The Sixty-Dollar Question
In the summer of 1990, a small industrial conglomerate headquartered in Hollywood, Florida — not the glamorous one, the strip-mall one — was trading at roughly $1.50 per share, adjusted for subsequent splits. The company made heating elements and had a market capitalization that wouldn't cover the cost of a decent Gulfstream. Its board, searching for a lifeline, hired a father-son duo from New York who had spent the previous decade buying niche manufacturing businesses through a family investment vehicle. The father, Larry Mendelson, was 50 years old, a CPA by training who had run Columbia General Corporation and learned the private equity playbook before that term entered common usage. The son, Eric, was 25 and had been working in the family's deal shop since graduating from Columbia. They didn't so much turn the company around as hollow it out and rebuild it into something entirely different — a platform for acquiring small, overlooked businesses that make small, overlooked parts for machines that absolutely cannot fail.
Thirty-four years later, that $1.50 stock trades above $260. A dollar invested in HEICO at the Mendelsons' arrival is worth more than $170 today, a compounding record that would embarrass most venture portfolios and virtually all public market vehicles. The company has completed over 100 acquisitions. It has never had a down year of net income under the current leadership. And yet the average American — even the average investor — has never heard of it. HEICO makes replacement parts for jet engines, wiring for fighter aircraft, infrared sensors for missile defense systems, and electromagnetic shielding for satellites. It operates in the market crevices that are too small for the aerospace primes to bother defending and too regulated for most private equity firms to stomach. This is the sixty-dollar question — not what HEICO is worth (the market has spoken, loudly), but how a family-run operation in South Florida became one of the most consistent compounding machines in American capitalism by doing something that sounds almost offensively simple: making cheaper versions of things that Boeing and Raytheon already make.
By the Numbers
HEICO Corporation — FY2024
$3.86BNet revenue (FY2024, ending October)
$2.37BFlight Support Group revenue
$1.49BElectronic Technologies Group revenue
~22%Operating margin
100+Acquisitions since 1990
$32B+Market capitalization
~9,500Employees across 40+ subsidiaries
48%Revenue from defense, space, and other non-commercial segments
The Mendelsons' HEICO is two businesses stitched together by a common operating philosophy and a family's allergic reaction to bureaucracy. The Flight Support Group — roughly 61% of revenue — is the original engine, built on a deceptively radical idea: that airlines shouldn't have to pay original equipment manufacturers monopoly prices for replacement parts. The Electronic Technologies Group — 39% of revenue — is the quieter sibling, a portfolio of niche electronics businesses serving defense, space, medical, and telecommunications markets. Both segments share a DNA that is recognizable across every subsidiary: small teams, entrepreneurial leaders who keep their titles and their equity, relentless focus on aftermarket revenues, and an institutional distaste for leverage, corporate overhead, and anything that smells like a committee.
The Aftermarket Insurgency
To understand HEICO, you have to understand why a replacement brake pad for a Boeing 737 can cost an airline $5,000. The global aviation aftermarket is a $90-plus billion annual market, and for decades it operated as a near-feudal system. The OEMs — GE Aerospace, Pratt & Whitney, Rolls-Royce, Safran — designed and certified components as part of original engine programs. When those parts wore out (and jet engine parts wear out on precise, FAA-mandated intervals), airlines had one option: buy the replacement from the OEM at whatever price the OEM chose. This wasn't quite a monopoly — it was something more elegant, a system of interlocking intellectual property, regulatory certification, and supply chain lock-in that produced monopoly-like economics without the legal inconvenience of actually being one.
The crack in the system was a provision in FAA regulations — specifically, Parts Manufacturer Approval (PMA) — that allowed third-party manufacturers to produce and sell replacement parts for commercial aircraft, provided they could demonstrate that the parts met or exceeded the original specifications. The process was grueling: each PMA required reverse engineering, extensive testing, and a separate FAA approval that could take years. But the prize was the right to sell a functionally identical part at a 30-to-50% discount to the OEM price.
HEICO didn't invent PMA parts. But under the Mendelsons, it industrialized them. The Flight Support Group built a systematic capability for identifying high-value, high-replacement-frequency parts across major engine and airframe platforms, reverse engineering them to FAA standards, obtaining PMA certification, and then selling them to airlines at prices that made the economics irresistible. By FY2024, the group held more than 14,000 FAA-approved parts — more than any other independent PMA manufacturer in the world.
We don't compete on price alone. We compete on reliability, delivery, and the total cost of ownership. The airline doesn't want to save 40% on a part and then have the plane sit on the ground because the part failed.
The OEMs fought this, naturally. They lobbied. They pressured airlines with bundled service agreements. They used their positions on type certificate data to slow PMA approvals. And for a long time, many airlines were reluctant to install third-party parts, fearing warranty complications or, more viscerally, the reputational catastrophe of a part failure. HEICO's breakthrough was not just engineering quality — it was institutional trust-building. Every PMA part had to meet or exceed OEM specifications. The company invested in testing infrastructure that in many cases was more rigorous than what the OEMs themselves maintained. And it pursued a portfolio strategy: with thousands of approved parts across dozens of engine platforms, HEICO could offer airlines a one-stop alternative that reduced procurement complexity alongside cost.
The economics are beautiful in their simplicity. A PMA part that costs HEICO $500 to manufacture and certify might sell for $3,000 — a 50% discount to the OEM's $6,000 price. The airline saves $3,000 per unit. HEICO captures an 80%-plus gross margin on a product with recurring demand on a predictable maintenance cycle. The installed base of commercial aircraft engines grows. The replacement intervals are fixed by physics and regulation. And every new PMA certification is a mini-moat — a years-long, capital-intensive process that deters casual entrants.
The Mendelson Operating System
Larry Mendelson ran his first leveraged buyout in the late 1970s. He was not, by any reasonable definition, a typical aerospace executive. He was a dealmaker from the Garment District school of American business — numerate, unsentimental about product attachment, and possessed of a conviction that the best operating strategy was to find talented people and then leave them alone. His two sons — Eric and Victor — grew up inside this worldview. Eric, the elder, developed an obsessive focus on the Flight Support Group's aftermarket strategy. Victor, the younger by four years and a law school graduate who had practiced at a Miami firm before joining HEICO, gravitated toward the Electronic Technologies Group and the acquisition pipeline. Larry served as Chairman and CEO until formally handing the CEO title to both sons as Co-Presidents in 2012, though the three functioned as a troika well before that.
The Mendelson operating system has a few distinctive features that compound over time.
Decentralization to the point of discomfort. HEICO's 40-plus subsidiaries operate with extraordinary autonomy. Each subsidiary retains its own management team, its own P&L, and — crucially — its own culture. Corporate headquarters in Hollywood, Florida employs a skeleton staff. There is no shared ERP system mandated across subsidiaries. There is no corporate development team running a standardized 100-day integration playbook. The Mendelsons' view, stated repeatedly, is that the people who built the acquired business know more about running it than anyone at headquarters ever will.
Equity incentives at every level. Subsidiary leaders typically roll equity into the acquisition, retaining meaningful ownership stakes alongside HEICO. This isn't cosmetic. The leaders who built the businesses often become the wealthiest people in their subsidiaries through HEICO stock appreciation. The incentive structure makes them owners, not operators reporting to a holding company.
Minimal leverage. HEICO has historically operated with a net debt-to-EBITDA ratio well below 2x, and often below 1x. In a world where private equity acquirers routinely lever portfolio companies to 5x or 6x, HEICO's capital structure is an anomaly. The Mendelsons' view is that debt constrains optionality — you can't move quickly on an acquisition if your balance sheet is screaming at you — and that the discipline of funding growth primarily through cash flow forces better capital allocation decisions.
Obsessive focus on ROIC. The internal metric that matters most is return on invested capital. Not revenue growth. Not EBITDA multiples. Not market share. Larry Mendelson's formative insight — drawn, by his own account, from studying the Berkshire Hathaway model — was that the rate at which you compound capital is the only metric that connects all the others. HEICO's ROIC has consistently exceeded 15% over the past two decades, a figure that would be impressive for a software company and is almost unheard of in aerospace manufacturing.
We have two rules. Rule number one is don't lose money. Rule number two is look at rule number one every day.
The Acquisition Machine
If the PMA business is HEICO's original engine, acquisitions are the supercharger. Since 1990, the company has completed more than 100 acquisitions, almost all of them small — in the $10 million to $500 million range — and almost all of them niche manufacturers serving regulated end markets with high switching costs and aftermarket revenue streams. The median deal size over HEICO's history is probably somewhere around $50 million. This is not a company that chases headlines.
The acquisition criteria are specific enough to be instructive. HEICO looks for:
- Proprietary, sole-source products serving aerospace, defense, medical, or other regulated industries
- High recurring revenue from aftermarket parts, consumables, or maintenance cycles
- Strong management teams willing to stay and operate under HEICO's decentralized model
- Low customer concentration — ideally no single customer above 10-15% of subsidiary revenue
- High barriers to entry — certification requirements, qualification processes, or embedded design-in positions that deter competition
- Attractive ROIC potential — typically targeting mid-teens returns within two to three years post-acquisition
What HEICO does not look for is as revealing. It avoids businesses dependent on large, lumpy contracts. It avoids businesses with significant commodity input exposure. It avoids businesses where the key value is a single customer relationship. And it avoids — this is crucial — businesses that require significant post-acquisition restructuring. The Mendelsons do not buy turnarounds. They buy well-run niche businesses and plug them into a platform that provides capital, access to a broader customer base, and the HEICO brand's imprimatur of quality.
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The HEICO Acquisition Timeline
Key deals that shaped the platform
1993Acquires Jet Avion Corporation, entering the PMA parts business in earnest
1999Purchases LPI Industries, expanding into electronic components for defense
2004Acquires Radcom, adding electronic warfare and radar capabilities to ETG
2009Buys majority interest in 3D Plus, a French maker of 3D stacked electronics for space applications
2016Acquires Robertson Fuel Systems, a maker of crash-resistant military fuel tanks
2018Purchases CAPEWELL and TRERICE, adding aerospace distribution and instrumentation
2022Acquires Exxelia, a French specialty electronics maker, for approximately $453 million — the largest deal in company history at the time
The Wencor acquisition in mid-2023 deserves special attention because it represented a departure — not in philosophy, but in scale. Wencor was one of the largest independent distributors of aerospace aftermarket parts, with roughly $690 million in revenue. The $2.05 billion price tag was nearly four times HEICO's previous largest deal. The acquisition gave HEICO something it had never had at this scale: a distribution platform that could channel not just HEICO's own PMA parts but also OEM parts, surplus inventory, and third-party components to a global customer base of airlines and MRO shops. It was, in effect, a bet that distribution — not just manufacturing — would be a critical moat in the next decade of aftermarket competition.
To fund Wencor, HEICO took on more debt than the Mendelsons had historically been comfortable with, pushing net leverage above 3x EBITDA temporarily. By the end of FY2024, aggressive deleveraging had brought that figure back down toward the 2x range. The deal's early returns were promising: Flight Support Group revenue grew 15% organically in FY2024, suggesting that the distribution channel was accelerating existing product sales rather than merely adding acquired revenue.
The Electronic Shadow
The Electronic Technologies Group is the part of HEICO that confounds the simple narrative. If Flight Support is about selling cheaper jet engine parts to airlines, ETG is about selling expensive, exotic electronics to people who can't tell you what they're using them for.
ETG comprises roughly two dozen subsidiaries making products that range from infrared simulation and test equipment to electromagnetic interference shielding, from microwave landing system components to underwater acoustic sensors. The customers include the U.S. Department of Defense, NASA, major defense primes like Lockheed Martin and Northrop Grumman, medical device companies, and telecommunications infrastructure builders. The revenue is diversified across so many end markets and programs that no single program cancellation can meaningfully dent the group's performance.
Victor Mendelson runs ETG with the same decentralized philosophy his brother applies to Flight Support, but the competitive dynamics are different. Where FSG's PMA business is about cost arbitrage against OEMs, ETG's value proposition is technical specificity — making a thing so specialized that only a handful of companies in the world can make it, and then making it reliably enough that defense primes qualify it into programs with 20-year production runs. The switching costs in defense electronics are immense: once a component is designed into a weapons system and qualified through the military's exacting certification processes, ripping it out and replacing it with an alternative could cost millions of dollars and years of requalification. The result is revenue that looks almost subscription-like in its predictability, albeit with the episodic uplift of new program wins.
ETG's operating margins have historically been somewhat lower than FSG's — typically in the low-to-mid 20% range versus FSG's mid-to-high 20s — owing to higher engineering content, lower volumes on some product lines, and the occasionally lumpy nature of defense procurement. But the return on invested capital is comparable because the capital requirements are modest. These subsidiaries don't need billion-dollar fabrication facilities. They need clean rooms, test chambers, a few specialized CNC machines, and extremely talented engineers who have no desire to work at a large defense contractor.
Every one of our ETG companies is a mini-monopoly. They may only do $30 or $40 million in revenue, but they have 60, 70, 80% market share in their specific niche. Nobody else wants to invest the $10 million and five years it takes to qualify a competing product for a $30 million market.
The Exxelia acquisition in 2022 was ETG's landmark deal. Exxelia, based outside Paris, manufactures high-reliability passive electronic components — capacitors, resistors, inductors, filters — for aerospace, defense, medical, and industrial applications. The $453 million purchase price was steep by HEICO's historical standards, but Exxelia brought something priceless: a European manufacturing and certification base that gave ETG direct access to European defense programs and Airbus supply chains without the friction of exporting from the United States. In the context of rising European defense spending post-Ukraine, the timing bordered on prescient.
The Private Company Inside the Public Company
HEICO is a publicly traded corporation on the New York Stock Exchange. It files 10-Ks. It holds quarterly earnings calls. It has a board of directors with independent members. And yet it operates, in almost every meaningful respect, like a private family business.
The Mendelson family controls HEICO through a dual-class share structure. Class A shares, held primarily by public investors, carry one vote per share. Class B shares, held predominantly by the Mendelsons, carry ten votes per share. The result: the family controls approximately 20% of the economic interest but close to 50% of the voting power — enough, in combination with aligned long-term shareholders, to ensure that no hostile bid, activist campaign, or short-term market pressure can force a change in strategy.
This structure is unfashionable in an era of governance activism. ISS and Glass Lewis routinely flag dual-class structures. ESG screeners penalize them. And yet the track record makes the governance purists' argument difficult to sustain. The Mendelsons have compounded shareholder value at roughly 20% annually for three decades. They have never issued guidance that prioritized quarterly expectations over long-term capital allocation. They have never diluted shareholders through an ill-conceived mega-acquisition financed with overpriced equity. The implicit contract with public shareholders is clear: you don't get a vote that matters, but you get returns that make the vote irrelevant.
The family's compensation is modest by public company standards. Total CEO compensation — split between Eric and Victor as Co-Presidents — has historically been in the $3-5 million range, a fraction of what similarly sized industrial company CEOs command. The real wealth creation comes through stock ownership. The Mendelsons eat their own cooking to a degree that would make most corporate governance consultants uncomfortable, simply because it renders their entire framework irrelevant.
There is a related point about culture that is hard to quantify but impossible to ignore. HEICO's corporate headquarters feels nothing like a $32 billion company. There is no campus. There is no cafeteria with a celebrity chef. There is no innovation lab with exposed brick and bean bag chairs. The Mendelsons work from a nondescript office building and answer their own phones. The frugality is not performative — it's dispositional. When Larry Mendelson flies commercial, he flies coach. This is a family that internalized the lesson that overhead is the enemy of compounding before compounding became a podcast genre.
The Berkshire Parallel and Its Limits
The comparison to Berkshire Hathaway is inevitable, and the Mendelsons have never discouraged it. The structural parallels are real: a decentralized holding company run by a long-tenured family, acquiring small businesses with durable competitive advantages, retaining their management, and letting them compound inside a permanent capital structure. Larry Mendelson has explicitly cited
Warren Buffett as an influence. The annual report has the same folksy-yet-rigorous tone. The shareholder meeting in Hollywood, Florida draws a devoted crowd, though the scale is more country club than Woodstock.
But the differences are important. Berkshire is a conglomerate in the classical sense — insurance, railroads, energy, consumer brands, and a $300 billion equity portfolio — with float as the compounding mechanism. HEICO is a focused industrial acquirer in aerospace and defense electronics, with organic aftermarket revenue as the compounding mechanism. Berkshire's moat is Buffett's capital allocation genius plus the insurance float. HEICO's moat is 14,000 PMA certifications, thousands of defense program qualifications, and a reputation among small business owners as the acquirer of choice.
This last point — being the acquirer of choice — is the most underappreciated element of HEICO's competitive advantage. In the market for small aerospace and defense businesses, there are many potential buyers: private equity firms, defense primes, other strategics. But HEICO offers something that private equity cannot: permanence. When a founder sells to HEICO, they are not entering a five-year hold period that ends with a secondary sale, a management shake-up, and a cost-cutting mandate from the next sponsor. They are joining a family that has never sold a subsidiary. The founder's name stays on the building. The team stays intact. The culture persists. For a certain kind of entrepreneur — typically in their late 50s or 60s, proud of what they've built, allergic to bureaucracy, and terrified of selling to a private equity firm that will "optimize" their life's work — HEICO is the only answer.
The result is a proprietary deal pipeline. HEICO sees opportunities that never reach the auction market. Founders call the Mendelsons directly, often referred by other founders who sold to HEICO years earlier. This network effect in deal sourcing is genuinely difficult to replicate and may be the single most durable element of the HEICO model.
Flying Through Turbulence
The COVID-19 pandemic was supposed to break the HEICO story. Commercial aviation — the foundation of the Flight Support Group — experienced the most severe demand shock in its history. Global revenue passenger kilometers fell 66% in 2020. Airlines parked fleets. Maintenance, repair, and overhaul activity collapsed. For a company that makes its living selling replacement parts to airlines on fixed maintenance cycles, the abrupt cessation of those cycles was an existential challenge.
HEICO's FY2020 results told a more nuanced story. Total net revenue declined 14%, from $2.06 billion to $1.78 billion. Flight Support Group revenue fell 28%. But here's what didn't happen: HEICO didn't lay off thousands of workers. It didn't draw down its credit facility in a panic. It didn't slash R&D spending. Net income declined to $304 million from $371 million — a meaningful drop, but the company remained solidly profitable through the worst year in commercial aviation history. The Electronic Technologies Group, with its defense and space exposure, actually grew 5% organically, serving as the ballast that kept the ship upright.
The recovery was faster than anyone — including the Mendelsons — expected. FY2021 revenue grew 7%. FY2022 revenue jumped 20%. By FY2023, with the Wencor acquisition layered on, HEICO reported $2.95 billion in revenue, blowing past the pre-pandemic peak. FY2024 brought $3.86 billion, with organic growth of approximately 10% on top of acquisitive growth. The company emerged from the pandemic not just intact but structurally stronger — with competitors weakened, airlines more cost-conscious (and thus more receptive to PMA parts), and the defense budget trajectory firmly upward.
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HEICO Revenue Trajectory
Annual net revenue, fiscal year ending October
| Fiscal Year | Revenue | YoY Growth | Net Income |
|---|
| FY2018 | $1.78B | +13% | $296M |
| FY2019 | $2.06B | +16% | $371M |
| FY2020 | $1.78B | -14% | $304M |
| FY2021 | $1.90B | +7% | $339M |
| FY2022 | $2.21B |
The OEM Counterattack
The OEMs have never been passive about HEICO's incursion into their aftermarket territories. Over the past decade, the response has intensified across multiple dimensions, and any honest assessment of HEICO's future must grapple with it.
The most potent OEM countermeasure is the "power-by-the-hour" contract, or its variants — long-term maintenance agreements where the OEM bundles engine maintenance, repair, and parts supply into a single per-flight-hour fee. Under these arrangements, the airline pays a predictable hourly rate, and the OEM handles all maintenance using its own parts. For the airline, the appeal is cost predictability and reduced procurement complexity. For the OEM, the appeal is locking out PMA competitors by contractually controlling the parts supply chain. GE Aerospace's services business, Pratt & Whitney's aftermarket division, and Rolls-Royce's TotalCare program have all aggressively expanded these agreements. By some estimates, power-by-the-hour contracts now cover 60% or more of the large commercial engine fleet, up from roughly 30% a decade ago.
HEICO's response has been characteristically pragmatic. First, it has focused PMA development on engine components and airframe parts that are not covered by these agreements — older engine platforms, auxiliary power units, landing gear components, and airframe structural parts where the economics of bundled maintenance contracts don't work. Second, it has pursued direct relationships with MRO providers (both airline-owned and independent) who service engines outside of OEM maintenance agreements. Third, and most subtly, it has accepted that some segments of the aftermarket are permanently foreclosed and has allocated capital elsewhere — into defense electronics, distribution (via Wencor), and adjacent industrial niches.
The result is a dynamic equilibrium. The OEMs are winning the war for the newest, highest-value engine platforms. HEICO is winning the guerrilla campaign for everything else — and "everything else" is still a multi-billion-dollar addressable market growing with fleet age and global air traffic.
Defense Tailwinds and the Post-2022 World
The Russian invasion of Ukraine in February 2022 changed the structural environment for defense spending in ways that will take decades to fully play out. NATO nations pledged to increase defense budgets to 2% of
GDP, with many now targeting 2.5% or higher. The U.S. defense budget has grown from $782 billion in FY2022 to over $886 billion in FY2024, with bipartisan support for continued increases. European defense spending is accelerating even faster off a lower base.
For HEICO's Electronic Technologies Group — with roughly 30% of total company revenue tied directly to defense programs and another 10-15% to space and intelligence applications — this is the most favorable demand environment in a generation. The group's subsidiaries make components that go into almost every major weapons system the U.S. and its allies operate: infrared countermeasures for fighter aircraft, electromagnetic shielding for naval vessels, power supplies for radar systems, fusing systems for guided munitions, and radiation-hardened electronics for intelligence satellites. The breadth of program exposure means that HEICO benefits from the overall spending trajectory rather than being hostage to any single program's fate.
The Exxelia acquisition positioned HEICO to capture European defense upside in a way that no other American aerospace parts company can match. Exxelia's French manufacturing base, its existing qualifications on Rafale and Eurofighter platforms, and its relationships with European defense primes like Thales, MBDA, and Airbus Defence give HEICO a direct channel into the most dynamic defense spending environment since the Cold War.
Succession and the Mortality of Compounding
Larry Mendelson turned 84 in 2024. He remains Chairman, attending board meetings and weighing in on major acquisitions, but the operational reins have been with Eric and Victor for over a decade. The succession question — the one that keeps long-term HEICO shareholders up at night — is not about the transition from Larry to his sons. That already happened. The question is what comes after Eric, 59, and Victor, 55.
The Mendelsons have been deliberate about this. Eric's son, David Mendelson, joined HEICO in 2019 and has been given increasing responsibilities within the Flight Support Group. Victor's daughter, Katherine Mendelson, has been involved in the family's broader business activities. The bench of subsidiary leaders is deep — many have been with HEICO for 15 or 20 years and share the cultural DNA that the Mendelsons have cultivated. But culture is fragile, and the history of family-controlled industrial conglomerates is littered with third-generation dissipation.
The bull case on succession is that HEICO's operating system is, by design, not dependent on any single individual. The decentralized structure means that the vast majority of operating decisions are made at the subsidiary level by leaders with equity stakes and deep domain expertise. Corporate's role is capital allocation and culture-setting. If the next generation can maintain discipline on acquisitions and resist the institutional imperative to centralize, professionalize, and generally ruin things, the machine can keep compounding.
The bear case is that the acquisition function — the selection of targets, the negotiation of terms, the cultural assessment of management teams, and the judgment about when to walk away — is deeply personal. It's the product of Larry's pattern recognition, Eric's operational instincts, and Victor's deal sense, all honed over three decades. You cannot codify that in a process document. And the moment HEICO starts hiring McKinsey to build an acquisition playbook, the game changes.
Our pipeline is as robust as it's ever been. We're seeing opportunities across every end market, and we have the balance sheet and the operating capacity to be very active. But we will never sacrifice discipline for activity.
The Quiet Compound
There is a particular kind of company that the market perpetually underestimates — not because it's hidden, but because it's boring. HEICO doesn't launch rockets. It doesn't build AI models. It doesn't have a charismatic founder giving TED talks about the future of humanity. It makes brake assemblies and capacitors and wiring harnesses, and it does so with a fanatical consistency that turns incremental improvements into exponential returns over time.
The stock has split seven times since 1990. It has paid a dividend every year since 1979 — a streak that encompasses the dot-com crash, the financial crisis, September 11th, and a global pandemic. The Mendelson family's aggregate net worth, derived almost entirely from HEICO equity, is estimated at over $8 billion. And the next generation is already at work, learning the craft of finding small businesses that make indispensable things, buying them at fair prices, and leaving them alone to compound.
On a Tuesday morning in Hollywood, Florida, in a building you'd walk past without noticing, the machine continues to run. Another PMA part gets certified. Another subsidiary founder signs a letter of intent. Another jet engine part that used to cost $6,000 now costs $3,500, and the airline orders it again next quarter, and the quarter after that, and the quarter after that. The flywheel doesn't need to be dramatic. It just needs to keep turning.
