This episode delves into the unique path of veteran founders building dual-use technologies for America, translating battlefield experience into critical innovations for national security and beyond.
Founders' Journeys: From Service to Startup
- Motivations for Military Service: The discussion begins with the founders' diverse paths into the military.
- Grant was drawn to the Air Force initially to fund his MIT education, subsequently working for four years at the Air Force Research Lab (AFRL) focusing on innovation and rapid system deployment for warfighters. AFRL is the primary scientific research and development center for the U.S. Air Force.
- Another speaker (Grant) joined the Army driven by family history and service, attending Cornell ROTC, serving in active duty (including Joint Special Operations Command - JSOC, an elite military command for sensitive operations), transitioning to the private sector (investment banking), returning to active duty, and now serving in the Army National Guard while founding Rune.
- John felt the call to service after 9/11 and the 2003 Iraq invasion, enlisting under the 18 X-ray program (a recruitment option allowing enlistees a direct path to Special Forces assessment). He successfully completed the training pipeline and served three years on an Army Special Forces team (Green Berets).
- The Entrepreneurial Pivot: The founders discuss whether entrepreneurship was envisioned during service.
- Grant saw opportunities to fix "broken or outdated" acquisition processes from the outside, driven by the mismatch between traditional methods and the pace of technology.
- The Rune founder initially pursued large corporate roles (investment banking) to build a "toolkit of knowledge," seeing entrepreneurship as a later opportunity to give back to the mission.
- John, always a "builder" since his computer science days, viewed service as a detour from an inevitable path to founding a company, later gaining valuable startup experience at Palantir before launching Cape. "My stint... at Palantir... I learned a ton... about the culture... the mechanics of how to operate in a company," John notes, highlighting the value of intermediate experience.
Identifying Needs: From Battlefield Gaps to Business Concepts
- Targeting Service-Identified Problems: The conversation explores how specific challenges encountered during service directly influenced their company missions.
- The Rune founder focuses on military logistics, particularly for the Army and Marine Corps. He observed that logistics systems effective during the Global War on Terror (GWOT – the U.S.-led international military campaign launched after the 9/11 attacks) wouldn't suffice against peer adversaries, motivating Rune's focus on field logistics technology.
- Grant's work at AFRL during the early days of military drone adoption (circa 2007-2008) revealed a critical disconnect. He saw "old school big heavy military systems trying to be thrown at these small light fast threats," which were ineffective against low-cost drones used by non-traditional adversaries. This inspired his focus on new approaches to airspace management and counter-drone technology.
- John's company, Cape, was directly influenced by the initial stages of the Ukraine conflict in February 2022. Observing the dual-edged sword of commercial cellular networks—a force multiplier but also a significant targeting risk—led to the foundational question: "What tech do we wish the Ukrainians were using right now?" This spurred Cape's focus on secure mobile communications, aiming to mitigate such risks, particularly with Taiwan in mind.
The Veteran-Founder Pathway: Direct Leap or Stepping Stones?
- Navigating the Transition: The founders debate the necessity of intermediate roles between military service and founding a company.
- John believes founding is possible anytime if it's "in your blood," but acknowledges his near-decade at Palantir provided crucial lessons in innovative culture, operational mechanics, and managing "a little bit of chaos" without failure.
- The Rune founder emphasizes the individual nature of the decision, depending on life experiences and perceived skill gaps. He personally valued time in finance and at a Palantir-like company to gain necessary experience before leading his own team.
- Grant suggests that some distance (like grad school, his path) helps process military experiences, shed bureaucratic frustrations, and strategically apply the positive aspects of service (like mission-focus) to a commercial venture.
- The host, Matt, adds his perspective, favoring an intermediate stop to "see what right looks like" at high-performing companies like Anduril, Palantir, or SpaceX.
- Avoiding the Rear-View Mirror: A key insight shared is the danger of only building solutions for past problems.
- The Rune founder warns against the trap: "If you try to build the thing you thought you needed, every month that goes by... what you thought you needed then is now out of date." Founders must constantly think forward.
- John links this to the innate founder mindset – an insistence on forward-thinking and ambitious goals, which he believes is core rather than learned.
- Finding the right co-founder with complementary skills (like a technical co-founder) is also highlighted as crucial, something potentially harder immediately post-service.
Culture Dynamics: Military Discipline Meets Startup Agility
- Contrasting Environments: The discussion contrasts the structured, hierarchical military culture with the ambiguity and autonomy of a startup.
- John, despite his Special Operations background (a flatter, more meritocratic military environment), notes the inherent structure and doctrine ("a book that literally tells you how to do your job") differs vastly from the startup's "blank slate."
- He emphasizes creating a startup culture that openly accepts failure when risks are taken transparently. "The only thing you need to do is be transparent... call it out when we fail and adjust... it doesn't do any damage," he states, fostering risk-taking.
- The Rune founder identifies common threads like initiative and drive but notes the lack of inherent support structures in startups compared to large companies or the military. Hiring for growth potential and providing mentorship is key.
- Grant stresses translating the military's "mission-driven focus" into a "customer-driven, user-driven" approach, particularly relevant for dual-use companies serving both government and commercial clients.
Dual-Use Technology: Bridging Defense and Commercial
- Defining and Navigating Dual-Use: The founders discuss the concept of dual-use technology (tech with both civilian and military applications) and its implications.
- Grant confirms his company is dual-use, as drone threats impact military bases, critical infrastructure (power plants, borders), and commercial drone usage (inspections, logistics). Building a culture grounded in shared values and understanding the seriousness of the mission is vital.
- The Rune founder finds attracting top commercial tech talent to defense work isn't overly difficult when framed as meaningful work for the nation. "Do you want to do meaningful work?" is a powerful motivator.
- Grant adds that showing real-world examples (like drones used by prison gangs for smuggling) instantly clarifies the stakes and resonates with potential hires who want to make an impact.
- John describes Cape as truly dual-use, akin to Signal (a widely used encrypted messaging app), serving privacy-conscious consumers, journalists, activists, and national security professionals with the same core need: leveraging cellular networks securely. He finds that unifying the engineering team around one product serving both missions works well, attracting "awesome folks" who embrace both aspects.
Identifying Future Defense Tech Needs: A Call for Innovation
- Requests for Startups: When asked about gaps they wish startups would address, the founders identify several key areas:
- The Rune founder immediately calls for "Lighter weight body armor and kit."
- He also highlights a need for reliable, autonomous "heavy lift aerial resupply platforms" capable of carrying substantial cargo to support automated logistics – a challenging problem.
- Grant observes that modern defense challenges are increasingly data-centric, not just hardware-centric. He emphasizes the critical need for better data sharing solutions between organizations (military branches, government agencies, private sector entities like power plants). "Anything that encourages and enables data sharing... is super super valuable," he asserts.
- *Crypto AI Relevance:* The emphasis on secure, interoperable data sharing across disparate organizations presents potential opportunities for decentralized ledger technologies or privacy-preserving computation methods (like zkML) to ensure trust and security. AI could be crucial for analyzing the shared data to derive actionable intelligence.
Modernizing Defense: Speed, Asymmetry, and Adaptation
- Shifting Paradigms for Future Conflicts: The discussion turns to whether current systems are adequate for future warfare, emphasizing lessons from Ukraine.
- John stresses the need for asymmetric capabilities – low-cost, attritable systems and cyber warfare tools that allow for significant impact with relatively low investment. Cape operates in the cyber vulnerability space of cellular networks. "How do we win the scrappy, messy, asymmetric war that's sort of inevitable?" he asks.
- The Rune founder argues for speed and agility in defense acquisition and development. He criticizes long prototyping cycles (e.g., "20-month prototyping effort") as "insane" for software. He advocates for rapid iteration, testing, and crucially, efficient offboarding of failing programs. "As taxpayers, as veterans, and as founders, we should want that level of competition," he states.
- John echoes the importance of "killing stuff that's not working," arguing it benefits everyone, including the company involved, by preventing resources from being wasted on "zombie programs."
- Bridging the "Valley of Death": Grant identifies a persistent gap in scaling successful prototypes.
- While programs like DIU (Defense Innovation Unit) help startups get initial contracts, there's a "Valley of Death" in scaling from ~$1M pilot projects to mid-size deployments ($10M-$50M range, implicitly).
- He argues that the true value of many systems (like airspace monitoring) only becomes apparent at scale, allowing for pattern recognition and broader strategic insights. Scaling is needed to "try it in the real world at a scale that matters."
- The challenge of frequent personnel rotation within DoD is also raised, hindering program continuity and knowledge transfer, making it harder to sustain momentum for innovative projects.
Building High-Performing Teams: Trust and Cohesion
- Cultivating Startup Culture: The founders share strategies for building trust and cohesion, mirroring positive aspects of military teamwork.
- John champions in-person work ("proximity matters") and founder leadership by example – being present, responsive, and setting the standard for mutual support, ensuring team members are there "picking up on the first ring." "Culture is what you do, it's not what you say," he emphasizes, quoting Ben Horowitz.
- The Rune founder highlights collaboration across teams (engineering, product, growth) facilitated by physical presence, alongside simple rituals like weekly team happy hours to build camaraderie, especially crucial when the team (the primary capital for a software company) is working intensely.
- Grant stresses the importance of celebrating real-world impact and successes. Initially poor at this due to mission-focus, they learned recognizing wins builds cohesion and resilience, motivating the team to pull together during inevitable challenges because they understand the "why" and the stakes.
Looking Ahead: A Potential Return to Service?
- Conditions for Re-engagement: The founders contemplate returning to military or government roles in the future.
- John would consider it a "defining career milestone" but only if genuinely empowered with the authorities needed to make a real impact, avoiding ineffective "innovation roles."
- The Rune founder (still serving in the Guard) sees it as an "honor of a lifetime" if offered the chance to contribute meaningfully back in a government role, balancing the entrepreneurial drive with a "selfless service aspect."
- Grant agrees, emphasizing the need for actual authority to implement necessary changes (drawing on his acquisition background). He humorously adds a key condition revealed by a former Secretary of the Air Force: "She said, 'Well, I can get you a beard waiver...' I'm like, 'Okay, now you're talking.'"
Conclusion
Veteran founders uniquely bridge battlefield needs and tech innovation, driving crucial defense modernization. Their focus on data sharing, speed, and asymmetric capabilities signals key areas where Crypto AI investors and researchers should track disruption potential and integration opportunities within national security frameworks.
