E442: Nelson Mills on Building a $100 Billion Company, the China Threat, and the Future of War

Building a successful defense startup requires solving high-barrier technical problems, such as undersea navigation and communication in GPS-denied environments. Nelson Mills, founder of Vatn, emphasizes that achieving scale in this sector depends on shifting from expensive, bespoke hardware to modular, cost-effective autonomous systems. By adopting an asymmetric warfare approach—where low-cost drones can neutralize significantly more expensive traditional naval assets—companies create a powerful deterrent effect. Transitioning from a venture capitalist to a founder provides unique advantages in fundraising and networking, yet success ultimately hinges on physical progress and tangible customer traction. By focusing on vertical integration and modular manufacturing, startups build defensible, multi-mission platforms that challenge the dominance of traditional defense primes while addressing the evolving nature of global maritime conflict.