About Our Guests AJ Piplica is the CEO and co-founder of Hermeus, a defense technology company developing hypersonic aircraft powered by air-breathing engines. His technical background centers on aerodynamics and hypersonics, with early career work on rocket engines and re-entry systems. Unlike many defense tech founders who come from software or commercial tech, AJ’s obsession with speed and aviation started in childhood and led him down the space track in college before gravitating toward the aviation side of hypersonics. He chose this path specifically because he wanted to push boundaries rather than spend a career optimizing incremental performance improvements on existing turbine technology. Zach Shore was recently promoted from Chief Revenue Officer to President of Hermeus. After beginning his career as a Marine Corps Intelligence Officer, Zach served in a variety of industry roles, including as a consultant at Deloitte, Sr Director of Business Development for JAD C2 at Anduril, and Vice President of Product at Vertafore before joining Hermeus in 2022. About Hermeus Hermeus builds hypersonic aircraft designed to operate in what AJ calls “the final frontier of aviation.” The company focuses on air-breathing, reusable systems rather than expendable rockets or boost-glide vehicles. Their approach mirrors the commercial space industry’s transformation of launch: prove you can iterate rapidly on full-scale hardware by treating vehicle loss as an acceptable cost of learning when no crew is involved. Hermeus has won Other Transaction Authority (OTA) awards like Chimera and Antares, where the government pays for data and milestone achievements rather than traditional cost-plus development contracts. The company is building 30,000-60,000 pound aircraft, which requires substantial upfront capital and a production-first mindset from day one. Key Takeaways 1. Separate mission assurance from safety to unlock hardware iteration The most critical insight from the commercial space revolution applies directly to hypersonics: hardware risk and human safety risk are fundamentally different categories. Traditional aerospace culture treats hardware loss with nearly the same level of concern as human casualties, creating a risk-averse engineering environment that prevents the kind of rapid iteration required to advance into new flight regimes. The regulatory frameworks inherited from crewed aviation assume that preventing crashes is paramount, but autonomous vehicles enable a different approach where controlled crash scenarios become acceptable learning opportunities. This shift in mindset allowed SpaceX to iterate at full vehicle scale, and Hermeus is applying the same principle to air-breathing hypersonics. 2. Build products for operators from day one, not technology looking for a mission The traditional research lab model follows a sequential path: develop interesting technology, demonstrate it works, then attempt to transition it to an operational program. This approach has a poor track record because it separates technology development from real operational requirements. Hermeus inverts this by starting with the operator and ensuring every development decision solves an actual warfighter problem that delivers substantial value. This explains why product companies often struggle to work with organizations like the Air Force Research Laboratory (AFRL), which see themselves as architects who design capabilities and expect contractors to build to spec. When you show up with your own product vision, there’s inherent friction with a “not built here” culture. 3. Concentration of capital beats diversification for hard tech at scale The Defense Innovation Unit’s hedge strategy tapped into a fundamental reality of complex hardware systems: you cannot prototype your way to a 60,000 pound aircraft on Small Business Innovation Research funding. The temptation in government innovation programs is to spread risk by funding many small bets, but this approach fails for systems that require immense upfront investment to de-risk both technology and production scalability. While giving 25 companies $5 million each might work for low cost attritable systems, in capital intensive hard tech the Hermeus team would prefer to see the government fund five companies with $25 million and pick some winners. This requires clear accountability and transition pathways, but it enables companies to actually build hardware that can reach production scale. 4. OTA structures unlock speed by paying for outcomes instead of activities Hermeus had success with awards structured as Other Transaction Authority contracts because they changed what the government was buying. Rather than paying for development activities and managing the technical approach, OTA programs pay for data generated along the way and for milestone achievements that deliver specific capabilities. This shifts the focus from process compliance to outcome delivery. For a company like Hermeus, this means the government isn’t dictating how to develop the aircraft or micromanaging spending decisions. Instead, they define what capability they need, and the company has the flexibility to build the infrastructure and processes required to deliver it efficiently. Summary Counterintuitively, the hypersonics race may not be about who has the most PhD researchers or the biggest simulation clusters. The Hermeus team suggests it will come down to who is willing to take hardware risk at full scale, iterate based on flight test data, and build products that solve real operational problems from day one. Hermeus represents a new generation of defense companies that learned from commercial space: embrace hardware iteration, separate mission assurance from safety, focus on operators instead of technology for its own sake, pursue concentrated capital rather than diffuse funding, and hold yourself publicly accountable through concrete metrics. For more: hermeus.com Follow AJ: https://www.linkedin.com/in/ajpiplica/ Follow Zach: https://www.linkedin.com/in/zacharyshore/ Subscribe to Crossing the Valley: valleycrossers.com This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.valleycrossers.com
