This is excellent analysis from Jai Malik and it’s heartening to see people who understand technology development in a venture capital context take sight of the beliguered aerospace supply chain.
I’m a tech sector guy who pivoted to aerospace four years ago. Permit me to add my own observations about what ails the aerospace sector as it relates to its antiquated supply chain:
1. Consolidation of companies producing key tier two and below subsystems and core components has created natural disincentives to innovate, as these rolled up conglomerates respond primarily to quarterly earnings and can’t get off that carousel. This is a competition gap.
2. Too many small businesses trying to make inroads with technology, product, or manufacturing process innovations are good at the technical aspects of innovation but poor at building a business that can scale. They can win SBIR grants but don’t know how to go to market. This is a capabilities gap.
3. For the few upstarts with good technology, enough business savvy to make a go, and incentive to innovate, the valley of death looms. The deck is stacked against small businesses when it comes to winning development contracts, but it’s even more unforgiving for startups vying for aerospace production contracts. Without access to meaningful capital, this gap is extremely difficult to bridge, and the current venture environment doesn’t understand or value this opportunity. This is a capital gap.
There are more challenges, including the fact that many aerospace startups pull their talent from primes or OEMs and struggle to establish legitimate disruption culture and got to market strategies that can challenge the status quo because their vessels have been filled by legacy thinking.
These challenges threaten national security and American dominance in civil aviation. The good news is unlocking innovation in the supply chain would not only kick off a new era of American air dominance, but also a new golden age of American manufacturing.
We wanted flying cars, but instead we’re worried about planes falling out of the sky.
To advance the systems we use today—from aircrafts to ships to missiles—we need to reimagine our nation’s invisible industrial base. I’m assembling an early team and laying the foundation for a new company to do just that.
If you're supplying aerospace and defense companies, I’d love to learn from you. If you're interested in building with me, my DMs are open. More here:
https://lnkd.in/eBFuUcmH
