsing

Let's start with what we were just talking about before we started recording. Your— what your opinion is of the future of tanks and battleships.

I think that's a big change happening, and you can already see it in Ukraine, obviously, where, you know, tanks are barely being used anymore. The same is true for artillery systems. If you get yourself into a tank, your survival rate is very short.

I mean, apparently the— the time that a Russian soldier survives now at the front is about 22, 30 minutes. You can argue about whether that's, you know, correct, but it's probably roughlyright in terms of ballpark. And it probably gets even worse if you're in a tank.

If you put yourself into a tank, you are one of the high-priority targets for anyone on the other side. You know, those targets can be found pretty easily now with drones. They can be destroyed very quickly with small drones, or with large drones if they're a little bit further away.

And so I think the era of tanks is probably over. And for artillery systems as well, if artillery systems try to hide 40 to 50 kilometers away from the front to shoot, you can still find them with drones, and you can attack them with drones.

And again, they're high-priority targets. So I think we're seeing a big changeright now in warfare. And those lessons have been pretty apparent, I think, in Ukraine over the past, I would say, 18 months or so, and I think people are starting to understand them now.

What's killing the Russian soldiers so quickly? Is it all drones?

It's drones, yeah. It's the ability, first of all, to see them with ISR drones, and then secondly, to strike them with either FPV drones or larger strike drones.

Wait, what's the difference between those two drones?

So FPVs are basically smaller drones, quadcopters, that most of the time are controlled manually, like a remote-controlled plane. And strike drones often travel over longer distances. And like the HX-2, which is our drone, quite often they're AI-controlled.

You had a tweet that was interesting where— and maybe this can tie into the dinner that we had a few years ago where we had this fierce argument, and I left thinking that we hated each other, and now we've become friends.

But you said something like, "100,000 of your drones could prevent a land war in Europe." What does that mean and why? Why do you believe that?

Yeah, I said this, I think, maybe a year ago or so, and I got into a bit of trouble for this because apparently it was deemed to be provocative. But I still think that's the case. I think the deterrence that you get out of having a very large number of strike drones at your border, I think, is pretty— is pretty strong.

And the reason is that if you turn up with tanks on the other side, let's say you turn up with 3,000 tanks, 100,000 strike drones that are able to navigate without GPS, that are able to find their targets— obviously specifically focusing on tanks— will destroy those tanks, I think, in a matter of hours.

It's very hard to defend against.

If you were on the other side, you wanted to invade a country that had 100,000 of your drones. How do you do that?

I think it's very difficult.

Why?

So using tanks would be extremely difficult because, again, there'd be targets immediately. You'd probably want to not use those kinds of vehicles. You'd probably want to use autonomous systems, smaller autonomous systems. And this is basically where everything is going.

So you have autonomy now, you know, with drones. You have autonomy coming up now with autonomous fighter jets. And you also have it coming up now with land systems, in particular robots.

So what do you mean by autonomous drones, though? So it's all run by AI?

It will be, yeah. At the moment, you still have a lot— especially in Ukraine— a lot of drones are still remote-controlled. So you have, you know, thousands of very skilled drone operators. That won't scale, though, and particularly it won't scale to the West and won't scale to NATO.

If you really want scaled drone usage, they have to fly autonomously. You want to have a human surveying them, looking at what they're doing, and being on or in the loop. But the drones themselves need to be AI-controlled and autonomous.

It's the only way to get the true mass. And it's the only way, also, to make it work pragmatically because we won't be able to train thousands and thousands of drone operators. We need AI to control them.

Is that a solved problem yet, or you still haven't figured out?

It's reasonably solved, I would say. I think it's the— so the need so far has been on, first of all, making the drones work, terminal guidance, which is basically the last 2 kilometers or so, and then to create the software to coordinate them all.

And now it's going to go towards almost full autonomy. Again, always with a human in the loop.

I want to go back to the conversation we had a few years ago when we were having dinner at Daniel Ek's house. About— essentially, your proposition to me was, you know, you're just not going to be able to have humans on the battlefield anymore because it's just going to be about who can produce more material.

I think we discussed this book called "Freedom's Forge," that I've read, like, twice. And essentially it's about the United States converting their, you know, industrial and commercial— industrial power from making products that people would buy to making war materials and just mass-producing more than the opposition had.

Yeah.

And that, you know, helped, you know, tilt the war and the balance in their favor. I thought you had a very similar perspective, that that's what we would have to do. Like, the winners of the future wars are just going to have to create, mass-produce more drones, more weapons, more everything.

I think it's going to be a battle of materiel. It's machines versus machines. The reason for this is that the autonomous mass, as we call it, so the number of drones that can fly in a coordinated way is getting better and better, and it's going to be very hard for humans to survive in that battlefield.

And again, that's already the case in Ukraine. You can't really enter the battlefield as a human and survive for very long, whether you're in a vehicle or you're on your own. It's very hard to survive. That's going to get worse and worse because, again, at the moment, the drones attacking you are usually remote-controlled.

Once they're going to be autonomous, it's going to be even more dangerous. Those drones usually don't care about jamming anymore. For FPVs, it's because they're connected through fiber optic cables, fiberglass. For larger drones, it's because they're already autonomous and they don't have to worry about GPS because they have GPS-free navigation.

They can detect targets and they can engage once you've allowed them to do it autonomously.

Wait, explain how you get around the jamming. I don't understand that.

So the problem with jamming is it's twofold. First of all, if you want to control your drone from afar, you need a video signal back. And usually the battlefield is jammed, so you don't get the video signal back.

So that means that the drone needs to fly autonomously or it needs to be connected with a cable, and that's what's happeningright now. And the second problem is GPS jamming. Pretty much the whole front line is GPS-jammed, so you can't use your GPS receiver.

So you need to find a different way to navigate and know where you are. You either do that with a human trying to recognize where they are, just almost like a pilot of a plane does, or you do it with AI that tries to do the same thing.

And those algorithms now are very robust. They work in daylight, at night, you know, in the snow, even with kind of deformed terrain, which obviously happens quite a lot with shell impacts. So that technology already exists. So these drones are getting better and better.

And at the same time, if you want to have humans on the battlefield, I think it's going to be very difficult. And I think the trend is going to be— and I think people are realizing this— is that it's going to be unethical to send humans on a battlefield where you know they're not going to survive.

But at the same time, you still have to retake territory. You have to protect and defend territory. So you need robots on the ground. If you extrapolate from where we areright now, I think that's where we're going to go.

I want to go into the way you're running Helsingright now. But I think to start is, like, why you decided to found the company to begin with. We can give, like, a real quick overview. You came from gaming,right?

You sold a company for half a billion dollars. You were angel investing, kind of looking for your next thing. Did you know for a fact that you were going to found another company after your first sale, or no?

After I left NaturalMotion and Zinga, I didn't think I was going to start another company. I was.

You did or did not?

I did not, no.

Okay.

I was pretty exhausted, to be honest. I'd been doing it for 15 years, and I was kind of very low on, kind of in my fuel tank. That didn't take very long to recover, about 3 months maybe or so, and I felt kind of the energy was back.

But then it took another maybe 2 or 3 years or so before I thought, actually, I want to start something again. And honestly, I wouldn't have done it had I not met my two co-founders, Gunnar and Niklas. Especially with what we're doing in defense, it's so complex.

I mean, being a founder is already lonely, being a single founder. But in defense, the companies are so complex. You have to think about so many things at the same time. You have to obviously deal with technology. You have to deal with politics, with export law, and a whole bunch of other things.

That it's very difficult to do it as a single founder. So when I met my two co-founders, we all independently had thought that there needed to be a new defense company in Europe.

How did that conversation even start?

Back then, I invested in Niklas's company in Munich, which was working on solving AI problems for some of the legacy primes in Europe. And I wanted to find out more about defense because I'd invested, but I didn't know that much about it.

And someone recommended I meet up with Gunnar, who at the time was at McKinsey responsible for aerospace and defense. And we met up in a café in Berlin and hit it off. And within 30 minutes, we thought we should start this company together.

Went to see Niklas, who had the same feeling. And then, like, within a few days or so, we decided to start Helsing. And this thing was very high conviction, and there was never a doubt either. And it's kind of still the feeling of the company now.

The company moves, I think, still very fast, and a lot of it is based on quickly settling on founder conviction, you know, in terms of what we do, that we need to go into certain areas, certain territories, et cetera.

Hold on. I don't want to move on from the conviction yet because this the year you're having these conversations, what year is this?

That was end of '20, 2020, beginning of '21.

Okay. I can't think of a more unpopular company to start at that time than a European defense tech company.

Yeah, it was very unpopular. We founded the company in March 2021, and it wasn't popular in our social circles. It caused all kinds of problems with banks. Although this has got better now, obviously, but back then it was quite unpopular.

And it was hard to raise money. Like, we didn't.

Wait, wait. Call it a problem with banks.

There is a risk, and some people have been debanked who've been close to our company around the time. And I wasn't, but I know another person close to the company had difficulty getting credit, difficulty getting credit because we were involved in defense.

So— and this is still the case now. I mean, it hasn't completely disappeared. I think ESG requirements are still there. And back then, the defense of a country or of a democratic society was grouped for banks in the same bucket as pornography and gambling and smoking because it was seen as weapons, and weapons are always bad.

And I empathize with the kind of gut feeling on this. It's just that when you think it through, obviously, it doesn't make sense. And this is also why we started the company. It felt like if we don't start the company, then no one else will.

We were specifically worried about Europe's reaction to Crimea in 2014, the invasion and the taking of Crimea, where I think we all of us didn't really want to think that this, you know, was the beginning of something bigger.

We all didn't want it to be true. But if you looked at, you know, what the ambitions were, it was pretty clear that something else was going to happen. And we were concerned that, you know, Europe was going to be very dependent on other territories, you know, for its defense, and on other countries.

And, you know, the US had companies like Anduril and Palantir that were very forward-looking defense companies with a big focus on AI, cheaper hardware, and abundant hardware, and the idea of mass manufacturing. But Europe had nothing. And so we felt we have to do this, and we have to prove that we can build something like this, although with a slightly different flavor in Europe.

And that's why we started it. Very difficult to raise money in '21 for defense. Like, no VC wanted to talk to us, and we didn't even try in the end. So we just raised money from individuals, family offices.

And then we were lucky that Daniel, you know, put in 100 million euros of his own money very early on, and that allowed us to scale the company faster than otherwise would have been possible.

Yeah. I always read about you guys, and they're like, "Yeah, and they got a $100 million investment from Prima Materia." It's like, that's his own money.

Yeah.

That's a high conviction bet, really, really early.

Yeah.

This is before the invasion of Ukraine.

Yeah.

There was a seed round first,right? Didn't you raise, like, what, 8 or 10 million or something like that?

Yeah, I think it was 8 million euros in March 2021.

And he was in that seed round?

Yeah, he was in that seed round too.

And then you guys had this conversation where he asked, "Well, how much do you need?"

Yeah, like 3 months later or so.

Yeah. And your response was?

"Ideally 100 million euros."

How'd you come up with that number?

I didn't really do a specific budget for it, to be honest. But it felt aboutright.

It felt aboutright.

And, but that's true for almost all funding rounds, isn't it? Like, it's you kind of eyeball it because so many things, you know, change so quickly in a company. It's very hard to kind of find an exact number.

But Daniel had the same level of conviction that Gunnar, Niklas, and I had. And I think he's a similar conviction person. Doesn't take very long, and then the conviction is very deep. And then it makes everything easier. It made all of the conversations easier.

We didn't have to really kind of struggle to come to a deal. It just happened really quickly.

You consider him more like another co-founder than an investor?

Yeah, I think he's closer to a co-founder than an investor because he's been with the company from the beginning. I knew Daniel before. He knew about the idea from the beginning. It was a big commitment for him to also be publicly seen, you know, to be investing in this kind of company.

And obviously then what happened only 11 months after we started the company, the Ukraine war happened, and public sentiment shifted. And it is now easier, and now a lot of people are investing in defense, you know, both in the US as well as in Europe.

But at the time, it was extremely unpopular.

But I think this is one of the things I most admire about you, this idea of founder conviction. And I love that you're, like, I've heard you say this before. It's like, the limiting factor is not capital, it's, like, actually ambition.

Yeah.

And one thing that I've talked to a bunch of people that have been on this podcast, it's like, I try to encourage them, "Stop selling your goddamn companies."

Yeah.

It's like.

100%.

Yeah. Your whole thing is, it's like, "Stop selling your company for 100 million and then buying a house in Italy and becoming an investor."

Yeah.

Like, we need more people. We have enough people in fucking finance, dude.

Yeah.

We need more people doing shit.

Yeah. And so I completely agree. I have this theory that the reason this happens so often in Europe is partly because Europe is such a nice continent to retire in, because you can buy a house in Tuscany and you can fly there from Scandinavia.

You're there in, like, whatever, 2 hours or so, and you can live an amazing life. And once a few of your friends start doing that, then it's kind of socially accepted. But it shouldn't be socially acceptable that you retire as a founder that's been successful and can start another company.

My friends that sell their companies, I say this jokingly, but it's a lot of truth is said in jest. They're like, "Got acquired." Like, sorry to hear that.

Yeah, exactly.

Entrepreneurship is the best game in the world. You took yourself out of the game and on the fucking sidelines.

Yeah.

To what? Write checks?

No, I mean, it's easy for me to say because I sold my previous company as well, and maybe too early, although I'd been doing it for a while. And as I said, I for a while thought I wasn't going to start another company because building companies is exhausting and, you know, sometimes you need to recharge your batteries.

But once you've done it, I think people are also afraid that they might not find theright mission or even that, you know, they might find that the second company isn't as successful as the first one. And that is a risk.

You know, I thought about that too. What if the whole thing just doesn't work at all? But, you know, I think that's a risk you have to take.

I just talked to Scott Wu from Cognition, and, you know, they're throwing all kinds of crazy money at him, you know, and this is this huge, like, there's a million people who are trying to acquire him as a person or the entire company.

And his whole thing is like, "Yeah, but this is, like, the biggest opportunity in my life." He's like, "I couldn't live with myself. I didn't at least try."

Yeah.

Like, "I'm fine failing." And then he said, "I'd be salty as hell," meaning, you know, he's super competitive. But at least I try to, like, be removed from the game completely as some kind of piece on somebody else's chessboard.

Yeah.

You're just, like, intolerable to somebody like that.

Yeah. No, totally. And for us with Helsing, it's the same thing. We made a decision probably 4 and a half years ago, just a few months into the company, that we're going to go full throttle, and we either kind of completely crash the thing or be super successful.

But we didn't want to do anything in between. And that's what we're doingright now, is that we try really to keep the foot on the gas really aggressively because we want to build a company that really matters. And we will never sell the company.

I have a funny story about this, and then we're going to get back to Helsing. But Adam, the founder of AppLovin, was sitting in the chair that you're in now, and he tells this hilarious story. He takes the company public.

It's, like, 28 billion or something like that. Every day for, like, 200 days, the stock just goes down and down and down. And he goes, it gets down to, like, 3 billion. He's like, he's like, "This is either, like, a multiple $100 million company or it's nothing."

Yeah.

And so then he winds up borrowing, like, he goes into debt by, like, 6 billion and does stock buybacks, and then winds up making, like, 60 billion on that trade.

Yeah.

He's like, "I'm not running a fucking $30 billion company." He's like, "This is either a big company or nothing."

Yeah.

And I'm not playing this little game.

Yeah. I think that's the only way to do it.

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Okay, so. The identification of what was missing in Europe,right, which leads to this mission that we need a European defense tech company. Then the mission comes before the conviction, or the conviction comes before the mission?

The mission comes first.

Okay.

And the mission is to protect our democracies. And I always say it's always a real privilege. I always feel like we have we talk to our new startups every month, and we always say to them, you know, it is a real privilege to work in a company.

At least we feel this where the mission is so easy that we protect our democracies. That's what we're here for. And lots of other companies, you know, have to spend time and go on an offsite or retreat to come up with some kind of mission paragraph that everyone agrees on eventually.

And we don't have that. It is to protect our democracies. And we can point out where we're doing thisright now with, you know, what we're doing with our deployed drones, for example, in Ukraine, and it makes everything easier.

We obviously never expected the Ukraine war to happen that quickly, but now that we are deployed, it's, you know, it's very concrete. This mission is a real thing. And then the conviction, you know, comes that there need to be these kinds of companies and that they need to be built in Europe.

And one other reason why we are building Helsing is also we wanted to build a big company in Europe. We honestly looked at, you know, Spotify as a beacon, as an example of, you know, a large company you can build that has, you know, A, global ambitions, but then also actually global impact and is up there with other big companies from the US and other countries.

And we wanted to build something like that too. We wanted to show that you can do this and you can do it in what is a heavily regulated area like defense because, you know, a lot of people find excuses why they can't build a big company.

It's very often regulation, bureaucracy, not enough funding. And none of that is true. They're all excuses.

You have a great line about this where I love what you just said. It's the excuses, like, people are way too concerned about the regulatory environment, the tax environment. It's like, what's missing is actually you need aggressive founders with large ambitions.

It's just aggression that's missing. Exactly. It's strategic ambitions. You have to think about what you want to be, and it needs to be big, and then you need to be truly aggressive. And a lot of founders, I think, in Europe have lost that aggression, but it's easy to find it again.

You just need to you just need role models. Like, we use Spotify as a role model. And, you know, once you have them, that, you know, that's what good looks like. And everything below that is failure. It is underestimated how much of a difference aggression and ambition makes.

Say more about that.

I think it's 95% of a company's success is that. Everything else, like I said, is excuses. So regulation doesn't matter. Yes, sure, it takes longer to start a GmbH in Germany. Who cares? Yes, you have to go to a notary.

Who cares? When it's like, you know, spend a couple of days more starting the company, it's not a problem. The regulation that we are subject to and other defense companies are as well with regards to the certification, qualification of our systems, export law, and a whole bunch of other things.

Dealing with confidentiality, classified information is, like, 100 times more than what a startup has to deal with in terms of bureaucracy. And you can still deal with it. It still doesn't slow us down. You just have to set the company up properly.

You're probably one of the most disagreeable people that I know. Have you always been that way?

You said that to me before.

And I've been trying to reflect on it. I don't think I am.

You just demonstrated here. Yeah, we have more regulation. Who gives a shit? Stop making excuses. Like, there is it's a superpower for founders. I'm not obviously, you know, it's not a pejorative when I say it to you.

I just don't like when people make excuses. And these things happen very quickly. You just need to have a bubble of people coming together and all reinforcing each other with these kinds of excuses. And then they have a, you know, content life.

And then we sadly have a continent where we don't have breakout companies because people just lack the aggression. But again, I am very optimistic. There are quick fixes. You just have to have a few very aggressive companies that point out that everyone else is basically mailing it in.

And I think a lot of people are.

Me and Daniel talked about this, this idea of, like, how many prime movers are there in the world? You know, the people that are inventing the technology that we're all using, creating the companies, you know, power laws rule everything around us.

And it's just, like, it's not that many. And if you just have a handful, like, you literally can change the trajectory of an entire country, entire world, whatever the case may be. When you raised the 100 million, though, where did you see, like, your entrance into doing this?

Was the idea it's like, hey, we're going to what you just said, it's like cheap, simple hardware, and then all the innovation comes in software. Is that the way you thought about it?

Actually, the biggest insight came, and I think it came from Gundberg when we said we're just going to go for programs of record, which back then as a small company was almost impossible and was extremely risky.

Explain what a program of record is.

So a program of record is a program that is an official government program that's in the budget that is usually quite large and where you ideally want to be the prime so you have the direct relationship with the government rather than working as a subcontractor through another company.

And that's extremely hard to break into. And the reason most companies didn't do it back then was because, you know, you got funding and you needed to generate some revenues and some proof points, you know, reasonably quickly. And that's almost impossible to do with a program of record because it takes so long to get one and to qualify for one.

But because we had the 100 million, we thought, okay, well, now we can take those risks. And if the first two or three don't work that we go for, we still have enough money left. And we felt it's the only way to build a defense company reasonably quickly.

And so we

applied for a big program of record for the Eurofighter electronic warfare upgrade.

What is that?

In Germany. So this is electronic warfare capabilities are essentially around detecting radars, detecting, you know, the types of radars, in this case, anti-aircraft radars that, you know, try to take you down, detecting their intent, et cetera. And the situation had become, you know, more difficult for Europe because a lot of those radars had become software-defined, which means that they basically are shape-shifting.

And so the old approaches didn't really work anymore. And we came in with an AI-based approach, deep learning-based approach that kind of recovered that ability to interpret those radars. And it was a big technology jump, and we managed to win that program of record together with our partner Saab against, you know, a lot of other consortia.

And we were the dark horse, but we ended up winning it. How big was the probability? I don't know, but there was a high probability that we'd fail. But we went for it because we thought we can afford to because we have enough money in the bank.

And this happened after two years and four months of founding the company. I think we became the fastest to go from founding to program of record.

How much of, like, your previous work at, like, Oxford, stuff you were doing at NaturalMotion, did you bring into Helsing?

A lot of it was the, I think, team building and fundraising and maybe prioritization pattern recognition that I had from NaturalMotion where I when I sold the company and when I left the company, I was reasonably pleased with myself.

I thought, you know, this all went quite well in the end. But it was only in the kind of two or three years afterwards where I started to reflect on some of the things, you know, I'd done and how I'd built the company.

Especially when I started to angel invest, I realized I actually screwed up a lot of things at NaturalMotion that I should have done better. I didn't deal with performance management the way I should have. I definitely didn't take hiring serious enough, just the kind of general hiring of great engineers.

And I also didn't think enough about how to, you know, think about your leadership team, how you grow your leadership team, how you bring theright executives in at theright time. And it kind of worked at NaturalMotion, but we probably could have done a lot of things better.

And so a lot of that, I think, pattern recognition, we were able to use at NaturalMotion and particularly in the first few years. But it's also true now that Helsing is now at a point where it's kind of uncharted territory for me as well.

The company is a lot bigger. I think we're about 1,300 people, much bigger than NaturalMotion ever was. And so we have to now kind of think through things either from first principles or by, you know, working with people who have already built big companies like Daniel.

And then the other part is we were lucky that we had, as three founders, very three different skill sets. You know, I had already started a company and sold it. I think I knew how to fundraise. Gundberg was very close to the various forces, to the military, also understood the processes, political processes really well.

And Niklas's background was on the AI and engineering side, which is what we really needed to, first of all, win this kind of contract.

Yeah, this is what I'm that was the reason I asked that question. It's like, well, how the hell do you go from founding to program of record faster than anybody else? Like, how did you even know you could solve this problem of.

It was just a feeling, I think. And particularly Niklas and Gundberg, you know, pushed that. Gundberg, I think, had a strong conviction that this was a really worthwhile program of record for us to have. And Niklas had an intuition as to how we could do it differently to anyone else.

Where did Niklas get that intuition?

I don't know. I think it's just a I mean, he'd already been in this space with his previous company. So he already had a feeling.

What was his previous company doing?

It was solving AI problems for legacy primes. And so he already had a feeling for this kind of thing. And then if you combine that with Gundberg's insight as to what programs of record worked, it was honestly became the blueprint how we approach pretty much everything now.

We try to find programs of record that are large, where we have a feeling that we can contribute something to it that's differentiated. That's basically our lens.

Can you give me an example of that?

Well, another example is the autonomous fighter jet that we are buildingright now. It's called CA1 Europa. And we went into it and invested a lot of money into it, knowing that Europe didn't have anything like it and that we felt this is going to be a big category and that we could contribute something to it.

And the reason for that was we started almost like a science experiment. We have a great chief scientist, Antoine Bodd, who joined us from Meta, where he ran co-headed Facebook AI research. And we set ourselves a task two years ago to create a superhuman fighter pilot for beyond visual range combat.

So the kind of combat that's.

Hold on. You got to slow this down. What? Superhuman? Say that thing again.

It's a superhuman fighter pilot.

Superhuman fighter pilot, but there's no pilot in there.

No, it's an AI. So it's a neural network.

Okay.

And it's for beyond visual range. So the most advanced type of air combat. It's essentially chess in the sky. You have, you know, the planes. Usually, it's two versus two quite far away from each other. It's the fighter jets.

And they use radar. They use different types of radar. They switch the radar on, off. They use missiles, obviously. You have to go offensive, defensive. You have to try to bleed off energy of missiles that are following you.

You have to have a feeling for when you can re-engage. It's extremely complex. It almost looks like ballet. It's quite beautiful to watch, actually, when you look at it at tactical views. And we've been told by pilots, active pilots, that this is the kind of last bastion of air combat.

You know, nothing will ever replace the intuition that a human has in the sky to read the situation, to have a feeling for, you know, how to engage, what types of, you know, weapons to use. And that turns out to be bullshit.

You know, it actually the AI is much, much better. And the reason is that it's able to explore the search space much more efficiently than, you know, a human can because a human learns it from a textbook and, you know, in flight school, but they can't explore the search space.

And so we use the same approaches, basically, as, you know, DeepMind used as well for AlphaGo and AlphaStar using reinforcement learning. And we have an extremely high-performance simulator that runs at 25,000 times real-time speed that allows us to explore the search space with reinforcement learning much, much more efficiently.

And that now means that we can train a neural network to be better than an active fighter pilot. Like, we regularly fly against Eurofighter pilots, for example, or Rafale pilots or Gripen pilots.

So are you running tests with your autonomous fighter jet against a human-powered pilot?

Yeah. So we used to do it in simulation only. First, it was only our simulation and we won. Then it was, you know, an official simulator, but from a, you know, of a big prime. And then last year, we flew a real fighter jet and we flew the Saab Gripen over the Baltic Sea.

I'm going to say we, our AI did and took full control of the plane in air combat against another Gripen, which was human-controlled. And so we flew three air combat scenarios above the Baltic Sea and proved at that point, and this, by the way, was also the point where we realized, actually, there's something bigger happening where we felt, this actually works and it works in the real world.

And so we developed a system. We called it Centaur. And it's now able to work in swarms as well, by the way, not just two views versus two.

Wait, swarms of fighter jets now?

Yeah.

Not swarms of drones. Now we've moved on to swarms of fighter jets.

Yeah. It scales really well and it's extremely powerful. And that gave us a conviction that crewed manned, you know, fighter jets were going to be very difficult to deploy in the future because you'll end up facing these swarms of autonomous fighter jets with superhuman capabilities.

And it's not science fiction. Like, one observation of what's happening at the moment, not just in defense AI, but AI in general, is that things happen faster than you think. You know, back in the old days, like 10 years ago, so like, everything was always five years away.

That was always kind of the number that people used. It's about five years away, whether it's kind of a particular medical breakthrough or maybe a robotics breakthrough. That's now all shrunk. The five years usually ended up being seven to 10 years, by the way.

Same as true autonomous driving. It's now the exact opposite. When you think something is five years away, it's actually usually now two years away. And so something has changed. And we felt that with Centaur as well. It's like, we were thinking, like, we couldn't believe how well this worked.

And still to this day, I always feel it feels a bit like science fiction. But that gave us the conviction that we needed to be in this space. And to be in this space, because it's so slow usually to work with primes, like, we could have partnered with a prime and asked, do you want to do an autonomous fighter jet?

We provide the AI, you provide, you know, the jet. It would have taken too long. So we decided to acquire an aircraft manufacturer outside Munich, our outside Munich, with its own runway, hangars, and full aircraft manufacturing capabilities, and build our own fighter jet, which is now called the CA1, and then put Centaur on it as the core technology component.

And so that's going to fly for the first time next year. And, you know, we want to show that you can really leapfrog everyone in this category.

We were having this conversation, me, you, and Michael Dell were talking about this at Dell's house a few months ago. You told us about this acquisition. And then Michael's like, can we come see it? And I was like, I'll come with you, but I don't want you to shoot down Michael's plane as we're coming in.

But you told us about this funny regulation where even though it's going to be an autonomous fighter jet, don't you still have to have a guy in it?

So eventually, no.

Butright now, yes.

Yeah. I mean, so we don't have the, I think, the advantage of the Mojave Desert, for example, where you can fly those planes and be completely autonomous because if it crashes, it doesn't really matter. You know, it crashes into sand.

If you, you know, crashed where we fly, you crash over built-up Bavaria, which is not ideal. So we have a human that's optionally in the plane for the first prototypes. Eventually, that's going to change, obviously. And the pilot is a safety pilot, the same way you'd have safety drivers for, you know, the early rollouts of Waymo and other companies.

The fact that you have this regulation at the moment and you need a person that has to change the design of what it looks like, correct?

No. No, we found a way to accommodate it without changing the design. It's the same system. By the way, it's another example of where you can, you know, beat on the EU or Europe or, in this case, Germany for having regulations.

But you just find a way to deal with it. And this is the way to deal with it. You just have a pilot sitting in there like this.

Is he in the back?

No, they're in the front.

Okay. So what you just described, that's very interesting. You said it's like chess in the sky and then you said it was ballet. So the way you see the short-term future is the same way it's essentially going to be immoral.

I want to get into, like, the morality, the way you look at the morality of, like, what you're building. The way it would be immoral to send a human into the battlefield because you're going to get swarmed by drones.

Yeah.

It's going to be immoral to send a pilot into the sky. Is it the same?

Yeah, it's the same thing. I mean, there are two reasons. A, it's more powerful to use autonomous systems. They will just be superior because the AI is just smarter than humans for this use case. And secondly, as a result, it will be immoral to send someone up because you have to assume that the other side will eventually have those systems as well.

Can you explain, like, how you view, like, the morality of what you're building and how you may view the other people's interpretation of, you know, essentially banning to creating new weapons or creating new defense? Like, you've thought a lot about this.

I kind of just want, like, what's in your mind, like a complete overview of, like, how you think about the morality of building the company you're building.

Yeah. The underlying goal has to be that you minimize the lives lost in general. And ideally, you get it down to zero. And the way to get lives lost down to zero is to not have any kind of conflict at all.

And that's why deterrence is so important. And this is also where this is a very old, obviously, argument, but it still comes up all the time is that people don't understand that you have to be able to deter in order to not be a target that looks valuable or achievable for the other side.

And we set up the company to deter. We never set it up, honestly, to have the systems deployed at scale in Ukraine, which is what we haveright now. We'll do it, obviously, because we'll have to do it. And it needs to make a contribution.

But the idea in general is to avoid conflict altogether. And you do that by being able to deter, by having a credible posture that makes the cost calculus on the other side such that they don't want to attack because it'll be too devastating for them.

And that is the first thing. If you have to go into a conflict, you want to do it in such a way that you minimize the lives lost on your side. And again, this is where, especiallyright now, and it's going to get worse in the future, you need to use autonomy because you cannot send humans into tanks, you know, in fighter jets or even as infantry onto the field.

That's the underlying theme. And then there's another category where you need to think about the way you deploy your software and what, as a society, you know, we're happy with, with the deployment of your hardware and software in terms of autonomy.

So are we okay for a machine to make a decision over life and death if it is more accurate than a human? Or do we say, as a society, no, a machine should never make that decision? And these are legitimate conversations.

It's no easy answer because people have different values on this. And the thing that worries me is that these discussions happened a lot when we started the company before the Ukrainian war. No one, in particular, journalists weren't interested in asking us, you know, about the capabilities and why we were doing things.

Everyone always asked about killer robots and autonomy and our red lines and do we have a human in the loop, which we were always happy to answer. These were annoying questions that are at the core of what we think about.

Now, though, no one asks these questions anymore. And I'm not quite sure why, but no journalist ever asks those questions. You know, how are we thinking about the ethical side? We do a lot of this ourselves. We have ethics workshops.

We have a lot of deployment guides for our technologies. We have to think very carefully about, you know, things like proliferation and a whole bunch of other things. But we have to do it out of an inner discipline.

And journalists don't ask the questions anymore. The public doesn't either.

I don't even understand the counterarguments that you receive. It's like, no, we should not have any new technology. It's like, well, humans are violent by nature. We've had war since we've existed. Like.

Yeah. But it is an interesting topic because, like, we get this pushback as well, obviously, at Helsing. And we get it. We get pushback from people who say war is always bad. You know, and of course, at some level, that makes sense.

But again, if you have a situation where you are attacked, if you have a situation where there is an adversary that is building up, you know, capabilities, you need to be able to deter in order to avoid war.

And then you need to be able to fight in order to then not lose lives, you know, unnecessary lives on your side. And like I said, we get a lot of pushback. And it is often from well-meaning people.

So it's not that, like, we hate people who have a problem with our mission. I disagree with the way they look at it. I think if you think it through from first principles, you need to have this kind of deterrence.

But we don't kind of dislike people. It's like, very often, people who just want to have peace. It's just that we want to have peace too. We just think you have to achieve it by not letting a war happen and not being inviting to a war.

But I think there's something interesting. It goes back to, like, your high conviction, the fact that you're extremely disagreeable, you're very comfortable taking, like, a counterposition, like you started this company when everybody else said, you know, it was very unpopular.

Something that I asked Daniel about and he said, he's like, he's a German building a defense company in a country whose entire post-war identity was never again.

Yeah.

Like, you're also willing to cut across your cultural, like, the culture expectations too.

Yeah. Yeah. And I think that's still the case in Germany. And, you know, we're set up as a European company. We have big offices in London and Paris and a bunch of other countries as well. But our biggest is in Munich and in Germany.

And German society is a pacifist society. And it's taking a lot of, I think, facing realityright now, which is what's been happening in particular over the last couple of years or so, where I think Germans realize it hasn't been the end of conflict.

There are now conflicts and they're coming closer and they might be coming even closer again. And it's very uncomfortable for a country that thought those times are over. But it's also the country now that has one of the most thriving new defense ecosystems, I would say, in the world now.

So there is now a rethinking of some of those attitudes. And it's also the country that has, in absolute terms, probably now the biggest growing defense budget going from 52 billion euros last year to originally, I think, 153 billion in 2029.

I think it's gone up again to over 180 billion. And this is a large increase if you think about that there won't be more soldiers, most likely. So most of the money is going to go on to new equipment spend.

Okay. So we go back to materials. Your whole thing is, like, the winner is going to be able to produce more materials than their adversary.

Yeah.

So I still don't think I completely understand the way you think about achieving that goal. Is the hardware that you're manufacturing has to be as simple as possible? And then you're offsetting all the innovation in software. Is that still the basic thesis?

The idea is that you build hardware that is good enough and build it in such high numbers that you eventually have economies of scale, but also the ability to overcome any, you know, adversary just through pure mass. And the way you achieve that is that you need to be able to mass produce.

You need to design to mass produce. But then crucially, you need software to allow those systems to, first of all, be smart and be able to coordinate. But you ideally also absorb a lot of the complexity of the hardware that usually, you know, would be these exquisite systems that legacy primers will make into your software so you can make the hardware simpler.

That means that your sensors are simpler and you regain a lot of the accuracy through very good AI algorithms. It might also be that your manufacturing tolerances are a little bit bigger and you regain a lot of the control and accuracy again through software that might recalibrate the system as it goes.

And this is what we do. And that works extremely well, but you have to think it through as one unified system. And once you do that, you can go into mass manufacturing. So the HX-2 is now a mass-manufactured strike drone.

And we had to go through, like, all of those learnings in July and August last year where we had to go from dozens of HX-2s per month to a baseline of 1,000. And it can now surge to, in the small factory that we have, to 3,000 a month.

And it's a completely different kettle of fish to producing just a few dozen. You have to think about the supply chain completely differently. Obviously, the way you design the drone, quality control, tracking every single step. And so you have to learn this.

But once you've done this and you're able to produce in very large volumes, you just have much more powerful systems because you can now overcome any adversary or target by, you know, having saturation attacks, for example, by sending more and more of these drones, by having them highly coordinated, and if necessary, just produce more and more of these.

And drones are just one example. The same is true for fighter jets. You want to build, you know, many hundreds of these fighter jets. Same is true for, you know, for other systems, maritime systems. It is going to be about being able to build these things in large numbers, to design them so that they can be built in such numbers and to have the industrial capacity and the supply chain to produce a lot.

Okay. Hold on. If we're talking about war materials, you can never predict the potential new adversary you might have in the future. That means you guys have to be completely vertically integrated. Like, if I'm a country, like, or a continent, let's say we're European, that means I can't outsource some of this production to China or to America or to South America or anywhere else.

Correct?

I wouldn't say any. I mean, with China, yes, that's true. There are still allies that you can work with, obviously, and that we all work with. But there will be some areas, and it depends on the sensitivities of particular countries, where you want to be fully vertically integrated in that country, and you want to be having your entire supply chain in that country as well.

There are other areas where you work with allies, and I think that will continue and probably even grow. And then there are other areas where you say, no, it's we're actually there's so many different suppliers, it doesn't really matter.

We are kind of free to choose.

But I feel like you would go more towards complete control. Like, not talking about what you're doing now, but in the future. You're going to be running this company for the rest of your life. You just said, I'm not selling.

Right? This is my last company. This is my grand ambition.

Yeah.

So, like, would you not want to work towards an area where, like, you have complete control over everything?

Yes, but you also want to work with allies. Like, there are many countries that you want to work together with and where you are stronger if you work together. There's some areas where, you know, specific countries have sensitivities around particular data.

For example, the UK, for example, is very specific about what they're doing in maritime and understandably so, where you want to be, like, really just national. But then there are other areas where you work with allies. And you need to be able to dial it up and down.

So what we're doing, we have this concept of a resilience factory where if a country wants to, you know, buy and build our hardware, they can do it on their own territory. We put a factory there and they can also build up their own supply chain to the point where they feel comfortable with and then buy from.

Explain how that partnership would work. So your technology manufactured in their factories on their soil.

So we can run the factory, but we make sure it's on their soil. And we find a way to work together with them to also make sure that the supply chain is as national, as domestic as it needs to be.

And again, the sensitivities in different countries are different. Some countries don't care at all. They just buy it from us and we can produce wherever. Others really care that it's built, you know, on their soil so that they have more control over it.

Why do you call them resilience factories?

Because we design them to be not this kind of one big factory that is a very easy target for attacks, but actually, they can be distributed all over a continent or even elsewhere, even be underground, as is the case with us, so that they are harder to hit.

You studied the Kropp family?

No. I know of them, but I don't know them in detail.

There's a great book I'm going to send you. It's like 700 pages. I should do an episode on it from my other podcast founders. But they ran into this problem during World War II where the allies just found their centralized factories and just bombed the shit out of them.

Yeah. I mean, by the way, this problem is completely underestimatedright now. Coming back to fighter jets again. So we have these exquisite fighter jets, like the Eurofighter, Rafale, and, you know, a bunch of others. But they all need airfields.

With the exception of the Gripen, they tend to use and need airbases to take off and land. Those airbases are obvious targets, obviously, for an attack. And so if you look at something like the CA1, our autonomous fighter jets, it's designed in such a way that it can take off from any kind of makeshift airstrip, which would be a road, an autobahn, a motorway, a highway, et cetera.

Essentially adapting it to where you can't bomb, you're not going to bomb all the roads.

You can't bomb all of it.

Exactly. Okay.

Yeah. And I think there is still, I think certain governments and militaries are still in denial of what actually is going to happen in a conflict. You know, in many cases, we won't be able to take off with our crewed fighter jets anymore.

So how do you go about, like, trying to explain that to them? Like, how do you just make it obvious? Do you just do it through product demonstrations?

Yeah. I mean, it's like with everything else, you do product demonstrations. You show what the capabilities are. We've done this a lot with drones. And then, to honestly everyone's credit, people do get it. I mean, it's not like people complain about procurement is so slow and governments are so slow.

Yes, but then when they do get it, it goes very fast. Like, the large strike drone contracts that happened happened really quickly with political support, with support of the procurement agency. And they went through all in record time.

And now, if anything, I think that the companies, you know, are really under pressure to deliver all of this stuff really fast. So it's like we all complained about it in the past, but it's a bit of a legacy problem.

I think procurement has got faster and the realization that these things have to happen is happening faster too. And, you know, there will be big autonomous fighter jet programs in Europe as well now. Two years ago, there was nothing.

Even one year ago, there was nothing, but it's now happening.

Something that just came to mind while you were speaking earlier is you're talking about how the, you know, in the AI age, everything is going to happen faster. You think it's in five years, it's actually two, maybe two years, maybe two months, might even be, you know, faster than even you suspect.

So AI is making your products better than better, faster than you expected. Can that also, can AI also help manufacture and increase your manufacturing faster too?

Yeah.

Because if you're saying we're going to produce a couple thousand a month, I think, isn't China doing, like, 100 million drones a year or something like that?

Not really. I mean, it's and Ukraine is building, I think, 2 million or so a year. But those are different types of drones. And of course, the FPVs, the quadcopters, and again, they have their role and they work, but they're much hotter range and they've got smaller payloads or explosives.

Strike drones are much bigger. I mean, they're like this and with.

How big is your strike zone?

So the payload, for example, the explosive is 2 to 4 kilograms or even larger. And the range that it can fly is around 100 kilometers. And so it's quite a lot more than FPVs. And they're used in different ways as well.

Those numbersright now, like up to 3,000 a month, are really quite high for this kind of category. And you can scale it up even further. At the moment, honestly, the bottleneck isn't manufacturing speed. We can build them really fast.

There will be a point, though, in the future where you want to be even more efficient and faster. And then AI will play a role in manufacturing as well. At the moment, it's too early. It's because we're not limited at the moment.

So wait, what is the bottleneck then?

Honestly, the bottleneckright now is the big programs need to come. So the first ones are coming. We just closed a 1 billion framework contract in Germany, but they now need to come everywhere. And then we can crank up manufacturing accordingly.

What do you mean by everywhere?

In the various countries because.

In all the Western countries?

Yeah.

Okay.

Yeah. There'll be some in Asia as well.

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That's applovin.com. Allright. I want to get into how you think about running the company. You mentioned earlier the mistake that you made with your previous company was not putting enough emphasis on talent and recruiting. What did you mean by that?

When you build a company, you obviously try to hire good people. And every founder will always say, you know, the most important thing is talent and their people, and they spend so much time on recruitment. But when you actually look at it in detail, and I include us there at NaturalMotion previously as well, it is I wouldn't say it's half-assed, but it isn't the most important thing.

And I would argue that hiring and finding theright individuals, number one, and then secondly, curating that group of individuals and also moving people out is the most important thing in a company. And it is the reason why a company has great culture.

And it's also the reason why a company is high-performant and it feels like it's light-footed. And Helsink feels that way, I think. It feels like it's a very fast, highly performing company that can adapt really quickly. And it is almost entirely because the talent density is so high.

So if that's your kind of thesis, and it was our thesis, then you have to think how to solve it. And the two main factors, the first one is you need to hire well. So you need to build a machine that hires well and be able to monitor how it does it.

And the second one, it needs to be able to curate as well. So you need to have a machine, a system, a set of processes that ideally are very easy that allow people to also manage people out when they don't work out.

And what a lot of people don't, I think, appreciate is that these two are linked because it becomes much easier to move people out that are not a good fit for the company if you know your hiring pipeline is so good that that position will be filled almost immediately.

Then it becomes kind of a low opportunity cost thing. What happens instead in a lot of startups and probably also larger companies is that managers are hesitant to move people out of a company because, A, it's always unpleasant, so you need to hold them accountable.

But B, because they mayberightly know that it will take nine months to fill that position again. And very often the argument, and many founders will be familiar with this, very often the argument of a manager will be, yeah, but if I fire this person now, then we won't be able to hit our deadline because at least they're going to get the job done somehow.

Maybe a bit slower than they should. Maybe they create cultural problems. They have an attitude issue, but at least eventually they'll get the job done. And that's not good enough. So you need to always have enough pressure on the pipeline to be able to fill those positions quickly so that it becomes easier.

And so what we did with Helsink at the beginning, because we knew this was, you know, going to be important, the first contract we ever signed, even before we founded the company, was with a third-party recruitment agency because we didn't have anything internal.

We always wanted to start with pressure on the recruitment pipeline. And Gumber Nicklas and I then spent easily the first year just reviewing the KPIs easily every week to see how our recruitment worked and always injected ourselves if it needed to be readjusted because the recruitment pipeline was so important.

Building then the internal recruitment team was really important. And then building processes for how you manage performance was important as well. And the most important thing is a quarterly performance calibration review. And what we do there is we don't actually review the performance of all the individuals.

We listen to the managers explain why they give their reports a certain rating. And then the manager is held accountable to that rating. So we ask them, you know, why did you give that person that kind of rating?

And then we might say, well, that doesn't sound like a three. That sounds like a two. Or doesn't sound like a three. It sounds like a four. And that allows us to make sure that the calibration that people have of what is good performance, what does good look like, is the same across the company.

And it also means that it's hard to hide. If someone is an underperformer and you give them a low rating, the expectation is that you do something about it. You either make sure that they become better, and that's your task as a manager, or if that's not possible, then you find ways to part ways.

And this kind of accountability, I think, is really useful for a company to do that because it allows you to eventually scale up and have a general view of, you know, what is the benchmark that we're looking for.

And it also gives us a feeling for which managers try to protect the teams and which don't.

I got to pull something up. Do you remember we were together, we were racing cars in Sweden and Luca Ferrari was there?

Yeah.

Did you spend any time with him?

I didn't. I didn't, no.

You need to. Or I'm not telling you what to do. You should. How about this? So we had this crazy launch. And Luca is a very, I like him a lot, but he's a very strange cat in the sense that, like, I consider the way he runs the company almost like Galapagos Island of entrepreneurship because he didn't, like, look to other entrepreneurs.

He doesn't really know much about entrepreneurial history when I talk to him. He doesn't really pay attention to anything. He's just, like, essentially, like, trying to figure out how to run a company based on what he wanted to do.

And so he's got a lot of very unique ideas. But I remember we had these notes and we were just going back and forth on WhatsApp. I was like, dude, I'm just going to type all the notes of the crazy shit that you said during this launch because you have some very interesting ideas on talent and specifically HR.

And so he had this idea. These are some notes from this. You should spend some time with him. He goes, he talks about hiring. He says, we make it a science. He's talking about what he's doing at Bending Spoons.

He has a team of 50 in HR, but they're all engineers. I've never heard of this before. And so what they do is they'll compare one, two, and three-year performance to signals from their CV. So we're, he's saying, hey, you know, we think quality X is really important, but we're just guessing.

So what we're going to do is say, we hired this person because of quality X. Well, what's their performance based on all the people we hire from quality X? You're 12 months out, 24 months out, 36 months out.

And he says they actually have developed, like, this algorithm of 100 different signals of what they figure, like, is important for talent. And he's like, we've completely.

That's really cool.

We treat it as an engineering process. And then he says, we sent, remember, he has all these different companies. And he's like, we centralize hiring and firing. And he says, talent managers are in charge of both entries, so people coming into your company, which you just described, and then exits, which you also just described.

And he's like, people, his whole thing was like, you should have brilliant people in HR that most companies treat HR as just like.

100%.

Like B, C, D players. He's like, no, you should have the best people in HR because it's so important.

Totally agree. And I think this kind of investment, taking it so seriously, it's just, it compounds over time because you just get the best people in. It carries a different culture and it becomes something that it will be, it's central to being successful eventually because especially if you can keep that muscle over time when you grow as a company, it's easy to lose it over time.

And we always say kind of a company like Helsink has to shed its skin almost like every nine months and you have to rethink how you do your processes again. You have to rethink about how you grow, what kind of leadership you need.

But if you can keep that kind of investment in making sure you have a great intake of people up, it's super valuable.

Are one of the co-founders having to approve every hire? How do you guys, how do you do this?

We don't have to approve every hire. I think that's too difficult now. I think we do get involved in hiring.

How, I'm going to argue with you since you like to argue.

Yeah.

You have how many employees?

1,300.

Okay, it's not too difficult. Elon approved the first, personally approved the first 3,000 hires of SpaceX.

Yeah.

It's in one of the books, the biographies of him.

Apparently, yeah. That's great. We don't do it that way. We have very good leadership that is able to make those decisions. It is true that, you know, sometimes we get pulled in, you know, for a second opinion. And it's also true that we get pulled in to interview people and sometimes to convince them to come into the company.

And then for certain roles, we do a lot of the hiring ourselves. Like we spend a lot of time, the founders and executive team on hiring.

I want to hear more about this.

Key positions, we will sometimes do end-to-end, end-to-end the hiring as founders. We'll do the search. We'll work together with search agencies. We'll work together with our network because they're so important that we want to get itright. And we know that if we get theright person, it'll be transformational for the company.

So Daniel also gets involved in our hiring. He just, you know, really played a very big role in hiring one of our most senior executives recently, which went out really well. So we all chip in. It's so important to get theright people in.

It is, again, it's the most important.

But if somebody's in front of you, how do you actually know if they're good or not?

So everyone, I think there's different methods. For me is I try to talk to them and I try to get a feeling for the person without a standard set of questions. I just try to find whether a person is effortless.

That's the probably most important person characteristic I look for.

Wait, what does effortless mean?

It's like one of the things you can tell if they don't try to impress, if you get a feeling they have deep knowledge of what they're talking about and at the same time they're still curious and have high agency.

That's kind of the combination I look for. And that combined to me is effortlessness. And it doesn't, I don't think it takes that long to find it out. It takes in a conversation maybe 10 minutes or so to get a good feeling for whether a person has this kind of effortlessness or not.

That's what I look for. But I don't interview software engineers, for example. That wouldn't apply that.

I mean, you're essentially, I would imagine, involved at the most key positions that you're trying to prove for. What do you think is happening in these 10 minutes?

Honestly, I haven't thought about it. I don't know. I just try to get a feeling for the person. I don't reflect on these things that much, to be honest. I just, I know it works for me. And the only thing that matters for me is whether the outcome isright.

So I do look, obviously, at the statistics because if I kind of came in and I just kind of vibed the whole thing and everyone kind of ended up being crap after six months, obviously that wouldn't work. But that's not the case.

We, you know, like all the senior positions obviously interviewed by all the founders. And so we always have a kind of second and third opinion on it. But we tend to agree on people. I think we look for similar things.

Sometimes you have to go into longer interviews and people do longer interviews with us as well. For me, it works better if I do short interviews and I just get a feeling for the person.

Have there been examples where your initial intuition about a person has been proved wrong in Helsink in particular?

Not at Helsink, but three times at NaturalMotion. I still know the names. And it still really annoys me why I didn't read it early enough. In all three cases, they were so good at faking the effortlessness and so good at coming up with fake facts that I didn't read through it.

I heard you say something on Harry's podcast. Did you actually think there's a lot more exceptional people out there than other people believe, especially if you have a couple thousand employees?

People's character and also performance is not set in stone. So quite often it's also a matter of, in larger companies, sometimes it might actually even be harder for people who have a 10X potential to become a 10X person.

So it's a combination of things. It's probably harder to keep just hiring 10 out of 10 people, but also harder to develop them. But it's still worth it. I mean, the power law in talent is extreme. There are very few 10 out of 10 people, but they make, I mean, it's a cliche, but we see this every day.

They make a disproportionate difference to the company. So it is worth trying to find these people. And it is worth finding a way to give them a hold in a company where they can really thrive. We try to do this very, very systematically at Helsink.

And we make for, I think, hopefully for everyone, we create a great environment where they're surrounded by amazing people. But, you know, for the 10 out of 10s, we go the extra mile.

How do you do it systematically?

Don't want to go into too much detail on how we do it, but we are.

That's fine.

We create an environment where they can do their best work because, and we make exceptions that we wouldn't always make for everyone because they are such big contributors to the company. And many of them now have contributed so much already.

It's also a feeling of gratefulness, to be honest, to have a bunch of those key employees that have made a big difference. And you can point at the successes of the company and you always know that. I mean, obviously it's all about talent because people make all of this stuff.

Maybe in the future it's more AI, but at the moment it's still mainly people. And you can point at those people that made a difference to the company. And so I think we all feel a lot of gratefulness as well to those top individuals, to everyone in the company, obviously, but in particular to the ones that, you know, have turned a project from really difficult to, you know, from red to green.

That happens very often. And it's quite often very small teams or specific individuals that make a big difference.

Based on the conversations we had, the way I would summarize your perspective on this, because you talk about this a lot, it's like talent density above everything else.

Yeah. I think it's the number one thing. It's, I feel that culture comes from talent density. It's, we had a situation, I don't know, maybe it was 18 or 24 months ago or so where we had a set of values at Helsink that we came up with at some point, I think in a workshop or so, and they were on our website and they were fine, I think.

And then we had one of our get-togethers where the whole company got together and a bunch of people came and said, we want to rewrite our values. We want to throw the old ones away. We know now what Helsink is about and we want to, like, do it completely differently.

And then, so at this get-together, there was this workshop. And I have to say, I was dreading it because I didn't want to do another value session because I never liked them. And it was effortless. Like the team came up with their own values based on their experiences.

And it wasn't one of those exercises where you kind of all contributed ideas. It was just kind of a mind melt and it was clear this is what it was going to be. And the top value was whatever it takes.

And then everyone gave examples for why that was. Some had just come back, you know, from the front line in Ukraine. Some had not slept for 48 hours and done a whole bunch of things that are just amazing and impressive.

And so that was one that came out of it. Another one that came out of it was the truth is in the field. Like it doesn't matter how much you claim that your system works, you know, in tests, in government tests, et cetera.

We found out it has to work in reality and in combat. And so the truth is in the field came out of that. And I was so impressed by the team. And I was kind of thinking, like, how do you, how did that part of the culture come about?

And as far as I can tell, it came about because a bunch of really good people got together, really cared about this stuff, had initiative, and thought about it, and then they came up with it. It was just that.

I think just getting really good people together that have good chemistry and when they sometimes maybe have the sparks flying, they can find a way to work together again. That's what creates culture.

So you have this idea to start this European defense company. You have ideas for the products you want to build. You raise money. So then you go from the idea to now your products are actually being used in Ukraine for the first time.

Do you remember the first time that you found out that your product was being used there? Where were you and then what that felt like?

We knew from our team in the field. And I do, and everyone thinks differently about these things. I think, and I respect, I think, most attitudes towards it. I've personally found it very difficult. I think it became a more serious company and like some of the kind of lightheartedness, you know, was gone a little bit because if you build a video games company or a SaaS company, you can be quite lighthearted about things and unserious.

Yes, it's a commercial business, but, you know, you can be it. It fits culturally. If you are deployed in what fundamentally is a sad thing, this kind of conflict, and you contribute to it because you have to, because you can think it through from first principles, but in my opinion, it's still sad that it happens.

That makes it a serious, you know, changes the culture. And we are, I think, very aware of it. And that doesn't mean that we don't want to create the best systems. Of course we do. And it doesn't mean that we are not super ambitious.

We are, but it is serious. It's very serious. We don't take it lightly.

Allright, so you've used the word deterrent multiple times throughout this conversation. So that means the best possible outcome for Helsink is nothing happens.

Yeah. You don't want a conflict. And, you know, in general, obviously the reason why you build capabilities is in order to avoid conflict, not to use them in a fight.

Which this goes back to this dinner we had like two years ago, this argument we were having about this, the fact that war has been, you know, constant throughout human history. So like what actually has to take place in your mind for that outcome to actually happen where it's like, no, there is no more human conflict?

I mean, that's a big question. I do think it's in human nature to have at least parts of the population that want to have conflict, that enjoy conflict, that want to, you know, increase their sphere of influence. Sometimes, you know, that is political.

Sometimes it's geographical. Sometimes you just literally want to have more land around you. I think that is partly cultural, but it's also partly hardwired into a part at least of the population and will probably be genetic in a part of the population.

In order for that not to dominate everything else, you need to make sure that the rest of the population is sufficiently protected so that it's too expensive to try and, you know, use force to take what you want.

That's basically what it boils down to. And if you could eliminate, you know, the outliers, let's say, who really are that aggressive and want to use force, then, you know, I think forever you'd have peace. It's unlikely you can eliminate it.

I think it's more likely that you have to contain them. And I think that's okay as long as you see it early enough that you have to contain them and you are able to look very prickly to them so that they don't attack.

You mentioned your previous company a few times and you said something when you guys were developing the autonomous fighter jet that you used a very similar technique that Demis used to do AlphaGo. I just finished reading this biography of Demis.

It's interesting to me that he got started. His first introduction to AI was through video games. Yours was too. Some of the best entrepreneurs come from gaming. What do you think it is about that?

Yeah, and I think arguably Palmer Luckey did too. I mean, I'm certainly very close to the gaming industry. Gaming companies are complex to build because you marry art with technology and in many cases, especially, you know, console games, you know, back in the day, today it's a bit different with some of the most, I would say, sophisticated IT projects that you could think of.

And at the same time, they had to have artistic value as well. And you had to accommodate, you know, people from all walks of life, like, you know, very focused software engineers with, you know, artists who, you know, just try to create something beautiful.

And that is not dissimilar to what happens in the defense industry. You know, maybe a little bit less artistry, although that exists as well. But we have very different people that work on very complex systems that have very different cultural backgrounds and still need to work together to produce something amazing in the end.

I think that's one part. And maybe it's also exposure to defense through games. I don't know. A lot of games are, you know, have a military theme. Maybe that's part of it as well.

Do you explain the founding of your first company? Like what was happeningright in your liferight before you started that one though?

I was studying in the UK and I was working on, in biology, I was working on systems, on simulations that simulated neural networks.

In what year?

The year was 1999.

Wait, you were working on simulating neural networks in '99?

Yeah, using genetic algorithms. I was looking to optimize them to do something useful.

Why were you interested in that to begin with?

I liked complex systems. So I had just started a PhD in complex systems in biology and neural networks are a complex system. And specifically the ones I looked at were fully recurrent neural networks. So ones that, you know, with theright weights could start to create spontaneous cyclic activity.

So they started to.

Is that not what you were just described on the fighter jet?

Well, it has some similarity because the, so genetic algorithms have fallen out of favor as a search algorithm. And now it's almost entirely reinforcement learning. But you could theoretically also use genetic algorithms. So there's definitely some similarity. The network architectures are different.

Back then I based my network architectures on biological, what's called central pattern generators. So CPGs, they are the neural structures that create rhythmic movement for, you know, for walking, for your heartbeat and a bunch of other things. And so I tried to recreate one of these for walking using genetic algorithms and a neural network, a quite simple neural network to optimize the weights.

And in order to see whether it worked, I hooked it up to physically simulated creatures. You know, very simple four-legged and then two-legged creatures. Physics engines had just started back then with, you know, Math Engine and Haverk and other companies.

And to my surprise, it ended up working quite well. So overnight, I remember it's quite rare that you have these eureka moments, but I had this thing set up overnight and those computers were very slow back then. And then the next morning when I looked at the experiment, I literally had this two-legged creature walk over the screen fully physically simulated.

You know, did a bit more research, you know, in that area and then realized this was going to work very well and thought I'd spin out a company to use these things as virtual stuntmen in movie scenes.

So if I go back to you in '99, did you have any inclination that one day you'd be a founder, an entrepreneur?

No, no, not at that point.

What did that person in '99 think that they were going to do?

I thought I was going to be a scientist. I wanted to stay in science and be a biologist and specifically do software and simulation work in biology. That's what I wanted to do.

Okay. But then you have this eureka moment and your first thought is, I'm going to start a company?

It was my first thought. It took a little bit of time, but this was the time of the dot-com boom.

'99 was an important point. Okay.

Yeah. And it was still, you know, like it looked like you could do that kind of thing. And it was inspiring to see lots of other people start companies. And so I started NaturalMotion and we first used it, you know, we produced a software called Endorphin that was used in big Hollywood movies like Lord of the Rings, Troy, Spider-Man, Harry Potter.

And that was fun and great, but it didn't make much money because we only, I think we charged $15,000 per license and they ended up kind of doing all of the scenes with them. And it was clear that the real value was going to be in using that technology for games in real time.

And Rockstar Games were one of our customers for, you know, for the old tool Endorphin. And they asked us, do you have a version that runs in real time on the upcoming consoles? And we said, kind of. And so then we started a long collaboration with Rockstar Games who ended up using our technology in GTA IV, GTA V, Red Dead Redemption, and a whole range of other games.

And then that company grew and it grew faster than before, but it still didn't have the kind of takeoff, the kind of lift-off characteristics that I kind of was hoping for as a founder. You always kind of obviously hope for more of a hockey stick thing.

And it felt like the kind of chess pieces were kind of drawing in and it was going to be hard to move. So we ended up saying like we need to make games ourselves and what you would now call vertically integrate.

We didn't think about it that way. We felt like we were so inspired and learned so much from Rockstar Games that we thought, how hard can it be? It turns out to be quite hard. But it ended up working quite well.

We acquired a games team, did the first games, the iPhone came out, and then we had a string of hit games on iPhone and then a big breakthrough, which was in a completely different area. All of our previous games had been in characters because that was our technology.

And then there was one game that I really wanted to make because I was really into cars, which was a drag racing game, so a car racing game without any steering. And that became by far our biggest hit, Scott Serious R Racing, and became the biggest game of all time on iPhone at the time.

And that gave us the hockey stick. Then there was lift-off for the company. And then it was off and it became a completely different experience.

I feel there's some, like a theme connecting here and I still don't have an understanding of this. So you'll see this in all these biographies that I read,right? So I'm reading oneright now. It's getting Raymond Plank writes it when he's 90 years old and he starts this company called Apache Corporation with $250,000 in 1954.

By the time the book is published, you know, 50 years later, it's like a $30 billion company. And his insight was he was a

tax planner and accountant. And some of the businesses that he was working for were these new American oil companies. And he realized there's these huge tax incentives that were taking place in America post-World War II. At the same time, you had tax benefits if you would invest in oil discoveries because the United States was trying to incentivize domestic oil production.

And at the same time, because there's so much debt after World War II, they increased the top marginal tax rate to like 90%. And so the very wealthy people were trying to find ways to offset. And that was the original idea.

Like he discovered Apache Corporation, which winds up being this massive oil and gas company because of the work that he was doing in tax planning and accounting for relatively small businesses. I feel there is some kind of connection between your first company and your second that I'm trying to get to.

Am I just wrong on this?

So I don't think it was that direct necessarily. One theme that I've always felt with everything I ended up doing is, I think, is that I ended up doing something slightly different to maybe what the mainstream was. And part of the reason is I've never felt kind of part of the group, of the peer group.

Like I never, as a biologist, you know, I did a lot of biology and I loved it, but I never really felt like I was like part of the biology group. And that made it a little bit easier to do different things.

That's why I ended up just doing software and simulation rather than grout into the field and watch animals and dissect animals. I never liked that stuff. I wanted to do something slightly different stuff. With gaming, I also never felt part of the gaming group and culture the same way.

And as a result, I think we ended up doing quite different games that I remember like the pricing for our games was very different to anyone else's.

The pricing?

Yeah, the first games that we made, we priced as low as we possibly could because we felt that we just maximized revenues that way. And everyone else in the game industry said, no, your game needs to have a value.

Like your mobile game needs to be at least $5 so that people feel it has a value. And it never made sense to me because all I wanted to do was maximize revenues. And I felt like there was so much price elasticity that we could just go all the way down and people could spend overall, we would make much more money because we'd have much more people.

So we sold our game for $0.99, the cheapest that was possible. And then when Free to Play came, we were the first big free-to-play 3D game and we made it free and then charged money elsewhere. And that would have been much harder had we been part of the group.

And I think a similar thing is also true for defense. It would be much harder for us to build Helsing if the founder backgrounds had already been in defense companies. Just much harder. It's easier to be an outsider.

That maybe is a parallel. But then the other thing is like I always try to do things that are different and sometimes cool. Like I wanted to, like I really wanted to do the number one top grossing game in the world.

I remember sitting, like standing in the shower at one point in the UK and thinking, I would like to do the number one top grossing game. It was just a goal. And with Helsing, I think we all want to build a company that has impact.

So I think that's similar too. You just kind of want to have those goals. You want to have a bit of a North Star and then go for it.

Okay. I love that you use the word North Star. One other, I think probably the last thing I want to talk to you about today is I've heard you say this, essentially this criticism of like this LinkedIn or X commentary culture that commentaries actually relatively worthless or completely worthless.

What's your opinion on this and like can you just expound on that?

Yeah, I think commentary is entirely worthless and it has almost, it has no positive contribution. The only thing that it does is it, I think it drags some people down. So it has a net negative benefit. And it obviously is encouraged through, you know, the way the social platforms are, you know, incentivizing contributors.

So you're incentivized if you comment and particularly if you comment negatively, but you're not incentivized, you know, to be a sponsor. And.

I see a little bit of that.

It is what it is. And, you know, they should do what they want. But I do think that creators are still somewhat undervalued and commentators are still overvalued because they get so much airtime. And there are many of them now, I think even more than before.

And it contributed to some of the European, I think, perceived malaise. You know, people talking themselves and each other down. I just had this the other day and I was just in a car with someone who was actually a great entrepreneur, but he himself just kept on commenting on how bad certain things are.

But there's no point in commenting about it. It creates zero value. You either do something about it or you don't talk about it. But if you don't do either, then I don't think it's a good contribution. Just commenting on negative stuff is not useful.

What would your advice be to do then?

Just to focus on building your company. I always think that you have a real privilege as a founder that you can make a difference. You know, depending on which sector you're in, you can make big differences in the way a society works.

Like arguably all the social networks have made a massive difference, for better or for worse. All the AI companies are making a massive difference. Many health companies, I think defense companies are making a big difference too. And if you are a founder that is very ambitious and you're in one of those fields, you can change society and not many categories of people can do that.

Politicians can as well. Certain types of other people can as well. Sometimes even investors. But founders, I think, have the biggest lever. And if you, that's also why you have so few founders, I think, on Twitter and

other social platforms because it's already very satisfying to do the stuff that you do. You don't then need to comment on how bad everything is. You just do your stuff and it has an impact.

That's the perfect place to end. Thanks for making the time.

Cool. Thank you.

I hope you enjoyed this episode. Please remember to subscribe wherever you're listening and leave a review. And make sure you listen to my other podcast founders. For almost a decade, I've obsessively read over 400 biographies of history's greatest entrepreneurs searching for ideas that you can use in your work.

Most of the guests you hear on this show first found me through founders.