Palmer Luckey - Inventing the Future of Defense

**Patrick O'Shaughnessy** (0:00)
Welcome to this Classic episode. Classics are my favorite episodes from the past 10 years, published once a month. These are end-of-one conversations with end-of-one people. Palmer Luckey is a relentless builder and original thinker. He founded Oculus, bringing virtual reality to the mainstream, and is now reshaping the future of defense and technology with Anduril. I hope you enjoy this conversation. Here's a puzzle. What do OpenAI, Cursor, Perplexity, Versel, Plaid, and hundreds of other winning companies all have in common? The answer is that they're powered by today's sponsor, WorkOS. If you're building software for enterprises, you probably felt the pain of integrating SSO, SCIM, RBAC, audit logs, and other features required by big customers. WorkOS turns those deal blockers into drop-in APIs with a modern developer platform built specifically for B2B SaaS. Whether you're a seed stage startup trying to land your first enterprise customer or a unicorn expanding globally, WorkOS is the fastest path to becoming enterprise ready and unlock growth. It's essentially striped for enterprise features. Visit workos.com to get started or just hit up their Slack support. Yes, they have real engineers in there who will answer your questions fast. WorkOS allows you to build like the best with delightful APIs, comprehensive docs and smooth developer experience. Go to workos.com to make your app enterprise ready today.
Hello and welcome everyone. I'm Patrick O'Shaughnessy and this is Invest Like the Best. This show is an open-ended exploration of markets, ideas, stories and strategies that will help you better invest both your time and your money. If you enjoy these conversations and want to go deeper, check out Colossus Review, our quarterly publication with in-depth profiles of the people shaping business and investing. You can find Colossus Review along with all of our podcasts at joincolossus.com.

**SPEAKER_2** (1:42)
Patrick O'Shaughnessy is the CEO of PositiveSum. All opinions expressed by Patrick and podcast guests are solely their own opinions and do not reflect the opinion of PositiveSum. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions. Clients of PositiveSum may maintain positions in the securities discussed in this podcast. To learn more, visit PSUMVC.

**Patrick O'Shaughnessy** (2:11)
My guest today is Palmer Luckey. Palmer is the founder of defense company Anduril Industries, which makes next-generation military technologies for the US and its allies. Since bringing the company to life in 2017, Palmer and Anduril have disrupted the established order in the defense industry. Prior to Anduril, Palmer founded Oculus VR, a virtual reality business that he sold to Facebook for $2 billion. This was one of my favorite interviews in a long time. Palmer is only in his early thirties, but he has already experienced more than most people will in a 40-year career. We talk about innovation, invention, differentiated thinking, and so much more. Please enjoy this great discussion with Palmer Luckey, and if you're interested in learning more about Anduril, you can listen to my Business Breakdown from last year with the company's CEO. You'll find a link in the show notes.
Palmer, I always like starting somewhere of recent passion. You started to give me some amazing material, so we stopped and we restarted the recording here. Maybe we'll just begin with this idea that you were telling me about. I'm always interested by major changes that might happen in the world that nobody is really talking about. Until you said the word synthetic long-chain hydrocarbon fuel to me five minutes ago, I'd never heard that combination of words before. Maybe you can start there and explain why that topic is of interest to you today.

**Palmer Luckey** (3:27)
Well, it's of interest because there's a lot of money being bet by companies but also governments on a handful of specific technological paths for electrifying vehicles, battery electric vehicles, hydrogen electric vehicles. If you can make synthetic long-chain hydrocarbon fuels, in other words, synthetic gasoline, synthetic diesel, synthetic jet fuel using carbon from the atmosphere in particular, there's a lot of ways to do it. Boiling down one of the ways to do it, you take water, you crack it into hydrogen and oxygen using some kind of energy source like a nuclear power plant and then you bond it with carbon to make hydrocarbons and now you've got artificial gasoline coming out the other end. If someone can figure out how to do that cheaply enough, first of all, it's an incredible carbon capture mechanism. Two, if you can do it cheaply enough, let's say a dollar per gallon, then all of these trillions of dollars in investment into battery electric vehicles and hydrogen electric vehicles become really a waste of money and a waste of time. There are of course some advantages to battery electric vehicles and hydrogen electric vehicles that wouldn't apply. But for the most part, especially on the aviation side, the ability to make fuels that just plug into existing fully known, fully optimized, fully understood, and even fully certified systems that are better than the ones that cost hundreds of billions of dollars to develop that also aren't as good. Electric planes spend most of their energy hauling around their energy storage, not people or payload, which of course means you need to put more energy into them in the first place than even synthetic fuels with a pretty low conversion efficiency. The reason it's so interesting to me is that the bet seems so misapportioned. You have so much money going into battery electric vehicles and electrification of electrical infrastructure that's not moving.