Allocators and Warfighters: From the Cap Table to the Battlefield with Kevin Pavnica

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Hey, good day everybody. Welcome to the Investor Relations podcast. My name is Joshua. I'm the host of this show. investor relations, I think, is simply this: a relationship between investor and group, right? Or investor-investor if you're syndicating. But what we wanna do with this show is bring on people in the industry to kind of share about a specific industry, a niche, a tactic, a strategy. And, I wanna introduce you to one of my friends, friend's friends too, is, I, I met Kevin through, Jesse, so a shout-out to Jesse. Jesse and I went to high school together, wrestled together, and, battled together. he went off to, military and do some cool stuff there, and then he joined a group and joined under the leadership of Kevin and his team to do some pretty cool stuff in the world of defense contract and defense tech and, consulting. So I wanna introduce you to Kevin. Kevin, welcome to the show Hey, thanks Josh. It's great to be here. Appreciate the opportunity. Thanks. Yeah. Cool. All right, so, I know you have to set the stage of who you are, what you do, and, put a little disclaimer in there, so take it away, my friend. Yeah, absolutely. So, my name's, Kevin Pavnica. I am, uh, the, um, one of the partners at a company called Blackrock Strategy, which is a, a global risk mitigation firm. We work on the, defense side for the United States government, we work for family offices, and we work for, large corporations, helping to reduce risk through, a number of profiles, whether that's tech acceleration and developments or allocation of capital or, traveling and other, you know, personal activities that people conduct in far-flung places. I started off in the Army coming out of college. I was an armor officer to begin with and had a, a variety of assignments from parachute reconnaissance, mounted infantry. got, got a little specialized after that and went over to the Army's, Asymmetric Warfare Group for a while, and then finished out in an organization, in the, the capital region doing some tech protect, and, and other, strategic intelligence, stuff. my wife and I got out. You know, eventually the Army doesn't love you back as much as you love your family and, so we had to, we had to get out, put down some roots. I'm still serving in the Guard on the, you know, one weekend a month, two weeks a, a summer basis, scratch that itch. And, I got four beautiful children, amazing wife, and, I started working for Blackrock Strategy right after I came out. We were five people, maybe five or six people full time when I joined, and we've, we've since grown to about 70 and, and, you know, we're on this, this incredible growth trajectory that's kind of followed, I think, the interest in the, in the defense sector that, we're, we're gonna talk about today. Yeah. Yeah. Well, cool. is there a disclaimer or something that you need to share? Yeah. And I don't know if you hit that, but, like, why don't you give that- Yeah … that, that, that bit. Yeah, absolutely. So, all of my opinions are obviously my own, and all the, the things that we'll talk about are, are coming from a place of experience, in and around the industry, but they're not the official opinions of the government, they're not the official opinions of any firm, or, or, or company. so I just, just want everybody to understand that as I'm talking. Cool. All right. Yeah. So Kevin, before we dive into, you know, Blackrock Strategy, let's talk about what is asymmetric warfare and asymmetric battle? Like, what does that mean? I'm, I, I didn't come from that background. Yeah. Yeah, absolutely. So, it's, it's essentially just leveraging, leveraging indirect pathways to achieve competitive advantage. Looking at the things that you do well and aligning them against, you know, an adversary or competitor's weaknesses. From a US perspective, when I was, when I was in Asymmetric Warfare Group, we were primarily concerned with preserving an existing, US competitive advantage. Part of that, though, was looking at it from a red side perspective of how could an adversary potentially leverage their strengths to achieve asymmetric advantage, whether that was locally or globally, against US interests. Okay. I know you can't get specifics or you, you'd have to… You, you guys would come get me. But, like, when, when it comes to, you know, what does that look like? What does that… When… 'Cause we're gonna bring that and branch that into- Yep … competitive advantage in the business world. But, you know, when we talk about military, you know, advantage, what are we, what are we looking at? What are we looking for if someone's- Yeah getting an advantage over us? well, it's… You know, if I, if I'm gonna use the, the, the, the term du jour here, it's probably strategic overmatch. And what that, what that means is that the capabilities that, the capability set that you have, is going to provide you with a battlefield advantage, in terms of technology, in terms of people, training, doctrine. all that goes against, adversary capabilities, and, hopefully, ideally gives you the ability to, to win a battle. Yeah. All right, so now let, let's parlay that into Blackrock Strategy. Your focus is risk mitigation, right? How- Yeah … if, if there is a strategic overmatch- Mm… right, you, you look for you kind of find the ways how to mitigate those risk. And, kind of weave that into, as we begin our journey into the conversation of, of Blackrock Strategy, what does that look like in the business world? Absolutely. So that's a, that's a, that's a great bridge. It's, it was a great bridge for me as I was working in Asymmetric Warfare Group, and then, and then beyond. You know, the whole point was to go out to scout emerging technologies, emerging problems globally. Advise senior leaders on what those look like, understand those from, from soup to nuts, and then integrate and help develop solutions to those problems. So been able to kind of flip that as we've worked for Blackrock Strategy and put together our operating concepts and our risk mis- risk mitigation capabilities, to go out into the environment and, and understand it. I like to, I like to tell, certain people, you know, especially on the government side, you know, you think you understand by looking at the top and looking at the signals what happens in the middle. But you need someone to go out and be your Lewis and Clark through the bureaucratic Louisiana Purchase, in order to, to map it out for you and make sure you understand the Plinko board that happens from a senior leader guidance all the way through down to outputs at the end. And that's, that's kind of how we, how we model risk through the middle and, and how we provide our clients, whether that's, you know, a decision-maker on the government side or a, you know, a capital allocator on the, the private side, with the ability to make better decisions and better bets about tech. Cool. What I'd love to do in the future, if we have an opportunity, is really understand the government side of it. Like, how they go about making decisions, but I think that would take a century- … to kind of walk through how the government makes decisions. But I think- It would … a little bit more lined up to this show would be the capital allocators. Mm. Like, when it comes to capital allocation within government detect or government tech, right? Things that the Uncle Sam will pick up and use for strategic advantage and strate- Yeah … strategic overmatch, right? Yeah. Like, what does, what does that look like, and, and how do you guys help capital allocators look at government defense and contracting and technology in a different light? Oh, absolutely. So there's, there's two, two sides. I'll, I'll define the bounds of the s- the, the spectrum first. The, the bounds of the, the continuum here. and a lot of times people tend to, to focus on, on either end of that continuum. So on the one side you have, you know, the things that make success that are, you know, political, right? Like a lot of capital allocators have, you know, they've got a lot of capital and access. So they'll go and they'll call up, some senior decision-maker or someone with access to a senior decision-maker and get their perspectives that way. Try and get their perspectives that way and de-risk the investment. and you have a lot of access, but that's fragile access and it's not sticky from a, a performance or a, a sustainability and industry standpoint. And then on the other side, you have technical performance. You have people that invest in really understanding the deep technical capabilities of products that companies are offering, and then rolling the dice. because, you know, everything is just, just a dice roll when you, when you get into it, as much as you try and de-risk it. The roll and the dice on whether or not the performance of the technology will, you know, entice the US government into large scale, contracts. You know, the valuation that comes from that and the ability to innovate continuously that comes from that initial, capital infusion. Well, but in the middle, is, is where we operate, and we call it modeling the middle, for, for our clients. So like I said, political is not sticky, but if somebody asks me, you know,"Hey, well, you know, this technology's amazing, why is it struggling to, to find adoption and traction?" You know, there are political considerations. But it really breaks down into is the technology or is the product offering from the company ready to perform? Is that company ready to integrate, both from a technical standpoint and also as a member of the defense innovation ecosystem, right? Are they ready to be a teammate to the United States government? Are they ready to be a teammate to the war fighter to be able to update, refine the product, and can preserve the advantage that their little piece of the tech stack gives? And then are they ready to scale? That's a huge one. A lot of people with great vision out there, but there are a lot of just, you know, deeply un- unrewarding and unsexy engineering tasks that have to get done in order to take a great vision to something that's scalable, for on the… that from a defense standpoint could be millions of units, and very compl- complex integration tasks. And then finally, readiness to sustain, right?'Cause after, after that technology is bu- after your product goes into the market, you're gonna have to be able to update it, you're gonna have to be able to help sustain it. Or at the very least, provide expertise to allow the government, and the defense, the defense user, to be able to continue to leverage the technology against adversaries. Yeah. Man, so cool. All right. So you were on the battlefield and now you're kind of at a… you're, you're in the- the, you know, high tower looking at the battlefield and, and seeing what, what technology, what innovation would give us an ad- a strategic advantage. So what did innovation look like from you holding the stuff on the ground versus you now scouting out innovation and innovative products from founders and, and VC groups, you know, across the globe? What, what does that look like differently? Well, okay. So I'll tell you in, in broad terms, innovation, when I was, when I was out there doing it, right, as the end user, it looked like a chain, right? The, the kill chain concept that, that gets talked about a lot, but it was linear and industrial. So it was like an assembly line. Like, I had a requirement, hopefully someone would take that requirement to the, you know, the defense, capability plant manager. It would go down the line and end at me with, like, one unit of combat power. Thank you very much, and I'll go off and do it. It was… I was very immature. I was also a lot younger, right? now, now, with the, the wisdom of, of a few years, not that many years though, it, it seems more like a web, right? You're trying to create as many pathways to get to where you're going as possible to create resiliency in the ecosystem, and resiliency from, like, a technical standpoint to be able to bring a capability from ideation all the way through. you know, my younger self would've said warheads on foreheads, but, to employment on the battlefield is probably the more, the more correct term. and, and that, that is the macro difference. At a micro level, you know, I can illustrate it with, with, with a vignette from, from when I was younger. When I was in Afghanistan, as, as a young lieutenant, I had literally a 40-foot container full of robots that we were supposed to find uses for, for counter IED, reconnaissance, that kind of stuff. No one told me what to do with those robots. No one asked me if I needed a robot, and I didn't need a robot. What I had was a container full of them, and they sat there. so there was a lot of people innovating solutions to problems that, that I didn't actually have, over there because the innovation ecosystem was moving more rapidly than the government requirements pro- process and was outkicking that, right? There was no check on the system'cause we were just cramming stuff in as fast as we could. Now, we're trying to align government processes, decision-making with that need at the, at the edge to be able to run those requirement streams in parallel, requirement development streams in parallel. I'm a warfighter, I have a need at the edge. That need is validated. Industry provides a solution, refines that solution through the validation of need to the warfighter at the edge. and then ideally those, those re- the requirement and the solution converge, in, in combat. that, that didn't exist when I was younger. now, now it is starting to. And the ability to focus the strategic and defense industrial aspects of the, the ecosystem on the warfighter at the edge, that is probably the biggest difference that I've seen, from bef- you know, before till now in the innovation world So he who builds the best mousetrap doesn't always win. Right. Because you had a bun- you had 1,000 mousetraps sitting in a 40-foot container baking in the Afghan- Yeah … sun, right? So, you know- Yeah … in the world of, you know, minimal viable product, in the world of in, you know, venture capital, we talk about product market fit and customer- Yes … adoption, right? Yeah. So just because I could build a robot that can locate IEDs and save US lives, that's cool, but if, if it's not being adopted, trained and adopted by the war fighter on the front end, then they're gonna sit and bake in the, and probably short circuit, in the container, right? Yep. All right. Ab- absolutely. Yeah, you're throwing, you're throwing tax dollar money away, which is, which is not good. But also, all those resources that built those robots could've been used to build some other capability, right? It's, it's inefficient. Yeah. F- so from the allocator's perspective, they might have got that first contract, but if they don't renew contract, or if the contract doesn't increase- That's right because of effectibility, and I don't even know if that's a word, effectiveness in the, in the field- Mm-hmm … then you're not gonna get the follow-on rounds. You're not gonna get the- No … follow-on things. And maybe you won't even get the privatization of that in the future. Am I kinda picking that up right? Yeah, abso- absolutely. That is, that is one of the bigger consequences from, from running things like that and from, from that mismatch. And it's not industry's fault necessarily. It's not. It wasn't, you know, the capital allocator's fault. you know, in a lot of cases, wasn't even a lot of times the government's fault. It's just a systemic issue that we have worked over, you know, over a decade now to try and correct and are finally starting to get some traction on. Right. So but BlackRock strategy exists from the, that middle kind of communications- Yes … and on the field testing and training and implementation. All the way up the stack is do, are, i- if we build this, will you use it? Will you train with it? Will you allocate it? Yeah. To the investors, like, "Hey, we think that, we think or we believe de-risk wise, if we come to this solution, this may meet the hands of the men and women serving." Is that right? Yeah. Yeah, absolutely. And let me, let me tell you kind of what, you know, what, model the middle means to us. You know, I talked about the Plinko board before. Mm. And you have fairly decent visibility at the edge, right? Because you can read any so, any number of open source documents. You can watch YouTube videos these days, about the war in Ukraine and, and other places, and see what warfare in the 21st century might look like, and visualize it and think about it. And you can listen to the signals that are coming out at a very strategic, like a national level for what very senior people are saying, "This is what we need." The issue is the middle, right? There are some very complex Very bureaucratic processes that, that happen. And not all those processes are, are bad or inefficient, right? Like, I was, you know, safety regulations were born in blood. Well, you know, defense regulations, acquisition regulations were born in fraud. And there, there is, there are some good reasons why those processes are designed the way that they are. It's about compressing the timelines on, on some of them. But, you have to, you have to be able to understand what happens in the middle, because that's where the valley of death is. The valley of death doesn't have… Has very little to do with, with senior leader interests at the outset, and it has very little to do with will this thing provide some sort of incremental advantage to the war fighter at the edge, and all about can you move it through the technical and political and operational and business processes that get a technology from one side of the valley to the other so that it can be employed at scale, and so that, you know, everybody can be rewarded for getting it across that finish line. Man, that's cool. We have a, I work with a group and, and we have a family office community, about 3,000 families, right? Who are interested in the world. Some, not all, but some are interested in the world of, you know, government tech, defense tech, those kind of things. So, you know, if, if we're meeting with a group of allocators and they go, "Okay, like, how do we know when you're meeting with founders that you're sifting through all the, the BS, you're sifting through the things that are gonna go sit on a shelf that will never make it to the government's hands?" You know, like Jesse helped prepare some of this con- the, these questions, and it's like when you meet a company or a tech team for the first time, what are the first three things you evaluate before even looking at their tech? Because you get pitched- Yeah … all day long, "Hey, look at this, look at this, look at this," from allocator side and from the ask side. Yeah. So what, what questions should the family offices think about before even looking at technology for government- Yeah, I, well, first I appreciate the question, because it's, it's a really good one. and, and also I should say at the beginning that, like, we, we get this question and, and questions like this mostly on the allocator side, and we also help on the, the government side. What we don't do, and this is how we keep our hands clean and, and stay ethical, is we don't advocate for technologies. Right. We're not, we're not lobbyists, but we do help people model decision-making processes that can optimize their tech or optimize their products or optimize their portfolio's products, which is really more we do for, for the processes at hand. So, one of the questions we ask first and start looking at is, is traction quality, right? Because we, we like to see the same data rooms and investment decks that these companies are pitching to the, the capital allocators. there's, there's a lot of, there's a lot of fluff in, in their puffery, in the, the marketing term, about, contracts, contract stickiness, what contracts actually mean. For example, you know, there's some contracts, especially now, where the contract serves a political purpose to show movement towards an objective, but doesn't actually have any, any allocation of funds to it in, in a budget, right? So you'll have this contract that you get awarded that you're on, but it's an indefinite quantity, indefinite, date that, Really, there's no revenue that's realized from that. You're just on a list somewhere that shows that you won. And allocators a lot of times don't understand the difference between that. They don't understand a- and, you know, don't understand the difference between that and a, an actual revenue realizing contract. They also, it's, it's hard to pick out from that what is something that is the company is being asked to prototype or support experimentation versus an actual pathway to large scale procurement without a lot of hurdles. We help people pick out, on that, and it helps evaluate traction. We do look at technical maturity. We, we do s- a significant amount of deep dives. This is a lot of, like, merger and acquisition support that we do, to de-risk kind of the technical side of, that transaction, make sure the tech and the products underlying that sale, underlying that interest are, are real. And then, manufacturing readiness and, and contract pathway quality are, are really the two big ones that we evaluate as well and help allocators evaluate. We don't do a lot of finance stuff because we find that our allocators are extremely savvy at understanding the financial aspects of the, the firms that they're investing in. And so we try and stick to our niche and be a part of a larger investment team that adds value, and then, you know, helps that team win the championship of, of finding something with good returns and things that support the valuation, support the, the financial data that they're seeing from their expert, expert eyes. So when working with an investment group, what do you think is one of the biggest, like, misconceptions when selling to the Department of Defense? Is it, is it this idea of prototype versus procurement? Like, what are, what are they just kinda like dipping their toe in versus what are they gonna deploy decent capital towards? Yep. I, I think, a lot of it has to do with, with product market fit. And, and, you can, you can understand that. y- well, you can use the term when you think about the defense market and the, and the, the, the private market. And, but even for dual use technologies, it's gonna mean different things. So what does product market fit mean for the defense industry? It means something that accomplishes all of the organizational and institutional objectives for the service that is, that is procuring it. It's not just about war fighter readiness. and one of the things too, I'll say this, we, we have to caution our allocators all the time on, is you're gonna, you're gonna find a lot of people with a lot of vision. but, a lot of times that vision is based on a, like a personal understanding of what the battlefield of future is gonna look like or what technologies are needed, what the product market fit actually is, right? And they will come to you and they will say, "I have product market fit. Look at this thing." And they'll, they'll show you some slick YouTube videos and, and it'll be great. But, they are solving a problem when you start peeling the onion away. They, they are solving a problem not that the war fighter has, but that they wish the war fighter has because the problem is cool or it's potentially lucrative or they can financially engineer it for maximal returns in the same way that you would on the, on, on the private side. But the, the government side is, is fundamentally different. And where we see allocators have the most success is identifying companies, identifying firms that are aligned with the, the war fighter mission, the DoD mission- And then aligning, like orienting their allocations based on that mission, right? They're not a, they're not a customer for, for this. a lot of times in the, the private sector, and you're starting to see this increasingly in the defense sector, and I think it's one of the, one of the perversions of the industry from so much capital flowing and so fast. But, you will, you will see, companies start to look at their investor groups as the customer, and the product oriented at the customer. In the defense industry, that really doesn't work because you will be found out very, very quickly that you oriented on the investor and not the actual problem when it goes through testing, when it doesn't work in the humidity, when your system crashes because your software was done quick or you vibe coded it, and then it can't get through the process for an authorization to operate because the NSA is evaluating it, not, you know, an IT department at a company. Wow. Yeah. Man, that's so good because we could be building… And I think this happens a lot, is we build the pitch deck, we build the prototype, we build it to woo the investor, and you may- Yeah … you know, like you may get that first win of the allocation, but going through- Yeah … testing,'cause things go through major testing before they even hit the battlefield. And when it can't survive in cold or in the heat, or sitting in that container overseas for a little bit, or the salt- Yeah … or any of the, you know, the, the rough conditions of, you know- Mm … put it in the hand of men and women who are rugged. Yeah. Man, you will be found out quickly, and then that allocation dries up very quickly, doesn't it? Yep. I, I think, I think a, a source of greater efficiencies that we'll see as it develops over time is that the, the, the DoD is putting a lot of the emphasis for internal research and development back on companies now. They're saying, "You take the risk on this, and then when you come to us with a viable product, we will adopt it or we will start putting it through testing." So there's additional opportunities for an allocator, but there's also additional risks because the signals about what is viable and what's not viable, are going to come later in the process now. You're not going to get just, like, a, a set of requirements that you can align, and do, like, a correlation of, of, of forces or a correlation of capabilities diagram where it's like, "Okay, the system does this. The requirements are this, therefore we have, you know, a, a 90% probability that this thing will get adopted and it'll be great." You're gonna get problems at the high level, and then you're going to be expected to nest your development in those problems. And the best solutions in those problems in a competitive environment will be selected, but then also expected to continuously refine and innovate on that product, not rest on their laurels. No 10-year sustainment contracts, no, locking the government into IP agreements where you can't touch the thing without, you, you know, a contract representative standing there. that's not gonna work on the battlefield, so it's gonna stop working in the defense industry here, I think, over the next few years as, as the environment changes. Yeah, super interesting. When I look at technology, you know, our team looks at mandates and technology and I'm like, "Man, that's cool," right? Like, that'd be awesome, right? Like, I can envision how it would be, but I've never stepped onto the battlefield, right? And I'm grateful for all the men and the women who have done that so that I didn't have to. I fought fires, they fought with, with bullets, and I'm grateful. But when I see technology versus you see technology, we have different perspective, different lenses, because you've seen things that I will never get an opportunity to see. Two questions as a follow-up. When looking at these things that are gonna be maybe put in the battlefield through, you know, investing in defense tech, how do we maintain security? Like h- like, how do we protect to make sure that this stuff gets invested in well, funded well, but that it doesn't get into the wrong hands? So that's question one. And then two, like, what level of clearance does your team have to have or maintain to ensure that safety, you know, as, as we build these out, as we fund these opportunities? Yeah. Well, I'll… So I'll tell you that capability development for the DoD largely happens at, at most at a, a secret level. And there's m- multiple levels of classification. You have unclassified, secret, up to secret, no foreign access, and then top secret with some additional compartments on top of that. But th- there are some capabilities that get developed up here, but those are small, they're not scaled, they're very niche, a lot of intelligence community stuff. And the, the competitive advantages, once you employ those, evaporate quite quickly because they require secrecy in order to be effective. Then you have, the, the secret level, and that's kind of like the, the bog standard, this is where capability development happens. And, you start there, but ultimately you have to reveal at some point, what's, what's coming out. And there, there was a, a lar- a, a really good document that circulated, a few years back, well, probably like five or six years back at this point, called Deliver Uncompromised. That was this, reflection of a shifting paradigm from, just, you know, developing really high quality stuff and, preserving advantage through ultra high quality, ultra high complexity devices that, that worked really, really well, to capabilities that could both be scaled and preserve advantages based on secrecy and protection up until the moment of, of employment. A, a good example of the, the shift in the deliver uncompromised mindset is, you know, the, the Abrams tank, the iconic tank of the, the latter half of the 21st cent- 20th century and 20- 21st century now for the, for the Army. Those things were designed in the '70s, delivered in the '80s, and it ruled the battlefield and are projected to rule the battlefield for, for decades longer. those i- have had to go through an accelerated development cy- redevelopment cycle, and, you know, strapping things on them, changing configurations in order to make them relevant to the, the future, the future battlefield. That's a really complex, really big platform that didn't start with the mindset of, "Well, we're gonna have to keep innovating this," because the assumption was we were going to create a different platform to do that. And you can see that the Future Combat vehicle program is one of, you know, one of the, the many failures in the defense, innovation ecosystem. But, you know, it's been hard to do that, I guess, is the, the way to take it back. Now, we're starting from the outset with the understanding and the assumption these technologies have a shelf life. They're only gonna be valuable on the battlefield in their current configuration for, you know, a couple years now instead of a couple decades. So what do we have to do to put together a team that can deliver, redevelop, re-refine, redeliver over and over and over and over again to preserve advantage so the government's not procuring technologies in, in and of themselves anymore? They're, they're pr- they're, procuring teammates, which is, which is a little bit of a different thing, and that's, that's kind of how you get around the, the, the compromise problem. Yeah. And then when it comes to, like, different levels of security in, in teams, like, talk to us about the leadership of BlackRock Strategies, some of the backgrounds, and why, why people might go, "Oh, these guys and gals and team know what they're talking about here," because they're coming from the place of they've done it. Yep. So, we've done it and are doing it, currently for, for a number of, of, of partners in, on the government side of the, the system. But, you know, we… The, the folks that work within our, our mission operations unit and that support our a- allocator inquiries and, and, and agreements, they have high clearances. They're, they're, they have access to information, and everyone's, everyone's focus is, is first and foremost on the, the national mission, right, national defense. So, you know, you're not gonna get to read the president's daily brief because you're working with us, for example. But what you will get is people with an inside look into how the machine works that brings stuff from ideation, to fielding, and the nitty-gritty, that, that people don't see when they're looking at it from 10,000 feet or looking at it through the lens of what the signals, the projected signals are. the, When we, when we have, our folks perform analysis, when we have them do deep dives on the, on the, the technical side, they're calling on not just the access that they have now as, as analysts, but what they're also doing is they're back… calling on their backgrounds. And it's everything from prototypers from, from Air Force, Special Operations to, you know, myself and some of the other folks, you know, from, from Asymmetric Warfare Group or other organizations that are like it, intelligence community, CIA, both case officer in, in paramilitary arms. One of our founders was, was, the guy who ran the, the, the, the Predator program, the MQ-1 program for intelligence surveillance and reconnaissance, and then later on, the effort to, strap weapons to it and use that loitering platform as a way to, to do conduct strike and, and overwatch, armed overwatch missions, for, for soldiers. And that was, you know, the iconic, the iconic piece of the, the iconic technology of the, the global war on terror there. And now you're seeing that, that story of adapting and developing a, a new technology, that, that maximizes lethality and minimizes risk and minimizes, you know, and maximizes protection, scaled and repeated thousands of times in people's garages and at large companies in the, in the ecosystem. So that's, that's kind of… That's what we've seen, and that's where we come from. We're born in it. we were, we were all raised in it before we joined the Blackrock Strategy team. and now we're continuing to, to hone that and, and develop it as we stay connected to the ecosystem and, and stay in the, in the heart of it. Now we've talked from the, the seat of the allocator. Sitting with you guys, you know, they're, they're getting pitched these mandates, "Hey, we want you to look at this tech. We're rai- raising capital for this," blah, blah, blah, right? So they, from the allocator seat, we're looking at things and we go, okay, having a, a team like Blackrock Strategy take a look and go, "Is this viable? Does this make sense? Where there's some holes in it." Like, we, we need some guidance here because we don't have a huge allocation bucket towards this, but we may be moving towards it, right? S- that's from the allocator seat. Let's move into the company seat, who is looking for allocation, and this is where investor relations and that, that conversation and the training will go. What do these companies that are prototyping some cool stuff, these founders that are building some great things in their garage with 3D printers and with cool technology and AI, what do they need to know to have better conversations with allocators? Yeah, that's a, that's, that's a great question. I think one of the, one of the things that they're gonna have to do is, accept that they're going to have to find ways to mitigate risk for allocators and to develop, and, and deliver a good product for the, for, for the government. Now, what do, what does that look like in terms of articulation? What is the language that they need to be able to speak? So they have to be able to speak the, you know, the, the profit loss, the, the profit loss terminology of the, the allocator, right? Or the returns language of the allocator. But they're really translating that, the, the lethality risk, calculation from the, you know, the, the defense orientation to the allocator to help align the allocator with the mission that that company is trying to assist with, right? So if, if done right, you can find allocators that are, willing, able, and enthusiastic to invest in defense, and lends their willingness to invest and ability to invest through companies, through firms that are oriented on the missions that need to be executed so that everyone stays, everyone stays integrated, and that the returns are coming from mission suitability, which is the product market fit, in the defense industry, and that those returns are sustainable over a long term and aren't just a, aren't just a, a flash in the pan. Hmm. Yeah, man. Super cool. Is there a book, a resource, a training guide, a podcast? Is there something that you would say for those in the allocation seat or maybe those looking to raise capital, here's a good place to go to learn some of this information Well, I'm a huge advocate for, digging into the signals, that, that you get. So when you are listening to a senior leader give a talk, whether that's at AUSA or on a podcast or, you know, on a, a televised address, there are hundreds and thousands of pages of documentation, that, that underpin those, those memos so that you can understand both the statement that's being made in isolation, but also the context, either what it's shifting away from or what it is orienting or reorienting people to. all that stuff at some point becomes public domain, and some of it's more easily accessible than others But, you know, anyone can go and read the Department of Defense instructions. They're called DODI manuals. The 5000 series deals with acquisition. And, it is not a fun read, but it is a read that because it is so not fun will give you a competitive advantage in understanding the system or at least understanding where the system is being circumvented, short-circuited, accelerated, compressed, all that. Because you will have seen the original blueprints for how the system is supposed to function. And then there's also, you know, the normal, the White House memos, the Defense Department memos that come out. Those are all publicly accessible. And, y- you know, a lot of allocators have, have people that, that read those for them, which is, which is great. We read those for our clients and provide them with, with summaries. But that's an important fountainhead of knowledge about the, the, the context and the, the ecosystem itself. Now, for allocating capital within it or successful, tech- technology programs, there's, there's, there's, there's a few, a few books. one of them is, the old classic from, from Charles Perrow called Normal Accidents, which, shows the challenges of dealing with large, complex systems and the, the failures that can happen between those. And that can help allocators, red team, their technology partners red team their potential investments just off, off the top and see where, where things might, where things might, might go, go off the rails. Do a little bit of a quick pre-mortem there. Those are always important. I'm not, I'm not sure if anyone has, you know, done a, done a podcast on, just, you know, how do you, how do you, how do you make good investments in the defense space. if they, if they do, I haven't, I haven't heard one that'll, that'll unlock the doors for you. But that'd be a, it'd be a great one to add to the empire, Josh, if, if you're, if you're ever looking for it. Yeah … but, but yeah, it's, it's really, it's really just taking, taking the knowledge that, that people already have. And again, our allocators are savvy, and they are. They wouldn't be allocators and they wouldn't be successful or have the capital to allocate if they weren't successful in some aspect. And it's just translating that into a different context, and understanding that there are unknown unknowns for them that they need to, to find help with and how, you know, putting together a team to be able to address The unknown challenges in the ecosystem. And an ecosystem that's changing constantly, by the way. And you can say what you will about, you know, administrations and the, the political precarity of the American system of defense procurement, which are valid. However, defense is bipartisan, right? And a lot of the, the changes are net positive, no matter who's doing them, or how you feel about it, as far as speed and capability delivery goes. So, you know, the system, the system moves outside of the, the, the more partisan political spaces sometimes. Yeah. So Kevin, I'll include your contact information in the show notes for, you know, for our groups who are looking for, risk mitigation or just strategy, right? We'll, we'll include those links for them to have a conversation with you. And in terms of, like, maybe adding- Awesome … a future, show to the, to the network, you know, like, we'll, we'll consider that. Maybe if there's anybody in the audience who specializes in this field, or if there's a podcast out there already, we'd love to have a conversation with you and, and maybe we can share it with, with the community here. But, you know, super grateful for this time, Kevin. was there another question or something- Yeah … that I should have mentioned that I forgot? no, actually. So I did, I did actually think of a couple, a couple of podcasts- Oh, go for it … now that I'm, now, now that I'm thinking about it. So, so one of them, Aerospace Advantage by the Mitchell, the Mitchell Institute. that one is, is done by, by the Air Force and talks about the, you know, the, the, the hot issues, including technical issues, that, that that service is, is considering. the, the Army has one called Convergence. I'm not sure if the Navy does, but it would surprise me if, if, if they didn't. and w- that… Look, that's, that's important for allocators to understand and listen to. One, they, they're good podcasts in general. They're well-produced. But also, services are the, procurement elements in the Defense Department. So the Department of Defense itself, the DOD secretariat, does not make investment or, or it, sorry, it doesn't make procurement decisions. The service acquisition executives do that. So paying attention to the service, the service signals, service requirements, service needs, that's where the long-term procurements are going to come from. The, department prototypes and supports those activities. Yeah. Super cool. All right. We'll look those up. Our team will do the research- Okay … look that up, and add that- All right … into the show notes. Kevin, grateful for having you on. Was there a question that I should have asked you? Like, you added those podcasts, which I'm super grateful. Sometimes, sometimes they, they pop into our head right at the right time. are there any questions that I should have asked you that I didn't? We, we, we hit, I think we hit all the, the top level stuff from the, from, from the, the market here. I, I guess, you know, there is no crystal ball that's gonna show you what, what we need. And, you have to, you have to also keep in mind that when you, when you watch the YouTube videos on Ukraine, or, or watch, you know, rebels fighting in Burma or some of the, the footage from, from other places, whether that's Syria or anywhere else, you know, this… That has to be filtered through a lens of how the U- the United States operates, how we fight wars, which is different than how the Ukrainians fight wars, certainly different than how the Syrians or the Burmese rebels fight wars. So those give you illustrations of technology vignettes, but they are not roadmaps necessarily for, or, or, or templates that can just be copied and pasted into the American system or copied and pasted into an investment thesis. and that is, that's something that we, we, you know, we caution our teammates on. and it's something that we, we see people make mistakes on, quite a bit. Innocent mistakes. It's not because people aren't smart, it's just because that's what's out there and, and people are acting on it. Man, super cool. What lens are we looking through? Because what we, what lens we look through is our perceived reality, and if that's our perceived reality- Yeah … our actions will follow those realities, what we believe in, and that might lead us to bad allocation- Absolutely … and might lead us to bad decisions. So, check your lens, everybody. Make sure it's unfoggy, make sure it's crystal clear. And, that's why we have these kind of guests that come on the show, to give you a new perspective, potentially a new lens to look through. And our ask to you, our community, is that you always reach out to our guests, say thanks for being on the show. If you'd like to learn more about them and dig into their services that they could provide with and for you, their contact information will be in the show notes below. That's a great way to connect. If you have other questions that you'd like to ping with me, head over to the investorrelationspodcast.com, fill out a quick form, and you can connect with us there. Kevin, any final parting words, my friend? No, it's just this is a really important sector of the market for everybody. And, you know, as a, as a taxpayer, I appreciate our allocators being willing to step up and contribute to, to defense, and contribute to helping to share the burden of, of risks that we all share, in, as citizens. and, it's, it's a place that all of us at Blackrock Strategy and all of us in the DoD are, are, are passionate about, and, it's very important. So thanks for the opportunity to come and, and talk about it. I appreciate it. Cool. Well, everybody, hope you're having a great day. We're coming up on the 4th of July. Celebrate well, be safe, and we'll see you all on the next episode. Cheers, everyone.