We often frame selling a business as “exiting.” But it’s a decision to walk away, to quit. That’s not negative, but it’s important to examine your reasons. Some are valid, others less so, and many fall into a gray area that deserves deeper thought.
Ideally, founders build a business they love, one that enhances their life. Business is, to me, one of life’s greatest gifts. It offers freedom, wealth, connection, and the ability to serve, create, and leave a mark on the world.
The headphones I use, the tools I carry, the art on my wall — all exist because someone built them. Entrepreneurs shape society. That’s the power of business.
This week’s “Ecommerce Conversations” is my fifth master class on entrepreneurship, following installments on hiring, branding, profit-building, and priority-setting. For this episode, I’ll address the reasons — valid or not — for selling a business.
My entire audio dialog is embedded below. The transcript is condensed and edited for clarity.
Invalid Reasons
The decision to sell a business is of course subjective. My view is owners often sell for invalid reasons, such as the following.
Believing another business is easier
Sure, some businesses may seem simpler, but what’s easy for one person is hard for another. It depends on your skills, team, and experience.
Business is a series of never-ending problems to identify, prioritize, and solve. Jumping to another doesn’t escape problems — it trades one set for another. If you think the next venture will be problem-free, you’re chasing an illusion.
Consider instead how to make your current business more enjoyable. Solving that problem — how to love showing up every day — is a worthwhile pursuit.
Wanting to ‘retire’
Lying on the beach, traveling nonstop, or restoring cars may sound appealing, but they are misguided. Work is a gift, not a burden. The true win is designing work around what you love, with people you enjoy, and on your own terms.
Ask yourself, “How do I create a business that lets me work on what I want, when I want, with people I want to work with?” If you can’t solve it now, you won’t likely solve it with the next venture.
Many entrepreneurs do fulfilling work, enjoy time with their families, and travel the world — not by quitting, but by shaping their businesses to support the life they want.
Valid Reasons
Certainly owners have many legit reasons to sell. Here are a few.
Partner problems
If you aren’t philosophically aligned with your partner(s), it’s nearly impossible to run a successful company. Misalignment in vision, values, or decision-making creates friction, and that tension will eventually stall progress or tear the business apart.
If you’ve made a genuine effort and still can’t find common ground, then it might be time to sell.
Failure of minimum viable product
The idea of an MVP is to test the market at a low cost. If the early results are poor with an uphill battle to gain traction, it may be wiser to quit early rather than sink tens of thousands of dollars into something the market doesn’t want.
The best products solve a specific problem for a targeted audience and generate genuine interest, even in highly competitive markets.
If your product doesn’t build momentum, consider cutting your losses and continue testing, refining, and seeking the ideal market fit.
Bankruptcy
If you’ve exhausted all options — negotiating with creditors, extending credit, selling assets, liquidating inventory — it’s time to step away.
Filing for bankruptcy doesn’t define you. It simply means you took a risk to build something new, and it didn’t work out. Many successful entrepreneurs have declared bankruptcy. It’s not a personal failure — it’s part of the learning process.
Use the experience as a stepping stone. Rebuild your confidence, reflect on the decisions, and learn from the lessons. That knowledge will serve you in the next venture.
Poor health
Serious health issues could signal a time to reassess. No business is worth sacrificing your well-being.
Find a way to integrate healthy habits, such as exercise, nutrition, and stress management, while continuing to build. But protecting your health sometimes means walking away and starting over. You only get one life. Time is your most valuable asset, and if your business is actively shortening it, the cost is too high.
Poor growth outlook
If you’ve hit a long-term growth plateau, selling the company is an option. The key is long-term. A business that has stalled for a few months or even a couple of quarters might have only a temporary setback. Ask yourself, “Are your expectations realistic? Are you experiencing the natural ebb and flow of entrepreneurship, or is this truly a dead end?”
Dive into the root cause. Is your market too small? Is profit razor-thin? Are there operational inefficiencies or overly aggressive growth strategies that aren’t yielding the desired results?
If you’ve exhausted all strategic options, it might be time to consider what’s next.
A life-changing offer
Getting a life-changing offer might tempt you to sell. Maybe you told yourself, “If I ever get $5 million, I’m out.” Then that offer comes. But here’s the catch: If you haven’t figured out what’s next, you might find yourself with time and money, but no direction. Many entrepreneurs discover they actually enjoyed building their business, and that magic doesn’t come back.
Especially if you’ve built it with partners you love and trust, selling is like a divorce. Once the business ends, so might that tight-knit bond. Great partnerships are rare and irreplaceable.
Selling when a strong offer arrives can be a smart move, but be clear on what comes next.
Declining market
Think Blockbuster — once a giant, but eventually overtaken by Netflix and Redbox.
Netflix pivoted — from DVD-by-mail to digital streaming, then to original content creation — completely transforming their business model. Blockbuster did not.
Before selling or closing your business, consider whether there is a pivot opportunity. If beard trends shift, could Beardbrand, my company, expand into men’s grooming or women’s products? An innovative pivot can keep you relevant, no matter how the market changes.
For years Jack Oswald was a touring tennis professional. He aimed for top worldwide rankings, the key to serious earnings. The rankings never came, but constant travel exposed a nagging problem: his tennis bags kept breaking.
Thus began his passion for designing a better bag for athletes on the go. And that led to Cancha, a direct-to-consumer seller of sport and travel bags, which he launched in 2019 from his base in the U.K.
Jack and I recently spoke. He discussed his transition to entrepreneurship — early struggles, raising capital, and more. Our entire audio is embedded below. The transcript is condensed and edited for clarity.
Eric Bandholz: Tell our guests who you are and what you do.
Jack Oswald: I’m the founder of Cancha, which means “court” in Spanish. We design customizable, modular sport and travel bags — gear that transitions easily between work, play, and fitness. Our mission is to make sports travel seamless and help people stay active.
My background is in tennis. I spent years training and traveling to compete, chasing the dream of going pro. I didn’t reach the top, but I learned a great deal and gained valuable global experience, including learning French and Spanish.
Before the pandemic, I began designing bags for myself to meet the needs of an athlete on the move — from court to city to nature. I had no background in soft goods design, but I dove in. During the pandemic, with travel and tennis on hold, I focused full-time on building Cancha and learning ecommerce.
Initially, our target market was traveling athletes, but most customers today are everyday commuters and recreational players. We’re especially popular in the U.S., which accounts for 60% of orders. Brexit made selling in Europe more challenging, so the U.S. became our primary market. Interestingly, we also have a loyal customer base in Asia, including Japan, Hong Kong, and Singapore, despite not marketing in those locales.
Bandholz: Tell us more about the transition from tennis to entrepreneurship.
Oswald: It was a long, gradual process. As a kid, I believed nothing could stop me from turning pro. But reality hit — tennis is tough to make a living in. Only the top 100 players earn well, and beyond 150 in the rankings, you’re often losing money. Unlike soccer, where thousands of players make a living, tennis is financially brutal unless you’re at the top.
I gave it everything — traveling constantly, chasing ranking points, trying to survive each week. The grind was intense, and you’re often alone without the same resources as competitors. A coach, decent accommodations, or even a meal can make a big difference. The mental and physical toll is enormous, especially when facing losing streaks or setbacks.
I eventually realized I needed a new path. I probably would’ve kept pushing had I not discovered a new passion with Cancha. Many of my peers struggled post-tennis, but I was fortunate to find something meaningful. Even so, it took over a year to fully shift. I was still half-committed to tennis while building Cancha, gradually accepting that it was time to move on.
Bandholz: Bags are expensive to manufacture. Where did you get the money?
Oswald: It started scrappy. I wasn’t spending much at first. I was learning from friends who knew about soft goods design. Between tennis tournaments, I attended trade shows, where I met suppliers who generously offered samples, perhaps thinking I was more established.
In late 2019, I ran a crowdfunding campaign, raising approximately £10,000 ($13,500). I had no marketing experience, but it provided a bit of capital to move forward. Then, during the pandemic, we received a government relief loan, which helped fund our first production run and enabled us to undertake better design work. That was a major boost.
We began with tennis bags because that’s what I knew. The concept was a modular system — bags with add-ons for shoes, laptops, or wet gear. We first tried a backpack with racket add-ons, but it was too bulky. So we pivoted to a dedicated tennis bag and expanded from there.
Having contacts in the U.S. tennis space — reviewers and influencers — helped us get early traction. From there, we’ve grown into other racquet sports and more lifestyle-oriented bags.
A main reason for launching Cancha was frustration — my tennis bags kept breaking. Tennis is a growing sport, but the industry itself remains largely traditional, especially in marketing. Most brands rely on sales representatives and retail, and their bags are often poorly made, used as loss leaders to sell rackets. Unlike golf, where premium bags are the norm, tennis bags lack innovation and quality.
I saw a gap for better materials, thoughtful design, and durability. That became our focus: premium, modular bags that meet the needs of modern players and travelers.
On the marketing side, I also wanted to break the mold. Most tennis brands rely heavily on player sponsorships, but those come with restrictions — players who wanted to use our bags often couldn’t. So we went direct-to-consumer via ecommerce, bypassing the old-school gatekeepers.
Bandholz: How did your growth evolve?
Oswald: It has been gradual. We haven’t had a breakout moment from ads or gifting — no “rocket ship” success. It’s been a steady improvement across the board. Our bags are significant purchases. They last a long time, and people take time to decide. That makes acquisition challenging, especially with rising ad costs.
Our limited production approach has worked well. We’ve leaned into that with email marketing — offering limited-edition drops, exclusive colorways, and brand collaborations within tennis and beyond. We’ve also done a lot of pre-orders.
Creating excitement around the product development process and scarcity has helped drive engagement and interest. Instead of relying on one big channel, it’s been a mix: building hype, maintaining a tight brand, and slowly earning trust.
Bandholz: Do you have repeat buyers?
Oswald: Yes, and that’s been a strength. Our modular design allows customers to add accessories, naturally encouraging repeat purchases. People often buy a base bag first, then return for add-ons.
I design accessories to stand alone while also integrating with our bags. That dual approach gives us crossover appeal — some people buy just the laptop bag, while others build complete travel systems over time.
Limited drops play a role, too. Customers offer feedback on what they want. That helps guide future product development. We’ve had customers spend upwards of $2,000 over a few years. That kind of engagement has been key to our growth.
Bandholz: Where can people buy your bags or reach out?
Every quarter, McKinsey & Company surveys upwards of 100,000 consumers across 18 countries to gauge economic sentiment and its potential effect on spending. The research, called “ConsumerWise, “provides a 360° view of the consumer through the combination of our team of experts and advisors,” per McKinsey.
In April and May, the survey focused on U.S. consumers to assess the impact of tariffs on their attitudes and behaviors. The findings showed that while inflation remains the top concern among consumers, tariffs have rapidly climbed to become the second most cited issue.
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In addition, most survey respondents have either adjusted their spending habits or plan to do so soon, even though the impact of tariffs has not yet materialized in store prices.
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Moreover, consumers who anticipated changing their behavior frequently mentioned less spending on nonessential goods, buying fewer items, or opting for more affordable brands and products.
Sally Wilson is a lawyer turned craft entrepreneur. She’s also an involved mother who shares her business and passions with two kids. She says being a great mom doesn’t mean sacrificing who you are.
Sally launched Caterpillar Cross Stitch a decade ago from her home in England. Fast forward to 2025, and her company has 12 employees, selling cross-stitch supplies, courses, and events to customers worldwide.
In our recent conversation, she addressed early struggles, leadership lessons, global selling, and yes, raising kids. Our entire audio is embedded below. The transcript is condensed and edited for clarity.
Eric Bandholz: Tell us what you do.
Sally Wilson: I own an ecommerce company called Caterpillar Cross Stitch. We sell cross-stitch and crochet kits, subscriptions, and run events and classes — everything stitch-related — from our base near Birmingham, England.
I launched the business nearly 10 years ago after leaving a law career I hated. I took an ecommerce course and followed the advice: find a niche, a community, and a product people love.
I bootstrapped the business from the start, using savings and reinvesting carefully. I’d always wanted to work for myself, originally thinking I’d open a law firm, but I knew I needed something outside of law.
We now have a team of 12, including my husband, who joined the business three years ago. He was an engineer, but juggling two careers and raising kids was tough. On our 10th anniversary trip, I suggested we work together toward the same goal, and he joined soon after.
Working together wasn’t easy at first. There was conflict, especially since we discussed the business at all hours. But we set boundaries and now work in separate offices. I handle marketing and design, he runs operations. We’ve found a strong balance and deep respect for each other’s roles, which makes the business — and our marriage — work.
Bandholz: How have you adapted your leadership style with a larger team?
Wilson: I’ve learned that not everyone thinks or works like me. Early on, I assumed everyone approached things the same way, but I’ve come to appreciate that people are gifted differently. This awareness has made me more mindful and patient. Now, I focus on balancing my style with what works best for the team.
In the early days, I was more rigid, expecting people to fit my workflow. Coming from a law background, where I worked alone in a closed office, this was normal. But business, especially creative work, requires more interaction. Now, I’m much more intentional about how I communicate to bring out the best in others.
I try to make our employees feel safe sharing how they best receive communication. I’ve done a lot of reading, including recently exploring the distinction between feedback and criticism. Feedback, when delivered well, is a gift — it helps relationships and growth. But criticism, even if it sounds the same, can feel harsh and unhelpful if it lacks intention. It’s all about how it’s delivered.
I’m emotional and reactive by nature. Sometimes my husband and I go to bed angry — and that’s okay. Time offers perspective, and I’ve learned to own how my words or tone contribute to how something lands.
Bandholz: What’s your vision for the business?
Wilson: I want Caterpillar to be the brand women think of for crafting, especially in the U.S., Canada, Australia, New Zealand, and parts of Europe. Australia, in particular, is an exciting opportunity. The data shows a passionate, underserved community there that we haven’t fully tapped into yet. I’d love to give it more focus.
More broadly, I’m driven by the idea that you only get one life — so why not see what’s possible? That’s not about always winning or having the right answers. It’s about being resilient and reframing failure as learning. You either win or you grow. I’ve let go of fears and leaned into trusting myself: Even if I don’t know something now, I believe I can figure it out.
It comes down to grit, consistency, and a refusal to quit. That mindset has carried me this far, and it’s what I’ll continue to bring as we scale globally.
But my health and my children come first. For years, I sacrificed sleep, working until 2 a.m., and it took a toll. Now I’m more intentional. If I’m not well, the business suffers too.
As a mom, especially a female entrepreneur, there’s a lot of pressure to step back, work part-time, or choose a less demanding path.
But showing up fully for both my business and my kids is the example I want to set. I pick them up from school every day, attend nearly all their events, and I’m always available. They see how hard I work, how driven I am, and how lit up I get when things go well. I think that’s powerful for my daughter and son to see that passion.
Being a great mom doesn’t mean sacrificing who you are. I want them to grow up with open minds, strong values, and a real understanding of what it means to chase their purpose.
Imagine: China deploys hundreds of thousands of autonomous drones in the air, on the sea, and under the water—all armed with explosive warheads or small missiles. These machines descend in a swarm toward military installations on Taiwan and nearby US bases, and over the course of a few hours, a single robotic blitzkrieg overwhelms the US Pacific force before it can even begin to fight back.
Maybe it sounds like a new Michael Bay movie, but it’s the scenario that keeps the chief technology officer of the US Army up at night.
“I’m hesitant to say it out loud so I don’t manifest it,” says Alex Miller, a longtime Army intelligence official who became the CTO to the Army’s chief of staff in 2023.
Even if World War III doesn’t break out in the South China Sea, every US military installation around the world is vulnerable to the same tactics—as are the militaries of every other country around the world. The proliferation of cheap drones means just about any group with the wherewithal to assemble and launch a swarm could wreak havoc, no expensive jets or massive missile installations required.
While the US has precision missiles that can shoot these drones down, they don’t always succeed: A drone attack killed three US soldiers and injured dozens more at a base in the Jordanian desert last year. And each American missile costs orders of magnitude more than its targets, which limits their supply; countering thousand-dollar drones with missiles that cost hundreds of thousands, or even millions, of dollars per shot can only work for so long, even with a defense budget that could reach a trillion dollars next year.
The US armed forces are now hunting for a solution—and they want it fast. Every branch of the service and a host of defense tech startups are testing out new weapons that promise to disable drones en masse. There are drones that slam into other drones like battering rams; drones that shoot out nets to ensnare quadcopter propellers; precision-guided Gatling guns that simply shoot drones out of the sky; electronic approaches, like GPS jammers and direct hacking tools; and lasers that melt holes clear through a target’s side.
Then there are the microwaves: high-powered electronic devices that push out kilowatts of power to zap the circuits of a drone as if it were the tinfoil you forgot to take off your leftovers when you heated them up.
That’s where Epirus comes in.
When I went to visit the HQ of this 185-person startup in Torrance, California, earlier this year, I got a behind-the-scenes look at its massive microwave, called Leonidas, which the US Army is already betting on as a cutting-edge anti-drone weapon. The Army awarded Epirus a $66 million contract in early 2023, topped that up with another $17 million last fall, and is currently deploying a handful of the systems for testing with US troops in the Middle East and the Pacific. (The Army won’t get into specifics on the location of the weapons in the Middle East but published a report of a live-fire test in the Philippines in early May.)
Up close, the Leonidas that Epirus built for the Army looks like a two-foot-thick slab of metal the size of a garage door stuck on a swivel mount. Pop the back cover, and you can see that the slab is filled with dozens of individual microwave amplifier units in a grid. Each is about the size of a safe-deposit box and built around a chip made of gallium nitride, a semiconductor that can survive much higher voltages and temperatures than the typical silicon.
Leonidas sits on top of a trailer that a standard-issue Army truck can tow, and when it is powered on, the company’s software tells the grid of amps and antennas to shape the electromagnetic waves they’re blasting out with a phased array, precisely overlapping the microwave signals to mold the energy into a focused beam. Instead of needing to physically point a gun or parabolic dish at each of a thousand incoming drones, the Leonidas can flick between them at the speed of software.
The Leonidas contains dozens of microwave amplifier units and can pivot to direct waves at incoming swarms of drones.
EPIRUS
Of course, this isn’t magic—there are practical limits on how much damage one array can do, and at what range—but the total effect could be described as an electromagnetic pulse emitter, a death ray for electronics, or a force field that could set up a protective barrier around military installations and drop drones the way a bug zapper fizzles a mob of mosquitoes.
I walked through the nonclassified sections of the Leonidas factory floor, where a cluster of engineers working on weaponeering—the military term for figuring out exactly how much of a weapon, be it high explosive or microwave beam, is necessary to achieve a desired effect—ran tests in a warren of smaller anechoic rooms. Inside, they shot individual microwave units at a broad range of commercial and military drones, cycling through waveforms and power levels to try to find the signal that could fry each one with maximum efficiency.
On a live video feed from inside one of these foam-padded rooms, I watched a quadcopter drone spin its propellers and then, once the microwave emitter turned on, instantly stop short—first the propeller on the front left and then the rest. A drone hit with a Leonidas beam doesn’t explode—it just falls.
Compared with the blast of a missile or the sizzle of a laser, it doesn’t look like much. But it could force enemies to come up with costlier ways of attacking that reduce the advantage of the drone swarm, and it could get around the inherent limitations of purely electronic or strictly physical defense systems. It could save lives.
Epirus CEO Andy Lowery, a tall guy with sparkplug energy and a rapid-fire southern Illinois twang, doesn’t shy away from talking big about his product. As he told me during my visit, Leonidas is intended to lead a last stand, like the Spartan from whom the microwave takes its name—in this case, against hordes of unmanned aerial vehicles, or UAVs. While the actual range of the Leonidas system is kept secret, Lowery says the Army is looking for a solution that can reliably stop drones within a few kilometers. He told me, “They would like our system to be the owner of that final layer—to get any squeakers, any leakers, anything like that.”
Now that they’ve told the world they “invented a force field,” Lowery added, the focus is on manufacturing at scale—before the drone swarms really start to descend or a nation with a major military decides to launch a new war. Before, in other words, Miller’s nightmare scenario becomes reality.
Why zap?
Miller remembers well when the danger of small weaponized drones first appeared on his radar. Reports of Islamic State fighters strapping grenades to the bottom of commercial DJI Phantom quadcopters first emerged in late 2016 during the Battle of Mosul. “I went, ‘Oh, this is going to be bad,’ because basically it’s an airborne IED at that point,” he says.
He’s tracked the danger as it’s built steadily since then, with advances in machine vision, AI coordination software, and suicide drone tactics only accelerating.
Then the war in Ukraine showed the world that cheap technology has fundamentally changed how warfare happens. We have watched in high-definition video how a cheap, off-the-shelf drone modified to carry a small bomb can be piloted directly into a faraway truck, tank, or group of troops to devastating effect. And larger suicide drones, also known as “loitering munitions,” can be produced for just tens of thousands of dollars and launched in massive salvos to hit soft targets or overwhelm more advanced military defenses through sheer numbers.
As a result, Miller, along with largeswaths of the Pentagon and DC policycircles, believes that the current US arsenal for defending against these weapons is just too expensive and the tools in too short supply to truly match the threat.
Just look at Yemen, a poor country where the Houthi military group has been under constant attack for the past decade. Armed with this new low-tech arsenal, in the past 18 months the rebel group has been able to bomb cargo ships and effectively disrupt global shipping in the Red Sea—part of an effort to apply pressure on Israel to stop its war in Gaza. The Houthis have also used missiles, suicide drones, and even drone boats to launch powerful attacks on US Navy ships sent to stop them.
The most successful defense tech firm selling anti-drone weapons to the US military right now is Anduril, the company started by Palmer Luckey, the inventor of the Oculus VR headset, and a crew of cofounders from Oculus and defense data giant Palantir. In just the past few months, the Marines have chosen Anduril for counter-drone contracts that could be worth nearly $850 million over the next decade, and the company has been working with Special Operations Command since 2022 on a counter-drone contract that could be worth nearly a billion dollars over a similar time frame. It’s unclear from the contracts what, exactly, Anduril is selling to each organization, but its weapons include electronic warfare jammers, jet-powered drone bombs, and propeller-driven Anvil drones designed to simply smash into enemy drones.
In this arsenal, the cheapest way to stop a swarm of drones is electronic warfare: jamming the GPS or radio signals used to pilot the machines. But the intense drone battles in Ukraine have advanced the art of jamming and counter-jamming close to the point of stalemate. As a result, anew state of the art is emerging: unjammable drones that operate autonomously by using onboard processors to navigate via internal maps and computer vision, or even drones connected with 20-kilometer-long filaments of fiber-optic cable for tethered control.
But unjammable doesn’t mean unzappable. Instead of using the scrambling method of a jammer, which employs an antenna to block the drone’s connection to a pilot or remote guidance system, the Leonidas microwave beam hits a drone body broadside. The energy finds its way into something electrical, whether the central flight controller or a tiny wire controlling a flap on a wing, to short-circuit whatever’s available. (The company also says that this targeted hit of energy allows birds and other wildlife to continuetomove safely.)
Tyler Miller, a senior systems engineer on Epirus’s weaponeering team, told me that they never know exactly which part of the target drone is going to go down first, but they’ve reliably seen the microwave signal get in somewhere to overload a circuit. “Based on the geometry and the way the wires are laid out,” he said, one of those wires is going to be the best path in. “Sometimes if we rotate the drone 90 degrees, you have a different motor go down first,” he added.
The team has even tried wrapping target drones in copper tape, which would theoretically provide shielding, only to find that the microwave still finds a way in through moving propeller shafts or antennas that need to remain exposed for the drone to fly.
EPIRUS
Leonidas also has an edge when it comes to downing a mass of drones at once. Physically hitting a drone out of the sky or lighting it up with a laser can be effective in situations where electronic warfare fails, but anti-drone drones can only take out one at a time, and lasers need to precisely aim and shoot. Epirus’s microwaves can damage everything in a roughly 60-degree arc from the Leonidas emitter simultaneously and keep on zapping and zapping; directed energy systems like this one never run out of ammo.
As for cost, each Army Leonidas unit currently runs in the “low eight figures,” Lowery told me. Defense contract pricing can be opaque, but Epirus delivered four units for its $66 million initial contract, giving a back-of-napkin price around $16.5 million each. For comparison, Stinger missiles from Raytheon, which soldiers shoot at enemy aircraft or drones from a shoulder-mounted launcher, cost hundreds of thousands of dollars a pop, meaning the Leonidas could start costing less (and keep shooting) after it downs the first wave of a swarm.
Raytheon’s radar, reversed
Epirus is part of a new wave of venture-capital-backed defense companies trying to change the way weapons are created—and the way the Pentagon buys them. The largest defense companies, firms like Raytheon, Boeing, Northrop Grumman, and Lockheed Martin, typically develop new weapons in response to research grants and cost-plus contracts, in which the US Department of Defense guarantees a certain profit margin to firms building products that match their laundry list of technical specifications. These programs have kept the military supplied with cutting-edge weapons for decades, but the results may be exquisite pieces of military machinery delivered years late and billions of dollars over budget.
Rather than building to minutely detailed specs, the new crop of military contractors aim to produce products on a quick time frame to solve a problem and then fine-tune them as they pitch to the military. The model, pioneered by Palantir and SpaceX, has since propelled companies like Anduril, Shield AI, and dozens of other smaller startups into the business of war as venture capital piles tens of billions of dollars into defense.
Like Anduril, Epirus has direct Palantir roots; it was cofounded by Joe Lonsdale, who also cofounded Palantir, and John Tenet, Lonsdale’s colleague at the time at his venture fund, 8VC. (Tenet, the son of former CIA director George Tenet, may have inspired the company’s name—the elder Tenet’s parents were born in the Epirus region in the northwest of Greece. But the company more often says it’s a reference to the pseudo-mythological Epirus Bow from the 2011 fantasy action movie Immortals, which never runs out of arrows.)
While Epirus is doing business in the new mode, its roots are in the old—specifically in Raytheon, a pioneer in the field of microwave technology. Cofounded by MIT professor Vannevar Bush in 1922, it manufactured vacuum tubes, like those found in old radios. But the company became synonymous with electronic defense during World War II, when Bush spun up a lab to develop early microwave radar technology invented by the British into a workable product, and Raytheon then began mass-producing microwave tubes—known as magnetrons—for the US war effort. By the end of the war in 1945, Raytheon was making 80% of the magnetrons powering Allied radar across the world.
From padded foam chambers at the Epirus HQ, Leonidas devices can be safely tested on drones.
EPIRUS
Large tubes remained the best way to emit high-power microwaves for more than half a century, handily outperforming silicon-based solid-state amplifiers. They’re still around—the microwave on your kitchen counter runs on a vacuum tube magnetron. But tubes have downsides: They’re hot, they’re big, and they require upkeep. (In fact, the other microwave drone zapper currently in the Pentagon pipeline, the Tactical High-power Operational Responder, or THOR, still relies on a physical vacuum tube. It’s reported to be effective at downing drones in tests but takes up a whole shipping container and needs a dish antenna to zap its targets.)
By the 2000s, new methods of building solid-state amplifiers out of materials like gallium nitride started to mature and were able to handle more power than silicon without melting or shorting out. The US Navy spent hundreds of millions of dollars on cutting-edge microwave contracts, one for a project at Raytheon called Next Generation Jammer—geared specifically toward designing a new way to make high-powered microwaves that work at extremely long distances.
Lowery, the Epirus CEO, began his career working on nuclear reactors on Navy aircraft carriers before he became the chief engineer for Next Generation Jammer at Raytheon in 2010. There, he and his team worked on a system that relied on many of the same fundamentals that now power the Leonidas—using the same type of amplifier material and antenna setup to fry the electronics of a small target at much closer range rather than disrupting the radar of a target hundreds of miles away.
The similarity is not a coincidence: Two engineers from Next Generation Jammer helped launch Epirus in 2018. Lowery—who by then was working at the augmented-reality startup RealWear, which makes industrial smart glasses—joined Epirus in 2021 to run product development and was asked to take the top spot as CEO in 2023, as Leonidas became a fully formed machine. Much of the founding team has since departed for other projects, but Raytheon still runs through the company’s collective CV: ex-Raytheon radar engineer Matt Markel started in January as the new CTO, and Epirus’s chief engineer for defense, its VP of engineering, its VP of operations, and a number of employees all have Raytheon roots as well.
Markel tells me that the Epirus way of working wouldn’t have flown at one of the big defense contractors: “They never would have tried spinning off the technology into a new application without a contract lined up.” The Epirus engineers saw the use case, raised money to start building Leonidas, and already had prototypes in the works before any military branch started awarding money to work on the project.
Waiting for the starting gun
On the wall of Lowery’s office are two mementos from testing days at an Army proving ground: a trophy wing from a larger drone, signed by the whole testing team, anda framed photo documenting the Leonidas’s carnage—a stack of dozens of inoperative drones piled up in a heap.
Despite what seems to have been an impressive test show, it’s still impossible from the outside to determine whether Epirus’s tech is ready to fully deliver if the swarms descend.
The Army would not comment specifically on the efficacy of any new weapons in testing or early deployment, including the Leonidas system. A spokesperson for the Army’s Rapid Capabilities and Critical Technologies Office, or RCCTO, which is the subsection responsible for contracting with Epirus to date, would only say in a statement that it is “committed to developing and fielding innovative Directed Energy solutions to address evolving threats.”
But various high-ranking officers appear to be giving Epirus a public vote of confidence. The three-star general who runs RCCTO and oversaw the Leonidas testing last summer toldBreaking Defense that “the system actually worked very well,” even if there was work to be done on “how the weapon system fits into the larger kill chain.”
And when former secretary of the Army Christine Wormuth, then the service’s highest-ranking civilian, gave a parting interview this past January, she mentioned Epirus in all but name, citing “one company” that is “using high-powered microwaves to basically be able to kill swarms of drones.” She called that kind of capability “critical for the Army.”
The Army isn’t the only branch interested in the microwave weapon. On Epirus’s factory floor when I visited, alongside the big beige Leonidases commissioned by the Army, engineers were building a smaller expeditionary version for the Marines, painted green, which it delivered in late April. Videos show that when it put some of its microwave emitters on a dock and tested them out for the Navy last summer, the microwaves left their targets dead in the water—successfully frying the circuits of outboard motors like the ones propelling Houthi drone boats.
Epirus is also currently working on an even smaller version of the Leonidas that can mount on top of the Army’s Stryker combat vehicles, and it’s testing out attaching a single microwave unit to a small airborne drone, which could work as a highly focused zapper to disable cars, data centers, or single enemy drones.
Epirus’s microwave technology is also being tested in devices smaller than the traditional Leonidas.
EPIRUS
While neither the Army nor the Navy has yet to announce a contract to start buying Epirus’s systems at scale, the company and its investors are actively preparing for the big orders to start rolling in. It raised $250 million in a funding round in early March to get ready to make as many Leonidases as possible in the coming years, adding to the more than $300 million it’s raised since opening its doors in 2018.
“If you invent a force field that works,” Lowery boasts, “you really get a lot of attention.”
The task for Epirus now, assuming that its main customers pull the trigger and start buying more Leonidases, is ramping up production while advancing the tech in its systems. Then there are the more prosaic problems of staffing, assembly, and testing at scale. For future generations, Lowery told me, the goal is refining the antenna design and integrating higher-powered microwave amplifiers to push the output into the tens of kilowatts, allowing for increased range and efficacy.
While this could be made harder by Trump’s global trade war, Lowery says he’s not worried about their supply chain; while China produces 98% of the world’s gallium, according to the US Geological Survey, and has choked off exports to the US, Epirus’s chip supplier uses recycled gallium from Japan.
The other outside challenge may be that Epirus isn’t the only company building a drone zapper. One of China’s state-owned defense companies has been working on its own anti-drone high-powered microwave weapon called the Hurricane, which it displayed at a major military show in late 2024.
It may be a sign that anti-electronics force fields will become common among the world’s militaries—and if so, the future of war is unlikely to go back to the status quo ante, and it might zag in a different direction yet again. But military planners believe it’s crucial for the US not to be left behind. So if it works as promised, Epirus could very well change the way that war will play out in the coming decade.
While Miller, the Army CTO, can’t speak directly to Epirus or any specific system, he will say that he believes anti-drone measures are going to have to become ubiquitous for US soldiers. “Counter-UAS [Unmanned Aircraft System] unfortunately is going to be like counter-IED,” he says. “It’s going to be every soldier’s job to think about UAS threats the same way it was to think about IEDs.”
And, he adds, it’s his job and his colleagues’ to make sure that tech so effective it works like “almost magic” is in the hands of the average rifleman. To that end, Lowery told me, Epirus is designing the Leonidas control system to work simply for troops, allowing them to identify a cluster of targets and start zapping with just a click of a button—but only extensive use in the field can prove that out.
Epirus CEO Andy Lowery sees the Leonidas as providing a last line of defense against UAVs.
EPIRUS
In the not-too-distant future, Lowery says, this could mean setting up along the US-Mexico border. But the grandest vision for Epirus’s tech that he says he’s heard is for a city-scale Leonidas along the lines of a ballistic missile defense radar system called PAVE PAWS, which takes up an entire 105-foot-tall building and can detect distant nuclear missile launches. The US set up four in the 1980s, and Taiwan currently has one up on a mountain south of Taipei. Fill a similar-size building full of microwave emitters, and the beam could reach out “10 or 15 miles,” Lowery told me, with one sitting sentinel over Taipei in the north and another over Kaohsiung in the south of Taiwan.
Riffing in Greek mythological mode, Lowery said of drones, “I call all these mischief makers. Whether they’re doing drugs or guns across the border or they’re flying over Langley [or] they’re spying on F-35s, they’re all like Icarus. You remember Icarus, with his wax wings? Flying all around—‘Nobody’s going to touch me, nobody’s going to ever hurt me.’”
“We built one hell of a wax-wing melter.”
Sam Dean is a reporter focusing on business, tech, and defense. He is writing a book about the recent history of Silicon Valley returning to work with the Pentagon for Viking Press and covering the defense tech industry for a number of publications. Previously, he was a business reporter at the Los Angeles Times.
This piece has been updated to clarify that Alex Miller is a civilian intelligence official.
Retail ecommerce growth in the U.S. lagged brick-and-mortar in the first quarter of this year, according to new data from the Department of Commerce (PDF). In Q1 2025, total U.S. retail sales — online and in-store — reached $1.86 trillion, a 0.4% increase from Q4 2024, while online sales declined by 0.04% to $300.2 billion.
Ecommerce sales, per the DoC, are for “goods and services where the buyer places an order (or the price and terms of the sale are negotiated) over an Internet, mobile device, extranet, electronic data interchange network, electronic mail, or other comparable online system. Payment may or may not be made online.”
Ecommerce accounted for 16.2% of total U.S. retail sales in Q1 2025, unchanged from the prior quarter.
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The DoC reports U.S. retail ecommerce sales in Q1 2025 grew by 6.1% compared to the same quarter in 2024, while total retail sales experienced a 4.5% annual rise over the same period.
For this week’s “Ecommerce Conversations,” I’m offering another master class on entrepreneurship. It’s my fourth this year, following episodes on hiring, branding, and profit-building.
My goal is to help existing and future entrepreneurs based on operating Beardbrand, my direct-to-consumer company, for a decade now. This installment is my most important master class to date. It’s about setting priorities for business and life.
My entire audio is embedded below. The transcript is edited for clarity and length.
Purpose
A common entrepreneurial mistake is building a business without intention or purpose. There are many ways to approach entrepreneurship, but I focus on creating a company that gives me freedom — doing what I want, when I want, with people I enjoy working with. That’s my North Star, and it influences every decision.
Your North Star might be different, but it’s important to define it early. For me, I lean toward less drama and more personal freedom. Bigger companies with rapid growth often have more lawsuits, employee issues, and general chaos. I keep things simpler to avoid unnecessary headaches.
If you aim to build a massive, high-growth company and sell it for millions as quickly as possible, this approach isn’t for you. But if you value a sustainable business that supports your lifestyle and aligns with your values, that’s what I’m here to share.
Profit Equals Freedom
A common mistake for entrepreneurs is chasing revenue instead of bottom-line profit. They obsess over gross sales, but the key is what you can keep, your net profit. High revenue with slim margins won’t give you freedom.
Money has never been important to me. My first job paid $11 an hour at a Dell call center. My parents were upper-middle class and supportive, but they were not investors in Beardbrand beyond buying products and cheering me on.
What kept me afloat was simple math: spend less than you earn. When income drops, cut expenses. When income rises, save aggressively. That cycle of living below my means has created financial stability over time.
Improving margins means lower costs (mostly for products and customer acquisition), higher prices to customers, or both. Entrepreneurs tend to focus on marketing, such as Facebook and Google ads and search engine optimization. But those channels can become more expensive over time and erode margins.
It’s just as important to lower the cost of goods while improving the end products so customers will pay more. Efficient supply chains and nonstop product improvement are critical.
A common trap is holding onto low-margin products because they generate top-line revenue. If a product doesn’t contribute to your bottom line, it’s not worth keeping — you’re working for free. But don’t abandon products too quickly. Test ways to cut costs, raise prices, or acquire customers more affordably. If those efforts fail, discontinue the item.
External Funds
Entrepreneurs often take on loans or seek investors, but the goal should always be to build the company without outside debt or equity.
The traditional route — bank loans, venture capital funding, or friends and family — means taking on debt or giving up ownership. A better option is customer financing. Crowdfunding platforms such as Kickstarter sell your product to consumers before it exists, providing seed money and real-world feedback while reducing risk and maintaining ownership. No debt payments. No investors telling you how to run your business.
Before borrowing money, ask if there’s another business to build first, perhaps a product launch in small batches. To start Beardbrand, I made 100 bottles of beard oil in my kitchen. Small beginnings can still lead to freedom.
Remember why you started. Is it for freedom, wealth, or ego? For those chasing freedom, avoid debt if possible. Fund your business in a way that keeps you in control.
Long-term
Too many business owners have a short-term mindset. We’re all bombarded with stories of entrepreneurs selling their businesses for millions. That narrative gets beaten into our heads: build fast, exit fast, make millions. But think long-term. Not just five or 10 years out, but 50 or 100 years — a multi-generational business.
For that to happen, you have to love showing up every day. And that usually starts with being profitable. Losing money is not fun. Cut unprofitable products, downsize, or humble your lifestyle to fix cash flow.
Beyond finances, entrepreneurs choose who they work with. That’s a gift.
Ultimately, think about your kids. Would they want to take over your business? If so, integrate them in a way they enjoy, not out of obligation. That requires investing time with your family now, away from the business, so they’ll want to be part of it later.
Self-invest
A long-term vision does not mean neglecting other aspects of life. I’m investing in my health and mindset — ensuring my body and mind are ready for my kids, grandkids, and the company as I age.
I exercise six days a week — three lifting and three rowing. I built a garage gym for time-saving convenience.
For my mental health, my family and I travel to Denmark every summer. It’s not a vacation — I still work — but being in a new place sparks adventure. For me, that’s travel. Others may value hobbies, gardening, or whatever keeps their lives interesting.
Priorities
How we spend our time is a key decision in life. It starts with knowing our priorities — serving our body, mind, business, spouse, kids, and friends.
I write in a Moleskine notebook what’s important to me. Then I rank them. No ties, no equals. For me, family ranks above business.
But above all, I prioritize my health and mindset. I can’t show up for my wife, kids, or company if I’m absent physically, mentally, or emotionally. You can’t pour from an empty cup. Get clear on your list.
Raphael Schneider launched Gentleman’s Gazette in 2010 as a blog for men’s style and apparel. He added his own product line in 2013, selling menswear and accessories.
He emphasizes quality in clothing and content. His YouTube channel, launched in 2015, remains essential for traffic and conversions, owing, he says, to the quality of the videos. “Ten years from now, someone can still benefit from a video we produce today,” he told me.
Raphael first appeared on the podcast in 2018. In this our latest conversation, he addressed the company’s origins, Google search, and, yes, his focus on YouTube.
Our entire audio is embedded below. The transcript is edited for clarity and style.
Eric Bandholz: Tell us about your journey to Gentleman’s Gazette.
Raphael Schneider: As a teenager in Germany, I earned money selling items on eBay. That’s when I discovered cufflinks. I learned they required French cuff shirts and jackets, which sparked my interest in classic men’s clothing.
I went to law school thinking I could dress well every day, but I realized I hated law, so I moved to the U.S. in 2009 through an exchange program and married my girlfriend, whom I had met earlier as a student. The job market was tough, especially for foreigners, so I turned to clothing and style, my passions.
Blogging was booming then. I launched Gentleman’s Gazette in 2010 to publish articles on men’s style. Readers kept asking where I got my clothes. That led me to create Fort Belvedere, our menswear brand, in 2013. I had no product development experience, and it took time and money to get going.
Early on, I wrongly assumed that building an audience produced easy sales. But I’ve learned a lot, and I love the creativity and independence of entrepreneurship.
Bandholz: Your YouTube channel is impressive.
Schneider: Early on, our main traffic generator was Google organic search. It was our bread and butter for a while, generating around 1.5 million page views annually. Traffic ebbed, so we explored other options.
I dabbled in video as early as 2012, but we fully committed to YouTube in 2015. Being early helped, and video is a strong medium for clothing and style. You can show fabric drape, fit, and personality, which articles can’t always convey.
We chose a personality-driven approach, featuring different hosts to appeal to a broader audience. Some may like me, others might not, so variety helps. YouTube’s landscape has changed. Now there are shorts, algorithms, and more creators, but we adapt. We’re experimenting with travel-style content, allowing viewers to experience places vicariously and inspire their journeys.
Our content isn’t just “look at this pocket square.” It’s about educating and connecting with a niche audience that values classic menswear. While most people wear leisure clothes and aren’t interested in cufflinks, we serve those who are. We continue to produce foundational style content while evolving to keep advanced users engaged.
So, yes, YouTube is an essential marketing tool for us.
Bandholz: Does investing in higher-production travel videos pay off?
Schneider: Last year, we visited London to test travel content. Not everything new pays off immediately, but we track performance carefully — click-throughs via YouTube Shopping, affiliate links in descriptions, and customer feedback. While it’s hard to tie direct sales to a single video, the response from viewers has been positive.
Some videos generate more revenue than others; we analyze patterns and adjust. But we’ve realized it’s about having a range of content: top-of-funnel to raise awareness, mid-funnel like product guides, and bottom-funnel content for ready-to-buy customers, like a deep dive into pocket squares. That mix still works well for us.
Attribution is tricky. A lot gets credited to organic Google search, but we know it’s multi-touch. Someone might discover us through YouTube on mobile, but check out later on desktop via branded search.
With AI and easier video creation on the rise, content production will become cheaper, but we still see value in YouTube. Competing on Instagram is tough. There are millions of creators.
The field is smaller on YouTube, especially with location-specific travel content. Few people can travel to Vienna, speak the language, and do in-depth style content. That’s where we want to stand out — a big fish in a small pond.
Bandholz: How is AI affecting your blog traffic and strategy?
Schneider: Our focus remains on original YouTube content, though we may test YouTube ads since we have an in-house production team. AI is changing things. I’ve always believed in creating timeless value — we make our products and content to last. Ten years from now, someone can still benefit from a video we produce today.
In the past, Google reliably sent traffic if you made comprehensive content. But now, AI tools give people instant answers. They don’t want to click through multiple sites to find their needs. We’ve noticed Google is leaning more on AI Overviews and keeping users on their platform, which doesn’t help small creators like us.
We’re seeing our brand in those AI summaries, which recognize Gentleman’s Gazette as reputable, but we’ve yet to see significant traffic or conversions.
So it’s a major shift. Big players are gaming the system and flooding the web with AI content from old domains. But I still think there’s a market for real, human passion. If you’re into photography, do you want advice from AI or from someone who lives it?
We are using AI in practical ways. For example, I created a voice clone for product videos. For a tie that comes in 14 colors, I recorded just once, and AI handles the rest. Tools like that save time without sacrificing personality. I think that’s the key.
People still connect with people. We’re continuing to invest in that, stay curious, and adapt. The danger isn’t change — it’s resisting change.
Bandholz: Is organic search traffic from Google still viable for premium-priced products?
Schneider: I’ve spoken to several search-engine experts, and they all say we’ll struggle to rank for high-purchase-intent keywords if you’re selling premium products. Conversion rates are lower for expensive items, so Google favors cheaper alternatives since it prioritizes click-throughs.
That said, we still get organic search traffic. We analyze landing pages and reverse-engineer what people might be searching for.
If someone searches for a niche item, such as a specific silk necktie, we can still rank because few apparel merchants offer those products. The key is to clarify that a premium product has specific features and a cheaper item does not.
Ranking for high-intent short-tail keywords is nearly impossible, but long-tail SEO is still viable. For example, “unlined driving gloves in lamb nappa” is specific enough to rank and reach the right buyer.
Ultimately, though, it’s more about brand affinity, like with Beardbrand, your company. People come for the lifestyle, the philosophy — they connect to the identity. That’s where premium brands still have power.
For $60, Bob DeMars’s company, Blind Barrel, will ship a package of four craft-distilled whiskey samples, unmarked, with a tasting glass. Recipients can then try them and guess the whiskey type, age, and proof.
It’s a game using Blind Barrel’s app, preferably with friends. Participants can purchase entire bottles at discounted prices.
Bob launched the business in 2021 from his base in California. In our recent conversation, he addressed the company’s growth, marketing tactics, legalities, and more.
Our entire audio is embedded below. The transcript is edited for length and clarity.
Eric Bandholz: Tell us what you do.
Bob DeMars: I’m the founder and CEO of Blind Barrels, a whiskey-tasting experience. Subscribers receive unlabeled samples and, using our gamified app, try to guess the type of whiskey, its age, and proof. It’s fun and interactive, but what keeps members around is the exclusive access we provide.
We feature small American craft distilleries and offer special barrel picks at competitive prices — like a bottle from Still Austin, normally $80–$110, available to members for $75.
It’s a subscription starting at $59.99 for one quarter or $49.99 per quarter annually. We ship curated lineups to U.S. customers only in March, June, September, and December. We chose quarterly because creating these blind tasting lineups — sourcing, bottling, legalities — is complex.
It’s tightly regulated. Quarterly curation helps us manage inventory — each lineup is limited, high-quality, and intentionally sourced.
Bandholz: Can you sell to consumers in all U.S. states?
DeMars: We’re limited. Some states are too restrictive. For example, we don’t ship to Utah. We can ship to Hawaii and Alaska, but it costs $60 to send a $2 item, so it’s not feasible. It also depends on our fulfillment partners. Having the right ones is key for both sample kits and full bottles.
A big challenge is the distribution system. Many craft whiskeys we feature are only distributed in their home states. After Prohibition ended in 1933, the U.S. implemented a unique three-tier system: producers must sell to distributors, who then sell to retailers, and only then to consumers. This setup doesn’t exist anywhere else worldwide and creates a stranglehold on access.
As a retailer, we sell to end users. We need the craft brands to get their products into at least one distributor in a compliant state. From there, our fulfillment partners can legally ship to most other states. It’s a complex process, but we’ve figured out how to navigate it.
Bandholz: Do you include big whiskey brands?
DeMars: We don’t feature the big guys — there’s nothing special about including a Jim Beam or Maker’s Mark in a tasting lineup. Even something like Johnnie Walker Blue is mass-produced. The big brands dominate through distribution. That’s why you see the same bottles in every bar and liquor store.
Craft producers, on the other hand, make some of the best whiskey in the country, but no one outside their region knows they exist. Our goal is to spotlight those hidden gems.
We don’t select brands — we select whiskeys. We build every lineup through blind tastings. No brand can buy its way in, and we don’t charge marketing fees. If your whiskey is in our lineup, it’s outstanding.
Craft distillers drive innovation. They’ve pioneered barrel finishes and experimental mash bills — recipes — and the big brands are starting to follow. Craft is where the creativity lives.
Bandholz: What are your shipping and product costs?
DeMars: Our boxes cost about $2, and the glass bottles, landed with shipping, are about $2.50. I called seemingly every vendor in the country to get those rates.
Even then, we pay slightly above cost for whiskey because it has to move through the three-tier system. So between the whiskey, bottles, caps, and shipping, our margins are roughly 50%.
The first kit we ship is basically breakeven — we don’t make or lose money. Profit comes from retention. We were profitable in our first year, but reinvested everything into site optimization and marketing.
When we launched, our website purchase conversion rate was just 0.6%. After tweaks, we hit 1.6%, and then I brought in an expert — we’re now at 3%.
The real game-changer has been low churn. The industry average for alcohol subscriptions is 10–12%; we’re under 3.5%. That loyalty saved us when conversions were low.
People share the kits with friends, especially now that we’ve gamified the experience. It creates viral momentum. Great whiskey is meant to be shared.
Bandholz: How do you acquire customers?
DeMars: We have multiple tactics. I didn’t raise much outside capital — I put in most of the funds myself because this was a risky model.
One of our first breaks came from a prominent Southern California FM radio host who joined as an advisor. He talked about us on-air, and suddenly 50% of our first few hundred members came from those mentions. That gave us enough cash flow to start testing marketing.
Now, our main acquisition channels are email and Google and Meta ads. We don’t use SMS much yet but plan to test it. Father’s Day and Christmas are big for us. We’ve grown revenue by around 25% per quarter.
I’ve bootstrapped everything. I didn’t take a salary until we hit 2,500 members. I managed all advertising and social content at first. I’m a filmmaker, so that helped. Meta ads can be tricky for alcohol brands.
For example, Meta doesn’t allow targeting consumers by age using Advantage+. We’re on our fifth marketing team, and they finally get it. They understand the brand, and I no longer have to carry the whole creative load.
Despite the geopolitical chaos and market collapses triggered by President Trump’s announcement of broad tariffs on international goods, some supporters still hope the strategy will produce a “golden age” of American industry. Trump himself insists, “Jobs and factories will come roaring back into our country.”
While it’s possible that very targeted tariffs could help protect some nascent sectors of domestic manufacturing, the belief in the power of blunt tariffs flies in the face of manufacturing reality. And it’s not just the idea of a speedy return to economic prowess thanks to smoke-belching factories and the sudden ability to cheaply assemble armies of iPhones that strains credulity. The sweeping tariffs ignore the complexities of today’s supply chains and the way technology advances are shifting how and where goods are made.
In fact, the high and crudely designed tariffs set out by the administration could damage a recent rebound in US manufacturing. Building factories and the supply chains they run on takes years—even decades—of steady investment. Meanwhile, tariffs have the immediate impact of boosting costs for critical supplies, many of which come from overseas—helping to raise prices and, in turn, slowing demand.
None of that is good for those planning to invest in US manufacturing.
“Tariffs, in general, as a tool for encouraging the type of manufacturing we want in the US are a terrible instrument,” says Elisabeth Reynolds, a professor of the practice at MIT.
Reynolds, who was an advisor to President Biden on manufacturing and economic development, says the Trump tariffs will raise the costs of US manufacturing without providing incentives for “strategic investments in the technologies we care about for national and economic security.”
Willy Shih, a professor at Harvard Business School, says the tariffs feel like “random acts of violence” in how they hurt manufacturing and supply chains. Because the tariffs proposed so far “are so scattershot and change so often,” he says, “it’s basically freezing up investments. Who is going to make any kind of investment commitment when things are changing so fast?”
The longer-terms effects of the tariffs are, of course, unknown. For one thing, the specifics—how large, how long, and on what countries—seem to be constantly shifting. And that’s a big part of the problem: For manufacturers and investors, uncertainty is the killer of plans for expansion, new factories, and even the R&D that feeds into new products.
It’s that uncertainty, above all else, that could derail a reindustrialization still in the early stages for much of the country.
In fact, US manufacturing in the years following the covid pandemic has been booming—or at least the groundwork for such a boom is getting built. Until the most recent few months, spending on the construction of factorieshad been soaring. New facilities to build batteries, solar cells, semiconductors, electric motors, and other new technologies are springing up all around the country—or wereuntil very recently.
“We never had more construction starts in the United States than we’ve had in the past four years,” says Milo Werner, a partner at the venture capital firm DCVC. “We’re at this amazing moment where we could actually rebuild Main Street America and bring back the industrial base.”
The move to bolster US manufacturing was fueled by a sense during the beginning of the pandemic that the country must regain the ability to make critical products and technologies. Thedecline of US manufacturing had become obvious. Federal support torebuild the industrial base came in a series of bills passed during the Biden administration, including the CHIPS and Science Act and the climate bill.
At the same time, opportunities offered by artificial intelligence and automation breakthroughs have spurred an appetite for new investments among many manufacturers. Many of those technologies are just starting to be deployed, but they promise a way for US producers to finally become more competitive with those in low-wage economies.
If the Trump tariffs slow or even reverse such progress, the impact on the country’s economic and technological future could be devastating.
There are a lot of reasons to want a stronger US industrial base. But it’s not mainly about whether we have countless well-paying jobs for those with only a high school diploma and little technical training, despite what you will hear from many politicians. Those days are mostly long gone.
Manufacturing jobs account fora little under 10% of total jobs in the US. That percentage hasn’t changed much over the last few decades—nor is it likely to grow much in coming years even if manufacturing output increases, because automation and other advanced digital tools will likely cut into the demand for human workers.
Still, manufacturing is critical to the future of the US economy in other ways. The invention of new stuff and production processes greatly benefits from an intimate connection to manufacturing capabilities and expertise. In short, your chances of successfully creating a new type of battery or AI chip are much greater if you’re familiar with the intricacies of manufacturing such products.
It’s a lesson that was often forgotten in the 2000s as companies, led by such Silicon Valley giants as Apple, focused on design and marketing, leaving the production work to China and other countries. The strategy created huge profits but severely crimped the United States’ ability to move ahead with a next generation of technology. In 2010, Intel cofounder Andy Grove famouslywarned, “Abandoning today’s ‘commodity’ manufacturing can lock you out of tomorrow’s emerging industry.”
Prompted by such concerns, in 2011 I visited manufacturers across the country, from industrial giants like GE and Dow Chemical to startups with exciting new technologies, and wrote “Can We Build Tomorrow’s Breakthroughs?” Over the next few years, the answer to the headline’s question proved to be no. GE and Dow gave up on their most innovative manufacturing ventures in batteries and solar, while nearly none of the startups survived.
The US was great at inventing new stuff, it turns out, but lousy at making it.
The hope is that this situation is changing as the country builds up its manufacturing muscles. The stakes are particularly high. The value of producing strategic goods and their supply chains domestically—biomedicine, critical minerals, advanced semiconductors—is becoming obvious to both politicians and economists.
If we want to turn today’s scientific breakthroughs in energy, chips, drugs, and key military technologies such as drones into actual products, the US will need to once again be a manufacturing powerhouse.
Limited tariffs could help. That’s especially true, says DCVC’s Werner, in some strategically important areas marked by a history of unfair trade practices. Rare-earth magnets, which are found in everything from electric motors to drones to robots, are one example. “Decades ago, China flooded the US economy with low-cost magnets,” she says. “All our domestic magnet manufacturers went out of business.”
Now, she suggests, tariffs could provide short-term protection to US companies developing advanced manufacturing techniques to make those products, helping them compete with low-cost versions made in China. “You’re not going to be able to rely on tariffs forever, but it’s an example of the important role that tariffs could play,” she says.
Even Harvard’s Shih, who considers the sweeping Trump tariffs “crazy,” says that far more limited versions could be a useful tool in some circumstance to give temporary market protection to domestic manufacturers developing critical early-stage technologies. But, he adds, such tariffs need to be “very targeted” and quickly phased out.
For the successful use of tariffs, “you really have to understand how global trade and supply chains work,” Shih says. “And trust me, there is no evidence that these guys actually understand how it works.”
What’s really at stake when we talk about the country’s reindustrialization is our future pipeline of new technologies. The portfolio of technologies emerging from universities and startups in energy production and storage, materials, computing, and biomedicine has arguably never been richer. Meanwhile, AI and advanced robotics could soon transform our ability to manufacture these technologies and products.
The danger is that backward-looking policy choices geared toward a bygone era of manufacturing could destroy that promising progress.
