In this episode of Programmed to Fail, we explore how accounting costs do not reveal the value being generated in the production process and cannot be used, on their own, as a guide for specific choices. Cost is not an objective reality, particularly to those who know the vagaries of cost accounting. Instead, our view of cost depends on subjective use value and is related to the term opportunity cost, or the next-best choice foregone. This chapter reveals that for defense acquisition to truly understand weapons value and leverage the power of commercial markets, it needs to shift away from its obsession with financial metrics.

This podcast was produced by Eric Lofgren. You can follow me on Twitter @AcqTalk and find more information at https://AcquisitionTalk.com

Programmed to Fail - 9. Cost

Despite the clear and present danger of threats from China and elsewhere, there’s no agreement on what types of adversaries we’ll face; how we’ll fight, organize, and train; and what weapons or systems we’ll need for future fights. Instead, developing a new doctrine to deal with these new issues is fraught with disagreements, differing objectives, and incumbents who defend the status quo. Yet change in military doctrine is coming. Deputy Defense Secretary Kathleen Hicks is navigating the tightrope of competing interests to make it happen – hopefully in time.

Steve Blank Podcast

The Department of Defense Is Getting Its Innovation Act Together – But More Can Be Done

Silicon Valley emerged from work in World War II led by Stanford professor Fred Terman developing microwave and electronics for Electronic Warfare systems. In the 1950’s and 1960’s, spurred on by Terman, Silicon Valley was selling microwave components and systems to the Defense Department, and the first fledging chip companies (Shockley, Fairchild, National, Rheem, Signetics…) were in their infancy. But there were no computer companies. Silicon Valley wouldn’t have a computer company until 1966 when Hewlett Packard shipped the HP 2116 minicomputer.

Clearshore - Steve Blank

The Secret History of Minnesota Part 1: Engineering Research Associates

We just wrapped up the third year of our Technology, Innovation, and Great Power Competition class –part of Stanford’s Gordian Knot Center for National Security Innovation.
Joe Felter, Mike Brown and I teach the class to:
Give our students an appreciation of the challenges and opportunities for the United States in its enduring strategic competition with the People’s Republic of China, Russia and other rivals.
Offer insights on how commercial technology (AI, autonomy, cyber, quantum, semiconductors, access to space, biotech, hypersonics, and others) are radically changing how we will compete across all the elements of national power e.g. diplomatic, informational, military, economic, financial, intelligence and law enforcement (our influence and footprint on the world stage).
Expose students to experiential learning on policy questions. Students formed teams, got out of the classroom and talked to the stakeholders and developed policy recommendations.

Technology, Innovation, and Great Power Competition – 2023 Wrap Up

If you haven’t been paying attention Apple has started shipping its Apple Vision Pro, its take on a headset that combines Virtual Reality (VR) and Augmented Reality (AR). The product is an amazing technical tour de force. But the product/market fit of this first iteration is a swing and a miss.

Apple Vision Pro – Tech in the Search of a Market

Capitalism has been good to me. After serving in the military during Vietnam, I came home and had a career in eight startups. I got to retire when I was 45. Over the last quarter century, in my third career, I helped create the methods entrepreneurs use to build new startups, while teaching 1,000’s of students how to start new ventures.

Is a $100 Million Enough?

One of the most exciting things a startup CEO in a business-to-business market can hear from a potential customer is, “We’re excited. When can you come back and show us a prototype?”

This can be the beginning of a profitable customer relationship or a disappointing sinkhole of wasted time, money, resources, and a demoralized engineering team.

It all depends on one question every startup CEO needs to ask.

Founders Need to Be Ruthless When Chasing Deals

The connections between the world of national security and commercial companies still has surprises.

The Secret History of Polaroid CEO Edwin Land

Kodak and Polaroid, the two most famous camera companies of the 20th century, had a great partnership for 20+ years. Then in an inexplicable turnabout Kodak decided to destroy Polaroid’s business. To this day, every story of why Kodak went to war with Polaroid is wrong.

The real reason can be found in the highly classified world of overhead reconnaissance satellites.

Here’s the real story.

Secret History – When Kodak Went to War with Polaroid

Gordon Bell passed on this month. I was a latecomer in Gordon Bell’s life.  But he made a lasting impact on mine.

Gordon Bell R.I.P.

A podcast on the management, technology, and political-economy of weapon systems acquisition.

Programmed to Fail - 9. Cost

Acquisition Talk

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