Editor’s Brief¹

Friday Surprise.

I wasn’t planning to publish this week. Then the reporting on Anduril broke, I spoke with some buddies who’ve used the systems in question, and it became clear the conversation was drifting toward the wrong problem.

Anduril was the the first company I covered when I launched DTS earlier this year. The company’s relevance obviously hasn’t changed but the pattern emerging around its growth, positioning, and incentives has.

Signal Brief: The Arsenal Isn’t Ready Yet

The debate over Anduril’s recent system failures is missing the point. Reports from Reuters and The Wall Street Journal described security issues, performance shortfalls, and operator concerns inside the company’s autonomous platforms. Anduril responded with an essay titled “How Defense Technology Actually Gets Built,” meant to reassure. But all three are talking about the wrong issue.

Test failures aren’t disqualifying; they’re part of the process.

They only become a problem when a company markets battlefield readiness, claims to be rebuilding the industrial base, positions itself as the backbone of a new defense ecosystem then explains away operational shortcomings as if it were still in the prototype phase.

The issue is not failure. It’s incentives.

Origins & Vision

When Anduril published “Rebooting the Arsenal of Democracy” in 2022, they captured what many of us in uniform knew firsthand: the traditional primes optimized for shareholder value over warfighter outcomes. The result was aging systems, late deliveries, cost overruns, and hardware that rarely matched the urgency of real-world need.

But less than eight years after founding, Anduril is drifting toward the same structural incentives it once criticized.

The company now markets and develops systems across nearly every operational domain: Sentry towers, Altius munitions, Ghost drones, Fury aircraft, Dive-LD submarines, and the Lattice command-and-control ecosystem. Ambition isn’t the problem. It’s expansion without demonstrated, battle-ready maturity in any one domain.

No firm, especially one without a manufacturing base prior to 2017, can mature, harden, and scale a portfolio this broad to wartime reliability on venture timelines. The legacy primes built their catalogs over generations. Anduril is attempting it in a handful of investment cycles.

That is a strategic choice. And it is optimized for portfolio valuation.

Capability, Claims, and the Gap Between Them

Warfighters care about three things: reliability under stress, production at scale, and deterrence effect. Publicly visible evidence suggests Anduril is still early on all three. Not for lack of talent, but because physics, supply chains, and integration risk do not bend to narrative velocity.

Operators who’ve used Lattice describe inconsistencies between advertised capability and real-world performance, exactly the kind of gap that appears when messaging outpaces engineering maturity.

These critiques aren’t actually the issue at play.  The problem is that Anduril is positioning ahead of where it actually is, on a timeline driven more by investor expectations than operational readiness.

The Gravity of Going Public

The primes didn’t start as shareholder-first institutions. They became that way slowly, bent by decades of quarterly pressure. Anduril appears to be entering that gravitational field early before proving its systems at scale in real operational environments.

Their recent marketing campaigns have been awesome.  The “Don’t Work at Anduril” recruitment campaign. The college football sponsorship. The NASCAR Race at Naval Base Coronado.

But these are not actually engagements with the defense community. They are broad-market brand plays designed to prepare for an eventual IPO.

When that IPO arrives, likely sooner than later, the incentive structure locks in. Growth becomes the metric. Reliability becomes the assumption. Investor narratives take precedence over the unglamorous work of maturing complex systems to combat credibility.

The investors will get their exit. The question is what happens to the operators relying on systems still in their adolescence.

Mission-Critical Work Requires Mission-Oriented Incentives

Unlike consumer technology, defense companies exist in a unique space where their customers (warfighters) can't choose alternatives. And company failures aren't measured in user churn but in body bags.

Either you're in R&D. Or you're operational. Or you're doing operational test and evaluation with warfighters as beta testers (brutal but defensible).

All three are legitimate.

What you cannot do is market battlefield readiness to secure contracts and build a $30.5 billion valuation, then retreat into developmental immunity when operators or journalists reveal problems.

Bottom Line:

The defense-tech movement started with a conviction: that we could rebuild the American industrial base to be more agile, more innovative, and more accountable than the primes that came before us.

But if Anduril becomes a $30- (or $100-) billion public company on the strength of branding, contracts, and narrative rather than demonstrable, scaled, combat-credible reliability, then nothing has been fixed.

We will have reproduced the old system's failures. Only faster and with better graphics.

Anduril still has the chance to become what it claims: a company whose systems not only push boundaries but earn trust through proof, not posture. But that requires choosing warfighter credibility over valuation velocity.

It requires showing, not telling, that the technology works under the only conditions that matter. It requires accepting that "move fast and break things" is lethal guidance when the people who move fast are warfighters and the things that break are people.

If you claim to be rebuilding the arsenal of democracy, the burden is not on journalists to stay quiet.

The burden is on you to demonstrate that the arsenal works before it's handed to the people whose lives depend on it.

Every time.

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1  The views expressed in this newsletter are my own and do not represent the views of the U.S. Navy, Department of Defense, or any government agency. Mention of companies, technologies, or products is not an endorsement or recommendation. The content is for informational purposes only and should not be considered investment advice.