In this episode, Brock talks with Josh Steinman.
Josh is a former navy officer who served in a variety of roles including the chief of naval operations rapid innovation cell and the office of the secretary of the navy task force innovation. After his time in the Navy, he went on to work on the national security council advising on cyber policy, an issue he's particularly passionate about. Josh has worked to launch several startups including an American made wool stocks company that crowdfunded over 50,000 dollars on Kickstarter and most recently Galvanick, a company looking to secure industrial operations from cyber attacks.
We talk through the importance of building a feedback loop on your life in order to get closer to reality, that past and present of cyber security and what Galvanick is looking to do in the industrial space, and the basic frameworks for startup founders.
You can follow along with Josh and Galvanick on Twitter.
(02:20) - What Josh thinks is important in life
(08:10) - How is required for us to get closer to reality
(11:40) - Working at Chief of Naval Operations Rapid Innovation Cell
(14:25) - Why it takes so long to implement change in the DoD
(16:35) - Building in public; the case to or not to
(24:00) - Social media, the echo chamber
(27:15) - Introduction to cyber security
(30:00) - An emerging threat; everything becomes a computer
(35:00) - Building companies for the world we want or the world that exists
(38:10) - What was the inspiration for starting Galvanick
(42:40) - Galvanick timeline from inception to today
(46:00) - Venture vs bootstrapping a startup
(53:30) - Building and scaling a team
(57:30) - Importance of understanding the problem being solved
(01:01:00) - Tools and resources for founders/startups
Resources / Links discussed:
Whether you’re in the service for four years or twenty, you have learned skills, led teams, and learned what it takes to execute under pressure. While those past successes are valuable, they don’t always translate to a life or career when you get your DD214.
Join Brock in breaking down the skills and strategies current and former military members are using to build a successful careers on the outside the service.
Get a weekly episode breakdown, sneak peak of the next episode, and other resources in your inbox for free at https://scuttlebutt.substack.com/.
Brock Briggs 0:00
Hello and welcome back to the Scuttlebutt podcast. I'm your host Brock Briggs and today I'm speaking with Josh Steinman. Josh is a former Navy officer who served in a variety of roles, including the Chief of Naval Operations rapid innovation cell and the Office of the Secretary of the Navy Task Force innovation. After his time in the Navy, he went on to work on the National Security Council advising on cyber policy, an issue he's particularly passionate about. In addition to talking about cybersecurity, we talk a lot about startups. In this conversation, Josh has worked to launch several startups, including an American made wool socks company that crowdfunded over $50,000 on Kickstarter, and most recently, Galvanic, a company looking to secure industrial operations from cyber attacks. If I had to summarize Josh's message for people, it would be to close your own feedback loop on life. We are bombarded by a significant amount of external influences in our life that distract and distort how we think, which in turn changes how we act. It's extremely easy in life to outsource decisions, and then point the finger elsewhere when consequences come knocking. By putting yourself in a position of responsibility meaning being truly responsible for your own actions, you're able to get a more clear picture on reality. If you're looking for more than just the podcast, I am working to get back to more routine write ups and larger breakdowns of the episodes. It's a great way for me to dive deeper into the subjects and resources we talked about. I send those out for free every week. You're welcome to check those email@example.com which you can also find a link to in the show notes. Enjoy this conversation bringing you a little closer to reality with Josh Steinman.
Josh, thank you so much for coming on with me today. I want to start with a broad overview. And just by asking what's important to you, in life? Don't want to come out of the gate swinging too hard. But as I was doing my due diligence on you, you've spent time serving our country, advising cyber policy, a wool socks company. And now you're helping companies secure industrial operations. Really a broad spectrum of things. So just want to start with the big question of what's important.
Josh Steinman 2:51
Yeah, thanks, Brock. Thanks for having me. It's here. Let's see if there's one animating question. In my life, it's been what's the nature of reality? And nearly everything that I've done is is sort of revolved around that question. And what do I mean by that, it means that most of the things that I try and do are designed to give me insight into the nature of what's true. And what I mean by that is like I seek out opportunities to be the person that makes a decision that will have consequences. That's not the thing that I'm actually looking for, you know, but it within the frame of things that I'm trying to do, I will look for the place where I can go in order to get information. Right. So if I care about something, you know, I'm not going to opine on it as my major activity. I'm going to find a place where I can try and start making decisions and get real feedback. And so those are the assignments that I sought out in the military were ones where I was the operational commander, you know, me and my men were going out and doing things and we would get feedback we would be would be in touch with reality. While I was still on active duty, I didn't start a sock company. I was thinking about leaving the military and I was thinking about getting an MBA and I just realized I could spend a lot of money and go get an MBA or I could just start a company. And so I went around and looked at a bunch of things and socks was the company that I decided to start and I was a lot of fun. Obviously I still had a day job and uniform next I was also going to night school, but but that was why I did it is because starting a company, any company was going to give me information about like, what does it take to run a business? How do you do sales and marketing? How do you run a supply chain? I got all of those things by just jumping in and doing a thing. When I ultimately left the military and joined a startup, same thing was animating. You know, that decision? And then yeah, when I decided to come back to government, and work at the White House, it was the same thing. It was like, How can we get as close as possible to understanding like, what decisions what changes can actually cause a shift in reality? Not what words can be said, but like, what decisions can we make in order to change outcomes to you know, make the world a better place for the American people.
Brock Briggs 5:55
Was there a single event, or maybe even a series of events that led to your focus on working on things where you can see direct change, because I don't think a lot of people think that way. You kind of like, I don't know how many corporate or like company meetings I've been on where they're, when you have to summarize the change in the impact that you've had like, that usually tells me that there probably hasn't been any impact. It should be very obvious and very direct the consequences of our actions.
Josh Steinman 6:34
Yeah, just a lot of reading that I did when I was in school, convinced me that most of modern life is designed to insulate human beings from the, from the consequences of their choices. And it wasn't a life that I wanted to lead, insulated from insulated from reality. And so yeah, I just thought, thought pretty long and hard about where I can go to not be insulated against the effect of my decisions. And that's what sort of led me down this path. And so, I think it's hard, because most people don't want to admit that they are in control of their own destiny to some to some significant degree. And the outcomes of their choices are manifest. In reality itself, it's very painful. But I think that if you read some of the more like esoteric philosophers, they'll actually reveal this in their own subtle way. And I think it explains some of the strange differences that we see in the behavior of certain public figures today is that there are a small group of people who, who are in touch with something that we call reality. And then there's a whole bunch of others that essentially go around and, you know, utilize the conversion of oxygen to carbon dioxide to try and make themselves feel better. And in reality, they're essentially clueless about how things actually work. Because they're used to living in a reality that does not actually connect their intentions and their actions to results.
Brock Briggs 8:30
Certainly in every single domain, there are positions and people that have what you're talking about. People who are able to kind of influence change and verify that it's happening and are kind of in control of their destiny, so to speak, whether that be in the military, or maybe the corporate world or business world, whatever it may be. Is it a certain amount of influence or above a certain paygrade? Or what, what leads to those peoples - What are the requirements to kind of get to the point of like being able to see that that feedback, I guess, you know, is it just a certain amount of authority? Or is it?
Josh Steinman 9:26
No, no, I mean, I think, I think that has to do with where you choose to put yourself in the world. It's why I left the military. So I had two very interesting operational assignments. And then I had a promise of a third and then when I showed up for it, a little bit of a bait and switch so I resigned happily so. But I think a lot of people, they just sort of get on the train tracks and again, they do turnover is really the only asset that they have their life to some large bureaucratic organization, find, to operate with a certain rhythm, irrespective of the humans that operate it. And they just sort of ride that train without control over their own destiny. And so for me, it's it meant I left the military and I went and joined a very small company. After starting actually three of my own, one of which was the sock company to more now we're talking about, but that were failures. In between when I made the decision to get out of the Navy, and join that small company, again to two failed startups, yeah. So you know, for folks that want that there are certain places you can go, obviously, being an in an operational role in the military is one place where you can go to get that. But, but then instead of, you know, taking some staff job or something, you know, there, there are jobs in the private sector that can give you that type of feedback. But you have to really look for them. Maybe it's like, owning your own business, starting your own business. Maybe it's like, working in sales and tech sales or something like that. I mean, there's, you basically have to, you have to get a sense for what it is, and then just trust your judgment when you when you find it. But it's, it's hard, right? Like I can't, there's no, there's no pathway that I can give to someone right now. That's like, hey, go do X and you'll have this experience, it's like, you have to come to the conviction on your own, you have to think very deeply about what it means to be in control and to be getting that feedback. And then you need to sort of go through your own searching process. But it's there, you know, like I have plenty of friends who have found it, I found it, I think, and and others have as well.
Brock Briggs 12:07
You held a handful of interesting titles while you were in the Navy, including working at the rapid innovation cell. I spoke with Ben Kohlman a few episodes ago. Was that a foundation for you, I guess, when it comes to your career since that point, you've you've mentioned several startups, and we're going to talk about Galvanic here in a little bit. But did that help lay the foundation for that kind of feedback loop that you're talking about?
Josh Steinman 12:43
I'd say that it was a great opportunity to use a bunch of the skills that I had already developed. You know, Ben did a great job in helping Admiral Greenert pull that group together. And it was a it was an amazing opportunity to speak truth to power, and do a lot of thinking and doing around the future of warfare. You know, stuff that we were talking about back in 2013 is just now becoming part of this mainstream conversation around around conflict. You know, my key initiative, which was creating a DOD embassy based function in Silicon Valley, which turned into the Defense Innovation Unit, that's that was my major project, writing that white paper for the Joint Chiefs, is just now hitting its stride. So did it form my thoughts on the on the world at all? Not Not really. It was though a great opportunity to sort of flex that muscle. You know, I think for the folks that that worked there, it was like, when you put gears in the right order, they all function quite well together. You know, many of us had come to similar conclusions about the nature of future competition. And you know, how we were buying things as a Department of Defense, how future wars will be fought. And so being in that environment, which gave us an opportunity to go out and demonstrate really interesting facets of conflict. Or, you know, say things that needed to be said to very senior people in the Navy. I think it was just a great opportunity to sort of operate on all cylinders.
Brock Briggs 14:39
You were on Pomp's podcast, and I listened to that in preparation for this. And one of the things that you I don't know if you use this line specifically, but my kind of summation of some of the things you were talking about, you said, working to shorten the timeline of innovation for Department of Defense adoption. Is that close? Or can you speak to that statement? What do you think about it and, you know, you're talking about how we're just now getting to the point where we're maybe picking up some of the things that you guys were talking about, then what has taken so long?
Josh Steinman 15:22
The Department of Defense is absolutely an evolutionary organization, meaning that change happens at the rate of decay. And so as senior folks leave and retire, you know, different people take those, those positions of leadership, and I firmly believe that that's the that biology is the real change agent in our Department of Defense, I wish it wasn't. And they, but it's very hard to convince anyone of anything, just in life. And so, you know, it's been eight years, and folks that were more junior have now become more senior. And they have have different ideas, and they've seen different things. So that's, that's sort of my read. And then there has been some legal change as well, which has been quite useful. And then pressure from Congress, which, which can be quite useful. And then, you know, pressure from the executive branch from the White House, has also helped to a certain degree. But yeah, at the end of the day, it's the people executing the missions assigned to them by the President, United States, who I think are the major driver of novel activity within the Department of Defense. And that just is a function of biology.
Brock Briggs 16:40
A lot of this, you've written extensively about it and talk publicly about quite a bit. One of the things that I during my reading of you and the stuff that you've produced, have come to admire, as you're very outspoken and public about some of the ideas and areas that we need to improve and change and very raw, I guess. A lot of people in the startup world, I guess, call it building and public little bit of an overused term, but I think it's nonetheless true. How do you how do you personally approach your process, whether it was back in the military working on your startup now? What do you think that you have to gain and or to lose by doing that?
Josh Steinman 17:32
I think that we are, as human beings, reflections of, and empowered by the tools that we use. I think that, you know, human beings specifically, are our tool, a tool making species. And that means technology as a class of things. And so, to me, I love technology, because it's this very human says very human thing that we we do. Very few other species use technology. Some do, but not obviously not to the extent that we do. And so novel technologies, to me are this very interesting, very human thing. And why do I say that? It's because I think that our public lives as like a species are shaped by technologies, right, the car, reshapes human civilization, airplane, the internet. And I think that I've seen my guess, having observed what's happened over the past 1500 years is digital technologies. From you know, more Morse code and the early, early information technologies through radio, TV. Now, the internet. They're shaping, you know, the world, they shape people's perceptions, they shape economic outcomes. And so my reading of things is that there's almost a symbiotic relationship and between human beings and the technologies that we use, and in order to continue to explore what that means, I've come to the conclusion that I have to embrace these technologies as I as I try and achieve something big. I've seen other people do this as well to great success. And, to me, part of that success was driven by the fact that they did embrace these types of technologies, because it gave them faster feedback loops, right, we've, I think we're all here fans of John Boyd and his writing and thinking. And so to me the use of public broadcast and public interaction technologies that can be Twitter, or it can be email, or podcasting, etc. To me, they're their tools for interacting with some facet of reality. And I do believe that by doing that, we can get closer to that point of understanding of what, what actually exists. And so, for starting a company that has meant meeting potential customers, meeting investors, meeting potential employees, explaining to the world my opinion on, you know, why what we're doing is important. And these technologies, I think, are a tool that enable that, and that's sort of the driver behind, you know, the way in which I'm proceeding with starting this company. You know, by my nature, I'm actually quite a private person. That may sound odd, but by both training and professional experience, it's not, it's not my inclination. There's that famous Arthur Conan Doyle, Sherlock Holmes, the case of the dog that didn't bark sort of thing, like, there's a lot that I don't talk about on social media that's much closer to my own personality, but the public facing stuff, is this sort of experiment in you know, how can you go out and start a company that, you know, maybe is pretty cutting edge. And so that's what's that's what's driving that, that thing I've embraced using a whole bunch of cool technologies like journey, the 60 second videos I do every month with very public updates of how the company is going, et cetera. It's all because I'm trying to think about, you know, how, again, how to do something really novel. How to technology to enhance that.
Brock Briggs 22:29
On one hand, I think that being very public about what you're doing, and it gets you closer to having some of those conversations, like you're saying, with investors, or maybe even customers, if you're building a company, and you're looking for that first paying customer or whatever. However, I think it does open the floodgates for a lot of groupthink. Whereas before we were in like kind of hyper localized communities, it's like, you're really, you're only going to date who you went to church with, or went to school with or who lived in your town. But now you've got access to, you know, a couple billion people that have an internet connection. And at some point, the sum of all of that knowledge is kind of almost the same as what it was when you were like, in one segregated community, too. I, a couple months ago, I had posted a Twitter question, just kind of posing, and it ended up kind of sparking up a bunch of stuff that I wasn't really looking forward, but I was debating whether going to an Ivy League university was worthwhile or not. And, you know, the of the couple 100 responses that I got, it was almost a 50/50 split on whether it was worthwhile or not. And so I don't even know, while I had all this feedback, I don't know that I was even better off for it.
Josh Steinman 24:00
Yeah, I think that's a really interesting aspect of current social media is that you can fall into this sort of echo chamber, right. And I think, yeah, it's really important to keep your head on a swivel, so to speak, and to focus on the, you know, ultimate goal. But at the same time, you know, social media can be an incredibly powerful tool for what we call sensemaking. Jordan Hall is a really interesting guy who has written really extensively about this concept, which is like, how do you create a perception? How do you shape people's belief about what exists in reality? And so I think that as long as you are mindful of what you're using social media for, it can be an incredibly powerful tool in terms of like, allowing that to be the thing that drives your own sense of, you know, what should I be doing? Or how should I be acting or etc? Like, I don't know, you'd have to really think about that. There are some environments where that really works. Arvin Call is his book, The Embedded Entrepreneur, is very good about this. In terms of how do you create a company that does things that its audience needs and wants? And then that type of a scenario where you're trying to do something for a group of people in a commercial relationship, I think absolutely getting online feedback can be quite useful. But yeah, I mean, you don't want to be held hostage by the sense of reality that's created by these tools. Right. But the point is, you can use them to create a sense of reality. But you have to recognize that these are tools for a kind of broadcast that kind of feedback, but not like Twitter's not real life. You know, the media is not real life. Podcasts are not Real Life, TV is not real life. words written on websites on blogs are not real life. But, that doesn't mean that those things aren't useful. That's my thinking.
Brock Briggs 26:54
Might just be perceived as like one other data point to kind of triangulate with some of the other sources that you mentioned, to kind of work to find that single source of truth or at least get closer to that maybe.
Josh Steinman 27:13
Yeah, yeah, possible.
Brock Briggs 27:19
In the vein of talking about opening ourselves up for feedback, and kind of, I guess, vulnerabilities, I want to talk about Galvanic, and what you're doing and building. But first, I think it'd be helpful to kind of talk about what the state of cybersecurity is. Today, I am not a super technical person would go out on a limb to say a lot of listeners are probably also in the same same shoes. Can you talk a little bit about where we are in cybersecurity today?
Josh Steinman 27:59
Yeah, so the computer virus is about 30 plus years old right now. And what that means is that we've had 30 years of people experimenting with ways of telling digital systems to behave in a way that is not intended, right. But is intended by someone that's not the user. So most of that experience, just because most computers are operated by people, for people, right there, word processors, email processors, etc. Like most of the malicious cyber activity that we've seen over the past 30 years, has been focused on what we would call it systems, information technology systems. You know, databases and computer programs running on laptops, or mainframe servers, etc. So it's very interesting because the biggest cyber incidents have been about like, stealing someone's bank account information and then like logging into a bank account and affecting a transfer or like hacking into hacking into a database and like moving some zeros around and trying to steal some money or, or things like that. For those that are technical, forgive me, I'm trying to explain this at like a very abstract level. For folks that are not technical. At one, you know, more granular order of magnitude. A lot of the things that I'm saying are, will sound dissonant, but the point is, is that like, most malicious cyber activity over the past 30 years has been focused on on computers that humans interact with regularly. laptops, cell phones, servers, desktops, etc. For us a Galvanic specifically aimed to address something that has just started happening about 15 years ago, which is that we've started to turn things that are not computers into computers, things that are not computers are like air conditioning, units, elevators, coffee cups, shoes, cars, big industrial systems, factories, satellites, airplanes, you know, these things used to be mechanically governed, or very specific scenarios, maybe they had a very specific type of digital control. But over the past 15 years, we've started to turn them into computers that are operated through human machine interface, sometimes even not. And that that computer itself controls this big industrial system. That can produce a lot of benefit, and has, but it also comes with an incredible and near infinite downside. And it means that all of the vulnerabilities that exist on structural vulnerabilities that exists for IT systems are now going to exist for what we call OT, systems operational technologies. So your office building, where previously, there was sort of known vulnerability, and what's that known vulnerability? Well, the fuse box may malfunction, the human beings that maintain the building may get sick, the elevator may need some critical component replaced, etc, could go on those things. Because they were sort of governed by physics, right? Like you pretty much knew what the lifecycle was on a critical piece of mechanical technology. Those things had predictable what we call downtime. And the humans had predictable downtime as well, right? Like they got sick, they left for different jobs, etc. What's happening now is because we're we're moving many of these systems over to being computers that perform these tasks.
We're getting unpredictable, downtime, unpredictable, meaning like maybe you go from like 99.99% uptime to a 99.99999% uptime, except that one time where something goes down, and the whole system will work for a week and a half, or some similar type of scenario. Much more along the lines of what Taleb would call like black swan events, where all of a sudden, you have something that seems to work perfectly. And then one thing happens, and it just stops working in a catastrophic way. So I think we're just at the beginning of seeing this whole transition happen. Personally, I don't think that it's the right thing for us to do as a civilization. Because I think predictable downtime is an incredibly powerful tool. But once you start to digitize these systems, you just open up all this vulnerability that we haven't even begun to explore in terms of its second, third and fourth order consequences. So we're building a monitoring technology, we call it continuous monitoring technology for that world of atoms, not bits, factories, critical infrastructure, distributed systems, drones, man systems, satellites. And so that's what we're doing and why and why we're doing it. But, yeah, it's this. It's this, these huge tectonic plates are shifting right now. We're probably like 1/3 to one half of the way through the whole, the whole transition, probably continue for another 20 to 30 years before like the world sort of resets into essentially like one massive class of computer based systems governing nearly every physical aspect of human civilization. Again, I think it's a terrible idea, but, you know, no one asked me.
Brock Briggs 35:01
Well I'll ask you and I can get you up on your soapbox about it if you'd like that that actually was going to be one of the questions that I might take aways from that you said that we, you don't think that we ought to be. But it's also that, that's driving so much efficiency. And maybe I don't know as much about, like the downside, or like these black swan events, like you mentioned. But that increased efficiency across an entire economy is pretty notable. I mean, down at the low levels, that's the computer at McDonald's, that takes your order instead of a worker.
Josh Steinman 35:38
That McDonald's stuff is great, except for your McDonald's, you know, franchises that are in Canada that are using, you know, cell phone chips in them in order to communicate back with some central database. And Rogers wireless goes down for a week and a half in Canada, and all of a sudden, this franchise isn't working. So I just think that you know, we have, in some cases, decades or centuries of actuarial data that tell us how efficient certain mechanical systems or human systems can be. And we are essentially swapping those types of meta systems out for, for for new digital systems.
Brock Briggs 36:30
It's interesting that you don't believe that we ought to be doing that yet are starting a company in a basically in that field. I think that that there's some interesting comments, companies
Josh Steinman 36:44
Meant to protect those systems. It's because it's because we're doing this. Again, if it were up to me, we wouldn't have these types of digitally connected systems, but people are building them. And so because they're building them, those systems need to be protected. So it's like we're doing it because it's like, the other option isn't available. So society has made the sort of decision to go in this direction. Personally, I disagree with it. But because you're going in that direction, you know, it's like, you got to do something to protect the systems. Yeah,
Brock Briggs 37:22
That's interesting that you, you say that, I guess you hear a lot of entrepreneurs or people starting companies talk, and they, they really want to build the company or the product that is for the world they want to live in. And so I that's interesting that you chose to go that way. I see. That's necessary. It absolutely is.
Josh Steinman 37:50
We have to see the world as it is. If you want to if you want to turn, you know, one thing into another you got to start with the base reality.
Brock Briggs 38:00
Yeah that's fair. I see where you're coming from there. I just playing devil's advocate a little bit. I don't have strong feelings one way or the other, just kind of teasing that out. Yeah. Can you talk a little bit about how you came to settle on that? Reading through some of your past writings, you seem to be like shotgunning out ideas on Substack. about companies that you could potentially start? What gave you the prod that this was the right idea to pursue?
Josh Steinman 38:40
Yeah, just just feedback from talking to folks. That were you using current day, industrial control system, cybersecurity technologies. You know, we talked over 100 practitioners, entrepreneurs, analysts, students, etc. And this was the thing that we just kept coming back to as the major, major pain point. And so we did cycle through, I believe it's six other ideas. We started thinking that we were going to start an insurance company. And then we and then we just went through a whole bunch of others. You're referring to the Substack series that I put out. Just as a matter of observation, what actually happened was that we did that customer discovery that I then wrote up over a series of months. And but in order to sort of create dramatic a dramatic sort of moment. I compressed the release of those blog posts into just a series of weeks. But those, I think, seven Substack articles were the result of like six months worth of discussions and phone calls. But it just felt easier, smarter to do. Once we sort of knew the full story arc, once I knew the full story arc, right, like, it's one thing to just like, write up an idea, talk to a bunch of people blog about it, and have the end of the blog being like, I don't like this idea. And then like, go through that whole process again. And then like three or four weeks later, you like write up another idea, I don't like this idea. Instead, it's like we went through the whole process, we started with one idea, didn't like that second, the third, the fourth, the fifth, the sixth, and then found the seventh one that we liked, and then go back and write up everything, and then release it in a much more sort of metronomic way, like once a week for like, six, seven weeks, and then have the seventh week being like, Hey, this is a company that we're doing. Part of working at the White House, you realize that so much of your success can be determined by the narrative that gets formed around it, it won't be nearly as successful as if you do it well. And you tell the story well, and so that was sort of like the first exercise using that muscle that I observed, and then utilize the White House, which is like we were going to, we're going to start this company. But we had to get out and start telling that story. First, because otherwise, you know, at some point, someone else may decide to try and jump in there and tell that story. And we're going to be much better at telling that story than they are.
Brock Briggs 41:50
Well, and that goes to your earlier point about the things that we see online social media, blogs, TV, whatever it may be, you're being delivered, and you're consuming a curated story. And it certainly is easier to kind of once put together and like the way you said the putting together the full story arc. And also, it really isn't that compelling. Unless you know somebody really, really well, your may if you're just reading kind of the ramblings and like the stream of consciousness as somebody like writes and hashes out an idea, much less compelling than being able to see kind of the entire story, which is what social really loves to see.
Josh Steinman 42:38
Yeah, yeah, exactly.
Brock Briggs 42:40
Can you maybe walk through the timeline of Galvanic from the start of the idea to kind of where you are today? Talk about any kind of major milestones, things that you guys are discovering, maybe about the product that you want to build the industry? Good or bad?
Josh Steinman 43:02
Sure, yeah. So we started thinking about doing something in this space a year and a half ago, back in February of 2021. We did about six, seven months of customer discovery that's calling people asking them some some very basic questions about some of the problems they were experiencing. For those of you that are interested in learning more about what customer discovery sort of feels like, there's a great book called the Mom Test. Like mother, the Mom Test, I think it's by Rob Fitzpatrick, it's a great, it's a great book. The whole point being like your mom's always going to tell you that what you're doing is fantastic. But that's not real information. You have to be able to structure engagements and conversations with people such that they can't help but give you actual information and not, you know, forgive my French bullshit. So mom tests great book. So we just did six months of customer discovery, talking to folks about pain points and problems. Cycled through seven ideas, including the insurance idea got to the idea of building Galvanic, which is a continuous monitoring platform. And then launched that company raised a little bit of money from some venture capitalists and angel investors. And, and then set out to circle back with many of the design partners. That's a company that has the pain point that you've identified, because usually you start a company because there's a pain point. Not because there's something cool I mean, class people can start things because there's something cool to be done. But if you start a company where there are people that have a pain point, like maybe those people will pay for you to address that pain point. And so we raised the money, we have since gone out and signed three design partners, companies that have these pain points that are looking to solve them. And now we're out building a suite of technologies that unify to provide this continuous monitoring capability to those companies. So, you know, it's basically how people do companies these days, they go out, they find folks that, you know, say, oh, yeah, I'd really love it if I could do x. And then people go back and they start building and prototyping, maybe they raise some money, maybe they don't, but then they go back to people. And they say, Hey, you said that you have this challenge around x, we've got this thing y kind of solves this problem, would you be willing to try it out? So that's sort of where we're at right now. is building the thing and seeing who really wants to use it. And if it actually solves the problem that they they have?
Brock Briggs 46:02
Do you have any particular feelings about venture backed versus bootstrapping a company? You've worked at several startups. I don't know what your experiences with bootstrapping. But at least with the going back to the wool sock company that you guys started, you guys did that on Kickstarter, which was really cool to see you guys. Because was a shitload of money for wool socks. I thought that that was super cool.
Josh Steinman 46:34
Yeah, I think it was like the number one or number. Maybe not number one, but it was definitely in the top 10 Men's fashions Kickstarters at least up until 2013. I'm sure there have been ones that had been very successful after but yeah, we did pretty well. Yeah, look, I mean, it just really depends on the type of company that you're starting. Venture backed startups are designed to ultimately grow fast. Like you have to empathize with the with the investor in the venture backed startup. And what do I mean by that? I mean, venture exists as a type of private equity investment. What do we mean by private equity? You know, equity means like you own a share of a company. And so you can go out and buy public equities today. They're called stocks. Right? Like Apple's a public company, you buy a share of that stock to public share. You know, private equity is when you got a company that is not publicly traded. And so venture exists is this like subset of that. And investors of various types have different like return parameters, like bonds return x percent a year pretty reliably, stocks, public equities, can return another percentage, somewhat reliably. Private equity, even riskier, can produce a different type of return. If done well, venture investing, angel investing, venture investing private equity, high risk, early stage private equity investments, they're incredibly risky. And but when they pay off, they pay off quite well. You know, people can go from being worth nothing to being worth billions of dollars, if they have significant share in in private companies that eventually go public. Why do I say all that it's because when you start a company, you can gain access to the venture markets, if the thing that you're doing might potentially grow 10,000x if it's gonna, if it's gonna have these types of returns. And the reason why is because in a big, mature portfolio of like an endowment, or, you know, a big fund, you know, you want to have certain return profile, you want to like, make a certain amount of money per year, seven to 10%, or something like that. And the point is, you can get at the low end of that using a mix of these, like stocks and bonds and real estate and all this other stuff. But what has happened recently in the past 50 years, is those big investors have carved off a very small portion of their portfolio, meaning like the money that they have to make very high return potential investments, you know, so they'll take like 1% of an endowment and invest it in high risk assets, meaning like venture backed startups, because the rest of their portfolio is returning returning six or 7%, which is their target. But if that 1% can increase by 300% At 1% turns into 3%. And their overall return profile goes from like 7% a year to like 10% a year, which is huge. And so you have to empathize with a venture investor, that the things that they will invest in, must, by definition, be able to turn into billion dollar companies from nothing in like a limited period of time, 5, 10, 15 years. So, if you're thinking about bootstrapping a company vise, taking venture investment, to me, again, it's this question of reality, it's like, is the thing that you want to build something that will make several million dollars a year profit? Great. It's possible that you could get some investment for that. But it may not actually - may not actually be the right fit for a venture investment. Venture investors will invest in companies because they believe in some, some types of scenarios like that company will go from, you know, being worth $10 million to $10 billion. And so they're 1% ownership stake 2% ownership stake could return their investors, that enormous return. And so I don't have an opinion, one way or another about, you know, bootstrapping, or venture investing, I would just say that like for Galvanic, I don't think that we could bootstrap it because of the capital requirements. But if it works, it'll be a massive company, billions of dollars of revenue per year operating across nearly every industrial industry. That's repetitive phrasing, but it's true. Whereas like a sock company, I don't think it ever would have been venture backable because, you know, the total addressable market for socks for for men's luxury socks is somewhat limited. Actually didn't have some offers for venture investment and what they were going for was, I was going to create a competitor to Ralph Lauren, that was going to be 100%, American made. So like, that's a way in which you can turn something that looks like it may have like a very small, total addressable market into something big. And the challenge at that point is like, how do you actually build something that still can achieve that size and those returns? So there's a bunch of resources, I can send you the resource list that I give to folks that are thinking about starting a company. But when you're thinking about starting a company, you just have to think through like, Okay, what might this company eventually one day look like? And use that to sort of backwards calculate the type of capital that you might want to take. Because a venture backed startup will burn itself out if it turns out that it can't achieve the scale necessary in order to, you know, fulfill the requirements of its investors, right, like, you'll burn through all this capital if you're trying to build something to grow fast. But eventually, if it doesn't, so you just have to be really honest with yourself upfront about like, what is his business look like in the end?
Brock Briggs 53:33
What types of capital requirements do you guys have other than salaries if you're even taking one? Looking at a lot of publicly traded like cybersecurity and companies, I know that this is different. And I tried to kind of dissect the differences here. Software is traditionally high margin business is really going towards paying engineers and good quality people.
Josh Steinman 54:04
Yeah, at the beginning, it's all just human beings. Like we have very high engineering requirements. Like we have to build a very complex piece of software. And it takes very, very talented folks to do that. And so that's just like, the first thing that we're doing right now is going out and hiring those people to build the thing. You know, eventually, we'll have a sales department, a marketing department, all these other things, but as of right now, it's literally just salaries.
Brock Briggs 54:34
How did you go about building your team? I guess who do you have on it right now? And I guess what are you looking to grow it to?
Josh Steinman 54:47
Yeah, so we've got two co founders, one of whom stood up Amazon's Global Industrial Control System cybersecurity program. Right before he left for us to start Galvanic, and then another co founder, who's a former hedge fund trader, and economist, who's the COO. And, and then we have a full time one full time employee, who is also a former Amazon senior software engineer. And then yeah, we're going to have probably something like 12, software engineer openings over the next, let's say, six months. So just folks that are gonna own various aspects of the, of the software stack that we're building.
Brock Briggs 55:41
How much time did you spend thinking about who you wanted to go into business with? And what were your thoughts around? Hey, this is I'm looking to build this next big company. And by nature of taking venture investment, you're kind of locking yourself in a little bit and handcuffing yourself to these co founders, in one way or another? That's a fairly big commitment if you asked me. And that's not something that you would want to do with anybody just walking down the street. Can you maybe walk me through or spend a few words on? What your thought processes and business partner selection?
Josh Steinman 56:26
Yeah, I've known both of them now for over five years each. And yeah, just high trust. With those folks, I encourage, if you're going to go into business with someone like you need to be able to trust them. And then yeah, it's I think it's really important to have similar outlooks on you know, critical issues that you're going to be addressing. So. Yeah, it's, it's important, certainly the the team that we have, there is high trust. And we have known each other for a very long time. So I think it's so good. It's a good mix.
Brock Briggs 57:12
What do you think that your biggest learning has been building Galvanic, the other companies that you've been a part of early stage, you mentioned that you have a list of resources. And I'd love for you to send that to me, I'll definitely include that in the show notes. I'm sure that I've read a lot of your content. And so I'm sure that I probably read it. But I'd love to include it for anybody listening. But I'd love if you could just kind of sum up some of your biggest key learnings and what people should think about when it comes to the setting off on their own.
Josh Steinman 57:48
Yeah, I think the most important thing is to just you have to keep in mind the problem that you want to solve. And even now, with our design partners, it's really important. And, you know, just today, I sent out 10 emails to folks that we talked to over the past year, to get back in touch to have another phone call, to talk through the challenges that they're facing because you constantly have to be asking yourself, like, are we building the thing that these people are going to need to solve the problem that they think they have, and to solve the problem that they do have? And so you just have to continuously be engaging with the problem set. It's hard because you want you know, the human mind wants to believe its own hype, right? Like, the brain wants us all to believe that everything's gonna be fine, but you have to, you have to constantly be engaging with reality, it's just really hard. And it's really easy to just start drinking your own Kool Aid. And, and that's, in my opinion, just the surest way to, you know, make make big mistakes. Like you have to be out talking to people and like, I'm not perfect at it. But it's important that I, you know, I remind myself constantly.
Brock Briggs 59:24
Do you think it's possible to solve problems that you don't yourself experience on a frequent or at one time basis?
Josh Steinman 59:41
Yeah, possible. It's possible. But I think it's much better if you are solving a problem that you have, you know, some some facility with so, you know, on our team, specifically The I've got I have a strategic, you know, exposure to this problem. I was the person that got woken up at 2am by the White House Situation Room when, you know, weird things were happening on American critical infrastructure. People were asking like, should we wake up the President or not? My co founder, was the person responsible for this entire problem set for one of the biggest companies that has ever existed. And my other co founder was someone who, for years was thinking about, you know, the economic implications of risk. And so the three of us approach this macro problem from very different directions. But we have all experienced the pain that these types of these types of compromises can introduce into civilization, economy, and everyday life.
Brock Briggs 1:00:59
One of the things that you have talked at length about on some of your social and Substack and otherwise, is you really harp on the use of tools for founders and just people in general, will you maybe take a minute and highlight some of your favorite tools that you use that might be helpful? And how to kind of sort through some of the, the BS, I guess, that's fed to the startup community?
Josh Steinman 1:01:33
Yeah, I think, you know, instead of talking about specific tools, I'll just say that, you know, when you're when you're doing something, like starting a company, or even just taking, you know, Jocko says, Extreme Ownership, taking extreme ownership over like, your life, you just have to be very honest with yourself about your strengths and weaknesses. So for me, specifically, I've put together a stack of tools, that, you know, they're they're commercial SAS products, you can go out and buy them or use them. Quite easily, it's nothing, it's nothing special. But for me, it's about my own weaknesses and strengths, and creating a digital environment that allows me to be very successful. You know, I use a specific email, inbox program, that for whatever reason, psychologically just really clicks in my mind. And without it, I just, I don't think that I'd be nearly as, as effective or successful. But you have to sort of play around with that, every person has to play around with that themselves, and, you know, really, genuinely ask themselves, like, what makes me, you know, be efficient, and what makes me be inefficient. Same thing with some other tools that I use, like a notepad, I use a specific type of notepad app. That same type of thing, it just happens to work with my psychology. So I don't offer a sort of one size fits all tool. But what I would say is, like, you take an honest look at, you know what, at what you're good at what you're bad at, try and find tools that help, you know, make you better at the stuff that you're good at, make you less bad at the stuff that you're bad at. And then just build build tools on top of each other, that enable like really easy workflows. So that you can do the things that you have to do repeatedly, very, very easily. And it's just a it's just a methodology. And, you know, this is nothing special. Tim Ferriss has talked about this for over a decade, if you read his books, Scott Adams talks about this in his books. You know, and I'm a product of reading, reading those guys, and just trying to apply those lessons to my own life. So, yeah, you know, I'll send along the little links to the public documents that I've written, but, you know, for folks listening to you just go back to that source material, read The Four Hour Work Week, which is really just a narrative version of Tim, trying out a whole bunch of things and just running experiments on his own body and mind to try and, you know, become more, more effective, be able to get more out of his life. Scott's mantra of like systems over goals I've I've, in turn, deeply internalized that. And that's essentially what you see me doing is I've created little systems that enable me to operate faster.
Brock Briggs 1:04:53
I like that I am a big Scott Adams fan and Tim Ferriss too, but Scott Adams book How to Fail at Everything and Still Win Big is definitely required reading.
Josh Steinman 1:05:05
Yeah, great book.
Brock Briggs 1:05:08
Awesome. Josh, this has been a really fun conversation. I've learned quite a bit. I really appreciate you taking the time to share. Where can people go to follow along with you or learn more about to?
Josh Steinman 1:05:22
Thanks, Brock. Yeah, Twitter is in which I interact a lot with the world, although, you know, just in that systems over goals thing, I would note that I do tweet a lot, but I use an app called hypefury, to actually schedule and transmit tweets. So you may see me tweeting, may not be on Twitter. That's an app that's doing it on my behalf. For various reasons. But yeah, on Twitter, it's at JoshuaSteinman, just my full name, no space, nothing. And sometimes I do respond to DMS. But most of the time, it's just much easier to just at me. Because if you if you send me a DM, there's probably 20 other people that have the same queer question or request. So if you just, you just tweet at me, you're like, hey, I have a question. What about X, Y, or Z? Usually, I'll respond. And then sometimes I'll even write something up. So that I can, you know, respond at scale. So that's, that's probably the best way.
Brock Briggs 1:06:28
Awesome, Josh, thank you so much. I really appreciate it.
Josh Steinman 1:06:32
Thanks, Brock. Thanks for having me. And thanks to all you Scuttlebutt listeners, and folks that are in and folks that have gotten out. Yeah, it's been great.
Brock Briggs 1:06:45
That's the episode. Thanks for listening today, it means a whole lot extra that you made it this far. If this is your first episode, and you're looking for more of this same vein, I'd recommend checking out episode 30 with Michael Madrid and episode 32 with Ben Kohlman, we talk a lot more about starting businesses and the principles around startups. Lastly, if you're a fan of the show, and you feel like helping me out, you can do that in one of two ways. First off, is leaving a review on whatever platform you're listening on. Any feedback is welcomed, and I'm always looking to improve the experience and value for you in any way that I can. You can also send this to someone you think would like it. The fact that you're listening means you probably have a circle of people with your similar interests. Word of mouth is powerful. And if you think of someone who might find this conversation useful, it would mean a lot to me and to them as well. Until next week.