Overcoming Bureaucracy in Defense Innovation with Jon Gruen

[00:00:00] Jon: You're not going to sit there from an office and figure out how to develop the next. Networking devices for DoD, have to be out and capital-intensive. it's a capital-intensive way to do business, but you've got to get out and go to the field exercises. You got to go out and talk to the labs and the warfare centers and partners, you know, in, the big primes that are doing, you know, a system of systems and integrations and all of that.

[00:00:25] Jon: So there are a lot of elements that you have to have right to be successful here.

[00:00:49] Bonnie: Okay. Here we are again, defense Mavericks, another fun episode. I have the guests I have with me today. His name is John Gruen. John, thank you for joining us. Can you give us a 32nd rundown? Who are you? What do you do today? And maybe a little bit of background on your journey to get to where you are.

[00:01:08] Jon: Certainly. A pleasure to be with you. so John Gruen is currently the CEO of Fordham Technologies, which is primarily in the counter-drone space. Inside, DOD right now, we are manufacturing, radar, small form factor radars, as well as drones that go and hunt and, capture or kill other drones. And so that's the core technologies that we have.

[00:01:34] Jon: how I got here started in the military, started as a Navy SEAL for 10 years, doing the operational stuff, then transitioned into the private sector, went to work for Lockheed Martin for 11 years. And, learned all about the industry from that side of the fence. And then took time to transition and went into, working in the venture capital and startup world.

[00:02:01] Bonnie: Oh, wow.

[00:02:01] Jon: that allowed me, I ran a. Aerospace and Defense Business Accelerator Program in Abu Dhabi, part-time for a couple of years. I worked with a lot of venture capital-backed startups, portfolio companies here in the States of a number of the venture capital firms you would know, you know, the defense, national security-focused firms, and just helping them do every element growth from, you know, contracting business development to internal structures, really just on that operational side of helping them be successful.

[00:02:36] Jon: So, I was brought on as executive chairman of the board for Fordham Technologies about 4 and a half years ago, and then coming out of COVID and seeing the massive growth in the counter-drone space. So, We knew we needed to scale quickly. So, I was asked to come on as the CEO a year and a half ago to facilitate that growth.

[00:02:56] Bonnie: Wow. That's quite a breadth of experience there. Operator, private industry. I mean, you're now the CEO as well, and also venture capital background. I'm wondering if that was planned or intentional, or if you just kept kind of landing yourself in these different spaces and communities along the way.

[00:03:15] Jon: it was not intentional. It was, I just took all the opportunities I could see in front of me that I saw as, important and, future-leaning, being a SEAL, you know, we don't come with major programs. You know, that we, buy and so going to like a Lockheed Martin, what they use me for was to be very entrepreneurial inside the company.

[00:03:39] Jon: And so I got to get around and see all the different business areas, see what they had as their products and their core offerings. And I tried to adapt that into different solutions, particularly for special operations markets, both domestically and internationally. And then also, you know, obviously service-aligned programs, but again, not being tied to a big fixed program.

[00:04:04] Jon: My background enabled me to have that very diverse experience and that just continued to play. So I remained as a reservist. Navy SEAL reservist the whole time, and still am actually. And so I was able to help, you know, the group that stood up, the innovation directorate inside the SEAL headquarters, concurrently.

[00:04:23] Jon: I was at Lockheed obviously, and I was able to work with the group that was standing up Lockheed Martin Ventures. And so it was just these little elements that built on themselves in my career. You know, at the right time, I just saw a pathway to go all in on it. And that's what I did. you know, there was business school involved and then going all to that venture world, which the startup world,

[00:04:46] Bonnie: Yeah. It sounds like the right place, right time, almost like you're, you were well positioned all along the way through. how has being CEO been for you? That's a relatively new experience. So you said a year and a half, right? Yeah. What's that been like in the startup world?

[00:05:02] Jon: it is everything. they say it is meaning it is 24 seven every day of the year. Full time, and dealing with every aspect of the business. I think that's fundamentally the difference. when you're at, you know, I was at Lockheed, I was business development and strategy, and while I worked with, you know, all the different business areas and corporate and the company, I still was in that function.

[00:05:27] Jon: Being CEO, you deal with every kind, every function, every day, Having to shift from financing discussions, one hour to HR, the next to manufacturing and working with suppliers. The next is truly all-encompassing.

[00:05:45] Bonnie: Yeah. How big is your company? Fordham tech.

[00:05:48] Jon: So we're about 110 people right now.

[00:05:50] Bonnie: Okay. I'm going to make an assumption. tell me what your lived experience was like. so going into each of these new roles in different spaces, did you have a feeling of, uncertainty or excitement or, what was that like for you in terms of like, you knew you were going into something that maybe wasn't your wheelhouse, but you, knew you had skills that would add value.

[00:06:13] Bonnie: And I'm wondering. did it come with a lot of anxiety or excitement all the above? And then I'm going to, and then I want to hear about specifically being a CEO though, because that's a very different role in my opinion.

[00:06:24] Jon: Yeah. I, you're kind of getting into imposter syndrome almost at that point. which is true. It's a real thing. I mean, all those emotions are there. I think I just fell back on your experiences and I had very significant experiences being a SEAL and, you know, deploying to Afghanistan and Iraq and living through that period.

[00:06:45] Jon: And leading teams in that environment. So you do not have to just fall back on your core experiences training and, education. And so education is a big piece of it. I think that was always the unique thing about me I always took an experience and tried to analyze what was happening in the process, like the process.

[00:07:10] Jon: Of the experience, not just the outcomes or the topics being discussed. And so by that, I mean, when I was in a. business development strategy, meaning I looked at the dynamic of the leader and how good leaders enabled great ideas to be brought forward and resource them appropriately. It was more about, it was as much about the process, successful processes, as it was about the immediate project or outcome.

[00:07:37] Jon: And so I guess it's a curiosity, right? Everyone talks about it.

[00:07:41] Bonnie: Yeah.

[00:07:41] Jon: curiosity and that just led me down this path. So when the CL community was standing up the venture arm, I was, or the innovation directorate, I was a reservist and up for a command. I chose the command, you know, I applied for the command that sourced all the bodies to that innovation directorate.

[00:08:00] Jon: And so, you know, that was just, that was the conscious decision to get into that space and it worked out. And so I spent four years. Sourcing and working, with all of the incredibly smart people that were brought on to work on those projects in that innovation space,

[00:08:15] Bonnie: Well, it sounds like I'm hearing like you, the journey has been more important to you than getting somewhere, which is very refreshing. I love that. going back to your startup, experience, you know, you're in it. This is somewhat, my space as well, dealing and interacting, trying to lower barriers to entry.

[00:08:32] Bonnie: How has it been for you working with the government? And you could be honest. Are almost always the same.

[00:08:39] Bonnie: It's rough.

[00:08:41] Jon: rough. again, everyone's well-intentioned. Everyone wants to do the right thing. You've just got a systematic issue right now that is again, being worked through. the early stage, outreach, I think has had a lot of focus. the organizations that were created, DIU, AFWERX, Naval X, Army's Futures, Softworks, all of those entities.

[00:09:05] Jon: I think that's been very helpful. I think it was necessary. I think it's refining itself into, you know, what that long-term effective structure will look like, especially as you start to apply more budget to it, and resources to it, but again, the transition part, you know, for, our case, you know, counter UAS was a capability that was not well, resourced and defined for many years.

[00:09:35] Jon: was, seen as. Either part of force protection issues or meaning the force protection forces, or it was very, you know, tactical systems that just mitigated an immediate threat to the force, handheld kind of stuff. R. F. Based. systems, anyway, I would call it the low-hanging fruit was, there and grabbed, but what was not happening was in my opinion, a thoughtful analysis of how fast the threat was going to mature and proliferate out in the world.

[00:10:08] Jon: So, you know, understanding we didn't grasp that DGIs could be turned into mortar Systems that can be operated, you know, by a single controller in person, you know, that's what we're seeing in Ukraine, right? That it's. That's been on the battlefield for a year and a half plus now. and so the U S government didn't have that plan.

[00:10:30] Jon: And when you don't have a plan, it's very hard to create it rapidly, especially if you don't have an overarching entity that is full as the budget authority has acquisition authority, all those other elements. So when we can trust what the U S government, you know, so DOD created the joint counter UAS office.

[00:10:49] Jon: But that had no budget authority, no acquisition authority. So they were there just as a, basically a doctrine and, reaching out to the services to, see what they had, going as different efforts internal,

[00:11:03] Jon: kind of do some analysis on what was best of breed or what was working, not working. Some reporting on that.

[00:11:09] Jon: That's very, you know, you can contrast that to a JADO that was created for the problem. In, Iraq and Afghanistan, whether, you know, would you need something that had that scale to it? And that authority? A lot of people will say, yes, it just hasn't been created yet. And so you look at the issue, and then the services themselves.

[00:11:28] Jon: Developed programs, you know, slowly relied on what they know. So they reached out to a lot of the legacy defense industrial bases and tried to port systems that were on the shelf over and adapt them to the threat. That was the old counter rocket and mortar systems that they tried to make counter UAS systems.

[00:11:47] Jon: And then, you know, they would add elements of, you know, RF and some of the easier systems at the time to buy that created, initial wins and fielding, but they've proven not to be able to sustain with the, again, the rapid, maturation of the threat. And so when you don't have programmatics that enable technology refresh and don't enable new capabilities to be on ramped effectively, you get what we have.

[00:12:14] Jon: We just get these. These valleys of where we're lagging the threat and don't have the funding and don't have the palm lines and everything else that needs to go into it. Our journey has been that because we were brought in through DARPA, through DIU, and not as part of it. You know, adjacent process, not part of a program of record development.

[00:12:34] Jon: So we are a capability, you know, in 1 regard that they didn't know they needed for a long time. And the innovation folks had a vision. and work with us to create the solution to that vision luckily we're, here and have it, but we're still facing the challenge that there is no, programmatic line item for us at this moment.

[00:12:59] Jon: And, when we, you know, there was a path to go down and create and transition from development to production. Here in this, in 2024, we've been on a continual resolution for six months. Production is considered a new start. So we've been unable to get to our low-rate initial production contracts because of that.

[00:13:17] Jon: So it's just been one thing after another that just kind of creates these delays. And in a startup world, you know, telling a company, Hey, we'll see you in six months. That's brutal.

[00:13:27] Bonnie: I can imagine, or I can only imagine, I suppose, what are some of the things you've had to do to maneuver and navigate some of the delays that you're talking about? Like, what does that look like for you? 

[00:13:39] Jon: So we very deliberately, we, our core technology with the radar technology has always had dual use potential. So we're using it in a counter-UAS defense way right now, but we certainly have projects going that are going to enable things like advanced air mobility. You know, on board the future of eVTOLs and beyond visual line of sight, logistics drones, as well as just digitizing urban environments to have very, you know, to allow drones to operate in cities, but also to do, you know, Even bigger, just, efficient commerce of the future.

[00:14:18] Jon: So we've always had that dual track, a little bit of success, that's a nascent market, the advanced air mobility market, you know, we're seeing more development now than we've seen in many years, primarily because the FAA is getting around to on the regulatory side to start to enable.

[00:14:35] Jon: Early, pilot programs and early use cases there. So we've had that. So that's allowed us to do two things. One is to raise money. So we have raised, you know, venture capital to sustain us. There is a limit to that though, when you do have delays. Large contracts, and then, international. So very deliberately, like I said, we, always have created an ITAR releasable version of everything we've developed. And so we have relied heavily on the last couple of years. Our early wins were, protecting the Tokyo 20 Olympics. And then we did the World Cup in Qatar in 22. So we had our radars and our drone hunters at all the stadiums, different mobile platforms, protecting those large, you know, venues and those large games.

[00:15:20] Jon: And so that. That kind of effort has, really spurred and kept us going, while we waited for the Department of Defense to, and bluntly the DHS and law enforcement to start to adopt us in, a meaningful way. And again, there's a pro there's a programmatic side to that. There's also the regulatory side of that. We're talking about a novel technology like ours, catching a drone out of the air here in the United States has been illegal up till very recently and just for federal law enforcement in specific use cases currently. That'll broaden here as we get wider adoption and people get comfortable with the concept.

[00:15:58] Jon: But up to now, any drone in flight was considered an aircraft under FAA regulations and 

[00:16:04] Bonnie: I see.

[00:16:04] Jon: take down any kind of aircraft in flight.

[00:16:07] Bonnie: Right. so going back to your point about, you know, you've had to, it sounds like you've got different revenue streams, thankfully, to help sustain you. You've got venture capital, international market. going back to the issue at large though, if you had only had maybe a more streamlined path, I'm not even going to say a clear path, but just something where whether it's the bureaucracy or the blockers that, Maybe stemming from the bureaucracy didn't creep in.

[00:16:33] Bonnie: It would have maybe been a little bit more seamless. So this goes back to the connection between some of those innovation hubs or like DIU or, DARPA with the rest of the system from your vantage point, like, what do you think it's going to take to bridge that or a little bit more so that it's not so much work on your side?

[00:16:55] Jon: The number one,

[00:16:56] Bonnie: a big question. Yeah, I know. But

[00:16:58] Jon: no, I mean, look, I think there's a couple of near-term things. one is the concept of the innovation navigator on the government side. you know, there's BM& T has a program on it. I think they're starting to teach it at DAU and having. Somebody who works with companies from the very front end of that outreach and in the front end of the pipeline through to a program of record, you know, in the short speak, but through the different cyber phases and finding the customer and the test and evaluation and planning for the R and D funding and planning, you know, working a palm line item that would adopt this.

[00:17:38] Jon: and those, palm line items can be very. General early on. And that's the other side of the coin. So not only is this person or that's working with the company in a much longer time frame than just the short cyber cycles or immediate, you know, funding level, whatever phase they're in on the other side, you need.

[00:17:57] Jon: Contracting officers. So the thing I hear the most from the government is they don't have enough, warranted contracting officers who know how to do things like production OTAs, 

[00:18:06] Bonnie: Sipper

[00:18:07] Jon: they just ran out of bandwidth. They are so undermanned in that skillset, that it just creates a backlog.

[00:18:13] Jon: So that, that creates one backlog. The other is on the resource sponsor side., On the program office side, they need to create these Palm line items that may be a little generalized in the early years, knowing that in two years, they'll have definitions around exactly what the product or what the specific requirements are going to be to satiate that.

[00:18:36] Jon: But you've got to put those in your palm projections. And if you don't have them, again, you create a two-year, value of depth. You create the two-year value of depth. That, Oh yeah, I want this two years from now. I can get it in a Palm. 

[00:18:48] Bonnie: if you were King for a day, what, would you do differently in the department? I mean, another big one. I know, like, I'm just trying to, I'm trying to go deep

[00:18:56] Jon: mean, there's the education piece, right? So, I mean, everything I'm talking about, you, have a massive workforce, a massive bureaucracy that you have to incentivize and train to do this innovation work. and that's very tough when you have, you know, ACAT, if you're a, I mean, take Navy aviation, for example.

[00:19:15] Jon: I mean, that is. I was, I was brought on to be the budget director for the SEALs as, a reservist for about eight months. and so I, I was, got to see that process with the OPNAV staff. Still, then all the other big, you know, so the aviation community or the sub-community, I mean, they're dealing with these multi-billion dollar programs, F-35s and Columbia, Columbia class submarines and carriers and everything else.

[00:19:41] Jon: It is so hard to get their attention on these innovation topics at any meaningful scale. And so you do have to carve out and dedicate personnel and resources to do that. You got to fence it. And you have to just really hold it, you know, at the top level, protect it because it's so easy to cut when you have budget pressures and you need to divest to invest and all these terms that we've heard lately inside the building.

[00:20:08] Jon: You know, the 1st place that's very easy to cut are these nascent innovation programs that you don't know how that's going to affect you for at least another couple of years. So I think that's probably it. It's.

[00:20:22] Bonnie: now. I like that.

[00:20:23] Jon: When we're getting there, right? I mean, there's a lot of debate on DIU, like I said, of being the overarching organization that shepherds this, that, that goes maybe even is given that budget directly to hold and to the fence.

[00:20:35] Jon: And so it can't be carved off by the services, as easily. And so, you know, those still need to be worked through and that those need to be established and codified.

[00:20:44] Bonnie: Yeah. I mean what I liked was you, started with, what you called education. I would, maybe call it literacy because we get a ton of training on a lot of stuff. And you said it earlier in the conversation, a lot of us default to what we know. And right now, especially working with startups like yourself, sometimes we have to do something different and be okay with that, but still understand the rules enough to enter that maybe unprecedented territory with good left and right limits and, working alongside, which takes a lot of energy, a lot of, that's why I said literacy.

[00:21:19] Bonnie: It's, understanding. when to pivot to avoid, you know, no one wants to break the law of like, where are the, where's the black and white, where's the gray. These are the types of things you don't get trained on. I think some people experience it and they, start to learn it on the job.

[00:21:35] Bonnie: If they're depending on what their mission is. so, to do this at scale, you're right. More. Attention to those things that maybe groups like DIU and DARPA do for the workforce at large is probably a good idea. It's probably a good start. I mean, and then you were talking about, there's good and bad to having like a group like DIU be the, I'm using air quotes, the innovation group because then people believe that's not their responsibility.

[00:22:05] Bonnie: So that's the Con, but the, pro is like you, to your point about, you have a group that's kind of protected from the cuts, you know, and hopefully that is trying to pathfinder is trying to do new ways of doing business. So, there's a dichotomy there. It, I think it's real, I guess is my point.

[00:22:23] Bonnie: And it seems like you're feeling it too.

[00:22:25] Jon: Absolutely. So yeah, watching that, those. debates happen everywhere, up on the hill, inside the Pentagon, down out in, I mean, I literally was at DIU this week and just flew back in from them, showcasing our technology to the vice chairman of the Joint Chiefs of Staff. And, you know, it is a mechanism to get that visibility and to get your, story heard to try to break through some of these roadblocks.

[00:22:52] Jon: and again, if they're more empowered with a budget, that helps move it faster. so yeah, those debates are valid. They're happening. the, exactly what you're saying, the con is, does it take the responsibility off of all the other folks in site and services and.

[00:23:07] Jon: there's a lot of, you know, the concept of venture capital is diversification, right? Whether you're operating a fund, or, you know, just talking about investing in a certain market segment, the diversification is what matters because you're gonna, you don't know the winners at day one. And so you need an element of, All these different efforts being seeded, you know, through different organizations and not narrowing the pipeline too quickly.

[00:23:35] Jon: And so there, but that's a contrast. That is the contrast.

[00:23:38] Bonnie: Yeah, well, what kinds of things or resources are you leaning on or that you like to share to help you continue to navigate this space, whether it's government or just technology in general? Cause I'm sure you, I mean, you're, in it, you're developing, you're trying to develop new cutting edge things.

[00:23:59] Bonnie: Like What is that? What is that for you?

[00:24:01] Jon: I guess to be successful, you have to have, all the elements within your, you know, around your business, supporting you. I know that seems obvious, but if you got venture capital backing and because you said you were going to do it in an app on, the iPhone, iStore. And you pivot into defense and trying to do an app for the intelligence community.

[00:24:26] Jon: A lot of times your investors aren't going to be aligned with that and they are not going to support you and they are not going to provide the runway you need to make that pivot. And it's very, hard to change investors from when you start because those early investors have the majority of the shares, they have board seats, and you don't just find someone to come in and buy them out and take the company in a new direction.

[00:24:50] Jon: That's very rare. And so early understanding of where market segments are, where your markets are going to take you, and aligning with your investors, that's one major one, for a startup. structuring your company correctly to have people who know how to go out and engage with the customers

[00:25:09] Bonnie: I see.

[00:25:09] Jon: appropriately and getting out there and doing it.

[00:25:11] Jon: You're not going to sit there from an office and figure out how to develop the next. Networking device for DoD, you got to be out and it's, capital intensive. You know, it's a capital-intensive way to do business, but you've got to get out and go to the field exercises. You got to go out and talk to the labs and the warfare centers and partners, you know, in, the big primes that are doing, you know, a system of systems and integrations and all of that.

[00:25:39] Jon: So there are a lot of elements that you have to have right to be successful here.

[00:25:43] Bonnie: No, I see what you're saying. Like the connective tissue, I suppose, to those different communities or places, right? Okay. favorite book or podcast that you're reading or listening to right now? 

[00:25:55] Bonnie: maybe, I'll add a movie if you don't do either of those.

[00:25:59] Jon: I try to do as much as I can. It's a little tough right now. I certainly like, historical fiction. That takes my mind off things. But, 

[00:26:08] Bonnie: Favorite historical fiction. 

[00:26:09] Jon: like the gates of fire and anything having to do, I spent a lot of time. You know, I always kind of, it was fine. My military time or even when I travel for business if I'm going to spend a prolonged amount of time in a certain country or region, I try to grab historical fiction on that region.

[00:26:27] Jon: And so I read it concurrently, so I'm able to like, look out the window and, you know, like, take Athens for example. For example and see the marathon route, you know, that was run, do they want and things like that. So I like to connect with where I'm at, in that time and place. And then of course, just, you know, biographies, lessons learned, there's a lot of, side and in front of coming from the military.

[00:26:52] Jon: I do appreciate that the military retired bios and some great leaders there, but having to learn that the commercial world and the business world, certainly biographies great leaders there, you get the terminology, I think for, you know, I My transition military to industry, you know, Lockheed was a great introduction to that, but there's still, there was so much more to learn on the, truly commercial side, just the, as you said, the language, I had to learn the language of business and learn the language of commercial business and it's, as we're talking about, Folks inside the government of bureaucracy, having to learn the language of innovation and startup businesses.

[00:27:33] Jon: So anything that just gets me that kind of, again, that curiosity of learning, new elements that I haven't been exposed to, I tend to gravitate towards.

[00:27:43] Bonnie: Okay. Last question. It's a hard one. Are you ready? It's not a hard one. I'm just trying to make you nervous. would you dip your grilled cheese in hot chocolate or not? Or do you dip your grilled cheese in hot chocolate or not?

[00:27:57] Jon: Oh, 

[00:27:58] Bonnie: Apparently 

[00:27:59] Jon: I've ever done that. I have not done that. Although the chocolate and cheese combination I get for sure.

[00:28:05] Jon: So, You know, 

[00:28:06] Jon: I I could definitely. Be convinced to do that. and it's not too far afield from, you know, the Midwest and my wife from Minnesota. I got to appreciate the dipping of your grilled cheese and tomato soup.

[00:28:20] Jon: So, that's a big thing back here. And so that

[00:28:23] Bonnie: Well, 

[00:28:24] Jon: be too far afield from that.

[00:28:25] Bonnie: this is also a thing in the Midwest. That's somebody out there told me that, like, that's a, a very common thing and I'd never heard of it before. So now I'm, always asking people, do you know about this thing? Like, am I the only one that was in a hole and didn't know about dipping grilled cheese and hot chocolate?

[00:28:43] Bonnie: So there you have it. Well, thank you, sir. I really

[00:28:48] Jon: Whatever gets you through the winter months.

[00:28:50] Bonnie: I know for sure. I appreciated your experience and your insights. Thank you for sharing that with me. Any last words for the audience? Last messages, things on your mind.

[00:29:00] Jon: No, I appreciate the opportunity, to chat and, you know, we need more of this. We need more out, we need more outreach to, the younger generation in particular. Education, you know, I'm all about that. We have to grow the ecosystem. That's the only way we're going to be successful. So

[00:29:17] Jon: happy to do this.

[00:29:18] Bonnie: Yeah. Thanks again. Appreciate it.

[00:29:20] Jon: Absolutely. Thanks.