Securing Our Future
Securing Our Future
SOF 013: Defense Policy, Company Building, and Space Innovation with John Serafini
Host Jeremy Hitchcock sits down with John Serafini, the Chief Executive Officer of HawkEye 360. HawkEye 360 is the leading developer of space-based radio frequency (RF) mapping and analytics capabilities. John founded the company and has served as the CEO since company incorporation in 2015.
John has over a decade of experience investing in and leading national security-oriented technology companies. He has founded and/or served as the CEO for 10 venture-capital technology companies, each with a thematic focus on the national security, defense, and intelligence sectors. His investment activities and management expertise center upon the intersection of profit-maximizing private capital and the unique requirements and R&D capabilities of the U.S. Government.
John previously served as Senior Vice President of Allied Minds, where he led the formation, financing, and management of HawkEye 360, along with other Allied Minds companies such as BridgeSat, Federated Wireless, and Percipient Networks (WatchGuard acquired). A former Airborne Ranger-qualified U.S. Army infantry officer, John is a graduate of the US Military Academy, Harvard Business School and the Harvard Kennedy School of Government.
Welcome to New North Ventures, securing our future podcast where we discuss ideas on national security, emerging technologies and investment trends with some of the most experienced leaders from the private and public sector. I'm your host, Jeremy Hitchcock, and today we have the privilege of welcoming John Serafini, who is c e O of Hawkeye 360.
Thanks for joining us.
Hey, thanks, Jeremy. Really excited to be here. Thank you.
Thanks. You have a really interesting background not only from armed services, but a little bit of venture studio. Now you're running a space company. How tell us how you got started. How'd you think of your first professional steps.
Sure. So a, as you mentioned, I was in the military beforehand as a West Point graduate and a US Army Infantry Officer for a number of years. I got out after six years and went to business school, did a combined degree between a business school and the. The the school of government, which kind of combined two things I was really interested in on one side, venture capital, investing in building young tech companies.
And on the second side helping to contribute to the fight in defense intelligence and security value propositions. And at the time, this was back in 2007, 2008 timeframe I knew I wanted to be a venture capitalist focused on building dual use national security technology companies. Sounds good, but at the time, that really wasn't a thing.
It really wasn't until cybersecurity became a mainstream area of tech investment. That dual use took off, and people began to recognize that investing in technology companies that could support the government was an attractive value proposition, and that those companies could scale and to use. The Bon Thees and the establishment of early contract wins with the government to then springboard into the commercial markets.
Cyber was that launchpad but space was right behind it. Over the course of 22, 20 2007 to about 2017 I spent time with a couple of different venture capital firms, most notably Allied Minds. And my focus there was in building companies from scratch where I would work with US National Labs.
Federally funded research and development centers and universities, particularly university affiliated research centers for the Department of Defense, identify interesting intellectual property and map it against hard challenges in the defense and intelligence ecosystem particularly as it relates to wireless communications and cybersecurity and robotics, unmanned systems.
And then most lately was space. In 2015, I started a company called Bridge sat now bridge com, which was commercializing intellectual property for optical optical communications in space. And got really interested in this concept of being able to build small satellites in low earth orbit for cheap and being able to.
To provide value to customers in the government and the commercial side. That led to the establishment of Hawkeye 360 in 2016 timeframe. And ultimately, I so loved Hawkeye and the work that we were doing to support our customer base, that I decided to leave venture capital to run the company full-time.
And it's been a seven or eight year odd see since then. So that's how we got to where we are today.
What a cool journey. So go, going back a little bit and we'll go into your the Hawkeye 360 story in a little bit. But how'd you think of Venture as like the next logical step after, after armed services?
What was it? The. Fact of doing of leverage of looking for investing the next ideas. Was it in the mission aspect of, especially around that dual use. Cause that was super early. Now there's a few more people that are doing this dual use investing. But when you look back what was driving the idea and or did you think, Hey, maybe I'll do a startup along the way as used venture as a catalyst.
But why? Venture
first. Not to disparage my business school classmates, but particularly at the time 2000. See, 2004, 2006 timeframe. The vast majority of people coming outta the business schools went to consulting or investment banking and really was pre bifurcated on those two career paths.
Neither one of which were at all attractive to me. I did not wanna be a consultant and I did not wanna work at finance. I. However, I was really interested in the venture capital paradigm of starting young companies. But at the same time I was interested in, in, in building companies that had a greater purpose, dual use an ability to provide greater value to society.
And whether, I know defense, having been a soldier having gone to West Point, and I wanted to marry my background in security and being an infantry officer and thinking about defense policy with my interest in building young companies. And what I came to appreciate after a couple years of venture capital is that, Raising funds to invest into series B, series C round companies.
Wasn't that interesting to me? What I really got excited about was going from zero to one, where you come up with an idea, you find some intellectual property, you build a team around that, you inject capital, you build it towards the initial milestones, and then off you go with a series A round and a great set of investors.
That really got me going. And so at Allied Minds, I had the chance to build. And dual use startup companies that were doing really cool things like augmented reality early on cybersecurity, different approaches optical communications mobile security spectrum sharing, all fascinating tech technologies where I got to be at the ground floor of that.
And that was fun. And so I never really wanted to be a. Traditional series B, series C and beyond Venture capital investor. I wanted to be a company builder, and my time at Allied Minds afforded me the opportunity.
Can you talk a little bit about Allied Minds? I don't think they get enough credit for, especially the, some of the deep tech stuff and some of the companies that were really forged through that process.
But what a cool model. And I was wondering if you could tell us a bit about how they got started the things that you saw there and why it
worked. So Allied Mines was at its very core. In essence, it was old school venture capital, right? It was going back to be outside the fence of our national labs and universities and waiting for great technologies to emerge and thrown over the fence for Allied Mines personnel to be able to catch and run with and build great companies.
Most of the times in partnership with the principal investigators at the lab or in the university old school. Building young, great dual use technology companies, and it was fascinating. What I most appreciated was getting inside some of these labs and they could be as arcane as like Edgewood Chemical Biological Center to Mitre and John Hopkins, a p l, some of the bigger, more mainstream organizations that huge budgets.
But what you realized is once you crack open these doors and you look inside is the enormity of, or the enormous amount of. Of opportunity for intellectual property commercialization. Like it's like you remember the end of Indiana Jones and the raise of the lost Ark, right? Very last scene.
The, this old guy is taking the arc, which is all in this. Wooden box and he's pushing it through this warehouse full of thousands of other nondescript wooden boxes, and you're left with the thought of I know what's in that box, and it's the most powerful thing ever. What could be in all these other boxes that, that's the feeling that you get when you walk into a place like Mitre and you see the huge amount of intellectual profit that's been created with Taxpayer Capital waiting to be commercialized.
And so that's what I got to do with Ally Bonds is build these great young companies. They're unleashing and unlocking the value of taxpayer funded intellectual property.
And you mentioned cyber. Was there a cyber company that almost caught your eye or a cyber theme that you almost that was almost the company that you worked
on?
We had a couple of these different approaches. Strong ARM was one. It was an intellectual property for DNS Black Hole that we licensed at Mitre and pulled a team of young scientists out created this company and eventually sold it to WatchGuard a couple years later. Nice successful exit.
Another opportunity was not successful, but a great learning. A case for me, which is a company called Optio. Optio, licensed intellectual property from Virginia Tech that was basically a shim inside the Android operating system that provide deep hooks into the operating system to bear control with.
Happens at the application layer for security. Really cool idea, but ultimately it didn't scale because we couldn't figure out how to do something different. Apple iOS is so close that we couldn't do anything differentiate, but it was a great opportunity to understand how to build a young software company, scale it, raise capital, build a team, et cetera.
Being a
DNS person, I remember seeing that was cool to watch. So bunch of years take place. You have a few of these patterns that you see and then there's this the early. The early signals of what becomes Hawkeye 360. What was the moment that you either thought or saw, Hey, this is something that you wanted to spend the next part of your career on and what, how did the team develop?
How did the idea
develop? So I had the privilege of working with Dr. Bob McGuire and Dr. Charles Clancy when they were at the Virginia Tech Hume Center for National Security and Technology. It's A U A University affiliate Research Center. There's a lot of ified work for the Department of Defense.
Charles and Bob and I had teamed up on a company called Federated Wireless. Which is building a system for spectrum sharing. Been a successful company, raised hundreds of millions of dollars, doing great. And I had such a great experience working with Charles and Bob when they came to me in 20 15, 20 16 timeframe with one of their friends, a guy named Chris De May, who was at the n r at the time, with this idea of building essentially a parallel to Maxar or Black Sky or planet, but in the signals domain.
I e if you can take. Images from space commercially. Why? Why can't you? Analyze signals from space commercially. We got really excited about it and we saw the promise and we funded some initial pre-seed work at Allied Binds with the team for them to go off and do some studies, look at some intellectual property that could be created, that be proprietary to the company.
And eventually we did. A 3.25 million seed round that Allied Mines funded that got the company off the ground and actually got us to our first contract for building our satellites. Now, our satellites are unique. They fly in clusters of three, which is never before been done in the commercial side before Hawkeye.
And that. That seed round got that work underway with our partners specifically Space Force, space Flight Laboratories up in Toronto. It was at that time that I started to realize that we had something pretty powerful. But we need to raise capital and need to scale and need a great set of external.
Venture capital investors who understood the dual use nature of what we were building and saw the promise and we were fortunate to get connected to Razor's Edge Ventures. This is 2016 timeframe. Razors was relatively. Knew at that point in time, they had they had stood up their first fund and we were actually the first fund out of the first investment outta that first fund with Mark Bodo as the investing partner.
Mark joined our board. Now our chairman, he's been chairman for nearly seven years, but they led that series A round alongside Raytheon and a couple of other investors. It was at that point when we brought in about 14 million in series A round. That we recognized we had something pretty special and that we are going to be able to fulfill a white space in space that hadn't yet been attempted via technical challenges or policy challenges wherever it is beforehand.
That now made it available for us. We decide to really go, all go wall in, and that's the point in time in which normally I would. Hire a CEO O and just go to the board and then go back and start another company, allied Minds. But I so loved what we were doing, and I could see the strong value creation that we were going to provide to our country defense and intelligence, apparat, as well as our allies, that I just decided I, I couldn't leave the company.
I just needed to keep going. I felt a personal connection to the co-founders and to the young employees, and to the new investors, and so I decided to leave Venture Capital at that point, 2017, to go run the company full-time and haven't looked back since. Oh, cool Story.
One thing that you see in, in, in CEOs as they go from early stage startup, employee number zero, number one, all the way to something a larger scale, is that, Small universe.
And I think about this personally in my experience going from small to large and. Again, it be as a result of the many skills that you have to experience in small scale and then the new skills that you have to develop for large scale. Curious how you've thought of both staying ahead of the game keeping the foot on the gas on accelerating the growth around Hawkeye 360.
You guys have had tremendous success in a variety of areas. But h how have you as a C E O changed. From those early days to what you are now and what do you think of as where you have to continue to evolve in the future?
That's a loaded question. Mean I think we've been successful only because I've had a phenomenal partner Rob Reinhardt, who's the COO of Hawkeye, been with us since the very beginning of think employee number three or so, where he came in to run our technology and now is running engineering product and programs.
And it's been my right hand for the internal management of the company without Rob that there is no Hawkeye 360. So kinda the first statement is you need to have a great partner. You can't do all this stuff alone cuz space is incredibly hard and starting a space startup is even harder. Second a good CEO needs to have a superpower of raising capital.
That's probably the job number one. In something as capital intensive as the space industry is, being able to raise money in all weather, right? Whether it's a good economic condition or it's a poor macroeconomic condition, you still have to raise money. You got, significant opex, but you also have very big CapEx and there's so much risk associated with putting satellites on orbit and operating them that you need to have a substantial amount of buffer to be able to weather those storms and.
Third, you really need to be able to build a high quality team and a team that scales. So not just a team that's good at the seed stage or a team that's good at the series A round. You need people who are gonna be able to grow and graduate and mature and evolve with you as you evolve in your maturation.
As a company, right? As you go from a series B to a pre i p o tech company, there's a lot of things that need to change. And having people who are flexible and Ernst while learners who want to develop and become better with the company, that's extremely important and we've been blessed to have a number of management team members who have been able to scale with us throughout the years and will be able to scale with us through an I P O whenever that does happen.
Looking back, are there any places where you have notable learning lessons? As you said, space is hard. Everybody wants to see people execute flawlessly, but you're doing things that no one else has done. Are there, there are times where you look back and say, ah, I wish we'd done this differently, or, this is a learning lesson for somebody else.
Yeah, I probably should have tempered my expectations a bit more. If we if you looked at our original projections on where we'd be by this point in time. Seven years ago, we'd have 5,000 satellites on orbit. Something ridiculous like that. We wanted to move faster than was possible, and we wanted to do it for cheaper, and we wanted to have more customers than we could possibly imagine.
And you have to be conservative. You have to be thoughtful. You have to set expectations that are reasonable and achievable, and go forward and hit those achievements and those milestones year after year, to build credibility with investors and with your board, and with your employees.
And so looking back, I kinda laugh at when we were 20 16, 20 17 timeframe. The expectations we had for ourselves were totally unreasonable, but that's what. Good visionaries, are trying to do or they're trying to do hard things and you gotta set big goals. I think if you go back and look at some of the stuff that the other space pioneers have said they do and their status against measuring against those goals that you find that they probably fell short.
But I think in the future, we're trying to focus on setting milestones for ourselves that are achievable.
Yeah, we're still waiting for our flying cars and our colonies on the moon. But you're I'm sure that somebody in the space domain is gonna get us there. Switching gears and just thinking about, you're, again, an example of somebody who's gone from startup to to scale up.
When you think of advice for founders especially being in 2023 And you mentioned the being able to be successful in all weather. What do you do differently in, in climates that are maybe more choppy or have had some more doubt? What advice do you give to startup founders who are starting off on the first, their first foray and to build in a company?
Yeah. I think my guidance. For young space companies is really around raising capital, right? That's, that is priority number one. If you can't raise capital, you can't feed the troops, and then you're not gonna have a company. So you gotta be able to get out there and raise money and. To some people it's really a foreign skillset, right?
Like people aren't really accustomed to asking for money and figuring out a way in which to present and market and promote themselves and their company in such a way as to attract investment dollars. And it's a learned skill, but the adage that I learned that I think. Is worthwhile to pass on is w when you ask for money, you get advice.
And when you ask for advice, you get money and you need to raise money when you don't need it, right? Those two pieces of advice give to every founder, and I think it's helpful particularly in difficult fundraising environments where the macro. Headwinds or extant. Not raising or raising money when you need it, puts you with your back against a wall and it's just gonna lead to poor terms going off and raising capital when you don't need it.
When you have a robust balance sheet, when you've hit the milestones when things are looking good. Puts the advantage in your court, and that's what you really need in difficult environments. And then the other piece, as I mentioned to you earlier, going and engaging and developing relationships with venture capitalists and other funding sources and sovereign and state and strategic investors have been phenomenal for Hawkeye and I thoroughly encourage startups to engage with that.
That community. But going to them and building relationships when you're not looking to raise capital is very important, right? Because they're inundated with people asking them for money. And when you go to them and say, Hey, look, lemme just introduce my company, tell you what we're doing, show you the milestones that we're trying to hit.
Hey, I'd love to get your perspective and advice on a couple things that engages them in a different manner and starts to develop mind share for those venture capitalists and strategic investors that matter, so that when you come back to them at some future time and say, Hey, do you remember I talked to you about hitting a, B and C milestone?
We did that and now we're thinking about financing. What do you think about that? That's a great way in which to build a rapport and a relationship that will have a better pathway to to being a successful investment opportunity. Remember that every venture capitalist is looking for their own proprietary deal flow, right?
They wanna feel as if their relationship with. Perspective companies is unique to themselves. If they have companies that they've built a relationship with that give them a chance to get in front of other venture capitals because hey, this founder comes and talks about the progress that they're making, hey, maybe we will raise them in the future.
That's like bait to a VC that knows what they're looking for and can say, wow, if I get out in front of everyone else, I can lead this financing non-competitive environment. That's good for everybody. It's good for the venture capitalists, it's good for the company as long as they can get standard, market terms.
But that's the kind of relationships that you have to build across the funding environment. And it doesn't happen overnight. You gotta get out there and be continuously networking and continuously fundraising to be prepared for when it's the right time to bring in capital.
Yeah. Being in the space world, you must see a lot of companies who right now are.
Wishing that they had raised more capital or been more successful. But that said, space is just an amazing frontier. There's a lot of activity going on. Where do you think the next set of companies in space are going to be focused on, and what are the areas that, that may not be as interesting that startup CEOs who are saying, ah, I really wanna do something in space and either other companies have too far of an advantage or or just may not be as fruitful for a startup to take on.
Yeah. In lower Earth orbit, the amount of white space of investible opportunity is obviously shrinking. Like people have come up with ideas for just about everything that's worthwhile to do in space. So you gotta look for new platforms that are commercializing areas of space that haven't been thought through before.
Either that's because of technical challenges or policy limitations. But you have to find new ways in which to push the envelope. A company that we really like is Albedo. Albedo is building a very low earth orbit satellite that actually orbits eventually at 200 kilometers. And from that distance to the earth, there's a whole.
Variety of different payloads that satellite can can hold to do a variety of different exquisite things to include 10 meter electro optical and and two meter thermal imaging. That's exquisite and super exciting for national security purposes, four times, five times better than what some of the other commercial vendors are able to offer with 50 centimeter eo.
That's an example of a new platform that's unlocking new applications that hasn't been done before because they're willing to build where people haven't been able to build before. Another example is cis lunar, right? Being able to get out closer to the moon, cis, lunar and lunar orbit opportunities.
Seeing a whole host of different new applications there. Super exciting that they're gonna take. 10, 15, 20 years to unlock the economic return. And it's likely to be a binary outcome, right? They're either gonna be huge success or they're not. That's very much of a success at all. But there's a whole host of different venture capitalists who want that kind of return profile and willing to wait for those kind of companies to succeed.
So I think both really close in and very low Leo, very low earth orbit and further out. And beyond Geo and De sis, lunar and lunar orbits and eventually Deep Space, there's a whole host of different applications that haven't been done before that are now coming to market.
Yeah. And last area I want to talk about you've lived at this intersection of where?
Public, US government these long cycle really hard areas and the commercial industry area of thinking about how to build commercial cycles around technology. There, there's a fascinating discussion right now going on. You have a huge groundswell, whether it's the CHIPS Act, whether it's office of strategic capital, suddenly industrial policy The Future Industrial Network, those things are being talked about and celebrated in a very different way, and being a practitioner in that space for more than a decade now, what do you think are some places where we're doing things right and where are some places where we need to do better?
I
think over the past decade since I've been investing in building cyber and space and other dual use companies, we've gotten pretty good at. Early stage research, development, testing and evaluation engagements by the US government. We've got D I U, we've got Intel, I've got F Works and Soft Works, all host of these other S B I R type programs where we're dishing out capital from t r l one to t r L six and people are doing new and innovative things in startups.
The challenge is that these have been given out so freely that they've become like candy and you've got a lot of young companies that are getting drunk on. R d t and E engagement, just jumping from one TL three to one, TL four type engagement and chasing those as opposed to taking one technology, going through R D T and E testing cycle, and then scaling that into a program of record that they can then productize and offer to the US government at scale for the betterment of the war fighter, the analyst, and the decision maker that the program of record piece is missing.
It's only happening in small areas. Palantir is a great example, right? Built a capability early engagement, scaled that engagement, built out a robust product line that's creating great value across the enterprise for D O D and the commercial enterprise like that. That's very unique and we need to see more of that.
We need to see more of these R D T and E engagements with clear transition partners, transition funding, transition contract vehicles with program or record funding from. Capitol Hill, it's been congressionally, appropriated dollars so that when you build a technology that is gonna better the war fighter or the analyst or the decision maker for the betterment of the taxpayer, that doesn't just end up on a shelf gathering dust, like some of the stuff I used to see in federally funded research and development centers, but actually has the resources to go off and create value for the long term.
That's the challenge that we're dealing with now. I think we've done a great job in creating, in instigating this new investment concept for defense. Technologies like d I U has been phenomenal for promoting the third offset strategy. The Ash Carter, was the founder of, but it's, how do we accelerate the development of these technologies to program of record, to create lasting value that I think we need to focus more on.
Last question. Any any predictions or anything on Hawkeye 360 for the future that you're most excited about? Or do you guys just heads down building every day, but close this out. What what things for Hawkeye 360 can we look forward
to? We've got 21 satellites on orbit that's more than like 180 countries, which is exciting.
We are moving towards a long-term steady state of 60 satellites flying in clusters of three. So 20 clusters we've raised. To date over 300 million. We have some more announcements coming up about additional fundraising. All of that capital allows us to, to continue to build. Our constellation architecture allows us to invest in the multi infusion of multiple different modalities operating together, right where you have.
Commercial RF tipping commercial, electro optical tipping, commercial synthetic aperture radar, and all of that data's coming down into one multi int platform that can answer a problem, right? Hey, here's the location of a mobile missile launch platform in country X, Y, and Z. Here's where it's moved.
Here's its patterns of life. Here's open source information about it. That's valuable to the war fighter and to the decision maker. And then we're gonna be investing further into the use of machine learning and artificial intelligence for creating downstream data, intellect products that solve a problem.
We can collect up RF data in the Gulf of Mexico and identify vessels we actually wanna be able to identify the dark vessels. The ones that don't wanna be found. They have turned off their a i s signals that are still operating with their Xan radars who may be doing the farst. Things like illegal phishing or human smuggling or drug trafficking.
And then being able to forecast their activities and their location and know more about that asset such that we can have a robust. Intelligence estimate about that asset and the people operating it. That's where we wanna go long term to provide knowledge products for our customers. In some, build out the constellation, make it robust, make it resilient, make sure it meets the requirements of the customer, let's build it so that it takes into account a fully orchestrated multi fusion vision.
And then let's use artificial intelligence and data science to be able to have knowledge products for our customers.
We're we'll be watching. We're super excited to see the progress of Hawkeye 360, so thank you, John for joining us.
us
oh, my pleasure. Thank you for having me, Jeremy.