Erik Prince on Blackwater's origins, the future of PMCs, and why Europe still isn't serious about defense

Summary

Erik Prince built Blackwater on a straightforward premise: the U.S. military had a training gap, and the private sector could fill it faster and cheaper than the Pentagon. Starting with $6 million of his own capital — inherited through his father's diecast machine business — he built the largest private shooting and tactical training facility in the world within an hour of Norfolk Naval Base. The first major contract came after the USS Cole attack in 2000, when the Navy realized sailors had been guarding the ship with largely unloaded weapons they'd never fired. Blackwater trained 100,000 sailors. After 9/11, demand for everything it offered — security, aviation, training, operations in difficult environments — scaled rapidly. By the time Prince sold the business in 2010, it had grown from a single leased aircraft to 73 owned aircraft, all self-financed with no outside equity.

How PMCs get contracts

About 98% of Blackwater's revenue was competitively bid. A customer would define a need — airlift, tonnage, night-vision flight requirements, FAA scrutiny level — and Blackwater would price it. Prince describes the business model as a factory: recruit, vet, equip, train, deploy, support. Because Blackwater started as a training facility, it already had the infrastructure to back into recruiting and vetting, including in-house doctors and psychologists for psychological screening.

On compensation, Prince never gave away equity — the work was too dangerous and volatile. Instead, deployed personnel were paid like oil rig workers: high daily rates while in the field, zero when they left. Bonuses ran two to five times base salary. His ideal hire was someone with special operations experience but not a full military career. Colonels and generals, he argues, tend to think in entrenched institutional patterns. The people who could find unconventional, cheaper, faster solutions were those who had absorbed military discipline without calcifying inside it.

The PMC of the future

Prince draws a direct line from medieval trebuchet builders — the contractors of their era — to today's drone and cyber operators. The private sector can move from idea to prototype to battlefield test in days or weeks, as Ukraine demonstrates. The U.S. DoD runs the same cycle in years. That speed gap, he argues, is obsolescing hundreds of billions of dollars of past procurement decisions. Buying equipment does not equal buying capacity.

His proposed fix is radical decentralization: push purchasing decisions down to division or even brigade commanders rather than running everything through Pentagon program executive offices. He wants the 25th Infantry Division in Hawaii and the 1st Armored Division in Texas buying and adapting drone tech suited to their specific theaters, letting the best systems surface before the Pentagon makes a larger consolidated buy. He acknowledges this would create supply chain chaos and says that's the point. The current alternative — 800,000 Pentagon civilians filtered through a handful of Washington buying verticals — produces the opposite of speed.

Defense tech investment warning

Prince is glad to see venture capital moving into defense tech but flags a structural mismatch. Silicon Valley investors are accustomed to finding product-market fit across millions of early adopters with high burn tolerance. The Pentagon has four primary buying verticals: Army, Navy, Air Force, Marines, with smaller flows from SOCOM and the CIA. However motivated those buyers become, the purchasing timelines will never match what tech investors expect. Prince estimates the overhead burn time that defense tech startups should plan for is three to four times what they're modeling. Good ideas, he says, will wither before they get to contract.

Taiwan and European defense

Taiwan's decision to decommission its last nuclear reactor and become fully dependent on imported natural gas strikes Prince as strategically reckless. His argument for Taiwan's defense rests on a home guard, not conventional military assets. He contends that any significant Taiwanese weapon system — aircraft, submarines — has likely already been pre-registered for multiple Chinese missile strikes, given what he describes as deep corruption in that government. A trained civilian home guard of 700,000-plus people, drawn from Taiwan's 24 million citizens, would inject genuine uncertainty into any invasion calculus. The terrain — dense urban areas and mountainous jungle — favors defenders, and China cannot sustain a multi-year conflict because it depends on hydrocarbon and food imports.

On Europe, Prince is blunt: only Poland has built real combat capability. The Baltics have not yet. Finland has made some progress. Germany he describes as atrocious. Rheinmetall's stock price reflects hope for future earnings rather than demonstrated output. The most capable military in Europe right now, in his assessment, is Ukraine's — specifically its drone technology, electronic warfare capability, and close air support doctrine, which he says is ahead of even the U.S. military. The front lines themselves, however, look like the Battle of the Somme: static artillery duels, bunkers, and tens of millions of landmines that make armored breakthrough nearly impossible. No Blitzkrieg-style maneuver warfare is coming without fundamentally different weapon systems.

Prince hopes Trump can secure a ceasefire, framing the current fighting as pointless attrition with no prospect of decisive territorial advance on either side.

Unplugged and TikTok

Prince also runs Unplugged, a smartphone company he started three years ago that operates outside the Google and Apple ecosystems, positioned as an answer to what he calls surveillance capitalism. Asked whether TikTok could run on an Unplugged device, he said he doesn't believe it's capable of doing so — and committed on the spot to making sure it cannot.