The key to understanding military/government customers
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Josh Strawczynski: 0:26
Welcome to a special episode of business life hacks. Today, we’ve got special guest David Rothzeid, who is going to be sharing with us his experience in military contracts, the technology, which is emerging out of Silicon Valley. And we’re going to delve into the buyer behavior, hind, all of that really interesting stuff and a little bit of a curveball from what we normally talk about that has a lot of real-world application for a lot of companies listening in. David Rothzeid, welcome to the podcast.
David Rothzeid: 1:01
Great to be here Josh, thanks for having me, Happy to help present some life hacks business hacks, you know, contracting hacks for those who maybe are looking at government and specifically my expertise, the United States Department of defense to become a potential buyer for whatever it is that they’re selling.
By way of background. I spent 13 years as an acquisition officer in the United States air force acquisition officer as a fancy way of saying, businessman. So I am that guy who was spending harder and taxpayer dollars to procure that next generation of military-grade technology that ideally is advancing America’s national security interests along with its allies and outfitting men and women in uniform with the best capability that money can buy. And ideally at an affordable rate, which in recent times has been harder and harder to come by. But I feel like we’d be a little bit burying the lead if I didn’t mention that I am also your cousin, Josh.
Josh Strawczynski: 1:59
That is absolutely the truth. And this is actually a show I’ve been wanting to hold for quite a while because we’ve been talking about this as long as you’ve been in acquisition. Now you’ve made that move into venture cap out of the armed forces. And really you’ve got a unique perspective that I think a lot of people are going to be interested in. You haven’t heard a lot of this show. So let me fill you in.
Where we really try to get down into is how we can influence the buyer decision cycle. And there was a statistic that I was listening to yesterday. It said that without emotion, human beings are unable to make decisions and complementing that 95% of the decisions that we make are made on a subconscious level. So that fits in perfectly with what we talked about a lot on this podcast and in our work in J Marketing.
How you can influence individuals and the sub-processes that go on in their brain, but the government in dual-purpose contracts, they’re a little bit different, right? I mean, there are checks and measures and departments set up just to check and measure the checks and measures. How’s it different from your perspective? What do you,
David Rothzeid: 3:20
So the first thing to kind of know about government contracting, and again, it’s more specific to DOD is, it is a highly regulated, heavy oversight procurement system, extremely different from what you’ll see in the commercial sector. And a lot of that is rooted in the fact that we are spending taxpayer hard-earned money. And if we’re going to do it, it needs to be done objectively, ideally without emotion around a specific set of requirements that get at the heart of what the military needs to again, get after national security interest items. And within that system, you can only imagine, and being with the DOD is the largest bureaucracy in the world that the procurement system is very difficult to navigate. There are lots of decision-makers there’s any number of people that can kind of say no, it’s generally difficult to understand who has the authority and ability to say yes and sign a contract and get capability out the door.
And so for companies that are looking to provide and present their innovative technologies within that ecosystem, it can be extremely cumbersome. And one of the things that we noticed starting in around 2015 is that because of this high, high regulation, we were actually precluding ourselves from getting access to the top tier innovation firms who don’t want to or don’t have to get government money in order to be successful. And so a lot of what I was doing during my time at an organization called defense innovation unit was lowering that barrier to entry whereby we could start to contract on terms that were more business-friendly or at least business relevant in a B2B situation versus what you might see in a business to government B2G.
Josh Strawczynski: 5:19
Okay. So let’s try to paint a picture so that people can understand because it’s one thing to think about something as a big machine and you just tick this box and you adopt that. But at the end of the day, even in a bureaucracy, it’s made up of people and it’s made up of solutions. So I want to start it with, what a solution might look like to someone’s got a photo in their head or a picture in their head, and then how would they actually be getting recognized? So who would they be talking to, to start with? And then how many chains are there of people that this is going to go through and in what format? So if we were trying to massage this all the way through the process and get a contract, what that would look like. I know I mentioned a lot of things there, let’s start with an example of a dual-purpose solution that the government might be interested in.
David Rothzeid: 6:13
So this gets really tricky because the organizational structure of the DOD is fractured across a lot of different communities. You’ve got those that are doing day to day operations and they fall, operationally to combatant commanders and combat commanders are either in charge of geographic areas. So famous example, being in DoPay calm that combatant commander has an area of responsibility that encompasses the entirety of like the Pacific Ocean and a lot of Asia. And so they’re going to have their needs just like the European commander is going to have their regional needs. And then you’ve also got, what’s called these functional commanders, right? So that’s your transportation commander. They are the ones that are getting widget X to location Y and ensuring that the way that we provisioned providers is done efficiently and effectively, whether that’s going to be a commercial carrier or that’s going to be a military carrier either by land, by sea, by air, what have you.
So those are just the combat commanders that are doing the day to day orchestration of activities. Again, all predicated on whatever it is that President’s priorities are and whatever Congress is saying, aren’t priorities. But then I haven’t even mentioned the actual military services right. Of which now we’ve got six and I think, well, sort of six. So we’ve got the department of the air force, which is made up of the United States air force and the United States space force. You’ve got the department of the Navy, which is the United States Navy and the United States Marine Corps. And then you’ve got the army. And then you’ve also got coast guard, which straddles the line between being sort of service, but not necessarily under the department of defense or under the department of Homeland security.
And then within the department of defense, you’ve also got the intelligence communities. So all your spooky agencies like the CIA, the NSA, the NGA, the NRL. And so within the services, they’re responsible for training, organizing and equipping the individual. So here is where you start to see some of the difficulties and navigating this bureaucracy, where you’ve got these combat commanders or operational responsible for fulfilling missions. And they’re going to say, these are my needs. And so annually, they present their needs back to the services in the form of what’s called an integrated priority list. Or as we say in the military, cause everything must be an acronym, apples, ideals. And then so the apples will go to the services and then within the services, they each have their own constructs that help wade through, from a prioritization standpoint, how do I take what the European command needs, versus the transportation command, versus the cyber command, versus SouthCom, versus NorthCom, versus AfriCom, versus IndopaCom. And I’m going to try to figure out where I see the similarities and ultimately what sits out is called a requirement. And then that requirement sort of gets mapped and validated across not just the individual services, but now the entirety of the DOD. That’s where the secretary of defense.
Josh Strawczynski: 9:31
If I was to just jump in there, are they trying to look for efficiencies?
David Rothzeid: 9:35
We are always looking for efficiency .
Josh Strawczynski: 9:38
So enough of these guys have said they need a flying Pogo stick. So let’s make that a requirement.
David Rothzeid: 9:43
Exactly. So the requirement of a flying Pogo stick might be the same between what the United States Marine Corps and what the army is looking for. And now is there just one good way to go by Pogo sticks or do we need to go do different types of, you know, science and technology discoveries, which might then get thrown back down to the left. So once we have these requirements, then it’s time to start budgeting for it. And now that process is a whole two-year cycle of, this is a thing that we need. What is the most ideal way to go buy it? Right? Because we’re looking for the best of alternatives. We’re going to do all kinds of different analyses along the way. And ultimately we’ll get some sort of a budget appropriation from Congress at which point now it’s time to do the contracting.
So we’re going to put up solicitations and people that are knowledgeable about where to look for these solicitations will say, I’ve got a solution that fits what you’re looking for. And eventually, that might end up, that will end up being some sort of a contract to now a defense contractor who is in charge of providing that capability. But what I’ve just done very quickly, and I know actually probably took forever and everyone’s like, get to the point, is layers and layers and layers and layers of people were back at that combat and command.
There is an airmen soldier, a sailor, a marine, a guardian or a space force. Who’s just needs the damn thing. And it probably doesn’t need to cost that much, but I had to go through this entire network of systems for you, ideally, efficiencies gained in order to get after whatever it is. And so, you know, a common thing that we like to say in the procurement system is we spend millions to save thousands. Because again, forbid you from using any sort of emotion or quick access point to buy something for the fear of having done it in a way that might be considered improper.
Josh Strawczynski: 11:48
That is fascinating and one of the questions which keep popping into my mind or I’ll shelf this, but I’ll put it out there as something we can probably reference. Sometimes living here on the island, I meet a lot of wealthy Americans who come down and I meet people that have won these contracts. And quite often having talked to them, I will think, how did you win the contract over someone else? You’re just not Elon Musk. And you always expect that with a process like you’ve just described, you would need to be bigger, better, smarter, or know the right person.
It’s an interesting idea. I’m looking forward to touching on that, but let’s go back to, we’ve got the requirement now. So I presume that these companies are developing solutions, particularly when they’re dual-use, so meaning they could have commercial applications in the real world or government applications. They’re not necessarily, payrolling someone just to look at military requirements and work out where they can wedge it in. They might, but not necessarily. So is there a whole industry of people who specialize in that, going through the requirements and then finding suppliers?
David Rothzeid: 13:04
There are in fact there are a lot of, intermediary businesses that sort of make it their mission to stay in touch with the innovation ecosystem. And they’ve got some sort of depth and knowledge about what the government use cases are and they can operate a lot like resellers. And so what you’ve got is these resellers structuring these pretty flexible contract vehicles to enable the government to quickly buy various state of the art, whether it be cyber security or artificial intelligence, very much SAAS model basis or capability to then come back into the DOD, ostensibly under some sort of overarching requirement, that’s fairly general. And as long as there’s a provisioning organization that has some sort of a user base, that’s going to leverage it.
It’s a pretty good and easy transaction, but unfortunately, you know, through a lot of these resellers, the government is essentially sending some sort of a 10 to 15% past just to get to the product that is obviously available in the commercial market for significantly less than economics. We call that deadweight loss and that deadweight loss is just paying for the highly regulated system that makes it a bit too onerous for those SAS providers to want to be able to sell directly into the government.
Josh Strawczynski: 14:31
Interesting and I can see that deadweight loss in things that already exist, Frisbee’s existing tanks, anything like that. When it comes to innovation though, I suspect that is a highly efficient system. You’ve got these people who are doing stuff, not necessarily knowing or specifically for the government and for the benefit of the government yet there is this third party who is; I’m joining the dots between these two and I can see a government usage. In fact, this is specifically what you did before for years right?
David Rothzeid: 15:13
So, you know, there are certain pockets within the department of defense that are far more nimble and flexible and better equipped to engage with this commercial innovation ecosystem that as I mentioned earlier, doesn’t necessarily need to sell to the government in order to be successful. But the government would be remiss not to have access to that technology, but for the need to keep up with the Joneses, if you will, because if the technology is being developed in the commercial sector, that is just as available to your adversaries than it is to you because the government no longer has a monopoly on state-of-the-art technology. And just to kind of paint a picture of that from a statistics standpoint, or an objective, if you go back to 1960, Dawn of the space race, 69% of global research and development funding was rooted inside the United States government 36% of that was the DOD.
So 36% of all global R and D was in the DOD. So we wonder why the DOD had state-of-the-art technology relative to the rest of the world. It comes down to money. Fast forward to today and the United States accounts for 24% of global research and development funding as of 2020, the DOD is three and a half percent. So they like 10 X, less than where they used to be from a prominent standpoint. And yet all of our acquisitions systems have sort of been developed under the guise that we are going to be the purveyor of the next generation of advanced technology. That’s why it is as serial in nature and complicated to gain those efficiencies. But right now it’s that dogmatic efficient process that is leaving us a bit on the sidelines as the commercial sector is just racing past the DOD.
We are talking about technologies, robotics, Commercial space, with all this access to launch capability, we’re talking about blockchain. We’re talking about quantum, we’re talking about artificial intelligence, which is a continually emerging technological frontier and these so with the government, not necessarily in the driver’s seat, like they once were. It kind of, befuddles the department of defense to figure out are there authorities that we can tap into the Congress has granted in order to keep pace? Because if you are not number one, there’s a target on your back and the United States has a target on its back and your competitors are not going to play by the same rules that you are in your highly regulated system. And so we’ve got to start to peel back that onion and get a little bit better about thinking as the commercial world does. And so my time at defense innovation unit, we were able to leverage an underutilized authority that was actually granted initially to NASA to actually help them get into the space race it’s called other transactions. And the best way to describe other transactions is to define it by what it is not.
It is not the federal acquisition regulation or as we call it the FAR. The FAR The far is like a 3000-page book that details in exquisite detail, all of the things that you can and cannot do and mainly cannot do. And so it makes it fairly cumbersome because it’s under the auspices of fairness and quality. So that everybody has a fair shot. But when you do that, you sort of dissuade most people from wanting to even engage. Because again, the barriers to entry are just too high. So other transactions, they’re not FAR-based procurement. They are more like conventional business formations. All right, you do a competition to the maximum extent practicable. So you, as the practitioner get to sort of defining what the competitive landscape is.
It is targeted for you to go after non-traditional defense contractors. So these are essentially those who aren’t totally steeped like their accounting systems are built in a way that conforms to what defense regulations makes you do. And so these were authorities that we leverage when I was at this organization, defense innovation unit, we were headquartered in Silicon Valley for obvious reasons. One, you know, to be away from the Pentagon, where they have an incessant need to sort of reach in and tell you exactly how to do your job. So 3000 miles or whatever of the distance between you just helps keep the bureaucracy at bay, but also that’s where the venture capitalists are. And because the venture capitalists were there with all their money, that’s where the startups go.
You’ve also got, you know, Stanford, which is created in Berkeley, which creates just this incredible innovation ecosystem. And while yes, the government actually did build Silicon valley during the space race, which the advent of the semiconductor, which was built to help go into fighter aircraft of its time. Silicon Valley, since the 1990s has just been on a blazing, fast path of innovation. And the government essentially receded that territory in the nineties to cut costs, right. We called it the cold war dividend. When the cold war and the Berlin wall fell, Bush and Clinton sort of completely gutted the military because the threat was ostensible.
And so we decided to receive what was expensive land to whoever wanted to buy it. And California was more than willing to say, we’ll take that for our own innovation. And as we know, the rest is history. So that was our mission. There was to help lower the barrier to entry. We were using these underutilized authorities that allowed us to operate a lot more like a traditional business and engaging in a relationship. We streamlined the solicitation process. We didn’t make it as burdensome from a documentation standpoint, but we still did great due diligence on the market. So that if you, as a warfighter came to me and said, I need to be able to see inside the building because I don’t know what’s in there and I don’t want to get shot at.
And so there are companies that are building autonomous quadcopters that can go in there and do some mapping, tell you what the threat looks like on the inside without having to put you in harm’s way, or I want to do mapping of the ocean, but I want to do it in a way that’s cost-effective well, Schumann’s tend to be sort of the lymphatic in almost any operation because he’s got to think about their survival and their logistic needs. But if you have autonomous sailboats, you know, they can probably do a lot more, a lot faster. They don’t get tired. And so those are the types of capabilities we were looking for because they do have an inherent dual-use purpose to them. Whether it’s the hedge fund, trying to gain whatever information that they can over their, their peers, this data that we are swimming in. It’s something that both the commercial sector and the government are looking to take advantage of. And our organization, our outfit was, was positioned to do just that.
Josh Strawczynski: 22:29
So you gave me so many books to fall on, but I’m going to tie it back to when you acquire a company in the real world, you are acquiring technology, you are acquiring a process that makes you good and special and profitable, but in particular, out of the time, you’re buying the innovators in that business. And that often is where the value is. Does the same thing exist in government contracts or because it’s so much binary data by the time it finally gets through to the decision-makers and by binary, I mean, they’ve stripped out the colour? They’ve stripped out the emotions. It’s just hard facts and figures does the owner, the innovator not become part of that.
David Rothzeid: 23:26
I think so, I think we try to take such an objective lens. We try to ensure that no one person becomes part of the critical path that it sort of strips the real innovator, the relationship that might really spur greatness. And yet we celebrate individuals throughout our military history because it ultimately does come down to people, of course not processes, but we also, we have this other saying that I’m going to share with your listeners when one person pisses their pants, we all wear diapers. And so, unfortunately, throughout the storied career of the acquisition procurement system, we have had those who have done wrong, and we feel the need to put out tons of instructions and tons of processes to ensure that could never happen again. And so it really does, unfortunately, curb the ability for one person to do things for the right reasons that autonomy and authority to get done.
Josh Strawczynski: 24:42
I oversee it to the left a little bit once on the road. And so now I can only make right turns exactly. Very good. The, so doing that individual, so there’s no Tony Stark from the Marvel franchise sort of providers to the US government.
David Rothzeid: 25:00
I think there are lots of, providers who would like to fancy themselves stark enterprise, but sadly, no, maybe the closest thing we’ve got. And fairly polarizing figure. Although Tony stark too is fairly polarizing, it would be, you know, something of an Elon Musk.
Josh Strawczynski: 25:18
Exactly the example that was going through my head, working out, whether it’s some point in the chain, these big names can just cut through all of that administrative bureaucracy and go, okay, what solution do you need, flying tax, you got it. Give me, he did that. Speaking of which Elon Musk did that with the Australian government have procurement process for electricity in South Australia, he just came through and said, everything you’re doing is rubbish. I’ll tell you what double or nothing.
David Rothzeid: 25:48
Well, an acquisition blog that I read by a good friend of mine, Eric Lofgren, I think was just highlighting basically the spacesuit NASA decided to take in-house. Working with six different integrators. And then they would be the ultimate integrator of these different components and pieces. And you can only imagine there’s a lot of costs overruns. It’s a little bit behind schedule and by a little bit, I mean, several years, and yes, we were supposed to be going back to the moon in the near future. Well, Elon Musk and Space X, are completely vertically integrated. They don’t subcontract out anything. I think they just made their first acquisition the other day of some company. But for the most part, it is all in house. They are definitely pros and cons to that approach. But Elon Musk in a lot of ways is sort of told the regulators be damned.
I’m going to build these rockets based on the first principles. I’m going to iterate. I’m going to, you know, with air quotes, fail, but learn in my failures. And that’s the only way that we have this almost fictional, you know, view of boosters, a launcher is going up and then in synchronicity landing again, and then being used for reuse. I mean, these are things of, science fiction. And he is making it real now whether or not they’re profitable, I don’t know. Right. Because they are a privately held company, but certainly capturing the imagination, certainly getting the DOD to think differently about the way that we access space. And what’s been incredible about that is how it inspires others.
So once upon a time we only built satellites based on the costs are directly correlated to the cost of the launches, so we don’t have a stockpile of exquisite satellites. In fact, we know that because it’s so darn expensive to get something into space, right on a per kilogram basis that we’re going to pack as much as we can in this one, a bespoke or small constellation of bespoke satellites. Now with the access to space, going down so much, right with Falcon nine and this new crop of other responsive launch companies, you’re starting to see all of these other potential state use cases emerging just like that.
And you know, you’ve got now the venture capital community really excited about the possibilities, whether it be manufacturing in space, whether it be mining and space, who knows, right. It just it’s, it’s capturing the fancy, it’s allowing other innovators to really think through what kind of problems they might solve. And it’s all because one guy said, regulators, be, I’m going to start launching stuff. I’m going to learn quickly. And I’m going to bring down that price point because we have become way too. Over-regulated way too risk-conscious to the detriment of American prosperity in a lot of ways.
Josh Strawczynski: 28:55
And so let’s bring our conversation now back to the practical side for a company that is, has, is going to, invest in innovation in this space, or maybe they’ll have a product and they’re looking and saying, okay, maybe the government is a potential for me. The name of the podcast is business life hacks. What can they do to give themselves a fighting chance or more than a fighting chance in advantage in the space, the things that pop to mind, are lobbying, having ex-military people in their companies that already have contacts. Potentially blanket advertising at those sorts of people are going to be making these buying decisions to try to appreciate their thinking towards feeling, this could be a solution. What do you think could be done? What would give them an advantage?
David Rothzeid: 29:52
So if you are, you know, there’s a couple of different pathways depending on where you are in your match maturity cycle, the easiest and best way for an entrepreneur who is trying to has an idea wants to validate. It also gets some funding from uncle Sam, right. Would be through what’s called the SBI or small business innovation research program for it’s been around since the 1980s under the small business act. And its idea was how can we set aside some government funding to help the next class of entrepreneurs get started? Because as you know, every politician in the United States likes to say, America is built on the back of small businesses. We celebrate the big ones, the Googles, the Amazons, not so much the Facebook that you know, but they are a big one. A really, you know, it’s small businesses that are the major employer.
It’s the major creator of the new age, intellectual property. Ideally, if there, you know, the startup mould, they grow up and they become, you know, incredible companies changing the world. They will all have started as a small businesses. And the small business innovation research was made to help them. I would say for most of its existence. In fact, only up until a couple of years ago, it sort of languished and operate as a bit of a tax on government programs without providing much of a return. But recently, as of a couple of years ago, a couple of my buddies in the United States air force created what was called the SVIR open topic. And it’s only currently in the air force, but it’s starting to gain and spread and get traction across other agencies as well as the other services.
And the idea is if you’ve got a good solution, tell us about it, and we’ll, if it’s commercially kind of relevant and DOD applicability and it looks good and it’s got good technical merit, you know, it’s a pretty simple application process. You’ll get $50,000 to go do customer discovery, a customer discovery can then turn into what’s called a phase two SVIR and the phase two SVIR has an opportunity of $750,000. Plus if you can bring in matching funding, whether, from the private sector or other government entities, it’s a little bit more complicated, but that’s $750,000 is non-diluted equity right into your pocket to help build something with the customer in mind. And it’s certainly not, you know, snap a finger. It’s not just filling out an online form, right. There’s definitely work to it, but like anything, it always takes a little bit of work, but it’s a phenomenal program to help you as an innovator and entrepreneur get started and get connected with those who could really benefit from your capability.
Now, if you’re a little bit more established, that you’ve got a working product, so say you are kind of like a post series, a post series B type startup. You’ve got some venture capital backing and definitely will want to take a look at defense innovation units website, they are constantly posting solicitations, and they’ve got a very, you know, a fairly fast process by which they do down selection across any number of different vendors. And if they still have to put up a solicitation that matches what you’re kind of doing, you know, that’s a great way to get a foot in the door.
There is no silver bullet when it comes to government contracting. There’s any number of people buying for its attention. And so I would say like, don’t get discouraged if the first couple of times you don’t make it. I think that’s one of the really important reasons why you should continue to push forward with whatever commercial lines of business that you have because you never know exactly where you’re going to catch fire, but certainly longer and longer we are in this world, the more overlap or dual-use the technologies become whereby they’re applicable in multiple different industries to include department of defense government.
Josh Strawczynski: 33:54
All right. Well, let me challenge you on a couple of things. And now we’re going to get into my world. At the end of the day, people are just people and sometimes they’re going to feel lazy. Sometimes they’re going to be highly in tune and in the detail, presumably, if you’re one of these people who’s reading the specs, the brief, the overview, and trying to analyze is this business worth culling or keeping in our consideration set, how it’s recent as important. So would having a writer or someone who’s an expert in putting together a military response, be an advantage to a company wanting to get through that process.
David Rothzeid: 34:36
You know, I think anytime you can sort of put yourself in their shoes, you can empathize with them, learn their language. It certainly makes it easier. I think in the DOD, we’ve been challenging ourselves to empathize more with the plight of the entrepreneur. And how difficult it is to be in their shoes because we’re more successful when they can be successful with us. And so I think you’re seeing this merging of two roads coming together, but certainly doesn’t hurt to be able to speak the same language or have somebody on your team. Who’s lived some of those DOD experiences now as an entrepreneur, probably the most important thing that you can do is hire the right type of people, spend your time getting the right kind of people on your team. Unfortunately, there’s a number of studies that sort of show the lack of integration between veterans and civilian counterparts.
They tend to sort of huddle to themselves. There are some really good outreach programs, so that, so if you’re an entrepreneur that you can look to get access to people that are just now leaving the military and seeing if they might have a set of skills or set of experiences that you would like to bring onto your team, you know, that there’s a, let’s see that’s in tech is a really good one. There’s a core organization called break line. And they’re helping people leaving the military, get placed with good innovative companies, their shift, So there’s a lot of this out there in the ecosystem. I would recommend people just do some Google searches. If you think you have the ability, or if you want the ability to bring on a veteran, right to your team, to help at least provide you with some of the right words.
But marketing in general, I think is underappreciated in large part within the department of defense. So from a marketing agency, just being familiar with the contract of the DOD again, what are the words that they use to describe their problem sets that may not necessarily map directly to the civilian world. And so you’re talking about the exact same thing, but like ships passing in the night, you just weren’t on the right frequency to communicate. And so that does happen. So I think it is important to take stock of that, to really invest in your understanding of where the military is coming from, but also challenge military counterparts that you do come across to think as they should be from a commercial sector standpoint.
Josh Strawczynski: 37:10
They’re in, is a crossover. Something I talk about with magazine students is executive summaries. Definitively in the corporate world. Often the only thing an executive will read, so make it as concise and using their language as humanly possible. Is there such a thing in the military world as a write-up, specifically for proposal development?
David Rothzeid: 37:37
That actual business does exist. I’ll do a plug. I wasn’t expecting you to do this, but a good friend of mine, Amanda Bressler, her mother created a proposal writing shop essentially. And she called it PW communications and they help small businesses as well as the largest, what we call prime. So these are your low key markets, Northrop. Grumman’s, Raytheon’s L three Harris. Even those corporations sometimes need help keying in on the right things to put in your proposals so that as you go after those contracts, the most important thing is to not disqualify yourself for some oversight, because when you have, in the DOD, in our procurement system, we’re famous for our checklists and it sucks, but it is one way to help sort of calling the herd because everyone in certain solicitations is all kind of the same. So you’re looking for reasons not to pick them.
And so lashing up with proposal developers certainly can be helpful. I think you need to get to a certain level of maturity. Maybe it depends on the size and scope of the contract that you’re competing for. You certainly wouldn’t need something like that for an SVIR phase one, in my opinion, there are other shops out there that do help companies get ready for sippers. You might want to meet with them. I’ll put another plugin for a buddy of mine’s shop treble one, you know, so they also help the companies get up to speed on how to compete with SBIRs. There’s the outpost, another shop that sort of does that. They all have different business models for how they take consideration. But it certainly does exist.
Josh Strawczynski: 39:25
Alright, let’s finish up with some quick-fire questions. I’m going to fire a few ideas at you and then a yes or no sort of format. Tell me whether this is worth investing in specifically to help get the attention of the military contracts. So we’ve covered writers. The answer is a potential yes. How about Branding? Looking professional.
David Rothzeid: 39:47
Josh Strawczynski: 39:48
So that, the colour, the style, the first impressions cannot be understated. Very good. Mock-up demos of how something would work in the future.
David Rothzeid: 40:00
Yes. And you need to do it from the standpoint of who your target customer is.
Josh Strawczynski: 40:06
Websites, do I need a website that explains us?
David Rothzeid: 40:09
It’s 2021. You have a website.
Josh Strawczynski: 40:12
David Rothzeid: 40:13
Not as important.
Josh Strawczynski: 40:15
How about how I, as someone connected to the business, see a shown on social media, what if I’m doing the wrong thing, shooting rhinos.
David Rothzeid: 40:27
Absolutely, I mean, the government’s always going to be very protective of perceptions, right? And I think in the day of 2021, 1 needs to always take stock about what they’re putting online and whether or not it might come back to haunt you. It’s not, not to be authentic, but just to be mindful that there are those out there who would love nothing more than to have a takedown in society. And so I think less is more when it comes to one’s own individual showing on social media.
Josh Strawczynski: 40:59
How about the flip side? What if I’m tuning my LinkedIn, my profile to show that I am well connected with the government and the US military. And I really understand who they are and to keep peace in it. Is that going to help my case?
David Rothzeid: 41:15
Yes, it will absolutely help your case. And if anything, it’ll broaden your access to a network that can help you write together. Everyone achieves more rights as a network, you go further. And so I think you should be incentivized, whether there are trade groups that might be able to help you in your advancement within any industry. I think there’s nothing that always helps. It cannot hurt to be associated with people in the industry that you were trying to get plugged into.
Josh Strawczynski: 41:46
Spending money, hiring retired generals, important people that were held important posts.
David Rothzeid: 41:55
Useful, but not critical.
Josh Strawczynski: 41:58
And let’s finish with advertising. And actually specifically within advertising AB testing, is this something maybe a little bit more of a long format, so that, do you see companies that came back over and over again, trying different messages for the same thing until they found a way to connect until they were was speaking the right language or presenting in the right way.
David Rothzeid: 42:26
That’s tough. I think as an individual, me personally, I only got one first impression with the company. So if it wasn’t very good, you would need to bring in somebody else to spin it a certain way, or at least ensure that you are hearing what we’re trying to accomplish in and very direct manner. But you normally don’t, you won’t see the same person over and over and over again. The defense system is massive and fractured. So if you didn’t get good traction with somebody the first time, you may not necessarily want to spend time on that same bridge.
Try to enter through a different focal point. There is any number of people on the inside that want to help companies be successful, whether they can do it directly or indirectly, go find that person, try to figure out how they might be a Sherpa for you recognize that they are busy. They’ve got a job, right? They want to help, but can they get you connected to somebody else who is in a better position? Right? So I think it’s important to let them know you’d like them to help you find success and what your goals are. And if they take to you, then certainly use it. Don’t abuse. It also recognizes it can only go so far.
Josh Strawczynski: 43:48
I said the last one, but anyone that’s familiar with anything, I do know that I take too much interest in where I say I’m in a wind. Let’s talk about shippers, water barriers. If I find one, buying them a drink, forming type friendships, the way we would in the commercial world, how does this play out in a military one.
David Rothzeid: 44:14
Totally different. We have a conflict of interest and we’ve got rules, governing gifts. I mean, I think I had to take training once a year on what my limits were. So I think it’s like $25 in any single outing and no more than $35 over the course of the year. So you can’t take them to a baseball game. In fact, I have this funny story when I was at defense innovation unit and we had just signed this contract with this company. They were a series B company. So it was, this was a meaningful contract to though I think it was about a million dollars. And the guy who I had interacted with and negotiated with was like, all right, I want to take you to giants game, got boxed. You know, our corporation has box seats or whatever. And I was like, sounds great. What’s the face value of the ticket? And then he was like, he got it right. We were friends. We were friendly, but I wasn’t going to go spend three hours at a baseball game and pay whatever the based off us. So now you can’t really do those things. That doesn’t mean you can’t have meaningful relationships. So there is any number of people that I would meet up with and see them at conferences and we would get drinks, but there would be two checks.
Josh Strawczynski: 45:29
So you, we can go and play golf together. Okay.
David Rothzeid: 45:32
I’ll do it .
Josh Strawczynski: 45:33
And you’re paying for it. So fantastic from now on every time we go out to the business meeting.
David Rothzeid: 45:38
Well now in venture capital, so I’m able to be in the mood.
Josh Strawczynski: 45:43
Okay. But that there is still relationship management and the benefit of going out, having someone on your team, innovators and founders are not always very magnetic people. Sometimes they are a little bit robotic. So having someone on your team that is a connector who is good with people can really be a hack to success if applied the right way and if they are connected.
David Rothzeid: 46:10
Certainly. And it’s an important, but still not sufficient right now, government, the person talking at the meeting, when you’re trying to describe your technology, you don’t want the salesperson who is able to only be in generalities. The military. A person gonna want to know all the technical competence behind what you’re doing, but at the same time, relationships are still very important. And there’s any number of, you know, we were, I think the military is fairly famous for the revolving door. Of people who spend their 20 years, they get out and then they go and join business development teams for any number of companies selling right back into the network that they know best. Or they’ve got a little bit of a half-life. Because the longer you spend out of the service, the less relevant of contacts you have and important positions. So, you know, it’s like anything relationships matter, but it’s a constant evolution. And knowing what the organization structure is and knowing where to look for those solicitation opportunities, may be just as important as having someone who can build those relationships on a golf course.
Josh Strawczynski: 47:21
In our agency, we use the metaphor of what can I do today to move the needle. And it doesn’t mean going from zero to the end of the race, it means what can I do to have moved to the next block? And so when we talk about hacks, that’s really what we’re talking about is how can I skip a block or speed through that block as quick as possible. I think today we’ve lost, we’ve gone into the lengthy and bureaucratic process that is getting a military slash government contract. We’ve also uncovered a few gyms. There are things people might want to be thinking about the can shortcut that. So feeling awesome. We don’t usually get to 50 minutes on a podcast, but there was just so much gold there. Finish us off with this. You’ve now moved into venture cap. You’re going to be in a super interesting space and you’re already looking at a broad range of things. It’s a super broad, final question, but what’s got your interest right now.
David Rothzeid: 48:25
I think EdTech is a really interesting area and untapped. I think that the way millennials come into more and more positions of prominent power, that the recognition of how to do things online or being comfortable with this remote work world. The fact that we’ve got this gen Z, you know, that’s coming in and taking also important positions in the workplace, they don’t have the tolerance for things being as brick and mortar as you know, generations before us. And I feel like EdTech is straddling that line to help keep people connected, ensuring that we’re doing things the right way, but efficiently learning how to take on that next advancement. This might just be because I had a call earlier today with an EdTech company, that’s dual-use technology focused, but I think it is a very exciting place. I think the United States is a little bit behind when it comes to embracing it relative to, some of its Asian peers, but it’s a fascinating place.
Josh Strawczynski: 49:36
Very interesting. Charles covers from the Charles COVID show always says, if I can take one gem, from every interaction I go into, imagine where I’m going to become at the end of this month, this year, these tech guys, there are a lot of gems in there for people to take away. David Rothzeid, thank you so much for your time. I’ve been wanting to do this for a long while and unedited. This is better than I could have imagined. Thank you so much.
David Rothzeid: 50:02
It’s been a pleasure Cousin.