Rajiv Parikh: 0:05

Welcome to the Spark of Ages podcast. Today we're joined by Matt Bigge, a partner at Crosslink Capital. Matt's been crushing it in the investing world for over 25 years and his track record speaks for itself. He's backed winners like Veriden, sold to FireEye, arcsight sold to HP and CloudShield sold to SAIC. He was even a founding investor and chair of Mesh Networks, which Motorola snatched up.

Rajiv Parikh: 0:30

Before he was writing checks and building tech empires, he was serving our country as an infantry officer in the 10th Mountain Division. We're talking full airborne and ranger qualified. This guy helped detain Haitian dictator Joe Raul Ced when he was just 24 years old. Talk about starting your career with a bang. When he's not hunting for the next unicorn or advising government and private sector leaders on cybersecurity, matt's living his other passion baseball, and we mean serious baseball. His son actually made it to the major leagues with the Cubs after being drafted in 2019. And now he plays for the Tampa Bay Rays, armed with degrees from Georgetown and Harvard Business School and based in the San Francisco Bay Area. Matt's also deeply committed to giving back through the Honor Foundation, helping special operations veterans transition to civilian careers.

Rajiv Parikh: 1:22

Some of the key takeaways you can expect from this episode the impact of low-cost versus high-cost defense systems. How the US is rebuilding our supply chains for defense and the logistical challenges faced by defense startups. Strategies employed by startups like X-bow and Darkhive to disrupt traditional prime defense contractors. And, finally, how Matt's interest in plausible science fiction influences his investment approach. Matt, welcome to the Spark of Ages.

Matt Bigge: 1:54

Hey Rajiv, Great to be here. Thanks for having me. It's always fun catching up.

Rajiv Parikh: 1:58

All right. Well, we're going to continue that fun conversation that you and I always seem to have and what really excited me about having you here, you bring this very unique perspective as a venture capitalist, as a business leader, because you served in the military and you're a true deep tech geek. But you then understand how to turn that into leadership and investing and purpose, so I wanted to bring all that to my audience. So let's start with a little bit of what's happening today. So there's a conflict in Ukraine, as you know well, and what's interesting about it is that they're faced with an overwhelming militarily superior power and they have innovated in ways that are just unbelievable. As you'd find in many military conflicts but in this one it's especially poignant They've demonstrated the impact of low-cost expendable systems like drones and loitering munitions. How has this shift influenced your perspective on investing in high-cost, exquisite platforms versus numerous low cost autonomous systems?

Matt Bigge: 3:08

Well, you know, I don't think it's, I don't think you want to think about this in terms of cost. I mean, ultimately cost does matter. But really, about 10 years ago, when I joined Crosslink not quite 10 years ago we, you know, we sat down and did a lot of work thinking through how do you make an impact, what are the challenges? That I saw, both as a soldier decades ago, but then also when I was CEO of my last company, which was a small defense contractor and we were running business operations in places like Iraq and Afghanistan and a variety of other places. You don't go on vacation and what it boiled down to was the future requires systems that are modular, that are interoperable with one another and they're responsive. So we can break that down.

Matt Bigge: 4:09

Modularity Things need to be plug and play. You can take components from one system and use them in another. It's kind of like blocks of software, because I think most people in the startup and venture world think in terms of software. But you know there's no reason why. You know, a UAV from one vendor cannot use the exact same interface as a UAV from another vendor. If you're plugging in a thermal camera or other ISR, you know, reconnaissance capability, Interoperable. These systems need to be able to communicate with one another, independent of who the prime is, independent of who the technology provider is.

Matt Bigge: 4:56

We have too many walled gardens throughout our national security infrastructure, and these walled gardens lead to a slowdown in communications, and that degrades combat effectiveness. And ultimately, what you want to build are products that enable the warfighter to do their job and enable the enterprise that supports the warfighter, and that requires interoperability. In addition to that, interoperability is critical for the military to run at machine speed. Too often the battlefield runs at human speed, while our adversaries are running at machine speed, and that's where autonomy comes into play. The last is responsive. We no longer can afford to take you know the average of 6.6 years to create a program of record. You know the average program of record from you know the day it gets talked about in the Pentagon to the day that you field an initial capability is 6.6 years. That's crazy.

Rajiv Parikh: 6:07

That's a long, long time.

Matt Bigge: 6:09

Yeah, Like what is the technology cycle?

Rajiv Parikh: 6:11

And then many of them, like you know, like some of the fighter jets, these are 20 plus year programs right before they get to production.

Matt Bigge: 6:18

Right, and so they are, by definition, obsolete before they're in the hands of the warfighter and our adversaries do not require, you know, three technology cycles to deploy one tech, one capability. You know, if we think about something that was spec'd out to require artificial intelligence in 2019, all right, that was basic machine learning, and you know, in today's world, things like generative AI are forming autonomy in ways that allow us to function at machine speed versus human speed low-cost drones, right.

Rajiv Parikh: 6:54

There's drones that are made with toys or toy components from China. I mean, right, a lot of the microcontrollers and those things, right. And then there's this massive sort of disruptive impact where these low-cost items, put together in large numbers in a well-trained system, are taking out much more expensive weapons. Like you know, 100x, 1000x times, right, a $200 device is taking out a $100 million system. So if you were to look at it from that perspective, is this because people were thinking about this before or is this an adaptation?

Matt Bigge: 7:41

Well, it's an adaptation. I mean, you know, when you're forced by an existential threat to come up with solutions, you get pretty creative. And hats off to everyone in the Ukraine because they've demonstrated, you know, incredible creativity, incredible intestinal fortitude. You know it's pretty cool the way people have found a way to stay alive and fight back and actually inflict some pretty significant damage on. You know, as you pointed out, a much more. You know financially well-backed adversary and when you look at that, it reminds me of a book I read in undergrad by Che Guevara on guerrilla warfare. And when you look at the way Che changed the way the Soviets implemented guerrilla warfare back in the 60s and 70s it took us a while to figure that out. Now, ultimately, the Cold War turned out the way it turned out and Che didn't meet with a very pleasant end.

Matt Bigge: 9:00

But that playbook is largely what we're seeing out of the Ukrainians. It's also what we're seeing out of the Ukrainians. It's also what we're seeing out of the Houthis. It's what we're seeing out of a number of nation state and non-nation state adversaries that are forced to function without fancy, exquisite systems that spent decades getting spec'd out and more decades before they went into production. And that's where you get back to MIR modular, interoperable, responsive. It's got to be responsive within the technology cycle. It's got to be able to interoperate and communicate and to me, that's the future of the defense sector.

Rajiv Parikh: 9:46

In a way yeah, in a way because they were forced to be in that situation. They didn't have all the setup and the infrastructure. They were forced into that situation and that's because we had these electronic systems that can be cleverly utilized. So now let's take it a bit further, right? So one of the other areas I'd love to chat with you about is the notion of the current supply chain base. Right, so we have the notion of modernizing defense production. Right, and you've invested in a company called Crossbow that's using an additive manufacturing approach for single rocket motors. Right, so they are additive manufacturing. That's printing, 3d printing. So how far along? So a lot of folks will say, well, the US has hollowed out its industrial base and supply chains, and you'll say that, and there's a lot of logistical challenges as a result. Right, I'm a startup and I'm trying to take advantage of whatever I have here in the US. I can't just necessarily draw from what's moved overseas. How do you think about that in terms of modernizing our production base?

Matt Bigge: 10:55

Well, I mean, it's about modernizing the production base so that we're actually putting the best and the latest and greatest capabilities into the hands of the men and women who defend our country. And we have gotten lazy about things. When you look at the world of solid state energetics, so you have two types of rockets ones that use liquids and ones that use solids. There's a few hybrids in there, but for the purposes of this, liquid versus solid. Liquid gas goes in your car. That's a liquid. The rocket that you built in third grade and shot up in the air, that had a little solid thing of gunpowder.

Rajiv Parikh: 11:44

It's like fireworks, right, it's like fireworks, right, it's like fireworks.

Matt Bigge: 11:46

Yeah, those are that solid state and solid state motors. Actually, most of the rockets that get shot around this world are solid state rockets and really, you know, prior to about six years ago there had not been a meaningful patent filed. You know, in my lifetime I'm not young, there is no non-gray hair on my head, and so that tells me that even if the capability is great, the ability to manufacture the capability is not. And that gets to being responsive, being modular, being interoperable, and I think where Crossbow has seen a lot of commercial success has been the ability to respond to customer requirements in very, very short order. When you look at the incumbents in this market, you have very, very long lead times on orders and you have very large scale like capital. They basically have mixing bowls the size of a four-story office building. They fill them up with chemicals and then they turn them into rocket motors, as opposed to Crossbow. They fill them up with chemicals and then they, you know, turn them into rocket motors, as opposed to Crossbow. They have a program with the Air Force where you can just 3D print these motors in a shipping container, like anywhere in the world. It's pretty cool and it turns out you don't have to order that nine months or a year in advance.

Matt Bigge: 13:27

But I think one of the natural tendencies in this conversation is to bash the legacy primes.

Matt Bigge: 13:34

But the reality is they've got to all work together and where that can be very symbiotic is the large primes are incredibly good at communicating with Capitol Hill. They're very good at managing very complex large programs. They have exceptional past performance which allows them bidding preferences. But, generally speaking, the best technology but generally speaking, the best technology it's found in Silicon Valley, it's found in El Segundo, it's found in Austin, texas, it's found outside the R&D facilities of large primes and, frankly, even some of the federally funded research and development centers. And prior to 9-11, over half of research and development in this country was funded by the DOD. Today that number is less than 18%. So it's because 9-11 happened and all of our spend shifted to immediate operational requirements as opposed to research and development. What we've seen over the last 10 years is the rise of venture-backed, national security-focused businesses. I've been investing in national security-focused businesses for well, since the 90s, and historically that hasn't been the place where you can find an idea.

Rajiv Parikh: 15:01

This was not the next sexy Amazon, or right?

Matt Bigge: 15:04

Yeah, but neither was cybersecurity 25 years ago, Right?

Rajiv Parikh: 15:07

So I mean you had to see it a bit earlier, right, I mean, that was the thing. It's like you had to see, I think, what you're talking about, this notion of modular interoperable response, If you had to see it, the need for that prior to that, because even your crossbow investment is not the last three years, right?

Matt Bigge: 15:26

this is like yeah, it's 2019 is when we right. Yeah, we were the first. They were in development even before that right.

Rajiv Parikh: 15:33

They were in development way before that right so they.

Matt Bigge: 15:36

The idea before was before that, but we, we were their first capital so it. That's when it went from really good ideas to really good ideas put into motion. And that's where you look at a company from basically zero six years ago to hundreds of millions of dollars in bookings. And that means, number one, they've built something useful. And number two, the customers find it useful, which we all go back to business 101. Budgets that those people have consistent with the capability and then the ability to have a contract vehicle that can do. Numbers one, three, three if you got all four of those things, you might have a business right.

Rajiv Parikh: 16:32

If, if you don't, if you're missing any one of those things, but you have to see it right, and so there's this combination of seeing it from the your, your let, your personal lens and then seeing it from the folks that you're talking with, and so this is a situation where it's kind of like the SpaceX I think the audience may understand as this as sort of like United Launch Alliance, which is Boeing and Lockheed's rather slow-moving rocket building capability that was very reliable but very expensive, versus SpaceX doing it less expensively much, you know, like 75% off per rocket launch, right, and coming up with super clever ideas about how to reuse, launch, reuse rockets Right, you were. You had to see the same thing in the defense world with these, with the rocket that can be manufactured in a kit on demand on a site versus off at a big location, right?

Matt Bigge: 17:31

Well, we have a big location too, but that's true. But even there it's you know, it's continuous throughput and again, that that's you know. This gets back to you know, responsive requires taking a greenfield look at things and, just like we do in any venture category or any startup category, really it's all right, this is how the world does it. Well, how should we be doing it in light of modern technology, in light of modern capabilities?

Rajiv Parikh: 18:02

Yeah, and that led you to see these sorts of things. So let's go to talk a little bit about AI, right, and so there's the rise of AI agents. There are tons of sensors out there of all types, so there's data coming from all those sensors, coming to the warfighter, right, and so that warfighter or the team has to make sense of it in the context of a highly disruptive battlefield. Right, there's massive volume. There's a lot of things coming at you. As one of our guests, jason Hansberger, told us, right, he's an Air Force colonel now doing work at Stanford to help bring Silicon Valley and the military together. It's not like driving your full self-driving system in a friendly city street right, where everybody has rules to get somewhere. You're in a complex world, right, where everyone's against you.

Rajiv Parikh: 19:00

So now you have to make sense of it, right. And so how do you see these AI-powered automation and augmentation capabilities coming together to help the warfighter that may be potentially overwhelmed by all this data?

Matt Bigge: 19:12

Well, you're absolutely going to be overwhelmed by this data and that is why I talk about the future requires functioning at machine speed, not human speed. The future requires functioning at machine speed, not human speed, because the human brain is not going to be able to handle those inputs at a pace that's nation to defend our country. Increasingly, they must all operate at machine speed and that requires interoperability of systems, which is a big challenge that we face in terms of modernizing our national security infrastructure. The good news is we've got great minds, great entrepreneurs out there doing it and I think increasingly the large primes understand that if they're going to be successful in the future and maintain their market share, they're going to find ways to partner with these emerging technology companies so that everybody's doing what they're best at. You know, crossbow, I believe, has you know, awesomely wonderful solid-state energetics technology and capabilities, and these larger primes, increasingly their organic ability to produce those materials is outdated. So if they want to service their customers the best way they possibly can, they're going to partner with these up and coming innovators that I believe.

Matt Bigge: 21:04

The Forged Act calls them non-traditional providers, which was a term coined by Silicon Valley Defense Group, and SVDG is a founding board member there, and we do a lot of work helping the Pentagon understand what the state of the art is and where to find it. We also do a lot of work educating Capitol Hill on what's the state of the art and where to find it. We also do a lot of work educating Capitol Hill on what's the state of the art and where to find it. I think we still have some changes that need to be made in the procurement world.

Rajiv Parikh: 21:41

I'm sure that's a significant process. Make my rocket on the battlefield right.

Matt Bigge: 21:51

Well, it's the motor. It's not the whole rocket, well, not the rocket.

Rajiv Parikh: 21:54

You have the explosive and then you have the rocket. You can make it at the battlefield or in forward locations, as opposed to getting it shipped all the way from somewhere.

Rajiv Parikh: 22:03

So that's, an incredible innovation in and of itself. And then I think, you have an investment in this firm called DarkHive, which is in the area of drones and drone management, where now you can have them working together as a swarm, working autonomously or semi-autonomously to get to where to fulfill a particular mission, so that, if they're somehow blocked by other communications technology, they can make things happen, right. Yep, so these are capabilities that are Silicon Valley-esque, capabilities that are combined with a military need to get people to where they want to go, right, and so this is how all this is coming together.

Matt Bigge: 22:52

Right, and it's a great founder market fit story, where a former Navy combat tech who I met when he graduated the Honor Foundation Transition Program back in 2018, kept track of him. He had a job with a large contractor, did that for a while, learned how the system works from the contractor end because he'd already seen the problem on the ground in combat zones, in combat zones, and so, when John was building his business, his question was why are we deploying, you know, a $150,000 drone to do a reconnaissance mission, when, if we take a step back and build it using consumer electronics methodologies as opposed to exquisite system methodologies, we can build that exact same drone and sell it for $20,000 or less? And that was the aha for him. I think what we've realized with the company over time is that, yes, those drones are going to sell like hotcakes, but the software that makes them run is what really allows the battlefield to run at machine speed rather than human speed.

Matt Bigge: 24:14

And then, when you think about the interoperability, it's building the hardware and the software with an open systems approach so that it can communicate both up and down. They can certainly communicate with the soldiers on the ground, but it can also interface with the software that informs higher headquarters at the operational and strategic level. So, thinking through that interoperable and responsive framework, you know you take a consumer electronics approach to building these systems. That's going to radically lower cost. It's also going to materially enhance your the manufacturability of the UAV and by doing that you become much more responsive. It's not place an order, wait six months, take delivery, go out and train on it. Maybe it all works, whereas with DarkHive it's yeah, what do you want? All right, well, amazon Prime, I mean, it's not quite that easy.

Rajiv Parikh: 25:25

It's pure sense and respond right as the market demands it and it and like you're saying, it changes the way you procure right. The, the traditional procurement system has changed and you know, to the defense department's credit, they've had darpa and other clever ways of working with industry and I think you guys have you, through your, your silicon valley group, have helped to change some of the legislation so that you enable these firms, or the primes. Explain a quick thing about primes A prime is.

Matt Bigge: 25:52

So prime is a systems integrator. So you think about the big ones Lockheed, rtx, boeing, northrop, saic, booz Allen. These are large companies. They control about 30% of, you know, all defense contracts, over 50% of the large defense contracts. Because, rightly, our federal government is not going to trust a $100 billion program that some startup with eight people and maybe a dog wandering around the office, because when you build these things they have to work. This is not. Hey, we have 99% uptime, we're good to go. We're talking five, nines reliability, nine, nines reliability.

Matt Bigge: 26:44

You know there have been some incidents over the last few years where startups, you know, don't stand up to the reliability and you know, just downtime requirements that you have with a military specification. You know, we all love to make fun of the $500 hammer and that is silly. All love to make fun of the $500 hammer and that is silly. But at the end of the day, if you know, I think back to when I was an infantry officer. If I pick up my, you know back then M16 and it jams every 10 rounds, I'm not using it. Yeah, 90% success rate is not good enough. Yeah, you're going to die. And when you look at these systems, you know five nines reliability in a network system. That equates to about six minutes of downtime per year and that is on the border of acceptable in a military system, because the idea is that we're going to win and we're not just going to use stuff that enhances our ability to die.

Rajiv Parikh: 27:55

So that's the reason for this notion of the prime contractor They've been certified, they have the systems in place, so it's easier for the government to work with them directly of the prime contractor They've been certified, they have the systems in place, so they so that it's easier for the government to work with them directly and then for them to vet the sub, these other companies that they, that they might put on that contract.

Matt Bigge: 28:12

Right, absolutely so. So so if I'm coming in providers right.

Rajiv Parikh: 28:16

So what? What? The game for the? If I'm going going to be an entrepreneur and build a defense tech company, it's probably in my. Eventually, I may either work through a prime or through one of the exceptions that I think you've worked on.

Matt Bigge: 28:31

Right, and so there are ways to sell direct, and it depends on what you're doing. I mean, if you're just, if you're selling discrete widgets, you can be what's called a merchant supplier, and as a merchant supplier to the government, you might sell through a prime, you might sell direct to the government, and that usually involves selling discrete things as opposed to systems. Now there are younger companies, growth stage businesses that aspire to be the next generation of primes. You look at something like Andoril. They're not in it to sell through Lockheed, they're in it to be bigger than Lockheed, and that's a longer journey. There's a lot of benefit to it, and I think we do need some upstart primes.

Matt Bigge: 29:21

Once upon a time SAIC was an upstart prime, and you know. And so there are different ways to skin the cat. But you know if you're going to be selling autonomous systems, you know you're going to want to work with. You know the large primes that hold the large contracts so they can more easily on-ramp you. You get that past performance so that you can then become eligible to bid as a prime on your own program of record.

Rajiv Parikh: 29:52

So there's a whole system that we need to have, that's available, that you've helped put together with like-minded folks, so it's not just closed off, like most would think.

Matt Bigge: 30:06

Everything in the world is hard until you learn how to do it, and then it's just work. And whether you're trying to sell into the Fortune 500 with enterprise software, well, the first time you sell in the Fortune 500, it's really really, really hard.

Rajiv Parikh: 30:21

It's freaking hard yeah.

Matt Bigge: 30:23

Yeah, and then you learn how to do it. You build a playbook and you know, over time you refine that playbook and then it's just worked and very similar to that. When you look at, you know our defense budget going to be about a trillion bucks by the time this thing gets through reconciliation. That's over 5x the GDP of the Ukraine. Yeah, Like, our defense budget is five times that country's GDP, actually a little more.

Rajiv Parikh: 30:54

Yeah, I think it's bigger than the next 10.

Matt Bigge: 30:59

At least. Yeah, I mean, it's rough. It's about 40% of global defense. Yeah, I mean, global defense spending is 2.7 trillion. We're a trillion. So it's the kind of thing where this is a very, very large enterprise.

Matt Bigge: 31:13

And if you're thinking about, as an entrepreneur, identifying what is my total addressable market whether it's hardware or software you've got dozens of Fortune 500 sized budgets inside the US national security infrastructure and people think about the government as a solitary or a one customer. Oh, you have concentration risk because you just sell the DoD Well, the DoD has hundreds of potential customers, so you have concentration risk. Is you just sell the DOD? Well, the DOD has hundreds of potential customers, so you have concentration risk. If the only thing you're selling into is you know the, you know one program like, if everything you do is going into the you know joint strike fighter, all right, that's customer concentration risk. But if you're selling through I have a portfolio company that's into they're a part of 28 different programs of record that's not concentration risk. That is rational spread of programs, rational revenue diversification, and so that's where the venture world is just coming online with understanding how to diversify revenue appropriately without even leaving the US government.

Rajiv Parikh: 32:38

Yeah, so that's a great way of putting it right. There's so many different ways, so many different potential buyers within this. So when I'm thinking about go-to-market to them, there's a whole way that there's a mechanism to get you there. There's a mechanism so that there's not concentration risk. And do I think about net dollar retention? Do I think about NRR? Is that what they're putting?

Matt Bigge: 33:02

up in their slides. It's much longer. No, when I go to a board meeting with Matt Biggie.

Rajiv Parikh: 33:06

Am I talking about NRR, ndr.

Matt Bigge: 33:09

Maybe on the cybersecurity side of the portfolio, but no, it does matter, though. The government can kick you out of contracts if you're bad at what you do, and it happens you see contracts terminated for convenience. That is a phrase that nobody wants to hear, and you do see this happening, particularly when products don't hit reliability standards. There's a reason why it takes so long to get a missile qualified or to get a safety system qualified. I don't want the parachute that was slapped together and it's gonna work 90 of the time. Yeah, I mean, I have no problem if you know. Uh, you know, I buy a box of pens and nine. You know I buy a box of pens and only nine out of ten of those pens has ink. Like, all right, that sucks, but I can get over it. But if my parachute only opens 90% of the time, like you know, hey, we got a problem.

Rajiv Parikh: 34:13

Even 99 is not good enough.

Matt Bigge: 34:14

All right.

Rajiv Parikh: 34:16

Let's talk about one of your favorite topics, which is plausible science fiction. Okay, so how does that inform your investment decisions in cutting edge national security areas like hypersonics or energetics or autonomous systems? How do you discern between plausible future tech and pure fantasy?

Matt Bigge: 34:41

I'd say number one. The future is way closer than people realize. When you look at these kind of things, you want to understand have the basic science challenges been overcome? And then it's a function of all right? Are we still inventing novel capabilities or are we into the engineering phase where we're refining a capability to turn into something that can be used in the world around us for business, national security, whatever, and actually I'll go with a company that you haven't named Alira.

Matt Bigge: 35:23

Alira is a company that we spun out of a lab at Harvard in 2019. And they basically make an SD-WAN product where the security mechanism is quantum entanglement, and when I first met the company, they had had a breakthrough. I first met the company, they had had a breakthrough. An undergrad student, working with Professor Preet Narang, had figured out a way to predict gate failures in quantum systems. It turns out that that little breakthrough allows you to sustain a communication connection that is essentially unhackable and when you think about the post quantum encryption world, unhackable systems are going to be pretty critical because there's no right now, right. So just to help everyone understand, when is wide area network?

Rajiv Parikh: 36:13

So wide area network we're trying to communicate across the networks today have been built on TCP IP and you know that was the original networking system. There's a lot of companies in cyber security at every single level network security, application security, cloud security, I mean there's, you name it. There's all these companies, right, but and everybody keeps talking about post-quantum, basically post-quantum computing as a way.

Matt Bigge: 36:41

None of our encryption works right now.

Rajiv Parikh: 36:43

Well, I mean, I got five or six different clients that keep talking about post-quantum right being essentially unhackable, because with quantum I can break the cryptographic code, right. And so you found this cool company that in the quantum space that had a had a bead to around it Right, that and that could be. Quantum has been science fiction for a long time, Right, it's always kind of like fusion, it's always 10 years out or whatever, Right? So but in this one you found something where there was a practical application.

Matt Bigge: 37:16

Well, not only a practical application but I mean, yeah, I mean honestly, the first time I sat down with a professor, I was like this is nonsense, like this is five to 10 years out. What I discovered was the research has been done, and then we had a couple of years of development where we were refining can we make this work in a manner that it can be useful to businesses and governments? And that took a couple of years. And then, once you do that, it's about engineering, where you're taking that R&D and turning it into a product For better or worse. I began my venture career running around research and development labs, defense contractors and federal labs trying to find cool intellectual property that appeared to have business utility, and so a lot of my early investing was in companies where we were taking R&D and making it useful, and so that kind of informed why I like going into these things really, really, really early, because I understand how that evolution works, and when I sat down with Professor Narang in Harvard in 2019, it was really quite exactly.

Rajiv Parikh: 38:39

Yeah, good job, all right, but yeah, great to meet you great idea yeah just like a lot of, a lot of I've talked to a lot of professors that you know their, their wet lab innovation is just just ready to be commercialized, right ready to go.

Matt Bigge: 38:54

but the longer I spent learning about, the more I realized, all right, the future is a lot closer than we think, and this is something that could have legs. So do you like read?

Rajiv Parikh: 39:09

science fiction books and that informs some of your thinking. Are you looking for things like that? Is there a pattern recognition sort of in in built in your head that while that you read about this cool stuff when I was reading you know prelude to the Foundation and now it comes out today I mean, if you read Diamond Age by Neil Stevenson and read the whole book it's a short book and then look at the year it was copyrighted, your jaw will hit the floor.

Matt Bigge: 39:38

There's a reason why Neil Stevenson was one of the first advisors to Jeff Bezos for Blue Origin. The guy has seen the future and frequently gets it right or close enough to right. So I do read a ton of science fiction, but I also read a ton of white papers and I am very much always on the lookout for where the future is closer than people generally believe it is.

Rajiv Parikh: 40:06

You know, I think- and so that's how you build the connection. You may have something way out there. Like somebody might read, ray Kurzweil years ago and he was maybe a little aggressive initially with what's going to happen with AI and the singularity and all that but Well, he had Leon Cooper at Brown in the 70ity and all that. But, he wasn't.

Matt Bigge: 40:22

Well, he had Leon Cooper at.

Rajiv Parikh: 40:23

Brown in the 70s and 80s. We're getting there, yeah, yeah.

Matt Bigge: 40:27

I mean the term neural network. I believe it was coined in 1979. Right right At Brown got in Leon Cooper, nobel Prize winner, and so that was a you know 40-year journey before that basic research turned into something useful. Now I think a lot of that had to do with the ecosystem around it, because the principles of neural networks have not changed a ton, but the bandwidth, the compute, the memory.

Rajiv Parikh: 40:58

Having the cloud essentially enables it to move so much faster.

Matt Bigge: 41:03

Or having this little device in our hands that's more powerful than any computer on earth in 1979.

Rajiv Parikh: 41:11

Right, right. So all that brings it together, and so you have to be able to see all that you know and you'll make mistakes, and some you know. But you have to be more. I guess you have to be one, you have to be 10% right on a home run.

Matt Bigge: 41:27

The power power law theory does work. You know that's a yeah, I think. If you look at the history of our funds, you know it's. You know we have plenty of singles and doubles and that's great and that's great for the entrepreneurs, great for the entrepreneurial ecosystem and it's wonderful for us and our investors. But ultimately, when you have a real home run of a fund, it's because you have a few of those outliers.

Rajiv Parikh: 41:52

Okay, so, matt, this was awesome. Now we're going to have some more fun and we're going to go to the spark tank. So here we go. Welcome to the spark tank, where we ignite the unexpected connections that fuel go-to-market innovation and occasionally set fire to conventional business thinking. Today, we're thrilled to have Matt Biggie, a true deep tech investor capitalist. We're thrilled to have Matt Biggie, a true deep tech investor capitalist, a man whose career reads something like Mad Libs, with a LinkedIn profile and accidentally created a superhero origin story.

Rajiv Parikh: 42:29

This is the ultimate word association challenge, where we're going to dig through decades of your brain's filing cabinet and see what fascinating connections fall out. Every response could either drop some leadership gold, reveal the secret sauce of team building, or accidentally pitch the next unicorn startup in science fiction investing. Here's how it works. I'll start with a word and, matt, you'll respond with the first word that pops into your head. No military precision required, just pure stream of consciousness brilliance. Then I'll respond and we'll keep this chain of associations flowing, you know, maybe two or three times back and forth, and then I might ask you a question about it. Okay, ready to see where your battle-tested synapses take us?

Matt Bigge: 43:11

Let's go.

Rajiv Parikh: 43:12

All right, here we go. Matt Mission.

Matt Bigge: 43:18

What needs to happen.

Rajiv Parikh: 43:20

Purpose.

Matt Bigge: 43:22

Leaving the world better than you found it. Do you have a couple of favorite companies that embrace that notion of mission and leaving the world a better place? Learn Lux. Learn Lux Financial wellness training as a benefit. This is something that's changing the lives of millions of employees around the world, of large companies that use the LearnLux platform so that their employees are better able to manage their day-to-day personal lives, which makes them better at their job. So lots of Fortune 500 customers, very exciting company that is absolutely leaving the world better than they found it.

Rajiv Parikh: 44:07

Awesome. All right, we'll do the next one Destroyer.

Matt Bigge: 44:13

Creative destruction. Battleship Slow musk, I wouldn't say slow for musk, I'd say that maybe I'd say lockheed for slow. The big primes, yes and no, and they're so slow it's so many things.

Rajiv Parikh: 44:32

Give me one word.

Matt Bigge: 44:32

Give me one word all right twist around my thinking what, what's the word, what's the association you're starting with again? Destroyer let I'd say innovator.

Rajiv Parikh: 44:42

Innovator. So this is like this philosophy for leadership right it's destroyer could be a battleship. It could be something where we look at things from first principles.

Matt Bigge: 45:03

Well and that's where I go is creative destruction, where you have to look at the world from first principle standpoint and understand all right, if we chuck out all the legacy baggage, what do we really need here? How would we do it if we're building a greenfield system?

Rajiv Parikh: 45:13

So what happens? When you're going through that process of thinking things from first principles, or destroying things? There's this point of well, why are things the way they are today, Right? And so there's that point where you're making the flip from moving from one to the next and you're wondering why everyone else hasn't thought of it.

Matt Bigge: 45:34

Right? Well, and that's where you have to understand the history of innovation in a given sector and other sectors, so that you can think through all right, how has something been disrupted in the past and what were the conditions that turned the tide from the old way to the new way? You know what are the set of unit economics, or what are the series of human behaviors. I mean, like unit economics did not drive the rise of smartphones. That was driven by human behavior and putting novel capabilities into people's hands in a manner that nobody could have foreseen the potential out of it. It just felt like you know, we give them all these cool toys, you're going to make them useful. So there are different types of creative destruction as opposed to. You know, let's go from bunnies to cars.

Rajiv Parikh: 46:30

That was a long evolution, I would say, in that period of putting the massive investment in and going from one to the other. I don't know about you, but there's that period where you're like I don't, you know. You wake up every morning with a cold sweat and say did I make the right choice?

Matt Bigge: 46:46

I put a lot of people into this. I think a lot.

Rajiv Parikh: 46:52

Maybe I can't be the only one that wakes up with a cold sweat.

Matt Bigge: 46:55

Yeah, now there's. There's a lot of capital running around, so very seldom entrepreneurs really take their own, put their own net worth at risk, um, but when you do, yeah, there's a lot of. I mean, you know you're a small business owner not so small anymore and you know if billings are off, uh, you know. You know who's writing the check for chief? Uh, payroll's getting covered. Yeah, so you know's writing the check? Rachief? Uh, it was getting covered. Yeah. So you know I've been there too, and you know your wife gives you a pretty. Uh, really, are we writing that check?

Rajiv Parikh: 47:30

why did you, why did you not sell the company? Okay, next one. Yeah, all right, this one's an interesting one because we talked about we talked about a little earlier china fundamentally different. Uh, they, they come with the opposite, yeah, opposite.

Matt Bigge: 47:44

So so you're it's just a whole of society approach that we yeah, it's just, it's a cultural thing. I mean it's yeah, they, they take a whole of society approach we have. You know, generally we separate business and government. I mean that's starting to change, but yeah to change. But I had a company I was a CEO of once where we got hacked by Huawei and they were trying to steal a proposal on a contract we were competing against them on. I called the FBI and they said we have no jurisdiction and you should probably invest in better cybersecurity tooling. I was like, well, great, that makes me feel awesome about my tax bill. And it was even in the spring. It was I was on my way to my son's baseball game when he was in high school and I get a call from my IT guy saying hey, I just unplugged everything and I'm like I am literally I'm going to write a check to the IRS in about two or three weeks.

Rajiv Parikh: 48:44

And what it is is that you're paying the government to do certain things. You have this expectation of some protection, and then you have another one that is a government sponsor of that that's actually doing this on behalf of their businesses.

Matt Bigge: 48:58

Where are you?

Rajiv Parikh: 48:59

going with this.

Matt Bigge: 49:00

Yeah, I mean, you know know, back then the chinese government owned 30 of huawei. So that's yeah. That to me is state sponsored and suboptimal. We wouldn't do that, or at least we claim we don't do it, so yeah and I think it's a there's.

Rajiv Parikh: 49:16

There's the benefit of, there's the the tough side and there's the benefit in terms of they do things at such scale that some of the technologies we're utilizing today have come down to such a low cost that it can be widespread, like solar or batteries. So there's a plus minus and I guess we're trying to figure out a happy medium.

Matt Bigge: 49:40

Yeah, I think that's well phrased.

Rajiv Parikh: 49:42

Okay, let's have some more.

Matt Bigge: 49:43

We'll end this with a little fun old-fashioned cocktail favorite I mean, I, the degenerate in me, says gambling. But yeah, old-fashioned is my favorite cocktail, so you just put them both together there you go.

Rajiv Parikh: 49:59

yeah, so you're gaming oldfashioned. I love going to the Gotham Club and getting the old-fashioned with the 24, the baseball with the 24 on it. I brought my daughter to that the other day and I was like, check this out, it was so much fun.

Matt Bigge: 50:14

That's pretty cool. Got to get a 43 on that.

Rajiv Parikh: 50:18

Oh yeah, we got to get 43. We got to there, we go there, we go. A little bit of Hunter on that, so there we go. Awesome, matt, did you always know you wanted to work in technology? Was there like a specific moment or project that sparked your passion in defense technology? What got you sparked, yeah?

Matt Bigge: 50:40

Yeah, I mean I was always kind of really, really interested in international relations and I did kind of get into computers at a very, very young age. May or may not have done some youthful hacking. That statute of limitations has probably expired on I think you're okay now.

Rajiv Parikh: 51:02

Maybe, maybe, I don't know.

Matt Bigge: 51:03

I don't know. In today's world it's hard to say. But no, I've always been passionate about the way nations interact and I've always been passionate about technology. In terms of a career, I kind of grew up just focused on what's the next step and when I got out of college I knew I was going right in the Army because I had an ROTC scholarship at Georgetown. When I got out of the army I kind of stumbled into technology. I always say I haven't had a career as much as I've had a series of things that I've done, that when you string them all together, it's been good and it's, you know, it's worked out very well for my family and I.

Rajiv Parikh: 51:49

But to me Was there anything about like a mom or dad or uncle or family or someone that you knew that was into it, that he drew from?

Matt Bigge: 51:58

You know there is I mean, there is a variety of people over the years in my life whether it was football coaches when I was young had the good fortune to play Pop Warner as a 10-year-old with a former Division I coach who had won a national title and he retired and was coaching his grandson. His grandson didn't make the team, so he learned a lot about how to fight through adversity. But for sports and the military, you learn how to set and achieve goals in a team-based setting at an elite level. That's a critical takeaway In terms of decision-making and thinking about what I'm going to do next. It's got to be fun, interesting, rewarding and entrepreneurial, because FIRE F-I-R-E fun, interesting, rewarding and entrepreneurial is something that, when I sat back in the late 90s and tried to think through what is my framework for decision-making personally and professionally, that's what I came back with and that framework is undefeated in my life.

Matt Bigge: 53:10

Whether it was the decision to start my last company, the decision to sell it or the decision to join Crosslink, it's got to be fun. You've got to love what you're doing and who you're doing it with. It's got to be interesting to the point where it keeps you up at night. It's got to be rewarding, both intrinsically and extrinsically. Extrinsically, you've got to pay the bills. Intrinsically, you've got to look in the mirror every morning, know for a fact that you're leaving the world a better place. Otherwise you're just a freaking oxygen thief and you don't have any right to be here. Entrepreneurial, because you're learning and growing something new every day, month, whatever. So that's kind of how I think about the world.

Rajiv Parikh: 53:47

It's a great fire, it's a great framework. So, matt, beyond specific technical skills, what are the most crucial leadership attributes developed through challenging military or team-based experiences? What are these experiences that you consistently find that are either vital or surprisingly underdeveloped in executive candidates you evaluate?

Matt Bigge: 54:08

I mean generally leadership. I think it even says it on our website. That is the trait I believe is most important in a founder you need to lead by example. You need to take a we first, not a me first approach. The overuse of personal pronouns can be very, very frustrating. We accomplish things, I don't. You know. It's really about finding a way to make the organization come together so that some of the parts, you know it, comes together and is accretive. So the one plus one is three to five to 10. And there are people out there, you know it tends to correlate with people who have a history of, you know, setting and achieving goals in a team-based setting at an elite level. That's a skill set that is refined in the military. It's also refined in sports.

Matt Bigge: 55:17

And you know there are a bunch of other ways where you can find that, find experiences that reinforce the concept, but sports in the military are two that are pretty consistent. It's kind of you know there are certain schools you can hire from where you're like I don't know if this person is a good at their job, but they can't be a dummy because they got into that place, you know. So that's kind of how I think about it, that's a great way of thinking about it.

Rajiv Parikh: 55:46

Can you make that one plus one into three, or one plus one, or two plus two into 10, right, can you do that, and the best leaders know how to do that.

Matt Bigge: 56:00

And that's a transferable skillset. You know, when I'm counseling veterans transitioning to the private sector, they're like all right, you know, as an army ranger I can jump out airplanes and shoot really well. What does that mean in the private sector? Well, it's like well, you also commanded 150 people and you got them to set and achieve goals in a team-based setting at an elite level Turns out, in the corporate world. If you can do that, you're going to be incredibly successful and probably make yourself and your shareholders a lot of money.

Rajiv Parikh: 56:28

Yeah, there's discipline and understanding of leadership and understanding of team that you get trained at scale. All right, I got some personal thank you for opening up some of these personal questions, so I got some more. All right, this is, I'm sure, a favorite of yours. Your son, hunter, was drafted by the Cubs in 2019. Now he plays for the Tampa Bay Rays. I know that you have notifications on whenever he's pitching Bay Rays. I know that you have notifications on whenever he's pitching. So Hunter was also a physics major at Harvard. How did you identify and support Hunter's unique passions and talents, both in science and competitive athletics, so that he could develop specific superpowers rather than conforming to a single path?

Matt Bigge: 57:14

We really tried to, you know, let him do what he was interested in. You know we never you know, I was an athlete, but certainly not at his level but we always just tried to say, all right, if you're interested in something, you know we're going to do what we can to support it within reason. And, you know, a little bit of coaching along the way. You know, he was really really into math, math and science broadly and you know, over conversations, you know we, you know him and I kind of vectored in on physics. Really, he vectored in on physics because he loved the way the math, the math, would interface with the physical world.

Matt Bigge: 58:01

And you know, at first he was thinking engineering, but then we took a step back and you know, and his theory was all engineering is just applied physics is just applied physics. So if I really want to understand how things work in a manner that's going to be useful, through technology cycles, physics is probably more useful and he's always had a very advanced approach to thinking about the world around him, approach to thinking about the world around him and I think that's benefited him both in terms of physics, where he was doing, you know, crispr research way before any of us had heard about it. Or in baseball, where you know he's one of 240 relief pitchers in the major leagues and, like, if you're one of 240 in the world at what you do, you're probably doing pretty well.

Rajiv Parikh: 58:59

Right, and so there's a tremendous amount of focus and sacrifice and discipline to get yourselves in raw, raw, innate ability to that's honed. So that's it's pretty amazing. I'd say definitely when I, as you know, I have four kids and I have a very we had a similar approach find what they like to do, expose them to many things and then, whatever they really like to do, help them go deep to the extent that we could, yeah, and then let them flourish to the level that they want to go with. But if you get good at one thing, if you can help them get good at one thing, you can take that anywhere.

Matt Bigge: 59:36

Yeah, I mean it gets to the transferability of skillset and understanding at the meta level, which. What are the elements of the skillset that are transferable? And that, to me, is why leadership is so critical and demonstrated leadership prior to starting a business, you know, because at the end of the day, any business is just a team that needs to execute at a high level, and if you have a history of getting teams to do that, it says a lot about you. You can do anything, yeah.

Rajiv Parikh: 1:00:04

All right. What's a piece of conventional wisdom that everyone around you accepts but you secretly think might be wrong?

Matt Bigge: 1:00:16

There are so many. A favorite interview question Do you jaywalk? Why would I waste time at an intersection that's empty just because the light says so?

Rajiv Parikh: 1:00:29

I'm a jaywalker. Luckily they don't have robot drones watching me, Okay.

Matt Bigge: 1:00:34

Yet.

Rajiv Parikh: 1:00:39

It's coming. Was there a historical event or person or movement that it really inspired you? Is there a person in particular that just lights you up?

Matt Bigge: 1:00:47

I mean I wouldn't say there's any one individual. Um, you know, I, I take a pretty broad-based approach to that one. I mean you know whether it's. You know I, I, I take a pretty broad based approach to that one. I mean, you know whether it's you know the guidance of Kevin Compton, who's just an amazing human, incredibly successful venture capitalist. You know, kevin's been very, very kind to me over the years and you know, honestly, I feel like every time I talk to him I just get smarter, uh, and then it wears off and I have to go see him again. So there's folks like that.

Matt Bigge: 1:01:20

Or Colonel Joe Bonnet, who is a professor of mine in ROTC at Georgetown, who was somebody who really taught me a lot about leading by example. There have just been a number of them over the years. Paul Meggers, who was my last boss in the Army. You know Paul taught me a lot about, you know, perseverance and executing through difficult times and being a leader when things are. It's not easy to lead by example when you haven't slept in days, you're out of food, all kinds of crazy things that happen in the woods. But those are just a few. Heck my wife, my son just watching the way. He had a really bad injury senior year of high school and to watch him persevere through that.

Rajiv Parikh: 1:02:12

That's really hard to come back by, right, because it put him off his path towards the major leagues, right.

Matt Bigge: 1:02:20

Absolutely, and you know the way he fought through it fought through it, figured out a way to do it, and you know his intestinal fortitude through his journey is something that my son has taught me.

Rajiv Parikh: 1:02:35

Do you have a favorite life motto that you come back to all the time with friends, work or life?

Matt Bigge: 1:02:40

I mean, the fire thing is really kind of my big deal.

Rajiv Parikh: 1:02:44

Yeah, I think you nailed it with that.

Matt Bigge: 1:02:46

Fun, interesting, rewarding and entrepreneurial. And if you live by that, at least, for me, and I think we all have to have our own personal version of it. But for me, and I think we all have to have our own personal version of it, but you know, for me that's been immensely instructive and, you know, it just kind of keeps me on the right path.

Rajiv Parikh: 1:03:02

What's a seemingly small act of kindness or generosity you've received that had a disproportionately large impact on you.

Matt Bigge: 1:03:10

I think you know I'll go back to Joe Bonnet. Lieutenant Colonel, you, colonel, lead professor of military science, georgetown University 1990. And Joe pulled me aside and at the time I was working a full-time job, carrying a full-time load of classes and still trying to play football and doing ROTC. It was ugly. And that was really where the you know we, not me concept really got hammered into my brain. Because you know, colonel Bonnet really helped me understand that by spreading myself too thin I was being a bad team player and that was a turning point in my life. It really helped me understand that by focusing on something I could get good at it. If I got good at it I would enjoy it. If I enjoy it I'm going to get better at it, and that sort of virtuous cycle I think is important. And it kind of gets back to everything in life is hard until you've learned how to do it. Then it's just work and if it's work you enjoy, you can get really good at it. Yeah.

Rajiv Parikh: 1:04:31

So if you had to teach a masterclass on something that's not your job, something that you're passionate about we covered quite a few of those what would the course be called?

Matt Bigge: 1:04:48

I mean, I'd probably wrap it around fire. Well, Just understanding how to see the world through other people's eyes so that you can. Because you can't engage people in mutually beneficial transactions unless you can empathize with them to the point where you can see the world through their eyes and understand why they make the decisions they make. So when I was running the last company we're hanging out in places like Afghanistan and Iraq and all these combat zones. They have a very different cultural framework, so it's really really hard to engage in business with them unless you can see the world through their eyes.

Matt Bigge: 1:05:23

All right, so I got the name Fire and Eyes, there we go.

Rajiv Parikh: 1:05:29

All right, what's your personal moonshot?

Matt Bigge: 1:05:32

My son.

Rajiv Parikh: 1:05:33

I love it. He's the best startup I've ever backed. There's nothing better than backing your kids and seeing them grow and become something you never imagined or go beyond your imagination.

Matt Bigge: 1:05:49

All right, this is great. I really appreciate you taking the time today. This is awesome.

Rajiv Parikh: 1:05:53

Matt, thank you so much for joining us. It was a thrill, as always, to sit and chat with you Hope we can have you again sometime and I think you brought a lot out. You brought a lot of great insights out for us. You helped us understand defense and technology and venture investing, leadership and what are things we want to think about as we raise our kids. So thank you so much.

Matt Bigge: 1:06:20

Well, thank you and glad to come back anytime. Always great catching up.

Rajiv Parikh: 1:06:31

Hey, so that was really interesting Love having Matt on the show. He and I have had so many great conversations together and bringing it to you is just one of the special thrills I get to do. As you know, I love learning about technology, innovation, disruption, and so looking at it come together in the context of the different wars and battles that we're fighting. It's the David versus Goliath nature of what people are able to do under extreme circumstances is what's really interesting about what's happening with Ukraine beyond them being so threatened and their lives being so deeply impacted and affected, and how people act under that fire, and what we learned in the conversation with Matt is seeing some of those things ahead of time and preparing for it and building an innovation ecosystem around it so that when the time comes, you're ready that understanding, seeing things before they happen, thinking about the people in your life who affect you and then bringing it all together as part of your life journey. So thanks for listening.

Rajiv Parikh: 1:07:39

If you enjoyed the pod, please take a moment to rate it and comment. You can find us on Apple, spotify, youtube and everywhere podcasts can be found. The show is produced by Anand Shah, edited by Sean Maher, aidan McGarvey and Laura Ballant, I'm your host. Rajiv Parikh from Position Squared, an AI-focused growth marketing company based in Silicon Valley, come visit us at position2.com. This has been an Effort Funding production and we'll catch you next time. And remember folks be ever curious.