Matt Brown Show - Conversations That Power The Business World.
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Matt Brown Show - Conversations That Power The Business World.
MBS966-Peter Newell, Retired U.S. Army Colonel & CEO BMNT
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Peter Newell is a retired US Army colonel of 32 years and a nationally recognized innovation expert whose work is changing how the government and companies compete and drive growth.
The Climb with Cherie Clonan
The Climb is a podcast for people building something meaningful and finding their..
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Hi there, ladies and gentlemen, and welcome to yet another cracking installment of the map brown show. Today we are joined from Austin Texas by Def Duel. He is a silver star recipient. He was a colonel in the US military for 52 years. He is the real deal, done some amazing stuff in the US military, and today he is the CEO of DMX, which is an innovation-focused business or group. And he's just doing some amazing work with hacking for defense programs over in the US and just so so much to get into. But for our viewers and audience around the world, Peter, who potentially haven't heard about you, why don't you kick us off, give us the elevator pitch, tell us what we need to know.
SPEAKER_02The idea of introducing entrepreneurship into groups of people to allow them to create a mission for themselves is something that we built BM ⁇ T to do. So oftentimes I tell people that VMT is less a company than it is a collection of really brilliant people who are driven by the idea of making the world a better, safer place, one problem at a time.
SPEAKER_04Okay, cool. So let's get into that. So obviously the word mission is very uh associated with um with the obviously military. I would actually equate uh, you know, um although I've never been in a battle situation, my father has, he was in uh the military for also around 25 years or so. Um but I would equate to business and the military being similar in some respects, only there's no bullets in uh in the world of business. No. Yeah. Um but um what what exactly is mission-driven entrepreneurship?
SPEAKER_02Well, you you know, I think you were you're right on. It it takes, I think, the best of both worlds, of the business world and and the military, and focuses people on you know what we consider to be a mission, which is you know, whatever problem you want to take on. Um you know, our tendency is to focus on the really hard ones, you know, both in terms of uh a way to gather, you know, really brilliant people around something and accelerate the work they do to actually see something be solved. But but oftentimes, yeah, as you know, being a startup founder, um, if if you don't have a sense of mission as a startup founder, your startup flounders rather than grows. If if you go after something in your life without a sense of mission, it it tends to flounder or meander. So the idea of having a mission to focus people on is what gets you the ability to collapse um socially, the right people in a tight concentric circle to work on something. Um we have focused on entrepreneurship um for years because we understood the essentially the principles of of lean, you know, that uh Steve Blank and Eric Rice and and others have promulgated, combined with the work that Alex Osterwall did, really provided the best blueprint for how to pick apart something. And actually how to very rapidly do a discovery around whether you're working on the right problem or whether you have the right people, or whether you actually have a solution or a pathway to deliver it. Um, that discipline led uh a great deal of rigor to this concept of I have a mission to solve a problem or to make the world a better place. How do I actually do that and turn that into a patronable activity that either drives my life or drives my company or or drives uh another group of people? So we've settled on mission-driven entrepreneurship really is the collection of activities that that you can actually teach people to do that allows them to take on bigger horror things and actually see progress made.
SPEAKER_04Great stuff. Thank you so much for that, Peter. Um, I want to quickly maybe go back in time um and talk to you about the the genesis of kind of your experience in you know where we're gonna go in this conversation today. So I think it's important for our audience to to kind of stick with us as we kind of tell the story. So um, if you cast your mind back 30 odd years ago, um what what actually made you join the army? What was that spark that led to you joining?
SPEAKER_02Yeah, I would say it's less a possession and more an act of survival. Um, you know, I was um I was a bored student in high school. I was not a good student. And it's not because I'm not smart, maybe I'm not. Um but it was because I I was bored sitting in a classroom listening to role learning. I some of the thoughts on experiential problem solving. And uh so you know, the classroom wasn't a great fit for me. So when I transitioned to college, I obviously did not do well. Um I got to the point that I had to make a living, uh, was running out of money, and I joined the Army National Guard, which is you know the reserves in the United States, as a private. I enlisted when I was 18 years old uh in order to earn money to continue to go to college. And and what I learned over the the five years that I was in the National Guard while going to school was that I was enamored with a dynamic environment where I was solving things on a constant basis. It was constantly a challenge and it was hard. And um so so my decision to stay in the military and become a commissioned officer, I would say is really just an extension of I enjoyed what I was doing and I just stayed there. I never really intended to make a career out of it. I just stuck with it for a while.
SPEAKER_04Well, you obviously did a great deal of good there. Um so I want to quickly uh talk to you around the period 2010 to 2013. So this is where uh Pete, you actually led the REF, right? So the Rapid Equipping uh Equipping Force. Um and you in made a uh from my understanding at least invested over 1.4 billion in developing solutions to soldiers' most pressing needs. Um and the the soldiers' needs were um would that's from my understanding again, so I'm gonna argue to maybe fill in the blank for me. Uh but the responsibility there was to rapidly find integrate and employed solutions to emerging problems as they face them on the battlefield. So it's a pretty pressurized environment. Um so maybe if you could uh in your own words just explain exactly what was the role of the REF there, because I think it's a really important springboard into where we're gonna go today.
SPEAKER_02So at the time, you know, I I spent my career as an infringement. So my introduction to the REF, I would say I was probably the most leak-likely candidate to run an organization like that. It wasn't a scientist. Uh I wasn't an acquisition officer. Uh and and the idea of taking somebody who'd been an infringement for forever, uh, and suddenly giving them the keys to what I call the Ferrari skunk works. And you consider, right, I had a $150 million budget and 100 people, only one boss in the Army, and I was told just to go find problems and solve them as fast as I possibly could in terms of days, not months and years. Um, and report back to you know the Army what problem I found and why the Army wasn't solving that problem. It was just, you know, it was the perfect place for for somebody like me who's been all over the world uh trying to solve problems, but but I had actually no um it wasn't a career move. It really was, it was supposed to be a placeholder for me. But I found when I got to it that that I am the quintessential problem finder. And and it really built and designed Ref, which was a really great organization, to actually um invest more time and energy in sourcing problems off the battlefield to increase the speed and tempo by which um we solve things rather than just delivering products. So it really became a problem-generating organization. And we use those problems to then attract other people across the services and in the commercial community actually to provide um solutions in real time to the things that we were anticipating on the battlefield. Um quite frankly, you know, is everything from unmanned aerial systems to uh ground robotics to uh traumatic brain injury, um monitoring systems to um uh clean energy on the battlefield, uh you name it, we probably tussed it over a period of time. So it so it really was um cathargic for me, I think, to be able to see the dynamic of the world change where the battlefield is working at a speed today that we never realized. And you're watching the same thing play out in Russia and Ukraine right now is is how fast that fight changes. Um clearly the Russians were not prepared for what would happen, but but that's what we saw in Iraq, and that's what we saw in Afghanistan.
SPEAKER_04So, uh, what was your process of identifying a problem? Because if I can maybe bring back in what you uh mentioned up front, which was mission, right? So mission-purposed entrepreneur. So an entrepreneur is kind of like what I'm hearing from you is when you were at the REF leading the REF, it was kind of like you were you were finding a problem that needed to be solved uh and it was almost unstructured. So what I'm curious to get uh a double click from you on is um is how do you what is your decision making process around deciding which problem is worth solving?
SPEAKER_02So so the whole process you know starts with what we call problem sourcing. It's just in mass sourcing problems. It's and it's a social skill, not necessarily a technology thing, is you've got to have people forward on the battlefield or in the business world, you have them out with customers. And here's where you know customer discovery comes in really candy, because the art of doing customer discovery also helps you with problem sourcing. But if you're out on the battlefield where the problems are happening and talking to people in real time, they'll tell you things that they will not put in a report or they will not think about later on. So it has to be in real time. So the first thing I'd always say is we had to be present where the fight was to ensure that we had an idea of what was coming off the battlefield. And what I found is the longer we did that, the better the forward-deployed people I had got at anticipating not just the current problem, but the next problem and the next one, because they could get a sense of what was going on around them. Um we also built um networks, networks of people who would tell us things, not just from the forward lines, but from the other commercial world and from senior leaders and for others. And it really was just a you know, it's like doing business intelligence, but but it was focused on problems. We wanted to hear what people were doing, we brought all that data together, uh, and then created this process of curation, which meant that we um manually condensed all those problems down, looked at commonality, and then built portfolios around it. So I and I go back to the 2010 to 2013 time frame. Um over a two and a half year period, I curate I I sourced, resourced, um 1,350 problems and eventually curated it down into seven portfolios. So for instance, you know, at the time 2011, um improvised explosive device attacks against dismounted squads was a big deal. Wasn't recognized anybody, but but they went from a couple attacks a month to over 900, which is a significant spike, and that happened over a period of five months. So the portfolio said fine technologies to counter improvised explosive device attacks against squads. That portfolio had 132 separate problems layered underneath it. So I didn't necessarily have to precisely attack every single problem as long as I was working on the portfolio. Um, we would eventually um start 360 projects and put them into discovery, which is you know the heart of what lean does, and then eventually deployed 115 solutions to the battlefield, 20 of which became programmed for record. So things you see being used in Ukraine right now, for instance, if you're familiar with Switchblade. Switchblade is the drone that flies and blows up on its end. Switchblade is one of those projects that we inserted in Afghanistan in 2013, that's now being used on another battlefield at scale.
SPEAKER_04So I'm curious, Peter, um how do you how did you approach it? I know you port put put it into portfolio streams, if you like, but uh you know, going back to the kind of context or or the relationship or similarities rather between you know entrepreneurship or business, uh uh building a business and the military, uh risk management's like a key thing, right? So obviously there's lots of projects that you identified um and they're falling into streams or um uh uh programs, if you like. Um and in business, uh there's also lots of potential projects that are also bucketed into streams. So how did you approach uh you know risk management? Because I think as a as a CEO founder, you most of the time, especially once you're at a survival stage, it's actually about figuring out how to manage risk. Um and with only so many hours in a day, and potentially with only so many resources, um you need to figure out how to prioritize. Um so what what is your advice to to or what did you learn, in fact, going back to the REF in terms of risk management and project prioritization? How did you figure all that stuff out? Because if you got that stuff wrong, the consequences could be really negative. Stay with us.
SPEAKER_05We'll be right back.
SPEAKER_04Hey there, I know being an entrepreneur can be a very lonely experience. You sometimes get stuck, don't you? Well, if you're like me being stuck, stuck. But what if you could access the minds of over 850 CEOs who have built companies generating billions of dollars in revenue and access all of that knowledge in a fraction of a second? Well, the good news is you can't literally do that today. What my team have built is Matt Brown AI. It is trained on all the interviews, over 850 of them that I've done to date, all my books, all the knowledge capital that's been generated over the last 10 years right here on the Map Brown show. And you can get access to all of that right now for free. So, how do you get access to this? Well, head on over to mapbrown show.com and at the top you'll see community. Hit that link, sign up, it's absolutely free, and you'll be given instant access to MacBrown AI and a community of over a hundred thousand subscribers.
SPEAKER_02So I so I will tell you, even today, BMT probably spends 50% of its time with our large enterprise clients helping them sort through how to do that. Yeah, and I and I give you the the the two things that we do most. One is um we are um confronted with the speed of of time. Time is time is the challenge. So to put it this way, is we're challenged by how long it takes us to recognize that there's a new problem or new opportunity on the battlefield of a business. We're then challenged by how long it takes us to articulate that in a language that other people can understand. Because I'm after a network now. I'm trying to attract right people and other things to it. So if I can't explain it and I can't get people excited about it, I can't draw the right people into it. And then I'm challenged um by how long it takes me to down select and agitate the right people to work with me as it seems to do the discovery we need to develop a product, a better understanding of the problem, and a pathway to deliver it. And then we're challenged by how long it actually takes us to incubate that solution and get it back into the hands of people. As a process of curation and building a pipeline, too often people fail to meet the standards necessary to move something forward and they just let it go. So if I let something move forward in my pipeline without the right team ready and without the ability to agitate and downslide people and without a right understanding of the problem, I'm clogging my process with stuff that's not ready yet. So so, first is you know, risk management be and and prioritization becomes not just a discussion of what's most important, but it's also about what's most ready. I worked on things that were important that I could not get anybody's attention to. And what I would find is the tech is too far out, the tech would change too fast, my problem wasn't articulated correctly, or or it was just it was an emotional thing and not something that people would really work on. So so the speed thing really gets you to think about um what it takes to actually get something done and help prioritize uh in terms of of what's ready to get on your platform when you do things. That's that's the first one. Um the you know, the second part of um risk management then becomes how you define risk. In most big systems, risk is a determination of efficiency. I have to perfectly deliver a solution to something that's gonna grow versus the risk of not delivering something in a timely manner to get the feedback you need to pivot into something that is actually going to grow. At Ref, we used to say that the the first best, fastest, most adequate solution to the battlefield wins. Because it's not until I deliver something in somebody's hands that I start having an honest discussion about what the problem was that I needed to solve. So so risk became a time-based thing. If I'm not fast enough, my problem will change and the dynamic will change, and I'll never catch up. Or I'll deliver solutions that are obsolete the day they show up on the battlefield. That happens to businesses all the time. If you're behind the herd of behind the power group, you don't keep up because you're trying to be too efficient with the use of your resources. Um that takes the to trade time against um efficiency. I call it effectiveness against efficiency over time, takes an entrepreneur's mindset. Entrepreneurs do that for a living. They they they know how to manage risk, they know the the potential for catastrophic failure, and and they have the I call it the personal fortitude and the mindset to to deal with the stress that comes with that.
SPEAKER_04Yeah, I agree with you entirely. I actually had Leif Babin on the show, and if you know um him, so he works with uh, he's the other guy, Navy SEAL, he does a lot of work with, uh wrote the book uh extreme ownership. Yeah, so he was explaining to me, which I've I found fascinating. You spoke about speed and effectiveness. So the Navy SEALs, uh Leif was uh explaining to me. He said that uh the STEALs, when they when they get on the ground, let's just say in Afghanistan or what have you, um, they don't actually have a formalized plan. So what they do is they go to the the person in command on the ground, the head of what the hell's going on, the guy with all the information, um, and they'll say, what do you need? What do you need us to do? Um and then based on the requirement, they will then mobilize around that particular issue or challenge that they may be having on the ground. It could be like, you know, snipers in this building carrying off this thing, or whatever the case is. And I found that quite a fascinating story because you would think that you know the Navy SEALs will have it all worked out, you know what I mean? Uh but they but they they do in terms of capability, but on the ground, to your point around speed and effectiveness, it's very agile in terms of their so I would yeah, I would take it one step further.
SPEAKER_02You know, the other thing, and I came out of the Ranger Regiment. So as a as a special operator for a period of my life. The other thing they are particularly adept at doing is in first contact, things start to change. So so they start based on our requirement, but as soon as as soon as they recognize the signs that things aren't what they thought they were, they are particularly adept at abrupt and efficient changes to attack the thing that they're presented with. Not much different than what an entrepreneur does as they're they're trying to take a product to market. They spend a lot of time testing the market and they retain the agility because they're highly um efficient and effective at the basic movements of what they do, that they can change direction on a dime. And it's that speed, speed to market, uh speed on the battlefield that that absolutely makes the difference.
SPEAKER_04Yeah, it does. Maybe if we could change gears, what exactly does BMNT stand for?
SPEAKER_02Begin morning nautical twilight. So it's a weather term.
SPEAKER_04It's a weather term? Okay, I actually thought that was a minute. It's a weather term.
SPEAKER_02Yeah, yeah, yeah. You know, somebody said it that's the founders, right? Bill, Mike, uh, Nancy, and Tom. No. Um BMNT is the the time in the morning before the sun comes up, which you could first start to recognize saddles on the ground. And as a as a military term, we go back to the the French and Indian wars in the United States, where um BMT, when you can recognize saddles on the ground, is when the Indians would be creeping up to the forts to to do their attack because they can make out the saddles on the ground and they can move. If if you're the French sitting in the fort, and you know when you can see the shadows on the ground that that's when the Indians are sneaking up on you, you have to be completely ready for the next attack to happen. So so BMT, depending on which side of the wall you you sat on, for the Indians, it was the best opportunity to get close. For the French, it it was the worst time of the day because they knew the attack was coming. Um technology today presents us with the same problem. Tech can be your best friend or it can be your worst enemy, depending on where you sit on the delivery of it. So so we took a military term that we grew up with, which says you have to be constantly vigilant and ready for what tech is going to do to you. At the same time, you have to be able to use it to your best advantage as far as you can see the glimmer of the shadows of what it can do. So BMW T sits in that space, particularly with large organizations, helping them position themselves so that they can do both at the same time.
SPEAKER_04How important, in your view, uh is technology in, let's just say, I'm going to go purely into the business space now, but in terms of business model innovation, do you do in your experience, and I'm happy for you to draw a reference from the US military in terms of how they use technology, because the US military is effectively a business with a m the business model underlying around partnership, technology, blah, blah, blah, blah, blah, um, network, customers, you know, da da da. And um technology, if you on face value, if you look at the drones, you know, flying over the Ukraine or whatever, it's like it's a hardcore military technology that's not available to you on your smartphones. That would be uh a great thing to have some kind of like hardcore military tech on there. But uh the perception, what I'm trying to say, Peter, is the perception is that US military technology is essential in the enablement of their effectiveness. In business, uh, I was speaking to Alex uh Alexander um Oderwelder this morning, and he was saying that for him, business model uh in the business space purely, uh, technology is overrated. So I'm curious to get your view. How important is technology in enabling a business model for the U.S. military andor in business in your case?
SPEAKER_02So I trend towards Alex's definition, and I say it's overrated. The thing the military, all militaries struggle with is um we'll call it business model innovation, is how to apply the technology. Technology isn't a problem. We have tons of technology. Um, and I can give you an example. Switch play is an example of something I did 10 years ago, that's just now being employed by the military at scale. I can also tell you that I put my hands on the first um quadcopter um UAS systems in 2012 in a U.S. company that will eventually you know obliterated in the business world by DJI. Um, I was doing battery power and clean energy 10 years before they actually effectively employed it as something. There was no reason that any of those needed to wait 10 years to be employed, except that the military did not have the business model or the operating plans to integrate the technologies into the battlefield and their formations at the speed at which they needed to. And you watch, I give you know the Ukrainians look at what they're doing today. They're taking on technologies that the Ukrainian military could never afford to have. And they're getting it from other countries, they're learning how to use it, and they're employing it directly into the fight as fast as we can think about it. So they're doing it in weeks and months, what sometimes we have taken ten years to figure out how to do. It's not because we lack the tech, it's because we lack the business model agility of how to apply the tech into our organizations and into our operating plans effectively. That's what slows us down.
SPEAKER_04And that's pretty probably the similar constraint I would imagine with corporates, right? So there's all this technology. How the hell do I implement this thing and integrate it into all aspects of the business if you take something simple, well, not simple, but something like AI or ML.
SPEAKER_05Stay with us. We'll be right back.
SPEAKER_03We were hiring when we were making 50 to 100k monthly losses. And welcome to episode one. I can't think of a single founder who's been around for a decent amount of time in business who hasn't had their tunnel of yeah. This was the idea. We're gonna be okay yet, Sherry. Some are gonna hear this and think you, TDP, but hear me out. You only have to do the math to understand that very soon we were half a million dollars down.
SPEAKER_02Yep. So you know, I have watched uh uh dealt with large several large corporate clients that that I felt were on a death spiral because they were unwilling to change their platform that was generating cash and disrupt themselves in order to take advantage of something. And what they saw is they were completely overtaken by by somebody completely from left field who who wasn't wedded to um having to sustain a legacy system that was decaying over time. And Steve Blank and I have this conversation all the time about um whose job it is to recognize that a legacy platform or system or model is starting to decay and ensure that there are potential replacements for it being built for the company. The challenge is we over-resource decaying things because they require more resources to prop up. And we don't apply enough resources to building potential replacement for them. Large organizations can't seem to do both at the same time.
SPEAKER_04Yeah, so curious then, how do you know when something is no longer fit? Because in the banking sector, it's amazing. If you take something like Swift, you know, the the exchange that essentially prices international transactions that technology is old. It's old. Um and yet it's still the backbone of you know international payments. Um I'm using that as an example, but there's other um technologies that are out there that uh are defunct. Uh but it's difficult, especially when you're sitting in as a corporate executive, to turn something off because it's not as simple as just, well, it's no longer fit for purpose because it's going to affect these 10 other downstream systems that affect all these other things. You know what I mean? So the bigger it gets, the harder it gets to turn off these over-resourced defunct legacy projects, right? So how do you identify when it's time to move something?
SPEAKER_02So part of it is you have to have a subset of the organization that's constantly looking at things like that. You know, it it's it's uh for in the Russians' case, when when they got unplugged from Swift, they didn't have a response. So without something to pull off the shelf and apply, what do you do? Um in the military, you would talk a lot about, you know, even in REF, the things that I put on the battlefield all existed someplace else. You know, I merely found things that were sitting at rest on a shelf. They call it tech technological debt, cobbled them together in uh MVP and put them in somebody's hands, and very quickly took the time and energy to build something. So if your organization isn't uh toying with studying and working on alternatives to even your flagship thing, if something happens to it, you really don't have an alternative yet to start over, which which gives other people the opportunity to leave fuck ahead of you. You know, in the case of Swift, you gotta every country in the world watch the Russians get unplugged from Swift. What do you think they're doing today? They're trying to figure out how they protect themselves if that ever happens again. Suddenly there's a brand new market, and it may be disruptive to the Swift system.
SPEAKER_04Stay with us.
SPEAKER_05We'll be right back.
SPEAKER_04Hey there. I know being an entrepreneur can be a very lonely experience. You sometimes get stuck, don't you? Well, if you're like me, being stuck sucks. But what if you could access the minds of over 850 CEOs who have built companies generating billions of dollars in revenue and access all of that knowledge in a fraction of a second? Well the good news is you can't literally do that today. What my team have built is Matt Brown AI. It is trained on all the interviews, over 850 of them that I've done to date, all my books, all the knowledge capital that's been generated over the last 10 years right here on the Matt Brown show. And you can get access to all of that right now for free. So how do you get access to this? Well head on over to mapbrown show.com and at the top you'll see community. Hit that link, sign up, it's absolutely free, and you'll be given instant access to MacBown AI and a community of over a hundred thousand subscribers. Yeah, well, I mean, this is what they're saying now. I mean, it's like, well, if I can't use Swift, I'm gonna use other instruments, blockchain crypto is an example. You know, I mean, the stuff that's going on there, it's who I mean, it's it's easy to monitor Swift, not so easy to monitor, you know, uh a crypto transaction.
SPEAKER_02Yeah, yeah, absolutely. I and I think, you know, at the economic level, you know, the North Koreans have been prolific for years at stealing crypto. Yeah. They've been unplugged from from Swift and the world's economic um base for years. Yeah, but they've managed to keep themselves afloat in large case by by learning how to uh work around the the Swiftism using crypto.
SPEAKER_04Yeah, absolutely. Um so I'm gonna talk now about uh BMNT, but I have one more question about the military. So I know you were there for a long time, three decades. I know you have a silver star, I know you had a lot of learnings uh over that period of time. But what jumps for you? Like if you were to cast your mind back over the over that entire turnf while you were in the military, is there something that jumps for you as a key learning? Like something that came across more on more than one occasion, or you know, something that even just today, it's like I would say that that's what it is. Is there something key learning or insight about innovation in the military or just the military in general that you feel would be applicable to entrepreneurs today?
SPEAKER_02So I I you know I'll say it both ways. Um in the military, you know, it's all about people. Um, you know, people are the key to everything you do. Um your ability to find, acquire, train, and deploy a team and keep them at a high peak of state requires um a lot of attention. Yeah, it requires a lot of leadership to ensure that you that you stay that way. Um, you know, some of the things I learned in the Ranger Regiment in particular was, you know, it was full of really, really highly qualified people. Um and if you had a leadership job and you stumbled or you got hurt or something else, um, you were replaced by the next person online who quite frankly was just as qualified as you to do the job. And it wasn't personal failure, it was about the mission. And and if the entire organization's focused on the mission, then then people swap in and out by placing the smartest, best person they can afford to do something, regardless of their age, their rank, their sex, or whatever else. It was all about the mission. Um corporate world, I think, suffers uh from an inability to to retain that focus. You know, their their people skills get diluted uh or they don't pay enough attention to it. I I think the mindset of an entrepreneur that though I discovered in Silicon Valley and towards the end of my career uh is something that has been uh a part of the military forever, but has never been nurtured as a profession in the military. That's one of the things we're working on now is is how to help the military um nurse that entrepreneurial um spirit as a profession and how to hang on to people like that.
SPEAKER_04Yeah, it's uh if you find them, you have to hang on to them. So finding them is one thing, whole hanging on to them is a whole other thing, I've found.
SPEAKER_02It is, yeah, absolutely.
SPEAKER_04Yeah. Um, so um in terms of leadership, because obviously, even in the context of corporate innovation, uh leadership or innovation has to be bought into at an executive CEO or T suite board level in order for the thing to work. Um, that's almost like a prerequisite. So in the military, obviously great leadership is worth, you know, you can't even put a you can't even put a value on that. What is the role of a well how would you let me rephrase, how would you characterize what a great leader looks like now uh in a modern business and uh military environment?
SPEAKER_02Um you know, I should the word that comes to mind is the champion. The leader has to be the champion of both the the mission of the organization, but also of the people in the organization who are um, and I'll just stick to the entrepreneur role, is they have to champion the entrepreneur's passion and harness that for the better of the organization. So sometimes that means pushing them really hard, and sometimes that means clearing a path for them, but most often it means taking what they learn from I call it the the reckless abandoning damage that entrepreneurs do and harnessing that to make their organization better. Yeah, you know, you know, it I never realized it was happening to me, but I you know, I was blessed with an opportunity to see some of the absolute best and absolute worst leaders in the military. And I work for both. Um I you know, I you know, I worked for Stan McChrysle, um uh Kearney and Vines and some guys who are you know well known in the military, uh Petrayus, um, who who are you know the gold standard of really calm, dedicated leaders that that you want to work for. Um in the the business world, if you don't recognize it as part of your job as a leader to harness the passion of these young folks and sort out who's actually an entrepreneur and who's not, then then you're going to lose them. And unfortunately in the military, they lose them in rows. Somebody figures out that they're a great entrepreneur, they get so tired of fighting the bureaucracy and not being given the tools they need to do the job that they quit and they go to the corporal world and you know they do great things.
SPEAKER_04So can I go back to that entrepreneur spirit story? Because, you know, for me it's like, you know, I I also want I care about you know growing entrepreneurs. It's why I uh do this show, because obviously, you know, the more entrepreneuri you can build or create or inspire, whatever the case might be, uh the more businesses they might create, the more employment they might create, the greater difference their products and services might make to humanity, right? That's kind of my my story and my space. Um and this idea of entrepreneur spirit um has come I've I've uh I used to do innovation consulting, you know, about seven, eight years ago. And standard banks, massive bank here, 10,000 stuff, blah, blah. Um, and they were talking about entrepreneur spirit and how do we get you know the spirit or the entrepreneur spirit into our workforce? And I never quite understood um the way that they were trying to enable that, because it was almost lip service, like, oh, it's an entrepreneur spirit, if we can invest it in the bank, then great, you know. Um but um I'd love to maybe get you to to try and take a stab at demystifying what that means. Because what what is an entrepreneur spirit? What is that what does that practically mean? If you were to meet him or her or Joe or Greg uh and they sat down in front of you, how would you know that that person has an entrepreneurial spirit, number one? And then number two, if you meet someone that doesn't have one, how do you encourage it?
SPEAKER_02So you know it's interesting. It's probably a really long response.
SPEAKER_04Go for it.
SPEAKER_02Um I teach I teach an entrepreneurial course um at Stanford with Steve Blank and several other people called Hacking for Defense. And it's a derivative of the lean startup class that he was teaching years ago. So we take problems out of the government and we get steams of students to self-form and take on the problems and come to the class as teams like a new company, and we're gonna set out to solve those problems. Um and we're teaching right now, so we teach in the spring. I've got 32 students. Yeah and out of the 32 students who are really working hard, and and eight teams will produce you know fantastic you know, business intelligence around a problem, a couple of teams will actually form companies at the end of the class. Um, out of 32 students, there are probably four, who I would call Dyden Blue entrepreneurs. So the answer to your question is you can't look at somebody's resume and say that's an entrepreneur versus somebody else. You really have to see them do work, not as an individual, but as a team. So so the challenge in the military has if they're starting to figure it out, is you you can't figure out if somebody is good at doing something or has the natural talent for it unless you give them experience doing it. So if you don't professionalize the pathway that says, I'm gonna introduce you to lean methodology, to agile, to design thinking, to all these tools, and then I'm gonna give you things to work on over time, and over time we're gonna sort out whether this is a natural passion for you. You know, and I and I find that you know the one thing that really separates entrepreneurs from everybody else is the risk factor. An entrepreneur is willing to personally take on the risk of being wrong because they see the experience of being wrong at something as growth, and it's how they learn to do the right thing over time. Other people just can't get there. They they see wrong as being devastating. So I can look at a group of students and say, these are entrepreneurs, these are people who will support entrepreneurs, and these other people, they're really gifted and focused on working things that that are in a more um constrained environment. And that's what they're good at doing. I think it's a mistake to try and take somebody from that environment and turn them into an entrepreneur.
SPEAKER_04Yeah, totally.
SPEAKER_02It just doesn't happen. It's a natural progression, I think, that you have to get through. But it requires um a bit of design to create that professional process of turning them into that. The military has a process like that for um growing non-commissioned officers. So, how do you take a private and turn them into a sergeant and eventually into uh a platoon sergeant, eventually into a command sergeant major? Well, you start with hundreds of thousands of privates and eventually you end up with like 50 command sergeant majors. And there's a progression over time of how you train them and then select them and then grow them and give them the experience they need to figure out how to do it. And oftentimes they self-select out, so you don't, that's not me. I'm not doing that.
SPEAKER_04Yeah, I think one of the things that really landed for me uh in terms of you know your answer there was around the risk piece, because you know, if you're gonna join the military and you're gonna go to the front lines, you're pretty much putting it all on the table, right? You're you're prepared to lose it all uh for a greater cause. It's exactly what a founder does on day one. He's prepared to lose his shirt for this problem or for this cause. The only difference being there's no bullets, different context. But it's very much the same. Uh it's almost uh I think entrepreneurial spirit and and you know entrepreneurial mindset are are basically the same thing. You know, it's the mindset of I can change the way things are because it sucks, you know. Uh or we're losing men and women on the front line, and that sucks. So I'm prepared to do whatever is necessary to take the building. Do you know what I mean?
SPEAKER_02It's that it absolutely is. Yeah. You know, I I people part of me and it's a student thing that comes up a lot, and in the corporate world, people say, well, we're going to do a pivot. You know, look at the Team and I said, listen, if there's nobody on your team throwing up in the corner because they're so stressed out about this pivot, you're not doing a pivot, sustainable change. It's not real. Because you know, it sucks. It's hard internally, it's hard externally to make the types of decisions as an entrepreneur that are really leap-ahead things that are going to get you someplace. Um same thing happens on the battlefield is Yeah, when when it says all or nothing take the building, you know, somebody's making that decision and it's gut-wrenching to say this is the building that we're gonna all or nothing on. You only do that so many times before you start losing people. Um so so either you win them all, or eventually you're you're the lone survivor at the end of the process. And that happens with startups. The same thing is if if you can't make hard decisions or you make them poorly, you'll eventually be the lone survivor in your company because there's no money left for for you to hold on to other people.
SPEAKER_04Yeah, exactly. Well, everybody else has to go and get a J O B, meanwhile you can go ahead and start another company. And then the pro and the process kind of repeats itself, you know.
SPEAKER_02At the same time, if you're not willing to make those hard decisions, nobody's gonna follow you. They're gonna follow somebody who will.
SPEAKER_04Absolutely. Absolutely. Uh so speaking of students, keep coming up here. I've been uh reading about your hacking for defense, H4D, uh is the acronym on that. So it's a university course sponsored by the Department of Defense. Uh fascinating. Uh what is H4D? Uh what are you covering there, and uh who is this all for?
SPEAKER_02So as as I mentioned, um, Hacking for Defense is a primarily a graduate level course that takes uh emerging problems out of the Department of Defense that they need solved, um, and they need um you know a different mindset to look at. Um the course is designed to teach um entrepreneurship in the public service space to really bright young students and give them experience working with the government, experience working with the military, while also teaching the principles of entrepreneurship focused on solving a real problem for a real client that gives them real experience that that helps them get real jobs. Um the the course now we actually prototyped it at Stanford in 2015. In the United States, uh it is it was taught in 60 universities in the United States this year, uh 12 more in the United Kingdom, and I think four in Australia. Um hacking for defense has expanded beyond DoD, but is now there's a hacking for homeland security program. So the Federal Emergency Management Agency uses it, the Transportation Security Administration uses it, the critical infrastructure critical infrastructure cybersecurity agency use it in the United States, but they have their own courses in the US. Um in the UK, there is one working with the police, there's one working with the National Health System, and there's one working on sustainment. And then uh of late, uh we have an impact program that is running uh a series of climate-based programs. So I think eight universities this year are teaching hacking for climate, you know, focused on on different climate-based problems. All of them take the principle of sourcing a problem out of the world and and using the principles of entrepreneurship to actually um prove that we're working on the right problem and get the problem right, build potential MVPs of solutions to those problems, and then build um MVPs of pathways by which you can deliver that. And that's the goal. The goal is to get young people involved in public service. Um, teach them how to be entrepreneurs, and in some cases, actually produce solutions to the problem. Um the hacking for defense program alone over eight years has produced 52 new companies. Wow, amazing.
SPEAKER_04So so this is almost like um if I were to use the analogy of you know, um exploit and explore, something I learned this morning from Alex. Um but uh in the US military, they're exploiting whatever they do, right? So then you've got explore, which is kind of like, hey, uh new things that we need solved so that we can remain relevant and competitive in the way that you know the US military expects. So is this a way of the uh of of the US um uh you know DOD, et cetera, of engaging with almost like a startup ecosystem to help them solve these emerging problems that um that they face? Is that is that a good characterization?
SPEAKER_02I I think that's a good generalization. I go back to the explore and exploit model of um we're using the process of sourcing problems out of the government and the prioritization of those as a um uh a model of exploration. And the exploit comes down to that's a great solution. Uh we have a champion for the problem in the government who has funding and authority and wants to take it on. And and now we're rapidly moving in the right direction, whether it's uh a tech issue or a policy issue or something else. Um, the ecosystem that has grown up around the course includes, you know, quite frankly, all of the universities are teaching it, all of the professors who teach it, all of the industry mentors, and and we have people all giving up their free time. Um investment um brokers, we have um you know managing partners of investment companies, we have you know senior folks from defense companies uh and from startups and others who are involved working with the teams on a daily basis, um, all as part of this really rich ecosystem. Um sixty percent of the students who go through this course continue to work with the government afterward, whether it's passively or actively on the problem they were working on. So the level of engagement is extremely high across the entire ecosystem. So, you know, over eight years we've sourced thousands of problems, and that's a really interesting database all in itself. But we've also produced thousands of students and thousands of mentors and professors who all get the language of mission-driven entrepreneurship focused on national public service, whether it's for the military or homeland security or climate or something like that. It's it's this massive pool of talent that we can draw on now to do other things.
SPEAKER_04That for me is fascinating. Probably one of the most fascinating things I've I've heard. Because you don't think that that would happen, to be honest. Like if from the outside you would think, you know, public sector US government, you know what I mean? It's like you have to be in in order to work on the problems. It's fascinating to know now that that's actually completely wrong as a perception. Um and that, you know, that um this is all about tapping up that knowledge capital across universities, of which there is a lot, uh, to solve these kind of amazing uh or challenging problems, but in the at the same way, as you mentioned, you know, building companies off the back of the 52 companies that have been founded um and that are built to some kind of scale is is truly remarkable.
SPEAKER_02Yeah, I think the the the 52 companies are are amazing. Um and we consider that a byproduct of the course. What we really wanted was to get you know young people into the government or into other companies who, when they had the opportunity, would come back together to work on things that were important to the country or to their country or to you know something like that. The the critical part of this is what they learn in the hacking for defense, hacking for homeland security climate course is a common language for entrepreneurship in the government space, which which is you know culture driven by common language. So if you want this culture of entrepreneurship to exist inside the government and where the government overlays with business, you have to start by teaching people to speak the language. You know, think about it, all those students who are graduating and got on, whether they're at Toyota or Tesla or a startup someplace, or in the government, all share a common language and a common framework for problem solving and entrepreneurial um methodologies for building solutions to problems. And it's a very unique asset that we can now apply, you know, not just um nationally, but we're one.
SPEAKER_04Amazing stuff, amazing stuff. Um very quickly, uh cognizant of time, uh Pete, um H4X Labs, what is that? Uh and how does this all play out uh in the business in the public and the private sector?
SPEAKER_02So H4X Labs is technically known as an early stage tech accelerator. But more importantly, you know, the first team to lead the Stanford Hacking for Defense class that started a company. It's called Capella Space. And Capella is an amazing company now doing synthetic aperture radar imagery from uh low-earth orbit satellites. The CEO of Capella came to me, you know, after he raised his series A route, and we were having a conversation about you know, what do you learn in the class that he still does in the company? And I asked him what we could have done better for him. And he says, quite frankly, you guys suck. He goes, I left, I was hurtful. He says, I left this amazing class where I had mentors and I had focused and people at me, and I knew the defense space. And as soon as I graduated and I started the company, I had nothing. There was no place I could go to that continued that process afterward. And he looked at, you know, quite frankly. I was sitting at BMNT and he saw him. He said, BMNT is the only place you go where that could have continued. And he said, so if you do something, you you need to figure out how to come up with a part two of that course that helps people turn into real companies. Um, we've heard that over and over and over again. So um we we very quietly launched HWOX labs initially to help transitioning students who were leaving the course and turning into companies. Because you can take four people who were students one day and say, to die, now you're a company, and the government wants to write you money and they're investors, and you know, that that's really a tough space to be in. Um so we started there, uh, and then as as folks from the government started come to us, you know, they said, you know, we have this problem with our SBIR, STTR, which are the ways the government engages companies, and and we're not getting enough out of the program where you take some of them off. Um and then, you know, in just a chance meeting, I ran into some folks from Norway one day who said, you know, we have fascinating companies in Norway that have commercial applicability and military applicability who we think would be value-added to, you know, working in the United States and we could grow dual solutions. So we created this Allied program, which is an accelerator that takes um shared problems in national security, looks for companies in other countries that have promising technologies, and actually puts them through um a multi-month process of turning them into a better company, helping them understand the problem better, but also introducing them to the folks in the United States who would take them on, whether it's investors or the government or something on. Um we've run that with the Norwegians twice now. We just started uh uh we're looking at the third year. Um we're gonna take on some Australian companies this year, uh, and we're having a discussion about doing the same thing in India. Um H4X Labs, I I think uh we worked with somewhere between 50 and 60 companies this year um in that process. Uh we've also run a strategic investment program for the government where where we actually um uh invested um in terms of a million dollars into emerging companies to actually build better products. So it was actually a contract with a company to build a better product that that helped them raise their specter in the investment world so they could attract more investment dollars commercially. So for $20 million in US money and government money applied to 20 companies, um, they've now raised in excess of two to three hundred million over the course of the year. So H4X Labs really has become the incubator for how to do that. Really focused on transitioning early stage companies, either coming out of academia, coming out of other companies, or um coming out of other countries to get them to the point that they're investable entities and interesting to the larger um finance community.
SPEAKER_04So if if let's just say, so I'm actually moving to the states um uh in July, and let's just say it's bit balling here, that uh you have a founder who loves solving problems, um, has you know great experience, mentors, blah, blah, blah, blah, blah. Great profile for someone who could fit into this program. How does is it possible for for someone like myself or maybe another viewer or listener listening to us around the world to get access to that inventory and say, hey, here's the problems that we once solved, you know, go and take a stab at it. Is that is that something that's doable?
SPEAKER_02Yeah, absolutely. Um, you know, we I'd say we're all over the place. We have always worked in a distributed manner. So this isn't like coming to Y Commodore where you're a cohort that's rigid that produces something. We're really, you know, the graduates are of our programs go on to Y Commodore, but we're really interested in that early stage, um, messy ground of do you have the problem right? Do you have the right team? Um, do you have the right technology? And then understanding what it takes to actually improve the technology to improve the team or improve the adoption of of the team's solution to a point where it's interesting as an investment. And that's where we cut our teeth at.
SPEAKER_04Amazing. Thank you, Pete, for that. Um, I have one more question for you. Why do you do all of this? Like what gets you out of bed in the morning?
SPEAKER_02Uh problem solving. It really is. You know, I was I was destined to become a general, and one day I realized that if if I if I continued on that path, um I would be locked into a job that had nothing to do with entrepreneurship. So I retired in the military. That's why. And I realized while I was at REF that this is what I wanted to do. I don't want to run a large corporation. I like building things and I like building people. So you know, I started BNT with four people. Um I BMT is now four companies, um, with probably over a hundred people between them. And you know, that's that's the goal. It's not just BMT, but like we've built a nonprofit, we've built another company in the UK, we're about to spin out an AI company. That's what gets me out of there. My drive though is focused on on the world as a as a better place, though.
SPEAKER_04Yeah, I'm sure. Peter, thank you so much for your time. It's been a real privilege and uh honor having you on the show. I've got a whole new perspective now about the US and and kind of the great work that you're doing there. So I will most definitely reach out to you when I'm on the ground there. I'd love to learn more about the program and and hopefully participate. And for all of my viewers around the world who ha are listening and following us right now, um, you know, get in touch with Peter, check out the BMNT website, you know, check out the uh Hacking for Defense program, H4X Labs. And if you want to get involved, please do visit those websites, get in touch with uh with Peter and his team. Alrighty. Peter, thanks. Yeah, Peter, thanks once again, man. It's been a real privilege and honor. Thank you all of you for sticking around. Hi guys, and thank you so much for checking out the Matt Brown Show. If you want more content like this, head on over to YouTube where you can catch my million-dollar principles channel and more interviews on the Matt Brown Show YouTube channel. Get weekly thought pieces and advice and so, so, so much more. And don't forget to like and subscribe for more Matt Brown Show episodes. Ever wanted to become a best-selling author? Well, I'm in the influence business and I work with business owners and CEOs and business leaders to help them scale their influence. And we do this as a team by helping you to become a best-selling author, sought-after speaker, and industry influencer in only 50 days. My team and I have developed a system that delivers a best-selling book and a launch campaign 300% faster and a 50% less cost than anyone else in North America. This system is incredibly efficient. One of my clients, Haiku, went from a 2% share of voice globally to an 11% share of voice globally in only seven days. If you'd like more information, head on over to showworkmedia.com for more. That is showworkswithinx.com. Ever wanted to become a best-selling author? Well, I'm in the influence business and I work with business owners and CEOs and business leaders to help them scale their influence. And we do this as a team by helping you to become a best-selling author, sought-after speaker, and industry influencer in only 30 days. My team and I have developed a system that delivers a best-selling book and a launch campaign 300% faster and a 50% less cost than anyone else in North America. This system is incredibly efficient. One of my clients, Haiku, went from a 2% share of voice globally to an 11% share of voice globally in only seven days. If you'd like more information, head on over to showworksmedia.com for more. That is showworkswithinx.com.
