Episode summary
Nelson Mills on Building a $100 Billion Company, Autonomous Weapons, and the Future of Defense
How I Invest With David Weisburd
· · 53 min · Hosts: David Weisburd · Guests: Nelson Mills
Summary
Nelson Mills argues that undersea autonomy has finally reached an inflection point because AI, navigation, communications, and manufacturing have improved enough to make lower-cost autonomous underwater vehicles useful at scale. Vatn Systems is trying to turn that opening into a focused defense company, starting with a smaller, man-portable vehicle and then sharing modules and software across a broader undersea product line. Mills says the company has already moved its first product, the S6 vehicle, into production readiness and has won over 40 million in contracts.
A major theme is that undersea warfare is an asymmetric market. Mills says underwater systems are hard to detect, hard to communicate with, and expensive to build, but those same constraints create a moat and a big commercial opening if costs can come down. He compares the opportunity to drones, pointing to use cases in mine countermeasures, ISR, port security, and kinetic missions where lower-cost systems can replace expensive divers or niche military hardware.
He also argues that defense startups can scale differently from traditional primes by using firm fixed price contracts, modular manufacturing, and visible hardware demonstrations that help close customers and investors. Mills says Anduril and Palantir helped prove that defense-tech companies can grow quickly while staying agile, and he wants Vatn to become a more focused undersea prime with the scale and defensibility to build a $100 billion company.
Key takeaways
- Mills says Vatn’s first product, the S6 vehicle, is in production readiness and the company has won over 40 million in contracts.
- He argues undersea autonomy becomes viable when cost falls and usefulness rises, citing a $2 million drone as too niche for many customers but $100,000 to $200,000 as more workable.
- Mills says the hardest undersea problems are navigation, communications, and GPS-denied operation, which create both technical risk and a moat.
- He says Vatn raised its first $2 million pre-seed in 30 days by showing a team, a market, and a path through technical risk.
- Mills believes defense founders should start with the smallest viable hardware product and use modularity to reuse parts across vehicles and missions.
- He says founders should always be building relationships for the next round, because they are “never not raising.”
Notable quotes
“we transitioned our first product, our S6 vehicle to full like production readiness. We won over 40 million in contracts”
“you can build a hundred billion dollar company”
“It's getting to scale, its cost and its usefulness”
“we raised our first round, $2 million preede in 30 days on a strategy dream”
“Always be raising. Yeah. So you're always building relationships for the next round, right”
How the episode opens
Andrew proved that you can build a startup in the government space that you can grow revenue rapidly and you can do that while still remaining agile and fast moving. — You want to become the next defense prime. What needs to happen between now and then for you to become this great defensive?
Recently we transitioned our first product, our S6 vehicle to full like production readiness. We won over 40 million in contracts. And if you do that, um, you create defensibility, you create a significant price advantage, um, and you can build a hundred billion dollar company.
There's this impending potential conflict between China and Taiwan. Is America ready to go into a naval war? — I don't know. Um, if this had been a war a decade ago, we were probably — So, Nelson, you grew up homeschooled on a sailboat in the Caribbean. How much of Vatton start today?
It's a great question. I spent my entire life on the water. Really grew up on it and for Vatton, I always wanted to build uh a maritime company, right? I worked on a bunch of ideas in the maritime space and then ultimately came to bot. And when did the ocean become something that you decided to turn into a business?
For me, it was really like looking for the right opportunity, right? I think blue tech started having its moment where people realized like, hey, there is this opportunity to take junior technology and apply it to one of the oldest industries in the world, which is, you know, maritime trade and commerce and naval warfare. Um, and that this was a new emerging market, right?
And so marrying those together really um just came up as hey this is the right time to do it.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- autonomous underwater vehicles
- defense technology
- ai and autonomy
- venture fundraising
- undersea deterrence
Companies and tickers mentioned
- Vatn Systems
- Anduril
Watch the episode
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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