Thread by @KTmBoyle

To those at Reagan National Defense Forum #RNDF, if there’s one BLUF you take away from the weekend, you should know: Time is running out with Silicon Valley.

After five years of DOD saying “we want to work with the best startups”, we have, at most, two years before founders walk away and private capital dries up. And many, many startups will go out of business waiting for DOD to award real production contracts.

Some context: In the past five years, thousands of startups have received funding from various innovation orgs. OTAs. STRATFIs. Startups believe they’re getting REAL contracts and many investors do, too.

And these orgs are doing good work. They are desperately championing the cause of DOD working with startups to build next-generation capabilities.

But experienced founders and investors know that until you have a production contract-- these are nice little door prizes from the DOD.

This is not just a problem for founders. This is a problem for all Americans because we’re living through two extraordinary, seismic paradigm shifts that are reshuffling the geopolitical order.

The first is software: Historians will one day say that software is the most important technological innovation in the whole of human history.

The second shift is concerning: It’s the talent crisis that the government deemed “a quiet crisis” in 1989—the best and brightest minds were going to Wall Street and McKinsey then.

Today, it's even worse: our best talent isn’t going into government. The best engineers aren’t joining prime contractors. And they aren’t joining software factories to build for DOD requirements. They’re going into fast-growing startups on 18-month life cycles.

But there’s good news! In fact, GREAT NEWS. It turns out that Silicon Valley heard the call from the Department of Defense and talented engineers want to build software for their country.

Companies like @anduriltech made it cool to work in defense!

Hacking for Defense, developed on Stanford campus in 2016, is now oversubscribed on 55 campuses across the country! Engineers want to solve REAL HARD PROBLEMS for America. h4d.us

And even better: THE COOLEST MAN ON THE INTERNET RUNS A GOVERNMENT COMPANY!

Investors heard the call too: In 12 months, roughly $2 BILLION of private venture capital went to defense-focused companies.

But where are we now? Early-stage startups are waiting. And many will languish after getting OTAs and pilot contracts that felt real but weren’t.

And while investors will give a handful of these companies the benefit of the doubt, you’re going to see talented, hard-working teams go bankrupt and head back to Facebook and Google because DOD decided to give the Primes contracts to study AI for ten years.

DOD doesn’t need acquisition reform or to burn down the house and start from scratch. It needs to award production contracts to venture-backed startups that can build technology for defense, fast.

So what should DOD do right now?

1) Award production contracts to the most important startups with the teams who’ve proven they can build. These don’t have to be big contracts. But they have to be real production contracts that show founders and investors that DOD is serious.

2) Change the culture of procurement: Procurement officers are punished for betting on a young startup. Incentivize the procurement officers to work with venture-backed startups that can build needed capabilities for the warfighter.

3) Commit to long-term changes: We’re in a business-as-usual state even though we’re watching our adversaries have Sputnik moments. This is not a drill. We have to act now.

This is urgent. The future of American national security depends on us finding a way to solve this procurement crisis. And talented engineers are ready to move fast and serve their country. 🇺🇸 #RNDF2021