Interview with David Rothzeid (Podcast Transcript)

[00:00] Richard C. Howard: Ricky here, owner of Dodcontract.com and host of the Government Sales Momentum podcast. Thanks everyone for listening to the Government Sales Momentum podcast today. I've got a longtime friend, David Roth, side on the show today. Dave is the vice president of Shield Capital and how I know him from is the Air Force. Dave and I work together at Hanscom. We're both program managers together there and he's done a lot of really cool jobs from Ghost program, which he'll talk about maybe if you're lucky, he'll talk about his PM experience. And then he went on to DIU, which is a really interesting organization, and ultimately the ABMS Temper Battle management System, which was near and dear to my heart and I'm sure David to some degree. So, Dave, how are you doing?

[01:54] David Rothzeid: Doing well. Life keeps bringing us back together. I feel like you sort of under sold the way we work together. I'm pretty sure I worked for you. You were signing my performance reports and keeping me on the line.

[02:07] Richard C. Howard: We're all on the other side of that now, right? So now we can let our beards grow a little bit longer and chill out. But one thing I did leave out was that you were the lead singer for our band, the Merkel Hash Trees at hand. Merkel Hash Trees, which may be the legacy that lives on.

[02:28] David Rothzeid: I mean, I think you should tell our podcast listeners what a Merkel Hash Tree is.

[02:33] Richard C. Howard: If I had to describe the Merkel Hash Tree algorithm or whatever the hell it is again, it'll it would probably put a lot of people to sleep. But maybe that's a story when we do our next podcast. How we came up with the Merkel Hash Trees as a name, but I believe that was related to an insider threat program we were working on.

[02:54] David Rothzeid: We'll just say it was classified. Stick to acquisition here.

[02:57] Richard C. Howard: There we go. That's classified. I can't get into it. Can't get into that today. So how's everything going?

[03:03] David Rothzeid: Life is good. So I separated officially in September of 2021, but also was able to do a program called Skillbridge, which I highly recommend to any transitioning military personnel, allows you to do an internship with a company that you think you'd like to work at. And so I was fortunate enough with Shield Capital, and I'll talk a little bit about how I found myself in this role, which I find to be pretty unique, but also maybe a wide interest to any military people that are listening or people that are familiar with the government acquisition space if they're trying to get into venture capital, like how that all sort of came together. But yeah, life is good. Being a venture capitalist and kind of learning a new set of skills, getting to interact with amazing entrepreneurs who are trying to build disruptive technology and make an impact not just on national security, but in the broader world market for whatever it is that they're doing. And I can't complain. It's really nice.

[04:04] Richard C. Howard: That's awesome. I feel like you basically have took what, maybe some of the stuff we were working on, enhanced them in the Air Force together and kind of taken that to the next level on the non government side with some of the companies. I know that we were always trying to hire those companies that had innovative solutions and advanced technologies, a lot of whom weren't used to working with the government or maybe didn't know how. We can hit a little bit of that today, too. I'm sure the audience will be interested in that. But let's start with you, man. Where are you from? And kind of maybe walk us through how you landed in the Air Force as a PM and some of the jobs we had in there.

[04:41] David Rothzeid: Oh, man. I guess it's not so dissimilar from a lot of people, but I grew up in Ohio, Cincinnati, so I'm a huge Cincinnati Bengals fan. I finally had my first good year in life ever. Very rewarding. Went to Miami University, sort of stumbled into the ROTC program. I could not have told you the difference between an officer and enlisted person until I joined ROTC my sophomore year. Went to field training, was really bad at it. The first half did okay. The second half, my field training officer, she was like, you know, David, I'm not going to lie, pretty worried about you there. But it turned out she was a contracting officer. And when you're at field training, you get to sort of see and hear from a lot of the different jobs that people are doing. And at that point I thought, I'm going to be a fighter pilot, right. I have great vision. I'm in pretty good shape, right? That's what you do. And then you kind of learn about the rest of what the Air Force does and I was an economics major, so I really gravitated towards that business side and was able to be a direct accession as an acquisition officer with my first duty assignment to Peterson Air Force Base. And I kind of said, I'm going to keep doing this job while it's fun, and that's exactly what I did. So 13 years of a lot of fun, a lot of good memories, got to live in a lot of cool bases, locations, met incredible leaders, worked with incredible people, and finished up at the Pentagon. But that first duty assignment at Peterson Air Force Base, working on a very sleepy ground satellite control system called the Air Force Satellite Control Network. My first job was trying to remove and replace some Windows 95 software and implement Windows XP, and that was in 20 08, 20 09, as well as upgrading a few Cisco routers that I think had also gone obsolete. So it was an interesting place to sort of learn about the variability of acquisition. But after Peterson, I was dead set on getting to a city because I just love cities, right? And Hanscom Air Force Base. Being close to Boston finagled my way into a Green Door assignment. And that's how I got into Special Programs division. And of course, that's where we met.

[07:01] Richard C. Howard: Greatest city on Earth. I know everyone, you may not agree with that, but I was always trying to get back to Boston. It's interesting about the acquisitions path because I was kind of the same as you. Coming in like, hey. I did fly for the first part of my career. But I remember going through officer training school as a 13-week wonder and asking like. Hey. Just thinking about. Hey. Beyond flying and what is there and what could be an interesting job. Not just in the Air Force. But afterwards, a skill set because you always hear about transitioning military that have a hard time finding a career afterwards. But one thing everyone told me was, hey, if you want to be employed and actually have a lot of opportunity to provide value, becoming an acquisitions officer is really an interesting pathway, and it's something that I kind of kept in the back of my mind until I later joined the ranks. So fast forwarding to you, we both ended up at Hansen around the same time. What year did you get there?

[08:03] David Rothzeid: I got there in 2012. So there was a little bit of an internal crisis right as they were moving away from Electronic System Center and embracing Air Force Life Cycle Management Center. So to me, it all seemed fairly obvious, like, okay, we don't have these centers anymore, but we still have our programs that we have to execute on. But Hanscom Air Force Base was going through a little bit of a crisis establishing the two peers there C Three Inn, which we both worked in, and then at the time, PEO Battle Management, now known as PEO digital. And then they were standing up a third one on the nuclear site. But it was an interesting time to get the Hanscom. I went from post milestone C acquisition. So dealing with programs that are in sustainment, dealing with a lot of obsolescence issues, like how can we keep the operational mission going? And then when I came to Hanscom, in a lot of cases, we were sort of pre milestone A, so that early R and D trying to help shape what are the future requirements going to look like, what is this program going to turn into when it grows up, right? Once it gets its established budget, which I'm sure we're going to hit on a little bit with the advanced battle management system ABMS. So that was kind of a culture shock for me. And then, of course, I went from very much out in the open, everybody knows about the technology capabilities of the AFSC Ed to green door signing where I'm getting right into the classified programs. And some of them were interesting, some of them I would go on to learn, are not even relevant from a technology standpoint, especially after spending a couple of years in Silicon Valley and seeing the art of the possible, art of the possible. So it was weird kind of dealing with this different frame of reference throughout my acquisition, but something you touched on, it's a little secret, right, about how fun and different acquisition could be. And when I say acquisition, I'm also lumping in not just program management, but also like logistics contracting, financial management, science, engineers, engineering. So it's this big broad and when I try to tell people what is it, it's like, hey, you're kind of like a businessman, right? And of course, every organization is a little bit different in the way that they're trying to sell product by product, operate product. And that's really the lifeline and the lifeblood of what acquisition does. So being a program manager, you sort of have to learn all of these different tricks of the trade and of course, something that makes the DOD fairly unique relative to a lot of industries. Although I'm sure in the health care center they like to argue with you about which one is more burdensome. Is there's just a ton of rules and regulations and policies and instructions and guides about how you should do things and then, of course, moving around to different organizations. Each one has their own little culture or the thing that they're more familiar with. And so even if you're an acquisition officer at Peterson Air Force Base, you might have a totally different lexicon for the way you explain doing the actual work. When I went to Hanscom and so it's a never-ending learning cycle. I wouldn't say it's the most efficient thing ever, but at the same time it keeps you on your toes.

[11:23] Richard C. Howard: Yeah, definitely. There is a lot that goes into putting the company on contract. And as I espouse on the podcast and with a lot of our clients, is having focus with your company trying to sell to the government, knowing who you're selling to is so important because what you just touched on was everyone buys a little bit differently. Right? So if I know that I'm selling to a unit of Hanscom Air Force Base, and I know that unit might use GSA to put a company on contract, for instance, versus maybe at Peterson, they're using blanket purchase agreements, simplified acquisitions, just a lot of faster, lower dollar purchases, maybe, to get to the same thing. And you just need to know who you're selling to and understand their mission and understand their contracting means. I think it's interesting too, something about Hansen. When me and you were there, there was a couple of years where we were in the same unit, where we're trying to do things a little bit faster than the rest of the Air Force, and not only within the unit, but you actually got out. You had a chance to go to the Ghost Program as well. And I don't know how much you can actually talk about that, but at least I could say it's an opportunity for an acquisitions officer to learn how to maybe do acquisitions with Special Forces and run a little bit faster. And seems like that you took that and kind of ran with it throughout the next few years of your career. You want to talk about that at all?

[12:46] David Rothzeid: I'd love to. I mean, the Ghost Program, it definitely rebluded me. And that term means, like, maybe you're getting a little bit downtrodden with your day to day work, and then you go and you do something that's a little bit more exciting and different, and it just re energizes you and wants to make you kind of want to stay in the military, but also, like, bring change with you right to wherever you're at. And so the Ghost Program, I think, does a phenomenal job of empowering young acquisition officers with a slate of missions that there isn't like a right answer per se, but somebody is depending on you to get something done ASAP. And I got there in December of 2013 and within a week was handed a requirement and a budget line around an urgent operational need in Africa and needed to put a contract together ASAP so we could go track a bad guy. And that's about the extent of what I can tell you. But in that time frame, I built out the justification and approval for why it could only be this one vendor that could perform the duties of putting together the determination and findings, putting together the statement of work, putting the DD 254, the security documents, the contract deliverables, the contract line items. Yes, I had a contracting officer that I was sort of working with. And yes, I had a requirements person that I was trying to address their needs. But as the Ghost, this is getting close to Christmas break, right? They just found the thing and, you know, like Thanksgiving to Christmas at headquarters position, even if it's so calm, people are sort of going into vacation mode. But by working over Christmas, we got that contract on, and we were able to fly missions in Africa to do this thing that was critically important, and it persisted for a couple of years. And that was like a huge learning opportunity to basically take this requirement, run it end to end, and then see it in operation calling down range to make sure that the contractor had the right type of facilities to be able to do what they needed to from an infrastructure standpoint. And that was just the tip of the iceberg of what we were doing down in my Ghost program. And then you got to go downrange. I have one story where we were moving a Scan Eagle site from one baseball team to Candehar and having to negotiate with the International Service armed people ISAF, and get the right type of frequency so we could operate from the base. And then we were working with the G Four to help stand up this new location with connex containers. They went home. We had a forklift, and we needed to be operational the next day. And so fortunately, I had gotten a forklift license back at Peterson Augmented Duty, and I was like, well, they left. We got to get this done. They're contractors. They can't drive it. There's just like a can do attitude when you're dealing with the SOCOM. And so coming back to Hanscom, then Colonel Kligman at the time was like, hey, David, there's this Combat Cloud Initiative, and I want you to own it and make sure the Air Force has a seat at the table and don't let the army and Navy dominate this thing. And so the birth of the Tactical Cloud Reference Implementation PC, and I think without that so calm experience, I'm not sure how well that could have gone for us.

[16:19] Richard C. Howard: Yeah, I think a lot of people listening would be or probably our maze because you're talking about your contracting effort at SOCOM. How long did it take you to actually put that company on contract?

[16:30] David Rothzeid: Less than 30 days.

[16:31] Richard C. Howard: That's extremely fast. Extremely fast. And it was a sole source contract.

[16:35] David Rothzeid: It was sole source. So we had to justify right. So I had to put together the body of work as to why this company was the only one that could possibly do it. And so come. Everyone says they move fast. They've got special authorities. That's not true. They don't have special authorities. What I would say is they do a much better job of linking their acquisition community, their contract community, their requirements community, and their operational community. And I think that's thematically, something that's super important for any small businesses that's listening to this right now, if we want to dovetail a little bit into like how most small businesses get their foot in the door, they're leveraging the SBIR program, right?

[17:12] Richard C. Howard: Right.

[17:15] David Rothzeid: Having an SBIR, especially a Phase Two with a company, that's great, someone's there to provide you some sort of feedback around the utility of the thing that they're doing. But as a small business owner, as an entrepreneur, depending on that end user or that program office to help you scale the feared valley of death, you can't depend on your government sponsor to do that for you. You've got to bring together the person from the Air Force, the Requisite major command. Right. So in a lot of cases that could be Air Combat Command or Air Mobility Command or Global Strike Command or Special Operations Command.

[18:01] Richard C. Howard: Here we're talking about someone with a requirement. Right?

[18:06] David Rothzeid: Yeah. You might want to even be thinking about who's the combatant commander that's going to ultimately be using this thing. How can they advocate that they're getting utility? So ensuring that you're positioning yourself to participate in an exercise, whether that's Trident Inspector or Pacific Rim or Red Flag. Right. How can you get your stuff in front of an operational community that's also going to vouch for it while you're building out the requirement? And then if you're not dealing with the program office, maybe you're dealing with a research lab. How can you make that connective hand off to the right PEO? So that the responsible stakeholder. Who's going to help you implement this into an existing program of record, which I know everyone talks about. I need to become my own program of record. I would caution you. And we'll talk about my time at the Pentagon, about what it means to stand up a new program of record. Because let me tell you, you might be waiting a while, but there are existing programs that are probably doing something similar to you. And how can you weave what you're doing into their current acquisition program baseline and make that program manager who's trying to be responsive to their requirement holder a hero because they're delivering something even better, more joyful than the requirement called for in the first place?

[19:29] Richard C. Howard: I didn't want to cut you off. I was going to say this is an interesting angle that I didn't intend to get into with you, but I would say that I don't want to say it's the most common challenge, but for companies that have gone and won their SBIR, that have found the user, the end user says, here's their software or tool and this is awesome. And a lot of times they're able to sell it small scale to units. That usually turns into a silver or two. Right. But scaling it from there, what do you have to do? And that's kind of what you're touching on there. Right. And then certainly there are some contracting.

[20:02] David Rothzeid: Well, the contracting is separate, right, right. And we will definitely touch on the various channels of contracting. And what does that mean depending on where you are from a maturation standpoint? I have a lot of opinions and thoughts but I would just say the way that you build advocacy for what you're doing you have to recognize that there is a status quo and to do something totally revolutionary is difficult. What I would advise companies is how can you be evolutionary, how can you build on the programs that exist today right. And just make them a little bit better because your solution solves a pain point and everybody who needs to be an advocate is aware of it and you're sort of being that central focal point bringing them all together. So when we talk about bringing them together, it's the program office. Of course it's the requirements owners, right. The match comps, it's the users. Maybe they're at an operational unit or maybe they're actually at the combat command themselves and then at a certain point you'll want to get the Pentagon involved too. Right. That stakeholder because that's the person who's going to ensure that existing program continues to carry forward their budget and can even potentially put a small line item in the justification books. The J books. Right. That's the R docs. P docs so that your niche thing can get established nestled inside of an existing program.

[21:32] Richard C. Howard: Sure, that's great advice and you're right, I mean there's plenty of programs that exist. Training comes to mind where you might have a training program in a certain field in the military and maybe you even do have a revolutionary technology but it's centered around training. You might not need your own program of record. You could fit squarely into this training bucket and then like you said eventually talking with the Pentagon, we talk more around hey, program office requirements and then user. But you're right, there is a time when talking with the Pentagon is what you need to do. We had someone else on who is six there that did a lot of the congressional work and he discussed and you guys can check out I'll put in the show notes where you can find that podcast. But when it's the right time to be a lobbyist and when it's the right time to be talking to the Pentagon but there are different stages to this and it's just kind of knowing where you're at and what's appropriate for the time.

[22:30] David Rothzeid: Yeah, and I think it depends on what you want for your business. So if you're looking to become, if you want to become like the next anderal right field AI, then at a certain point you're going to need to engage in some sort of lobbying effort right. And establish your own programs of record because they're trying to go up against your traditional defense primes who own a lot of the programs of record and the channels and access points. But if you're trying to be a small business, medium sized business. Maybe you're not going to be venture backed and we can talk a little bit about how I think about the defense industry base and venture capital writ large. But I would advise those companies to look at, from a contracting standpoint, look at GSA schedule. Right? Because that can be an easy button that you can continue to refer your DOD customer to buy capability. But of course not every DOD entity is familiar with GSA schedule. Or maybe they don't have the right waivers in place and so the timelines can drag on super long. Another opportunity is to partner with the Primes right and access the programs of record that way. And I know a lot of people can be very skittish about working with the Primes. They're going to take my intellectual property or they're going to cut me on the margin. I would say, you need to develop the right relationships with the right Primes because that's what it comes down to. Contracts are very impersonal, but if you can get the right types of advocates at the prime, they will take care of you and do right by you. And I've seen that time and time again when you don't take the time to build those relationships and ensure and it just becomes a transaction, then it starts to get a little bit unwieldy and maybe not as friendly to the entrepreneur, the small business, medium sized business owner themselves.

[24:25] Richard C. Howard: Sure, yeah, no, that makes a lot of sense.

[24:27] David Rothzeid: Interesting.

[24:28] Richard C. Howard: So relationship is something we talk a bit about. What's your opinion on the importance of relationships? Not with maybe Primes, but let's take small business and the program office. In your opinion, where does the relationship fall in the level of importance there?

[24:45] David Rothzeid: If you're dealing with a research lab, I would say their familiarity and understanding of the small business and wanting to tinker with the technology and make it great is probably very high. But is the research lab person that you're working with understanding what sort of business goals you have? And are they going to help you scale and grow your company to whatever your dream and vision is? Probably not. And then on the program office side, I hate to say it, but at least when I was a lieutenant or captain one, we didn't touch SBIR. It was kind of an oddball side job. It basically just looked like a three and a half percent tax to our RDP and E budget line and we didn't expect much good to come from it. I have to admit what App Works has done in the last five years now in revamping it to try to build out the defense industry base and try to bring successes to the forefront. I think the program has changed dramatically. I don't think we'll know about its successes for several years because it takes time for these things to sort of work through the systems. Another Silver program that I was pretty impressed with and just got a recent briefing from down at Austin is the Army Application Lab and their Spartan program where they bring a very nice white glove approach to bringing in the user, bringing in the program office so that when you hit success, you've already got advocates trying to plan for that transition pathway. But that's very difficult to set up, it's very difficult to scale it. And so I find that there's a lot of Silver phase two happening. But if you're lucky enough to win one of those and you cannot just solely rely on the program manager on the other side to do all of your heavy lifting to ensure that you.

[26:41] Richard C. Howard: Transition, no, what you talk about, it's interesting because a lot of that you mentioned being a program manager is almost like being a jack of all trades. And what we talk about with a lot of our clients and just people that give us a call for a consult or interviewing people on a podcast is the easier you can make it for your contracting team the better. Right? So if you can come in and link together, hey, you're already talking with the requirements people and maybe you have an idea of where there's some funding that can go on contract and make it easier for them to put you on contract. So if you have those relationships in place with teaming agreements with companies that have maybe contract vehicles. Whether it's GSA or something else that allows us to get to you. I say us like I'm still in the government. But it allows the government to get to you a little bit easier because there are certainly times where there are companies I wanted to hire that I had no idea like how to get to them because there was nothing you have to be really creative to get them there. So there's certainly some work there that they can do because I want to get to Shield Capital but there are two more pieces to your Air Force career I wanted to jump on. I'm extremely familiar with ABMS because it's something I worked on a lot. But I know in the beginnings, in the birthing of AVMs, I guess you could say you were in the unit when for instance, the capabilities based assessment was written for a BMS and we got to see that program which is supposed and you ended up becoming the PEM of this. This could be an extremely large program, we'll see where it goes. But this started as the replacement for AWACs and then we have JSTARS and then recently in the news, of course that turns into an AOA later on and then it became a program of record and you became the PEM for that. Recently we saw that it looked like the wedge tail going to be providing some support to AWACs that are being retired. So why. Don't you give us kind of an overview of your experience as, first of all, tell everybody what a pam is because everyone doesn't know what a pam is. You became the ABMS Pam and then a little bit about your time there and where you think ADMs is going.

[28:56] David Rothzeid: Okay, so we did skip over DIU. So I'll say that when you were doing the capabilities based assessment for what was supposed to be the original ABMS, that was 2016. I went to DIU and then got to the Pentagon in 2019, just as ABMS had sort of evolved to become not a platform, not a sensor replacement, but what Dr. Roper at the time coined the Internet of Things. And then what followed was all the product lines, the famous and infamous ones, I think, at this point. Right. And it was this idea around should we be constrained to just a platform or is it really how do we move data around the battlefield so that the decision makers have access to the right information at the right time, at the right level? Yeah.

[29:51] Richard C. Howard: So we had an unexpected power interruption, which caused my entire office to go out. But I'm sure through some creative editing, we will get back on track here. So for everybody, if I were trying to re-sync you in here, we just walked through almost all of David's Air Force career. Very obviously, briefly, we hit on that. We touch points and start talking about ABM and that program and what it entails, and we're going to touch on DIU. I skipped over that he touched on a little bit. But let's continue where you left off with advanced management system.

[30:31] David Rothzeid: Yes, thanks. I was hitting on data becoming like the new oil, and we see it happening in our everyday lives. Right. So anything around social media somehow that is being monetized and then pushed back at us for selling products on the government side. How can we leverage all of this incredible data that we're getting off of our exquisite sensors. Off commercial sensors. And paint a picture of the battle space so that commanders have the best awareness. So they can deploy the right asset at the right time based on whatever our rules of engagement is. And so by the time I got to the Pentagon, ABMS had started to morph into that. But what was difficult is decoupling what it had been, which was a replacement platform for the aging AWACs and then the aging JSTARS. And that brought in a lot of political issues. Right. Because nobody wants to retire jets, because there's a lot of jobs associated with that. There's a lot of heritage and history. We are trying to talk through the narrative of why we need programs to be architected differently to enable the data to move across the battlefield. And it shouldn't matter whether it's going off of military SATCOM or line of sight across military sensors, or leveraging commercial satellites. Right, in the case of something like Starlink. And so it was an exciting time to be in the Pentagon. It was very difficult to explain this sort of revolutionary concept because traditionally your weapons systems again are very much a stovepipe and they're wholly contained and you've got the technology is going to probably be awarded to some sort of integrator and they're going to do it all for you. And we are taking just a very different approach now. By the time that I left the Pentagon, we had successfully transitioned the program to the Rapid Capability Office and they've definitely taken some of the tenants of what was started. But they've also, I think, from what I can tell, refined it a little bit more to how can we build out certain capabilities extremely well to do specific functions. But I think what the lasting legacy of that iteration of AVMs will be is to call out a lot of our C two weapons systems that were once upon a time built in a vacuum and no longer allow that to happen. So that the systems are not dramatically different because what they're trying to do is command and control. And what they need to be able to do is communicate with one another regardless of where you are. So I think that'll be a very good lasting legacy. And what we've seen then at the OSD level is this embrace of Jazzedu, right? Joint all domain command and control. And so how can the services better partner together? Now, specific to ABMS and the CDA that you wrote and then the AOA that it entailed, I think it has led the Air Force to say we still need an asset in the sky being able to do certain components of command and control. We still need those types of sensor capabilities because of the military advantage that it provides. And of course, this is something you could probably speak to way better than I could, but it does seem like the wedge tail is the direction of the Air Force is going.

[33:51] Richard C. Howard: Yeah, we'll see. It hasn't happened yet. I think one theme you basically touched on it, which is that I think ABMS and eventually jazzie too, and even other things that we were working on in some different areas because we had the opportunity to work in a lot of different places back in Hanscom and beyond, is that idea of, hey, how do we actually communicate correctly? How do we get the right data to the right person so they can make a decision? And it's not just command and control and a BMS, it's everything when you.

[34:21] David Rothzeid: Think of business intelligence, right? Yeah. This is something that companies are struggling with, and I think you've seen this with the amount of money that's willing to invest in startups that are digitally native, so built on the backbone of the internet, they're not beholden to some of the legacy systems of how they were doing decision making in the past and they're just able to operate at a much faster rate. That's why you're seeing just so much disruption in the marketplace with these new internet-born type companies. And that was really something that I took away from my time out in Silicon Valley with Defense Innovation Unit. When I got there, it was still di UX, right? It was at the change of the Guard when we went from the one DOTTO to the two auto. And managing partner at the time was Ben Ross Shaw. And that's who I now work for at Shield Capital. So that's sort of my LinkedIn connection. But my role at VI UX was helping to build the business model, right, that we now know as the Commercial Solutions opening and leveraging the underutilized acquisition Authority, OTAs other transaction authority. And it was just an awesome time, right. And nobody was talking about how can we leverage commercial technology to solve military pain points. Maybe in small circles inside of Special Operations Command, this was going on because they've always just sort of been a little bit ahead of the curve. But by and large, from the big services it was we've got these requirements. We have assumed that we are the creator of the next generation of advanced technology and we're going to pay somebody to build it to our specification. But on the flip side of that same world in our personal lives, we're seeing the evolution of technology just get better and better and better. And the ability to communicate and see things and interact was just far surpassing the technology that we were seeing on the military side. And that's why Fence Innovation Unit was stood up in the first place, right? As Ben Secretary of Defense Ashton Carter just saw this screaming bullet train of commercial tech and being like, oh, if it's being developed on the commercial side, that means our adversaries at the click of an Amazon button can get this technology in their hands and use it against us and provide themselves an asymmetric advantage. We need to become more reactive and flexible in embracing this technology so that our own war fighters can enjoy the benefit of it. And following Diuex, you've seen this encouraging sign of venture backed start ups building technology that you would see on the commercial side. Also be fairly interested in the Department of Defense, and that's where the Shield Capital thing comes into play, right? So we're certainly not the first venture capital firm to be interested in this dual use technology space. And my dual use, I know it's probably I've talked to some people, they hate the term because a stapler is dual use. I can use it in the military, I can use in the civilian sector. What we mean is more advanced technology that has some sort of intended military capability that is fairly unique to the mission set, but also the basic same tenants can be applied on the commercial sector. And for us, when we invest in a company, their DNA has to be that of I'm trying to build technology that is disruptive or innovative or unique. And I have the intent to sell and grow in both the national security marketplace and non national security, right? Whether that's in the financial systems, whether that's in health care, whether that's in consumer tech, right, you name it. And the technology, by and large can be applicable to multiple industries, sure. And to some degree, some are easier than others. But that's what Shield Capital is looking at. Who can we invest in and help them build the national security marketplace as maybe a secondary or tertiary market? Because by and large, venture capital, we are judged by the returns that we get on the investments that we make. We've got that fiduciary responsibility to our limited partners, right? But we need to sell into large markets. And while the DOD, right, is $770,000,000,000 marketplace, most of that is in milpers, and then another large majority of that is in healthcare, and then another large majority of that is in programs and sustainment. So when you look at what is the actual addressable market of the DOD, it's significantly smaller than I think a lot of people say. And so for a venture capital firm, by and large, your company that you're investing in has to have some sort of an addressable market in commercial because that's where the real, what we call the Tam total addressable marketplace resides.

[39:29] Richard C. Howard: When do you think a company that's listening to this? Because there are a lot of companies that either have developed a technology that they would consider disruptive or maybe they're in the process of it. When will a company like that be ready for this type of investment?

[39:44] David Rothzeid: So there's different investors at different stages, right? So you've got your angel investors and they are just willing to take a flyer on a slide deck, right? Maybe just the idea and concept. And so they're like, hey, I like the cut of your jib. Here's a $50,000 check to get started. You've got seed investors, so maybe you've got a couple of people on the team and you're building your first prototype. Maybe you've even got a minimum viable product MVP that you can show them that gets them excited. For Shield Capital, we're still an early stage investor, but we're looking at that Late Feed Series A. So you've probably got some customer traction already. Maybe you don't have a ton of recurring revenue, but you certainly, if we're talking about like DOD parlance, you've definitely at least got a phase two SBIR, or maybe you've got a Di, you OTA or you're in a consortium, a different consortium, or you're partnering with a prime and selling through them. You've got to have a customer reference call that I can make to validate that your technology is bringing joy to somebody, right, that we're not building the technology from scratch, that this isn't some aspirational thing. But what we're going to do is invest in you to help build out your team so you can hire the right business development people, the right marketing people, maybe augment your engineering team so that you can start to scale and start to turn this bespoke product into something that hopefully becomes ubiquitous across a number of different use cases. And selling in and scaling inside defense is difficult. And so we recognize that that the sales cycles are longer, they're more difficult. But a couple of things that Shield brings to the table is one, we've got an incredible board of people that are just highly connected so we can get meetings in the right places with the right people. Obviously I lived my life inside this acquisition system. So while there is no silver bullet to growing and scaling as an entrepreneur, there are 1000 dead ends that you can walk into. And the goal is to minimize and limit the debt ends because time is the most precious resource for a startup. So how can you most judiciously spend your time trying to work through the bureaucratic DOD procurement system? The other thing that Shields Capital brings to the table is we have a strategic partnership with Elfre Harris and it's been incredible, right? And when we make an investment in a company, they take a very proactive response to OK, what is it that this company does and how can it potentially augment the things that we're doing inside our business so that we can provide a better experience inside the programs that we're running on behalf of our DOD clients. And so that becomes a great sales channel partnership for an aspiring technology company. So there's a lot of different ways to sort of slice the onion. But Shield Capital, where we sit is in that late seed series A and our intention is to lead that race. So we're going to take a board seat, which means we're going to be very involved with you as a founder. So you got to kind of have to want somebody with national security chops coming onto your board. But at the same time, our partners at Shield Capital have all led and run successful startups themselves. So they've been in the trenches. They can empathize with you, they can help provide and bring that type of advice. So you can continue to also grow in the commercial side as well. And that's just something that's I think fairly unique about Shield Capital. What we're bringing to the table.

[43:27] Richard C. Howard: Yeah, I think that's a very interesting formula. Certainly you have a lot of companies out there that are looking for some type of investment, but anyone looking to sell to the government, this is what we go over a lot, is typically a company is going to end up starting to hire people that have a background of a David Rothzeid, right? Or Ricky Howard or somebody that has maybe a network initially, but usually it ends up being a little bit more than that. Former contracting officers, program managers that could really help navigate, I guess you could say, the fire and the different contractual options and get them in there. So it sounds like with Shield Capital, first of all, you're there, which is an amazing bonus, but you kind of have that mixture of the funding and the David Rothzeid and the other people in the company that you mentioned that have those backgrounds. And that can be I mean, that's a recipe for success. L three, which is one of the big primes almost always when you look at a successful bigger company, they're subcontracting all over the place. They'll be subs themselves. They'll have people subcontracting to them and getting started, having somebody that already has the contract vehicles, the contracts, the different programs with the government to fit into that, that's going to make it a lot easier to get some of those initial contracts or subcontractors. So that is really interesting. So, Dave, I've had you on the line here for an hour. We've had a power outage and we've got some good back and forth. Is there anything that you would like to leave the audience with?

[45:04] David Rothzeid: Well, I mean, to the entrepreneurs out there, I can't empathize with you because I haven't necessarily been one myself, although I've led and started a few different programs inside the DOD. So from that standpoint, I can sympathize. But the DPD is a tough and challenging but also rewarding customer. And I just advise you to find partnerships with the types of firms that have the same values as you and can help you grow and prosper. This should not necessarily be a journey that's on your own, but it's certainly one that you have to lead if you want to be successful. And so I wish you good luck. If you're a transitioning military person, please feel free to reach out to me. I'd love to help where I can. And then if you're also trying to raise some funding for your own startup, Shield Capital, as long as you're dual use, as long as you're that late seed Series A and you're in either space, artificial intelligence, autonomy, or cyber security, I'm interested. Right. But really, it's just been a pleasure and an honor talking with you and catching up and maybe we need to dust off the guitar and I don't think I can really sing like that anymore. But maybe we can have a jam session.

[46:24] Richard C. Howard: Maybe your voice is a little bit lower in scratch here. We can do some easy top or something. No, that's great. Well said. I really appreciate having you on. And how can people find you if they want to reach out?

[46:36] David Rothzeid: Yeah, so, I mean, LinkedIn is probably the best. I ask that you send me a note. It can be a little bit discerning in who I actually connect with, so a little context goes a long way.

[46:49] Richard C. Howard: All right, sounds good. Well, we will put a link to your profile in the show notes. Thanks again for having on, man. This has been a great talk. I'm sure people are going to be very interested and hopefully first of many.

[47:01] David Rothzeid: Awesome. Well, all the best to you and the family.

[47:04] Richard C. Howard: All right, man, take care. Hey, guys, Ricky here and hope you enjoyed this episode of Government Sales Momentum. If you did enjoy the episode, please subscribe to the podcast and leave a review. It's very much appreciated. If you're interested in selling products and services at the Department of Defense, I have something for you that you're not going to find anywhere else in the world. The team and I created a program that takes everything you need to win defense contracts and put it into one place. Up until now, only large defense companies and a small amount of people in the know have had access to how products and services are really sold to the Department of Defense. I've taken all of that information and put it in a step-by-step training module that shows you how to consistently sell to the US. Military. If you join our membership, not only do you get the model, but you get weekly sessions with former DOD acquisitions officers for training and guidance to answer your questions and a community of likeminded, business owners that want to partner on different opportunities to bid for subcontracting and teaming, or just to discuss general strategy on how to sell to the DOD. You'll have access to every course I've created, every coaching session I've ever recorded, and every interview with an acquisition professional that I've ever conducted. And we covered topics that range from defense sales planning and competitor analysis to SBIR and STTR foreign military sales. The list goes on. Go to Dodcontract.com if you are interested, and I would love to see you in the membership. Thanks.

If you enjoyed this episode, you can check out New Horizon Conference where I talked about this conference I attended, its benefits, resources you can gain and where you can register for this type of event.