Transcript

Rapid Response: Public-private opportunities, with Defense Innovation Unit's Mike Brown

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Artificial intelligence, biotechnology, autonomous systems, cybersecurity. We need a different way of doing business with the commercial world. That's what DIU is all about. How do we understand who the companies are that are developing those technologies? And how do we have a process that makes the Department of Defense as friendly as possible for those vendors? So the experiment is working, we've delivered. twenty-five different capabilities now to the military that they didn't have before from commercial sources. We've introduced sixty five First time vendors to the Department of Defense. We have started our one hundredth project.

We're doing twice as many projects as we did two years ago. We're seeing a hundred percent increase year over year in terms of the company submissions to DIU. I'm proud of that track record that our DIU team is establishing. But relative to D O D, which is probably about A trillion, two trillion, or three trillion dollars in that time period.

where a drop in the bucket. So I think that we've proven the benefit of how we work. There's a lot more commercial technology we could be taking advantage of. We need more emphasis on how do we scale what DIU is doing to help. Department of Defense. That's Mike Brown.

director of the Defense Innovation Unit within the US Department of Defense. Mike's role is to help bridge the gap between technology innovators and the US government. And during the COVID nineteen crisis, he's used that position to introduce some cutting edge projects that advance the health safety of military personnel. I'm Bob Safian. Former editor of Fast Company, founder of The Flux Group, and host of Masters of Scale Rapid Response.

I wanted to talk with Mike because with so many health and other challenges facing the United States. Public private partnerships could be a key way to accelerate meeting those challenges. And no one has a more insider's view of the industry government interchange. Then Mike. As the former CEO of Symantic

Mike experience working with the government from the private side. He knows that public private partnerships can be a big growth opportunity for businesses. And he's become a key ambassador between Silicon Valley and Washington. He also has a keen eye on China's tech efforts and its potential impact on US companies and US national security. Bringing the best of commercial tech into the government, Mike says.

Isn't just a nice to have? But a need to have. I'm Bob Safian and I'm here with Mike Brown, the director of the Defense Innovation Unit. Of the US Department of Defense.

Mike's coming to us from his home in Palo Alto, California, as I ask my questions from my home in Brooklyn, New York. Mike. Thanks for joining us. Thanks for having me. Looking forward to the conversation, Bob.

So Before we dig in on your rapid response. I'd love to get some context from you. You were previously the CEO of Symantec. Before that you're CEO of Quantum. You have a lot of experience in the private sector. Now more recently you work in the public sector.

These are two spheres that engage, but Often don't really connect. Quite naturally. What's the difference between working in the corporate world and for the government? Hm.

Well, there's probably quite a few differences, but one that will immediately strike you if you join the government is the way Congress allocates money. I've heard it said that every government organization has five hundred and thirty five members of the board of directors. That's our Congress. very different in terms of working with a corporate board. Which actually provides a lot more flexibility for the CEO to pursue a strategy. And working with the Congress, which would like to be informed about what's happening, has different colors of money as they're called. So

Appropriations come not only by year and then by color in terms of what you can spend for ongoing expenses, what you can spend for R D. They all have different expiration points. Those are not fungible between categories. And you have a lot of folks who are interested in what your organization is doing. So for The defense innovation unit being a part of the department of defense. We have House Arms Services Committee. Senate Armed Services Committee.

House Appropriations Committee, Subcommittee on Defense, and same thing on the Senate side. So you have four Committees with congressional oversight. So it's a big difference in terms of your flexibility. Now your mission is to try to Integrate more public private partnerships.

What are things that private sector folks most misunderstand about working with the government. Well, I'd say number one might be what we just discussed. Sometimes you're not able to move as quickly because of the different way funds are allocated. What we try and do is mask as much of that as possible so that we don't have to have every company that wants to work with us understand both the organization of the Department of Defense, which is

complex the biggest organization in the world. And those details about how money is allocated and what authorities you're operating under, et cetera. All those rules, entrepreneurs don't really like rules a lot of the time, right? Exactly. They're motivated to move as fast as possible. So really, how do we reflect the opportunity cost that small innovative organizations have in working with Department of Defense? Course there's a well developed

routine for the large defense contractors who have a business model that is suited to working with what the Department of Defense Requires. But we want to take advantage of all of the innovative capacity. The great things that are happening all across the country.

So to do that, we've got to make sure that we have a process that's agile. Is fast. So that's really What we've set up and we have a special process, we call it commercial solutions opening that really makes it easy to interact with us. and gets companies an answer quickly.

Even if that's a no, even if they're not going to be the vendor that's selected, as we all know, it's more important for companies to get that answer quickly. than to waste a lot of time and find out later that they're not gonna be moving forward. So We're all about speed. So The Defense Innovation Unit.

Which you run. It's relatively new. Five or six years old. Offices in Silicon Valley, Austin. DC, Boston. The goal is facilitating these public private partnerships between the tech industry and the DOD.

Heading into twenty twenty, you had fifty, sixty, seventy projects underway, something like that. Then the pandemic hits. Now you have plans, all leaders have plans all the time. How did the Changed environment. Impact

Those plans. you thought you were gonna be on versus where you ended up focusing your attention. Right. Well, maybe I can just also take a minute to provide a little more clarity on what public private partnership means in this context. We are providing revenue contract for small companies. To first

prototype their solution. with the Department of Defense. And that doesn't mean uh prototype in the sense that it's immature technology. It might be a very mature technology in the commercial world. So we use that term to mean just test it in the government environment, test it in the real world military application. And we want to make sure that we do that quickly, and that's

One year if it's a software project, two years if it's a hardware project. to then get access for that company to production volume and contract dollars. So Defense Innovation Unit really is all about getting companies access to the large contract dollars that DOD awards. So that's what we mean by public private partnership there.

Your question about Covid, you're right. like all organizations, we had to go through quite an adaptation. It really came in three flavors. One Can we operate When we're not all face to face in the office every day. Now the good news about our work at Defense Innovation Unit, we was already set up on commercial tools.

So we had it a lot easier than many of our Brethren at the Pentagon who had to figure out okay, how do we work with some of these video platforms. We use a suite of Google applications. So that was pretty seamless. The second, we actually did some work related to COVID. So we we found ourselves increasing our workload.

at that time. I'll just give you two quick examples. One project we work on, we call Clean Sweep. How can we use robotics? To be able to disinfect areas that are enclosed. Think about ships as the use case. Where we won't be able to use ultraviolet light or some disinfectant.

And because it's automated with a small robot. How can we do that without exposing other people to COVID? So that was an interesting project still ongoing. We have a couple of interesting prototypes. And then the second How can we

Provide an early warning signal. For someone who might experience covet. And we've employed you won't be able to see it on the podcast, but I'm wearing a digital watch now and a ring. So two digital wearables. And we're working with a third company that's assessing all of that data, which is data on your temperature, your heart rate, and it's all relative to you as an individual.

Oxygen in your blood. And Phillips healthcare. They develop algorithms that are a predictor of symptoms up to 48 hours before you even know you might be sick. So this is critically important if you think about crews that might be going on a ship. We need to understand whether

Folks are coming down with something before they get there. And of course this was A project we had already scoped. But we reoriented it to be specifically focused on COVID. We've now detected about three hundred

And fifty cases of COVID. using these digital wearables. This health assessment tool that you've been working on. It sounds like this was something that was Planned

But sort of shifted and accelerated in this time. Like in some ways Did the pandemic provide an opportunity? For you to move faster through the system that otherwise might have been Slowed down more? Bob, you're exactly right. So we had thought this will probably be a good indicator when someone might be coming down with something. Could have been flu or something else, but because of the urgency and understanding whether crews might be coming down with COVID and we saw

uh negative effects of that on the Teddy Roosevelt. This was able to focus our efforts to look specifically at predicting covid. And also it helped us enroll many more people in our study. So very important for expanding the trial group. Focusing us on one particular disease. So you tuned what these devices were measuring to the specific symptoms or things that happened early on in Covet.

you held up your watch and your ring. Are all of us gonna be wearing these watches and rings? Is the commercialization part of this Well, we often want to work with companies not just for what they can do for defense, but who have a successful commercial business as well. Those tend to be the best vendors for the military because That means that Commercial company is gonna continue to improve its platform. Refined its technology.

And then the military's gonna be a beneficiary of that. So it's a huge improvement in terms of the capability that the military gets if we're working with a commercial technology. So you're exactly right. This is a technology that is being pioneered, but Phillips Healthcare is an example. is very interested in what they can do to make this a commercially oriented product. So while you might not be able to take advantage of that today,

I think you might be able to in the future. We were talking about how the funding works. So you oversee only a small part of the DOD budget, right? Like the vast bulk of the dollars are still. Spent this old fashioned way. Is part of your goal to like develop a proof of concept so that you can demonstrate that that budget should shift. What will it take for this to happen at a larger scale, or do you not think it needs to happen at a larger scale. Oh my goodness. It definitely needs to happen at a larger scale.

If you think about These game changing technologies like AI, like cyber, like autonomous systems. These are being developed by the commercial world. So we need a different way of doing business. With the commercial world. I would say we need to become a fast follower if we're not the developer of those technologies. How do we understand?

who the companies are that are developing those technologies, and how do we have a process that makes the Department of Defense as friendly as possible for those vendors. And we talked about speed and agility being absolutely key in that. We can't work with those companies in the same way we might work with Northrop Grumman or Lockheed. The opportunity cost would be too high. And we need them. The leading edge is happening.

Yeah. So the experiment is working. We've delivered twenty five different capabilities now to the military that they didn't have before from commercial sources. We've introduced sixty five First time vendors to the department of дефенс. We have started our one hundredth project.

We're doing twice as many projects as we did two years ago. We're seeing a hundred percent increase year over year in terms of the company submissions. Two DIU, so becoming a little bit more well known, more companies saying they want to work with Department of Defense. Having said that, your point that you started with Which is where a very small part of DOD procurement absolutely true. We're probably affecting

In the neighborhood of one to two billion dollars of procurement. From a startup from five years ago where we're affecting none. I'm proud of that track record that our DIU team is establishing. But relative to D O D, which is probably bought A trillion, two trillion, or three trillion dollars in that time period.

I can imagine during twenty twenty for a lot of smaller businesses, founders and CEOs who were wary about their prospects in the difficult economic climate, that doing some work for the government didn't seem like such a bad thing. I can imagine that might have fueled some of this sort of increased deal flow that might be coming your way. Well, I think that's right. We're a relatively stable source of revenue if you can get access to it. And the good news for those companies working with us, we've seen recently some fantastic support from Congress, those congressional oversight committees we talked about earlier. have provided their support and in in this year's appropriation, uh we're in the fiscal year twenty one of the government.

We receive fifty percent more in congressional appropriations for projects. than we had been able to ask for through the president's budget. So We very much appreciate that support, and you're right, that helps bring companies along to see DI U's growing.

You took on the director job during the Trump administration. Now you're continuing In the Biden administration What changes in your job? as the lighthouse Changes.

I was lucky enough to pick up an organization that already had a start. And my whole emphasis at DIU's been how do we scale this? So how do we become much more relevant? And in fact, we have a dedicated team we call defense engagement. that is really scanning for what are the most important problems that we can work on.

One of the things that Secretary Mattis emphasized to me is We really need to be working on projects that can transform capabilities of the Department of Defense. There's a lot of smaller projects you could do that are interesting, but they don't move the needle on department's capabilities. And when he first gave me that charge, I was a bit daunted by how big that charge was. But when I went away and thought about it, we really do have an impact there.

We worked on predictive maintenance for aircraft. That's a technology that The commercial world has used for years. And we went to the vendor of Southwest and Delta Airlines. And said could you

help us prototype that in the military. And what you're talking about here is big data. Taking the maintenance logs, understanding what is gonna Probably fail next. And we were able to show that we can improve the readiness. of a particular aircraft by three to six percent.

And that may not sound like a big number, but for a lot of these sophisticated aircraft You're trying to make sure that the readiness level is higher than a fifty or sixty percent level. So that's how often that plane is not available for a maintenance problem. So be able to predict that in advance has huge implications So that's an example of a technology that we started with the Air Force. We've taken now to the Army and the Marines, applied to ground vehicles, which is predictive maintenance can apply to anything that moves. And now we're talking to the Navy. And maybe the first technology that

We've started with and Taken across all the services. So the mission for me at DIU has been how do we scale the organization? The good news is innovation Working with the commercial sector, that's a bipartisan agenda.

We've had tremendous support through the Obama administration, Trump administration, and through the Biden administration. This is something everyone can get on board with. Getting access to leading capability for our military. And doing it at low cost because It's always cheaper for the taxpayer if we use a commercial solution than if we develop something custom.

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You have a a cybersecurity background as the C of Symantic. You mentioned the challenges that the DOD has in security. I know a lot of Our listeners in business much more reliant on remote access and cybersecurity issues in their business also a greater need, a greater threat. What should folks

understand about cyber right now. Well, what folks should understand about cyber is it's a very complex field. And almost impossible to defend yourself if a nation state is coming after you as it appears the Russians have done. through what's been called solar winds, but now is a much bigger attack vector than what we saw with just that one vendor of solar winds. So it's difficult to provide the right level of cybersecurity protection.

for any company out there. But still, most of the breaches happen. Because we don't take care of what I call cyber hygiene. Which means we have to continue to ensure that folks are educated, not to click on things that Or

Spear fishing. And we've got to make sure that we have the right level of defense and That means that you're buying the latest products from the commercial market, cybersecurity vendors, and you apply the right patches. So these are basics, and we continue not to be very good as a country, as a society about applying those basics, and therefore we continue to get breached. Now, separate from that, what this sophisticated attack has shown us is

We spend a lot of our energy On Building a moat or high wall, a high perimeter making it difficult to put in the network. We have to move to more of what's called a zero trust Philosophy.

where you have to assume that you've been compromised at least at some point in your evolution as an organization, which really means you've got to spend some of your resources on hunting looking for intrusions. So I think there's gonna be an explosion in techniques, which I think will Help us be more secure. There's a lot more that we have to do. We continue to not impose enough costs on the

Attackers. So it makes it easy for them to develop these campaigns. And we have to recognize that when there are nation states involved, we have to figure out what is the right policy that imposes more costs there. The current philosophy of US Cyber Command to defend or hunt forward is a key step in that to try and make sure that we are not in a position of only defending on our own turf, but we're also

looking at what adversaries are doing And interrupting some of their operations on their own turf. And the technology that is at the leading edge of being able to provide that protection or that hunting. Is that coming from within the government or is that coming from the kinds of partnerships that you're trying to develop?

It's both because as companies operate, they don't have the legal authority to be hunting or defending forward as Cyber Command does. That's illegal to take offensive cyber action. And as it should be, we can't have complete anarchy in cyberspace. But the tools to at least understand the intrusions, that's gonna come from the private sector. One of our big D O D partners is US Cyber Command, NSA. And of course the

cyber groups within each of our services, Air Force, Army, and Navy each have their own cyber force. And we're helping them integrate the commercial tools with What they might also have developed. they're gonna be a lot more effective in their jobs if they can combine the best of what the commercial world has plus what they might know. being a government organization.

For some businesses working with the Department of Defense has engendered protests. Sometimes from their own employees. And CEOs can find themselves trying to defend that relationship.

How do you address that in the work you're trying to do? Well, I think it's important to understand what the use cases actually are for department of defense. A big mission for our military is humanitarian assistance, disaster recovery. So some of the technologies we're looking for have to do with helping our military carry out that mission. The military's

taking a very active role now in covet response. We know that there's gonna be FEMA center set up to provide additional vaccination and the medical personnel in the Department of Defense are gonna be out vaccinating Americans. So it's a lot of different missions of the Department of Defense. And I think we need to make sure that those Professionals have access to the best technology.

So I think part of the answer is understanding what the full complement of things are that DOD's doing. Part of it is understanding that no matter what your Beliefs are about the offensive capability of DOD. We need to make sure that those folks have the best information possible, the best tools available to make themselves more productive.

The Department of Defense takes ethics very seriously. In AI we now have a published set of ethical guidelines. So I think it's a more complex picture than maybe a lot of folks give DOD credit for. I wanna ask you about China. You were asked by Ash Carter to

Do a study about China's unique approach to melding technology and security. And it seems you see some competitive risk in the way The Chinese were Versus the way things work here. Absolutely. Well, the study you mentioned really brought some attention and light to the fact that

Not only were The Chinese busy Using cyber theft, індустріal espionaž. But they were also Taking the very legitimate legal step

of investing in early stage technology. So this highlighted the fact that in twenty fifteen, twenty sixteen. Chinese investors were involved in fifteen percent of all US venture deals done that year. So China has five hundred different investing entities that mirror Western Venture capital, growth equity.

private equity firm so they can participate in deals because China's discovered that one of the best ways to bring technology back to China, which is part of their national strategy. One of the best ways to get access to leading age technology was to follow US venture.

around, see where they're investing, what companies and technologies are they investing in. So sure enough, they had a very active program there. So that study resulted in some changes to The committee on foreign investment in the US, an interagency group. That's responsible for understanding What technology leakage occurs.

that might be sensitive in national security arenas. And they have some jurisdiction to be able to stop that if they see that that could be detrimental. to national security. But to your broader question.

I think we need to recognize that China is very focused on how they transform their economy. through technology. It's a very systematic long term goal. And you can see it in how they're operating. One of the strategies they employ is something called military civil fusion. And that basically means that

Any commercial discovery immediately gets transferred to the military. That's their goal. We could argue about how well that's working in China, but that's their goal. So rather than a DIU, which is trying to provide incentives and work in a faster pace. In China, we know there's no company that is beyond the reach of the communist party. If the party reaches in

And says I want help. If they want access to Waway's communications infrastructure. The company has no ability as we do in our system to say no, I don't think so. They have to comply.

So it's a very different set of rules for companies in China. They're National strategy. To be stronger in technology. We're talking about

Satellites Five G like Huawei. AI through companies like Baidu. А дай сі дас таки. to maintaining the kind of growth they've become accustomed to.

in the next twenty, thirty, forty years. And they're making the investments Early on. From a science and technology standpoint. that they hope will lead to a foundation again where they are the leading innovator. Where they're setting the world standards.

And where they don't have to rely on outside Countries like the US. For some key ingredients to the products they want to make. For example, today semiconductor is a key ingredient. They have a plan made in China twenty twenty five. with the goal of forty percent of the semiconductors used in their own electronics.

And at the world's largest electronics. Manufacture. To be Chinese made. They're nowhere near that goal.

They've probably doubled from where they were, probably seven percent to fifteen percent. Nowhere near the forty percent. And their goal is by twenty twenty five for that forty to be seventy percent. So we don't know whether they'll be successful with their goals, but their goals are clear. They wanna displace us, they want all those profit pools to be moving to China.

They want to be on the world stage as the leading technology superpower. So we need to think about what is our response to that. And one of our responses needs to be thinking about How much are we investing in science and technology.

For the future. Part of that role comes from the federal government because Through government investment, we can make longer term, riskier investments that have led to some great innovations in our history. Like the internet, like GPS. Those have come from Department of Defense investments.

And think about the tremendous commercial prosperity, the economic prosperity is a country we have because we've led there, we've set the standards there. It's our companies on the world stage taking advantage of those technologies. Are we making the investments today that will ensure we have that same position? For twenty, thirty, or forty years down the road. Our federally funded R D has declined.

precipitously since the sixties when we were making big investments during the height of the space program. Some Silicon Valley CEOs is their facing increase. government regulation or the prospect of it. Some of them quietly say, Hey, I'm not monopolistic because Some of my biggest competition is coming out of China and

If you tie my hands, the Chinese government's on the other side is just gonna keep going and you know, we're gonna lose in the long run. Do you feel that way? Do you see any of that argument? Well, I think there is an argument there for ensuring that our antitrust philosophy recognizes that these are competitors on a world stage. But I also think there's an argument for ensuring that we're encouraging innovation. And if our philosophy is limited to we only want large national champions, the way China thinks about the companies they want to put on the world stage

We're probably not doing the best from an innovation standpoint. So we need to think about the response to China As What brings the best of what the US can offer. In some cases that may not be

applying anti trust laws. If we look at competition on a global scale versus US. In other cases, I think it's making sure what policies do we have to make sure we're stimulating increased innovation. in the economy. And part of that stems back to what we talked about before. Are we making the investments as a federal government That provide the

breakthroughs that will lead to future innovative companies coming on the scene. What's at stake in this moment? For DIU. I think that it's a critical inflection point as we think about the Department of Defense facing increasing budget pressure, because there's other pressures we have for our spending dollars as a government. To be increasingly efficient.

And efficiency, part of that means we've got to be drawing on all the innovation that's happening across the American economy. And working with more commercial technology. So DIU today is just scratching the surface on what could be done. Both in getting More leading edge technology to the military.

And making sure that that's very efficient from a taxpayer point of view. because it's always going to be less expensive to leverage commercial technology and the tremendous investments that are being made by Venture capitalists, private equity, and other actors across the economy than to do something custom. So we need to make sure that D.I.U. is

very effective in its role and has the possibility to expand to provide even more value and impact to DOD. You don't have a specific military background. So As you Come into this job.

Do you Miss being in the commercial sector. What about the military is Satisfying or frustrating? Well, y you're right, I have no military background, which makes me a bit unique.

in the Department of Defense and at DIU. But what has been compelling and apparently it's been the best job I've ever had, I've just enjoying it so much is the mission. There couldn't be a more important mission, as we've talked about. It's critical that we get leading edge capability to our warfighters. And I'm working with an incredibly talented set of folks. And then the folks that we get to work with at the Pentagon and the Congress. It's a really interesting mission working with some great people who are also aligned.

I think that one of the benefits of having a commercial background is to be that bridge. I understand the pressures that young companies are under and those CEOs And so we can help bring that message to the military in terms of how do we need to change how we do business and be that fast follower so that we can be the right type of customer for those companies that we need to work with. So I think the translation is something that's important. To bring to the job.

But you're having fun. I am having fun. I have never worked on something that is so mission oriented with a more talented set of folks. And that's inspiring. It's very motivating to work with the people I'm able to work with on such meaningful work. Well, Mike, I really appreciate you taking the time to share all this with us. And uh thanks so much for joining us. Oh, thanks for having me. Really enjoyed the conversation, Bob. Masters of Scale Rapid Response is a Wait What original. The show is recorded remotely, using sanitized audio gear.

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