Podcast: eVTOLs, Agility Prime, and AFWERX with Col. Nathan Diller

Eric Lofgren: [00:00:00] I’m pleased to be speaking with Colonel Nathan Diller. He’s the director of AFWERX and we’re here today to focus on the agility prime line of effort, which has taken a really innovative approach to electric, vertical takeoff and landing, or eVTOL systems.

Colonel Diller. Thanks for joining me on acquisition, Talk.

Col. Nathan Diller: [00:00:16] Eric. Thanks so much for having me. It’s really an exciting time in the aerospace world. And it’s also an exciting time in the defense acquisitions world. I think there’s a lot of really interesting new approaches that are being explored. I think there are participants that are thinking a little bit differently, really about partnerships and so excited to talk a bit largely about the things that we’re doing with AFWERX and certainly in particular, the things that we are doing with agility prime.

So looking forward to the discussion, appreciate the time.

Eric Lofgren: [00:00:54] great. Definitely. So I guess let’s, can you just start off here by giving us a little lay of the land in terms of the capabilities you’re seeing with the eVTOL systems coming out?

Col. Nathan Diller: [00:01:03] That’s an interesting question. It’s one actually I think to some degree.

We have been questioned on because it’s a pretty broad spectrum literally from, somebody who has a jet pack or, literally a lawn chair and a few electric fans to some amazingly sophisticated vehicles that look to, be really taking electric aviation to an entirely new level.

Some of the more sophisticated ones certainly are. It’s going to take a little while to mature, but really across the spectrum opportunities to see electrification do things that we’ve never seen before from a propulsion perspective. Similarly, we always talk about three.

Technologies that are coming together to make this industry. And the idea of electrification is clearly the obvious one, that the ability to have distributed electric propulsion and the benefits that we can talk to about that. But autonomy is also a critical piece being able to in their various different levels, right?

Whether it’s automation in entirely new ways that let us think differently about what it means to pilot into the future. And then the last is materials and manufacturing being able to start using 3d printed parts in ways we haven’t before interesting things that are happening with composites.

And so these things have all three have come together to create for us what we’ve divided into three different areas of interest. The first area largely prompted by this idea of urban air mobility. Something that’s a three to eight passenger vehicle. Flying, a hundred ish miles, a hundred ish miles per hour.

And that’s where we started, but we very quickly went with our second area of interest, which was, is one to two passenger vehicles. And with the first you have, as you’ve seen, probably in the news, just over the last week or two but certainly over the several years, a couple of years almost now a huge investment going into that area of interest, one category of vehicle, area of interest too, was interesting to us.

I didn’t necessarily fit the model that has been  the core of this. What was the urban air mobility discussion now more broadly in an advanced or mobility? We did find that a lot of these, the smaller aircraft, some of them were using ultra light. Part one Oh three authorities to operate and to get a pretty high level of maturity in the number of flights, in some cases these aircraft going into relatively decent numbers in manufacturing.

So that was helpful for us. As we built our investment portfolio to think about that. And then the third was these larger cargo vehicles, unmanned cargo vehicles. Now there are some cases where the area of interest one and two could be unmanned, and in many cases are doing site tests on man now. But the third area is one that was specifically done designed, and they’re doing interesting things with modularity, as well as hybridization auto in case range and increased aircraft utilization.

So that’s the spectrum of the hurdles that we’ve been looking at. There are some. Companies that are pushing much higher speeds and higher altitudes. And then, you’ve got your folks in their backyard doing man flight tests in the backyard. So those are, it’s an interesting world.

That’s really sprung up just in the last few years. Yeah.

Eric Lofgren: [00:04:33] So when you look at, you know, us firms in this area, how good are they, compared to our allies and China, even, do you have an idea of the ranking structure there?

Col. Nathan Diller: [00:04:43] I would definitely hesitate for. There’s so many companies that are out there.

So many interesting things that are happening. So many possibilities of things that are happening behind the scenes now. But what I can say is, we have some of the best engineers across the spectrum of disciplines, it’s been exciting to see the combination of people, diversity of expertise that’s been brought to this industry.

And so in the United States, there’s a huge amount of interest. And again, just that the, the thing that’s exciting about this market is the types of people that it’s brought together from, amazing software engineers. People think about autonomy or artificial intelligence, too.

Maybe military fight test pilots or test engineers. And they’ve been doing this for several decades and bring that horsepower together to build new things. This is just fun to watch. So I would say, and I think you can look a bit by investment portfolios. Th the publicly announced investment certainly across Europe just over the last week you’ve seen  some of the things that have happened on now publicly traded Chinese company.

So there’s a spectrum of capabilities that are out there. I think until we really start doing a bit more disciplined flight test and started understanding some things about ability to actually manufacturer and operating costs. There’s still a lot to be determined, but you can start to see this engineering expertise show in the early flight tests that are happening.

So I guess I’ll. Stop short of going and getting a rank ordering.

Eric Lofgren: [00:06:17] Great. yeah, there’s, it’s not just innovation happening in the technology there for EVTOL. There’s actually there’s also the acquisition component and the innovation going on there and, the way that agility prime is being run, it really makes me think about the way that, will Roper, who is the former air force acquisition executive.

He made this distinction between, the requirements approach to acquisition and the opportunity approach. So can you just break down? What do you think that means to you and how has it manifesting in agility prime going after Evie tool?

Col. Nathan Diller: [00:06:47] Yeah. We’re going to get to this new world that we’re in, where.

Some 80% of research and development is happening in the commercial sector, that is research and development. That’s happening on problems. Interesting problems, hard problems, but there may be weren’t problems that were conceived by the military. They weren’t built to requirements driven by the military.

And so if you plan to harness that, if you’re going to try to absorb that technology, you’re going to have to take a different approach than we have. So I spent two years on the joint staff as the aerospace branch chief taking requirements for a multitude of our air and space vehicles through our joint requirements oversight council, that group chaired by the vice chairman of the joint chiefs of staff, goes through a very deliberate process of looking at capability gaps, analysis, starting to think about what requirements would need those.

Capability gaps in going through what is a very long process to design things that in many cases are phenomenal capabilities. You’re not going to get some of these capabilities without that type of process. So the last thing I want to, would suggest is that we need to completely,  start a new and divest ourselves of that process.

Now there’s always opportunity for improvement. But that process is necessary and it’s, what’s created great things that we have that said that process, the speed just in the development of the requirements takes an inordinate amount of time. And so if you’re going to move at a pace that is relevant to the commercial sector, if you’re gonna move at a pace that is it’s probably needed in many emerging technology sectors, you’re going to have to take a different approach.

And that approach is one that starts at a different question. It says, it’s not, what, how would I like to fight the future war? It is, what do I have today that might. Provide me capability sooner, provide me greater agility or provide me more affordability. And how do I go partner with the folks that are out there working on that technology today?

How do I establish relationships with those technologists that are conceiving these new approaches to commercial challenges? That many cases, when I start to think about what’s going to happen with autonomous systems, with artificial intelligence, with connectivity, with computing power, with transportation and flexibility and transportation with sensing, these are in many cases very similar technologies.

Now, again, not 100% overlap, but you’re going to find expertise across those areas that you have to mobilize the American innovation ecosystem in a way that we didn’t necessarily have to mobilize. In, you know what I’ll say, this last era of defense acquisitions we have to, we really have to think about how we’re going to take a whole of nation approach in the national security challenges that lie ahead.

And that requires us to think differently about reforms.

Eric Lofgren: [00:09:55] Yeah, so you brought up this idea that, the commercial R and D now is really starting to outstrip and exceed what the defense R and D was. And it’s like the opposite, right? Like when we created the requirements, approach, defense R and D was really a looming large in the overall spectrum of the nation.

And it seems like agility prime. The way that they’re going about it, you guys are going about, it is really kind of flipping the market research and the requirements piece, because usually it’s like, What is the requirements we need to transport some people for example, and then we think about the alternative ways of doing it.

And then we throw that, analysis over the fence of the acquisition folks, and now they go do, like market research on that outcome, but it seems like you’ve flipped it. And you’re saying, instead of starting with that, we’re really starting with understanding what the market is, what the technology is, building an in-house, technical capability for recognizing value, and then that constant interaction with users and the requirements before we really start off and kick off like a major program.

So can you just talk a little bit about like, how you view the market research role that this program is taking and is it really just like an awesome way to do continuous market research

Col. Nathan Diller: [00:11:06] yeah. So we actually, yeah, I think that is one of the strengths that we have now in AFWERX,

and, just briefly as really prime when we brought app works together back last summer, what we really did is we combined kind of three ad hoc innovation initiatives. One of those was obviously agility, prime. Another was AFWERX, again, relatively obvious taking a slightly different approach than maybe when you call it afterwards.

And then the third was AF ventures and ventures has really gotten to this.  I think it’s a pretty novel concept in what we’re doing with our SBIR [Small Business Innovation Research] open topic, because what it does. And so what it is we have three times a year. We’re basically this open topic is if you have a great idea and you think it’s useful for the department of defense.

Go submit to this SBIR small business, innovative research or small business technology transfer program during these three open periods throughout the year and bring your ideas to us. Because what we’re trying to do is try to, we’re trying to avoid those blind spots, trying to avoid missing those technology trends.

Not only is it interesting approach and I think a relatively effective approach to tech scouting, it doesn’t mean that there’s aren’t there aren’t things out there. Our large primes have great things that they’re bringing on board as well.

But there’s phenomenal innovation happening in the small businesses out there. And this is a way to attract that technology and build cognizance of that technology in our defense. So that is providing. First an approach to scouting and understanding that those technology sectors.

But then secondly,  there’s been this reticence to actually engage with industry, to have conversations with industry that there’s, someone’s going to misspeak and we’re going to have a protest. What it does is it establishes those initial, very small contractual agreements that then allow that conversation to happen.

And allow that to happenin the proper way so that we can really learn quickly. And that’s really what it’s all about is how do we accelerate our. Learning so that we know the technologies that are out there, we know the match of those technologies. And so this approach to SBIR under the open topic has really created the venue.

And that was really where, some of our first agility prime companies came in, started with $50,000 contract. And within a year they were on multi-million dollar contracts. So it’s that speed. It’s the learning. And it’s the conversation that happens with these small businesses that I think is really posture, agility prime.

And it’s really been now going to be a key way that we accelerate some of the other primes.

Eric Lofgren: [00:13:46] Yeah, it, I guess the agility prime is under the AFWERX umbrella, but it seems like what you guys have done with the the SBIR program, you’re, you guys are like setting these technologies up for programs of record, but you’re not necessarily programs of records.

You’re not building programs of record yourself. And agility. Prime is a little bit different because unlike the SBIR, which is really, putting R and D funds onto contract through those various phases agility prime, of course it did, it has put R and D funds on contract is my understanding, but that’s not really the point.

Like agility prime is coming at it from a different angle, looking to accelerate commercialization of private projects, but in doing so, it’s bringing assets and services from the air force to help accelerate these for eVTOL . So it’s, instead of, you know, We’re really here to provide funding and revenue for these companies.

We’re here to provide, these assets and services. So can you talk a little bit about, that strategy and what the air force really does have to offer these firms?

Col. Nathan Diller: [00:14:47] Yeah. There’s a, there’s an important nuance there  that the it is worth addressing. And it is that we’re bringing funding in for these SBIRs.

Phase one is the kind of 50 to $150,000. Phase two,  750, maybe up to $3 million. Those aren’t large pots of money. You’re not going to go do,  massive breakthrough research and development with that amount of money, right? It’s enough research and development to see if there is a match of kind of many existing commercial technology with a DOD use case.

So you can read them in some cases you’re certainly going to move the ball forward in a decent way with some of the larger in the phase twos.  But once we get the companies to that point where we’re we’re understanding that alignment if there is alignment, then the next step that we’re taking with agility, prime is not really continuing to pay.

For research and development. That we’re really leveraging the commercial research and development. And we’re looking more  when I say that it’s where we start to look more at the test and evaluation piece. That’s been, our focus with agility. Prime is largely looking at many of those pieces, those, the ability to do that test and evaluation to see if there is a good match in some cases to, to drive maybe additional research and development.

But we’re not, again we’re not setting requirements. As such, we it’s allowing the companies to ensure that whatever type of in this case aircraft is going to continue to be aligned with their commercial use case. And so that is a different approach that, from the outset, we know the, for example, with agility prime, probably have  may, we’re expecting probably five or so prototype aircraft to start flying with the air force this year.

You certainly can’t go write requirements and design five aircraft prototype aircraft to fly on anything close to the budget that we have. So  that’s the approach that we’ve taken. What’s the value proposition for the companies then,  why are they interested in doing this?

And I think what you’ll find when hear directly from those CEOs or the engineers and testers. In these companies is that we are bringing our expertise. In some cases we’re bringing hardware and that is accelerating their learning about how to do the testing in particular, how to go down a path where they are reducing regulatory risks by falling our airworthiness processes, that eventually would get them to that commercial certification.

And then in the end too, we are providing some funding. We want to see these vehicles in operational use cases. And as they get to a level of maturity that we can start to engage in that operational testing,  it’s helpful for those companies to actually be getting data and actually be getting fundings for that operational testing because it’s testing that needs to happen probably.

Before you would take it to full commercial use case. But it could still be doing something useful for the air force. So that approach to initial Light research and development when we start actually getting aircraft then, and are actually buying time, that’s where I may go through that three-pronged approach of risk reduction from the technical regulatory and financial risk.

Eric Lofgren: [00:18:18] Awesome. I saw that agility prime, I believe that you guys received about $25 million in RDT and E funds for FY 21. So you got a little bit, but you’re trying to like multiply that essentially using commercial by having the dual use commercial overlap and then bringing these other assets to bear right.

Col. Nathan Diller: [00:18:37] Yeah, that’s the idea is that, if we can  there’s this approach to getting additional SPR funding through the SBA [Small Business Administration] has given us this opportunity to get waivers for additional SBIR funding. So been able to leverage that as well. That’s been able to add to what is a pretty small budget for the type of work that we’re trying to do.

And it is, our fundamental question on this whole thing is how do we stress the taxpayer dollar? How do we provide the most value to the war fighter at the same time that we are. Hopefully getting a boost too, our domestic technology providers and that we feel like this is one of the most effective ways of doing it.

One of the most effective ways of meeting the intents of the 1982 small business authorities that, that we’re in statute of really making sure that our American companies have an opportunity to have government funded research and development. That’s going to commercialization and actually creating revenue to make those small companies, large companies and turning those small ideas into big ideas.

And so that’s really that’s that path that of being, being able to use the SBR and we were able to use some other funding, right? It’s not all small businesses. We specifically. In our air race to certification the contracting mechanism that we’re using for part of the agility prime program written intentionally for large companies as well to also be inclusive of large companies, because there’s fantastic technologies that could be dual use technologies there as well.

From an AFWERX perspective, we are very much focused on those commercial dual use technologies. And in many cases that comes from small businesses, but in many cases, it comes from some of the others. And those will be companies that you’ll start seeing, do work with us over this coming year as well.

Eric Lofgren: [00:20:32] Yeah. Some of those small companies are actually getting pretty big valuations, I think because of some of their intellectual property that they’re building out there and their potential. So let’s just say, A few years, a couple of years, you start to see real like military ready capabilities in E vital.

And certainly, it’s not just the air force, right? Their force is doing this, but all services could really benefit from the outcomes here. But with, budgets expected to flat line in decline, the future years defense program is pretty packed with programs right now. And as you said earlier, you’ve done a tour with the J eight and resourcing enforced structure. So how do you think about laying the groundwork to transition across the Valley of death?

Col. Nathan Diller: [00:21:11] In the end there, it has to have demand signal from the user. There’s nothing that, I mean, we write, we write. John’s four things regularly. I’m not that I’m suggesting that we use for this program but, in the end, the warfighter does have a pretty strong signal if there’s something that’s useful and is providing value. So that is really the key is how do we get an opportunity for them to see this capability?

And frankly, it’s not, this is a hypothesis. We have we could be completely wrong. And there, there may be something about this technology that makes it not ready. There’s only one way of finding that out though, as I mentioned at the beginning is we have to accelerate learning.

And so we for for a.  Pretty reasonable price compared to other research and development test and evaluation projects. We’re going to be able to quickly take those capabilities for different types of exercises. We have been developing a pretty novel approach to data analytics and business case analysis.

That we are working with commercial sector as well on to find where those cases that we have alignment in interest where there may be right. We may find that this technology has some type of shortcoming that with a little bit of investment we could overcome and really open up and unlock a whole new capability set that right now may not necessarily be perceived.

And so to that end,  that Valley of death question is how do we accelerate learning? one of the first. Times when I left flying to go do a desk job as I was departing , one of the general officers said there’s a reason bureaucracy exists is there’s a lot of bad ideas out there.

There’s also probably some bureaucracy that gets a little bit too thick and kill some of the good ideas. But there is a point that all, the reason the Valley of death thinks this is, it takes a, it’s a pretty high threshold to go take taxpayer treasure and turn it into war fighting capability.

And so we expect if we’re going to go across that, I, things that we’re trying to do to make that easier is for process improvement in those things that stop  the programs from crossing the Valley of death, things like. Airworthiness things like contracting things like budgeting things like  logistics and training.

So we’re really trying to approach those all to some degree simultaneously  and do learning as well as in some cases, hopefully brain 21st century technologies to many of these processes that may not have quite made it to the 21st century yet. And in part of the reason they haven’t is because they’re tried and trusted approaches.

But it doesn’t mean that we couldn’t do some work to innovate in those approaches to create efficiencies with some new technologies. And so that, that process improvement is key. That warfighter demand is key. And we think that, between those different approaches, we start to learn faster.

A part of it. That’s cultural too, right? Being able to have hardware, get people to experience the technology in a different way is certainly something that we’re aware of and trying to take opportunities for early engagement by folks across the spectrum that might be touching this technology.

So that cultural piece is important as well.   But we do think by partly by being able to leverage other parts of Africa with those efficiencies, with that process improvement. But fundamentally we need to be bringing something that’s useful to the war fighter and that’s where. Testing as quickly and learning that it is, or is not, is we believe the fastest way of getting across.

Eric Lofgren: [00:24:53] . It’s definitely a good approach because it seems like, in the way you’re speaking about it, you’re actually pretty humble about your knowledge of whether it will succeed or not. And what use cases it will fulfill for the war fighter. And I almost would contrast that with a lot of the requirements approach where you almost have to make that decision without really knowing.

So either because you’re doing an incremental change on a legacy thing, so you’re pretty certain. And so you can definitely write a requirement for that, but then if you’re trying to do something kind of new and novel the requirement almost is you’re saying that it will be a valid approach, even if you don’t know whether the technology can catch up in one way or another.

And I know that they’re trying to write them, broad enough that, it might not be an eVTOL. We could do multiple things, but usually those things end up pre specifying, at least a general view of what the system might be. Did you have anything to jump in on that?

Col. Nathan Diller: [00:25:49] Yeah, I think it goes really to, like you said, with the requirements process if you have got to the point that you asked the warfighter, how the warfighter wants to execute the war you’ve gone and invested, a good amount of time into that requirement.  Then once you get to that point, then you go and invest a good amount of time into a couple of contracts.

To meet that requirement. And so you put yourself in this real funny situation that you’ve been trying to solve something for so long that to divest yourself with that idea if you’ve missed the Mark becomes very challenging and some in fundamentally it comes it’s very expensive or it takes very long amount of time and typically both.

And that’s, again, the reason while you, you have to follow that process likely on, on many programs, if there’s, is there a ways of, at a lower cost testing immediately because the technology is there and available, and if it doesn’t work then not much lost. And, from my clinical capital or from a taxpayer dollar perspective.

So we do think that really does it, it changes the game and how you’re looking at acquisitions. You don’t become.  So invested over so many years that you get to the point where you’re accept significant delays, because you feel like you have to, or accept cost of runs because you feel like you have to.

And we and then the other thing is that, to some degree it forces some innovation to happen in other places. We are not relying and we’re not saying technologists go innovate for us. To some degree, we’re saying, listen, we’re all in this together. This may not been the way that you’ve been doing business for the last many years. But let’s try something else. And many times by forcing a different way of looking at it, you come up with solutions to that really opened the aperture. So I think it kind of pushes.

That innovation a broader spectrum. It really forces that, as I said at the beginning, the key to this whole thing is a partnership.  And you asked about the Valley of death question a little bit earlier because we’re not necessarily going in. And I guess I’ve seen this a few times where the requirements teams aren’t that well connected to, in some cases to the technologies that actually understand the technical feasibility what we are, again, in terms of trying to accelerate things we have at the very outset, both with agility prime, and as we’re starting to build out the other primes, being very deliberate about building a team that is composed of the war fighter.

The technologist and the acquisition agent right at the front. And while it seems like that would be common practice  I guess I’ve been surprised that it is not as common as you would expect and, the logistician ends up getting left, it at the beginning, the it’s the cost model who doesn’t show up not because they don’t want to, but because they weren’t called on early enough as you’re doing your analysis of alternatives and then it’s the logistician that doesn’t show up until later, the sooner you get all of those teams in the room, the, I think the more success you’re going to have at accurately predicting those costs utility pieces and that partnership ends up, really being key, but it does, it becomes like you said, is it’s a different approach to requirements development.

That may  cause create opportunity to not get stuck on pride or are we stuck on a system that has been, you’ve invested so much in with so little knowledge, how do we get, how do we get more knowledge and invest less to learn faster again, what this approach offers us and with recognition, then it doesn’t offer that necessarily at all across the spectrum of technologies.

Eric Lofgren: [00:29:35] it seems like it would just makes so much sense to get a lot of those different players in their perspectives, in the room at the start, rather than starting with the requirements and then handing that off. And then it seems all of those voices get in the same room in the acquisition plan, but they’re all kind of part of their own separate reporting structure.

And they’re not like literally, sitting there talking through the issue and iterating. On those things.  And oftentimes it’s like the requirements team at the front that kind of sets this all up. They’re really speaking on behalf of the user in my view, more than like they are the user, or so you said earlier, it’s we’re looking at the demand signal and I guess like this ability to leverage what’s going on in the commercial world to get prototypes in people’s hands earlier actually helps stimulate what those requirements should be and actually gets the voices of the actual user rather than.

I guess maybe a staff officer, imagining or, using his experience on behalf of them. Did you have anything to say on that kind of demand signal, but also like metrics and data seems very important and you mentioned that to build up this case for if it’s ready, you will have the data to prove that.

And you will also have the demand signal from the users, stating that as well. So that’s a pretty powerful case.

Col. Nathan Diller: [00:30:53] those are both good points. So what we have done is started to establish a series of models. And since we’re not testing the requirements, we can go back to one of your other questions on requirements.

We’re not testing, I spend time doing flight tests and you would go build your test matrix to make sure that  that new aircraft, that new system was going to as requirements since we’re not building those requirements at the outset.  What we’ve done as an alternative.

And we started to look and different use cases and say in this use case, what is a way that I would measure utility, right? And that, you can bring together multiple different attributes to what we’re seeing as military utility. There’s also the question of, okay, what is the cost? That costs may be monetary, but there’s also some pretty novel ways of looking at non-monetary costs.

And so we can go build those. We have those models out. We’re now going to start flying this year and to a large degree, we expect that our test points. Are going to be a function of those unknowns, those variables that are out there that we made assumptions on, but we didn’t right, because I haven’t actually fallen and we don’t have real data.

We go to a sensitivity analysis and if there’s high sensitivity to some of those values, then those become some of our most important test points. So that requirements piece of it affects the testing has affected the way we’re thinking  about the analytics. And so I think,  that’s an important piece that as you’re thinking about different approaches, process improvement in different purchases that you have to take under this type of a construct that’s one, fortunately that’s coming at the same time that there’s this huge push for digital engineering and digital threads and new approaches to modeling and simulation.

So we’re able to leverage that at the same time. And that’s, again  another way of accelerating learning.

Eric Lofgren: [00:32:44] As we start seeing this, I would like to, for you to riff on some of the use cases and do you see like the department of defense using any kind of commercial EVTOL services versus ,like where will it procure an own its own Vitols in these use cases? Or is that a little bit, too far in the future?

Col. Nathan Diller: [00:33:01] No, it’s a good point. And, talking to the use cases besides the analytics, to your point on the warfighter input. But like I had mentioned we intend to have these aircraft flying in some exercises this year.

It’s important to have that input but if you can, within our, in theory, we should have within 18 months from the first request for information in this program, we ought to have hardware, essentially in the hands of the war fighter with him being able to see and feel and touch, entirely new flying vehicles.

You could imagine that being faster, but I don’t know if there’s a precedent for us going much faster when it comes to novel new flying concepts. So  the analytics is important but as I mentioned earlier, too the cultural piece, the cultural acclimation is important.

And what’s really interesting is we’ve started to have these discussions on analytics. We’ve gone directly to our major commands. We’ve worked closely with operators, the Marine Corps and the coast guard. And when you start to open this up Across a pretty good spectrum of  grains. Yeah.

You get new ideas of how you might use these vehicles in ways that you probably wouldn’t have, if you would have taken a requirements approach. And again, I don’t want to, I, continue to state the traditional requirements in a pejorative way, because as I said, there’s a reason for doing that but it’s just it’s been fascinating to say, Hey, if you have this, you tell me how you might use this.

And then this may not happen again in all sectors of technology, but this is one it’s interesting because there are cases where. One, maybe you’re, the easy one is replacement, like it looks, it goes, it takes off and lands vertically. Okay. Great. We replaced helicopter’s well, that’s not really the approach that we’re taking.

That’s not the person that we want to take. I’m not going to go compare an eVTOL aircraft one view one D one with the V two, that’s not the intent. So I think there’s probably a couple of articles that went out at the beginning with not the clearest understanding.

What’s been exciting about the approach that we take with the analytics is it’s not a one-to-one comparison, but going and taking a portfolio of mobility assets, whether they be in the air on the ground, And saying, here’s what I’m trying to do. I’m looking very much at an effects base approach of this is, I need this type of stuff here at this frequency at this range.

And I opened that up as an unconstrained problem in terms of the potential solutions.  And so I can look in and see, are there cases where right there’s times I need a V 22, there’s some missions that I can’t do with something other than a V 22 in some cases now, but there’s times when, if I have a portfolio.

And I’m mixing some of the high-end assets with relatively inexpensive potential, eventually, maybe autonomous assets though. We’re certainly not expecting that to happen immediately. From operational use cases it’s given us a new way of looking. So what are the use cases?

Certainly personnel recovery is one that’s interesting. We’re starting to look at some ranges that, that make that a potentially viable. The very near term use cases is, as I said, we need to look into the future really to make this highly valuable technology that, that’s going to give you our high returns on investment.

You need probably longer range than maybe some of the initial electric though batteries and battery density is going to improve, and those ranges are going to get better. But there’s some interesting things potentially with hybridization That we could look at there’s things that we can look at from from communications, from sensors, from compute, and then potentially putting all that together with our rhythms for autonomy.

And so some of the early use cases may just be creating test platforms where we can accelerate learning in. Electric propulsion, accelerate learning in hybridization, accelerate learning in those sensors, compute, calms our rhythms and in . So that could be something that we may, could give really started looking at even this year.

That’s that is a use case, right? We when I was the squadron vendor for flight test partner, we had an aircraft that we use daily for starting testing. But there’s also interesting things you can do on ranges are being able to potentially put in place range of assets for rapid set up, as you think about the types of scenarios that we want our air assets to use.

These are simple DOD, domestic, use cases internally as you start to get to another case has just range, moving personnel and equipment around ranges even, maybe around  Are different installations. You can think about some of these short range.

So we’ve got a partnership with  one company working closely with the police department  to see what it would look like to have, your law enforcement  using these. And certainly that’s a, base protection is a very important mission that we have. And again, one that potentially could be done vehicles that are quickly ensuring that have all of the necessary specifications.

Oh, you can imagine, not just for law enforcement, but first, first responders again on a base or in in an area of operations,  urban warfare certainly this would be interesting, a potential use case but being able to have first responders, medivac Quickly get there.

And this is one that’s, having one person on site very quickly if you have some type of an injury a while, other, ambulance whatever else is needed  having an aircraft with a very small footprint, very quickly bringing a first responder could be extremely useful starting to think about just unmanned logistics across the board.

We’ve got some of the performers that are going to be carrying thousand plus pounds around with some pretty interesting things on modularity. So being able to conduct operations away from runways has been a priority that the air force futures team has been looking at now for a couple of years.

And it certainly could do that. You could imagine different types of give me this hearing any Defensive support to civil authorities domestically the, in a different contingency response operations that are there, but you could also think about the some pretty long range missions.

When you look at again, the hybridization of some of these vehicles the ranges that you could get.  That we potentially looking at finding ways of testing really start to open the aperture of how you could move forces pretty quickly in a very different way. All that to say that we’ve, right now has about 20 different use cases that are out there.

We started doing analytics on a good number of those use cases. Now all of them are largely right. They’re moving personnel and equipment. We’re not considering any kinetic types of use cases for a variety of reasons. There’s just a lot, taking these into actually a shooting environment is not something that we worry we’re intending to do in near term.

But if we can go save time and save money in some of these other.  More logistics focused approaches we think that can have a significant impact in the way that we’re doing this. And it’s something that, again, we don’t have to imagine into 2030 imaginary land these are the things that we do feel like we’ll be able to start to demonstrate this year.

And that, that again puts this program in a different place than any that are out there.

Eric Lofgren: [00:40:20] I liked that approach because it’s not, like with these niche areas that you’re using to start, you mentioned like base protection, logistics, , evacuation, none of these individual kinds of requirements or missions, would itself, find itself important enough to necessitate a whole requirements approach and then building an acquisition program and then going out to solve that with potentially EVTOL at a relatively high cost.

Using this kind of platform that you are to look at the general technology that could have many different applications and fill those niche areas to start and not really looking at it as Hey, we’re going to go out there and we’re just going to replace what we already have, like a V-22 right?

Maybe many years into the future when you’ve proven the technology out, then it starts replacing some of those missions, but that’s not where you’re starting. And you’re starting with the gaps in the seams that, the requirement system really leaves behind.

Col. Nathan Diller: [00:41:15] That’s actually a great point.

You can go look at some of the systems that we have out there that in many cases will be, there’s a discussion of, Hey, that we need to replace that. You get three to five years in the requirements process and you’ve put, a couple million dollars of RDT&E, then you realize it’s, you’re still five or 10 years away.

So I think the language you use is probably pretty accurate. There’s some of these it’s capability sets really do get left behind and we’re,  we ended up 10, 20, 30 years of old technology. That’s missing huge opportunities for agility, huge opportunities for efficiency and, maybe worst of all huge opportunities to create an initial CD to market for our domestic companies to now grow this technology and to a great commercial capability for the rest of the nation.

the other piece of it is, it’s not just that end product, but it’s I think a lot of the things that we’re finding.   the associated technologies may have as much value as the end product, because you’re just developing, you’re developing a phenomenal amount of human capital.

You’re developing a phenomenal amount of learning of these technology areas that may not be, just that platform.

Eric Lofgren: [00:42:26] Yeah. I think that’s one thing that perhaps the acquisition system doesn’t really think about is that human capital portion, not just on the contractor side.

And then of course, like major winner take all programs, create workforce issues over there, but, also on the government side, right? Because you know what you guys are doing seems to be, increasing the in-house knowledge and, getting the, user technical people, contracting people, testing people, logistics people, and then getting them used to understanding the market intelligence and the technologies.

And, when time comes around, like that kind of institutional knowledge will actually prove probably, useful in the acquisition phase, as these things become, larger programs. And it’s really hard for us, I think to know what the benefits and the effects are of that, integrated, in-house workforce and the knowledge of that to, creating acquisition success on the backend.

Col. Nathan Diller: [00:43:21] I think the acquisition success in the backend is great. And I think we will we’ll eventually get there, but you have that also.  I think it starts to attract human capital in different ways, people that may not have been interested in acquisitions. I mean to a large degree, we haven’t spent much time talking about it, the AFERX 1.0, the innovative airman now this innovative  guardian is we are now supporting space force as well as the air force.

That is a critical piece when we, when that’s the cultural piece of this that you look to broader change. If likely our requirements processes in the future are not going to move at the pace to keep up.  Our way of maintaining success is with our agility.

And that agility comes from really changing a culture. And that culture comes, that empowerment is of the airmen and the guardian that are out there to say, if you’ve got a great idea, don’t find that commercial partner and let’s find it a way of, to some degree making a much broader population of acquisition professionals and maybe we had before.

And now you’ve gotta be careful with that, because again, these are very serious matters writing, taxpayer dollars for war-fighting capability. It’s  there’s a skill set that has to be trained there. And so we’re working  as we build that out. But that cultural piece is one that you can’t forget.

Eric Lofgren: [00:44:40] So I want to actually wrap up with And an update of AFWERX, but right before we get there, can you just, give me a little like thesis statement about what types of capabilities or market areas are actually ripe for this prime methodology? Cause I heard that, there’s a space prime effort, coming down the pike here.

So do you have any insights on, what’s going on there and what’s the general idea of what other places we might expect these types of things to pop up?

Col. Nathan Diller: [00:45:03] Absolutely. So the prime idea, right?    there’s all kinds of interesting ways of using the word prime if you’re a mathematician and think about derivatives and accelerations and velocities but you can also think about it from the perspective of kind of priming, priming the pump.

For us, the mission for prime is to expand the technology transition pass. Like we talked about earlier, we’re looking to accelerate those emerging tool markets by taking government resources and using those government resources, hopefully to provide value to the commercial sector that allows us to rapidly and affordably field military capability while we are still bolstering as technical advantage.

So the kind of seven, again, this partnership perspective is really important. We think of that structure with prime with kind of seven different entities.  So the investor, Oh, industry first, right? There has to be something that’s out there. The investor who is interested enough and sees commercial potential that they want to co-invest with us.

Inter-agency often because these are dual use technologies. And so typically you’re going to have some type of regulatory oversight. So keeping close relationships in the inter-agency because our value proposition may be just that we are helping to provide government awareness of the potential of this technology.

That’s, nontrivial potentially. I’ll say international because in some cases, the technology, and you mentioned this a little bit earlier there’s cases where the technology overseas is fantastic. we look often  to our defense industrial base that includes our partner nations.

So that international pieces is important from purchasing as well as building partnerships through a potentially expert in technology. The last three then are ones that we control more directly. That’s the acquisition to actually feel the capability. The laboratory, that’s validating that this is good technology.

And then finally the war fighter who is coming up with those innovative concepts. So what is a prime? It is something where we get an alignment of a nascent technology among that group of stakeholders to say, there’s something here. This technology is ready to go, but there’s a couple of things that are missing.

And if we work together collaboratively, we can get that extra capital. We can get that extra regulatory guidance or relief. We can get potentially some international engagement. We can get the acquisition agent to start preparing for fueling. And we can get a third party, with our laboratory of validating the technologists, and this is ready to go.

And then to some degree, it’s that early market, right? Our war fighter becomes potentially that early market. And so where are those cases? We right now, as I mentioned we’re looking at space. We’re looking at autonomy.  Energy is another one. Does autonomy and energies obviously have some synergies with agility.

Prime. Vector prime is one that’s interesting. The, this is a supersonic, the number of companies that are out there looking at potential commercial supersonic capabilities. Micro electronics is one.  continues to be a massive challenge, all looking at the security of our microelectronics that literally, they thrive everything we do.

And then the last is this idea of a digital game prime. As you start to look at the value that digital engineering brings that leveraging, literally some of the gaming technologies that are out there to help us design from the sub system up through a full,  system aircraft, potentially to a portfolio of systems to eventually designing entire campaign.

How do we use modern techniques for doing that? I afraid the taxpayer might be disappointed if they saw our approaches to work gaming. So those are different areas that we are assessing, expecting to move forward with space here in the coming months. And they’ll probably have a variety of different seedling efforts that we start to  move forward with in these other areas as well.

That’s great.

Eric Lofgren: [00:49:04] Here’s to the proliferation of primes. So can we just wrap up here real quick with an update on AFWERX itself. So we had some of the AF ventures guys on pretty recently. So is there anything new going on there, your other lines of effort or just,  how are you guys operating now with the new administration and now that Roper’s gone?

Col. Nathan Diller: [00:49:24] Absolutely. So one of the things we want to do is we really want to continue to refine. The work that we’ve been doing in the small business innovation research. So in the process, actually right now, some sprints on that we want to continue to accelerate the pace that we can provide contracts back to industry.

So it put some time into that. There’s some infrastructure work that’s necessary there.  We think it’s really important to be able to maintain that, that pace with industry. On the spark side, really starting to grow that group finding ways to make sure that you’re probably familiar with the spark tank making sure that we’re driving, we’re not only working to make sure that we’re really keeping trust with industry and the speed that we’re moving there, but also keeping trust with our airmen that we’re providing all the tool sets to make sure that if you’re an admin was a great idea.

You’re able to find the path of getting that great technology, as small as it may be. It could be just a simplest thing on the flight line  but could save thousands of hours and get aircraft launch when they really need to be launched or save money for the taxpayer. Also on the sparks side really starting to build that out with 80 different sparks cells across the different bases out there,  40,000, some people that are engaged in some form or fashion with this, also both of those are interesting.

There’s some other work that AF ventures is looking at in terms of they talked a bit about some of our loan programs and most importantly, really starting to scale innovation. So we are hiring if there’s anyone out there that is interested in joining AFWERX, could AFWERX.com. We will be adding a multitude of different physicians out there, program managers, engineers, looking for folks with experience and a desire to work in the venture space, in the investment space.

Operations tests. So looking at it, and we’ve been really impressed with the type of talent that we’re actually starting to hire already. But we’ll have many more positions that’ll be coming available. So it’s an exciting time for us in AFWERX. I think an exciting time in the innovation world and exciting time in the acquisition world and continuing, I, so far great feedback from our engagements as we start to think about some of the approaches in this new administration.

So we are not planning on slowing down anytime soon.

Eric Lofgren: [00:51:37] Awesome. Colonel Nathan Diller. Thanks for joining me on acquisition talk.

Col. Nathan Diller: [00:51:41] Thank you. Really appreciate it. Take care.