First and foremost, we have to be honest with American public. We have to call a spade a spade. I believe it is a Cold War and we should call it such.
You should all feel some level of butt clench when you're anywhere in the chain of a massive hack related to a capability you helped deploy.
Welcome to the Goat Rodeo podcast. We are back after I think about a month off here in August of 2026. I'm your host Garrett Smith, joined by my fellow co-hosts, regular co-hosts Dave Cottrell and Simon. We're all from Reveal Technology and we're grateful to have on the show today Dmitri Alperovitch, a polymathic Renaissance type himself. I will not do him justice by way of introduction, so let's hear how he introduces himself and then we'll get into a few topics today, but welcome Dmitri.
Thank you so much for having me. Yeah, I started my career in tech, founded a little company called CrowdStrike, now one of the top cybersecurity companies. For the last 6 years have been squarely focused on geopolitics, war fighting, spending a lot of time on the Ukraine conflict, but primarily focused on China, wrote a book on the topic called World on the Brink, America Could Beat China in the Race for the 21st Century, a national bestseller, and host my own podcast called Geopolitics Decanted, where we dissect the battlefields in Ukraine and Iran, lessons learned for Taiwan. And I'm also an active investor in both the defense tech space and broader technology.
Fascinating and highly credible background, and you're involved in so many things now. I think one of the main theses of your writing and presence generally is that we are now entering or have entered or have long been in what you refer to as Cold War II with China. I'm inclined to believe you, but I'd love to hear maybe a bit about the pithiest version of the defense of that statement, and then I've got a follow-up which will sound something like why does it matter if we label it Cold War II or not?
Yeah. Well, to me it's ridiculous that this is not accepted wisdom, right? And let me just run you through the comparisons of the first Cold War with the Soviet Union and the second with China, right? First of all, you have a global competition for supremacy playing out in every single corner of the world between the US and China, just like we had with the Soviet Union. It's not constrained to the Indo-Pacific. It's in Africa, it's in Latin America, it's Europe, it's everywhere, right? And it's military, it's economic, it's diplomatic, it's technology, it's everything.
We are on the brink unfortunately of war, right? You look at President Trump's request for a $1.5 trillion budget. It's not to fight Iran, it's not to give more aid to Ukraine. It's China, China, China, right? And the Chinese have of course been going through a massive modernization of the PLA, of the People's Liberation Army, that's unprecedented in history in terms of the scale and rapid changes that they've been undertaking. Really preparing for war with us and particularly over Taiwan. You have this arms race that's been going on. It's both conventional but also nuclear. For the first time in generations, the Chinese have dramatically been increasing their nuclear arsenal. So, they've had a pretty much a stable number of nuclear warheads at about 300, planning to destroy America if they wished for decades. Xi Jinping comes to power in 2012 and says no, I want to match warhead for warhead, missile for missile the US arsenal. I want to get to 1,500. He's more than doubled it already to 600 and the US intelligence community believes that they'll get there in the 2030s to about 1,500 total. Very similar to the first Cold War. We have a space race, right? We're trying to get to the moon in a couple of years. Why? Because we want to get there before China does. Like, if that's not sort of the defining element of the first Cold War, the race to the moon, that we're now yet again in, I don't know what else I can tell you to convince you that this is a new Cold War.
You have a scramble for military bases, right? We're expanding our bases in Guam and Mariana islands and Okinawa and other parts of Japan. The Chinese are doing that and Cambodia and Pakistan, even all the way to Djibouti. Really trying to establish their presence in that region, even as far back as Eastern Africa. You have an economic war that's been going on for quite some time with tariffs and export controls on both sides, with Chinese weaponizing their rare earths. You have a spy war. The level of espionage against America is the highest it's ever been, according to the FBI, including during the first Cold War, and part enabled, of course, by cyber. You have a tech war, right? Particularly with AI, but other elements as well. And you have a major regional flashpoint. I argue in my book that Taiwan is the new West Berlin, right? And in fact, it's even more dire because West Berlin really did not hold any strategic or historical value for either the United States or the Soviet Union, right? It's not part of, you know, Russian Empire. For us, it was an enclave within East Germany. It was really not a factor. And it had, you know, sort of moral and symbolic value, but beyond that, not much else. Taiwan is very different, right? Taiwan is the epicenter of semiconductor production, which is vital for the global economy. I argue that it's vital to holding the first island chain and containing China within the Eastern Pacific, Western Pacific. And for China, of course, it holds incredible symbolic and historical value that West Berlin just never did for the Soviets. And you know, you have an ideological struggle, you know, communist country, authoritarian country in China versus the United States that's trying to influence the world and try to bring the world into its orbit.
So, you look at all this and you're like, how is this not a cold war? And the only argument that's on the other side of this ledger is, well, look at all this economic interdependence that exists between China and the United States. And my answer to that is one, there's decoupling that's taking place. In fact, you know, you talk to senior White House officials, Jamison Greer, you know, the head of USTR was at our conference, the Silverado conference, and he basically said companies should start thinking about decoupling from China. Also, it's a fallacy, historical fallacy, I go through this in the book to think that there was no economic dependencies between the Soviet Union and the West during the first Cold War. In fact, the entire Soviet industry was built by Western capital, Western industrialists that came in to build their automotive sector, to build their steel sector. In fact, if you're following the Ukraine war closely, you may remember that in the early days of the war in April and May of 2022, there was a standoff in the southern city of Mariupol where Ukrainian defenders were holed up in this massive steel facility, Azovstal, that had big underground components and they held out for about a month before they surrendered. Well, that steel facility is an exact copy of what at the time in the 1930s was the largest steel facility in the world in Gary, Indiana. An American industrialist came over to the Soviet Union to build a steel factory for Stalin because why wouldn't you want that Stalin to have steel to produce tanks and airplanes and so forth, right? And even into the 1980s, the Reagan administration was desperately trying to get Western banks, particularly in England and Germany to stop financing the Western bloc countries, which were basically going bankrupt because of the state of their economies and were being sustained by these loans from Western banks that Washington was trying and at the end of the day couldn't stop. So there were lots of economic interdependencies even then, obviously not at the same scale as we have with China. But you know, that to me does not negate all of the other similarities that exist between these two conflicts.
So I think that it's generally accepted that there is something going on on the continuum of competition to outright conflict, albeit proxy or indirect, between the US and China and that this is the geostrategic showdown of probably the century if not the millennium. Why does it matter if we label it Cold War or not? In other words, we've seen national security strategies from the United States over the last successive administrations identifying China as an adversary or as a competitor and orienting public policy and industry in that direction. Is that just not enough? Do we gain something by kind of labeling it as a Cold War? Do we get on more of a war footing? Does it escalate the language somehow that leaks into policy? How do you view that?
Yes to all of that. And look, first and foremost, we have to be honest with American public. We have to call a spade a spade and I believe it is a Cold War and we should call it such. Well, beyond that, probably the biggest differences between these two Cold Wars, unfortunately, that exist is that in the first Cold War, if you had gone to virtually any American, regardless of their political persuasion, you could be on the left, you could be on the right, and if you had asked them, 'Who is the main adversary that we face today?' universally the answer would have been Soviet Union, right? With few exceptions. Today that is not the case. Today roughly half of Americans don't worry about China at all, don't think about China. It barely registered in the 2024 campaign, it barely is registering even in campaign right now. Which was not the case during the first Cold War. It was always sort of ever present this competition with the Soviet Union. So you need to mobilize the public on this issue. And if you're going to ask the American public for sacrifices, if you're going to ask them to increase the defense budget to 1.5 trillion dollars, you have to explain why, right? And if they don't think there's a threat and we live in a peaceful world and conflicts over there don't matter to us, well, you're not going to get there. So it's really really important to get them to appreciate that this is, I believe, an existential fight. One that is even more dangerous than the first Cold War was, right? You look at the conflicts that we had with the Soviet Union that brought us close to that threshold of war. It was really two. It was Cuba for 13 days, right? The Cuban missile crisis in 1962. Sorry, 1961. Actually, 1962. Getting somewhere in there. It was the average, yeah. And West Berlin. And West Berlin really stopped being a problem once, ironically, the Soviets started building the wall. And actually they built the wall in 1961 and that directly impacted the Cuban missile crisis a year later in 1962.
But the crisis you're identifying there was the kind of like rhetorical, if not geopolitically weighty, showdown between Kennedy and Khrushchev, right? And it was this kind of like it was this sense that the weak Americans couldn't handle escalation by the Soviets, which actually resulted in the Cuban missile crisis. That misread or the mismanagement of that situation.
It actually is and we now know this. A friend of mine wrote this remarkable book on the history of the Cold War a couple of years ago, To Run the World, Sergey Radchenko, and he had access to the Soviet recently declassified Soviet party archives. They really shed new lights on how the Soviet perceived the entire Cold War, but specifically the Cuban Missile Crisis. And our understanding of that crisis for the last 60 years has been that Kennedy and Khrushchev have this meeting in Austria at the start of the Kennedy administration. Khrushchev perceives weakness on the part of President Kennedy, tries to press his advantage and put missiles on Cuba. It was completely wrong based on what we know from Soviet archives. What happened is, if you recall, Kennedy comes into office, launches the disastrous Bay of Pigs invasion that was left over from President Eisenhower on his desk, authorizes that to move forward. And it becomes a catastrophe, slaughter. And instead of looking at that from the Soviet perspective and saying, 'Oh my god, the Americans screwed up badly, they're weak.' The interpretation from Moscow was, 'Oh my god, the Americans are intent on taking Cuba. They've tried once, they're going to try again. We need to stop them and deter them.' Why? Not because Cuba matters all that much to us, but because we're going to lose face to the Chinese in the communist world, right? Because there was a big conflict that was now erupting between Soviet Union and China.
Yeah, the inter-communist.
of the communist world. So, complete misreading of American politics, complete misreading of Kennedy, thinking that putting nuclear missiles on Cuba is what's going to deter conflict versus actually provoking it as ended up being the case. But obviously, there was no strategic interest in Cuba from the Soviet perspective. From the American perspective, we were willing to basically let Castro control it as long as there were no effective weapons there. So, it was not the type of danger that Taiwan presents, which China is intent on taking. And I think we're intent on preventing them from taking it for a whole slew of strategic reasons. So, this is a much more dangerous conflict and we're much more likely to end up in a war with China, God forbid, hopefully not, than we ever were with the Soviet Union, in my view.
So, I've lived and operated, worked on both sides of the Taiwan Strait. I spent time doing business in Beijing and Shanghai, living there from 2012 to 2013 and then I lived in Taiwan from 2002 to 2004 and I visit there often for business and a whole range of other reasons. And the conflict is real in their minds, right? There's motivation on both sides to shape and understand what that looks like. And in your book, again, we can plug it, World on the Brink by Dmitri Alperovitch, but you identify that the conflict over Taiwan relates to the 21st century imperative to win the AI, semiconductor, and biotechnology race for, if not the US, then the kind of the friendly, classically liberal West and beat China in that race. Can you maybe tease out a little bit more what that needs to look like? What are the win conditions, in other words? How do we know if we've won in this kind of Cold War competition?
Yeah, well, first of all, preventing war, making sure China never attempts to invade, right? Because, you look at the three potential outcomes here, China invades and loses, China invades and wins, and China never invades. The last one really is the only one you ever want. Obviously, if they invade, we want to win, but God, you think about what that victory would look like, the casualties, the economic devastation, physical destruction. You don't want to imagine that. And by the way, we've never fought a great power, we've never fought a nuclear power. What's to say that the conflict would stay conventional and not escalate to the nuclear phase? Very, very dangerous. So, deterrence is really the only answer here. We don't want to fight this war. We want to make sure that China never launches this invasion.
Two, the AI race, as you mentioned, right? AI, I think it's not controversial to say is really fundamental to our the future of humanity, right? It's critical for military dominance. It's critical for economic dominance, for medical advancements. I mean, there's not an area of science or our way of life that's going to be untouched by AI. And we want to make sure that we have the very best models and that we establish as much distance between ourselves and China in this fight. And right now, the distance is too close for my comfort. They're still 6 to 9 months behind even with the latest advancements. There's a lot of hype over Kimmy release last month and Quinn releases, obviously Deep Seek a year and a half ago. But the race really hasn't changed in terms of the position of the relative actors. Just give you one sense, Kimmy comes out last month, everyone is in awe of its capabilities and it's pretty good. It's nowhere close to Methos, which by the way was trained by Anthropic back in February, right? Over 6 months ago. So, they're at least 6 months behind if not much longer. And the only reason that they are as close as they are, there are really two reasons. One, they're stealing, right? They're engaging in massive illicit distillation from all three frontier labs, from Anthropic, OpenAI, and Google. And stealing their intellectual property unabated. And two, even if you're stealing, you still need a lot of compute to do this post training on the stolen traces, recent traces that you're getting from these labs. And they're able to get that compute because our export control regime is full of Swiss cheese. So, we have this really well advantage where China cannot produce any AI chips worth their salt, right? They have the Huawei Ascend chip that they tout. Very few numbers that they're able to manufacture. And so far, this is sort of the little untold story here that no one talks about. So far, all the people that have looked at that chip and have done the technical teardown of that chip have discovered that every single one of the chips that we've been able to see has been made by not China, Taiwan. TSMC in Taiwan. So, they're using illicit ways with shell companies and other frauds to basically get TSMC to manufacture their chips, right?
Yeah. Singapore and Vietnam as a buyer or transloader of these technologies and there's a bit of like a turning a blind eye toward some of that indirect logistics and routing. Yep.
Well, that's a different issue because the other way that they're getting compute is well, one, they're able to import in the... There was this big case this year. May have read about it. Supermicro. Where the CEO was using a hairdryer to get the labels off the Nvidia chips for export to China. Just unbelievable like conspiracy theory criminal conspiracy on the part of him and probably many other people to smuggle chips into China. And thirdly, we have no restrictions on Chinese companies using compute overseas. So, there's some restrictions. They're not as enforced as well and not as comprehensive as they need to be to ship compute into China, ship chips into China. But if you're a Chinese company, let's say you're z.ai, tied by the way to the Chinese military, making a really good large language model GLM, you may not be able to buy directly chips without breaking US law, but there's no restriction for you accessing Nvidia chips sitting in a Malaysian data center and trying to use it to the full extent that you need. Literally nothing stops you from doing that. It's just mind-boggling how we are literally letting our entire advantage escape and help China catch up with us and potentially one day even eclipse us. When we have full control of this, right? We design all the best chips with TSMC in Taiwan and Samsung in Korea, we manufacture them in a way that the Chinese are not able to. We have this amazing company ASML in the Netherlands that uses extreme ultraviolet technology to make chips at the 2 nanometer level, 3 nanometer level that the Chinese cannot. We have all the ingredients for the control of this industry and we're not using our power to curtail China. And in fact, there's an ongoing debate in Washington, which is just mind-boggling to me of well, maybe we should sell China some chips. And to your earlier question of why do we need to label it a cold war? Because can you imagine going back into the first Cold War and saying, let's sell some high-end technology, supercomputers to the Soviet Union because maybe they'll use them for some legitimate purposes, maybe they'll improve their food production and less people will starve. No one would even entertain that notion. Or imagine saying back then in the 1960s, let's sell some rockets to the Soviet Union so we can win the moon race. Maybe it won't be the very best rockets, maybe it'll be like second best but hey, if we sell them rockets, they won't produce their own and we're going to win. It would be a ridiculous argument and yet that is the argument that some people like Jensen Huang of Nvidia, CEO of Nvidia and others are using by basically saying, hey, if we sell them chips, they won't build their own, which is complete nonsense because Xi Jinping has made it a strategic priority to win this race, to achieve independence from Western technologies. He's going to continue pushing his companies to use domestic chips. He's going to continue subsidizing that industry no matter what we do, and selling them chips just accelerates their progress.
I buy all of that. And I think it's worth leaning into. I'm going to do a shift or a pivot here in the conversation. Since we haven't been on for about a month and Dmitri may or may not care as deeply about this stuff as we do, I'll run through a couple of high-level defense tech venture items from the news docket, but then I kind of want to take that and pivot it back into Dmitri's experience with CrowdStrike and building a company that exited in the multi-billion dollar category and really made a strong impact not only in the cyber realm but elsewhere. So, over the past month or so, we've seen a couple of pretty significant defense technology venture investment rounds. The first that we'll talk about, and this pertains to some of the cold open content, but Singularity Air Defense took an $80 million Series A at a $400 million valuation. That just happened a few weeks ago, mid-July. Again, early stage, like who knows if this thing wins or not or actually delivers capability or not. And Dmitri, maybe they're pitching themselves as a dual-use air defense capability. I don't know, but that's key investors at Coastal Ventures and Felicis as co-leads, AEI Ventures, NEA, Menlo Ventures, Y Combinator, Harpoon, and a bunch of others in there. So, I think that's useful and interesting. We've also seen the a rising trend for
As far as I can tell, they're still not ballistics. It's drones. It's
It's
cruise missiles, but not ballistics.
Totally. Totally. Not ballistics. You're totally right. I was trying to
Tie a tenuous thread back to that topic, but you poked a hole in it immediately. You're totally right. I do think that air defense counter-drone kind of thing is a hot, frothy topic right now generally, but totally true. Yeah, we're not seeing a lot of activity in the ballistic space and who knows what to make of the hypersonic hype machine. Quantum Systems advancing the trend line of European venture-backed defense technology plays. They're a German company, took a $1.2 billion Series D led by a syndicate out of Europe and a bunch of institutional growth funds. They're in a unicorn category, multi-billion dollar valuation category. Lockheed Martin Ventures, this isn't a direct investment, but deployed $100 million into a UK and Europe regional allocation for CVC activity in Europe, again kind of advancing that trend line of European venture activities in the defense space. I think we covered this in a previous podcast, but just to double-click on it. This is useful and interesting and maybe Dmitri's got a comment here, but Firm 20 took a $100 million Series B at I think just north of a billion dollar post-money valuation. That happened in mid-June, but Excel, Catenate Capital, and a bunch of others, In-Q-Tel's in there, General Catalyst was in there. Again, this kind of like RF electronic warfare and cyber merging of interests in the defense technology and national security space is interesting. And then a few others, Mark Industries raised, ISI raised a bunch of big ones, but maybe tapping Dmitri into your background as a venture-backed operator, co-founder with CrowdStrike. I noticed a few trends as I looked at the CrowdStrike journey. What do you have to say now 15, 16, 17 years past co-founding at CrowdStrike and taking it all the way? What are you making of current trends in the defense technology venture ecosystem? How does that match up against your experience? Is it different in certain ways that are notable? What do you think?
Well, there's no question we're in the midst of the hype cycle, probably near the top of the hype cycle. And yeah, I see a lot of investors that are very unsophisticated about the government space, about the defense stack, jumping in because it sounds hot. Not a lot of people thinking about exits, right? It's great to raise at a billion dollar valuation, but you got to ask yourself the question, what's the exit path? And the worry that I have is that government resources aren't infinite. And with a debt load that we have, you know, it's going to be harder and harder to keep increasing defense budget, right? And the reality is you look at all the new entrants, you know, Anduril's and everyone else, you know, they have less than 1% of the overall defense budget right now. The vast majority of the defense budget, of course, as you guys know, goes to personnel and sustainment. But, you know, the rest of it goes to the old primes, right? And the big weapons programs, whether it's aircraft carriers, F-35, you know, etc. They're going to keep funding, like there's no way that these programs are going away. They're key and core to our capabilities. So, where are you going to get, you know, huge influx of money to fund all of these startups? You know, some will succeed. I think Anduril clearly, you know, very likely to succeed. It's going to become, you know, another, you know, sixth prime. But, we're not going to have 50 primes. We don't have the budget to sustain that. And I think you look at some of these valuations that these companies are raising at and you got to scratch your head and say, like, first of all, the other primes, you know, they're being valued on a cash flow basis in the public markets. They don't have the resources to buy up, you know, a $10 billion pre-revenue startup, right? So, that exit path from an M&A perspective is closed. And the IPO markets are going to look at your revenues. And if those don't match up with the hype, you know, you're going to have a problem. So I worry a lot about all the money that's been poured into this and how much of that is actually going to be a successful investment.
So I realize that we're denying Dave and Simon access to this conversation because it's mostly been you and me, but here's my last volley and then if you guys have stuff you want to chime in on before we wrap the discussion, great. But something I admired about the CrowdStrike journey and something that we as a company are trying to manifest for ourselves is this idea of category creation or category definition or category leadership. And a trend line that I point to often is that I think in the last 18 months about 80-85% of all defense-oriented venture capital has flowed into the top 10 biggest plays or the identified category leaders, think Anduril, think Saronic, think some of the space plays, Hawkeye 360 is an example, or others. Your experience in kind of the 2010s of category creation, definition, and then occupation of that as the category lead, can you talk to us a bit about that and what you think, if there are some lessons to be learned for this defense technology kind of trend or hype cycle that we're in right now around that category creation idea?
Yeah, I think the most important thing to creation of a category, you can sort of create a category out of thin air, and the most important thing is you need to have a real problem, a huge problem that you're going to address in a novel way and better than everyone else, right? If you can do that you can easily create a category out of it and you don't even have to do a ton of work to create that. You know, look at Google, right? You know, it's now a verb, right? Created a category of much, much better search engine, people want to search, and they didn't need to spend a gazillion dollars marketing Google. Everyone just sort of jumped on it because it was obvious. I see a lot, you know, I get pitched every day by tons of companies. A lot of them are solutions in search of a problem. I mean, my first litmus test is the founder, right? If you don't have a great founder, I don't care how good the product is or the solution, it's probably never going to work. But the second one is, how big is this problem and how many people actually care about it, right? And to the point about DEW line use earlier, right? You know, air defense, okay, you know, US government is going to buy it, NATO is going to buy it, some militia is going to buy it. Is every Walmart going to have an air defense battery? Maybe not. Maybe if you're in Russia, you might need that as their warehouses are going up in smoke, but maybe not here in the United States. So, you got to sort of look at who are the buyers, how much budget they're going to have over time, what the competitive landscape is going to look like, as you're thinking about creating a category. And too many things I see are point solutions or really, really small categories. What I actually like about munitions is you always need more of them because you keep expending them, right? And some of these other things you kind of wonder how much can you really sell?
Yeah, I mean, makes total sense. And I think it's become murky in our arena what the categories even are because prime contractors aren't necessarily category owners. They're solution integrators and prime contractors that manage, you know, sprawling ecosystems of sub-primes and component vendors and a whole range of other things that are oriented more at emerging solutions, or they help to kind of like build the requirements ahead of solutions and they shape the budgets and stuff. I mean, it's a funky thing, but...
The category is defense. They're good at selling to the Department of Defense, which is its own thing. They exist to sell to the Department of Defense and they can create capability anywhere across the Department of Defense because they know how to sell to the Department of Defense. But you know, look at Anduril, that's exactly what it is, right? There's tons of technologies. They're primarily like sort of an acquisition firm now, right? They've acquired all these small startups of great value, integrated them, but like you can't say that they do one thing well, they do sort of a ton of things.
That's right. Yeah. And yeah, I would agree and maybe a counter example to that is that Palantir actually did get very good as a category leader for handling national security data and kind of like riding and creating and then riding that wave in those early days. Okay, we are going to round out the discussion. Dave, do you want to defend Simon Sinek? Do you want to jump in on a topic? Like what do you want to do?
Yeah, no, I think the Palantir topic was actually good, so segue because I did have a question for Dmitri here. You know, Dmitri, you're saying that well, you know, your background, you don't have a deep background or subject matter expertise in procurement, but your book and your op-ed both cover this topic. Garrett mentioned Palantir, you know, hot topic. Palantir's currently fighting with the DIA. In World on the Brink, you focused on like mass over exquisite capability and commercial first. And in your op-ed, you focused on like bureaucratic incentives and risk aversion. And the risk aversion and the bureaucratic incentives is something that I've worn out on this show, but I'm glad you're here on this podcast. What do you think the answer there is? Reward acquisitions officers for outcomes? Is it speed and user satisfaction, cost-effectiveness? Like how do you create genuine accountability here? Because I think you're right.
Yeah. Look, I think the core of this problem is you've got, you know, GS-13s, 14s that are making these decisions, you know, good people, I don't want to cast aspersions on them, but they're being measured, if you're a procurement executive, on are you going to get protested, right? And when that is your metric for success, for promotions, for bonuses, etc., guess what are you going to do? You're going to create mounds of paperwork, tons of checklists and compliance documents to try to CYA and make sure that no one protests you or if they do, you're going to win that protest, right? We need to completely upend that and focus on does this fulfill the mission? Are you delivering it as rapidly as possible to the customer? And are you getting a good value? By the way, it's mind-boggling to me that these procurement executives don't actually negotiate, right? When I was buying, you know, significant volumes of software and other things at CrowdStrike, I would literally call up the vendor and say, 'Hey, I know it's your end of quarter. I'm going to give you the deal this month. It's going to help you make your quarter, but you're going to give me a 10% discount.' And you know what? Every time the answer is yes. No brainer. Why shouldn't the government do that? It's like, you thought this was going to come out at the end of the year, but it's going to come out in this quarter. Congratulations, but we want something back for the taxpayer, right? They can't do that. It is mind-boggling. Right? So, it is all about just the incentives of the personnel. And reorgs and renaming these offices does not actually accomplish that. It's how you measure it for your promotion, can you give a bonus? I'll tell you a quick story. I was talking to a friend of mine, there's a very senior sales executive in cybersecurity. Told me the story. Sorry, he mostly focused on the public sector. Early on in his career when he was just a rep, he was doing this deal at a naval facility for some software and he had this procurement guy named Art who literally did the deal in like a week. You know, my friend was astonished that this happened this quickly. He took Art out for drinks to congratulate him and he found out that Art didn't actually work for the Navy. He worked for GSA. But he was a blue badger or federal government worker. And he said, you know, because I'm GSA, I can actually do procurement for lots of government agencies. So, if you're doing a deal at the VA or somewhere, just send them over to me and I'll get it done quickly. And what my friend found out is that Art was getting paid like, I don't know, $500,000 or something for every contract that he would get through. So, he was motivated to get it done and get it done quickly. And I was listening to the story, I'm like, why can't every procurement executive in US government be Art? Why can't we incentivize these people to focus on speed, to focus on satisfaction of the end user, to focus on getting a good deal for the taxpayer, and give them 500 bucks for every deal that they do of significance or a thousand bucks, right? We'd have been better off if we create those types of incentives. People are motivated by incentives, right? And the fact that we don't do it is just absolutely mind-boggling. Time for follow-up, Garrett, or
No, totally. I was going to say, I'm really glad that you guys are channeling your inner Charlie Munger's and show me the incentive, you know.
Show me the incentive, we'll show you the outcome. Go for it.
100%. Yeah, so it's funny, you probably know her, Bonnie Evangelista, had a great War on the Rocks piece in February, where she gave an example where she'd rushed a capability and gotten it out in the field and, you know, well measured within nine months or something like that, meeting a critical user need and was actually, I think, to some extent sort of punished for her risk tolerance.
Yeah, and this is the reality, by the way. And whenever you have these examples, MRAP program is probably the best example of getting capability out in the field that the warfighter needs quickly, but it requires enormous efforts. If Bob Gates, the Secretary of Defense at the time, wasn't having daily meetings on this, it would have never happened. You can't do this for every program. It does not scale. You have to create the incentives at the lowest levels to make sure it is done routinely and not just when Feinberg or Hexter or someone else is looking at this and demanding answers.
