To predict a project's success, move beyond lagging indicators like schedule and budget. Instead, monitor leading indicators like the rate and "stickiness" of decisions, the stability of interfaces between subsystems, and how proactively risks are surfaced and addressed. These day-to-day factors determine the ultimate outcome.

The nearly trillion-dollar US defense budget is misleading. The vast majority is locked into fixed costs like salaries, facilities, and sustaining legacy systems. The actual procurement budget for new technology is at a historic low as a percentage of GDP, constraining modernization.

Current military assessments focus on inputs like '6,000 targets struck,' creating a false sense of progress. This echoes the Vietnam War's body count metric, which measures activity but fails to assess actual strategic effects like achieving free navigation or eroding the enemy's power.

Robert McNamara's efficiency-focused systems in the 1960s unintentionally suffocated the US's industrial capacity. By introducing massive friction and layers of "bean counters," it made building anything slow and expensive, a systemic problem that persists today and which Anduril was built to counteract.

Teams often focus on perfectly implementing frameworks like OKRs or Discovery, creating a false sense of achievement. This "alibi progress" prioritizes methodology correctness over creating value in a specific context, leading to lots of outputs but no outcomes.

To combat slow, costly development cycles, the Department of War is shifting from hyper-specific requirement documents to stating clear, high-level objectives (e.g., 'I need a missile that goes this far'). This new model empowers innovative companies to propose their own solutions and moves to fixed-price contracts.

The defense procurement system was built when technology platforms lasted for decades, prioritizing getting it perfect over getting it fast. This risk-averse model is now a liability in an era of rapid innovation, as it stifles the experimentation and failure necessary for speed.

The standard "cost-plus" model guarantees contractors a profit margin on top of their expenses. This creates a perverse incentive to maximize costs and timelines, as 10% of a $3 billion project is far more lucrative than 10% of a $150 million one.

Unlike SaaS, defense and manufacturing startups must build physical products. Investors now scrutinize the "production lag"—the time from contract win to revenue recognition—as a key performance metric. This lag can obscure a company's true health if only looking at top-line contract values.