Can the Military Move at Startup Speed? How the Army and Navy Are Rebuilding

This episode reveals the inside story of how the Army and Navy CTOs are dismantling decades of bureaucracy to accelerate tech adoption, offering a blueprint for engaging with the historically opaque Department of Defense (DoD).

Meet the CTOs: Driving Tech Transformation in the Army and Navy

• Alex Miller, CTO for the Chief of Staff of the Army, describes his role as heavily focused on education—explaining technology's potential for military missions—while also dedicating significant time to hands-on engineering to advance the Army's tech goals. He emphasizes setting a "north star" for technology use, navigating complex stakeholder environments (including Congress and the public), and overcoming decades of risk-averse policy implementation. Alex notes, "most companies don't have 60 years of policy and rules that were written generally by enthusiasts and visionaries but implemented by minimalists." His background includes serving as the science and technology advisor for Army military intelligence (G2).
• Justin Finelli, Department of Navy (Navy and Marine Corps) Chief Technology Officer, highlights that the CTO role in government is a relatively recent acknowledgement of commercial technology's disruptive potential. His focus is on finding and scaling innovations from non-traditional partners, tying new tech adoption to divesting from outdated systems, and aligning disparate internal organizations towards achieving "outcomes overmatch"—a significant advantage over adversaries.

Deconstructing the DoD "Black Box" for Startups

• Both CTOs acknowledge the perception of the DoD as a "black box" for startups, particularly those focused on R&D and minimally viable products (MVPs). Alex explains this opacity wasn't accidental, stemming from historical frameworks like the Packard Commission (acquisition), Clinger-Cohen Act (IT), and Goldwater-Nichols Act (linking mission and acquisition), which created layers of bureaucracy.
• Current efforts focus on cutting through this red tape rather than relying on workarounds. The Army is actively bringing industry partners in earlier, seeking input on requirements and leveraging Other Transaction Authorities (OTAs)—flexible contracting mechanisms granted by Congress—to form consortiums. OTAs allow for faster prototyping and adoption outside traditional, rigid procurement rules.
• Justin notes an unprecedented alignment, with more companies wanting to work on national security, driven by a recognition that "only superior military technology can credibly deter war." This creates a unique opportunity, potentially a "century anomaly," to divest from legacy systems and integrate new players, though the translation process remains challenging.

Navigating Program Offices (PEOs) and Programs of Record (PoRs)

• Justin explains Program Executive Offices (PEOs)—large organizations responsible for acquiring systems at scale—and the Programs of Record (PoRs) they manage. The DoD has 75 PEOs (18 within the Navy), creating a complex landscape for startups to navigate. A PoR signifies a long-term, funded program, often seen as the ultimate goal for startups seeking stable DoD contracts.
• The Navy is shifting towards a "Military Moneyball" approach, evaluating "capability per dollar" rather than rigidly adhering to PoRs. This involves converting PEOs into portfolios (like PEO Digital) to enable more data-driven decisions, especially for Horizon 1 capabilities (incremental improvements to existing, budgeted systems). An online index helps startups identify relevant PEOs.
• For Horizon 2 capabilities (breakthroughs using existing tech/budgets), mechanisms like Small Business Innovative Research (SBIR) grants and Accelerating Procurement for Innovative Technology (ATP FIT) funds exist but are limited. ATP FIT provides funding to bridge the "valley of death" between R&D and sustained funding.
• Horizon 3 capabilities (game-changing, entirely new tech) still often require "guerrilla marketing," engaging directly with DIU (Defense Innovation Unit), Congress (the Hill), and requirements writers, as existing PEOs may not have budgets or frameworks for such radical shifts.

Challenging Legacy Systems and Requirements

• Alex argues forcefully that many current processes, including PEOs themselves, are workarounds for a broken system and not mandated by law. He advocates for fundamentally reshaping processes below the statutory level.
• He provides a stark example from Counter-Unmanned Systems (C-UAS)—technology to detect and defeat drones. A requirement he reviewed effectively demanded a system that only needed to work 51% of the time due to compounded statistical thresholds. Alex questions this acceptance of mediocrity: "What person at what company is going to go 'Yeah I'm okay with my engineers building something that only works 51% of the time'?"
• The goal is to move away from overly prescriptive, "gold-plated" requirements towards focusing on mission needs, acknowledging that becoming a PoR often creates perverse incentives to maintain the status quo rather than innovate continuously.

Scaling Innovation: From Pockets of Excellence to Enterprise Standards

• Justin emphasizes scaling successful new approaches, like using concise Capability Need Statements (CNS) and the Software Acquisition Pathway—a modern process allowing rapid software development and deployment—which drastically reduced an 18-month requirements process to three months. The challenge lies in making these better methods the norm across the DoD.
• The rapid pace of technology, especially software and AI, necessitates more agile experimentation. Pulling horizontal capabilities like AI across 75 PEOs requires enterprise services. DIU's "digital on-ramp" aims to streamline this.
• Examples of successful cross-service adoption include the Navy deploying an Army-developed edge compute solution (compact, powerful computing deployed near data sources, like ships) and the Army quickly adapting a Navy electronic warfare solution for use on Humvees, demonstrating agility is possible.

Shifting Focus: Value, Speed, and Field Testing

• Alex highlights a critical mindset shift: moving away from the traditional program manager metrics of cost, schedule, and performance (often tied to rigid requirements) towards value and time to delivery as the primary goals.
• The Army leverages its flexibility to conduct "transforming in contact"—testing new tech directly with units in the field (Europe, Pacific, Middle East). This allows rapid feedback, as "only the soldiers will actually be able to tell you yes this works at a time of crisis."
• He recalls Quick Reaction Capabilities (QRCs) during the Global War on Terror (GWOT), where needed equipment reached Afghanistan in 30 days, proving speed is achievable but requires fixing the underlying system, not just creating temporary workarounds ("side quests").

Defining Overmatch and Reducing Technical Debt

• Justin defines Overmatch as achieving order-of-magnitude improvements, not just incremental gains (e.g., 15%). This level of leap is needed to justify displacing entrenched systems.
• Examples include consolidating thousands of identity management solutions into a single Naval Identity Service and leveraging companies like Seronic, which used cloud-based high-level compute (massive parallel processing power) for simulations, proving capability improvements dramatically faster than traditional methods.
• Alex illustrates the burden of legacy systems with the Army's "mission command" enterprise, which had 17 PoRs, each with its own mapping server, hindering the adoption of modern, shared mapping services (like KML/KMZ-based systems – standard file formats for geographic data). Consolidating these "vestigial organs" is a major ongoing effort.

Adopting Venture Principles: Specialization and User Focus

• Alex draws parallels with venture capital, noting the DoD is learning not to expect contractors to excel at everything. The new approach focuses on assembling best-in-class components, like Lego pieces: one company for data services, another for UI, leveraging their core strengths.
• He laments the gap between soldier-fielded technology and consumer-grade usability: "It is shocking to me how much stuff we buy for soldiers that no one would accept if I handed to you in your everyday life." Changing this mindset is key.
• Justin adds that acknowledging software-defined warfare allows leveraging high-performing components across systems, promoting reuse and economies of scale, requiring better governance and integration, especially for AI.

Enterprise Services, Proximity, and Culture Change

• Both CTOs advocate for Enterprise Services—common capabilities provided centrally (e.g., by the Chief Digital and Artificial Intelligence Office (CDAO) or DIU) to avoid redundant efforts across services, drawing on the Intelligence Community's "Services of Common Concern" model. This frees up individual services to focus on unique mission needs.
• Alex mentions a meeting with major Large Language Model (LLM) providers (AI models trained on vast text data), noting the tech itself is available; the value lies in the DoD's unique data and mission applications. Startups can help identify problems, but the DoD must articulate its needs clearly.
• Justin stresses the importance of proximity: startup CEOs should spend time near the end-users (warfighters) to truly understand their problems before focusing on sales.

Addressing Risk Aversion and Budget Constraints

• The fundamental difference in risk perspective is highlighted: Venture Capital embraces risk for high reward, while traditional DoD acquisition focuses on minimizing financial risk (waste, fraud, abuse), often ignoring the opportunity cost of time. Alex argues, "I'd rather lose a dollar right now... than spend that 10 years [waiting]."
• Justin uses the quarterback analogy: measuring success by avoiding mistakes versus scoring touchdowns leads to different outcomes. The focus needs to shift towards speed and impact ("Speed as an Independent Variable" or SAVE). Internal "Mavericks" who champion breakthroughs despite systemic friction are crucial.
• Alex explains the historical context of budget rigidity, starting with the Minuteman 3 missile program in 1968, which introduced program-specific line items. Today, thousands of line items in the National Defense Authorization Act (NDAA)—the annual law funding the DoD—dictate spending, forcing predictions 3-5 years out and limiting flexibility, making rapid tech adoption difficult.

The Path Forward: Scaling Success and Key Initiatives

• Justin is optimistic about scaling successes via the Software Acquisition Pathway and getting proven breakthroughs fielded faster within the next 6-12 months. The key is demonstrating undeniable value (A/B testing) to justify divestment from legacy systems.
• Alex outlines major Army initiatives for the year:
• Next-Gen Command and Control: Moving a consortium-developed system (tested on platforms like the M1 Abrams tank using Android devices) into a formal program.
• Project Flytrap: A C-UAS initiative in Europe learning from Ukraine, integrating non-conventional sensors, compute, and automation to protect soldiers from drone threats.
• Autonomy Consortium: Developing autonomous vehicle formations, focusing on human-machine teaming, robust toolchains (simulation to validation), and moving beyond older microcontroller-based systems.
• Alex emphasizes a "with our shields or on it" mentality to overcome policy blockers, stating, "This is not a technology problem, this is a culture and a process problem that we can apply technology to."

Lightning Round: Quick Insights for Founders

• Red Flags: Don't work with bad/long requirements documents (Justin); Stop trying to make the DoD your only source of revenue (Alex).
• Green Flags: Keep building your core product vision and work with DoD to find applications (Justin); Keep imagining a safer world and bring top talent to DoD problems (Alex).
• Book Recommendation: The Hundred-Year Marathon by Michael Pillsbury (Alex).
• Misconception to Dispel: This isn't your granddaddy's DoD; bring data, and policy exceptions can be made (Justin); The Army is globally engaged, transforming while actively in the fight, and has been since 1775 (Alex).
• Favorite Military Movie: Top Gun: Maverick (Justin); Starship Troopers (Alex).

DoD leaders are actively dismantling barriers to speed up tech adoption, presenting a significant opportunity. Crypto AI investors and researchers should monitor these reforms, engage via new pathways like consortiums, and align solutions with the DoD's urgent need for outcome-driven, scalable capabilities, particularly in AI, data, and autonomy.