Brandon Tseng

Fully agree with Pete Modigliani and Matt MacGregor in their analysis of winners and losers in the House Appropriations Committee's FY25 Defense Appropriations Bill. Pay raises for service members are great, but prioritizing aircraft (many which are already delayed) over missiles is a poor signal to industry. "Yet at a time when our aircraft, ships, and munitions inventories are at historic lows, while the CCP churn out massive quantities of new systems, this is the worst time to cut procurement budgets. This does not enable production at scale. This does not incentivize new entrants into the industrial base to compete for production contracts." "Aircraft are undoubtedly important assets but at a time when munitions are acknowledged as being in critically short supply, the cuts to those accounts are not encouraging." https://lnkd.in/exu7Y337 #defenseindustry #defensebudget

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Great Article. The Defense Industry is not the Defense Industry that Eisenhower warned us about 60+ years ago. And DoD approach is largely to blame, NOT greedy 'arms dealers'. I've experienced contract negotiations where we provided a product at well below 'market value', yet the focus was on how much profit was written into our price. Never mind that profit is what pays for innovation, pays for a contractor to go out on a limb to listen and provide a solution to what are 'known' defense shortfalls. Defense leaders have been screaming to get private capital to invest in the defense market, but why would they when their returns are capped at around 10%? Much better investment to buy real estate, invest in Google (27% returns), or Microsoft (44% return), or Apple (34%). Bottom line, you get what you pay for. If you cap returns, companies have less capital and less incentive to go beyond 'requirements' and provide cutting edge tech to our warfighter. They simply cannot afford it, and the contracting largesse of the DoD actually discourages it. It's like keeping gifted and talented kids moving through school at the same speed a the lowest common denominator.

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The highlights from the SASC FY25 NDAA Summary include: • $25B topline above FRA caps • Streamline Milestone A and B approvals • Strengthens Middle Tier of Acquisition authority • Reinforces the need to reform DoD budget and requirements processes • Increased approval thresholds for OTAs • UAS and C-UAS initiatives • AI and Emerging Tech #NDAA #FY25NDAA https://lnkd.in/gJmJ2wpv

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Matt and Pete nail the analysis of Congress-DoD budgeting activity again. But they might have under-examined one key trend... This budget markup shows serious concern about #ContestedLogistics. Although the Navy took serious cuts to many programs, budget lines for logistics platforms tell a different story. Logistics platforms that received plus ups: - CH-53 (Heavy Lift Helo) - KC-130J (Tanker) - V-22 Osprey (Troop Transport) - Fleet Oiler - Towing, Salvage, and Rescue Ship - Ship to Shore Connector Non-Logistics platforms that received plus ups: - F-35 Missiles and surface combat capabilities received severe cuts. To me, the essence of how we do logistics is very important. Our proficiency, culture, and experience will serve us well. But there is no substitute for sheer mass. The House Appropriations Committee clearly recognizes that we need more ships. #Logistics #Congress #DoD #Budget #Defense #DefenseTech #DefenseTechnology #Acquisitions #Shipbuilding #Ships

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An opinion via Defense News by Doug Robb and Kate Robb offers creative, credible recommendations for reducing admin burden in order to attract more small, innovative startups to the defense industrial base. 1. Tailor flow-down requirements to make regulatory flow-downs from the primes less burdensome to their small business subcontractors -- which I learned is an authority already available to contracting officers. 2. Transition more OTA contracts to programs of record to provide follow-on contracting opportunities for small businesses working on R&D and prototyping.  3. Automate parts of the contracting process to alleviate shortage of contracting officers in the workforce. 4. Streamline contracting tools to better align with acquisition. #defenseindustry #defensecontracting #defenseindustry https://lnkd.in/eNvkeaci  

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Vannevar Labs is aiming for $1 billion in revenue by 2030. 💰 They are one of the fastest-to-profitability defense tech stratups... ever. 🚀 And their founders, Brett Granberg and Nini Hamrick, are two of the most candid, caring, and driven in the industry. This week's #CrossingTheValley is an absolute masterclass in what separates innovation theater from mission-impact. Check it out wherever you get your podcasts, and read on for some top takeaways 👇 1. Peers are the real support network of a business school… not (necessarily) the professors. Outside of the Hacking for Defense ecosystem, Brett got an icy reception from professors when he spoke about dropping out of Stanford. One went so far as to say, “if you drop out, I’m not going to help you.” 2. You can fundraise with problems and users… you don't (necessarily) need product. The world was different in 2018… but the Vannevar team didn't have a prototype. They had a deep background and extensive network of end users because they chose to solve a problem that they had experienced personally their previous lives. This made it easy for them to pick up the phone and get together with users who understood the problem deeply. 3. The best "first" deal is the first (real) deal you can get. “Whatever you can get, the fastest you can possibly get it, is what you should go after.” But crucially (and this will stand out from the typical deftech startup), they deprioritized SBIR, innovation money, and anything that sounded like innovation money or research funds. If it wasn't real money, it wasn't an important enough problem. 4. "Selling" in defense isn’t about sales… it’s about solving a problem with a customer who lacks existing capability. Many of the areas the team focused on were new to the government; they didn’t have to focus on competitors, and they didn’t have to obsess over a business model - they had to figure out what it would take to make the problem go away, and then deliver. Check out the full case writeup on Frontdoordefense . substack . com for the complete list of lessons and some 🌶 quotes!

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So, about that $4.1B AeroVironment <> BlueHalo deal... The first piece of work I ever did as a consultant was a defense prime split of two companies. Determining who went where, how to split up business units, and future rules of the road was no small challenge. And then, it was on to "Post-Merger Integration". The very first thing you learn is that >70% (probably closer to 90%) of M&A fails to achieve deal targets. So what about this one? The primary industry chatter (from some bankers, investors, CEOs, in the last 24 hours) is that this is a hedge against the next administration either ending the Ukraine War, or ending US support to Ukraine. - #AVAV posted revenue of $716.7 million in FY 24, up 33% year-over-year. In FY 25, they project $790 million - $820 million, representing nearly 12% top-line growth. - #AVAV Loitering Munitions Systems (LMS) segment is the big question mark -- it grew 74% YoY driven by demand for Switchblade and Puma products. In that same period, AeroVironment's services revenue declined by $12.1 million, as did its UnCrewed Systems (UxS) and MacCready Works (MW) segments. That's to say... if the primary driver of revenue (loitering munitions) were to slow, the company would have a bit of a challenge on its hands. So, what are they getting with BlueHalo? First, diversification away from drones to drone defense (cUAS). Second, a chunk of services revenue. Third, a smorgasboard of space, electronic warfare, cyber, maritime, and software / AI projects. That allows them to look at integration / cross-selling opportunities and decide where to invest, but it also offers plenty of space for additional transactions -- either to bring in house other capabilities to pair with BlueHalo solutions and go after big programs... or, to spin off these capabilities to other strategic buyers. Unknowns: what does BlueHalo have in the hopper? Some takes: - This is NOT a WWIII deal -- if anything, it's a contra-signal! (And in case you're keeping score at home, that's a **good thing!!**) - Last month Peter R Dixon made the case that actually more consolidation - not more companies - is what defense tech needs right now. Could this be the start of a trend? - This is not an Anduril Industries style deal: that's to say, it's not a laser-focused acquisition of a niche team or technology that positions the acquirer for a single big program or award. Where they go from here remains to be seen. What do you make of the deal? I know people have takes... let's hear 'em!

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Disaggregated System-of-System force designs have benefits, but also have significant vulnerabilities that DEMAND traditional mission aircraft. I did research for DARPA on disaggregated forces in combat operations, and am concerned with signals I'm now seeing trends that suggest the USAF is leaning heavily into a force design dominated by disaggregated SoS while minimizing traditional aircraft. What should this balance be, and why? Spoiler alert: The USAF should still be weighted towards traditional mission aircraft, augmented and supported by disaggregated, simple-function, autonomous platforms. First, what is a disaggregated SoS approach? Think decomposing all the individual functions of combat operations into individual platforms - probably CCA. E.g., each step of the kill chain would each be its own CCA. Find would be a CCA - Fix and track its own CCA - Target its own CCA - Engage (the weapons employment) its own... and so forth. If one node gets attrited by the adversary, the others are still in the battlespace and can mesh with quickly with other nodes to keep kill chains alive to achieve resilient effects. There are reasons why disaggregated SoS present an opportunity for advantage: with enough quantity, this approach offers survivability, resilience in function, complicates the adversary's targeting problems, and can offer off-axis and multi-static options to close kill chains. BUT, a disaggregated SoS is completely dependent on comms. Break or degrade the links, and you paralyze the system. Nothing can operate. This also increases attack surface. Systems do not require 100% attrition to lose effectiveness - about 20% may be sufficient to grind the system to a halt. This approach is insanely complex to manage and orchestrate, which may induce more fog and friction than necessary. Integration and interoperability are problems, especially when one considers upgrades and modernization. And, finally, a disaggregated SoS - to be effective and resilient - is expensive. Each function has its own airplane. And, you have to buy the all the things in super-high quantities to achieve the desired qualities and advantages. When has the USAF actually bought the planned quantities of anything?? Traditional mission aircraft will continue to provide resilience in the battlespace because they host their entire system on the same platform - they can execute their mission through attrition. And - importantly - traditional mission aircraft are proven and mature concepts. We have the experienced warfighters who know how to employ and execute their mission. Disaggregated SoS are still just exciting, wicked, hard, and unproven science experiments. So what is the right balance? There are clearly nuances to all of this - it's not absolute anything. We do need disaggregated SoS, CCA, AND we NEED proven, mature, traditional mission aircraft. I would argue that the balance should favor traditional mission aircraft, augmented by disaggregated SoS/CCA.

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Congress has published the FY25 NDAA bill. Find links and a summary of key points the Defense Tech and Acquisition newsletter. Some key themes described: - Continual support for improving acquisition of commercial solutions through reduction of certain regulations, improving training, and providing incentives. - Streamlining processes and certifications to enable greater speed and agility. - Codifying rapid and software acquisition pathways into statute. - Continued modernization of DoD requirements and budget processes. https://lnkd.in/eFFwVCs7 #defensebudget #defenseindustry #defenseinnovation 

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I’m at #SOFWeek2024 currently, and this morning, Military Embedded Systems published 2 articles summarizing yesterday’s sessions that are rather contradictory and confusing if read through the lens of a VC-backed startup. First, there was an article about Ms. Melissa “Mojo” Johnson’s keynote expressing SOCOM’s interest in expanding its ecosystem, to include proactive engagement with the VC and investor communities and their portfolio companies. Second, there was an article summarizing key takeaways from the PEO Rotary Wing session that stressed the importance of modular open systems architectures (MOSA). In the second article, Dan Taylor the author writes: “…industry should be focused on helping [PEO Rotary Wing] solve problems with technology the agency already has rather than developing their own proprietary solutions.” If executing on Ms. Johnson’s vision is a priority, this statement needs to be revised to state: “…industry should be focused on helping …solve problems USING technology the agency already has WHILE developing their own proprietary solutions.” This is the only way everyone will win—startups, VCs and investors, and especially the government. Just my $.02! #nationaldefense #executionmatters #onward

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What would you do with your own Air Force? When you don't actually fly, but tell the drone what you want it to do. What could your organization do with an air force, that can put just about any sensor, just about anywhere. Ad hoc, and/or on a regularly scheduled bases. Random routes, or pre-programmed over and over to measure changes over time. Getting an update on the latest this week from team Skydio #skydio #autonomous #autonomy #sensors #fly #program

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Secretary of Defense Lloyd Austin's has unveiled the details of the Replicator 2.0 initiative, it is clear the U.S. defense strategy is rapidly advancing to counter uncrewed aerial systems (C-sUAS). This makes the current moment a pivotal one for Directed Energy Weapons (DEW) technologies. My business innovation partners and I have been working on a new venture that has a flagship product focus of a distributed antenna, man portable directed energy weapon system that offers a precise and scalable solution to neutralise enemy assets, including drones. Its advanced radio technology is being developed to neutralise and destroy electrical systems with unprecedented accuracy, filling the critical capability gap identified by Replicator 2.0 and more. The precision is afforded by a distributed antenna system means highly localised effects, allowing for the neutralisation of drone swarms while minimising collateral damage. These features directly support Secretary Austin's goal of fielding C-sUAS systems at key locations both domestically and abroad, aligning our proposed technology with the Pentagon’s vision for the future of defence technology. Our development partners are significant key names in Defence, who recognised the potential of our method as a key and scalable component in this next-generation defence architecture. With the right strategic investment, we are poised to reach a Technology Readiness Level (TRL) of 7-8 within 12 to 18 months, positioning us as an essential partner in the broader Replicator 2.0 effort. We also believe this capability to be at the forefront of space defence technology. With growing missile and drone attacks in the Middle East we believe this technology needs to be exploited with immediate effect. Battelle Mission Technologies, a division of HII General Dynamics Mission Systems Sierra Nevada Corporation Babcock International Group Owen SudlowTom Coates James Earl Bram O. Andrea Traversone Bobby Sakaki Prof. Stuart Harmer John Caudwell AeroVironment Eric Brock Florian Seibel Anduril Industries Christian Brose Trae Stephens Founders Fund Steven Walker Evan Trevors Marvina C. Thales Defense & Security, Inc.RTX HENSOLDT Michael Dempsey Bryan S. Airbus Palantir Technologies Alphabet Inc.SpaceX United States Department of Defense U.S. Department of State 10 Downing Street UK Space Command US Space Force Enterprise Talent Management Office United States Air Force SAIC Lockheed Martin

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About 80% of the attendees raised their hands when I asked how many of their companies are actively supplying to the space sector. I posed this question at the start of my talk yesterday at the Pacific Northwest Defense Coalition (PNDC)'s Space Supply Chain Opportunities Conference. The audience response marked a striking shift from just three years ago, when I asked the same question at this event. Back then, as I recall, about one-third of the attendees were supplying to space customers. This (anecdotally) highlights the significant growth of our local space ecosystem and its expanding supplier base. Kudos to Denise Ryser, Andrea Hegarty and the PDNC team for organizing another terrific supply chain conference. The program featured fascinating talks by Mike DeRosa (Gravitics Inc), Jeff Thornburg (Portal Space Systems), and Tiffany Le (Starfish Space). Each shared their innovative space company's compelling vision and emphasized how supplier partnerships are critical in meeting their ambitious goals. Ryan Peoples of Renaissance Strategic Advisors delivered some of the most insightful space sector analysis I've heard. It was a pleasure to see old friends and meet new folks, all of whom are contributing to humanity's future in space through their interest, involvement and initiatives. As I noted in my talk, the Pacific Northwest, particularly the Puget Sound region, is a global leader in the space and satellite sector. It's a great home base for suppliers looking to support this dynamic, growing industry. Washington State has lots of space! Buckle up. Let's go! If you’re interested in learning more about Washington's growing space and satellite sector, here’s a list of space companies and organizations in the state: https://lnkd.in/gFUzE8h. Dradin Kreft | Ryan M. Casey | Sam Zvirzdys | Chris Groves | Christopher Pavel | Pacific Northwest Mission Acceleration Center | Nikki Malcom | Rosemary Brester | Mike Gravelle | Tommy Gantz | Amandine Noel-Crabtree | Rachel McKay (Slingshot Aerospace) | Ben Sappington (Moss Adams) | Michelle Wilmot (City of Kent, Washington) | Katherine Jerald | William Funke | Simon Shackelton | Joanna Boatwright | Robin Toth | Erica Bogard | Kei Shimada | Jo VanDerSnick | Kimberly Chaussee | Craig Baerwaldt (Sigma Design) | Space Northwest | Photo credit: Nikki Malcom

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Great DOD Commercial Space Strategy Report

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AI is the new technology frontier and innovation pioneers are creating new pathways and concepts for future development. Has the U.S. government positioned our U.S. based firms to accelerate and outpace foreign development? Or have we handcuffed ourselves to policies that lack vision and hold firm to a risk adverse cultural mindset?

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