The Startup Defense
The Startup Defense explores the intersection of commercial technology and defense innovation. Callye Keen (Kform) talks with expert guests about the latest needs and trends in the defense industry and how startup companies are driving innovation and change. From concept to field, The Startup Defense covers artificial intelligence, cybersecurity, mission computing, autonomous systems, and the manufacturing necessary to make technology real.
The Startup Defense
Product-Market Fit, Engaging the Defense Industrial Base, and Evangelical Social Proof with Mark Holden
In this episode, Callye Keen engages with Mark Holden, a defense innovation expert in an insightful discussion on innovation in the defense industry. They delve into the challenges and opportunities within the defense industrial base, addressing topics such as scaling the force, modernization priorities, and the need for technological advancements in the ever-evolving landscape of great power competition.
Topic Highlights:
[00:00] Introduce Mark Holden
Callye Keen introduces Mark Holden, founder of HOLDEN, a professional services firm dedicated to offering top-notch content marketing and robust market strategy for companies, big and small, within the defense and aerospace markets.
[01:40] Challenges and Opportunities in Defense Innovation
Mark discusses the unique challenges and opportunities presented by the defense industry, emphasizing the importance of staying agile in the face of emerging threats and modernization needs.
[07:20] The Role of Technology in Great Power Competition
The conversation highlights the critical role of technology in responding to the demands of great power competition. It underscores the need for technological advancements to ensure the military's effectiveness in an evolving operational environment.
[14:12] Unlocking Defense Industry Success
Mark offers sage advice for solopreneurs and entrepreneurs aiming to enter the defense industry. He emphasizes the importance of identifying evangelists and building social proof, showing how these elements play a crucial role in gaining government interest and procurement.
[33:00] Defining Lethality, Dispersion, and Mobility
Mark emphasizes the significance of lethality, dispersion, and mobility in defense innovation. These components are crucial for improving survivability in modern warfare scenarios and addressing the challenges posed by emerging threats.
[42:00] Engaging the Defense Customer
Mark offers insights into how innovators can effectively engage with the defense customer. He encourages asking thought-provoking questions, embracing intellectual curiosity, and making use of community resources to understand the government's modernization priorities.
"Embrace the era of defense innovation, stay curious, and be part of the transformation. We're here to support innovators and enthusiasts as we navigate the evolving challenges and opportunities in this space." - Mark Holden
Callye Keen - Kform
https://kform.com/
https://www.linkedin.com/in/callyekeen/
https://youtube.com/@kforminc
https://twitter.com/CallyeKeen
Mark Holden - HOLDEN
https://www.linkedin.com/in/mark-n-holden
https://www.youtube.com/channel/UCqk8UYrKBqChKnfMn1de0yQ
www.defensebyholden.com
Having served in our nation's military during the Global War on Terrorism, Mark transitioned to a Product Leader role in the Defense and Aerospace sector. Mark Holden has had the privilege of working with dynamic teams, focusing on advanced robotics, artificial intelligence, smart weapons, drones, missiles, tanks, lasers, and thermal imaging sensors. His collective effort has always been aimed at delivering game-changing, life-saving technologies for our warfighters.
Now, Mark helms HOLDEN, a professional services firm dedicated to offering top-notch content marketing and robust market strategy for companies, big and small, within the defense and aerospace markets.
And now everybody inside knows that there is about to be a breach by Americans. So I've lost the element of speed, I've lost the element of surprise and there's nothing on that drone to overcome violence of action on that objective. So now I'm about to hit a target where everybody knows I'm inside. They've all closed their doors, they've got belt fed, pkm pointed out the door, and now we're about to go eat our lunch.
Speaker 2:Welcome to the start of defense. My name is Callie Keene. I have Mark Holden on out. Mark, you have been a Navy courseman, you've worked at some pretty illustrious startups, you've worked in safety and I know you put out a ton of content. So you're a multidisciplinary, multifaceted man. But the way we start off the show is I want to know what are you passionate about right now?
Speaker 1:Yeah, I appreciate that.
Speaker 1:You know, for me, fostering community within the defense industrial base is kind of a passion of mine, that I'm serving through content, through my engagement through social media, which is primarily through LinkedIn and YouTube.
Speaker 1:You know, for me there is this big need for a more present and robust defense industrial base within America.
Speaker 1:We're gearing up for some really scary conflicts, you know you unified land operations in the European continent, turmoil in the Middle East, we've got South East, southeast Asia to worry about and some weird forms of hybrid warfare that are coming to our shores now as we start to gear up for lateral combat in the South China Sea.
Speaker 1:And I see the tea leaves, I see the drumbeat and I know it's really important for us as a, as a community, to come together and start talking about some of these challenges. We've got this big, wide gap between some of the large defense primes, the small little startups, and while we've kind of been at it for the last couple years like we need to band together, and so for me, what I try to do through my content while I, you know, certainly try telling very accurate and highly detailed stories through it is making sure that we've got a mouthpiece, a community for other folks within the industry to feel comfortable to come forward and start talking about this defense industrial base that we're building because, gosh, in a few years we're gonna need it.
Speaker 2:Yeah, we definitely are aligned on this mission because traditionally I come from manufacturing and particularly defense manufacturing, so probably the quietest combination of industries that you could get into. People feel uncomfortable about sharing their defense entrepreneurial journey. I think that's changing. Talk about, you know, venture capital and acting like startups and innovation and all that fun stuff, but traditionally manufacturing is this very quiet. The biggest industry in the world. I'm in northern Virginia. People will come to our facility.
Speaker 2:I didn't know that there was actually manufacturing here. But we have Lego, we have Rubbermaid, you know we of course. We have Northrop, all their space systems down the road. We've got all of the big boys, of course, primes, but there's pockets of these innovative companies all over the place. Some of the biggest medical companies are here. If we're taking leadership from the revenue leaders in this industry, they don't exactly put out exciting content. And so these smaller innovative companies I feel like they're doing a disservice because they're fighting on equal grounds with Raytheon and when they're doing very, very interesting things, things that would be amazing content, they got to get their story out there, attract talent and I see what you're doing. I'm like Mark, he's with it.
Speaker 1:I appreciate that. You know one of my superpowers is drawing from my operational time. So, yes, I've got a story career standing up growth engine lines of business across the defense industrial base. But for me what I realize as a product leader in the industry trying to cop together marketing shoots, is you've got folks who understand the cinematography aspect of marketing, you've got folks who understand the you know the brand awareness piece and maybe they can cobble together an interesting story.
Speaker 1:But for me, authenticity is so important in this industry because people come from the ranks of the military and find themselves either as a customer or as a patron or as a member of this defense industrial base and very quickly those individuals can see the one thing wrong with the shooting, very quickly that disenfranchises them.
Speaker 1:And then now you've wasted potentially hundreds of thousands of dollars on a shoot because you miss one thing. So for me, focusing on authenticity is really important. In drawing in from my operational time I'm able to couple together some highly compelling and highly operationally relevant pieces of content for some of the clients that I work with. And for me it's about drawing from not just the you know my operational time but still, through the experience and the defense industrial base, seeing what works and just tearing apart some of the just substandard content coming out of some of the large defense primes. It's been a good time, and so working with some of the smaller companies that are trying to enter the defense base through high value, quick hit, high quality content has just been a great way to disrupt the industry.
Speaker 2:Yeah, and you've certainly picked up lessons along the way, because you're at SHIELD AI and I want to talk about that role a little bit, but they're, of course, one of the venture darlings. There's somebody that we reference on the show pretty frequently. They're up there with Andrewle and maybe Hadrian and a couple of the other people really mixing up different elements of the industry. I don't think they've been that shy about putting out video of VBAT and talking about putting intelligence in fighter jets and very interesting cutting edge projects. What other lessons maybe that we don't know from the outside, that you pick up at the, you know, working with such an innovative company?
Speaker 1:Yeah, sure you know. For me, for those who don't know I was fortunate enough to stand up the product team at SHIELD AI. I was a product leader there for a little under a year and for me initially coming into SHIELD AI, it was a big lesson in humility. I saw at NOVA the initial product at the time and I couldn't put my finger on the product market fit in this product. I just couldn't, and I had this morbid curiosity of this product and I had to join the ranks of the company to find out really what this product was about. And so I'll break it down really briefly because this was a huge lesson in humility for me as a product manager.
Speaker 1:So SHIELD AI's product, the flagship product, called the NOVA, their hardware that supports their HiveMind software. So NOVA's job is to enter a building to find the bad guys before the bad guys find the good guys, right, such a noble mission. And so obviously they were wildly successful with highly over-subscribed fundraisers for their first A, b and C rounds until we diversified into the VBAT and the Heron Systems portfolio. So Group 3, tail-citter Aircraft and Automated Dogfighting Behavior for F16. But before that, the lead up to that was NOVA and I couldn't figure it out. This thing was a square peg in a round hole of a market, because let me break it down for you. So the pitch is NOVA is this product, you and me, man, we're a special forces team, we got four folks behind us and we're ready to go clear a thousand square foot building. So me and four or five of my closest friends can probably clear that thousand square foot building in about 60 seconds, right? Nova does it about the same right, and so the most dangerous part of any general operations? Certainly that initial breach close quarters combat. It's ugly, it's dirty, it's noisy. Right, it's just this ugly, ugly thing. So, naturally, wouldn't you like to know where the bad guys are, wouldn't you like to know where the threats lie before you go ahead and enter that fatal funnel of that doorway? Right? Perfect, hundreds of million dollars invested, easy day.
Speaker 1:I still couldn't figure it out. Because here's what happens. You have this very challenging triad to balance. In a direct action operation, like close quarters combat, like that scenario where we're clearing a thousand square foot building, you have to balance three things Speed, surprise and violence of action. If the rules of engagement dictate that I may not use violence of action, I can overcome this tactical disadvantage with speed and surprise. If I lose the element of surprise, I can overcome this tactical disadvantage with speed. Violence of action. Cool, easy day.
Speaker 1:Let's break that down and juxtapose it to Nova, because here's where my problem was. So Nova, 60 seconds to clear 1000 square feet great, just about as fast as my special forces team. But now I have to go clear that building. Now I've doubled my time on target, potentially tripled my time on target. I've now got a very loud and angry quadcopter going through this narrow hallway and now everybody inside knows that there is about to be a breach by Americans. So I've lost the element of speed, I've lost the element of surprise and there's nothing on that drone, nothing to overcome violence of action on that objective. So now I'm about to hit a target where everybody knows I'm inside. They've all closed their doors, they've got belt fed, pkm pointed out the door and now we're about to go eat our lunch.
Speaker 1:Got to the company and the company's leadership just were incredible mentors to me and they sat me down and I asked what's the deal with this thing? And they broke me down and said listen, you know, like initially this product yes, conceptually this is the concept for it, but really it's our demonstrator for a larger variance of our what's hive mind right to the larger extension. Right, we have to start somewhere. So it makes sense, because you can't just start with F16, and it was such a lesson in humility, right.
Speaker 1:So I had come from PE backed companies, we'd sold it to FLIR, we'd sold FLIR to Teladon and I had just come from SHIELD as employee number 16,002, what a giant defense company that managed revenue to the week. And I had a lot of thoughts, right. And it was the great minds of both the executive and the technical leadership of SHIELD AI that really told me what Nova's mission was. The fact that you need a demonstrator out there, the fact that you need to have something to showcase your product other than slide work, was super important. And so you know, for me it was a big lesson in humility and I realized very quickly that as a consultant now I'm able to step back into a company like, yeah, I'll be able to formulate preconceived notions, but you've really got to get out of the hood of that company to understand the subtle nuances, because oftentimes your preconceived notions are real.
Speaker 2:Yeah, I mean there's a lot of really great startup lessons or innovation lessons in that as well, because if you can show, not tell, you can really start to have valuable conversations with the customer. And if they push back and tell you, hey, here's my problem, you just tripled time on target, you haven't really saved any lives, this and this and this, and say, well, we haven't yet. But now we know with greater accuracy what the gap is and I can bridge my valley of death with my engineering talent. I can focus in on that. I can focus my BD and partnerships on that. I can focus how my deck looks and how my marketing looks and how all of these looks on this really specific problem that you have, whereas with a slide deck it's all just numbers.
Speaker 2:And I had a similar, I'd say, pushback with SHIELD early on, mostly because I know so many people that have created drone companies and some of them ended up going into bridge inspection. Some of them did crops, some of them did solar, some of them did work out very well in defense. But I looked at it and said, what's so special about this? And it took a lot of time sussing out the details to really be the same thing with Swarm, right? So I've mined this Swarm software. I'm like, okay, well, I have probably three friends that do autonomy from level one to four and or do Swarm as well.
Speaker 2:So what's the combination here? And really, over time it susses out. As they can maintain this level of innovation and customer engagement, they can make the message clearer and clearer and they can make a better and better product not a perfect product from day one. And so where the other people kind of wimped out and went into bridge inspection, you just see SHIELD keep going and going and going. Now you have this program of record. Vbat's very successful and the idea of having a mid six figure Swarm drone all with all these capabilities is pretty mind blowing at this point. But dial it back a few years and, like another drone company, I really like the idea of conversationally working with somebody like yourself to get in their third point of view, push back and then giving innovators the tools to market and message what they're doing with customers so they can get continual improvement and feedback. Really different approach. That's the startup approach. Really different approach to the done in one defense contracting big, big boy, prime setup.
Speaker 1:Yeah, continuous improvement is just one of those things that you didn't even hit the audio industry until. Like well past the industrial revolution, right, the audio industry would create a car and they would say this is the car for the next five years and they wouldn't change it. And then they realized there's so much value that they can give the consumer continual iteration. We got windows that roll down electronically, like let's get that into the next model, we don't need a whole new car for this one feature, and it really just jumpstarted the auto industry in the US and it was huge. I start to see a little bit of that with the defense industrial base. But you're absolutely correct.
Speaker 1:Oftentimes and you know, I think about products like the B 52 hotel that's going to be flying for really 50 years, has been flying for 70 something years Like we will continue to perpetuate great products. We will also continue at the same time to perpetuate bad products within the defense industrial base when new products need to get done. But as you know, man, there is so much financial programming and physical programming and palming that has to do just to get new capabilities in. So it may not be fair to juxtapose the auto industry of the defense industrial base. But the point is continuous improvement, for the betterment of your customers is so important, and what better of a cause than the defense industrial base when your users are the warfighters?
Speaker 2:I've just seen this shift where there's a new generation of companies that are going out and hacking it together, building it and then showing up to demos with a product and it's not perfect Usually it's less than perfect but you put them against. The traditional way is that at that demonstration there would be nothing, it would be a PowerPoint presentation and somebody says, oh yeah, I have my product, let me show you. And then they film it and they release a little video for it and they put out PR around it and they raise funds around it. And that is a wildly commercial approach to defense.
Speaker 2:And so I enjoy I mean, with my manufacturing background, that's how my brain thinks is like can I print something, machine something? Can I make a board? Can I use an existing thing, put it together? Can we take pictures, send somebody a slick sheet, make a video for them, just send it to them and say, hey, what do you think about this? Get them to tell me that it's really bad, that just tripled their time on target Right away and get feedback. It's just, it's like a different world now that we live in this innovation world, and I don't want to pull out specific case studies from who you're working with right now, but I want to pull out maybe some redacted case studies of how this works for small businesses, the startups that are listening to this, why this is so important to think about their actual marketing, not as a separate piece. It's not sales, it's part of their innovation strategy. It's part of their business model itself.
Speaker 1:I love this. I had 30 seconds to impart wisdom on any a solopreneur, entrepreneur trying to break into this industry. Here's checkmate in two moves Identify evangelists, build social proof. That's it. Strategically sell right. Strategic selling is an incredible weapon in the United States defense industrial base and it is so wildly important of getting your products into the faces or into the hands of the users. Social proof is really important, but the evangelists are just as important. People do evangelize your product, ideally within the ranks of the customer sets that you're looking to sell into. Super important to have that beta user that's there to not only evangelize you but to work with you to get your beta product to a V1 product, because there's going to be a lot of challenges, but it's so important. I'll tell you a great story. This is one of the reasons that 10 months ago, I started getting on LinkedIn posting every day.
Speaker 1:My first role out of the military, working for the government, was working for a company called Arianne where we created a product called Skyrater. Before Skyrater came to bear, we had a product called Skyranger. When I first started working for the company, I just got my LinkedIn set up and I realized that we had one really good opportunity to demo this product to some round-breaking Marine Corps programs. That potentially starts selling this thing in a big way into the Marine Corps. I said, okay, how can I use the social media thing to influence this? I spent about a couple of weeks preparing my LinkedIn profile, with connecting with the folks who I knew I'd be demoing to and making sure that I connected to their networks that's following all their stuff and had everything set up. Then, the weekend before we showed up to demo, I went to do some flight testing up the mountains. I took our beautiful 60-times zoom camera and I pointed on a house and then I zoomed back. Then you just got to see this big wide-angle lens and zoom was really far away. You can see the aircraft kind of buffeting, but this picture was really stable and it was just this beautiful 20-second video.
Speaker 1:Now I go flying in on Monday morning. I check into Camp Lejeune, hit the hotel and there's a team of the evaluators who are going to be evaluating our system sitting there in the lobby looking at their phones and they're looking at that video and they're talking about it. I'm checking in and I'm sitting there with a smile on my face, I get my key card and I walk past them and I say you know that thing you're looking at. I slap the hard case and I'm like this is the aircraft you're going to see tomorrow. I'm not saying that that's the thing that put us over the edge, but in turn, the focus was we didn't need to see it in altitude, in the mountains, in the wintertime, with incredible winds, of loft, when you're trying to find, like a man's ice target 5.2 kilometers away, like we do with that. They saw that they had that social proof. So when we went and flew it off the East Coast, they were like cool, we know it flies at altitude, we saw it. They have so much more confidence. Yes, they went in and procured it. But anybody can do that. Anybody can leverage this opportunity that we have, both either within social media or within strategic selling, just by reaching out to somebody and saying, hey, I've got an idea or hey, I've got a product and getting some feedback on it. But in turn, that social proof is wildly, wildly important and we do it now like some of the secret sauce that we're doing.
Speaker 1:So this technological readiness level, it's a really big thing in this government. Technological readiness level for those who don't know started by NASA. Trl-1s like you know, wentfinger in the air in a PowerPoint slide. Trl-9s, like, fully fielded or operated in a replicative environment. So what we realized is that it's pretty expensive to take a TRL one or two, three product and try to get it into a TRL-4 or 5 product, because at that point you are replicating the environment that particular piece of technology is being utilized in and you can do this through marketing right. You're a user. If you grab folks that are either users of your product and you have the opportunity to conduct that marketing shoot in a very replicative environment, you are documenting a test, a conceptual test of your product that in turn can be leveraged to bolster theoretically your technological readiness level through marketing dollars and so through that, like that's the nature of product management, it's connecting marketing and it's connecting the business and the sales and the tech and all the other the organization, the business, and so for me that is one of the reasons why I focus on marketing, but there's certainly a lot of passion with it for me.
Speaker 1:But it is real Like social proof is a big thing and for those looking to break in you don't need to be this well-funded, good jillion dollar company. One of the reasons that I really enjoyed Fleer is we used to spend 12.5% of top line revenue on I read internal research, not so much at the big defense primes. Half percent to 1%. Yes, top line revenue is bigger but there's significantly more of a internal research and development environment. And so, having had the leadership to say like, yeah, we'll give you a little bit of I read to develop a prototype so you can bring to a customer and validate it Like that's all you need, because oftentimes people are like, well, you need to validate this PowerPoint slide before we can even get there. But if your product individuals able to validate the product market fit and you don't think you're going to be that tired toddler trying to mash a square peg of a product in the random overmarket you're in great shape.
Speaker 2:I'm glad you mentioned TRL levels. It is something that's industry specific but DOD wise, nasa wise, most of the programs they have a flavor of TRL. They might call it MRL, they might call it something else CRL but it's all really the same thing. It's important to know because at different TRL levels you're eligible for different non-dilutive funding. And so we have people I talk to almost every day. They want to make something, they want to invent something, want to commercialize something and to know, hey, I got to put this information out there because I need to capture a customer who's going to help me pilot it or look at it. And then I can get to TRL 3, which makes me very eligible for an Sibir or Phase 1. And then I will get $100,000, $200,000, depending on who's doling out the money to then commercialize that, hopefully in partnership with me or a company like me, and hopefully in partnership with that customer who saw that piece of material or that piece of content. And then they'll be able to go to Phase 2 and get a million dollars. They'll be able to then deploy it with that customer. They'll be able to do more matchmaking and BD opportunities. Usually at that point then they're eligible for some type of seed or pre-seed funding, start talking to different very early stage venture capital and go on.
Speaker 2:But to pull that in from having a finished product and waiting and then just trying to go the direct contract route, the market is fairly difficult to jump into. But there are all these entry points, and a lot of those entry points, yeah, are like, say, tech Connect is coming up, so Defense, tech Connect, sbir, showcase, all you have to do is submit a white paper and maybe a video and you can win a little bit of money. But you can also be invited to a table of all these companies like you and all the nerds like me and all the community leaders and all the venture capital people will be there and to see your product. So it's really not as opaque of an industry as people portray it. It's much more porous. But it does start with understanding what do I need to do to get one person's interest enough? So they'll say, yeah, I'll come over and I'll take a look at it and we can fly that thing around a parking lot and I can give you some requirements. And that actually hits most of the needs to get to TRL3, believe it or not. And now I can go get $180,000 out of Air Force if I want, and that's wild. It's so wild to me.
Speaker 2:So I'm really glad that you mentioned it. We talk about it pretty often here. People are obsessed with venture capital, and rightly so. Like if you want to scale to a billion dollar company, somebody's probably going to help you with a little bit of growth capital. But for the most part, people just want to get started, and $50,000 or $1 million would take them pretty far. So I know that you've been in and around that quite a bit, so I appreciate you mentioning that. But it's really interesting to hear how content plays a part of that journey.
Speaker 1:It could. There are a couple of big misconceptions about taking the government's money, two in fact. They come to mind. One is that the government's going to steal my IP. The second is I'm a well-funded PVC backs company. Why do I need the government's money? Well, first thing is government's been pretty good with me, at least about purpose rights. If I'm doing joint developments, I can usually justify why critical things need to stay within the company and not be owned by the government. And I've never had a problem, even when I've taken government dollars CRAT, customer research and development dollars to build something for the government. They've always been really good and very open about intellectual property restrictions and considerations there. And the second piece is we've got all the money we need.
Speaker 1:Why do we need the US government's money? I'll tell you, sure, like a hundred grand out of your IRAT budget is worth a million out of the government's budget. And it's primarily because of the emotional, fiscal and administrative buy-in of that program into your effort. Now, that's not to say yeah, they're going to carry all the way to the end, because there's a lot of sippers that die on the vine. There's so many of them.
Speaker 1:But it's so important to recognize that if you take money from the government, the government's now invested in you. You have a program manager that evangelists you've identified to help build something that's emotionally ready for you guys to bring your product to market, because they've got a problem every day that you solve for and they work with you. There's the government procurement office that, once you're supporting them, they're there to help you with all sorts of things, all sorts of resources. Doing business with the government is like it's really tough because you've got to do things like all these crazy DD235s and all the things you need to do to do business compliantly within the United States. Government's a lot, but there's certainly gold in the hills and there's no better place to sell on value than the aerospace and defense market.
Speaker 2:Yeah, I think if you look at those opportunities as ways of entering the market, making friends, getting champions like you were saying getting those key accounts, everybody wants to sell to Navy, seals or SOCOM or they always say these wild things. I'm like you know, you can just go to softworks website or you can go to AAL's website. They have some really great opportunities out there less management than a traditional cyber, and they tell you exactly what they're trying to do. You come up with any wild idea that you want, make a slide deck of a video and send it off to them and it's like maybe somebody says no, you'll probably get good feedback. But if they say yes, I can't think of better way to develop a business Relationships right.
Speaker 2:So from a BD perspective, relationship perspective is incredible. To be honest, a lot of more established companies. They say exactly what you said, like well, I don't need a hundred K, I don't need 200 K. Well, do you want to sell into the US government? Because you have no track record whatsoever right now. So you're either gonna have to work through like our sales network or you're gonna have to go through one of these kind of ports of Entry and build some muscle of how this whole process works and TRL sounds boring, but honestly it's really not that bad. If you want to get non-dilutive funding, even grants, let's all lunge to that as a structure. So yeah, of course, a point and you.
Speaker 1:You mentioned a briefly special operations being. It's a great funding line and there are folks often who so I believe that riches lion niches don't get me wrong. But I do believe in this industry that like we're making products or services that are just geared towards tier one operators, so like the shadowy sides of the intelligence community and national mission force it's a higher form of patriotism. It's so difficult to scale that business. You need to slide, you need to pick tough problems and and like there's no better place to build evangelists and social proof and and the shadowy parts of the United States government.
Speaker 1:However, scaling that is difficult. I oftentimes have folks coming to me and so we've got this great thing and it's used by only a couple of folks in the military. How do we get everybody to buy it? It's like we you didn't pick a wide enough problems. This problem is only a counter by folks and you're doing great, but scaling that business is very difficult and so jumping in with special operations with your products is double that sorority. Sometimes folks polarized way too Sexy and become way too niche of a product and can't scale. And the folks who figure it out realize that special operators are a great place To test conventional equipment that can eventually make their way into the, into the fleet in the years to come.
Speaker 2:Yeah, and certainly not only the product features, the price. But then the way that it's described and talked about is going to be a lot different. If you're going for big army and you're going to talk to a al about technology, they think about technology. You know very high scale, right, talking to them about batteries, yet Tony Williams on, and so they think in the, in the tens of thousands of anything, and You're looking at how do we scale an idea? That's a very large organization to sell into but it's zero to ten percent Adoption rate. It can just crush a small company.
Speaker 2:I like niches, I like building personal relationships. But yeah, that's a good point. I think the holy grail that everybody is is pushing look for dual use. So, hey, if you can jump in Primarily, yeah, work with. So comp I still comes great to work with. I mean, we went to soft week. You get to talk to everybody, you get to see what everybody's working on. Everybody has a booth really great. But as a primary customer, great. But I will tell you, the way that special forces thinks about their problems and the way they Can spend money is a lot different than the way that anybody else can spend money. So that's a really yeah, it's a really interesting point for people. I think that the government makes a great primary and secondary customer, but you look at like Fleur, so you're at Fleur right, there's absolutely government only Applications that they make very high-end products, but they also make a product that I can attach to my iPhone the broadest possible market appeal product. So how do you scale out of that? And I think really, to just hammer this point home for people, a lot of that is I want to be able to communicate with a broader and broader Customer base and still solve a problem. So I have to continually communicate what I can do and figure out what they want.
Speaker 2:It's been really, really hard for these small companies because they don't even use LinkedIn, forget about posting on LinkedIn, they don't even read LinkedIn. They don't have a blog, they don't have a podcast, they don't have a newsletter. We always joke here is when somebody's gonna come visit and I go look at their website, a lot of people's website. You can't even figure out what they do and, to be honest, like I understand, especially in like, I see like why it's just nonsense on their website. But they're legitimate innovation businesses that look at those organizations and say all copy what, what Frank has on his website.
Speaker 2:I'm like, no, no, no, don't copy what Frank Frank is doing his own thing, right, he doesn't really even need a website. You need to have a website and you need to, like you know, figure this out. Your, your startup. Come on, I don't, I don't know if that makes sense reveal, but you know, traditionally this is like a business where you could you could run a 10, 20 million dollar company and not have a website and it's just mind-blowing to people outside the industry and that's changing pretty bad.
Speaker 1:Oh it, it truly is it kind of levels the playing field a little bit for all. Like you can't. There's not a whole lot of social media influence. I can have it. However, like you know, you go to the a USA's, you can come off the metro and there's the giant like f35 there and soft week for sure. You have banners everywhere. It's there. And Too often I find folks that protract civilian trends, whether it's product management or marketing, or you have pricing trends Into the defense industrial base, and fail miserable because you have to have to parent the US government strategic narrative back to them in the form of your marketing material.
Speaker 1:You can't. You have to solve a hard problem in the battlefield. You got to save lives doing it. You got to replace something of consequence and you have to do it at a tenth of cost and like that's table stakes right now For disrupting the industry. It's so tough. But if you've got the right team with you and you got the right product and you're equipped to survive that Good old value of death, you can get there.
Speaker 1:And yeah, there's always that focus on dual use, especially With all of the great opportunities to start selling into our coalition force partners because we're going to need it right.
Speaker 1:We're all focused on the great power, competition and your European Theater.
Speaker 1:The unified land operations there and the littoral combat in the south china sea will require an incredible amount of Coalition force interoperability.
Speaker 1:So for folks looking to sell into the US government and trying to survive that value of death, yeah, look internationally, because there is an incredible amount of procurement opportunities and it's a great choice for you to bifurcate your product, meaning you have a product that you sell internationally that you pre you charge 100 bucks for, and then you have something that you sell into the US government. That's relatively the same product, but maybe there's the access controls in place, maybe there's the anti-tampers switch that you had to put there so it's static compliant, but now you've got a product you can sell for 300, 300 dollars, three x, right. It's an opportunity to expand margins and and I'm all about value selling I try to focus on products that I can have the opportunity to work on, selling value on, not a price, because too often it's like a race to the bottom, and that's why I don't do too much in like drone portfolios these days, because it is just an utter race to the bottom, right now.
Speaker 2:I know you are at a usa and I know you're. You create content, so you have to be a great listener. So I'm focusing in on some of the bigger initiatives, like armies, 2030 plans, so you have like 5g on the move and, of course, replicator. Everybody's talking about drones. How do you rapidly create a thousand? But I want to hear from you some of those big trends that you see, and then let's talk about how people can actually follow these things, because to me, it's very public, but I realize, like I live in this little bubble. Uh, this is what, what I do. But if you wanted to break in, what are some of those big trends? Obviously, the political climate is changing very, very quickly, so there's some immediate, obvious things. I don't think the applications are obvious, but, um, what are some of those big pieces that you see happening right now that we should be paying attention to as innovators? Scaling?
Speaker 1:the force comes to mind. It right now is a very scary time in the defense at the dod right. So we are, we've drawn down in global war on terrorism. I we have we're no longer conducting wide scale counterinsurgency and counterterrorism operations across the globe. So we have now realized that there is an incredible amount of veterans that I've we're part of g watt that have looked to the great power competition, say, well, my fight's done, I'll leave this one to the next generation. So we are Hemorrhaging Talids out of the military and, at the same time, because of the political climate, we're having a hard time meeting recruitment. No, what's meeting recruitment? And so, if you look at how the dod is starting to solve for this, there's a reason that the fiscal year 2023 and certainly 24, that there is a year over a year increase 40 of technology budgets, 40 percent increase in technology budget year over year, to scale the force. And that's like you look to the shield a eyes, you look to the area sky raiders, like it's all about providing one Individual to be able to scale operations across a large Area of effects. Tonight. What I mean by this is you can have one marine solve a problem, or you can have one marine with 12 drones all operating in concert solve a problem, and They've realized that they can overcome some of the lack and troop strength by bolstering that with technology.
Speaker 1:But if I spent a lot of time at these trade shows, I spent a lot of time talking to the nation's senior leaders and I ask them the same questions what keeps you up at night? And I listen as you know, I try to be a good listener and I realize that there are three things that we, as a defense industrial-based, need to arm our military with capabilities, with the order to fight and win in that next great conflict, and that's lethality, dispersion and mobility. The speed of battle will move stizzingly fast. The contested environments, electromagnetically, gps communications will not be there. So we have this massive problem on being able to conduct combat operations in this next disparate environment. We know that because of our electronic signature and our heavy use of electronics at the enemy will pinpoint us in a very short period of time. And so in order for our forces to thrive in this new operational environment, the technology, the solutions need to ensure that those forces are more lethal, they can operate in a more dispersed manner, in a decentralized manner, and that they have the opportunity to be highly mobile, because speed will be survivability.
Speaker 1:So if you take lethality, juxty, you add some mobility and you add some dispersion opportunity in there, you now have survivability for the great power competition and so the companies looking to get into this industry.
Speaker 1:It's a pretty good time to do it. If you look at two years ago, a wet finger in the air, right we're drawing down in Afghanistan, global war and terrorism is done. Now you've got all these companies who have polarized to GWAT with all their solutions where we're fighting toothless goat herders and caves, and now they have to retool their entire innovation base to start rationalizing the fact our great power competition is going to put us up against the likes of Russia and China in a way we've never seen and at a hybrid warfare. Today this gray zone is operations are getting run rampant around American streets, and so vigilance is certainly important, but for any folks looking to get into it now is a great problem, because we've got a lot of problems to solve. That was a great time to start bringing solutions in, because the problems are real and the drum is beating and it beats louder and louder every single day.
Speaker 2:It's pretty wild. Even in the past couple months, the conversations have completely changed from the hey, this is the multidisciplinary, multi-joint force, this is what we imagine this is going to be to hey, you know that thing that you spoke about at what's in what? Yeah, we'd like to demo that in a couple of weeks. Yeah, that was a white paper. So, yeah, we will get started on that. But we're moving very, very quickly and really all forms of technology, things that you would think are pretty standard commercially, like being able to use your phone in a detailed environment with totally denied signal it's not going to happen, right. So there's just a massive market, whether somebody is interested in software, they're interested in signal, they're interested in just pure tech, compute, ai. There's lots of these issues To your drum point. There's been lots in flight and it's still not a saturated market. There's still lots of white space in there. I'll give one as hearth-hardened drones, like nobody's really solving that problem adequately. If you're listening and you want to, I'd love to help you solve that problem. But look at all the acquisition behavior that's happening in UASs right now. Right, lots of companies being scooped up, lots of funding going on that because the Navy can't get people to be on those giant ships that they have, so they want to be able to just send a drone, they want to send a sub, and so if you're interested in robotics, if you're interested in fabrication, there's a lot of 10x, 100x problems and we talk about it on the show, but it's like six months ago it'd be like, hey, this is a nice place to explore. Go, look at some of the innovation challenges. Think about how you could dual use your product. We could talk about bridging your product into defense, but now it's kind of like you should look at doing that now. You should look at doing that right now.
Speaker 2:There's very interested people. We haven't spent any money seriously on EW capabilities in a decade. You could argue against that, but new jamming technology is really just not implemented out there. So you look at how environments are not just contested but they're easily completely denied by. I always joke on the show, mark. There's things that people can do that are like 15 year olds with YouTube, that are highly disruptive on both sides right now, and that's how far behind we are. Things that you can do with a HACRF or with an Arduino, and that's what we're up against at scale is like a country of engineers and a country of hackers, and so what we have it has to go through this rapid innovation cycle, and that's what this show is about. But now's an amazing time to get out there and listen. There are good ways that people can actually go out there and figure this out, like listen to the customer.
Speaker 1:Yeah, so the customer. Unfortunately, within the defense industrial base, within our industry, the customer is often hard to find and cagey and they generally won't give you the straight answer and they generally have to bite their tongue a little bit because they're a contracturing officer and they've got five other companies asking the same question, things like that. And it really for me, what I found at least that works for me is one community. So the glorious thing about LinkedIn now YouTube for me is being able to draw upon one, the content that's there because everybody's sharing their observations, but two, to also pressurize stuff with my audience, with the community that we've built here. And it's so important to pressurize that stuff because, as we talked about, it's like my time at Shiloh Day Eye, where I had a very misconceived notion about a product. It's important to regulate that.
Speaker 1:For me it's like trade shows. That is the place that I go to binge. I binge a lot on not just the government, because it's great. You sit down, you can hear the government's problem and they say these are our problems, these are our modernization priorities and you can go ahead and do something about it. It's also a great place for industry because a couple of things you can learn from walking the trade show floor.
Speaker 1:I've been doing AUSA for a lot of years now and same thing. So I do AUSA Shot Show, soft Week, modern Day, marine, soft, airspace, airspace, cyber, all that stuff. I would do all the small ones too. But what I love is watching the industry. You know what In one they bring the same crap to the same trade shows or they bring the same thing to different trade shows, meaning that they're using the same marketing material for trying to get one product into the army to get another product into the Marine Corps. It's also great to see who's not bringing anything new. What's missing from this thing? That's the biggest thing I ask myself every day when I walk that show floor and I am For those of you who know me at AUSA and for those big shows. I walk that show floor constantly and I always see who's innovating, who's doing something different and who's staying the same.
Speaker 1:Because if you're an innovator and you're looking to disrupt the market, find out who's not moving, find out who's waiting for the government to ask them how much they need to fix the product, or find the opportunity to also collaborate. There's tons of opportunities with Small companies to work with bigs one, the bolster, you know a collective bid, but to there's a lot of. Those bigs have a lot of Undefended flanks that, as you mentioned, a 14 year old kid on YouTube could probably solve for, and they sometimes need those 14 year Old kids off YouTube, and so for them, you know, it's a great opportunity to disrupt and there's no better place to like Knock on the door of a company you want to work with. Then add one of those trade shows, because there's generally business development Individual there. There's maybe something, somebody that can get you back into the executives heck, maybe there's an executive themselves. And so for me it's trade shows.
Speaker 1:For me it's it's a constant. It's a constant like thirst for learning across what's going on in the world. You know, I do some of the news, but I I'm not on tiktok, I'm not on Instagram and not on Facebook, so there's a whole lot like there's a whole part of this world that there's this noise that I don't hear, that maybe there's something there. But for me it's about listening to what's going on in the ground, talking to people about it, asking the government the hard questions. What keeps you up at night? What are your big modernization priorities? What's the problems that you're trying to solve for today and I asked that to everybody. I asked that to, yeah, ensigns in the Navy. I asked that to four-star generals, I asked that the senior executive service and I've asked that the presidents. Right, it's the same thing. And so ask questions, intellectual curiosity, find opportunities to get in front of the customer with the problem to ask those questions.
Speaker 1:But if you can't, like I do readouts for everybody, I go to USA, I'll do a readout, so just follow with some of the readouts. Right, there's creators out there like myself, trying to get more people into the defense industrial base to create more. But there are folks out there that I'll share and if you have a question, ask. That's, the great thing about a community is if you have access and placement to a broad range of individuals like myself, with the 10,000 folks we connect with on LinkedIn and ask a question, I know I'm gonna get a pretty couple of pretty good answers out of it.
Speaker 1:And so bottom line is you can't do this alone. There's no one-stop-shop to get the whole understanding of the United States government. Samgov is one glimpse and the investment Opportunities that are there. But get out there getting these trade shows. If not follow creator like myself, that can help you really just get a deep dive. If you can't afford to attend or too busy to send these trade shows, get the so what out of them, and there's a ton of resources that are out there. But you're right, you have. You do have to look. It's not immediately present.
Speaker 2:I don't think either of us have tiktok, so I won't put that In the description, but I will put your LinkedIn and your YouTube channel so people can connect with you, and If you're going to a fca west, I'll buy you a beer. Is that's the next big trade show that we're going to? Yeah, it's a good show. San Diego is beautiful and we'll have a nice booth. But, mark, thank you so much for taking the time to be on the show. This is fantastic. It's great to share your mission, what you're doing, how you're helping innovators and helping broadcast out. This is an important thing, right? If you want to help out country, you want to apply your smarts. This is it. This is the thing for you. So I really appreciate you taking the time out of your schedule and hopping on the show. Thank, you.
Speaker 1:No, it's been great. I love the content you produce. I've been a big fan of the show for a long time. It's just a little bit of a dream to come here and chat with you. It's just been a great conversation and for those listening it now is the time to start supporting this defense industrial base. Yes, we're here to do a lot of business and make a lot of money for investors, but the American people need us right now, and if you remember the beat up lead up to world war two, it happened very fast and this one Will happen fast too. So, looking forward to connecting with you out there, reach out to me on linkedin or YouTube, direct message Me if you got a question with this one and, man, thank you so much for this opportunity. This is a phenomenal platform, a great institution. I can't wait to watch, continue watching this and be a fan of this podcast.
Speaker 2:My name is Cali Kean, and this has been the start of defense.
