Matt Grimm
speaker
244 appearances
1 recordings
1 series
first heard Nov 2024
last heard Nov 2024
Matt Grimm’s voice in public audio — every appearance, attributed to the second.
Trend
recordings per month · last 12 monthsNo recordings in the last 12 months.Older appearances are listed below; set an alert to hear about the next one.
Appearances
Like last year alone, Lockheed Martin, the 2023 numbers, Lockheed Martin spent $6 billion on stock buybacks, They only spent $1.5 billion on IRAD, which is called internal R&D, their own at-risk funding of research and development. They spent four times the amount of money on stock buybacks than they did on at-risk research and development. That's wild. That's wild.
That's completely upside down from how any technology company, how any software company, how any Silicon Valley-type company operates. But I don't understand that. And the reason that they're doing that is... Because that's the incentive structure that exists within government procurement and is rewarding that kind of behavior.
So what I'm trying to propose in a new administration, kind of a new worldview, a new approach to these contracts is like stop funding that. It's not working. Like you're not getting the best technology in the hands of soldiers. But fundamentally what you are getting is you are getting technology that is two or three generations behind technology.
Because by the time you go from a requirements document to a PowerPoint proposal document, to hiring the engineers, to developing the thing on a cost plus basis, which takes exactly as long as you think it would, very long time, and then into a fielding and then ultimately into a support mechanism for that whole procurement, by definition, you're operating on requirements that are a decade, 15 years old.
There are two or three cycles behind where the current state of the art is.
Yeah, so it can be upwards of 15, 20 years to go from first requirements document to full fielding of a system, which is way longer than most Silicon Valley companies have been alive. A wild amount of time. I'm really enjoying your face right now.
No, I mean, if you remember in the early days of the Iraq War, we sent American soldiers and British soldiers into conflict in Iraq in soft-sided Humvees where they were just like bullets coming through the canvas on the side. We were equipped for a different kind of conflict.
And then over the course of the 20 years that we were in both of those conflicts, we innovated and developed these MRAPs, these kind of mine-resistant vehicles. We put armor on all of the Humvees. We totally transformed. We had a lot of like IED defeat equipment.
Six to 12 months would be very hard. I think a two, three year cycle is extremely believable, especially if you architect your products to be pretty modular.
If you architect your products to be upgrade friendly, design your products around a software kind of mentality where you can, thinking similarly to how Tesla approaches their fleet of cars with their over the air updates, pushing pretty frequently.
Like if you take a software first approach to a lot of the products, yeah, I think you can get a lot shorter than a five, 10, 15, 20 year kind of life cycle. But
I don't think there will ever be a venture style dynamic of a winner take all. I don't think this is a situation of like Google versus Yahoo, where one is the obvious dominant winner by 10x and then there's the other rands. I don't think that's going to be anywhere close to the case in overall defense spending. So Kind of goes against that thesis, sure.
The inverse of that is that it is a gigantic market and it is a long enduring market. I have a couple of stats here to throw at you. In 2024 alone, US is spending about $880 billion on defense. The UK is spending about $73 billion more. The EU member countries are spending almost $300 billion on top of that. Australia is spending $45 billion on top of that.
And that's before we start talking about other partner nations like Japan or like Taiwan or Middle Eastern allies or any of that. That's purely just looking at like this year's spending. It's like over a trillion, almost a trillion five in spending. Big number. My point is just that this isn't a kind of new emerging sort of like... oh, I wonder what that growth sector is going to look like.
It's not that at all. It's a big, enduring, very reliable sector. The other thing I would say, kind of bringing it back around to the political positioning where we started the conversation, is that defense spending has largely remained fairly flat and kind of grown pretty predictably, almost linearly over Republican administrations, Democratic administrations, same in the UK for what it's worth.
So from a perspective of like, do we think our customers will be there buying important technology in five years? Of course they will be. So yeah, I think there's a couple of pieces. One is like, I don't see it as a true winner take all. I don't see it as like Lockheed, Boeing, Northrop, Raytheon, et cetera. We're going to take all of them down. I don't see that at all.
73.
73. 73.
UK spending too little by a wide order of magnitude. What should it be? Closer to the 2.5%, 3% of GDP that everyone's committed that they should be spending on NATO. It should be, my guess is like 50% higher than that. More importantly than a particular dollar amount, they should be spending it more efficiently. And the UK, like the US, is not.
Your comment, not mine.
Showing 81–100 of 244 · page 5 of 13
← Previous
Next →