Intro Seth Winterroth is a Partner at Eclipse where he has been investing in the physical world for over a decade. They now have fresh $1.3B in funds taking their AUM (Assets Under Management) to ~$10B to build and invest in critical technologies in the physical world. His portfolio alone is collectively worth over $13B and includes: * Wayve - valued at $8.6B as of their last round. Their global team is advancing AV2.0, a next-generation embodied AI system that can learn from real-world experience and large-scale data, and generalize across cities, vehicles, and driving conditions worldwide. * True Anomaly - valued at $1.5B as of their last round. The only defense technology company focused exclusively on space defense. It designs and builds spacecraft, payloads and software for space superiority * Mytra - reportedly valued at $2B. It is a software-defined automation platform built around three modular components: The bot, storage, and operator interface. All the intelligence lives in the bot and software layer; the storage structure is commodity steel. That architecture eliminates the lifts, cranes, and conveyors that make traditional automation systems rigid and prone to cascading failures, and replaces fixed workflows with a platform that can be configured and changed in software * Forsight Robotics - reportedly valued at $500m. The company aims to bridge the worldwide gap in the accessibility to eye surgery and help over one billion people who suffer from preventable vision impairment. * Ursa Major - reportedly valued at $600m. An aerospace and defense company delivering flight-proven capabilities for hypersonics, solid rocket motors, space mobility and launch. *The company descriptions are sourced from Eclipsed website and the valuations are sourced from publicly available reporting. In this conversation we cover: * The talent density in frontier tech is growing, fueled by leaders and decision-makers trained at organizations like SpaceX, Tesla, and Rivian, alongside software builders “bored” of the “long tail of SaaS”. * Eclipse’s investment framework prioritizes “market, market, market,” alongside a strong team and a differentiated technology-driven product. * The firm focuses on taking engineering execution risk—following the Jeff Bezos adage that “hard is our moat”—while actively avoiding science risk or net new invention risk. * Seth is excited about distributing large foundation models into physical world applications for multi-variable problems, but notes that hard engineering execution challenges must be solved to proliferate this capability. * He defines Eclipse’s opportunity set as every problem that exists in the physical world, viewing the 80% of global GDP in that domain as an unbelievably large opportunity. * A key insight for early-stage teams is the willingness to ship, knowing they will get “punched in the face” during the pilot phase. The most important factor for success is how teams incorporate those messy learnings into Gen 2 and attack the next phase with vigor. * Seth’s most contrarian view is that “physical AI” is currently “a lot of hype,” and that humanoids and general-purpose models for robotics are “ninth-inning robotics,” suggesting the category will unfold through an iterative grind, not a sudden “ChatGPT moment”. Watch on Youtube: Timestamps 00:00 - Introduction 02:14 - Breaking down techno-optimist Tech Twitter04:45 - Rediscovering Silicon in Silicon Valley 08:45 - The SpaceX and Tesla Training Grounds 12:45 - Hard is the Moat: Engineering Execution vs. Science Risk 16:45 - Institutionalizing a Thesis-Driven Culture 20:45 - Partnering with Highly Prepared Minds 24:45 - The Wave Series A Case Study 28:45 - The Willingness to Ship: Managing the "Gen 1" Failure 32:45 - Managing Design Partners and Expectations 36:45 - The Hard Reality of Defense Tech Go-To-Market 40:45 - The First Chapter of Company Formation 44:45 - The Mytra Thesis 48:45 - The Build-Co Strategy at Eclipse 52:45 - First Principles Thinking and Avoiding the Small Idea Trap 56:45 - Why General Purpose Robotics is a Ninth-Inning Game 1:00:45 - Breaking the Industrial Food Complex: A Decade-Long Opportunity 1:04:45 - Finding Value After the Hype 1:08:45 - The Rigor of Capital Allocation and Returns 1:12:45 - Reindustrialization: Market Dynamics and National Security 1:16:45 - Sustaining Long-Term Value and Discipline 1:20:45 - History, Podcasting, and the Next Generation of SaaS This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit wethebuilders.us
