Opening day of Air Force Space Pitch Day. The two-day event was hosted by the U.S. Air Force to demonstrate the Air Force’s willingness and ability to work with non-traditional startups. The opening ceremony features Lt. Gen. John F. Thompson, Space and Missile Systems Center commander, Dr. Will Roper, Assistant Secretary of the Air Force for Acquisition, Technology and Logistics, and Secretary of the Air Force Barbara M. Barrett.
Featuring:
Dr. Will Roper
Assistant Secretary of the Air Force for Acquisition, Technology and Logistics
Producer:
Walter Talens
Public Affairs, SMC
Transcript
So, before I turn over the mic to Dr. Roper so that he can make some comments, I would like to highlight something that is a unique personality trait of Dr. Roper. Sir, can you show us your socks? (crowd laughing) Dr. Roper has some of, has the most amazing sock collection in the Department of Defense. (crowd laughing) But in honor of today’s event, Dr. Roper, we have created very special Air Force Space Pitch Day socks. (crowd laughing) Hashtag digitalAirForce, hashtag disruptiveAirForce, hashtag deftAirForce. Sir. (crowd applauding) The floor is yours.
Thank you, JT. My work here is done. (crowd laughing) JT, thank you so much for that overly kind introduction. For anyone that’s worked in a large organization, you know that it’s the people that are out in the trenches that make the innovation happen. So it is an awesome privilege, it’s a pleasure to be able to work on a team as talented as this and to just see what’s possible when we embrace that change in government is possible. The thing that I hate about working in Washington, the Pentagon so much, is so many people have been there for so long that they’ve forgotten what it’s like to work with people who create change and innovation for a living. And if you just get outside of those five-sided walls, I think our future is incredibly bright because of the talent that we have in the workforce. And JT, you are an inspiring leader of our space acquisition workforce. You trust the rank and file, you trust action officers, and they wanna be you when they grow up. I wanna be you when I grow up. (crowd laughing) So every time I wear these socks, I will try aspire to be the kind of acquisition leader and professional that JT has been through his entire career. I’m also super excited, I’m gonna introduce our new Secretary in a few minutes. But the fact that she has an entire Air Force to be responsible for and she is here with us today in week three, should tell you something about how important today is in the context of today’s Air Force, but more importantly our future. So I wanna do three things. I wanna do some welcomes. I wanna talk about what today means in the context of our broader Air Force initiatives to remain innovative and cutting edge into the future. Then I wanna talk about, well what is the future? So you’re here at a pitch event, what’s next? What’s our process? I wanna make sure that we start dispelling some of the ambiguity because as we create change the government is usually too late to clarify its process. So I’m gonna give you some thoughts about what does the next gear mean, and why should you be excited about it? So with that, let’s do some intros. If you are here from a company that has never worked with the government and maybe never thought you would, would you mind raising your hand or even better just stand. Round of applause people. (crowd applauds) For those of you, I just want to thank you for taking a step out on a limb with us. We realize that the government has not been the best partner of choice historically but I can promise you we are going to change that in the future. So I hope that, as you become successful businesses and we wanna ride that success with you, that you’ll tell your story and say, “You know, “the Air Force was a good partner with us early on.” And when we need to pick up the phone and have the next round of innovation and the next round, we hope that you just won’t answer it but you’ll say, “You know, we’re on your wing.” Now if you’re a company that has worked with the government or the Air Force before, would you mind standing up? Another round of applause? (crowd applauds) So for those of you who just stood, thank you for coming back, right? We may be getting something right! And for the first group, there’s hope. (laughing) We want everyone working innovation in this country to think of the Air Force as a right, first partner to go to. And I’m going to talk in the second section about what today means, about what we hope to be in the ecosystem that is tech in this country, one of our strengths. So the fact that you have come back to the government, that you are willing to believe that we can be different and better, gives me a ton of hope for our future. Now next, if you are here from Air Force Acquisition, which is really the tech company of the Air Force, if that world doesn’t mean anything to you, would you mind standing up? I think another round of applause. (crowd applauds) I especially want to thank Rock McMillan and Murph Busby and all the team of believers, zealots, and heretics that made this possible. Folks, this is an extra duty assignment for them, and I’m asking a lot of this team. I mean, you come into Air Force Acquisition and you tell your team, “All right, “you’re the greatest team I’ve ever worked with, “we gotta change everything about how we do business. “Lets go.” (laughing) And the fact that you don’t have to keep anything of the old is actually what makes this easy. We have to reboot everything from our Cold War acquisition system and start looking like a 21st Century purchaser and tech investor. The team that pulled this off, they are true believers in the innovation of this country. They are true believers that our process can change to work at the speed that you need, that we can understand how to cultivate an ecosystem that works in Defense and commercial. That we can create dual use companies in this century, whereas we created Defense primes in the last. So for the team that’s here, I wanna thank you for believing and making today possible. Now the next group that I wanna thank, only two more, is all of our space operators and space policy people. If you are here or representing the operator or the war fighter, would you mind standing? (crowd applauds) So, for the companies here, the investors here, the group before last, that’s your investment arm in the Air Force. We are going to be the collaborators with you to help you understand your product market match. We’re gonna be working with venture investors to figure out how we work together to make sure that innovation is the hotbed and strategic advantage of our nation. The group that just stood, they are your customer. They are the user, and I hope that you will take today to get to know your customer. It is so important in our business that we keep in mind that the systems we make, the details we work with companies, ultimately get put in the hands of amazing airmen that have to make their mission work, regardless of what we’ve given them. So the fact that they are here, DT Thompson, the fact that you’re here representing SpaceCom, I truly appreciate, because this business does not work without the user tied to our hip. So if we keep doing these every year and our operators are here, we will see amazing success. So thank you for being here. And the last group I’d like to have stand, if you are a private investor, venture capitalist type, anyone that works in the broader tech investment sphere, would you mind standing? (crowd applauds) So I really truly appreciate you being here. I also appreciate how much private investors and venture capitalists have reached out to us since our transformation of how we work with tech start-ups. So we’ve been on this journey for a year. We’ve made mistakes but we’ve gotten a lot of things right and interesting from the Open Topics works that we do with AFWERX to pitch events like this, and we have a great vision for our future. But we wanna share it with you. We wanna be influenced by you because the last thing we want to be is a bull in this china shop. We want to be a strategic partner with you to help create some of the greatest tech the space community has ever seen. So I appreciate you for bearing with me on the welcomes. It’s important to know how many communities are here. Get to know them. So let’s talk about what today means. Today I would say is second gear on a path to get to higher gears working with commercial innovators. When I came into this job, learned a ton, I get to work with amazing people everyday. You find that, oh we have an account in the Air Force and it’s working with tech start-ups and it’s sizeable. It’s 660 million every year. That’s in addition to the small business set-asides that are billions, and you get excited anytime you find money that’s there and you can do innovation with it. And you ask the Air Force and the Pentagon, so what do we expect from this account? Nothing. What a sad statement about what the last century and the end of the Cold War did to our acquisition system. If you don’t know anything about Defense acquisition, I’d recommend that you don’t, because we’re going to re-write it with you. (crowd laughing) But to give you a peek under the hood, the Air Force was an awesome service, still is, but it was truly vibrant in the early 40’s and 50’s when we were first created. Airplanes coming out every other year, such a fast innovator, with commercial vendors and commercial makers. But then we hit the end of the Cold War where tech slowed down. It got expensive because computers had to go in nearly everything when computers were still expensive and difficult to work with. So the pace of new programs slowed down, and that forced our industry base to collapse. We went from having 13 companies who could build advance airplanes to the two or three today. And we’re still stuck there in the Pentagon. But what’s happened since the tech slow down of the late Cold War? It’s that tech sped up. You’ve sped it up. Commercial innovators have sped it up. It’s time for us to speed up. It’s time for us to acknowledge that by the end of next year we will likely be less than 20% of the R and D spent in this nation. When we’re talking to a tech ecosystem in space that most investment firms believe will represent at least one trillion dollars of the world economy by 2040, some going as high as four. We’re crazy not to try to make it with you. Part of our future, to remain an Air Force that is worth a damn, we’ve gotta be part of an ecosystem that is world leading and we have to change our role of working with you. So part of what we’ve done, creating organizations like AFWERX, our small business innovative research office, funding open topics where you can come pitch an idea to us that we don’t even know we need. And we love those ideas. Doing pitch days like today. We’ve already done four or five with six or seven more planned. It’s going like wildfire because of the enthusiasm of this service to work with you. And the fact that you’re going to pitch to us today, and we are gonna put you on contract and pay you today, even if you’re a company that doesn’t need a check today, we hope that you will view that as earnest money of our seriousness of working with you. We will do this every year, forever. As long as innovation works this way, we want to be a partner that works with you at your time of need. So, you can imagine, being 20% of R and D in this country, we’ve gotta do some thinking about our future. We can’t just say it’s important to partner, it’s important to invest with you, it’s even important to understand our role, because as a partner with many companies, we actually have a lot of appeal. Our money’s not going to dilute, right? We’re not owning equity in your company. We’re a pretty patient investor, in that seeing returns in four or five years is pretty fast for government. And I’ve been told by a lot of investors in the valley that they have seen return on investment timeline shrink with software becoming the dominant area of investment. Over 80%. So maybe we can play a role that’s more strategic, more alone in its view, so that we are never short sighted in directions of technology. But it’s not enough. Because if we have this goodwill, and we’re a thousand flowers blooming, we’ll never be able to pull it into a bouquet that you can understand. And so, my goal by the end of this year, is to clarify roles and responsibilities across our venture ecosystem. I am open for suggestion on this, which is why everything I say now is not final. It’s not written in stone, everything is penciled. So if you hate this idea, come see me and tell me why you hate it and you’re probably right. I think thing one is we’ve gotta have a easily understood front porch of the Air Force. I grew up in the South, so I like front porches, They’re friendly, it’s somewhere between the outside world and the inside world. If you’re a company that’s not sure about working with government, we need a friendly place for you to discover, does your product have a match to our market? So I’m gonna be relying on AFWERX to do that for the Air Force. To put you on early, phase one contracts which are really meant to let you figure out your Air Force partner. To get you prepared for an event like this, where you’re gonna be talking to your investor and your user. This event becomes kinda the bread and butter of whether you have a strong connection with an Air Force mission. So, we are bringing you out of the normal way of doing acquisition and putting you face to face with the people that are responsible for growing a portfolio of companies that work with the Air Force. Can’t go higher than JT Thompson. War fighter, you can’t go higher than DT Thompson. You’ve got them here, so all that bureaucracy, which I believe weighs eight and a half pounds if you print it all, cut through all of that, and you’re gonna get to talk to your customer live. We wanna do these every year across all of our missions. And so it’s something you can plan on, and hopefully use to your advantage if you’re a company that wants to work with us. And thank you, for being willing to do that. The last step is one that we’ve gotta do this next year. What happens beyond phase two is phase three, and historically that has been the “there be dragons” part of the map where it’s not clear what you do. Because I don’t think we really cared about it. I think we thought that small businesses means small capabilities, small contributions to the war fighter. Small business, which I hate that term, tech start-ups, high growth potential companies, that’s the place where our future will be made. Now we care. We truly care. But what we’ve gotta do in phase three is find a way to collaboratively invest in you with our commercial investor counterparts. ‘Cause we do not wanna pull you into a defense only orbit. That will kill companies that are willing to work with us because of patriotism, devotion to the country, or just because we have cool problems and cool people. That works, too. But if we pull too much, we’ll ruin what could be a partnership that will make us successful in this century and keep the Air Force and world leading. So I hope that as we move into next year, we will tackle the co-investment of phase three and that that is the money needed to truly launch your products within the Air Force with a long-term connection. And hopefully the bridge that we create helps you get to commercial viability. ‘Cause we are like a little mini-market in this country. We pay different prices than the globe. We have different risk tolerance. So we could be an early adopter of much of what you have, get you cashflow and revenue until you’re ready to become a big, commercial powerhouse. And we hope that when that happens that we’ll be able to say, “Yeah, I remember “when Company X, Y, or Z was just five or ten people “pitching to us, and now look at them.” So that’s where we’re going. There is no more important work that we are doing in the Air Force. One of my favorite people from history is an obscure person, but a war fighter. His name was Lord Collingwood. He actually won the Battle of Trafalgar. Lord Nelson gets a lot of the credit, but Lord Nelson’s ship was incapacitated and Lord Collingwood actually won the day. So, it’s not someone you’ll read in your history books, but what I love about him is this peculiar habit that he had. He took long walks through the English countryside with a pocket full of acorns, and he planted acorns as he walked. And his stated reason was so that the British Navy would have oak to make ships a hundred years later. A hundred year view, and a person in uniform. We are getting that back in the Air Force. We want to take the long view, the long tech maturation view, share your vision, and hopefully make you that company that’s the difference maker, not just for us in the military, but a difference maker for the competitiveness of this country.