Scaling Horizontally: EpiSci’s Strategic Play in Dual-Use Tech | The Pair Program Ep58

 Welcome to The Pair Program from hatchpad, the podcast that gives you a front row seat to candid conversations with tech leaders from the startup world. I'm your host, Tim Winkler, the creator of hatchpad and I'm your other host, Mike Gruen. Join us each episode as we bring together two guests to dissect topics at the intersection of technology, startups, and career growth.

Hello everyone, and welcome back to The Pair Program. I'm your host, Tim Winkler, alongside my faithful cohost, Mike Gruen. Mike, how's it going? It's going all right. How you doing? It's good. It's good. I just, um, uh, you know, coming, coming with that random fun fact. I just read that. At the beginning of each year, Lake Superior State University, you ever heard of it?

No. Uh, Lake Superior State University releases a list of banished words, and these are kind of like terms that have become overused or misused or just unnecessary. Mm hmm. So this year, um, we are not supposed to use these 10 words, cringe, game changer. Era, dropped, IYKYK, sorry, not sorry, skibbity, 100%, utilize, and period.

Utilize has been on my list for a long time. It's one of those words that bothers me because, uh, use, it means the same thing and usually people who use the, I'm going to probably offend some people. But I don't care, uh, but people who use the word utilize, I mean, there are times like utilization and stuff like that, but for the most part, usual serves the purpose and people tend to use it to sound more, uh, articulate than, yeah, I've said, sorry, not sorry before.

And I was like, I say cringe all the time, but I say it like ironically to my kids. So I feel like that's okay. Well,

no, knowing that we've only got, uh, you know, uh, a couple of days left to use these words, I asked you to chat GPT to use all of them to create a little ad pitch for us. So here's what, here's what it spit out.

And this era of podcasts, The Pair Program truly dropped as a game changer, navigating cringe tech cliches with a hundred percent insight. Sorry, not sorry. Utilize our episodes and stay ahead. If you know, you know, period.

No

scabity. No scabity, you're right. You're right. A little default. Just shows how AI is.

It's not going to replace all our jobs yet. Anyway, all right. Good, good stuff. Let's, uh, let's give our, uh, our listeners a little bit of a preview on what today's episode is all about. So, you know, today we are, are hitting on a topic that's always top of mind for any startup founder, and that's going to be scaling the business.

Um, this is going to be a little bit of a unique spin on scaling. Uh, we're fortunate to have with us the founder of a dual use startup who's shaping the future of defense with, uh, trusted tactical autonomy. Episode is the name of this startup. Their founder is Bo Ryu. He's with us to tell the story of how they're building trust and their AI algorithms for the use of autonomous vehicles like planes and boats for the military.

Uh, in addition to Bo, we're excited to have David Rothside, a principal from Shield Capital, also joining us. Some of our longtime listeners might recall that we had another Shield Cap member join us last year with Mike Brown, uh, on a good conversation around dual use tech. So, um, Bo, David, thank you both for joining us today on The Pair Program.

Thank you so much. Um, very, uh, privileged to be on the show. It's an honor to be here. Thank you.

Good stuff. Looking forward to it. All right. Now, before we dive into the heart of the discussion, let's, uh, warm up with our, our favorite segment, the pair me up segment, uh, here's what we'll go around the room and spitball, some fun parents, Mike, you kick us off.

Yeah. So, uh, Going back to the, uh, the family stuff, uh, Kids and Science Projects, uh, that's gonna be my pairing, they go well together, um, over the weekend I helped my oldest son, who is 18, uh, with his biology project, which involved, uh, fire, which is always good, and, um, Probably could have just been a pairing on its own, a fire and something, uh, and the, the impact on like seeds.

So we wanted to light fires on top of like planted seeds and see what would happen. Uh, one thing we did not account for, uh, was the, uh, nitrogen and phosphorus rich soil we had used. Uh, and it created quite the, uh, toxic gas, uh, it was, uh, literally it was outside. So it wasn't that big a deal. I'm not like a crazy person.

But, uh, the, since it was so cold, we had to move the, the pots into the garage and overnight it was just kept on outgassing for, for days and, uh, and, uh, yeah, so, um, What can go wrong, you know? Exactly. Kids and science projects. Have they done it? Has

he presented yet? Or is it still going? No, no, no, we just,

we're in the very early stage.

We haven't even planted the, I mean, we haven't even really seen any, uh, anything really come from, we have the seeds, they need to be watered. It's going to take a little while.

Nice. Yeah. Uh, yeah. Kids and science projects. That's a, that's a classic. I feel like that's been around for years. For days. I felt like I had eaten a battery, like

I always picture those, you know, the, the classic like volcano, you know, getting it to spew out the, the, the lava. Cool. Cool. All right. We'll, uh, we'll, we'll accept that. Uh, let's, let's move, uh, move it around here. Um, I'm going to, uh, go with like a classic sports tradition and I'm going to pair, um, you know, a little bit of this hometown pride.

I'm going to go with a playoff beard. And the Washington commanders in the NFC championship game. So it's been 34 years waiting for this moment. A lot of disappointment out of the, uh, the DC area when it comes to the, the Redskins commanders team. So it's a, it's still a bit surreal, uh, to be in this position.

So I'm growing out the beard until we either win it all or get knocked out. Um, been growing it since the, you know, we, we, we beat the bucks, took on the and now going in against the Eagles. Um, you know, I'm, I'm rooting for, uh, you know, at this point, you know, can't, can't be disappointed that we've made it this far, but I'd love to keep growing this thing into the super bowl.

So that's going to be, uh, my parent, the playoff beard and seeing the commanders and the NFC championship game.

I'm going to show my NFL, uh, ignorance, uh, cause hockey is playoff beards. Is that also is playoff beards a thing in. It's yeah,

yeah, it goes, it's, it's sports wide. It's not, uh, it's not just for, I think hockey is probably the most, uh, relevant or the most well known for the playoff beard, but, um, I think people are growing them out for any sport at this point.

Um, yeah, love it. Good stuff. Um, all right, let's, uh, pass it over to David. Uh, how about a quick intro and your pairing?

Awesome. Well, David Rothside here, principal investor at shield capital and, uh, Tim, congratulations on the commanders. I know. Exactly what you're going through as a lifelong bangles fan three years ago, I got to like what is my first playoff victory as like a conscious human being and it was a pretty surreal feeling.

And, um, yeah, is that against, uh, the bills, the Raiders Raiders? Yeah. There's a story behind, you know, how I celebrated at a particular spot, maybe for another podcast, but, uh, you know, on the. For the, as far as the, the pairs go, I couldn't, I was thinking about this on the flight, uh, to LA last night when you sent this, this homework out and, uh, I, I, I had two and one kind of for this different seasons.

So right now, given that it's like the dead of winter and in DC, my pair is a Scotch next to a nice Hardy fire. But the one that I'm looking forward to when the weather gets better. Is walking the dog, listening to a podcast, maybe this podcast.

Yeah. Yeah. Yeah, I, I think, uh, the, you said scotch, right? Scotch.

Yeah. Yeah. That's, uh, something about that. That's just kind of like warming, right? It's gonna get a set off the fire. It's a, yeah. Mike's kid over there probably, you know, teeing up another fire while Mike's sipping his own scotch. But, um, Yeah, that's a good one. And then podcast walking the dog. It's actually, I think we've had one of those.

I was going to say, yeah, we've definitely

had X and a fire, like drinking and fire. Uh, but, uh, but not, I don't think scotch and a fire. I mean, like, I don't know. I could, I could just stare into a fire with me. I don't know. That's a while drinking. Right. Doesn't matter. I've really been trying to cut off the drinking.

It's the easiest calories to cut from my diet. Yeah. Yeah.

Yeah. No dry January for you. Um, all right. We're gonna, we're just going to jump into, uh, passing it over to you on a quick intro and you're pairing Bo.

Sure. Hi. Um, my name is Bo Liu. Uh, I'm the founder of Episci. Okay. And now a former, uh, CEO of Episci and I'll tell you more about that throughout the show.

My best, my most favorite pairing is actually, um, a cell phone and a voice assistant, you know. And, uh, the reason I mention it is that, um, uh, always get frustrated, uh, with, you know, I use Android, Google, you know, Google Voice. I still don't understand that well and, um, I just saw the news, um, yesterday about Samsung new phone, where they're going to have the actual on device, on device Edge, uh, Edge AI running the, you know, actual AI.

So you don't really need the cloud or anything like that just to send your questions and get the answer back. And that looks like it's going to be very, very powerful. So actually I'm very much looking forward to, uh, Using that, uh, you know, when the phone is out and, uh, they did not have to type anything, right.

What to do. And then Paul will do it for me. Just looking forward to it.

Yeah, very nice. Anybody else here an Android, uh, user, Mike, David? Am

I the only one? Yeah. Well, yeah, I'm from South Korea. So, you know, I'll give you my ledges.

Well, we'll take your green bubble in our, our group texts any day. Um, excellent. Well, again, we're, we're super thrilled to have you, uh, you, you and David both. Um, let's, uh, let's go ahead and jump into the, uh, the core of today's episode. So. Uh, like I mentioned earlier, we're going to be talking about, you know, scaling swiftly without the burden of, you know, maybe building every component from scratch, specifically in an area, uh, of high regulation, such as defense tech.

Uh, so we're going to be hearing from, from Bo, uh, the founder and CEO of Episci whose company is a testament to the power of this strategy of horizontal AI autonomy for some major defense customers. Uh, in addition, we'll dive deeper into some of those use cases where their tech is disrupting like autonomous UAV swarms, uh, kind of catch that VC perspective from David, uh, riff on some future trends within dual use, and then we'll wrap with the, uh, rapid fire Q and a on our, our five second scramble segment.

But let's go ahead and start with you, Bo. Um, can you kind of give us the backstory behind founding Episci and as someone who's, you know, worked. A number of years in aerospace and defense, you know, what kind of led you to focus specifically on AI software and space that has historically been heavy hardware.

Uh, well, thank you for asking that question. And again, thanks for having me in the show. Uh, Tim, um, the, the genesis of EpiSci, actually, we, we don't have, uh, no. Glossy or fancy, you know, story behind, uh, me and my couple of, uh, colleagues from university, uh, got together and they wanted to advance our, um, R and D, uh, in general through similar programs.

So, um, um, the, our start was very humble, and I happen to have the colleagues, my co founders. Well, with AI background at the time, not the deep learning, it was more of a AGI, uh, researcher, uh, in robotics and the signal processing. So our goal was to create a holistic system approach and solutions for a number of different systems.

And that's where actually the name EpiCy comes from. So EpiCy stands for, uh, epiphany of system science. System science is kind of fancy word for, um, you know, the system integration and system engineering in general in interdisciplinary areas working together to create the breakthrough. And I love the word epiphany, you know, and, um, it just, you wanna, want, you want to have as many epiphany as you, like, you need and you want, right?

For, uh, making your startup, your company, really the breakthrough. That's how the, you know, EpiCi, you know, came about and, um, uh, I'm very much actually looking forward to this new chapter of EpiCi. Uh, and, um, uh, and, uh, well, maybe I should break the news right now while I'm introducing it, I guess. Um, so we were just acquired by a company named Applied Intuition, uh, Applied Intuition.

Uh, thank you. Yeah, it was a, uh, wildest journey I never imagined I would take where we are at, uh, very thrilled about it. And, um, um, Just like us, where EpiSci focuses purely on software autonomy. Uh, and if you look up Applied Intuition, uh, it also does actually software autonomy for, primarily for, uh, automotive business.

And EpiCy does autonomy for maritime and airborne. And she will talk about more. So it was a great marriage. And also The topic of today's, uh, you know, the discussion here, dual use, one more can you have when you bring a scale of the automotive market, you know, proven, uh, uh, productization and tools. Apply that to defense tech, you know, defense tech for the scale up.

So, um, I mean, the topic that we have, I think is a perfect one for us. And for me to really talk about the, you know, where, what do I usually means at least to, uh, uh, me. And, and my fellow, uh, PSI, uh, employees. Yeah.

And, and I'd love to, to dive deeper into some of those specific use cases, because I just think it's a fascinating journey on, you know, how you took the technology into the, you know, say, say starting within planes and how that carries into other domains like within maritime.

Um, so we'll get into that, but, um. Uh, for one, congratulations, uh, an amazing accomplishment, uh, as an entrepreneur, never an easy road, but you know, here, here you are, you know, 13, 14 years later from starting the business and, uh, you know, successful exit. So kudos and congrats. Um, David, let's, uh, let's hear your, your perspective a little bit here from the shield capital side of things.

Um, you know, what, what is it, uh, that kind of stands out regarding, you know, maybe emphasize approach to, to dual use technology and, and, and again, you know, seeing, uh, an industry that's been. Predominantly, you know, a hardware heavy kind of space. Um, you know, the, the software and AI boom, how's that impacting the defense sector?

Uh, and the fact that there was, you know, a dearth of venture capital in the marketplace, like it's totally true. And I'd say today, you know, you've sort of seen much larger groundswell as the department of defense continues to become. A better customer, but I think even more consequential is the recognition of the convergence of technology and the fact that maybe dual use is sort of an outmoded term because everything is sort of dual use and anything that's being built for the commercial sector as an application in the national security environment and anything that the national security environment wants to do.

That's pretty advanced. Uh, there's probably a commercial use case as well, right? And once upon a time, the department of defense didn't make it. So it didn't exist. And I think, you know, that, that day is long gone and what we're seeing from the venture capital community and why there's such interest is the fact that the national security environment to include, you know, the DOD and ally nations are just becoming a better buyer of, of this technology.

And so. You know, with that, uh, I think Mark Andreessen famously wrote, you know, software is eating the world. And, you know, now there's going to be new topics and, you know, with chat, GPT and Anthropic and Gemini, where AI is just sort of going to be part and parcel to everything that we do. And it'll be difficult to distinguish what is like AI and what is just operating in our day to day environment.

And a lot of it has to do with good software. But, you know, you still do need incredible hardware to be able to apply things at the end of like you need real things and a lot of this dual use renaissance or defense tech renaissance is largely being driven by a lot of hardware companies. Um, and a lot of the, the enablements and the value is being increased because the software is also good.

So the user experience, the user interfaces are just sort of meeting the moment, right? And a rule has lattice, but it's a lot of different hardware components tied to it. And the same thing goes for a lot of the portfolio companies at shield, you know, highlight overwatch imaging. You know, they have a line of business where they're building sensor camera balls, but they've also got their automated software operator A.

S. O. Technology. That helps process all of the sensors at the edge, bringing it back to an environment that's probably not quite as austere where operators can be, um, and being able to still perform the mission. So it's that combination, I think, of hardware and software that enables. Artificial intelligence to start having some really impactful, um, really impactful things, both, you know, on the battlefield or if you're just, you know, a company operating in a remote environment, being able to do things more with less

and on that one, David, I'd like to amplify if that's okay with you, what you have just said with two things.

Um, I, I, I'm totally with you in that, uh, the word dual use, you know, is more of the outmode aspect of converters. But what is unique and challenging is actually from the business standpoint, now that I have gone through from start to the finish, it's actually being able to monetize with the notion of the dual use actually is extremely hard, extremely hard.

So, uh, yes, things can be used for both national security and the commercial part, but having a company actually to. apply to that both domains, you know, domains actually is a lot, lot harder than I thought. That's number one. Yes. So I think that is kind of where, uh, I have learned perhaps the biggest lessons in, in this journey.

That, you know, the, we know autonomy can be used for national defense and the commercial and all that, but eventually in order to answer to investors that say like you, right, we have to demonstrate that we are able to monetize it through scaling, right, scaling. And that's kind of where we are. I'm really excited about the next chapter of EpiCite.

That's the first one. The second one is that, um, the, Um, in defense, uh, in, in defense, uh, the, you know, as Tim said, it's very hardware driven. I believe we are one of the very first one who has, if not the first one. Actually, who has no hardware and dare to say that we are doing autonomy for D.

O.

D. So you look at all other companies that we work with, including Andrew.

If you look at Andrew, actually, Andrew, although they had different systems for borders and all that. Actually, when it came to the autonomy, autonomy. They started with Lattice, right? I believe that, you know, uh, when I met actually, uh, uh, uh, the founder, uh, Lucky Palmer, uh, several years ago, I think he said this Andrew was a very, you know, software driven at the time, but now you see the more and more drones that they're building and all that.

So they have that more of the holistic system. So we. Uh, you know, it's funny that one of the very first trade shows that we went to was AFA. Actually, it's not the big one in D. C., it's the one in Colorado. Uh, I think we were the only booth that has no device to show. No, no, no, no, no, no missile, no plane, you know, no drones.

And, and, uh, uh, I think, I mean, we were very proud of that aspect because we believe And we continue to believe that in order to truly provide that dual use or the scalability of the autonomy, you know, we had chose to not invest or chose to not go into a particular hardware pack. So that we can really focus on finding ways.

We cannot, at the time there was no replicator, there was no SWAMI, you know, a lot of times it was a large asset, right? Largely produced by, uh, DoD primes and enabled autonomy. So we took the approach where, um, you know, we are going to make sure that our, uh, solutions are modular. And we have an opportunity, we have, uh, developed, uh, enough secret sauce.

To be able to bring the emerging AI solutions, the deep learning modules and all that, but still part of the bigger system. So, uh, that's kind of how we, um, have evolved from just SBIR company to develop and demonstrate, uh, our solutions. And really, now we have about more than 20 platforms. That runs our, our, you know, autonomy, you know, as a core.

Of course, there are variations of our software because sensors are different. The platforms are different, right? Some of 'em of them are group one, uh, UAS, some are, uh, unc crewed, maritime boats. Uh, some, you know, as you might, uh, recall, F 16, the Vista, where we are. Uh, are very proud of, uh, flying a secretary, uh, of Air Force, uh, Kendall, uh, to experience actually the, what AI can do on a real fighter jet.

So, uh, and, and, you know, if you look at the autonomy as a whole, it is not just about controlling the access and the teaming together. You'd actually, um, as you mentioned, you'd actually have to know a lot from the sensor domain standpoint. But the answer is a starting point. To learn and understand what's going on.

So, FPCI has, um, the sensors and signal processing from the beginning. And now the autonomy control, the teaming and control. The third part being the now the better management. And now we are able to do it maritime and airborne. And now in some way space as well. And that's the holistic approach, uh, was.

Our, you know, our bet that that's what DoD would need. But I have to tell you, David and Tim, um, not having the hardware, I think, uh, you know, was, uh, was, was very difficult because DoD is not buying software licenses, right? As you know, so how do you, how do you monetize it? Now, now we have a very first sale of our, of our autonomy software.

To DoD actually, you know, we, you know, we hope to announce that now they are really beginning to adopt the software world, right? Software model world where they are, they are willing to pay license for a per tab basis, for example. And because you are building a lot of the, the assets, uh, you know, uh, for the scalable swarms and systems and all that.

So, uh, I, sometimes I feel that maybe we should have been a little bit two years late or two years early, you know, depending on how, how we, uh, you know, put this on ourselves. But again, um, uh, it's all now in the past and, uh, now what's exciting for us is that the, the, the amount of expertise. Experiences in the productization and the the robustness, uh, and the scrutiny of the commercial technology.

Through our new, uh, new company, uh, applied Tion now can seamlessly apply and leverage our defense tech and make it really better. Safer and secure to use right for the scale. And that's the, that's what excites me the most, you know, among other things that, you know, that we have going on, uh, with Applied Intuition.

Yeah, I think that's something that's, you know, you, you know, when I was reading a little bit more about your background and, and at large, you know, you were always emphasizing speed and scalability. Um, and those are, you know, two areas that you don't always associate Uh, with defense, uh, or, or, you know, plugging and playing into those environments.

And so, um, to be able to, to, you know, to, to take your technology and to figure out a solution on how to, to get to that end point is, is super impressive. Um, I want to kind of build a little bit on that and David, you know, from your, from your perspective, you know, like from risk management, uh, within like AI investments, um, this need for kind of rapid adaptability and, and defense technologies, how do you assess the potential of companies like Episci, AI.

Okay. That are developing, you know, like tactical autonomy solutions. Like, what are some of those key factors that would influence your investment decision in this kind of like high stakes sector?

Yeah. Yeah. So just kind of like, as a preamble, but I do want to hit on something that both said, maybe, maybe.

Uh, start a controversy or like conspiracy here, but, uh, you know, so with that, like adaptability breeds scalability, but also, you know, you can think about horizontal growth from a platform standpoint, but I think what Bo kind of articulated is that if you can go have a vertical depth in a specific application, you can build a lot of user trust and then it's at that point you can go from one system To many systems, and then that breeds scalability, um, I guess the big thing is they'll pick that first sort of use case proof point very carefully because you want it to be a proxy by which other end users or other systems.

Also see themselves, um, in that, right? So they want a piece of it, uh, right? So you just kind of want to build that fear of missing out. I don't think that was one of the terms that was canceled for this year. So we're okay with almost, uh, but you know, just to start a little bit of a conspiracy theory here, Beau, was 16 with the former secretary of the Air Force?

I mean, I'm just reading the tea leaves here, but that's what happened. That's a spicy take spicy one. And I think the timing kind of works out, you know, now we know what the incoming administration has said.

Platforms. Yeah. Which is what they do. But again, that was back in April, end of April. Uh, you know, there was publicize and all that.

And whenever, you know, it's the Nice thing about actually at FPCI that I feel very actually fortunate is, um, you know, um, Uh, I was able to start a defense company with virtually no defense background. My background is not defense, it's just R& D, you know, it's R& D. SBIR allowed me to start a company like this with my founders, other founders.

But now, uh, we, I have, um, uh, plenty of credentialed, you know, people at EpiCi, actually, who will be happy to take the question from you, David, the controversy question, and give their perspective on it, uh, because, um, I'm gonna, you know, so, uh, I declined to respond because I didn't know. Yeah. Yeah.

Yeah.

You know, so Bo, Bo talks about, uh, leveraging the SBIR program, I think, in one of the most pure senses and the way that, you know, we in the venture capital community look at it is, hey, you tell me another industry out there with a customer who is willing to sort of underwrite it.

Right. Your research and development, and I will, I'll call you a liar, right? They don't exist, you know, I think the difference though, you know, and both you had started your company a little bit later when, you know, AI sort of became the currency of the realm and, uh, leveraging autonomous systems, but also trying to think about scalable solutions for the department of defense that maybe one day we'll also have applicability in the commercial.

Yeah, you probably would have fetched a pretty penny, you know, uh, and, you know, leveraging those two things, I think is really important for, you know, the modern state of where technology is headed and the need from a national security environment to be able to build disruptive tech that can scale, you know, it's really hard to do that and just ask Bo without a little bit of venture capital funding to sort of help bridge.

The gaps, make sure that payroll can always be hit, not have to compromise on where your focus is and thinking about product market fit for, you know, the ultimate end user who maybe isn't interested in your nascent solution. And so you have to sort of. Work with whoever is willing to work with you and maybe they don't have the shared vision that you do or the connectivity to like the scaled approach that something like a replicator, which I imagine Bo has probably been a big boon to emphasize business, um, to sort of showcasing the way that these autonomous systems and operate.

In tandem, right? Whether that's a swarm or just connectivity to implement, uh, concepts like joint all domain command and control, right? Jet seat too. So, you know, I just kind of wanted to hit on what Bo talked about with leveraging the SBIR program, which generally does have a bad reputation because not all companies are founded by people like Bo.

Who is trying to see and execute the larger vision, um, absent venture capital dollars,

I think I want to pull on that a little bit, David, because it's funny. It's almost like you've read some notes that I had about the cool thing about government is that they do have that money there for to fund your R and D.

And I've been at plenty of companies where. That's the, the push pull of like, okay, like at one company, our solution was like we split the company and there was one, one group of us, we had our core NLP engine and we were, and, uh, there was a federal group that was selling, you know, into the federal and we had very little like impact on the core product and there was the core product that was selling commercial, you know, like it's the same engine, but very, very different.

It's like this. And I'm just curious, like how much of that has changed? Is it still that I was talking to somebody who's at a dual use company now and they have that challenge of like, we have this money. We know that if we can do this contract. We get like 1. 52 million dollars and that's really appealing.

And how, and balancing all of that work against, well, but we also want to do this other stuff. And yeah, I'm just curious, like what your experiences are with and what advice you'd give to companies trying to balance that all out?

Well, Bo, Bo intimated right on this already. Um, it's really hard to focus on both.

Right. So what we talk a lot about with our portfolio companies and, you know, with shield capital, we invest at the early stage, so predominantly seed series. A we'll go earlier, even into pre seed, right? Your first money in. Um, and I think we've dabbled just very little in like later stage stuff. Um, but focus is super important because you've got a small team.

Your time is the most valuable resource that you have as a startup. And so we think about it very conscientiously with our founders of this is why you go into the national security environment, and it better be because. The available dollars are going to occur faster, or you're building hardware systems that could really be helped out with underwriting of, you know, direct to phase two servers, which might then leverage attack by or in the army, the catalysts or hopefully a stratified and that sort of gets your product to a level of like zero to one.

Maybe at that point, it's appropriate to start looking at the commercial sector because they can take your one product that now has de risked all of the technical stuff and maybe has a rubber stamp of approval from a really difficult customer, the Department of Defense, right? Who is using stuff to make sure that people stay alive, right?

Um, or to deter their adversaries. And you, maybe you can start to scale that into the commercial sector. And maybe because you're able to now get all these iterations and economies of scale and faster adoption. Now you hire. Just a hit squad to help you scale inside the government that does have like longer sales cycle to establish, you know, what people talk about the, the, uh, elusive program of record that then provides you kind of annual recurring revenue from the department of defense, which as a venture capitalist, you know, that's ultimately what I want to see.

I don't want to see you getting drunk on non dilutive. R and D contracts that are fairly difficult to sustain themselves and don't actually show true product market fit, but you know, it, so for me, it does, and for shield capital, it does depend on the technology that you're building. Where is the market opportunity and how quickly can your customers help you grow and scale be able to build as disruptive of a technology company as possible?

That's interesting because I think you pointed out the like getting diluted on the government side and on that, but I think one of the and my experience was, I think, in some cases, chase the commercial market too quickly and that we didn't write and now. It's we're trying to, we're trying to satisfy two different masters at two different paces and they're divergent and we didn't really, we don't have that core product and we don't have, you know, whatever it is.

And now we're sort of floundering, uh, you know. Between the two and not really sure, you know, then there's all these strategy questions, but where do we want to focus? And I think it's a pretty common thing for startups to not have focus. And I loved your earlier point about build trust, do something deep, build the trust and expand from there.

I think that that is a much better solution than, you know, like being, you don't want to be you. TGI Fridays, where you have this giant menu of all of these things that you kind of do kind of okay.

Now, I think they're in a little bit of trouble last night. I saw in the public markets, you know, I'd be remiss not to just quickly highlight.

So I'm currently in LA. I just had a board meeting with Apex. They're a satellite vehicle manufacturer, you know, The satellite vehicle that they sell to their government customer is the same thing as they sell to their commercial customer. Now they did the proof point with a lot of national security customers on their first satellite vehicle, which then helped unlock and a pretty prodigious fashion buyers and customers for the commercial sector.

But at the same time, you know, that space heritage was also a very important proof point to other programs in the national security environment. You know, and I, so I would say that like apex. Is maybe kind of uniquely situated in position, but maybe going forward, that is going to be a lot more commonplace again, as these markets continue to converge on, we just need the best technology and the best technology generally is getting some sort of economies of scale because.

You know, you can start to reduce the margins, but increase the performance. And that's really ultimately what everybody wants, right? We don't need to have exquisiteness, you know, to the level that others might think the price point just doesn't make sense. Or, you know, you talk about what are adversaries able to do with mass and at a certain point, you know, exquisite versus mass, exquisite is going to lose out, um, because you're going to lose on the cost curve.

So anyways, I'll stop

there. I think also one more thing to add to that, uh, is that, you know, we often talk about three things, right? Speed of development or speed of the product, productization. Uh, quality of the product and the cost, right? That includes, so your speed, cost and quality or capability.

Getting three all done is extremely hard. Oftentimes you have to let one go either, Hey, it's going to take a lot longer to get cost down, right? Or, or quality has to be sacrificed because we have to get something out and all that. But I think the autonomy, when it comes to autonomy, I feel that we are reaching a point where customers expect all three of them, you know, all three of them.

And, uh, uh, that I feel it both in the commercial sector as well as the, uh, the defense sector, uh, as I go in. So how do you bring, how do you bring a solution that's very, very fast, right? It doesn't cost that much. It's still maintained high quality and one use case. So what I want to actually emphasize, um, advocate here is that, um, as we become part of the Applied Intuition, uh, family, family, we see an opportunity where The cost to add the tools and autonomy tools and autonomy stacks for a new customer, new customer will get faster and faster.

You know, and then, um, the cost is lower and quality still remains high because of two things. Number one, um, in the automotive market, I'm learning a lot still these days about our parent company, but it, it does, it does show how that scalability, you know, uh, is, is, it's being achieved. That's number one.

And number two. Um, the when it comes to the, uh, the adaptation to, uh, you know, to the new market or that nice thing about autonomy is that it no matter whether you are going to maritime or small drones or the larger drone, oftentimes you have to do three things. They all have the three things that are common.

They all have sensors. You are, uh, you all have to control the platform really well, flying it, right? And number three, you'll have to make a good decision on what you want to do by yourself or with your, you know, teammate, whether it's a man, you know, crude or uncrude. And, you know, Ukraine obviously changed all these things, right?

So, uh, cheaper, right? Having a lot of these things that work really well as a group, you know, will redefine the future of the warfare. And, uh, and I really think that, uh, at least based on what I have seen so far, um, the autonomy world is moving towards that direction.

Yeah, it's going to be interesting to see, um, you know, cause you know, just an initial search on applied intuition and it sounds like, you know, a lot of, a lot of what their core areas are, the, the trucking.

Industry as well. Um, and so they

have, uh, you know, uh, overturning, uh, manufacturers that they're working on. So definitely there's a lot going on, uh, you know, for the company. Uh, I'm not going to speak for, you know, uh, for my new owner, right. For my boss, obviously. But, uh, what, what I've seen so far is so exciting because.

You know, David, you've seen so many, you know, small businesses, right, in defense tech tend to have a good tech, right, has a potential, but not able to take that to the next level, you know, how many times we hear about value of death, right, I mean, so let's not even go there, but we were fortunate, we were able to get Stratify, we were able to get some seed money from our defense investors.

And, uh, we, but, you know, and finally have an opportunity to really scale up, you know, to a wide range of autonomy solution providers, you know, as autonomy partner. And that model, we hope, want to, uh, maintain and demonstrate that's how you're going to get. The, the cost down to, to acquire new autonomy and still perform really well.

Yeah, we're excited to, to track that. Uh, obviously it's, uh, you know, still so early, but, uh, maybe we have a, a follow up episode, uh, in six months or 12 months and, uh, see how things are going. On the dual use piece. Yeah. It's an area that we are continuing to get, um, you know, inbounds from our community, looking for.

Just more about this because I think it does get thrown around quite a bit. Um, we're, we've got an exciting episode that we're crafting in about two or three weeks, which has, um, David, you may know him, Jake Chapman, uh, wrote that piece around, you know, dual uses of trap. Um, and, uh, and, uh, Gene Kesselman from MIT's ventures.

Um, and it's more around, you know, just redefining dual use, but not so much as a label, but more creating this like strategy and a framework, uh, around entering those markets. Based on demand and scalability, um, versus I feel like it's often just an accidental, Oh, maybe there is a use case here. And through that, you know, you don't, as a startup don't typically have the capital to, to play that experiment out.

Um, but, um, yeah, also I would do want to plug, um, you know, your, yourself and, um, Maggie gray, uh, from shield capital. Uh, great substack that you guys put out regarding this mission driven metrics and a framework for assessing startups that are targeting national security will include it, uh, in our episode and then the show notes, because I thought it was a really great piece and.

Super well thought out with how you define it from, you know, like the team and some of the other key metrics that you're looking at.

Yeah, thank

you.

And uh, just real quick, you know, so I had the honor to co write that one with Maggie, but it is her, her stuff's that great. She's just prolific, putting out something very compelling and interesting to anyone who's interested in the national security space as well as AI area.

Uh, called gray matters. So yeah, I was honored to write that piece with her and it was a lot of fun because I'll just say this, um, this whole dual use mission driven, right? Uh, purposeful tech, like it's all, there's a lot of nuance here and I think it's just really important for founders when they think about embarking on this journey.

That you're gonna want people around you that just truly understand the space and can provide you good advice based on their own scar tissue, right? Mm-hmm . Um, so, uh, it's definitely nothing to to, to sneeze at. Like, it, it is hard, uh, but if you get the right people around you, it, it is doable. Um, and it just requires nuance.

So just wanted to get that out there. Nuance. Yeah. And the nuance, uh, aspect that David, I want to add is that, um. Um, the oh, man, I'm losing my thoughts here. I'm I'm apology is that, uh, when you, uh, you know, when you have the capital, you know, to do the beer, something, uh, something, you know, that we believe to do or use, um, it is, uh, you know, the by the biggest lesson I learned is that when I was starting, it would have to be pivot to a pivot to the autonomy world, you know, We still had, we also recognized we got to have sensors, uh, we got to recognize that we got to have the teaming, you know, working and all that.

And, uh, being able to tell that story, that complete autonomy story, actually to investors, um, was much harder than I thought. You know, because a lot of times because we don't have, so are you, are you going to charge government on a, you know, per machine or are you going to, um, sell the Humblee system to a, a, a prime or, or what?

And as we, you know, we were. Team of 50 people at the time, right, trying to focus on the maturity of some of those technologies and all that. Yeah, balancing that out, right, at that stage was, was brutal. So, uh, I think maybe you're right that those founders really do need to understand what they're focusing on, right?

And really maybe take up Smaller, but a focused area to go to go big and then deep deep, rather than trying to solve much larger problem. I think some founders, including myself, right, were, you know, oftentimes get trapped. Oh, we got to solve that one as well to make our product more appealing. So why don't we do that?

And, uh, you know, so yeah, that, that balancing is very difficult as founder. And, and I wish, uh, should capital were available.

I would have invested,

I

would have been right in

there. Yeah, yeah,

yeah. One meeting, one meeting. I'm a different person than that, David, so.

Next time, next time,

next time. Yeah,

well, let's, let's put a bow on it. It's a good wrapping point. Um, we're going to go ahead and pivot to our final segment here, which is the five second scramble is we're just going to ask a series of questions, kind of give you a response.

Within five seconds, um, some business, some personal, if you go beyond five seconds, you will get air horned off, uh, off the pod.

I have to give you a warning, Tim. I'm never good at these things, but perfect.

Perfect. Then I'm going to let Mike take, uh, take you, Bo. Um, and I'll go with David. So, Mike, go ahead and tee us up.

Yep. Uh, here we go. All right. Uh,

you ready, Vo?

Uh,

not sure about the clock. All right, here we go. Well, start easy. Give us a quick pitch on episodes if I were a five year old.

Um, hey, um, uh, you want to do a lot of cool stuff in the car or, you know, without driving? Oh, that's an episode. No, I'm sorry. That's a plight.

That's a plight. Oh, boy. Um, uh, uh, you know what? I'm going to fail.

This might be

the more fun one yet. Oh boy, oh boy. Yeah, can you skip? Yeah,

sure, sure. Next month. Um, how would you describe the culture at Episci?

Actually, uh, um, at FPCI, uh, we are half, I mean, 70 percent of people are remote, but I don't feel like we are remote, once you're online, they are present day, night, and evening.

Late evening and, uh, uh, very, very, uh, supportive and collaborating with each other. I love it. Nice. What kind of technologist

thrives at EpiSci?

Two types of people actually at EpiSci. One, uh, someone who actually, uh, understands and Uh, being able to adapt the latest technologies to solve the problem. And of course, that's, you know, of course, that's, you know, valued no matter what, right? And actually second, someone willing to help out, you know, uh, uh, you know, beyond their call of duty.

So, those two types of people, uh, and help out. And of course, you know, we have, we have visionaries, we have great leaders and FBSI and all that. Out, you know, when it comes to focusing on actually people doing the work, you know, not talking like myself, I think those two types of people really make a big difference.

Uh, what kind of tech roles are you hiring at FSI?

If you write, uh, great autonomy software, top to bottom, you know, you are in awesome.

What's the first thing you do when you wake up?

I check my messages, yes. Ha ha ha. Email. Guilty. Guilty, yeah. Team. Oh, I mean, I mean, less now, right? I'm trying to not do that anymore. Now that, now, uh, I have a little bit of different role. I've applied, but definitely every morning was, you know, you get up, see if there's any emergency. I think it's actually a fun one.

Rare times, you know, we have servers in our, in our office. Uh, one time the server, uh, went down. We need someone to reboot, you know, reboot at 11, I think 1am, uh, you know, so it's 11pm, 1am. I was so glad I got that message because obviously you're in the middle of, you know, uh, middle of developing something important.

So I was able to turn that on for the group and kind of chatted with the engineer and He was so grateful to me, actually, that someone is out there to do it, you know, the weekends and all that. So, you know, those are the kind of scars or things that you get to be, you know, able to earn, right, as only as the founders, right?

Right. I mean, if you're not founders, you know, and you know, why do you not, you know, why do you do that? So. Yep, that would be the one of the best episodes for me.

Nice. Um, aside from your phone, what's a tech gadget you can't live without?

Oh, boy. Oh, boy. Um, besides my phone. If I give you a laptop, that's, that's too lame.

Oh, boy. Um. Um. I would say, uh, the smartwatch, you know, I recently got one and I love it. I wish I bought it, uh, much, you know, uh, earlier, uh, and, and use it. Uh, it tells me a lot about, uh, you know, what's going on, uh, even if I didn't watch the phone, so that's great.

What's a charity or corporate philanthropy that's near and dear to you?

To me, um, uh, yeah, based on my faith, actually, uh, there are several, uh, around me, uh, nearby, uh, really, which really, they are all focusing on, uh, the poor and unfortunate. So actually, I'm not going to name names, uh, in here, but, um, uh, those are, uh, the, the, Now that I have a little more time, right, somehow less burden, right, on running things.

Uh, I, I love to do actually some more, uh, work on, on those, uh, uh, agencies and charities. Um, I love what they do and I see them, uh, and I like what they do. And so, yeah, um, uh, those charities are, are, are important to me. Actually, one more thing since you asked that, Maya. Um, again, I am working in the defense, and you get, you really have the privilege to work with, uh, you know, men and women, right, in the uniform, and who are, even though, you know, some may not be in uniform, but the fact of the, the fact is that our work, uh, and I happen to deal with a lot of fighter pilots, right, pilots, and, um, uh, they, uh, they, um, Uh, I mean, again, great respect and admiration for what they have done and what they do.

So there are some charities that actually that are focusing on, on the warfighters and definitely, um, uh, I'd like to do more, uh, you know, uh, in support of that. I

couldn't agree more. Um, so, uh, what's your, what's your go to dessert? My go

to dessert? Uh,

ice cream. Ice cream? Any particular

flavor? Uh, the cookies and creams with coffee.

There's one, there's one, um, you know, they The mom and pop ice cream shop in Del Mar, I went there, they had a cookie and cream with coffee and one other flavor. I loved it so much, I went there a week later, that flavor was gone.

So, oh boy, yeah, I miss that. Still don't have that anymore.

If you could time travel to any period, which would you visit first?

I think I would have certainly, you know, just like anybody, right? Wouldn't make a lot less mistakes.

I would not have had much money, though. So, um, all

right. Uh, last one. Uh, what's, uh, what's one thing that's on your bucket list?

Oh, my bucket list. Um, you know, uh, I wish I had really fancy ones, but, uh, the one that I have is, um, let's spend more time with family and not this whole thing was very taxing, you know, the family and, uh, Again, I owe tremendous amount of, uh, guilt and all that to my wife and my children.

Some of my children actually work at EpiCi. So in this, but, uh, but again, it's a work, right? It's a work. And at home, uh, it's a totally different story. So, uh, I do, uh, need to spend time, you know, whether that is, um, Uh, hiking more, uh, you know, going to charities more and things like that. So, yeah, uh, just spending more time with family.

Definitely. You know, my next big item. All

right. Well, it wasn't so,

so painful. That was, uh, I wish you gave me some, uh, advanced notice. We'll say that was the five minute scramble.

No, enjoy. Enjoy those answers. David, you're up. You ready? All right, let's do it. What's one of your favorite company values at shield capital?

Uh, intellectual honesty. So everybody gets a say on stuff. Obviously we have four decision makers, the partners, but, uh, everyone gets to like share their, their opinions.

Nice. What kind of human thrives at shield capital curiosity? What are some of the most common tech roles that you see your portfolio companies hiring for right now?

The ones that they need are good federal business development people. Uh, it is a difficult thing, requires a lot of different complimentary skill sets.

Um, and they are totally invaluable. I would also then make a plug for you're never too early to actually hire a really good either fractional or full time CFO.

Good plug. What's one of the biggest challenges that you hear from founders in early stages?

Keeping the culture from when it was really small.

Um, and like letting go and delegating and knowing that it's going to be okay. Right. A lot of the founders are, they, they have a very particular way. They want to get things done and vision. And, you know, ultimately you can't do it all. So having trust in the people and spending a lot of time hiring the right people, I think is super important.

Critical.

What's a favorite piece of legacy technology that you still own today?

I don't think I do. You just pitched it all like all appled out. But just call me basic. I don't know. I've got like this. Uh, JBL speaker, uh, in the shower so I can listen to my podcasts.

What's, uh, what's your favorite business book that you would recommend to fellow entrepreneurs?

You know, in this space, I get asked a lot by people that are transitioning, they want to get into, you know, early stage. So startups or venture capital, and I just recommend the power law. That's such a good book. So many good anecdotes and it's a lot of fun.

Good stuff. What's a charity or corporate philanthropy that's near and dear to you?

Uh, yeah. Um, so big dog lover over here. Uh, and I got my dog from the humane rescue Alliance, so big fan of them. And then I'll just give two plugs to friends of mine who are running some nonprofits, uh, my friend, uh, Erringer Helbling, she runs Damati Ventures. Which is a place for veterans to sort of find community, specifically with one of her initiatives called Project Sunrise, which is A weekly yoga practice.

Um, that's amazing. And then another friend of mine, uh, Sarah Scully and her podcast, women in the arena, uh, which is under another five Oh one C three, uh, iron media or butterfly iron media. So anyways, um, yeah, they're just really inspirational people doing great things.

Yeah. We'll, we'll point them out, uh, in the show notes as well.

Um, what, uh, if you could have dinner with any tech icon pastor present, who would it be with and why?

I mean, I guess I'd like to, at this point meet with Elon Musk, uh, he's super controversial, but he also has like the ability to sort of. Make things happen. And so if he's got a particular beat on something, cause he's seeing it all, that would be probably pretty good for my future investments.

Yeah. Be an interesting dinner. What is the worst fashion trend that you've ever followed that I followed? Yeah.

I'll tell you this. I was convinced, uh, when I turned 28 that I could make velcro sneakers, a thing. And then I was quickly told by people that you're not allowed to create fashion after the age of 30.

Like you've just aged out. I wasn't able to, uh, so I just started wearing all birds and I still wear all birds to this

day. Super comfortable. I mean, the velcro is just so easy, but right. I hate it. I'd

like tying shoe. Basically, I just buy shoelace shoes that I can slip on.

Right? Yeah. All birds. Yeah. Last question.

What was your dream job

as a kid? My dad was a businessman, so I thought I would just be a businessman. And then I ended up. Uh, joining the air force in college and are doing ROTC. And I got to become a businessman in the military. Um, so there you go. Not that, not that looks like living out your dreams.

Maybe I thought I'd be like an architect for Lego Legos. When I was a little kid, that is a dream job. Well, you know what, let me reverse that back. I did want to be a sportscaster. I thought I wanted to be on like sports center. Nice. Like Scott Van Pel and you know Stuart Scott and, uh, Dan Patrick.

It's never too late, you know, it's never too late.

Mike, Mike on ES ESPN one of these days. Yeah. Um, awesome. Well, well thank you guys both for, for spending time with us and, and, uh, you know, uh, sharing some, some of those insights on this whole defense tech ecosystem. I know it's gonna be helpful for a number of our listeners who are kind of building out their strategy for their own startup, so.

Thanks again for hanging out with us on the pod. It was an honor and a pleasure. Thank you, gentlemen. Thank you so much.