Ep. 85 - Building a first check partnership

Speaker A: I grew up dirt poor. I was homeless till fifth grade. I think I saw a lot of real world and I really understood that most people were good, but there are a handful of bad people in the world.

Speaker B: I came from immigrants who had no money and now their son was at West Point. West Point taught me how to be a military serviceman and the Marine Corps taught me how to be a man, be a leader.

Speaker C: Thousands of companies show up to sell their technology to the U.S. department of Defense each year. But so few will transition from proof of concept to true production across the valley of death. The select few who do, their stories are rarely told. Until now. I'm Noah Sheinbaum and this is Crossing the Valley. All right, well, welcome back to Crossing the Valley. I am thrilled to be joined here in New York city today by Mr. Paige Craig, the founder and general partner of Outlander VC and Mr. Phil Duong, the CEO and co founder of Noda AI. Uh, gentlemen, thank you so much for making the time. I think this will be a fun conversation.

Speaker A: Thanks for having me, man. It's great.

Speaker B: Thank you.

Speaker A: Yeah. I'm glad you brought one of my favorite founders here.

Speaker C: Yeah, this, this is going to be cool. I, I, I love having the balance of the, you know, the person who has the vision for the company and then the person who uh, says hey, this, this is the vision we need and I'm going to back it with everything I've got. So I think this will be a cool one. Um, Paige, why don't we start with you. I, I, you know, first off, you know, before we talk about this particular company, um, your craft, your background, military service, uh, a private military company. You're no stranger to the defense space. Uh, where's that passion come from?

Speaker A: You know, that's, it's hard. It came very young. Uh, I don't know why I was that 8 year old kid reading Tom Clancy, going to civil Air patrol, playing sports, um, big reader. I grew up dirt poor. I was homeless till fifth grade. Uh, I think I saw a lot of real world and I really understood that most people are good, but there are a handful of bad people in the world. I saw it very, very clearly in the violent world that I grew up in. Uh, and also had a grandfather, Paige Craig, who has named for, who was enlisted guy World War II, which is pretty rare. Uh, senior enlisted, got pulled into Patton's ah, Army, converted into an officer in California, rode out the North Africa campaign and came back for the Marshall Plan. I don't only say all that. I didn't live it. But he told me these stories and it wasn't about war, but about leadership and sacrifice. And um, I think all that came together so that when West Point came to recruit me, and I remember they essentially all bastardized it, but they had this line that you can go study any engineering. I was very into computer science. I was making video games. I was thinking aerospace engineering. I was thinking Harvey Mudd, Caltech type stuff. And like the only place that's going to teach you to lead people is the military. And so I went to West Point and like, I am the worst person in the world to go to West Point. Phil went to West Point as well. I, uh, am only, I guess, famous in my class for being the most punished cadet. At least when I left and I left in the fourth year as going into my first year, I just, there wasn't a rule I couldn't break and I was just not. I did not have a barracks mentality. I went to West Point thinking warriors and war fighting, you know, killer angels. Like my attitude was I was gonna go be the best. And I was there in the early 90s when that wasn't the mentality. It's changed dramatically. That's a great institution. But it wasn't fit for me. And I realized I'm a very unconventional guy. So I ended up going to the Marine Corps, the intelligence community. I built a private military in 2003 to do the second Iraq war. And I'm in Syria, Afghanistan, Africa, having a blast building war fighting solutions at the ford edge, beyond the ford edge, in the countries that we can't even go to. And I loved it. And I learned so much about leadership and company building. I sold that business to Kinstellis aged, uh, about 16 years ago. And I became a VC and my whole lens was I'm going to go find those crazy, good, crazy people, uh, like me and also different from me, but I'm gonna go find those people. And my entire lens are the people and the mission that they're focused on. That is the two things I'm looking for an incredible person. We have this 38 point founder framework, but I look for an incredible person or team in a mission that I believe in. And I'm lined up with that we can go fight together for.

Speaker C: Uh, I mean there is so much to unpack in that story. Uh, from homeless in fifth grade to recruited by West Point to actually, I'm not going to stay through graduation day. I'm out of here. Was that so tell us the honest. Were you thrown out or you left?

Speaker A: No, I went to my brigade TAC and I had tried my second year. I realized very quickly I was just. It's funny, Phil has a similar but very different story for leaving West Point. But for me, I realized I did not fit in. I realized very quickly, uh, I love the Sandhurst competition. I love the military drills. I hated the KLED's manual. I hated, um, this robotic process. I hated the barracks. I hated these rule followers. I remember I was saying military, uh, history and mathematics. And I was analyzing the concept of total war, uh, under Curtis LeMay as being criticized for people for bringing up, uh, a methodology that most officers would not talk about. So, uh, I wanted to be a pure warrior. I realized at the time that's not what West Point in its. At that point, uh, I don't know what the right word is. Very woke manifesto at West Point in the time. Very barracks mentality. So it wasn't fit for me. Uh, but no, I went to my brigade and I told them why I need to leave and laid out why I would never be a great, you know, XO or army officer. I was, okay, we agree with you. Yeah, I didn't get a better place for you. I didn't get kicked out for anything bad. I just, uh, I went in, was just like, hey, this is over a period of time. This is not for me.

Speaker C: Yeah.

Speaker A: And it was the end of my third year, we're going into first year. And I was like, this is absolutely not for me. And what impressed me with Phil, too, is he had a very different reason for leaving. Um, I think one thing I see in founders is, you know, you want to put conviction over brand or title or pride. Right. You need to focus on what you really are supposed to do. Don't focus on the titles. Forget the. And that's why you see great founders leave University.

Speaker C: I was gonna say it's much, much more prestigious. The joke was much more prestigious to drop out of Stanford than it was to get a diploma.

Speaker A: Yeah, I mean, not that prestigious to drop out West Point, but.

Speaker C: Well, it reminds me of the story that Stan Crystal tells of how he was the worst one in his class and now, you know, but rose to the. To the ranks. So, Phil, what was. What was your reason for. For leaving West Point? We talked a little bit about your background, but what's your. What was your reason?

Speaker B: I left that part out. But it's actually to Paige's point, that's a. It's a critical intersection. When I learned. When I met Paige by The way. And I do want to share some time on that, because Paige is so humble that he never talks about how phenomenal he is in the early space. But so I grew up like Paige, dirt poor. I was. Like I said, came here from immigrant parents with no money and no language. Um, and like him, I grew up reading Tom Clancy, Civil Air Patrol, all these different things. I grew up in a family of all service people who, Who. Who. Who fought for.

Speaker C: For.

Speaker B: For their freedom in Vietnam. And when the war fell and they came over here, I inherited all that patriotism. That's what I wanted to do. I want to repay this country, um, by all means. Multiple lives worth of.

Speaker A: Of.

Speaker B: Of repayment. Right? And so I got into West Point, and I didn't know anything about the military. Like most high school kids. I just knew that I wanted to be an aviator, just like my dad, just like my uncles, just like all these people. Um, around, uh, by the second year, I, uh, went to West Point Prep, and then I did my plebe year and was unlike, uh, Paige, I was. I enjoyed the regimented lifestyle. Cause I was such a. I. I was a bad kid in high school. I just had. Didn't have a lot of structure. And so I enjoyed the regimented lifestyle. I loved West Point. But there was a real hard decision for me, which was I couldn't branch aviation back then out of West Point because of a, uh, childhood medical issue. And so I had a really hard decision, um, early in my life, I look back of testing metal and conviction, which is I wanted to be a military aviator. And the path that I had, despite as prestigious as it was and social pressure to stay at West Point, I left, um, I gave the Marine Corps a call. At the time the war was at its height and they needed pilots. And so they said, hey, man, if you can live through and, uh, and graduate our selection process and become a Marine officer will give you a shot to be a pilot. And so I made that. I made that decision to leave. And, uh, it wasn't an easy decision. Right. I came from immigrants who had no money, and now their son was at West Point. Like, this is. This is the story. This is the American story. And, um, you know, uh, I think the four or five years until I got my wings, it was really hard, personally. Um, I didn't get the most support, I'll put that way.

Speaker C: Yeah.

Speaker B: Um, and so that was the story.

Speaker C: Any regrets?

Speaker B: Absolutely not. Uh, how I say it is, I got the best of two worlds. I think West Point taught me how to Be kind of a military service person. Uh, serviceman. And the Marine Corps taught me how to be a man and be a leader. Um, and I look back now, it's those two skill sets. I've been the beneficiary of how I set culture and lead at noda, uh, to how I interact with my family and how I. How I'm a husband and a father.

Speaker C: I think it's exceptionally rare to be in a conversation with two people who both left West Point. It's even more rare to be in a conversation with two people who left West Point and both became Marines. There you go. And you two have, uh, like, interesting parallel, but certainly not analogous, I mean, stories. It's fascinating. Uh, it's really, really interesting for two very different reasons. And I'm kind of curious of how this story starts to converge because I don't think you guys, not judging anybody's age here, I don't think you guys were necessarily in the same class at West Point. But did, uh, where did you all first encounter each other?

Speaker A: It was just a completely, um. Not random, but it was a swap. So I was talking to a brilliant guy over at Upfront Ventures, Nick.

Speaker C: Yeah.

Speaker A: And Nick. I can't remember how Nick had met Phil, but I was down in LA and I'm always talking to hundreds of VCs every year, and we're jamming on interesting ideas. I'm like, hey, have you met anyone interesting? And he's like, yeah, there's this guy Phil. And um, he's really different. He's really interesting, but we don't understand what he's doing. I was like, that's always a good signal for me. Different people doing things that other people don't understand. And, um, Nick made the intro and, um, yeah, Phil and I had a great chat. I told to come hang with me in Northern Florida. We have a house down in Rosemary Beach. And he came out to the Panhandle and uh, we did a bunch of conversations and it was just, uh. Uh, like most of our things is a pretty fast connection to understand him. Uh, his co founder, who he served with and now builds a company with. Um, but it's just like the right people and the right mission very quickly. But that's how it came together.

Speaker C: You agree with that story, Phil?

Speaker A: Yeah.

Speaker B: And if you give me. I'd love to add some color here.

Speaker C: Yeah, please.

Speaker B: I don't always. I don't always get the first level is.

Speaker C: Is the story correct?

Speaker B: And the second level is I appreciate Paige not going deep here because he's he's one of the most humble, humble guys I've met, given his accomplishments. But, uh, I will give up floor time here to, to shine some light on, on page. Right. Um, so I had a very kind of typical kind of founder journey up until this point. Um, I would probably say, and obviously I'm biased here, that Paige is probably the, one of the best in this space for, for early checks, first checks.

Speaker A: Why?

Speaker B: Um, he said, hey, man, we got connected. I was raising my pre seed, I had this conviction, this thesis. And he said, I want you to fly out to Florida to meet me. I don't think we opened up a PowerPoint slide once in those three days, uh, when he says he makes a bet on the founder and he's got like a proprietary checklist, uh, I think it's, you know, 38 points. Uh, I think it's probably in the thousands that he's probably doing implicitly the calculus that he's doing. And we spent 72 hours very close. And a lot of times these stories, Noah is like, oh, you know, like, I'm an investor, I'm a vc, and I just met, you know, this founder and I fell in love with him. I think it was the other way around. I think we share the same stories that you just heard right there. And to me, I knew because of his upbringing and his journey that he was going to turn over every stone and make sure I was successful. Right. We just, we, we had this shared, uh, life experience of conviction, ambition, fighting through seemingly, um, impossible problems. Right. Um, and, and when I got on the plane three days later and he said, hey, man, I'm going to back you, I knew that we had something there.

Speaker C: Right?

Speaker B: Like, I knew the, the combo. The team here is, was, was, was special. And that's not always the case. I mean, I have investors that, uh, they're all great for what they do, but I know Paige has just the right balance of, you know, do I need to, like, be involved or not be involved? And I know, I trust that Phil's going to call me when there's a critical problem that I can come solve. And I don't, I don't ever invoke that card, rarely. But every once when I do pick up the phone, he, he, he makes it happen.

Speaker C: We're going to get into the meat of the company building here in a minute, but I don't want to move off of this just yet, because I think this is. There's a couple of things happening here. And you guys have both used the Word conviction in a variety of ways, talking about a couple of different topics. But Paige, for you to even invite Phil on that first flight, it came through an introduction, sure. But presumably you get hundreds if not thousands of pitches a year. I'm assuming you're not flying every founder to go spend three days with you. So what did you see in that flight? First part of the, or just even in the introduction that said, all right, this is a guy worthy not just of like an hour of my time, but potentially a couple of days to go deep and on, on him versus the, even the business.

Speaker A: And I will, after a first intro or call, I will quite often tell people, hey, if you want to come meet me, I'll carve out time.

Speaker C: Okay.

Speaker A: I, I, I keep well over half my day free unscheduled, so I can go on long walks with my founders, uh, or just new founders coming the door. So I do do that. And part of it is we're looking for unknown. Like we are looking for truly those low signal but incredible people, uh, that the industry doesn't know how to recognize who they are, what their value is. In Phil's case, we had had some, we had had a chat and the, the things that stood out to me were one, um, it was a number of stories. As I went through his history, I could tell the intense conviction that he had in the mission. I could tell that it was genuinely he like I think about vision. So we, so all those characteristics come down to vision, intelligence, character and execution. So the vision size, like 10 out of 10. This guy sees the world, he sees the future of warfare. He sees a thing that I also agree with and uh, it's rooted in real world experience. This is not a Taurus founder who plays video games and decides how he's going to go build.

Speaker C: Like this guy get rich quick scheme in defense tag.

Speaker A: Yeah, there's a lot of that, right? And this is a convicted guy who had been through hardship. And then he tells me a story about giving up West Point to go be an aviator and then giving up aviation to become a jtac. And then his story is about his co founder and the bond they had, uh, when he put his neck out for his co founder to join. And I think we're getting ahead of the story. But there's a story about how he went to bat first. Co founder Dave, who the company was working for, did not believe in and he used his card and he went to bat for this guy when no one else believed in him. And that guy rose to the Ranks. I might be wrong here, but to become one of the best product managers of the company and they've now built a business. And so everything about Phil's life, I saw high agency, I saw conviction. And this is where most people get wrong. Most people are a, uh, derivative of other people's goals and expectations. Right. And you have to like, conviction is you doing what you know is right, what you believe is right, and taking those leaps through the unknown because you're convinced. You know. And so I saw all these like, positive signals. Um, I saw even in hardship in starting his startup.

Speaker C: Yeah.

Speaker A: When he got abandoned by another vc, uh, and promises, you know, like, I watched him push through that and say, screw it, I'm still going to build. Uh, I watched him take a leap of faith. I watched him convince engineers to come work for him when there is no money to actually get it done. And so that's leadership. So I saw all these positive things. I said, great, come out and meet me. And yes. Um, we've got 10,000 plus people top of funnel every year. About 5,000 of those make it through our AI filters to a first call. And a few hundred people come and meet. There's seven partners at the fund now that I've trained up, but a couple hundred folks come and meet us every year in person. And then we invest in, you know, 10 to 12. Wow.

Speaker C: Yeah, that's, uh, that selection rate is far harder than West Point. I think that's like, uh, I don't know, I. No math in public for me. But you probably know what your, what your pass through rate is for us. Yeah.

Speaker B: Oh, it's very low.

Speaker C: Yeah, very low.

Speaker A: Very low. Bips.

Speaker C: Phil, we've talked a little bit about the vision that you had, where the conviction and the idea came from, and how your background kind of informed what you wanted to build with noda. Um, what I don't think we've talked about yet is how you actually got started. So when you're at C3, when you're walking out of the door on the day where you decide like, okay, I'm all in. Talk to us about the decision to go all in. Like, what did it take for you to say not only like, this is the thing, but now is the time, now is the moment and what'd you do first?

Speaker B: Yeah, it's a really good question. Um, I think C3 gave me. I loved it there, by the way. Um, you know, my wife always joked that I lived the dream of most MBA students of going into tech like this. Rapid rise uh, in a growing company and being able to work closely with the CEO, who was well accomplished and their executive team taught me so much, um, on how to build a company, how to build and sell, design, develop and deploy to the government, which is non trivial, like, you know, which we'll get into. Um, but I had this other thing that was in the back of my brain, this conviction, this problem that was not being solved within the Pentagon or with industry that I knew we needed to build soon. Um, and so when I had, like I said before, the gumption to leave, uh, and put my resignation in, part of me was sad because I was still building something with C3. But part of me knew that the country, not to sound kind of dramatic, needed this soon. Um, and so when I left the moment, I was the general manager at the time for federal practice professionally, I didn't tell anyone why I was leaving. I just told everyone that reported to me that was resigning. And it became a Jerry Maguire moment of folks that I worked very closely with. Um, senior engineers, data scientists, product designers. Uh, my co founder, who was, who is one of the rising product managers at the company, all got up and left without even knowing the thesis, right? And said, we're coming with you. Whatever you're doing, we're coming with you. Um, and so that was endearing to me. But that also started to turn up the, the pressure, right? It wasn't just me prototyping on, on, on the weekends. It was, hey, folks are ready to commit their, their livelihoods, their opportunity costs, their family to come with me. And so we start prototyping right away. It was the same team that I've built a business and deployed stuff to the government already. So I felt confident there that we could do it. And when we got to the point where the prototype was demonstratable, um, we went to the government and said, this is the thesis that I know you guys know about. I'd like us to give us a shot to demo this to you. And then we've been, um, you know, we've been flying since then, right?

Speaker C: When you walked out that door, did you have a check in hand? Did you know where the money was

Speaker B: going to come from? No, There's a, there's a, there's a dirty. Not a dirty, size, the wrong word. There's a dramat story that turns out was, was good for me that Paige alluded to. Um, you know, you build relationship with VCs and everyone's in a different place. And I, I'm sympathetic.

Speaker C: Don't gatekeep on us. Phil, come on now.

Speaker B: Well, you know, so I'll leave. I'll put like this. And I'm very, and I'm still, I still have a very positive relationship with these investors. Right. So this is not a, a, ah, demerit on the fund. It's.

Speaker C: You don't have to name names.

Speaker B: Yeah, ah, timing is timing and things aren't always perfect, but we had an investor in mind that was very interested in us early. Um, and I was still new too, by the way. There's a tremendous amount of accountability that's like, I did this wrong, I did the investor VC relationship wrong. Um, but basically, long story short is we kept building under the premise that we would get funded throughout prototyping. And that deal fell apart and we'd been building for six months quietly prototyping. And so we did not have a check. The entire team was working for free. I was, you know, I would, you know, everyone was unemployed building. Um, and then I met Paige and everything changed after that. I mean, we built probably an onus for about a year, um, for free.

Speaker C: Wow.

Speaker A: Yeah.

Speaker C: Is that. You've seen a lot of founders. How normal is that?

Speaker A: For the greatest founders, it is normal to take risk and to sacrifice in a way that, you know, the 99.999% population would not. So that is normal for that extreme

Speaker C: type of overachiever to have a team like that willing to do it for free. Also.

Speaker A: No, I'm saying. But also it speaks to leadership. So if you lead with mission. Right. Not dollars, and if you can actually lead with mission and purpose, you can get people to make tremendous sacrifices. Uh, but most founders just don't know what leadership means. I don't mean that like that they're bad, but most VCs don't understand leadership. But leadership is available to everyone. It is like the most abundant resource that every founder could use. It doesn't cost a dollar, but it requires character and behavior and action, and it requires giving a shit about the people who work for you and actually giving a shit about the mission. Uh, but it's one of these, like, untapped, vast resources that most founders don't use. And most VCs have no idea how to judge or help people tap into it.

Speaker C: Yeah, that's. I mean, that's a really important point. That's a hell of a signal when you see that number of people willing to do it for. And it has nothing to do with the fricking tit. This is the biggest thing that, like, you know, it's Almost. It's almost a contra. Right. Someone's like, I'm a leader. I'm m. This person. If you just told me who you are, it's the. It's the John Boyd quote, right? It's like, you want to do something. You want to be someone.

Speaker A: Yeah.

Speaker C: It's like, which one. Which one are you kind of, uh. You can sell pro pretty fast.

Speaker A: Yeah. It is something we look for. We. You know, we look for these gold miners who, you know, realize at some point in their life that there's this unlimited amount of gold under your feet, right? That's. That's your leadership potential. And if you go mine it, you can mint m yourself an amazing team and an amazing company before you actually have dollars. And people get to it in different ways. Sometimes, ah. A crisis helps someone understand, uh, that they will be a leader, like the classic Lincoln story. Or you get someone like Phil, who went through training and education and development as an officer and a warrior, and you learn it on the job over time.

Speaker C: So, Phil, you were carrying the lives of these people on your shoulders, right? Like their livelihoods. Very much so. I want to use lives gently because this wasn't war, but it was business. Uh, right. But their ability to kind of make a living on you. Um, you went government first. You went defense first. Talk to us about. You said you showed up. You said, we built this prototype. We want you to test it. Um, first off, how did that conversation go? You said, ever since we've been flying. But that's the. That's the hand wavy, you know, sunshine and rainbows founder version. What really happened when you brought this thing in front of a government customer or end user for the first time?

Speaker B: I will answer that. It's a very good question. I know we're segueing here, but let me. Let me touch. If I could just. On what page said a little about leadership, right? And I think it's important. At least important to me. So I'll just use the floor time. Um. Uh, to. To make sure I say this right. Like when I said earlier that the Marine Corps taught me how to be a man and a leader. That. That. That. That's true.

Speaker A: That.

Speaker B: That'll. That.

Speaker C: That. That rings.

Speaker B: That I'll hold dear to me forever. Right? And there's a saying that I'm sure Paige heard in his service in the Corps. That rings to me. That's core to me. A core tenant. So much so that I make every manager and executive read this book. The Marine Corps, we say the leaders eat last Right. Um, that is figurative in value now, but also literal. Every time, despite the circumstances, we get. We get. Whenever there's food or whatever the circumstance, we get in reverse rank order, and everyone eat. The leaders of senior folks eat last. Why? It's because if there's a shortage of food, then the leaders don't eat. Right. And I take that principle into this company, and so how it applies to the previous conversation is when we had nothing and then we got certain small checks, the folks who were building the product got paid. And at eight first.

Speaker A: Right.

Speaker B: And I hold that kind of core value and that core principle today, every executive I hire, every manager I hire gets a copy of that book. Right. Um, that I think Simon Sinek wrote based on his observation of the Marine Corps. So I don't want to understate that because that. That leads into so much of what you want to get to is, how did we cross that chasm? How did we find so much success? How did people come work for you and not get paid anything? With children, with opportunity costs is they all understood that, like, hey, we're going to do something great, but leaders eat last. And, um, I'm going to take care of you. And then when you're a leader, you're going to do the same thing for the folks who report to you. Right. I think people bought into that early. Okay? So everyone knows culture matters so much, Leadership matters so much. But I think it's understated, um, in concrete examples, okay, so that journey of transitioning and getting a prototype. Right? And so it was. I had the benefit and privilege and serendipitous timing that I had this thesis and I had people bought in. And I know folks, the visionaries within the Pentagon that knew what needed to be built. We're still waiting for this solution. Right. Um, and so when I built the prototype and I said, hey, give me a shot. Just give me a fair opportunity. I'm not asking for any favors or such. Give me an opportunity to present to you what we've built. Um, by the way, this isn't a unique story. I think a lot of companies do this. Well, um, we, uh, presented it, we demoed it, and then we got an opportunity to be assessed against formally, um, assessed against other competitors and other vendors. Um, and then we were selected.

Speaker C: So. So, Phil, sorry to interrupt, but where were you? Did you go to a. Like an operational unit? Were you at a program office? Like, who was that? Where was that first touch point? Because I think this matters.

Speaker B: Yeah, um, it was a program office. I Would say, probably part of the easiest way to say it. But even going to a program office

Speaker C: first is like, that is a choice. Not everyone does that. A lot of you see a lot of folks.

Speaker B: Not everyone can.

Speaker A: Right.

Speaker B: And so, um, you know, part of, I think where we're going to get to this concretely around crossing that valley, to your point, is, and we can go to it now if you want, is what I call the triad. Right. Um, and I don't think it's a matter of you kind of do. The reason why I paused there when you asked that question is, um, you kind of do them all at the same time. In my observation, I'm sure Paige sees this too. The folks who serve building in the government is so unique. So, so unique. The Pope, the people who, who cross that, that, that, that, that. That gap the fastest are the folks in, in government specifically, uh, are the folks what I call can. Can navigate this triad. The war fighter, the Pentagon, the war fighter that owns the use the problem statement, the program office that represents that war fighter, and then Capital Hill that funds the program office. Right. Like, you can't just do one first or only. You've got to be able to navigate. And you could probably add acquisitions there. But triad sounds cooler, right? But, um, you know, who can navigate the three vertices correctly? Which is, I gotta get product market fit with the end user. We understand that, but in the government, that's not enough. You've gotta have product market fit with the program office that represents that warfighter, shape problem statements and all these different things. And then you also have to go, um, to the policymakers that say, hey, this is a real problem. I need you to work with the other vertices of this triad and fund it. Um, that's really the secret sauce here that we did very quickly.

Speaker C: Paige, you've done this yourself and also seen this across your portfolio. Is that the Rosetta stone or the skeleton's key now for hacking Government acquisition or, uh, do you see other models that have worked as well?

Speaker A: There are other models. Um, my model was simply to draw. So it's rare just because it doesn't happen as often, but you go into the middle of war and you build a capability, uh, that other people cannot build, and you arbitrage the risk of operating literally in a war zone. Um, you can't build. This technology is not relevant to that. But we were doing a Ford Deployed Intelligence program, um, so that's one way to do it. Um, you can go and acquire a business. Um, I've seen an interesting thing Where a tech company goes and buys an old school business. Um, and there's a number of these, but you go and find a company that has something, some program with the military. You take your tech business and you buy this smaller sole proprietorship, small business that has access to a program. You buy them and roll into your business. There's many ways to do it.

Speaker C: Yeah, like a spac of a government contract.

Speaker A: Not spac. You just go and you acquire another business.

Speaker C: You get access to the vehicle, the relationships, and then you can insert your technology that way. Yeah, sure, that makes sense.

Speaker A: Yeah. And the fact is, like the military, um, and the government at large is, has created more surface area. I started my company, was that 20, 23 years ago, my first defense company, and the government has created massive surface area to get founders to come in. The problem is that that thing's about an inch deep and miles wide. And so a lot of people get small programs. But what Phil has cracked is kind of how to get in and build a, uh, massive program quickly. And, and that is much harder to do.

Speaker C: Right. And that's where that sequencing and a parallel tracking comes in. Filler. So you got to do all three at once. One thing I did not hear you say was sbir or zipper. I didn't hear you say, you know, you weren't talking about vehicles, you were talking about people. Um, what did that initial. So demo. You put that in front of people. They like it. What did they do? Because, Because I think. And again, this is the mechanics. It's do. They didn't tell you to. Did they tell you to go, okay, we have an open topic on, you know, at work or DiU. We're going to open a program for you or a CSO for you. What. What did. What actually happened?

Speaker B: Yeah, I mean, well, I appreciate the framing that I've solved the world's problems.

Speaker C: Your phone's going to be ringing, buddy.

Speaker B: There's a, there's, there's a, um. There's a slew of long nights and broken hearts in that journey. Right? Yes, we did do sibbers. We did all these things like you

Speaker A: have to do that.

Speaker B: We talked to a lot of folks that said, hey, there's a solicit. You still have to do that. That is good resourcing and opportunity for new companies building in defense. Those are great resources and opportunities. Um, I just highlight the main thread and the champion effort that we got, uh, and rapid traction within this programmatic kind of solutioning, if you will. Um, okay, so your question was, um, outside of sbirs. What was the question was.

Speaker C: So you're talking about bringing these three things together. Um, you talked about putting a demo in front of a program office and them liking what you did. And I think it's just instructive to pull the thread on that. So when they say, great, this is cool, what do they do next? They send you to an integration exercise, assessment, evaluation, what happens next?

Speaker B: That's exactly right. And so, um, we start with a demonstration and I think there's a very important cultural shift here that's happening in the Pentagon that I'll use opportunity to highlight, which is, is in a world where there's a lot of marketing noise and communication and a lot of vapor being sold, allowing the government to see something that is real and also ambitious was a key point here that I didn't mention. Right. And so, you know, there's billions of dollars being poured into autonomy and collaborative autonomy and a lot of big promises and fancy articles being written. Um, but we brought that government out to see our technology with real vendors, integration, real vehicles, uh, and not fluff, right? I didn't have the money to market back then, so I just said, hey, show up to this beach and we're going to show it to you. Right? We're going to show you that we're doing what other people are writing about. And you've already given tens of millions and hundred millions of dollars to over the last 10 years. And we're actually going to show it to you as a five person startup. And that was the catalyst to all of it. And so, um, yes, there was a demo that started everything but making sure the government knew that this was real and this wasn't just another vapor pitch was important. And it also endeared us personally and we built that trust very quickly. And so once you have that trust, then I think the government is more, uh, let's say apt to bet on you and accelerate and scale with you.

Speaker C: So where are you on the journey right now? First off, maybe lay out for us, Phil, your vision of where this needs to go, what you know, where it needs to go in terms of a product and like the operational kind of, uh, impact of what you're building Page, you can add in maybe like where you expect this to go from, kind of even from, from your land, from your vantage point, the investor standpoint, um, and where are you on that map? Kind of what does the next year look like for nota? So a little bit for each of you.

Speaker B: Are you talking about specifically the orchestration layer?

Speaker C: I'm talking about the world that you want to create and how far, how close you are to realizing that vision.

Speaker B: Yeah. So, um, I will answer your question directly. I promise. There's something that I will share with you. Just my personal values here. Remember I alluded to earlier that there are things that my personal values and maybe naive as a business person, but um, I'm a Marine and patriot first, right? And there's a lot in the world of defense tech where a lot of people are talking a lot. I will share things that I think is valuable to share. But I also understand if I overshare, our adversaries are also listening. And so uh, I won't get into too much specifics on how or what we do specifically and what accounts we're going to and what combatant commands we're working on. Um, but I can share with you my worldview where I think this works. I think basically our early conversation is industry needs to continue to mature the vehicles and the collaborative autonomy enabling technologies that they're building. We kind of described that earlier in the call. Um, the next functional thing that needs to exist is overlaying that tactics and strategy institution that we described. The weapon schools, the top guns, the WTIs of the world. Onto those capabilities we're building. We're re representing what in the last 50 years is what exists in a strike cell or an operations center, if you, if you're familiar with that, right? Dozens of human beings frantically trying to figure out specific like they all have their own subject matter expertise. Whether it's weaponeering or, or weapon target pairing or, or legal rules of engagements. We're going to parallel that down and accelerate because robots are going to be the ones uh, operating on the battlefield next. So this is, this is the future uh, that we're building on is how do we dynamically deploy government designed and developed tactics onto these capabilities that other people are building so we can execute it real time. Right? If, if, if we're in conflict, if we've, if we've gone from competition to conflict and they are ubiquitous autonomous systems on the battlefield and capabilities, then's not the time on how you defeat a 5th gen fighter or a, a uh, let's say a strategic frigate from our adversaries, right? You really have to have that play baked in algorithm form that you can deploy real time down to the boats, the planes, the submersibles that are going to operate autonomously.

Speaker C: Right?

Speaker B: That's how that, that's my worldview of the future and we're doing that very rapidly. Across very, let's just say very, um, topical combatant commands now.

Speaker C: I love it. Paige, uh, how do you underwrite this at noda? What is, what is the, the view of the world that you see with, uh, Phil and team having radical success?

Speaker A: Yeah, I mean, my world's pretty simple. Um, pick exceptional people lined up on missions I believe in. And it may m sound odd, but I really don't stress the details. Meaning it's Phil's job to go out there and figure out how to make this work, what I know to be true. So I sort of think top down, once I pick a person, and that's my main job, is to pick a person going in a cardinal direction. So autonomous warfare. I will back every incredible founder I can find who's going after autonomous warfare, as long as they're not going to go butt heads with each other. Uh, I know autonomous warfare is the future. We are sitting in the middle of, uh, the biggest shift in power, the biggest change in conflict. You know, the reason the entire world is going to rearm, the reason every arsenal is antiquated is the economics of war. Right? The, the fact that a thousand dollar robot can destroy a $100 million asset or that hundreds of dollars of drones can kill dozens, hundreds of, you know, well trained men and women, that upset of the economics of war is changing everything. Second, uh, we've lived through a history where society has to be able to scale up potentially hundreds of thousands to millions of people and put the men and the machines and sustain them in combat for short or long periods of time. To impose your will on the enemy or to defend yourself. That's no longer true. Now we're getting to a world where you have to build. You can build robots, right? So you look at country regions like the Middle East. I think the Middle east is going to be one of the biggest military powers next couple decades. They don't need to go and build and train millions of pilots and armor officers and infantry, right? We are going to a world of truly autonomous warfare. Now that doesn't mean humans go away. You will always have men in combat. We're going to have men and women working in close coordination with small teams and large teams of robots. We will also have fully autonomous as well as teleoperated vehicles. But if you don't adopt autonomous warfare, you will lose. You will lose the ability to protect your democracy, you will lose the ability to protect your resources. You will lose your ability to impose your will on the world. And so I know that autonomous warfare is true. So how we make that happen? Well, Phil and several of our companies are the key architects of that next generation. But what I don't have to worry about is how Phil builds that software, how Phil builds the program. I have to pick the right people who are lined up in those spaces.

Speaker C: Yeah, it's understanding. Understanding, uh, your job. And executing relentlessly. Love it. Gentlemen, I think we're just about of time here. I appreciate both of you for taking the time. Let's end with this. Phil, if people are inspired by your mission, where should they go to join you? And then, Paige, if people want to pitch you or join. I don't know if Outlander's hiring, but certainly I know a lot of people are interested in probably joining, uh, your portfolio. You can share, uh, that information as well. So let's, Phil, start with you.

Speaker B: You can always find us on nodaintelligence. AI.

Speaker C: Awesome. And Paige?

Speaker A: Uh, I am Paige with an Iutlander VC. You can hit me up on LinkedIn. You can also go through any of my founders and get them to say, hey, come chat with me. It's probably the best referral, but we do look at everyone that comes inbound. We are always looking for founders who are in their earliest days. Right. Most companies are just too late stage for us. But if you think you're a special high potential, young or older leader that's going to change the world, uh, and you're building technology, come talk to us. And we are hiring for our fund. Uh, we, we are always looking out for that exceptional investor who was a founder and had a lot of success as a founder and now wants to be, uh, the coach and mentor to great founders like Phil.

Speaker C: Fantastic, guys. Thanks for making the time. This was a lot of fun. Great stories, great lessons. Uh, we'll be watching. We'll be rooting for you and hope to have you back here soon. Awesome.

Speaker B: Thanks a lot. Appreciate it.

Speaker A: Thanks, Phil.

Speaker C: Take care.