How Defense Tech Is Evolving and Harnessing User Input

Montana: I'm Montana Ware. I'm an attorney at Orrick. I work in our technology companies group. And I'm based in Austin, Texas. I work with a lot of defense companies, with VCs and other investors who are interested in defense. This is my friend, Jim Rabuck, he's with the Defense Innovation Unit. Jim why don't you tell us a little bit about what you do at the DIU.

Jim: So my focus, Regional Director inside DIU, I also lead the Defense Innovation Community of Entities. What that means is think like Army Applications Lab, AFWERX, NavalX, DARPA, there's about 130 of them. My job is, how do I herd the cats? How do I get them to focus on strategic efforts that matter for national security?

Montana: So when was the DIU first started? It's a pretty new agency, right?

Jim: So go back to 2016, Ash Carter, working with the president says, bottom line, Department of Defense moves way too slow, takes years to acquire technology, takes years to get it in the hands of the warfighter. The bottom line is that we're just not moving fast enough. So DIU gets stood up. And what it first started as is, can we go connect with the absolute best technologies in Silicon Valley that VCs have invested in, and can we get it pulled into the DoD? We went from a $30 million organization back in 2016 to now just over a billion dollars.

Montana: Do you guys ever encounter any legal or regulatory red flags or concerning things that you would sort of advise the companies you work with, the companies you talk to, to go seek counsel on, CFIUS, facilities clearance, ITAR, what do you see?

Jim: All the time. From a standpoint of where we try to help sherpa them through the process, absolutely, that is one of the key areas. Like, great, you got a product. There's some significant hurdles that you got to get through to actually get into the hands of a warfighter.

Montana: What can defense founders and early-stage defense companies do to help maximize their chance of success when they're trying to sell to the DOD?

Jim: You have to find who's the user that absolutely needs this? Like, who is the guy that is using the product? Then you have to figure out who's the agency that's actually going to buy the product. Usually that's an entirely different organization that has no idea who that user is. If a startup can walk into the room knowing who that user is and have that user bought into what they're doing, that accelerates the process significantly.

Montana: If you are a tech company that develops defense technologies or dual-use technologies in 2010 versus 2025, what are the differences in that acquisition process, in that sales process, and are our technology companies, are our tech founders today, are our new defense startups today in a better position than they were 15, 20 years ago?

Jim: The bigger companies in 2010 were very entrenched in the way that they were able to get contracts. They'd been doing it for years, hiring senior leaders out of the Department of Defense, and a lot of times able to get into that requirements process early. What it looks like today is that the end user has a voice, and what I mean by end user is the warfighters that are out there in the combatant commands and on posts, their voices are heard by the companies, whether startup or big prime, they have the ability to go get answers for themselves. And now it's kind of, I wouldn't say democratized, but it's made it much easier for venture-backed startups and the small businesses to get access to the contracts that they need.

When we talk about DIU and when we talk about why we exist, you can go down to that “why.” It's that we have an adversary. They are a peer with us in many, many ways. And our goal is to make it so that it is so painful for them that if they choose to start a war with us—it really just comes down to that they don't want to start a war with us because of the decisions we've made beforehand.

Montana: There's a concept of never letting it be a fair fight.

Jim: Yeah, absolutely. You want to have every advantage and every possibility. So when we start looking at, you know, competition in China, we can make bets now to stop any sort of aggression from China or our adversaries.

This is why we exist. We exist to help the best commercial get into the hands of warfighters. And if you have a product that can work with us, we're here. We'll make it fast.

Montana: Amazing.

Jim: Thanks for having me.

Montana: Thanks as always, Jim.