Building Defense Technologies to Protect Democracies | Torsten Reil, Helsing

Let’s start with what we were just talking about before we started recording. What’s your opinion of the future of tanks and battleships?

I think there’s a big change happening, and you can already see it in Ukraine. 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.

Apparently, the time that a Russian soldier survives at the front now is about 20 to 30 minutes. You can argue about whether that’s correct, but it’s probably roughly right in terms of ballpark. 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.

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

Again, they’re high-priority targets. So, I think we’re seeing a big change right now in warfare. Those lessons have been pretty apparent, I think, in Ukraine over the past 18 months or so. People are starting to understand them now.

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

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

Wait, what’s the difference between those 2 drones?

FPVs are basically smaller drones—quadcopters that, most of the time, are controlled manually, like a remote-controlled plane. Strike drones often travel over longer distances and, like the HX-2, which is our drone, are quite often AI-controlled.

You had a tweet that was interesting, and maybe this can tie into the dinner that we had a few years ago, where we had this fierce argument. I left thinking that we hated each other, and then we became friends. You said something like, “100,000 of your drones could prevent a land war in Europe.” What does that mean, and why do you believe that?

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

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 and find their targets, 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 and wanted to invade a country that had 100,000 of your drones, how do you do that?

I think it’s very difficult. Using tanks would be extremely difficult because, again, they’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.

This is basically where everything is going. You have autonomy now with drones. You have autonomy coming up with autonomous fighter jets, and you also have it coming up with land systems, in particular robots.

What do you mean by autonomous drones, though? Are they all run by AI?

They will be. At the moment, especially in Ukraine, a lot of drones are still remote-controlled. You have thousands of very skilled drone operators. That won’t scale, though, particularly in the West, and it 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 achieve true mass, and it’s also the only way 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 have you still not figured it out?

It’s reasonably solved. I think the need so far has been, first of all, to make the drones work for terminal guidance, which is basically the last 2 kilometers or so, and then to create the software to coordinate them all. Now it’s going to move toward 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. Your proposition to me was essentially that you’re just not going to be able to have humans on the battlefield anymore, because it’s going to be about who can produce more material.

I think we discussed this book called Freedom’s Forge, which I’ve read twice. Essentially, it’s about the United States converting its industrial and commercial power from making products that people would buy to making war materials, and mass-producing more than the opposition had. That helped tilt the balance of the war in its favor.

I thought you had a very similar perspective: that’s what we would have to do. The winners of future wars are just going to have to mass-produce more drones, more weapons—more of everything.

I think it’s going to be a battle of material. It’s machines versus machines. The reason for this is that autonomous mass, as we call it—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 on that battlefield.

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 on your own, it’s very hard to survive. That’s going to get worse and worse because, at the moment, the drones attacking you are usually remote-controlled. Once they’re autonomous, it’s going to be even more dangerous.

Those drones usually don’t care about jamming anymore. For FPVs, that’s because they’re connected through fiber-optic cables. For larger drones, it’s because they’re already autonomous and don’t have to worry about GPS, because they have GPS-free navigation. They can detect targets and engage once you’ve allowed them to do so autonomously.

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

The problem with jamming is 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. That means the drone needs to fly autonomously, or it needs to be connected with a cable. That’s what’s happening right now.

The second problem is GPS jamming. Pretty much the whole front line is GPS-jammed, so you can’t use your GPS receiver. 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, almost like a pilot of a plane does, or you do it with AI that tries to do the same thing.

Those algorithms are now very robust. They work in daylight, at night, in the snow, and even with deformed terrain, which obviously happens quite a lot with shell impacts. That technology already exists.

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. I think the trend is going to be—and people are realizing this—that it’s going to be unethical to send humans onto a battlefield where you know they’re not going to survive. At the same time, you still have to retake territory and protect and defend territory. So, you need robots on the ground. If you extrapolate from where we are right now, I think that’s where we’re going to go.

1. Why Torsten Founded Helsing

I want to go into the way you’re running Helsing right now, but I think the place to start is why you decided to found the company to begin with. We can give a quick overview. You came from gaming, right? You sold a company for half a billion dollars, and you were angel investing, looking for your next thing. Did you know for a fact that you were going to found another company after your first sale?

No. After I left NaturalMotion and Zynga, I didn’t think I was going to start another company. I was pretty exhausted, to be honest. I’d been doing it for 15 years, and I was pretty low on fuel in my tank.

It didn’t take very long to recover—about 3 months, maybe—and I felt the energy was back. But then it took another 2 or 3 years before I thought, “Actually, I want to start something again.” Honestly, I wouldn’t have done it had I not met my 2 co-founders, Gundbert and Niklas.

Especially with what we’re doing in defense, it’s so complex. Being a founder is already lonely as a single founder, but in defense, the companies are so complex. You have to think about so many things at the same time. You obviously have to deal with technology, but you also have to deal with politics, export law, and a whole bunch of other things. It’s very difficult to do it as a single founder.

So when I met my two co-founders, we had all independently 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. I wanted to find out more about defense because I’d invested, but I didn’t know that much about it. Someone recommended I meet up with Gundbert, who at the time was at McKinsey, responsible for aerospace and defense.

We met up in a café in Berlin and hit it off. Within 30 minutes, we thought we should start this company together. We went to see Niklas, who had the same feeling, and within a few days or so, we decided to start Helsing. This was a very high-conviction decision, and there was never a doubt. That’s still the feeling of the company now: the company moves very fast, and a lot of it is based on quickly settling on founder conviction in terms of what we do—that we need to go into certain areas, certain territories, et cetera.

2. Founder Conviction & Betting on European Defense

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

That was the end of 2020, beginning of 2021.

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 gotten better now, obviously, back then it was quite unpopular, and it was hard to raise money.

Wait, it caused problems with banks?

There was a risk, and some people who had been close to our company had been debanked around that time. I wasn’t, but I know another person close to the company had difficulty getting credit because we were involved in defense, and this is still the case now. It hasn’t completely disappeared. I think ESG requirements are still there.

Back then, the defense of a country, of a democratic society, was grouped by banks in the same bucket as pornography, gambling, and smoking because it was seen as weapons, and weapons are always bad. I empathize with the gut feeling on this; it’s just that when you think it through, obviously it doesn’t make sense.

This is also why we started the company. It felt like if we didn’t start the company, no one else would. We were specifically worried about Europe’s reaction to Crimea in 2014—the invasion and the taking of Crimea. I think all of us didn’t really want to think that this was the beginning of something bigger. We all didn’t want it to be true. But if you looked at what the ambitions were, it was pretty clear that something else was going to happen.

We were concerned that Europe was going to be very dependent on other territories for its defense, and on other countries. The U.S. had companies like Anduril and Palantir that were very forward-looking defense companies, with a big focus on AI, cheaper hardware, abundant hardware, and the idea of mass manufacturing. But Europe had nothing.

We felt we had to do this, and we had to prove that we could build something like this in Europe, although with a slightly different flavor. That’s why we started it. It was very difficult to raise money in 2021 for defense. No VC wanted to talk to us, and we didn’t even try in the end. We just raised money from individuals and family offices, and then we were lucky that Daniel put in €100 million of his own money very early on. That allowed us to scale the company faster than we otherwise would have been able to.

This is what I always read about you guys: “Yeah, and they got a $100 million investment from Prima Materia.” That’s his own money.

Yeah.

That’s a high-conviction bet really early. This is before the invasion of Ukraine.

Yeah.

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

Yeah, I think it was €8 million 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, about 3 months later.

And your response was—

Ideally, €100 million.

How’d you come up with that number?

I didn’t really do a specific budget for it, to be honest.

But it felt about right.

It felt about right. That’s true for almost all funding rounds, isn’t it? You kind of eyeball it because so many things change so quickly in a company. It’s very hard to find an exact number.

But Daniel had the same level of conviction that Gundbert, Niklas, and I had, and I think he’s a similar-conviction person. It doesn’t take very long, and then the conviction is very deep, and it makes everything easier. It made all the conversations easier. We didn’t really have to 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 investing in this kind of company.

Obviously, what happened was that only 11 months after we started the company, the war in Ukraine happened and public sentiment shifted. It’s now easier, and a lot of people are investing in defense, both in the U.S. and in Europe. But at the time, it was extremely unpopular.

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

Yeah.

One thing that I’ve talked to a bunch of people who have been on this podcast about is that I try to encourage them: stop selling your goddamn companies.

Yeah. Your whole thing is, like, stop selling your company for $100 million and then buying a house in Italy and becoming an investor. We need more people. We have enough people in [__] finance, dude. You need more people doing [__].

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. You can buy a house in Tuscany, and you can fly there from Scandinavia. You’re there in about 2 hours, and you can live an amazing life. 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 who’s been successful and can start another company.

My friends who sell their companies—I say this jokingly, but there’s a lot of truth in it—they’re like, “Got acquired.” And I’m like, “Sorry to hear that.”

Yeah, exactly.

Entrepreneurship is the best game in the world. You took yourself out of the game and put yourself on the [__] sidelines to do what? Write checks.

No, I agree. It’s easy for me to say because I sold my previous company as well. It may be too early, although I’ve been doing it for a while. As I said, for a while I thought I wasn’t going to start another company because building companies is exhausting, and sometimes you need to recharge your batteries.

But once you’ve done it, I think people are also afraid that they might not find the right mission, or that they might find that the second company isn’t as successful as the first one. That is a risk. I thought about that, too: What if the whole thing just doesn’t work at all? But I think that’s a risk you have to take.

I just talked to Scott Wu from Cognition, and they’re throwing all kinds of crazy money at him. This is huge—a million people are trying to acquire him as a person or the entire company. His whole thing is, “Yeah, but this is the biggest opportunity of my life. I couldn’t live with myself if I didn’t at least try. I’m fine failing.”

And then he said, “I’d be salty as hell,” meaning he’s super competitive. To be removed from the game completely, as some kind of piece on somebody else’s chessboard, is just intolerable to somebody like that.

Yeah, no, totally. 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 were going to go full throttle. We either completely crash the thing or be super successful, but we didn’t want to do anything in between.

What we’re doing right now is trying to keep our 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. 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 valued at $28 billion or something like that. Every day for 200 days, the stock just goes down and down and down, and it gets down to about $3 billion.

He's like, “This is either a multiple-hundred-billion-dollar company or it's nothing.” So then he winds up borrowing—he goes into debt by like $6 billion—and does stock buybacks, then winds up making like $60 billion on that trade. He's like, “I'm not running a fucking $3 billion company. This is either a big company or nothing, and I'm not playing this little game.”

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

3. Helsing's Mission: Protecting Democracies

So, the identification of what was missing in Europe, which leads to this mission that we need a European defense tech company: Does the mission come before the conviction, or does the conviction come before the mission?

The mission comes first, and the mission is to protect our democracies. I always say it's a real privilege. We talk to our new starters every month, and we always say to them, “It is a real privilege to work in a company where the mission is so easy: We protect our democracies.” That's what we're here for.

Lots of other companies have to spend time and go on an offsite retreat to come up with some kind of mission paragraph that everyone eventually agrees on. We don't have that. It is to protect our democracies. We can point to where we're doing this right now with what we're doing with our deployed drones, for example, in Ukraine, and it makes everything easier.

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

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

A lot of people find excuses for why they can't build a big company. It's very often regulation, bureaucracy, or not enough funding. None of that is true. They're all excuses.

You have a great line about this. I love what you said: The excuse is that people are way too concerned about the regulatory environment and the tax environment. What's missing is that you need aggressive founders with large ambitions. It's just aggression that's missing.

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

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

Say more about that.

I think it's 95% of a company's success; everything else, like I said, is excuses. 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? We spend a couple more days starting the company. It's not a problem.

The amount of regulation that we are subject to—and that other defense companies are as well—with regard to the certification and qualification of our systems, export law, and a whole bunch of other things, including confidentiality and classified information, is like 100 times more than what a startup has to deal with in terms of bureaucracy. 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?

Yeah, you said that to me before, and I've been trying to reflect on it. I don't think I am.

You just demonstrated it here. We have more regulation. Who gives a fuck? Stop making excuses. It's a superpower for founders. Obviously, I know it's not a pejorative when I say that.

I just don't like it when people make excuses. 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 content life.

Sadly, we 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.

Daniel and I talked about this idea of how many prime movers there are in the world—the people who are inventing the technology that we're all using and creating the companies. Power laws rule everything around us, and it's just not that many. If you just have a handful, you can literally change the trajectory of an entire country, an entire world, whatever the case may be.

When you raised the $100 million, what did you see as your entry point into doing this? Was the idea, “Hey, we're going to do what you just said: cheap, simple hardware, and then all the innovation comes in software”? Is that the way you thought about it?

4. Programs of Record & Winning the Eurofighter Contract

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

Explain what a program of record is.

A program of record is an official government program that's in the budget, usually quite large, 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.

The reason most companies didn't do it back then was that you got funding and needed to generate some revenue and proof points reasonably quickly. 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, now we can take those risks. If the first 2 or 3 we go for don't work, we still have enough money left.” We felt it was the only way to build a defense company reasonably quickly.

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

What is that?

It's in Germany. Electronic warfare capabilities are essentially about detecting radars—the types of radars, in this case antiaircraft radars, that try to take you down—detecting their intent, and so on.

The situation had become more difficult for Europe because a lot of those radars had become software-defined, which means that they basically are shapeshifting, and the old approaches didn't really work anymore. We came in with an AI-based, deep-learning-based approach that recovered the ability to interpret those radars.

It was a big technology jump, and we managed to win that program of record together with our partner Saab against a lot of other consortia. 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. We went for it because we thought we could afford to, because we had enough money in the bank. This happened 2 years and 4 months after founding the company. I think we became the fastest company to go from founding to a program of record.

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

A lot of it was, I think, team building, fundraising, prioritization, and pattern recognition that I had from NaturalMotion. When I sold the company and left it, I was reasonably pleased with myself. I thought, you know, this all went quite well in the end. But it was only in the 2 or 3 years afterward, when I started to reflect on some of the things I'd done and how I'd built the company, especially when I started to angel invest, that I realized I had 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 seriously enough—the general hiring of great engineers. I also didn't think enough about how to think about your leadership team, how you grow your leadership team, and how you bring the right executives in at the right time. It kind of worked at NaturalMotion, but we probably could have done a lot of things better.

A lot of that pattern recognition we were able to use at Helsing, particularly in the first few years. But it's also true now that Helsing is at a point that is 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, so we now have to think through things either from first principles or by working with people who have already built big companies, like Daniel.

The other part is that we were lucky that the 3 of us as founders had 3 very different skill sets. I had already started and sold a company, so I think I knew how to fundraise. Gundbert was very close to the various forces and the military, and also understood the political processes really well. Niklas's background was on the AI and engineering side, which is what we really needed to first of all win this program of record.

And this is what I was getting at. That was the reason I asked that question: how the hell do you go from founding to a program of record faster than anybody else? How did you even know you could solve this problem?

It was just a feeling, I think. In particular, Niklas and Gundbert pushed that. Gundbert 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 from anyone else.

Where did Niklas get that intuition?

I don't know. I think it's just that he'd already been in this space with his previous company, so he already had a feeling for this kind of thing.

What was his previous company doing?

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

5. Building a Superhuman AI Fighter Pilot

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

Can you give me an example of that?

Another example is the autonomous fighter jet that we are building right now. It's called the CA-1 Europa. We went into it and invested a lot of money in it, knowing that Europe didn't have anything like it, that we felt this was going to be a big category, and that we could contribute something to it.

The reason for that was that we started almost like a science experiment. We have a great chief scientist, Antoine Bordes, who joined us from Meta, where he ran or co-headed Facebook AI Research. We set ourselves a task 2 years ago: to create a superhuman fighter pilot for beyond-visual-range combat.

Hold on. You've got to slow this down. What did you say? 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. It's a neural network.

Okay.

It's for beyond-visual-range combat, the most advanced type of air combat. It's essentially chess in the sky. Usually it's 2 versus 2, quite far away from each other. These are fighter jets, and they use radar. They use different types of radar, and they switch the radar on and off. They use missiles. Obviously, you have to go offensive and defensive, try to bleed off the energy of missiles that are following you, and have a feeling for when you can reengage.

It's extremely complex. It almost looks like ballet. It's quite beautiful to watch, actually, when you look at it in the tactical views. We've been told by active pilots that this is the last bastion of air combat. Nothing will ever replace the intuition that a human has in the sky to read the situation, to have a feeling for how to engage, and what types of weapons to use.

That turns out to be bullshit. The AI is actually much, much better. The reason is that it's able to explore the search space much more efficiently than a human can. A human learns from a textbook and in flight school, but they can't explore the search space.

We use basically the same approaches as DeepMind used for AlphaGo and AlphaStar, using reinforcement learning. We have an extremely high-performance simulator that runs 20,000 to 25,000 times real-time speed, and that allows us to explore the search space with reinforcement learning much more efficiently.

That means we can train a neural network to be better than an active-duty fighter pilot. We regularly fly against Eurofighter pilots, for example, or Rafale pilots or Gripen pilots.

So wait, you were running tests with your autonomous fighter jet against a human-powered—

Pilot. So we used to do it in simulation only. First it was only our simulation, and we won. Then it was an official simulator from a big prime. Last year, we flew a real fighter jet. We flew the Saab Gripen over the Baltic Sea.

When I say “we,” our AI did that and took full control of the plane in air combat against another Gripen that was human-controlled. We flew 3 air-combat scenarios over the Baltic Sea and proved it.

This was also the point where we realized that something bigger was happening: this actually works, and it works in the real world. We developed the system and called it Centaur. It's now able to work in swarms as well, by the way—not just 2-versus-2 swarms of fighter jets, but now swarms of drones.

Swarms of fighter jets?

And it scales really well. It's extremely powerful. That gave us the conviction that crewed, manned 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. It's not science fiction.

One observation of what's happening at the moment, not just in defense AI but in AI in general, is that things happen faster than you think. Back in the old days, 10 years ago or so, everything was always 5 years away. That was always the number people used, whether it was a particular medical breakthrough or a robotics breakthrough.

That's all shrunk now. The 5 years usually ended up being 7 to 10 years, by the way. The same was true of autonomous driving. It's now the exact opposite: when you think something is 5 years away, it's usually now 2 years away.

Something has changed, and we felt that with Centaur as well. We couldn't believe how well it worked. To this day, I always feel like it seems a bit like science fiction, but that gave us the conviction that we needed to be in this space.

Because it's usually so slow to work with primes, we could have partnered with a prime and asked, “Do you want to do an autonomous fighter jet? We provide the AI, you provide the jet.” But it would have taken too long. So we decided to acquire an aircraft manufacturer outside Munich, with its own runway, hangars, and full aircraft-manufacturing capabilities, and build our own fighter jet.

The aircraft is now called the CA-1. We put Centaur on it as the core technology component. It's going to fly for the first time next year, and we want to show that you can really leapfrog everyone in this category.

We were having this conversation—you, me, and Michael Dell—at Dell's house a few months ago. You told us about this acquisition, and then Michael said, “Can we come see it?” I said, “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, you still have to have a guy in it, don't you?

So eventually, no.

Right now, yes.

Yeah. I mean, we don’t have 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. It crashes into sand. If you crash where we fly, you crash over built-up Bavaria, which is not ideal. So we have a human 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 the early rollouts of Waymo and other companies.

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

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 beat on the EU—or Europe, or in this case Germany—for having regulations, but you just find a way to deal with it. This is the way to deal with it.

You just have a pilot sitting in there like this. Is he in the back? Where is he?

They’re in the front.

Okay. What you just described is 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 that it’s essentially going to be unmanned. I want to get into the morality—the way you look at the morality of what you’re building, and the way it would be immoral to send a human into the battlefield because you’re going to get swarmed by drones. It’s going to be immoral to send a pilot into the sky. Is that the same?

Yeah, it’s the same thing. I mean, there are 2 reasons. First, it’s more powerful to use autonomous systems. They will just be superior because the AI is smarter than humans for this use case. Secondly, as a result, it will be immoral to send someone out because you have to assume that the other side will eventually have those systems as well.

6. Deterrence, Autonomous Weapons & the Morality of Defense

Can you explain how you view the morality of what you’re building, and how you may view other people’s interpretation of essentially banning the creation of new weapons or new defenses? You’ve thought a lot about this. I want a complete overview of how you think about the morality of building the company you’re building.

7. How Torsten Hires Exceptional People

The underlying goal has to be that you minimize the lives lost in general, and ideally you get it down to 0. The way to get lives lost down to 0 is to not have any kind of conflict at all. That’s why deterrence is so important. This is also where—I mean, this is a very old, obviously, argument, but it still comes up all the time—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.

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 have right 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. 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. Again, this is where, especially right now—and it’s going to get worse in the future—you need to use autonomy because you cannot send humans into tanks, fighter jets, or even as infantry onto the field. That’s the underlying theme.

Then there’s another category where you need to think about the way you deploy your software and what, as a society, we’re happy with in terms of the deployment of your hardware and software in terms of autonomy. 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? These are legitimate conversations. There is no easy answer because people have different values on this.

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—was interested in asking us about the capabilities or why we were doing things. Everyone always asked about killer robots, autonomy, our red lines, and whether we had a human in the loop.

We were always happy to answer. These weren’t annoying questions; they were at the core of what we think about. Now, though, no one asks these questions anymore, and I’m not quite sure why. No journalist ever asks those questions: How are we thinking about the ethical side? We do a lot of this ourselves. We have ethics workshops and a lot of deployment guides for our technologies.

We have to think very carefully about things like proliferation and a whole bunch of other things, but we have to do it out of an inner discipline. Journalists don’t ask the questions anymore, and the public doesn’t either.

I don’t even understand the counterarguments that you receive. The argument is, “No, we should not have any new technology.” Humans are violent by nature; we’ve had war since we’ve existed.

Yeah, but it is an interesting topic because we get this pushback as well, obviously, at Helsing. We get pushback from people who say war is always bad. Of course, at some level that makes sense, but again, if you have a situation where you are attacked, or where there is an adversary that is building up capabilities, you need to be able to deter in order to avoid war. Then you need to be able to fight in order to not lose unnecessary lives on your side.

We get a lot of pushback, and it is often from well-meaning people. It’s not that 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 dislike people. Very often, they’re 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 your high conviction, the fact that you’re extremely disagreeable. You’re very comfortable taking a counterposition. You started this company when everybody else said it was very unpopular. Something that I asked Daniel Ek about, and he said, “He’s a German building a defense company in a country whose entire postwar identity was ‘Never again.’”

Yeah.

You’re also willing to cut across your cultural expectations, too.

Yeah. Yeah. I think that’s still the case in Germany, and 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 office is in Munich, in Germany. German society is a pacifist society, and it’s having to face a lot of reality right now, which has been happening in particular over the last couple of years, 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. It’s very uncomfortable for a country that thought those times were over, but it’s also the country that now has one of the most thriving new defense ecosystems, I would say, in the world.

So there is now a rethinking of some of those attitudes. It’s also the country that has, in absolute terms, probably the fastest-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. This is a large increase if you think about the fact that there won’t be more soldiers, most likely, so most of the money is going to go toward new equipment spending.

8. Mass Manufacturing, Software & the Future of Materiel

Okay, so we go back to materiel. Your whole thing is that the winner is going to be able to produce more materiel than their adversary. I still don’t think I completely understand the way you think about achieving that goal. Is the hardware that you’re manufacturing supposed 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 adversary through pure mass. The way you achieve that is that you need to be able to mass-produce. You need to design to mass-produce.

But crucially, you need software to allow those systems to, first of all, be smart and be able to coordinate. Ideally, you also absorb a lot of the complexity of the hardware that usually will be these exquisite systems that legacy primes will make into your software. So you can make the hardware simpler. That means 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. This is what we do, and that works extremely well.

But you have to think it through as one unified system. Once you do that, you can go into mass manufacturing. The HX-2 is now a mass-manufactured strike drone, and we had to go through all of those learnings in July and August last year, when we had to go from dozens of HX-2s per month to a baseline of 1,000. It can now scale to 3,000 a month in the small factory that we have, and it's a completely different kettle of fish from producing just a few dozen.

You have to think about your supply chain completely differently. Obviously, the way you design the drone, quality control, and tracking every single step—you have to learn this. But once you've done this and you're able to produce in very large volumes, you have much more powerful systems because you can now overcome any adversary or target by having saturation attacks, for example, by sending more and more of these drones, by having them highly coordinated, and, if necessary, just producing more and more of them.

Drones are just one example. The same is true for fighter jets. We want to build many hundreds of these fighter jets. The same is true for other systems, maritime systems. It's going to be about being able to build these things in large numbers, designing them so that they can be built in such numbers, and having the industrial capacity and supply chain to produce a lot.

Hold on, though. 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. If I'm a country—or a continent, let's say we're European—it means I can't outsource some of this production to China, America, 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 have 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. Then there are other areas where you say, “No, actually, there are so many different suppliers that it doesn't really matter. We are kind of free to choose.”

But I feel like you would go more toward complete control. I'm 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. This is my last company. This is my grand ambition.” So, would you not want to work toward an area where you have complete control over everything?

Yes. But you also want to work with allies. There are many countries that you want to work together with, and where you are stronger if you work together. There are some areas where specific countries have sensitivities around particular data. For example, the UK is very specific about what they're doing in maritime, understandably so, where you want to be 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 is, we have this concept of a resilience factory where, if a country wants to 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.

Explain how that partnership would work.

Your technology is manufactured in their factories, on their soil. We can run the factory, but we make sure it's on their soil. 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. 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 on their soil so that they have more control over it.

Why do you call them resilience factories?

Because we designed them not to be one big factory, which is a very easy target for attacks, but to be distributed all over a continent or even underground, as is the case with us, so that they're harder to hit.

You studied the Krupp 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 about 700 pages. I should do an episode on it for my other podcast, Founders. They ran into this problem during World War II, where the Allies found their centralized factories and bombed the shit out of them.

Yeah. By the way, this problem is completely underestimated right now. Coming back to fighter jets again, we have these exquisite fighter jets, like the Eurofighter, Rafale, and a bunch of others, but they all need airfields, with the exception of the Gripen. They tend to use air bases to take off and land.

Those air bases are obvious targets for an attack. If you look at something like the CA-1, our autonomous fighter jet, it's designed in such a way that it can take off from any kind of makeshift airstrip, which could be a road, an autobahn, a motorway, a highway, et cetera.

9. Airbase Vulnerability, Procurement & Scaling Strike Drones

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.

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

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

Yeah, it's like with everything else: you do product demonstrations and show what the capabilities are. We've done this a lot with drones, and, to everyone's credit, people do get it. It's not like people don't complain that procurement is so slow and governments are so slow. Yes, but then, when they do get it, it goes very fast.

The large strike drone contracts happened really quickly, with political support and support from the procurement agency. They went through in record time, and now, if anything, I think the companies are really under pressure to deliver all of this stuff very fast.

We all complained about it in the past, but it's a bit of a legacy problem. I think procurement has gotten faster, and the realization that these things have to happen is happening faster too. There will be big autonomous programs in Europe as well now. 2 years ago there was nothing; even 1 year ago, there was nothing. But it's now happening.

Something that just came to mind while you were speaking earlier is that you're talking about how, in the AI age, everything is going to happen faster. If you think it's going to happen in 5 years, it's actually 2—maybe 2 years, maybe 2 months. It might even be faster than you suspect. AI is making your products better and better, faster than you expected.

Can AI also help with manufacturing and increase your manufacturing speed? If you're saying you were going to produce a couple thousand a month, isn't China doing something like 100 million drones a year?

Not really. Ukraine is building, I think, 2 million or so a year. But those are different types of drones. They're FPVs; they're quadcopters, and, again, they have their role and they work, but they're much shorter-range and they've got smaller payloads of explosives.

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

How big is your strike drone?

The payload—for example, the explosive—is 2 to 4 kg, or even larger. The range that they can fly is around 100 km. It's quite a lot more than FPVs, and they're used in different ways as well.

Those numbers right now—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 because we're not limited at the moment.

So wait, what is the bottleneck then?

Honestly, the bottleneck right now is that the big programs need to come. 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.

In all the Western countries?

Yeah.

Okay.

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

10. Talent Density, Hiring & Performance Management

All right. I want to get into how you think about running the company. You mentioned earlier that the mistake 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, “The most important thing is talent and people,” and they spend so much time on recruitment. But when you actually look at it in detail—and I include us at NaturalMotion previously as well—it is, I wouldn’t say half-assed, but it isn’t the most important thing.

I would argue that hiring and finding the right individuals, number 1, and then, secondly, curating that group of individuals and also moving people out, is the most important thing in a company. It is the reason why a company has great culture, and it’s also the reason why a company is high-performing and feels light-footed. Helsing feels that way.

I think it feels like 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 thesis—and it was our thesis—then you have to think about how to solve it, and there are 2 main factors.

The first one is that you need to hire well. You need to build a machine that hires well and be able to monitor how it does it. The second one is that 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 and allow people to also manage people out when they don’t work out.

What a lot of people don’t appreciate is that these 2 are linked because it becomes much easier to move people out who are not a good fit for the company if you know your hiring pipeline is so good that the position will be filled almost immediately. Then it becomes 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 may rightly know that it will take 9 months to fill that position again.

Very often, a manager’s argument 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, maybe they have an attitude issue, but at least eventually they’ll get the job done.” That’s not good enough. You need to always have enough pressure on the pipeline to be able to fill those positions quickly so that it becomes easier.

What we did with Helsing at the beginning, because we knew this was going to be important, was sign our first contract—even before we founded the company—with a third-party recruitment agency because we didn’t have anything internal. We always wanted to start with pressure on the recruitment pipeline.

Gundbert, Niklas, and I then spent easily the first year reviewing the KPIs every week to see how our recruitment worked, and we always injected ourselves if it needed to be readjusted because the recruitment pipeline was so important. Building the internal recruitment team was really important, and then building processes for how you manage performance was important as well.

The most important thing is a quarterly performance-calibration review. 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.

We ask them, “Why did you give that person that kind of rating?” Then we might say, “Well, that doesn’t sound like a 3. That sounds like a 2,” or, “That doesn’t sound like a 3. It sounds like a 4.” That allows us to make sure that people have the same calibration of what good performance is and what good looks like across the company.

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

This kind of accountability is really useful for a company because it allows you to eventually scale up and have a general view of what the benchmark is that we’re looking for. It also gives us a feeling for which managers try to protect their teams and which don’t.

I’ve 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 know him.

You need to, or I’m not telling you what to do. You should. How about this?

We had this crazy lunch, and Luca is a very—I like him a lot—but he’s a very strange cat, in the sense that I consider the way he runs a company almost like a Galápagos Island of entrepreneurship. He didn’t look to other entrepreneurs. He doesn’t really know much about entrepreneurial history when I talked to him. He doesn’t really pay attention to anything. He’s just essentially trying to figure out how to run a company based on what he wanted to do.

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 lunch because you have some very interesting ideas on talent and specifically HR.”

He had this idea. These are some notes from this. You should spend some time with him. 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. They compare 1-, 2-, and 3-year performance to signals from their CV. He’s saying, “Hey, 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 for quality X, 12 months out, 24 months out, 36 months out?’”

They’ve actually developed an algorithm of 100 different signals that they figure are important for talent. He’s like, “We treat it as an engineering process.” Then he says—remember, he has all these different companies—“We centralize hiring and firing.”

He says, “Talent managers are in charge of both entries”—people coming into your company, which you just described—and then exits, which you also just described. His whole thing was that you should have brilliant people in HR. Most companies treat HR as B, C, and D players. He’s like, “No, you should have the best people in HR because it’s so important.”

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

It’s easy to lose it over time, and we always say a company like Helsing has to shed its skin almost every 9 months. You have to rethink how you do your processes. You have to rethink how you grow and 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, it’s super valuable.

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

I’m going to argue with you since you like to argue. You have how many employees?

1,300.

Okay. It’s not too difficult. Elon personally approved the first 3,000 hires of SpaceX. That’s in one of the biographies.

Apparently. Yeah. If you know, 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 sometimes we get pulled in 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. Then, for certain roles, we do a lot of the hiring ourselves. We—the founders and executive team—spend a lot of time on hiring.

I want to hear more about this.

For key positions, we will sometimes do the hiring end to end as founders. We’ll do the search, work together with search agencies, and work together with our network because those positions are so important that we want to get it right. We know that if we get the right person, it’ll be transformational for the company.

Daniel also gets involved in our hiring. He played a very big role in hiring one of our most senior executives recently, which went really well. So we all chip in. It’s so important to get the right people in. It is, again, the most important thing.

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

Everyone, I think, has different methods. For me, I try to talk to them and get a feeling for the person without a standard set of questions. I just try to find out whether a person is effortless. That’s probably the most important characteristic I look for.

Wait, what does “effortless” mean?

It’s like one of those things you can tell. You can tell if they don’t try to impress you, if you get a feeling that 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 the combination I look for. That combination, to me, is effortlessness.

I don’t think it takes that long to find out. It takes maybe 10 minutes in a conversation 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 there.

But I mean, you’re essentially involved, I would imagine, at the most key positions that you’re trying to recruit 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 know it works for me, and the only thing that matters to me is whether the outcome is right.

I do obviously look at the statistics, because if I came in and just vibed the whole thing and everyone, and it ended up being crap after 6 months, obviously that wouldn’t work. But that’s not the case. All the senior positions are obviously interviewed by all the founders, so we always have a second and third opinion on them.

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 just get a feeling for the person.

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

Not at Helsing, but 3 times at NaturalMotion. I still know the names, and it still really annoys me why I didn’t see it early enough. In all 3 cases, they were so good at faking the effortlessness and so good at coming up with fake facts that I didn’t see through it.

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

People’s character and performance are not set in stone. Quite often, in larger companies, it might actually be harder for people who have 10× potential to become 10× people. It’s a combination of things. It’s probably harder to keep hiring 10-out-of-10 people, but it’s also harder to develop them.

But it’s still worth it. The power law in talent is extreme. There are very few 10-out-of-10 people, but they make—I mean, it’s a cliché, but we see this every day—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 home in a company where they can really thrive.

We try to do this very systematically at Helsing. We create, hopefully for everyone, a great environment where they’re surrounded by amazing people. But for the 10-out-of-10 people, we go the extra mile.

How do you do it systematically?

I don’t want to go into too much detail about how we do it, but we create an environment where they can do their best work. We make exceptions that we wouldn’t always make for everyone because they’re such big contributors to the company, and many of them have contributed so much already.

It’s also a feeling of gratefulness, to be honest, to have a bunch of those key employees who have made a big difference. You can point at the successes of the company and always know that they’re there. Obviously, it’s all about talent because people make all of this stuff. Maybe in the future it’ll be more AI, but at the moment it’s still mainly people.

You can point at those people who made a difference to the company. So we all feel a lot of gratefulness to those top individuals—to everyone in the company, obviously, but in particular to the ones who have turned a project from red to green. That happens very often, and it’s quite often very small teams or specific individuals that make a big difference.

11. Helsing's Culture: Whatever It Takes & Truth Is in the Field

Based on the conversations we’ve had, the way I would summarize your perspective on this, because you talk about this a lot, is talent density above everything else.

Yeah. I think it’s the number one thing. I feel that culture comes from talent density.

We had a situation—I don’t know, maybe it was 18 or 24 months ago—where we had a set of values at Helsing that we came up with at some point, I think in a workshop or so. They were on our website, and they were fine, I think.

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 Helsing is about, and we want to do it completely differently.”

At this get-together, there was a workshop, and I have to say I was dreading it because I didn’t want to do another values session. I never like them. But it was effortless. The team came up with their own values based on their experiences. It wasn’t one of those exercises where everyone contributed ideas. It was just kind of a mind meld, and it was clear that this was what it was going to be.

The top value was “whatever it takes.” Everyone gave examples of why that was. Some had just come back from the front line in Ukraine. Some had not slept for 48 hours and had done a whole bunch of things that were just amazing and impressive.

Another value that came out of it was “the truth is in the field.” It doesn’t matter how much you claim that your system works in tests, government tests, and so on. We found out that it has to work in reality and in combat. So “the truth is in the field” came out of that.

I was so impressed by the team, and I was thinking, “How did that part of the culture come about?” As far as I can tell, it came about because a bunch of really good people got together, really cared about the stuff, had initiative, and thought about it. Then they came up with it. It was just that.

12. Deploying in Ukraine & the Weight of Defense Technology

I think getting really good people together who have good chemistry—and when they sometimes have the sparks flying, finding 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, and you raise money. Then you go from the idea to your products actually being used in Ukraine for the first time. Do you remember the first time you found out that your product was being used there? Where were you, and what did that feel like?

We knew from our team in the field. I do remember it, and everyone thinks differently about these things. I respect most attitudes toward it, but I personally found it very difficult.

I think it became a more serious company, and some of the lightheartedness was gone a little bit. If you build a video game company or a SaaS company, you can be quite lighthearted and unserious about things. It’s a commercial business, but you can be that way; it fits culturally.

If you’re deployed in what is fundamentally a sad thing—this kind of conflict—and you contribute to it because you have to, you can think it through from first principles, but in my opinion it’s still sad that it happens. That makes it a serious thing. It changes the culture, and we’re very aware of it.

That doesn’t mean that we don’t want to create the best systems, of course, and it doesn’t mean that we’re not super ambitious. We are. But it is serious. It’s very serious. We don’t take it lightly.

All right. You’ve used the word “deterrent” multiple times throughout this conversation. So that means the best possible outcome for Helsing is that nothing happens.

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

Which goes back to this dinner we had about 2 years ago, this argument we were having about the fact that war has been constant throughout human history.

What actually has to take place, in your mind, for that outcome to happen where there’s no more human conflict?

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, or that want to increase their sphere of influence. Sometimes that is political, sometimes it’s geographical, and sometimes you literally just want to have more land around you.

I think that is partly cultural, but it’s also partly hardwired into at least a part 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 use force to take what you want. That’s basically what it boils down to.

If you could eliminate the outliers, let’s say, who are really that aggressive and want to use force, then 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 are able to look very prickly to them so that they don’t attack.

13. NaturalMotion, Gaming & Torsten's Path Into AI

We mentioned your previous company a few times, and you said something about how, when you guys were developing the autonomous fighter jet, you used a very similar technique to what Demis Hassabis 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, it was certainly very close to the gaming industry. Gaming companies are complex to build because you marry art with technology. In many cases, especially with console games back in the day, they were some of the most sophisticated IT projects that you could think of, and at the same time they had to have artistic value as well.

You had to accommodate people from all walks of life, like very focused software engineers with artists who were just trying to create something beautiful. That is not dissimilar to what happens in the defense industry. Maybe there’s a little bit less artistry, although that exists as well, but we have very different people who work on very complex systems, who 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 have a military theme. Maybe that’s part of it as well.

Explain the founding of your first company. What was happening right in your life before you started that one?

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

In what year?

The year was 1999.

Wait, you were working on simulating neural networks in 1999?

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. I had just started a PhD in complex systems in biology, and neural networks are a complex system. Specifically, the ones I looked at were fully recurrent neural networks, the ones that, with the right weights, could start to create spontaneous cyclic activity.

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

Well, it has some similarity because 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 are called central pattern generators, or CPGs. They’re the neural structures that create rhythmic movement for walking, your heartbeat, and a bunch of other things. 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.

In order to see whether it worked, I hooked it up to physically simulated creatures: very simple four-legged and then two-legged creatures. Physics engines had just started back then, with MathEngine, Havok, and other companies, and to my surprise, it ended up working quite well.

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. The next morning, when I looked at the experiment, I literally had this two-legged creature walking over the screen, fully physically simulated.

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

If I go back to you in 1999, did you have any inclination that one day you’d be a founder or an entrepreneur?

No, not at that point.

What did that person in 1999 think 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 a time of the dot-com boom, and everyone wanted to start a company.

1999 was an important point.

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

That was fun and great, but we didn’t make much money because we only charged $50,000 per license, and they ended up doing all of the scenes with it. It was clear that the real value was going to be in using that technology for games in real time.

Rockstar Games was one of our customers for the old tool, Endorphin. They asked us, “Do you have a version that runs in real time on the upcoming consoles?” And we said, “Kind of.” So then we started a long collaboration with Rockstar Games, which ended up using our technology in Grand Theft Auto IV, Grand Theft Auto V, Red Dead Redemption, and a whole range of other games.

The company grew, and it grew faster than before, but it still didn’t have the kind of takeoff—the kind of liftoff characteristics—that I was hoping for as a founder. You always hope for more of a hockey-stick thing, and it felt like the chess pieces were drawing in and it was going to be hard to move.

So we ended up saying, “We need to make games ourselves,” and what you would now call vertically integrated. We didn’t think about it that way. We felt like we were so inspired by and had 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 and made the first games. The iPhone came out, and then we had a string of hit games on the iPhone, followed by a big breakthrough in a completely different area.

All of our previous games had been about characters because that was our technology. Then there was one game that I really wanted to make because I was really into cars: a drag-racing game, a car-racing game without any steering.

That became by far our biggest hit, CSR Racing, and became the biggest game of all time on the iPhone at the time. That gave us the hockey stick. Then it was liftoff for the company, and it became a completely different experience.

I feel there’s some theme connecting all of this, and I still don’t have an understanding of it. You’ll see this in all these biographies that I read. I’m reading one right now: 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, 50 years later, it’s a $30 billion company.

His insight was that he was a tax planner and accountant, and some of the businesses he was working for were these new American oil companies. He realized there were huge tax incentives taking place in America after World War II. At the same time, there were tax benefits if you invested in oil discoveries because the United States was trying to incentivize domestic oil production.

And because there was so much debt after World War II, they increased the top marginal tax rate to around 90 percent. The very wealthy were trying to find ways to offset that. That was the original idea. He discovered Apache Corporation, which wound up being this massive oil and gas company, because of the work he was doing in tax planning and accounting for relatively small businesses.

14. Outsiders, First Principles & Ambitious North Stars

I feel there’s some kind of connection between your first company and your second that I’m trying to get to.

Am I just wrong on this?

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

As a biologist, I did a lot of biology and loved it, but I never really felt like I was part of the biology group. That made it a little bit easier to do different things. That's why I ended up doing software and simulation rather than going out into the field to watch animals and dissect animals. I never liked that stuff.

I wanted to do some slightly different stuff with gaming. I also never felt part of the gaming group and culture in the same way. As a result, I think we ended up doing quite different games. I remember that the pricing for our games was very different from 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. Everyone else in the game industry said, “No, your game needs to have a value. Your mobile game needs to be at least $5 so that people feel it has a value.”

It never made sense to me because all I wanted to do was maximize revenues. I felt like there was so much price elasticity that we could just go all the way down and people would spend. Overall, we would make much more money because we'd have many more people. We sold our game for 99 cents, the cheapest that was possible.

Then, when free-to-play came, we were the first big 3D free-to-play game, and we made it free and then charged money elsewhere. That would have been much harder had we been part of the group. I think a similar thing is also true for defense. It would be much harder for us to build Helsing if our backgrounds had already been in defense companies. It would have been just much harder.

It's easier to be an outsider. That may be a parallel. But the other thing is that I always try to do things that are different and sometimes cool. I really wanted to do the number-one top-grossing game in the world.

I remember 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. With Helsing, I think we all want to build a company that has impact. I think that's similar to you: You just want to have those goals. You want to have a bit of a north star and then go for it.

15. Why Commentary Is Worthless & Founders Should Build

Okay. I love that you use the word “north star.” The one other thing—I think probably the last thing I want to talk to you about today—is that I've heard you say this criticism of this LinkedIn or X commentary culture: that commentary is actually relatively worthless or completely worthless. What's your opinion on this? Can you just expound on that?

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

You're incentivized if you comment, particularly if you comment negatively, but you're not incentivized to be a creator. I don't complain about this because it is what it is, and 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—perhaps even more than before.

It contributed to some of the European perceived malaise: people talking themselves and each other down. I just said this the other day again. I was in a car with someone who is actually a great entrepreneur, but he himself just kept commenting on how bad certain things are.

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

Arguably, all the social networks have made a massive difference, for better or for worse. All the AI companies are making a massive difference, as are many health companies. I think defense companies are making a big difference too. If you are a founder who 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. That's also why you have so few founders, I think, on Twitter and other social platforms: 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.