In this episode of #AcquisitionTalk, we listen in on a Twitter spaces discussion hosted by Andrew Kirima and Pablo Felgueres as part of their series on American industrial dynamism. Check out industrialdynamism.com and @morefactories. Tons of great speakers join, including Liz Stein, Jake Bullock, Jake Chapman, Griffin Barnicutt, John Dulin, AJ Piplica, and Eric Lofgren.
Excerpts:
"I'm pretty sure if the future of defense is AI, the future of AI is also in defense. And so that's why we do a lot of really ambitious AI research at Modern AI."
"You'll often see, tech crunch articles about, name your defense company, and the billion dollar contract they signed because they got an IDIQ. What the article won't tell you is that they're not actually getting a billion dollars and that contract might have 50 people on it."
"Are you a commoditized product, as in another piece of software or a certain parts maker that someone else can 3d print for cheaper? Or are you something that they literally can't replicate, which is hopefully where a lot of this American industrialism and dynamism will end up."
"The reason a program of record as a word is meaningful is there are so many moving pieces in government acquisitions as it's done today... What you're trying to do is cobble together those three people and acquisitions officer, a user, and then a funder together."
"You can raise a seed round with a deck but to get to Series A most of the VCs, and anybody feel free to correct me if you want, but most of them need to see a production contract. It's really hard to get there on the timeline that you could in any other sort of industry."
"A big reason that we encourage our portfolio companies to definitely pursue a commercial product first and find products that are 10x better than what's in the government, 10x cheaper. So frankly, a Herculean task, but that really is sometimes the bar."
"My pessimistic take on this is that if you're relying on the DOD to fundamentally change, how requires technologies in order for what you're building to be successful? I think it's a fool's errand."
"The way that you're going to have to write your proposal will lock you in to a very defined waterfall process that ultimately leads to bad products."
"The entire industry doesn't want to shift to horizontal platforms because that will cause new incumbents to emerge and it will effectively erode the power that these primes have."
"If you look at the new ULA and Amazon partnership, even with satellites, it's give or take a couple of billion dollars. I will put a lot of money that half of it will be subcontracted out and will generally go to startups."
"One of the most beneficial things out of that consortium model is being able to have the conversations with the end users. And that happens so rarely because of fairness in the procurement process."
"A lot of us on the outside have been a little bit weary about getting our hands dirty and playing the game the way it's played. Frankly, that's what's required in order to work within a system that's been entrenched for decades."
