Dino: There's a real generational opportunity to build what this country needs for the next 100 years and we need more founders. We need more builders and we need more folks in government pushing for change.

Host: It's really frustrating how much fragility we encounter within the traditional defense industrial base because we have a sole supplier that's not really that profitable that was bespoke for the defense industry and all of a sudden we've really created our own set of vulnerabilities here. This room is filled with PEOs and PMs from across the Pentagon. What's one key message you'd like to send this group as we look to build together and build faster in 2026?

Host: How have you translated this alignment between Seronics's autonomy and the Navy's no man left behind ethos into contracts? and and how does how do autonomy breakthroughs actually allow you to build more faster products for the Navy?

Dino: So, that's one I'll come back to. What autonomy enables is, and I'm a I'm a huge believer in this, we're unlocking capability that didn't exist before. Like, warfare will require humans involvement at some point, but I've seen it. And you should never send a human if you have the ability to send a robot. you just shouldn't do it. So, let's leverage robotics and protect human life where we can. The real unlock to autonomy is speed and scale. Right? If I was sitting up here telling the secretary how we're going to build the same ships that we've been building for the last 50 years or the same ships that they're building in China, we're just going to do it better, faster, and cheaper. I mean, he should just politely ask me to leave. You have to bend the economic cost curve. You have to build ships cheaper. You have to build ships faster. The only two levers you have to pull are material costs and labor costs. We're not going to buy steel cheaper than they're buying it in China. So, you have to take a first principles design to the ship and just fundamentally use less steel. How do you do that? You build for software autonomy and digitization. Same thing on labor hours. We're not going to acquire a per hour labor rate cheaper than they're paying in China. So, let's build ships much faster. For example, Marauders using is about a 50,000 labor hour on our first ship. Just for order of magnitude, put it in frame of reference. Apples and oranges comparison here. I'm going to acknowledge that up front, but a destroyer is 7 to 9 million labor hours. So that's the scale and speed that autonomy unlocks because you can redesign the whole platform and make it much simpler to build and then you build the then you have the capability at the scale that you need to keep as many people as possible out of combat scenarios.

Host: You you you mentioned um the sort of factories and bringing bringing autonomy into the actual manufacturing uh processes. You've put real money behind rebuilding the American industrial base, most notably a major expansion of your Louisiana shipyard. Um, as well as getting prepared to launch Port Alpha. We're excited. Uh, we're excited for news there at some point soon. Um, how are you thinking about Seronic investing in some of these forgotten areas um, forgotten demographics as you build out manufacturing across the US and has how has scaling been similar, different, complimentary for the different customer bases that you're targeting?

Dino: I mean, the workforce is critical, right? The secretary and I were talking about the workforce earlier. We have to rebuild the workforce to support the maritime industrial base, right? You can't create people with 15 years of experience overnight. So it goes back to the first principles approach design of the ship. Design the ship so you actually don't need 15 years of welding experience to build it in the first place. Then you can actually rebuild and retrain the workforce. Um I'll steal one of the lines from our head of manufacturing. He says, "Less like an encyclopedia, more like IKEA." It's like everybody can build furniture. If somebody can't come out of somebody that's building a car for Ford or General Motors or an airplane at Boeing or a rocket ship for SpaceX and we can't get them highly effective building ships quickly, that's our fault. That means our design isn't simple enough. if we don't have the processes or the work instructions or the training materials or something else. So, it's rebuilding and recreating the workforce and changing the culture, what it actually means to work at a shipyard again, making it cool, building for the future, giving people a mission, and giving people job security behind that.

Host: You mentioned the job security piece. Um, so following up generally on your investments, um, Honorable Duffy, what investments do you want to see companies making as we look to rebuild the defense industrial base and maybe I'll expand that to companies and private capital?

Duffy: Well, I think Dino's got it right in terms of how we can leverage modern manufacturing. I mean, one of the things that we're finding as we dig down into traditional industry and as we look at, you'd mentioned the transition of Defense Security Cooperation Agency under my uh jurisdiction now in the Pentagon. Production really is the biggest constraint for us when it comes to fulfilling our foreign military sales orders and production is generally the rate of production is generally kind of calibrated to what the US Department of Def budget looks like. uh we can no longer kind of live within those constraints and you've seen some of the deals that we've uh been able to do with traditional industry in the last two months where we've um incentivized them to expend their own private capital to expand production with their own funding which I think then instead of being a handout from the US government as it's traditionally been incentivizes uh industry to do what Dino is doing with his company which is really modernize how we're take ownership on the actual efficiency and cap production capacity that they're producing. I think that's a fundamental shift that we want to see industrywide, which I think levels the playing field for both the new startups that are already practicing this way and bringing our traditional defense contractors who have capability that we need into that uh into that uh construct as well.

Host: Yeah. Yeah. Completely. Um maybe Dino, moving back to you, um what role will Port Alpha play in supporting your growth and expansion as you continue building for both the defense and commercial markets at speed and scale? And in particular, how have you found the commercial market to be important to support your defense market?

Dino: Yeah. I I mean to put it bluntly, I mean Port Alpha is a generational pro project. I mean, we're looking at building one of, if not the largest shipyard in the world, focused on autonomous platforms, focused on the future of the maritime industry, unlocking the commercial market, building larger vessels, cargo containers, bulk carriers, oil tankers, things that enable things that like energy dominance, right? It's absolutely critical to have that commercial market because at the end of the day what what our goal is is to provide the Department of War wartime production capacity during peace time. And if we can't enter the commercial market in a viable what an economic manner, then we're just looking to the government for the next contract vehicle and the next paycheck to support our company's longevity. And maybe it's 5 years from now, maybe it's 10 years from now, maybe it's 20, maybe it's 30, but eventually we we may end up right back where we are. That's why the commercial market is so important. And you see a big focus with the maritime action plan is on the commercial shipping industry within the United States.

Duffy: Yeah, I think if I can jump in on that, I mean commercial first is a major element of our acquisition transformation strategy and the resilience it provides the industrial base. I mean it's it's really uh frustrating how many how much fragility we encounter within the traditional defense industrial base because we have a sole supplier that's not really that profitable that was um a feeder to a design that was bespoke for the defense industry and all of a sudden we've really created our own set of vulnerabilities here. If we can prioritize commercial first and producability as a primary um input to the development of a design that creates all kinds of resilience and benefits for the department of defense as well. So that's I think key to our success.

Host: Yeah. On on our team we often say there's no uh defense industrial base without an industrial base. So the two really go hand in hand. Um honorable Duffy, this room is filled with PEOs and PMs from across the Pentagon as well as many founders that are building for the department. What's one key message you'd like to send this group uh as we look to build together and build faster in 2026?

Duffy: Well, let me start with an expression of gratitude for the leaders in this room who are um who are driving innovation, who are fighting through the bureaucracy to deliver the war the the the capability that the war fighter needs on schedule. Um and I think uh the other message I would say is it's really up to everybody in this room, right? uh we recognize I think as a part of this acquisition transformation strategy the only way for to to succeed is really to uh let a thousand flowers bloom and ensure that we are removing the obstacles to companies and program leadership to deliver the best capability the war fighter needs on schedule and that's going to take time and it's going to take cooperation you know one of the things that we've been trying to do as we try to change culture within the Pentagon is maximum communication throughout the hierarchy of the acquisition system directly with industry and ensuring that there's um clear understanding what's getting in the way. We want to continue to to expand on that. And I invite everybody in this room uh to engage with my team or others and just say, "Hey, this is not working. How can we remove this barrier?" Because we're committed to making sure we can go as fast as possible.

Host: Thank you. and and and Dino advice to other builders who might be a click or two a click or two behind you.

Dino: Yep. Find find what you believe in and then go for it. Right. We're in a there there's a real generational opportunity to build what this country needs for the next hundred years. And we need more founders. We need more builders. And we need more folks in government like the secretary pushing for change. This isn't a one company, one person is going to solve this problem. We need a partnership across the country and folks that are thinking about getting into this space, building a company. I would say, you know, build the conviction and what you believe in and then go all in on it because the country needs you and the partners are here to support you.

Host: Amazing. Thank you both so much, honorable Duffy Dino. It's been a real pleasure. I can't do it.