SchoolHouse Panel: Overcoming Defense Barriers to Accelerate Innovation

[00:00:00] Bonnie: Hey guys, Bonnie here from the Chief Digital and Artificial Intelligence Office. Today's episode is from a panel I did for Schoolhouse, a privately backed platform founded by U. S. Special Operations dedicated to fostering mission first founders and accelerating startups. I was joined by Lisa Sanders, Mike McGuire from SpaceX, and host Gene Ebersole to talk about the challenges of transitioning defense projects, the bureaucratic and cultural barriers within the DoD, and leveraging existing policies to speed up tech advancements.

[00:00:30] So many great insights in this one, and I hope you enjoy. 

[00:00:32] Gene Ebersole: Fortunately, I've emceed hundreds of events before. I've actually never done this, so hopefully I don't do too bad. But, I appreciate the opportunity. You know, it's interesting, I joined the military, in 2005. In 2006, I was on my first 15 month deployment to Iraq. And, it was my first exposure to technology and biometrics in the Department of Defense.

[00:00:53] And so I still remember for 15 months carrying around this cinder block. And that cinder block just so happened to be in a piece of technology that weighed like 15 pounds and it captured a photo. So, you know, it was pretty archaic in the sense of where we are at with technology today. In 2008, I was in the back country of Afghanistan walking up and down mountains, and that was the opportunity I put in my very first seismic sensor so we can trigger on, you know, the adversary maneuvering throughout the mountains onto our positions.

[00:01:22] And, looking at where we started. and to where we are today, you know, having seen the first person viewer drones along with a few others in this room being flown on target in a foreign country and the evolution and where we're at in scale is remarkable and it's only just begun. so I'm super excited about where we started, where we are and where we're going, because I feel like we've really only crested it and it's showing with the amount of representation in that room today.

[00:01:51] A year ago, I had an opportunity to attend an event and everybody in this room knows founders, especially that breaching the barriers of defense is very difficult. But once you make it, it's really like you made it and you're off to the races. But getting there is a very difficult process and a runway that not many are able to achieve at a scale that helps them endure in long investment strategies throughout the government.

[00:02:14] And so with that, I'd like to kick off our first panel with some amazing panel participants that we have. Focusing on defense based barriers. The first amazing representative that we have to come up. is Mike McGuire. Mike was my former deputy commander at our organization. I had the honor and pleasure of serving with him as our task force commander, as well as our deputy commanding officer.

[00:02:36] Mike also had the opportunity to lead all of the technology and soldier systems development for our organization. So he has a deep background investing in technology and the life cycle that it takes that we actually start a development and build it into our programs of record or what we call our POM strategies.

[00:02:53] So we can actually keep them with an investable strategy throughout a five year plan. The next awesome, panelist that we have is Bonnie Evangelista. very, maybe well known in this room, far off, but Bonnie and I were introduced with an amazing colleague of mine. She is the founder of the TradeWinds platform within CAO.

[00:03:13] If you don't know about it, I would highly recommend you check it out immediately. and she is also the, Deputy CEO, director of acquisition. Yeah, I got it. Right. and I'm so thankful that she is here today and last but not least, Lisa Sanders, the director of science and technology for special operations command, Elisa has had the opportunity to support me indirectly for a lot of years and support my unit for more years than I've been in special operations.

[00:03:43] So without that, we wouldn't have the ability to be where we are today. So thank you so much for supporting this event. Alright, let's get started.

[00:03:56] Did I miss anything amazing on the introductions that I otherwise should have covered? 

[00:04:01] Bonnie: I was told this is a safe space, right? Yeah. And we unpopular opinions are welcome. 

[00:04:06] Gene Ebersole: Yeah. So 

[00:04:07] Bonnie: just checking. 

[00:04:08] Gene Ebersole: I think everybody in this room has seen a panel before. I've seen a panel and you know, most transparently just to, to rip off some banding band aids, like a lot of cool things happen on panels and a lot of big words are said and they sound motivating, but another thing actually happens after a panel.

[00:04:23] So what I would like this to do is if you actually have a call for action, if you actually identify something that within the community in this room that we can tangibly solve, we want to actually pursue that. We want to follow it and we want to actually improve the defense industrial base from where we are at to where we need to be because we can only do this together and we can't do it as individual offices, services or performers.

[00:04:45] So please, like I mentioned before, those cards are going to be amazing as well as the follow on collider that will have. So just to kick it off. One thing that I, you know, I would like to start, for every panel member is, you know, we always hear that, you know, the FAR is letting us down, the defense acquisition process is extremely slow, and in the sake of how fast commercial moves in comparison to defense it is, but what are we not doing right now within existing policies, authorities, and processes that are under leverage that could accelerate some of the issues that the people in this room are feeling?

[00:05:21] Bonnie: I'll start. I think I'm the only contracting nerd in this room. That's okay. That's why I'm here. I've been in the rapid acquisition space in the Department of Defense for almost six years now. It became very clear to me when I started in an Army program management shop for defensive cyber, that speed is a differentiator.

[00:05:40] And so part of my job was to investigate exactly what you're asking, figure out how do we get speed, but how do we stay compliant and legal, and all the things that most people are worried about in my space. And the few things that I found and that we are taking advantage of today with, the Tradewinds initiative that you mentioned are, small business innovative research portfolios.

[00:06:04] I understand that they're, they can be hard to navigate and they're so voluminous now that sometimes it's hard to maybe catch some of the money that are in those pots. However, the differentiator there is if you can get that money. You have a direct to phase three pathway that so that speed is very helpful for someone in any functional lane who needs to get to your technology very fast.

[00:06:29] The other piece is other transaction authorities. Now, when I say other transaction authorities, I think that there, there has been a renaissance with OTs and using OTAs. but I think a lot of the far baggage that you referred to, practitioners like me are still leaning on what they know and applying it against an authority that says you don't have to do that.

[00:06:51] So you're going to see, it's a mixed bag out there, but you can design really cool and really fast pathways, to get to technology. And then the third is a commercial solutions opening. If you've not heard of it, it's because it's fairly new. It started as a congressional pilot. It's now in the DFARS, the Defense Federal Acquisition Regulation, after being a class deviation for a couple of years.

[00:07:16] this also gives practitioners like me a direct pathway to get to your technology based on technical merit instead of what everyone else is used to, which is competition and contracting act. And everybody gets a shot at everything unless you fall in these 15 exceptions. So that's a quick run and dirty, quick and dirty on.

[00:07:37] A few quick policies that are tools in our toolbox that we have today that we can use. And then the cool part about all of that is that the authorities are there. People like me can get very creative in how you stack those authorities or you design the authorities to work together. As an example, the marketplace is leveraging all three.

[00:07:59] Sorry, not sievers. It's leveraging three different authorities and regulations at the same time. and one general solicitation. That's I think the magic here. It's not just like, Hey, there's authority A, B, and C. It's how can I use them collectively, to get to a long term strategy or a short term strategy.

[00:08:18] And then final thing, final thought, I know this is long winded answer. There is another authority that is highly underutilized and is, For this community in particular, it's very powerful, and it's called 10 USC 4023, which is Procurement for Experimental Purposes. You're probably very familiar with this.

[00:08:39] there is no competition standard. So, for certain sectors of technology, or use cases of technology, and for certain operational experiments, you can go direct to, technology provider or a capability provider, run an experiment and buy as much as you need to run an experiment for operations. 

[00:09:01] Lisa Sanders: Yeah, I think, Bonnie did a really great job of talking from the how do you actually award a contract, which is a really important thing, right?

[00:09:10] but there's a lot of acquisition that's left of actually signing the contract. The first thing you have to have is the money to be able to do that. And, in order to get money, actually, Gene, you mentioned the POM, the Program Objective Memorandum. A lot of people that don't work in the defense space don't realize that we are working right now on what will be in our budget for 2026 and 2027.

[00:09:38] Not what I'm going to buy today. Not what I'm going to buy next year. The first place that we have any flexibility is two years out because of the way that the budget is generated and that's in the law. So one of the policy authority questions that really needs to be addressed if you want to work in a responsive timeline is figuring out the way that you can get money that you can use faster than two years from the date that you submit it.

[00:10:06] So there's a lot of work that's underway to do that. So what are the tools that we do have? The, the single most important thing that any acquisition entity can do is tailor. Just because the rule says here's the standard doesn't mean that somebody can't say you don't have to do that step of the process.

[00:10:27] You may have to go up pretty high to get to that, but if you don't ask, you're never going to get the opportunity to do that. So, the, point about speed being, you know, The actual coin of the realm is really important. And so when you have a conversation that says, all right, I can do this, but here's how much time it adds to the schedule, or you can give me a waiver and we can document it.

[00:10:52] And this is how much time you take out of the schedule. That is the conversation to be able to have to really get after those kinds of challenges. 

[00:10:59] Gene Ebersole: Those are all amazing points. You know, one thing that I learned since having the opportunity to be a fellow With Bravo Victor and supporting the schoolhouse as its own entity is that it seems that we do a lot of similar things between capital, between commercial performers and between D O D.

[00:11:19] The problem is we just use all the different words. And then when we actually have an opportunity to be in the same room in order to see if your requirement can be supported or if to see if commercial can solve a problem, we end up not getting to fruition, right? The award of a contract. Can you, so when I hear venture capital talk, you know, general partners will talk about their PPM, right?

[00:11:42] Their investment thesis, like what the fund is actually geared towards investing in with the deployment of capital, community or the performers will talk about revenue forecasting and revenue strategy and where they're going to go actually find the customers that they have a solution for a problem that they solve.

[00:12:00] And then like you had just described, the government talks, year of execution, presidential budget in the fight up. So where do you think, how can we find more common terminology so we can start moving together faster? Because what you're doing in the year of execution throughout the fight up, directly impacts capital investment and it directly impacts revenue strategy and forecasting.

[00:12:23] How can we all start moving together faster? 

[00:12:26] Lisa Sanders: I think you need to pick a problem area, and you and I had that conversation, but Mike, I think that one of, I think the whole NGIA scenario, which a bunch of letters, right, but Mike, as a user, had a hard, hairy problem, and he, you know, maybe you start how you kicked it off, and then how we implemented it might be a good thing.

[00:12:45] Mike Mcguire: Yes, I think the first step we did is get rid of the word requirement and requirement document and focused on a problem statement. I think that's something so calm does very, well. is uses real world events, exercises and war games to identify the gaps in technology. And then we turn to you, to the people in this room and in our government laboratories to tell us how to solve them.

[00:13:07] So the one hint I would tell the industry is, get yourself involved in those, look at the problem statement before some system convolutes it into a requirements document that loses all meaning. so what we did is we listed those kind of requirements, those kind of gaps that we had in order to conduct targeting in a contested environment.

[00:13:25] This was probably five or six years ago, where great competition, great power competition was just beginning the approach we took. We called it next generation targeting, and we try to build up a consortium, which was essentially a lot like this room, right? It was a coalition of the willing where we got everybody on the table.

[00:13:43] The one rule was you have to be willing to talk to each other. And I think the one Over the past five or six years, I've seen a number of these types of events where you try to get the government innovator and, and the commercial innovator at the same table. And I think we do get trapped around language and it becomes very transactional.

[00:14:03] So I think the key to that consortium and the key why I'm so excited to be a part of schoolhouse, I think the approach that they're taking here is very, different. Focus first on that relationship, find the common ground that might not pay off with a contract tomorrow and it might not feel some widget, you know, in six months, but you've got to establish that relationship where you're speaking the same language instead of jumping right into transaction.

[00:14:26] We even call it transactional, right? That's the authority. But engagements like this where you can hear the problem from the end user. And you can build a coalition of the willing who are looking at the making the pie bigger instead of trying to slice a little piece of the pie, is the way we get past that.

[00:14:42] Lisa Sanders: And I think then when you've done that, then you figure out, okay, what category do I fit in? Because in that conversation, sometimes it's like, hey, there is a thing that we can do. All right. And maybe we are ready to move into transaction. But sometimes it's like, hey, this is a problem that hasn't been solved yet.

[00:15:01] And in order to get, but it's really important, it's on the critical path, but we can identify what are the gates that we need to, get through in order to show that progress. And that's a different set of people working on it. So, what you don't want to do is go, if you go to a laboratory and you have this conversation, everything they're going to do is going to be science and design.

[00:15:23] If you go to somebody that's selling widgets, they're going to sell you the widget. But breaking it down and figuring out multiple places that you can work together to solve that problem, it, you may actually have to go slower, which is a little bit against what we said in the first conversation. But the product that you actually get to gets there faster because you've actually defined the problem.

[00:15:46] Mike Mcguire: Slow is smooth. Smooth is fast. Like, build that relationship first and it's gonna pay out. Government is hard to work with like Jean pointed out. But if you invest the time, it pays off. It's not gonna pay off next month. But that's what we need to do. 

[00:16:00] Gene Ebersole: So you're saying everybody should just add SAM. gov as a bookmark favorite to their, homepage.

[00:16:06] That's the new landing page of the, Emergent Technology Performers. No, it's not. 

[00:16:11] Lisa Sanders: No, because if you go there, you won't, I know where my, I know that I have a broad agency announcement and I still have to have them send me the link. I can't even find it and I'm a government employee. 

[00:16:23] Bonnie: I'll also add that what we're advocating for in my office when we do this type of work is I don't even post on sam.

[00:16:30] gov if I don't have to. If it's a regulatory thing, I'll do it, but the people I'm trying to reach are likely not trolling sam. gov. So, it gives you a sense of if we're truly going to diversify into growing our ecosystems and our coalitions of the willing or our consortiums. And we truly want bleeding edge emerging technology.

[00:16:50] We too have to start speaking a different language sometimes. I'll also say the awareness on industry, you know, we're not going to change overnight. And so being aware of who you're talking to. Lisa talked about this. If I call what you were describing buyer communities and end user communities. And if you're talking, if you're building the relationship, like Mike said, with the end user community, you absolutely have to do that to improve your product.

[00:17:15] Someone in the acquisition community is not going to tell you how to make your product better or how to give somebody in the field a 10x improvement in their day to day life. So having that relationship is important, but it doesn't stop there. You need relationships with the buyer community. So how do you bridge the end user and the buyer community?

[00:17:31] In SOCOM it might be a little bit easier. services, general forces, it's a little, pretty hard, it's actually pretty hard. because those communities don't naturally talk to each other. So, you kind of become a bridge and you have to understand, okay, end user is giving me this type of feedback and it's to benefit this purpose.

[00:17:52] If I'm talking to acquisition professionals or buying communities, it has a different purpose. And then if I'm talking to labs, that could be totally different because they're going after moonshots. They might not even be looking to field anything in the next one to two years. So you, just being aware of how you engage with the different communities, I think is also helpful.

[00:18:11] Gene Ebersole: I think that there's, like, everything that's been discussed so far, it's all interconnected, right? it starts with focusing on the problem, as Mike had described. But problems aren't very easy to find, right? There's easy common sense problems. If we look at, you know, what's happening with Ukraine, if we look at what's transpiring, in Gaza, and what much of the community would predict as a future conflict in the Pacific Command Theater, how do, how does commercial find problems more quickly?

[00:18:41] So they can actually solve them with their own capital. 

[00:18:45] Lisa Sanders: That's a, that's, it's, that's the question. That is the question. And it depends upon who you're talking to and what you want to do. one of the, one of the, objectives that Special Operations Command does for the Department of Defense Is because we are what we call a joint by design.

[00:19:05] That means that we're not unique to the army, or the navy, or the Marines, or the air force, we are employed with all of those services and we're global, we believe that we can be the early adopter of technology to provide a pathway to a broader scale. But if your business is all about volume, special operations, we're this, you know, we're two and a half percent of DOD's budget.

[00:19:31] And, so we're not going to be the big volume producer, but we may be the bridge to get you into that, you know, that broader customer base. 

[00:19:42] Gene Ebersole: Yeah. So there's obviously platforms like sam. gov, special operations command has, you know, Vulcan and ESOF. They're okay. They're not remarkable. what's something that we can do tomorrow to get closer connected to people that understand?

[00:19:58] Pressurized problems. And I say pressurized for a specific instance. one of our senior leaders of our organization just said it right. So a lot of people think they understand the problem, but there's a delineation in hearing the problem and living the problem. What can we do better immediately to start understanding problems faster?

[00:20:18] Maybe not even solving them, but being closer connected to the people that actually have touched to the people that need the technology in their hands. 

[00:20:27] Mike Mcguire: I think if you were a founder or one of the VCs out here, you wouldn't think twice about, dedicating an afternoon to some of your best talent to go do market research.

[00:20:36] I think SOCOM actually does a very good job of opening their doors to some of these exercises that I talked to you about, where you're getting real world problems from a soft unit that did an operation a month ago and fail because they lack some capability. I think that gives you the ability to solve a problem instead of provide a widget.

[00:20:54] And it gives an opportunity for the SOCOM community to listen to ideas from people that are actually innovating things before it turns into a requirements document. So I guess I would foot stomp again, Lisa Sanders and SOCOM, reaches out to people for true partnerships where you can get involved in when something is still in the problem stage and it's not somebody's good idea.

[00:21:16] It is an operator who came back with blood on his shirt because something, some capability was lacking. 

[00:21:21] Lisa Sanders: Yeah, and one of the platforms we do that with, not SAM. gov, is we, use our partner intermediary. That's one of the functions that we set up. a non profit, a 501c3 non profit, that operates outside of the base.

[00:21:37] So you don't have to get a security clearance, you don't have to pass all your information. And they curate, and they, do it virtually too. So if you go to softworks. org, and Leslie Babich is here, she's the softworks director, all those user communities can submit their problems in to that platform, and we do a variety of things.

[00:21:57] Collaboration events where those customers will be in the room listening to your thoughts about how to solve those problems. you can Google doing business with SOCOM, and we identify both what's open for procurement right now, and what's open for procurement. Plus, the problem areas that we're working on.

[00:22:18] scale can be a problem, because there, there's a way a lot more problems than we can have people come to events, because our operator's time is the most precious thing that they have. So, so, the good news is, you know, if you've got an event that you have operator feedback there, it is a priority, because they don't spend their time if it's not important.

[00:22:38] Gene Ebersole: is there a location where events are posted? And readily available that say what the intent of the event is. So commercial can make more informed decisions of where to spend their capital that's closer to an end user to solve a problem. 

[00:22:51] Lisa Sanders: I think if you're looking for SOCOM specifically, the best platform to do that is to sign up for the Softworks ecosystem because the entire community feeds through that whether an event is held at Softworks or held someplace else.

[00:23:05] CDAO 

[00:23:05] Bonnie: also, I'm encouraged by the work they're doing with the global information dominance experiments with the combatant commands. it's still early in its maturity, but the goal is after what we're talking about. They are trying to bring, new sets of capabilities to end users in the field in live operational or, as close to live operational settings as possible, to get after specific mission threads.

[00:23:32] There is a strategy emerging to bring in new vendors. So I would highly recommend everyone also be a part of the Tradewinds community because that's likely where we're going to be posting, either upcoming, what we call them Insights Day, like Guide Insights Day, where there's a regular cadence right now where, I think every 90 days they're going to be running exercises and experiments.

[00:23:55] And then after that, we're working with the team to do like a brief out to industry if we can, we're still not sure if we can do that in an unclass setting, but if we can, we shared lessons learned and then we gen up either new problem statements or new mission threads and we try to identify who's coming in to the next series as well.

[00:24:14] Lisa Sanders: Let me touch on the classification thing cause we haven't talked about that yet. And I, one of the questions I get asked a lot is, Hey, I'd love to help you, but I don't have anybody with a security clearance. one of the things that we have spent a lot of energy on is our problems themselves usually aren't classified.

[00:24:33] It's what the threat is about, where the vulnerability is, you know, those sorts of things tend to be classified, but you can work on our problem. We can put it in like a notional theoretical scenario. So that you don't have to have a clearance in order to be able to do that because one of the huge barriers to being able to solve our problems is if I'm asking the people that already have the clearance to solve the problem, if they could have solved the problem, they would have already given me a solution.

[00:24:59] I have to ask people who don't have access to that information. And so, there are times that we bring things in through an unclassified venue. That when we actually develop the capability, we may need to put it in, you know, behind a classification level. But we have to start solving, or start seeking solutions at the lowest possible access level we can.

[00:25:25] Gene Ebersole: Yeah. So to me, you know, there's all these sorts of ways. You can go to exercises, or you can get exposure to the program managers and the end users that have the capability gap. Is there a way, right, so if I pull up SOCOM right now, or really most organizations, you can't find a single name of a PM that's responsible for a technology portfolio.

[00:25:46] How do I find the right person? 

[00:25:51] Bonnie: My pro tip would be to follow the money. So if you are tracking opportunities or announcements, there's always a POC, a contracting POC, and you can start there. You can ask questions through there. And those questions are likely going to get forwarded to the PM, because the contracting person does not have the technical expertise or the domain expertise to answer your questions.

[00:26:13] So, even if there is no PSE on a website or somewhere you would expect it, you can try and follow the money, and other than going to events like this, and, I believe you're always at least one or two people removed from the person you need to get to. a lot of, so a lot of the, you touched on relationships, like that cannot be, I think, underestimated, I would say, in this space.

[00:26:39] Mike Mcguire: So you can follow the money, or you can start at the bottom and follow the blood and the sweat, right? I think you, by having these relationships and engaging with the end user, eventually they will find their way up to the PM. So I think you can approach it either direction, and you probably need to do both.

[00:26:54] Lisa Sanders: And I'm going to tell you something that a lot of people do that, I'm not going to tell you it never works, but it's my least favorite way to do that is when you hire a retired general or admiral, so and so, there are times you'll get a meeting, but oftentimes it's not with the person that actually is going to take the action.

[00:27:18] So, so. I think those are very valid things. And, again, this is one of the, SOCOM has one of the, longest standing, what we call unsolicited proposal pathways, where, when you do that doing business with SOCOM Google search, it has a place that all, whatever you have for your thing. You can, post it on the webpage.

[00:27:45] It will run through an algorithm and get sorted based upon who is working on that capability. And you will get feedback. Now I will tell you that feedback is not always, I want to go buy it. Sometimes that feedback is thank you for your interest in national defense. It's not unique and you know, so, but you will at least get an answer.

[00:28:01] it's not, you know, you're not going to send it off into the abyss and not get an answer. 

[00:28:05] Mike Mcguire: Awesome. Thank you. And the reason why you do need both is if you engage with only the end user, as Lisa will tell you, you're not going to get any funding, right? That person has no ability to obligate money, but they know their need.

[00:28:17] If you engage only with the PM office or the contracting office, the acquisition officer, you may very well meet a requirement document and you'll sell a few test articles and then the end user won't adopt it and the program ends. So I think it's really important that you talk to both levels, both the end user and, the PM.

[00:28:36] How 

[00:28:36] Gene Ebersole: different, from an acquisition and contracting perspective, I kind of see the defense based market as markets of markets, right? Every combatant command, every functional command, every contracting and acquisition office that supports them, AFRL, AFWERX, the labs, whatever it be, everyone kind of has a little bit different identity and a different process of how they do things, though it's fundamentally all based on the same U.

[00:29:00] S. code, if it's FAR based or not. What are some of the similarities that, When people are responding to all these different types of proposals, right? It's like a master resume, but you're responding based on different specific proposals. Even though this technology doesn't stay the same, it's just a different application of how you use it.

[00:29:18] What's something that can be more common across the acquisition and contracting pathways that would make organizations more successful when they're submitting against sibbers or other type of contract vehicles and solicitations that often gets them ruled out before they even have a chance. 

[00:29:37] Bonnie: It's really long, I'm sorry.

[00:29:38] this is a tough one because the whole point of the FAR, the Federal Acquisition Regulation, was to fix what you're talking about. It's only, the FAR is only like 40 years old or something, 80s I think. and it was because there was no common language across the government, and yet we're here still talking about what you're talking about.

[00:29:55] So, it just goes to show everyone's, culture and, language. Local policies are still influencing things in a way where we're interpreting things differently. I would say What was your question? What can we do? 

[00:30:11] Gene Ebersole: Yeah We need to advise them to tomorrow This is something that you should always do that doesn't get you ruled out before you should always 

[00:30:19] Bonnie: read the directions I cannot tell you how many times We get submissions and somebody just didn't read the directions.

[00:30:28] and I understand sometimes you're reading things that are hundreds of pages long. Section L is your friend if you're doing FAR. If you're doing OTs, look for something like submission instructions. Like, read that very, carefully and just do what it says. Like, don't overthink it. As an example, if you're submitting a five minute video pitch to the marketplace, it's a five minute video.

[00:30:50] Do not do five minutes and one second. Five minutes and one second. 15 seconds, like just those, little nuances and details matter. so that's like the first gut reaction I had to that. 

[00:31:04] Lisa Sanders: And it may seem stupid, but the reality is that if we don't hold to that standard, then it throws out all of our work.

[00:31:10] Cause somebody is going to come back and complain and protests are cheap. They don't even cost you a stamp anymore. And we have to stop and respond to that. and so. I mean, I've seen it where, you know, it's a 10 page proposal and somebody does like a half page of this and a half page of that, and you know, yes, it, but the answer is we count the top 10 pages and throw the rest of it away because that's what we're required to do.

[00:31:38] so, so that's there. I think the other thing is because this kind of, I, I sit on a wide variety of DOD level working groups. Trying to find common problems and, you know, like being, I wish we knew the answer to that because if we, you know, theoretically the data, you know, Lake should help us if we can, you know, scrape across that.

[00:32:08] But, it is, it's a huge challenge. So I guess for you guys, as, the community that's interested in working in this space, I think this may be a scenario where you have to decide what's your golden ticket strategy, right? If you've got lots of, if you're willing to devote a lot of time for a pretty low probability of hit, then maybe you just want to, you know, spread it to everywhere and just bet that one of them is going to fit, right?

[00:32:39] That you're going to, you're going to put the same proposal out. It's not going to be tailored and you're just, you're betting on mass. Okay. Or you may take, you know, the Charlie viewpoint, which look, I'm only buying two tickets, then I better go after, I better know exactly what they're looking for, I better know that that, my product fits that, and so I think as you, you have to decide what your strategy is.

[00:33:04] And, if, you're going after the, that kind of a really nuanced, then I don't think I would go after a big broad service thing because the odds of you hitting exactly what they want when they don't even know what they want is going to be hard. 

[00:33:18] Gene Ebersole: Yeah. And I think it goes back even to this, you know, one of the original comments is that if you're going to be that scoped in your solicitation responses, you should hopefully have a high degree of trust currency.

[00:33:30] With the office that you're responding to, or at least someone in there. So you have some sort of bona fides before someone that's maybe never responded to a solicitation from that office or has a track record of success to be benefited from. You know, I was kind of curious, Mike, you know, obviously you've ran so many operations while you were in all over the world, you led the development of our organization's technology for several years and pioneered some of the things that we still have today.

[00:33:59] What would you do differently? And this is my failed introduction of Mike. He also is a director of recovery operations at space tech. So I just had to fail at that so I could be better next time. So kind of a big deal. But, if you don't know about space tech, they're a company that does space, but what's something that you would do differently now, knowing everything that you did when you were in and working in one of the most innovated and fast solving companies in the world, what lessons have you learned since transitioning?

[00:34:27] To commercial technology. And what would you have done differently in those positions now? 

[00:34:31] Mike Mcguire: Yeah, I've given a lot of thought to that. if I was going to go back in time to when we were working together years ago, how would I view it differently in that role as a combat developer, which works in conjunction with acquisition and contracting, but really represents the, the end user, the first thing I would remind myself and my team.

[00:34:49] We have the word special in our name in special operations. We're not that special, right? Everybody thinks their problem is unique, and that's one of the reasons why we struggle to work with the commercial industry. Find those things that are not unique. The intelligence community years ago realized this idea that you should write for release, right?

[00:35:07] You should write your documents so they can be shared. I would ask our people to write our documents so they can be understood with a commercial application. None of the things in DoD are truly as special as we say they are. This isn't just a classification issue. This is the, fundamentally, the problem you're trying to solve.

[00:35:24] Probably has an application for, business to business or some family or consumer. And instead we write it so special and so niche that, that a company has to drop everything and divert their product line and create something new. So, the first thing I would say is realize that you're not that special and you're not that unique.

[00:35:43] The second thing, now looking back on my time and seeing how things work at SpaceX and other places, I wouldn't waste my time on product testing. Never did I have a program in CDD that failed because the widget didn't work, right? The widget always worked, but had several programs that failed because we were unable to integrate that product with the operating paradigm, with what the commander or what the manager wanted to use.

[00:36:08] you know, engineering things are complicated. Engineers can do complicated. They can solve those. But integrating in a system is complex. And you can't engineer your way out of that. You have got to test what the widget they gave you in the operating environment. And I wouldn't even waste my time hardly with product testing.

[00:36:27] the third thing is if I was receiving some of those proposals now, number one thing I'd be looking at is who are you going to put on the project? Like, I don't really care about the glossy brochure or the five minute video. I want to know that we're going to get the 18. We're going to get the varsity working on our problem.

[00:36:44] And in fact, it's probably the quality of the team is inversely related to how pretty the brochure is that we get. Right. I want to know that we're getting the varsity 18 and, and we can work with them. The last thing I would realize is I think sometimes in DoD we fall in love with one or two companies and feel like we have got to, we got to get some, welfare money out here to support this little company or they're going to fail.

[00:37:07] I would absolutely 100 percent only bet on a company that's willing to bet on themselves if they aren't willing to take the risk and invest. I think, I read there's 67, 000 AI companies registered in the United States right now. There's only one United States Department of Defense. The industry as a whole can take much, much greater risks than DOD can.

[00:37:27] And we should be encouraging to do that. Those companies succeed. not all of them, some of them are going to succeed and some are not. But the ones that do are because they chose the risks to take consciously. They develop partnerships and they found a way to collaborate with DOD on some shared space.

[00:37:42] That's going to, they're going to build a product that's going to sell millions commercially, and they're going to solve a DOD problem. So, pick the right people. Don't make your problems special bet on those who will bet on themselves and test things in the operating environment. That's those are, obviously given some thought to it.

[00:38:01] I've given some thoughts to the other side too, which we could talk about at the table, but there's a lot of incredible things that special operations in particular does so well. If you are a founder or a CEO or that I took back to SpaceX, man, there are some gold nuggets and soft truths and others out there that, that those lessons learned definitely go both ways.

[00:38:20] Gene Ebersole: That's awesome. Thank you. I'm going to tear a little bit of Band Aid off with this, so you can answer it as truthfully as you want, or we can keep it vanilla, but hopefully it's a little bit cringing, because I think the responses will be amazing. you know, there's a couple common themes that people would say are issues, right?

[00:38:37] And if you have an issue, right, always bring a solution, right? Otherwise, we're not going to do anything with it. But some of the common things that I hear getting ready for this panel, are there issues with people, right? There are issues with policy. And there are issues with communication in the DoD.

[00:38:56] How do you see that impacting, your organizations? From specific to SOCOM and how that translates to transitioning technologies to the PEOs, CDAOs to the services, as well as, I'd be curious on, if any of that exists within the commercial space since Space Tech is so large now, how has bureaucracy stifled innovation?

[00:39:22] Bonnie: I'm going to start, there's actually someone in the audience I'm going to steal this from. there's a term out there, it hasn't caught on yet, but it's called DevSecBureaucracyOps. And, I, it's absolutely, It's, funny when we mock the constraints we live in. And it's funny, not funny kind of thing, because we're living in it, but like, I, you can only laugh about it.

[00:39:45] So there's, The culture part is real. the people that are actually investing in changing culture, I think that's a good signal to all of you. So if you see that, if you see people making an intentional effort to change culture, like, well, that's a place to be potentially and then just be aware.

[00:40:07] So who's not doing that are gonna be a little slower to, get after some of the things we're talking about. this is not This stuff is really hard because of the people part. I do believe this is a people problem, not a technology problem. That was the whole genesis of the marketplace, under the trade wins initiative.

[00:40:27] Our hypothesis was there are more solutions out there than there are problems. And we just have to connect the people with the problems to the solutions. And if I can do that very quickly, like we might have some, we might be moving the needle in the right direction. And so we're going to prove out.

[00:40:41] I believe we're going to prove out that hypothesis and show that there's a huge demand signal. And we're going to, we're going to get after this as an example, offices that are choosing to continue to focus on requirements instead of tying those requirements to actual problem solving are not going to get to the outcomes we're talking about.

[00:40:59] That's Bonnie's opinion. you, Mike was talking about like starting at the bottom, working your way up to the PMs. I would offer again from the same person who, Kind of coined the DevSec Bureau Ops, you know, phrase. There's another layer at the top, the senior executive leadership, and he calls it the mountain and he said, and in order to climb the mountain, you have to get through all the layers and you have to understand each community and you have to understand what their needs and wants are.

[00:41:27] That's a lot of work, though. It's a lot of work on your side. So I guess what I'm offering is, you have to know the game to change the game. so from, at least from my seat. We are aware of kind of our, left and right limits and where we do well and where we don't do well. And so that's why we're trying to design either methodologies or delivery models.

[00:41:53] Guide is a part of like an actual delivery model where we think we can do something similar to Project Maven, if you're familiar with that. Not exactly the same, but again, it's about getting the right people at the right decision points at the right time. There's someone else in the audience, who kind of, got me thinking a little bit differently about time and time in the field is different than time in the Pentagon.

[00:42:18] So how do you flip that on its head? And I'm just sharing a little bit of my headspace right now, but again, if we can get the model right and put the big R requirements to the side for a second, we might have a chance at moving a little bit faster to get to delivery. I agree with the vast majority of what you said.

[00:42:41] Lisa Sanders: In that culture thing, one of the constraints that we need to have a solution for is people will do what they're incentivized to do. So if we really want to break the barrier where the culture is not achieving the outcome that we want, then we need to incentivize them to work towards the outcome that we want.

[00:43:04] And, and so finding the ways to do that is how we'll get over that. So things like, you know, a, very common, truth, it's not just a perception, is that in the federal acquisition enterprise, nobody gets in trouble for telling somebody they can't do something. Because you can always find a rule somewhere that, that says, so everybody can tell you no.

[00:43:29] But this gets to the point about the mountain of bureaucracy. Getting to the person, you know, allowing the person to say yes for the right reasons is the incentive structure that we need to put in place in order to overcome this. I'll give 

[00:43:44] Bonnie: an example of that. This is, and this is maybe more for awareness to help you have empathy to the public servants who are trying to do their best there when they say, don't give you the answer you're looking for.

[00:43:57] If you see the train wreck, you're like, why? There's. There's probably a lot behind that, I guess is, but, someone else, at AFRL, Alexis Bunnell, she is trying to institute a kill bonus. She will give you money if you kill a program, unheard of, right? Because no one's incentivized to kill the program.

[00:44:18] She's like, I will incentivize you to kill the program. I will give you the power or feel, the power to be empowered to say yes. This is not serving X outcome or objective and we need to allocate our funds to something else. 

[00:44:33] Mike Mcguire: Understanding the incentives both on the commercial side and the acquisition side are really important.

[00:44:40] And looking for the common ground in between. One other piece of advice I would give to myself and Actually, I did this when I was in the seat, I just couldn't tell Lisa, but make failure a line item, right? Like, I'm, as a government combat developer, I'm playing with your tax money, I can't go betting on red and hope we get lucky, right?

[00:44:58] You have to, innovation is a series of incremental evolutionary gains. a commercial company can bet and go after that unicorn, right? But, that acquisition officer can't do that. And you need to understand their incentives. I would put failure as a line item. They're 20 percent of the money that Lisa Sanders gave to us.

[00:45:17] We were willing to let go as in start a program, find out that it fails, take the money away and move it somewhere else. If we lost, if we wasted more money than that, I'd definitely be fired. And if we wasted less money than that, then we certainly weren't pushing the innovation space. So. I think, the idea, I'm great.

[00:45:33] I'm really glad to hear that we were incentivizing acquisition officers to do that because in the past, it'd be really difficult to read the memo from the sec def and be the first acquisition officer to step up and say, I'm going to use this broad new authority and take risks like everyone's telling me to do.

[00:45:47] And then as soon as they do, they realize no one's got their back. 

[00:45:52] Gene Ebersole: is SOCOM doing anything like that in regards to those incentives like, Alexis might be doing? And if so, could you share one? 

[00:46:00] Lisa Sanders: Yeah, we were talking a little bit here, and I'm going to jump to the question that you may or may not ask me, which is about percentage of transition, and do I have a target for percentage of transition.

[00:46:08] Gene Ebersole: That's a great idea. 

[00:46:09] Lisa Sanders: Yeah, and I don't have a target. for one thing, we are working on a set of problems that change, okay, because they're supporting our operators needs. And if I set a transition goal, that's what people are incentivized to meet, which means they probably aren't going to be working on the hard enough problems.

[00:46:29] the conversations that I have, and these are harder conversations than if I just said a number. Hey, what's your number and did you meet your number, right? The conversations I have is, why did you make the decision you made and was it the right decision at the right time? It gets back to what Mike said here.

[00:46:45] And you could have told me that and I would have been perfectly happy with it. So the good news is we were thinking the same way. Right, so, so I do measure transition because, frankly, my congressional staffers ask me every year what my transition rate is and they'll only listen to me say it, it's a number that I don't want to ask.

[00:47:00] So my transition rate right now is when I get, so I have early prototype money and trans, and prototype money. So I don't have basic science, I don't do basic science, but my more mature money is 75 percent right now in a transition rate. But a big part of the reason is because I make those decision steps.

[00:47:20] and also, I would say that, you know, I would say that there's two ways So that's why that transition rate, I think, is as high as it is, because I'm not counting the stuff that I killed in the first year. So those numbers are a little bit different. 

[00:47:43] Gene Ebersole: And knowing a lot about other programs and services, 75 percent transition rate is actually very impressive.

[00:47:50] Lisa Sanders: Yeah. But if I looked at what I started to what I ended, it's probably 50 ish, 

[00:47:56] Gene Ebersole: like that. So unfortunately we are running short on time. I keep thinking of more questions that I would like to ask that I feel like would be very relevant to this room, but I just would like to close with a leading one, cause I am going over time centric to you, Lisa, you know, we were in a meeting recently with a SOCOM senior leader and it was mentioned in the room.

[00:48:19] You know, through the last 15 years, the government has essentially funded early stage companies. And so, that necessitated less of a requirement to raise that from private capital. I was told that the level and the opportunity of funding to help scale and grow companies with non diluted government capital is, I wouldn't necessarily say going away, but the tides have changed.

[00:48:47] And I think the cause and effect of that is the relook from venture capital having to increase their level of initial investment than they have had to do in the last 15 years because companies have been able to rely on the government for that capital. Is that true to say that venture capital may need to relook their investment in early stage companies and how much capital is required to extend the runway that was previously funded by the government?

[00:49:18] Lisa Sanders: I think it's tied to the fact that the dollars in general are going down. Okay, because we, it used to be that during the, additional, you know, non standard budget, that there was money to be able to address those gaps. And, now there's a lot more conversation about where, what is the government's role in providing that development.

[00:49:44] A bit of it comes back to what Mike said. Should, are we really creating these very unique niches that we don't need to do? and so I don't know that I would say that there won't be government money, therefore there needs to be private capital. But what I will say is that where we can find the incentives that private capital can fund those things that we can provide a pathway to, then we're not going to fund that bridge with government.

[00:50:18] So, so it's not necessarily because, but, it's really about using the government money for the things that only the government can invest in and allowing and finding partnerships and partnerships. for the area that there's a common ground for. And that's going to be true whether it's SOCOM unique money, or we're, having this conversation with our, service partners.

[00:50:41] I mentioned the two and a half, and again, it depends upon which way you count it, but it's definitely less than 5 percent of the defense budget, no matter what, that goes to SOF capability. So I'm looking to partner with the service to say, all right, we'll be your early adopter, but you have to fund it. So we're, that, that same conversation can happen in that private equity space, perhaps with other government customers.

[00:51:06] Mike Mcguire: Bet on those who bet on themselves. 

[00:51:08] Gene Ebersole: Yeah. I mean, I really liked that philosophy as well, but unfortunately we are already over on time. I would love to ask more questions.