100 OODAcast Episodes! Providing actionable insights for future risks and opportunities.

Informing your decisions with intelligence analysis and insight brought to you by the team@oodaloop.com hi, I'm Matt DeVoe, the CEO of OODA, LLC, and I'm joined by Bob Gourley, the CTO. And this is OODAcast100. Bob, can you believe that we have produced 100 episodes at this point in time?

Yeah, that really went by quick, and for me, it was very insightful. Hundred episodes. There's a lot of lessons in those things.

I think so as well. I mean, it's fascinating for me because of our focus on decision making and leadership, to get the insights and find out, you know, who was influential for some of these great leaders, whether they be cybersecurity or business people or government executives, it's been interesting to see their path to leadership and the things that influence them and how they've adapted it to their own decision making. So certainly has been a valuable endeavor, I think, to get these interviews on the record and to curate that content, you know, to understand not only their background, but how things like the OODA loop and similar mental models help them evolve into the leaders that, you know, allow them to be very successful.

Right.

Do you have any favorite moments? You know, what were some of your favorite OODA casts that you recorded over the past couple of years?

You know, one I have to mention is the joint one that you and I did with Chet Richards. Both of us had known of Chet for a long time, read his book, knew that he was an acolyte with John Boyd himself, knew he was a great leader, but to be able to ask him questions about what it was like in the room as John Boyd was describing the OODA loop and describing military strategy and describing how things would work in the business world. Just a great conversation. Very insightful. One moment that was new to me in that conversation was when he described the interaction between John Boyd and the famous business strategist, author Tom Peters. I had no idea that Boyd was influencing Tom Peters, which then influenced so many other businesses around the world.

Yeah, you start to see that downstream impact. And, you know, the phrase that kept coming through my head as we were having that conversation was, you know, from the. The Hamilton musical and the room where it happened. Right. We really did get that insight. And Chet was the person who was developing the graphics. I mean, when we search for OODA loop on the Internet and we see some of the more nuanced versions of that, those were actually graphics that Chet was producing. So it also, to me, demonstrated the value of having a peer network that you're able to interact with and share those ideas and have a drink and gather around a table. And that certainly seemed to benefit John Boyd. He was obviously very brilliant, but he surrounded himself by folks that were intellectually challenging him all the time. He was calling these people at all hours on the weekends and in the evenings and that really helped advance his thinking. So for me, that also reinforces a lot of the work that we're doing with the OODA network and that we are building those peer groups for people to share these not only strategies around how they deal with the problems of today, but thinking through how are we going to handle this, the risks and opportunities that emerge in the future. So I agree that that was a ton of fun. And for historical purposes, I think we captured some really interesting and unique insights around how the OODA loop that was, was developed that don't exist anywhere else. So that was fun.

Yeah, that was fun. Well, another one, Matt, you know, I've had several favorite CEOs through the decades. You're one of them, you're a multiple time CEO entrepreneur. Another is John Chambers. And John had a very interesting story. You know, he was a great sales guy. He worked at Wang and IBM. He joined Cisco as a sales guy when they were, they were growing, but not so big. They were about $90 million in sales a year. He then took over as CEO and led them in the huge growth to be a $90 billion a year corporation. Now he's Chairman emeritus. He is running a venture capital firm, investing in startups, trying to pay it forward and create companies that create jobs and are good for the economy and open society. And what I wanted to mention is something that stuck out at me was his prediction on the 2022 business environment, which so far he has nailed it. He said his gut was telling him that this year is going to be like being on a roller coaster. You'll have these high highs and all of a sudden you, you'll be heading down towards the bottom and you'll have no idea where the bottom would be and you feel like it's going to go down forever and then you jerk right back up and start going up again. So the roller coaster analogy I think so far is fitting for this year.

Yeah, absolutely. Great to see an executive too that, you know, I don't want to say he's retired, but you know, he's kind of moved on to, to a diversity of endeavors. Still so engaged in what's happening in the world and still so insightful and applying the lessons that he's learned, you know, in business and in life and helping others decode what is happening or what is going to happen in the future. I thought that was very insightful as well.

Right. You know, another that stuck out for me was retired Admiral Bobby Ray Inman. So here's another guy who is still extremely influential. Earlier in the year, some friends of mine in the current intelligence community were emailing around a list of sayings from Bobby Ray Inman called Inman's Rules. And they're all so relevant to leadership in the intelligence community and for anybody who wants to do analysis of hard problems. And Bobby Ray Inman, I had never met in person. He was the mentor to my mentors. But to get him on a udacast and asked him, what are Inman's Rules, and how can you put these in context for us, and do you wish that you could rewrite them? He added a new rule, by the way, he thought was so critically important, something that is causing humanity to continue to make the same mistakes over and over in analysis, and that is to beware of mirror imaging. He really emphasized that too frequently our analysts fall into the trap of thinking that your competitor or your adversary is just like you, and that skews your analysis in ways that it's hard to recover from.

Yeah, that was fascinating for me, of course, having built a program 20 years ago called Mirror Image as a training program for military, U.S. and Canadian military folks, and we did law enforcement and intelligence services as well, where we actually forced them into that uncomfortable zone of behaving like the adversary, of actually mirroring the adversary to better understand them. So I can see that value. Right. If we have to kind of drop our preconceptions, and we have to take that perspective from the adversary's perspective if we're going to appropriately Red Team their potential future behavior. Right.

Matt, let me mention one other and then ask for some of your favorites. And this is Charity Wright. Charity Wright is an intelligence analyst, and I really enjoyed talking to her and learning from her, especially about the Chinese threat. But talking to her also helped me think back through our careers. When you and I were in the cyber world and cyber threat intelligence, we were some of the first. There were very few that were treating this like a discipline. Now the community has matured so much and has incredible professionals like Charity Wright who are focusing on important aspects of the cyber problem. We talked about the threat overall, but we focused on China and the Chinese threat to stealing intellectual property, but also the creation of a digital Silk Road where China is Giving at deep discount, a lot of it to foreign governments. Those foreign governments use those to surveil their own people. And China finds ways of using that for espionage to move data back into China. Charity rights analysis on that particular problem was just really impactful and insightful to me.

That's excellent. Yeah, it's. It's so also inspiring to deal with the generation of analysts that are dealing with these issues today. As you mentioned, we're. We are lucky as a nation that we have such smart people focusing on these issues and helping us think through these risks as we move forward. For sure.

Well, Matt, which ones were, which uticasts were impactful to you that you'd like to.

Yeah, yeah, it's.

It's tough.

As you know, we've interviewed, I think, 98 people now at this point because in the first couple episodes we split them in half. And there's so many fascinating folks, but, you know, a couple that really resonated with me. The first was Kevin Roberts. I had picked up Kevin Roberts book 64 shots during a time when I was kind of transitioning and taking some risks in my career and, you know, needed like a little shot in the arm with regards to my worldview and found that book to just be incredibly inspirational. So for me, it was fascinating to conduct the interview with him a. That he was gracious enough to, to come on the Uticast, but to, to find that, you know, his experiences and his personality kind of almost completely matched and resonated those which I experienced in the book. He had his own version of the OODA loop, you know, though he didn't call it ooda, he had all sorts of great leadership lessons. I love his perspective, you know, where he adapts ways to do things, field research and understand the world from different cultures and different businesses. You know, famously in his book, he talks about this Japanese concept of get your boots on. You know, where if you want to understand how a tiger hunts, you don't go to the zoo, you go to the jungle. You know, you need to be out and understanding the environment that you're in. So I just found that to be, you know, an incredibly fun interview because he was so jovial, so full of personality, and then also incredibly insightful as well.

Yeah, I like that too. And some of the things I took away from that was his focus on things like transparency and honesty and good vision, leadership. But he also described being proactive. And one of the things he said about this current environment is we're going to have to hack our way into the Future. And that resonated with me because that word has multiple meanings. Of course, when I hear hack your way into the future, I think, all right, hackerman's going to get on a keyboard and it's going to change time. But that's not what he meant, of course. He meant like, you're in the jungle. How are you going to get through all this, this thick mess? You're going to keep working at it, you're going to be proactive, and you're going to build your own path, and you have to build your own path because the future is unknowable, especially in dynamic times like this.

Yeah, yeah, I love that as well. And, you know, it reconciles with a mental model that we use in some of our consulting services called Hack Think Right, which is applying those kind of hacker principles to thinking about problems that are not cybersecurity problems. It's the dissecting them down to their roots, figuring out ways to put them back together again, you know, really not. Not accepting things as being defined along a clear path and recognizing that you can still influence them. So, so that. That was a lot of fun, for sure. Another one that I really enjoyed was Jer Thorpe, who wrote this great book called Living in Data. For me, that was, you know, incredibly compelling from a data science perspective. He really humanized, you know, how we should be thinking about all this data that we're collecting and the data science and the machine learning that we're able to conduct on top, but with a couple of unique observations. One is that, you know, these lack of data adjacencies are impactful in how we move forward as well. Right. So he was hugely influential to me in thinking about the data that you don't collect is as important as the data that you collect. And sometimes the data that you don't collect is a failure of the technology, a failure of the machine learning or the data science that you're trying to conduct. So I found that perspective fascinating. The other piece too is, you know, we joked he's been described as kind of the Indiana Jones of data science. He travels around the world collecting data on these unique global environments and figuring out how data science can help solve some of the ecological and natural challenges that we're facing, or even just to bring awareness to the population around the existence of some of those challenges through actual data. So, great interview, great perspectives, and really does a great job of helping you think through not only what is big data, data science, machine learning, and he's one of the top experts in the field. But then the artistry of using data science to better understand the world around us and make sure that it is an equalizing force as opposed to kind of a discretionary type force.

Right. I had two thoughts about that interview. One is, as you mentioned, failure to collect data is, can be a huge failure. And the data scientists need to understand that and build good collection methods, approaches that are comprehensive and right. But executives and business leaders need to understand this too. They need to be proactive and think, what data are we not collecting and how can that influence our results? This is especially important for government policy as well. If you don't collect the data, you're not doing the right analysis. And he did describe that well. I also liked his attitude toward data as not just a noun. Yes, data is this thing. But for a practitioner, data is also a verb. Let's go data this, let's get. Not just get and hold data, but make it actionable.

Yep. Now that was great as well, that the data as a verb. I had forgotten about that. A great perspective. A couple others that are kind of top of mind. And again, we interviewed so many great people over the past couple of years. One for me that was just a great uticast moment was the discussion with Nate Fik. And Nate is one of those folks that I'm not easily enamored with leaders, but he is somebody that I literally would follow anywhere. He is just incredibly competent, compassionate. He is one of those kind of natural leaders. And you see that in his telling of the story of his life. Going to Dartmouth College, then entering into the Marines, deploying into the Middle east, writing a best selling book and pivoting into thinking about these global national security problems and then into the cybersecurity domain. And he really has just brought this great intellect and leadership to everything that he's done. And of course, as we record this on July 28, 2022, we are hoping that he will be appointed as the cyber Ambassador at the State Department. Right. So what a great leader to put into that position and to take those leadership abilities and that knowledge and deploy it in conversations with nations around the world. So we're looking forward to that. But the moment that really struck me during that conversation, you know, as rich as it was, was a, a perception that I had. I pulled out of reading his book One Bullet Away, where there was almost this shift when he was in college to when he became a Marine officer and was responsible for the lives of his troops over in the Middle east. That seemed almost stoic to me. It seemed like he had had this mental model shift where he moved into this perspective of stoicism. And I recognized it in the book. And when I asked him about it, he said, geez, you know, in all the hundreds of interviews I've done, because his book was converted into HBO miniseries, it was very popular. He's done a lot of media and presses. Nobody else has ever picked up on that. And he said, as. As it would happen, I actually in my rucksack carried a copy of Meditations by Marcus Aurelius. So that was for me, kind of a fascinating moment to be that in tune, you know, with the folks that we were interviewing in this case. Nate have to have picked up on that shift in his thinking where he did become a little bit more stoic in his perspective of the world. And that obviously influenced his leadership and his calm demeanor and helped ensure the safety of his troops in the field.

Right, Yeah, I enjoy that as well. And it is great seeing these leaders. He's not done yet. You know, he will lead in government and we haven't seen the. The end of Nate. He's a tremendous leader I would follow anywhere, frankly.

Yep. No, I agree. Two more that come to mind. And I imagine we could go through all 98 interviews and have highlights and insights. So it's a challenge for us to kind of pick a few to talk on this episode. 100. Rick Prado. I feel like, you know, what a unique experience for us at Uticast. For those unfamiliar with Rick, he had a career in clandestine services, you know, had been described by director of CIA as the closest thing to James Bond that the US has ever had. He had never done a public interview. He had. There was no pictures that existed of him. You know, if you Google searched for. For Rick Prado, CIA, you came up with, you know, unfortunate for the person, the subject out there. It came up with a photo of somebody else. And Rick finally, you know, started to receive permission to be able to tell his story. And he chose Uticast as the first venue to come and do an interview. So the first time that he ever gave an interview, the first time that he ever, you know, allowed for his appearance to exist in the public domain was on the Udacast. And again, that was incredibly insightful. His career progression as a Peter Pan refugee from Cuba, coming over here, becoming enamored with the US and an ultimate patriot, and then, you know, his time of service in the CIA. And the fun part, which I think is a fun success story for the Uticast, is that I opened that Uticast, you know, by introducing Rick and saying, hey Rick, you know, your life is so compelling that it could be a best selling book. And of course after that Uticast, he was able to secure a book contract and he did become a New York Times best selling author. You know, he wound up number seven on the hardcover list and number eight in overall when you add in digital and physical copies. So it was great to see him use our Uticast as a venue to get his story out. And it was great to see his story resonate with so many, you know, hundreds of thousands of people when he wrote the book.

Yeah, that was a great Uticast. Great insights into his story and his way of thinking and a great book. And to me, that book told a story that was so compelling. And then he ended it with, and I don't want to spoil it for anybody, he ended it with a couple sentences about what he really believes. And as I read those, I felt like, like, yeah, that entire book was building up to this and I believe it too, about. And really, I don't want to spoil it for anybody. I want everybody to grab that book and read it. But you have a couple others to talk about, Matt. But it's probably a good time for me to mention that a lot of these folks wrote books.

Yeah, we actually, I think we've counted there's, you know, over 30 books that have been written by folks we've interviewed on the Uticast. And we will in the show notes for this Uticast put the list, we put a grouping of them together on Amazon. So if you want to go peruse the books, I certainly would encourage it. So much great material there. And again, over 30 books that have been written by folks that have appeared on our show. I have, you know, one last one and I think it was one that resonated with both of us and that was Michelle Walker and talking about this concept of a gray rhino. And I read a lot of books about risk management, as do you, Bob. We read a lot of books about business. But Michelle's book really resonated because it gave us a language to describe a category of risk that, you know, is always a challenge in talking with these executive teams. We're very comfortable talking about the black swans or kind of the unknown unknowns or the things that could come in and be highly impactful, but that we can't predict. But Michelle talked about the, this category of risk that she referred to as the gray rhino. It's the risk that is sitting right in front of us and represents a threat that we refuse to acknowledge for one reason or another. And she steps through, you know, some of the reasoning of, of why we don't confront these gray rhinos and then provide strategies for how you can change your, your viewpoint to actually remove this paralysis and confront these gray rhinos that really are risks to you. Mostly in a business context, but obviously can be app at an, at a nation state context, can be applied at an individual context. In fact, she wrote a follow on book that was all about personal risk management called you are what you risk. But for me, you know, I know we've used it and we've created some, some gray rhino references in our OODA loop content. It really served as a great framework for thinking about those confrontable risks that need to be managed.

Right. And Matt, you may recall, I'm sure you do, the very beginning of this pandemic, before it was even considered to be a pandemic, something was happening in China and people were starting to speculate, could this be a coming black swan event? And I remember a conversation with you and we both talked about this. No, a pandemic is not a black swan event. In fact, specifically in Taleb's book the Black Swan, he calls out the fact that pandemics are not black swan event. You expect those. And when you interviewed Michelle Walker and you asked her views on the COVID pandemic, she became so animated and said, this is exactly what I'm talking about. This is a gray rhino. Everybody knew there was a risk of a pandemic. And she talked about the Bill Gates videos and the stand up of things in government to mitigate the impact of this. And it became the, I think, one of the most animated parts of that video.

Yeah, absolutely. Yeah. And that perspective resonated with me, you know, Jim Miller, you know, who is also another great udacast that we recorded. And I had, you know, 20 years ago now, a little under 20 years ago, done the defense adaptive red teams. And one of the key themes that we looked at and developed plans for were pandemic. So you know, it was, it was a risk that was acknowledged. We actually had done pre planning about how we would respond to it. So I think for those of us that had been involved so heavily in that, it really was catching us off guard with regards to the inadequacy of the response. You know, the refusal to kind of follow the playbooks, take advantage of the expertise that existed out there. I think that's a classic kind of gray Rhino. We knew it was coming and you know, when it emerged, you know, in reality, we didn't confront it appropriately. Right. And that'll be a case study for, for, for decades, if not hundreds of years, I imagine at this point.

I think you're right.

So this is great. So Uticast100, you know, encourage everybody to go back and, and watch the episodes that they've missed. There really are some incredible interviews there to check out the books that have been written by the Uticast folks. But we are not done. We're getting ready to kick off another series of Uticast. So you know, we. To episode 101 and beyond. And Bob, as a tool for, you know, our listeners and watchers to understand kind of how we're thinking about the world and the types of folks that we're going to bring on in the conversation that we want to have. Would you like to run through our kind of global threat and risk perspective that we just put out for our OODA Loop members last week?

Yes. In fact, in the, our list of risk and opportunities, many of these deal with both the potential of a black swan event, this thing that you cannot see coming, or a gray rhino, the thing that you really should be preparing for. And there's a lot of these require further analysis, but they're meant to facilitate a discussion and generate some awareness. One, a top geopolitical issue is the fact that great nation competition is transforming globalization. We wrote it that way because many are calling for the end of globalization. There's several best selling books right now that have titles like that and we're looking at that a bit differently. Globalization will certainly change and evolve, but there's no indication of a real collapse of globalization yet. Matt, you have views on that?

Yeah, I would, I would tend to agree. I think we definitely are seeing, you know, new lines being drawn, you know, new alliances. Maybe a little bit more of a global perspective on what is right and wrong and what is accepted behavior and how powerful nations use that power. You know, what norms are acceptable. And if anything, I think that, you know, globalization allows us for a more rapid collective decision making. If you look at the response to the Russia invasion of Ukraine, it was fairly swift and it was very coordinated and involved public and private sector participation. So I think you could argue that that type of response that, you know, although it didn't deter the activity in of its certainly set the table stakes for how globalization impacts collective decision making and collective risk management and collective norms around behaviors. So I agree. I think things are shifting. The world is way too Interconnected by way of economies, supply chains, technology and communications and transportation for there to be an end of globalization. For me, an end of globalization is a zombie apocalypse where we can no longer fly and, and we can no longer connect to the Internet. But it is going to transform, and I think it is going to transform based on different perspectives around behavioral norms and what we're willing to accept, you know, as collective nations.

Yeah. And clearly business leaders should continue to assess their supply chains, their dependencies on others, and continue to take action to mitigate risk. In this world of great nation competition.

What it's demonstrated for certain is that redundancy and resiliency need to be part of the model. Because if you assume that globalization continues across one static course, then you can build some dependencies that maybe don't represent risk. But what we've seen recently, not just with COVID but with some of the geopolitical conflict, even with just some of the kind of, what we call it, the economic conflict or economic coercion, is that we need resiliency, we need redundancy. And that is particularly painful in the supply chain area. We have had major impact on the US Economy and the products that we've been able to produce that are consumer products, cars and computers and other devices based on the global computer chip supply chain shortage that has highlighted the need, and we've talked about this and written about this in the site, the need for onshoring or more friend shoring or near shoring, or however you want to phrase it, I would say it is redundancy and resiliency in your supply chain. No single source of failure, no single relationship with a nation state that you're dependent on. You need to build that resiliency into the system. And we need to remember too, and this came up during our UDA network strata game on the global computer chip supply chain issue. Excuse me, that while an observation of car lots being empty because Ford or Toyota or whomever can't get the chips to build and complete those cars is something that confronts us. You know, you drive down the road and you see this, oh my gosh, the Toyota lot is empty. There is also a behind the scenes impact with regards to our ability to engage in advanced research. Our ability to engage in, you know, advanced biomedical research, which has a dependency on computer chips, the AI research that we're conducting, the data science and machine learning and kind of all those things in our space program all have these dependencies on computer chips that are, aren't, you know, visible to the average American. But impact our economy, you know, and our long term success. So we need to be aware of the fact that the risks are not just the ones that you see at the Toyota lot and Walmart or Best Buy, that they actually impact our, you know, long term gross national product and ability to resiliently engage in technology development as well.

I think that's well put. And I think the advice to every business needs to be you need to start with analysis, detailed analysis and visibility into your own situation and supply chains so you can take appropriate action.

Absolutely. And you know, we're big fans and we talk about it, you know, that you need to use these, the strategic tabletops and you know, war games or strata games as a tool because if you only ever envision your decision making with one potential path in the future, you're going to be subjected to a lot of gray swans that become black swans for you or black swans or potential impacts based on behaviors outside your, you know, direct control. So you need to develop resiliency in your thinking and you need to be thinking about kind of multiple outcomes. There are multiple paths that the world could take and you need to understand what the risks and the successes look like around all of those paths and plan accordingly or at least build the resiliency in your planning to be able to pursue multiple courses of reality. Right.

Matt, let's talk about food and food security too. You know, you can think of food as a product or you can think of food as a supply chain, but food is something far more important. Food is substance. You have to have it to keep going and you want to have it. And right now, because of all these pressures in the world, plus extreme weather, plus breakdowns in a lot of the suppliers of grain, including Russia and what they've done to Ukraine, there's a lot of indications that there's going to be famine, more famine than usual in just about every continent. Now in the US I think we will have it better than most. Even though throughout the Midwest and the west there's been a drought, we still are overall food producers looser. We may see impacts like maybe we don't get out of season berries. In many other places though, it is getting severe already and there's indications it could get worse. Sri Lanka, for example, riots there have resulted in the Prime Minister having to flee the country. In Argentina, with over 70% inflation, people cannot afford to buy the food they used to. Throughout North Africa, there are indications of coming famine. So this is getting very serious. And in our, one of our monthly member meetings, we talked about this. And although the general assessment was that humanity has gotten through famines before, humanity will endure. It would be extremely important if governments and businesses can find ways to shrink the famine. And I think there are smart solutions out there. It's just a matter of leadership to help improve the situation. And this includes distributing food better, quicker, faster, creating new ways to build fertilizers because previous fertilizer supplies are drying up and taking other actions like creating more vertical farms that produce more food, smarter for less energy. So we felt this was so important to raise as a risk that businesses need to think about because a lot of markets could be in turmoil. But also think about it because of the human factor of famine.

Yeah, no, I agree. It's one of those where, you know, we're closely monitoring it, obviously in continents like Africa and what the impact will BE in the U.S. you know, I feel like our perspective has been similar to that of inflation. You know, the early days it was, was it's going to be transitory and, you know, no, oh, no, now inflation is for real. I feel like we're experiencing that a little bit with the food shorty in the US I saw last week just my first mainstream media article that says, hey, we may have some impacts from this in the United States. So it is certainly something that we should be tracking. It is also another one of those areas where, you know, the globalization or the ability for leaders to move initiatives forward is important. You talk about access to fertilizer. Well, you know, the one of the largest known phosphate reserves in the world is off the coast of Mexico. It has been unmined for half a decade because it's tied up in NAFTA arbitration over who gets to mine it. You know, where the government's trying to nationalize it despite somebody else owning the mineral rights there. Being able to, to get through a problem like that and take advantage of that resource, you know, would put a country like Mexico that has a huge farming population that's really been struggling right now with access to fertilizer, even access to water from, you know, net importer of fertilizer to a net exporter. So every time we dig at one of these issues, I feel like there is, you know, some underlying aspect of the system that is introducing a lot of friction, you know, at the geopolitical economic layer around some of our ability to solve these problems.

Well, another one that is also big complex thorn journey that we wrote about is in this list the Russian invasion of Ukraine and its impact in Europe and globally. Now we've been tracking this issue for a year and a half. But when the invasion started, things played out that, frankly, were hard to predict. One thing that was a positive, I shouldn't say it that way. There's no positives of war. But one thing that was a pleasant surprise was that NATO stuck together, the EU stuck together, both becoming stronger. And many other open nations around the world also seem to awaken to the fact that not only is Russia a threat to peace and humanity, but so is China. And this is, I think, causing some waves in geopolitics that have not been fully impact. Have not fully impacted us yet. But I do see a stronger NATO, stronger Euro, eu. There's a new alliance between India, Israel, the UAE and the us which I don't think would have happened without the invasion of Ukraine by Russia. It's a realization in the, of the, the group, in the India, us, uae, Israel, that they're going to have to create solutions for food supply, water supply, energy to work together. And I really think that Russia's evil invasion of Ukraine is waking up a lot of countries to the fact that we need to do more to support ourselves. Do you have thoughts on the impact of the invasion overall?

Yeah. No, I agree. You know, it's, it's appalling to a certain extent, you know, because you feel like as globalization increased and we become more connected, that you hope, hope that conventional conflict like this, where civilian buildings are being bombed, that those types of atrocities and war crimes go away. So there's a couple lessons learned here, and that is one that hasn't happened. You know, conventional conflict is still a thing. And actually, in our UDA Almanac in January, we talked about the resurgence of conventional conflict and confront, confronting the realities associated with that. And I think this is a perfect, perfect exemplar. You know, conventional conflict is, is going to continue and we need to recognize other, you know, what adversaries would view as zones of opportunities for future conflicts that look like the Ukraine. And I think, obviously we need to keep a close eye on Russia, but we also need to keep a very close eye on what's happening with China. I do believe that part of Russia's intent was to test the NATO alliance, and the fact that it is getting stronger as a result is a net positive. Again, you don't want to associate any sort of positives with conflict, but I do feel like that there maybe, you know, was a potential pathway the Russians envisioned where NATO just couldn't pull it off. And a weaker NATO is a stronger Russia. So the resolve that we've shown internationally the resolve that NATO has demonstrated. The stepping up of some of the other Nordic countries as well, I think will help us build stronger international institutions that are able to confront some of these conventional conflict risks in the future. And the other thing I would highlight is it's clearly demonstrated that our response doesn't have to be in the form of military aid. I mean, it's been an unprecedented economic response via sanctions and supply chain and other impacts that go after the leadership and the oligarch structure. So we've shown that, you know, we don't have to have a, you know, the resolve to actually go in and engage in conventional conflict, that there are other tools available and that those other tools, when applied collectively amongst a bunch of nations, can be very powerful. Right.

And, Matt, another point is, I think when individual companies also were making their own decisions, regardless of what their government was doing, because they realized this was wrong and did not want to be seen as supporting this invasion of the Ukraine. And I don't think we've ever seen anything like this on that scale anyway, where so many companies made their own decisions before their governments even did to pull out or to change or shape their business in different ways. And I think it's something that businesses ought to keep in mind. I think it was a good thing we do.

I mean, we talked about, you know, Even back in 2020, the increasing role of. Of corporations from an international power perspective. It has a lot of analogies with science fiction. Right. We're not living in a Neil Stevenson world right now or declaring citizenship to, you know, a taco shop or whatnot. But we did see this during COVID as well. Right. As an early indicator, a lot of the large companies, particularly the tech companies, took action before the government did. They provided for, you know, emergency bonuses and things to help employees survive prior to the government issue, issuing subsidies. They issued local grants to businesses around their campuses that they had closed to make sure that they would survive. So we are seeing, you know, this increased role of corporations in national and international politics. And I think the situation in Russia was just a further articulation and strengthening of that. Right.

You know, another we ought to talk about is, and this is perhaps the biggest gray rhino out there there, the, the weakening economy of China. Now, we started writing about this well before the pandemic. The fact that there are indicators that China's economy is going to weaken and it's going to weaken faster than many anticipate. Now, during the pandemic, we saw, you know, frankly, it looked like they had a great response and then their response fell apart because frankly, their vaccines don't work so well. Well, just accelerating a weakening economy in China over the last two weeks, we have seen their real estate market continue to collapse. Their banks and their version of credit unions go into default, shutting people out. We've seen tanks on the streets surrounding banks to keep people from coming in and getting their own money. We've seen protest during lockdowns, extreme lockdowns, months. So all of this contributing to shutdown of supply chains, ports have been shut down. And this is on top of the fact that China already is facing a demographic time bomb where more and more of the older generation have to be supported by fewer and fewer of the younger generation. Which means long term things are not looking good for China, short term term things are looking bad. And this is important to think about because the number one driving force for the Communist Party of China is to maintain power over their populace. And if they can't feed and support their populace, it could be a threat to the party. If there's a threat to the party, they will try anything, they will do anything to stay in power. And it really is a situation that bears wide watching.

Yeah, I agree. This is one, though, where I see multiple pathways. Right. What we've seen is, you know, an authoritarian version of capitalism. And while that was successful when you could not have the transparency from the global market perspective, they were able to use that to rapidly grow the economy. And now that there's more transparency required, now that there is more interconnectivity and supply chain and interdependencies, it's given the world of view with regards to, you know, maybe the scaffolding that's holding the roof up on the Chinese economy. And there's definitely risk there associated with that further deterioration. There are, you know, two other angles from, for me personally that I track as it relates to that is one, desperate times allow for desperate measures. So if the economy continues to deteriorate, I think it increases the potential for regional conflict because they will do something to kind of demonstrate their, their great military power. And they certainly have focused on that over the past couple of decades as well. But then I would paint, you know, if we're doing our scenario planning, I would paint a picture where we say, okay, there, there are definitely issues there, there are definitely problems to confront, but they are a pretty robust and resilient society and maybe there is a way for them to ad out of this. Now, it will require a little bit of a shift in leadership, a Little bit of a shift in focus, but I do see a pathway out based on just how productive they've been able to become, just how quickly they've been able to transition people from these kind of rural farming, subsistence jobs to contributing to the overall economy. So there is, if well managed, I think, a potential scenario here where they do carve their way out of this and build some additional resiliency. Whether that is, you know, something that is allowed to transpire under the current leadership regime, the current leadership structure, I think remains to be seen. But I think there's probably two net negatives and a net positive, you know, in my outlook on the Chinese economy.

Well, maybe this kind of thing calls out for some scenario planning where maybe it's another workshop in a strata game where we come up with several realistic futures that could unfold here and then look for pros and cons and actions we should take based on those to inform business decisions. Because it is going to be very hard to predict, which means scenario planning is probably an important step.

Yeah. For me, the most interesting issue around China is what set of circumstances keeps them in check with regards to conflict in the region and expansion of the regime. That, to me, I think is kind of one of the number one questions that remains to be answered. The response to Russia invasion, the Ukraine, I think, has provided a bit of a deterrence because they recognize it would be a very painful path and maybe they want to suffer the pain because they feel like, you know, the end state outcome would be worthwhile. But I think the calculus has probably certainly changed for them over the past six months with regards to some of their regional, you know, expansionist initiatives.

That's one where, of course, I don't know, but it could be that Xi looks at Putin and sees that Putin has never been stronger and more solidified in, in power. And so maybe adventurism overseas, maybe an invasion of Vietnam might solidify his power. And it's the maybes we need to think.

And that's the risk with authoritarian regimes and centralization of power. Right. And we saw that with Putin. And that's another great udacast that we did with Scott Shumate, where we did the psychological profile of Putin. It is tough when you have a global geopolitical environment that is so dependent on single person personalities. Right. Like, it is almost incredible to me that we would have two global powerful nations, the different scales of power, where the centralization of the decision making is so singular. And that certainly represents a risk because you're at the whims of Those individual leaders, the lessons that they're learning from what's happening in the world. You know, it becomes harder to predict the activities of a system if it's comprised of an individual as opposed to, you know, a collective of individuals and some transparency that is associated with that. Right.

Let me mention another one, Matt, and this is one that our UDA Network member, Dr. John Sullivan has really helped bring some visibility to and understanding to. And that is the fact that there's a convergence in many parts of the world world, a convergence of crime, insurgency, corruption and extremism. And this convergence is being driven by technologies. So it's a networked extremism plus the convergence of crime, insurgency and corruption. Businesses need to be aware of this because it could transform the threat environment. It can also. This kind of corruption can influence policy and regions, unfortunately influence markets. It can also impact your own workforce. And so it really requires tracking and thinking. This convergence of crime, insurgency, corruption and network extremism. I know you followed this for decades as well, but what do you see in this trend?

Yeah, absolutely. I mean, it's a trend line which I think is one that is fairly easy to predict. I don't think we have potential alternative pathways and that is that we are going to see a different additional convergence and it will be a lot of technology driven convergence. And you know, if I'm a CEO, I need to understand where that convergence again, you know, as you mentioned, might impact me from a risk perspective, but also need to start thinking about the technology risk associated with that. Is there a way for a bad actor to get access to my supply chain to understand where they're going to hijack trucks that have high value pharmaceuticals and things of that sort. Right. This convergence of this criminal actor space in this, you know, more interconnected marketplace associated with illicit goods and, and crimes and drugs etc, is only becoming more robust. So it's definitely something I'll continue to track. I know I'll certainly be relying on John's insights as we move forward to understand, you know, how that is increasing over time.

Right. Let's move to some cyber risk trends. One that we put in our report was this dynamic now between geopolitical risk and cyber risk. Now you and I have tracked this for a long time. You know, back in the mid-90s, in the, the Bosnian wars, there were minor hacks and, but that was not really a, a major cyber movement for me. It was a, the Hainan island incident when a US P3.3 was forced down in 2001. Watching the hacking around that was different and new. Clearly state sponsored hacker and hackers and groups. And ever since then, for the last 20 years, we've seen more and more connection between geopolitical events, state sponsored cyber conflict and state sponsored cyber manipulation. And clearly this trend is just accelerating. Which means all these geopolitical issues we just reviewed are going to have cyber components.

Absolutely. And we need to be planning for that for certain. I mean, there is no decoupling at this point between the conventional geopolitical conflict and the cyber conflict. In fact, the cyber becomes maybe a more exacerbated element of that, that because it is a strategy that some countries will deploy without the geopolitical component to it. Luckily, you know, I also feel like from our collective defense perspective, we're getting a little bit better at state led response. I've been incredibly impressed with the work that CISA has been doing under the leadership of Jen Easterly with the Shields UP program and you know, the, the critical vulnerability database and just the, you know, the outreach that they're conducting with the private sector. Because this is one of those issues where, you know, your headquarters is probably never going to be faced with a foreign adversary's tank trying to blow off its doors, you know, unless you have a large geopolitical risky footprint in your business. But your cyber front door is going to be confronted every day with nation state level cyberpower potentially. So the defense and intelligence and readiness and resiliency piece of this becomes critically important. And I'm one of those folks that as you mentioned, we've been tracking this. For me, this is my 30th year involved in cyber war, cyber conflict in one matter or another. And I've retained an optimistic outlook. We are building these new technologies. We need to build more security into the system, but we certainly are understanding role that they play in national security. And I feel like now bringing in the leadership and the approaches that are helping us improve our collective defense overall. Right. So if you're, sorry, if you're a business and you're not paying attention to what CISA is doing and the information that they're putting out, you know, just as an exemplar of one organization, it's kind of shame on you. That is your, that is your shield against the gray rhino that you should be taking advantage of.

Absolutely. And then one, one in particular that we call out in our report is ransomware and how ransomware is evolving and will continue to evolve. The technology of ransomware is evolving, becoming more sophisticated and the business models behind ransomware are continuing to evolve. Which if the, as the business model evolves, it means that the bad guys behind this can elude capture and can continue to innovate. And this threat from ransomware really is at a pain pandemic level. And it requires continuous vigilance to keep the ransomware out and an ability to respond once it gets in. The evolution of ransomware is moving so fast. I think what's required is a way to outthink the adversary and try to figure out their next step and block them from that. But that's so easy to say and hard to do.

It is, yeah. There. There is no better exemplar of how, how cyber security is dependent on resiliency and redundancy than with ransomware. Right. In a perfect world, our cyber defense initiatives in our organization help us prevent or limit the impact of a potential ransomware attack. However, you know, if that's what you're solely relying on, you might be subject to some very unpleasant surprises where there are new vulnerabilities that are released or new capabilities. And really, the way to have a more robust defense posture is to make sure you have that resiliency and the redundancy that you have an ability to recover, that the data is stored somewhere that is protected from the ransomware attack. And yes, it becomes an inconvenience, and yes, it becomes costly to response to, but it doesn't become catastrophic. I think the issue that we're facing right now with the current ransomware problem is that when ransomware targets some of these organizations, it is incredibly consequential or catastrophic because they don't have a recovery plan. They're dependent on paying the ransomware, they're dependent on some sort of third party incident response to help them navigate through this. And a lot of times there isn't a clear path if you don't have that redundancy and that resiliency built in. And also it is one where we need to capitalize on the establishment of some of these international norms around conflict and crime and do a better job job of kind of, you know, putting pressure on the financial structure, ecosystem associated with ransomware. You know, the cryptocurrency environment was a huge boon for the ransomware industry. I've talked about that on prior uticasts. But at the end of the day, you know, despite how robust that, you know, environment has been built, and I know that's a topic for future discussion, these actors want to move their money into regimes that are stable and economic institutions that are stable. So there's more that we can be doing to track and kind of squish the outflows of ransomware where it gets stuck in, inside a cryptocurrency or it's not able to move, you know, or we have full transparency on where it is moving and applying appropriate pressure from a law enforcement perspective to make sure that we target some of these threat actors.

Right. Another that I think you put very well on the topic of innovation is the lack of security. Innovation perpetuates continuous attacker advantage.

Yeah, this is a, you know, and I've been struggling for months to, to put this on paper, but my perspective right now is that the cyber security industry has done incredible things. The fact that the system hasn't burned to the ground, you know, our collective networks haven't burned to the ground, is a testament to, to the labor and intellectual power and just the resolve that we've put into trying to keep these imperfect, insecure systems more secure. But if we're honest and reflect back over the past 20 years, my argument would be that we've been in the middle of a cyber winter. We have really not sufficiently innovated our cybersecurity approach approaches. Any technology that you throw at me, and I've done this in front of live crowds and on our UDA network calls and, and with peers over. Over glasses of whiskey, is simply an iteration of something that existed 20 years ago. It is an improvement. Right. It allows us to do the job better. But really what I feel like if we're going to make sure that the system doesn't burn to the ground, is we need entirely new approach approaches. We need to, you know, be thinking way outside the box and not be looking for these incremental improvements. And that means that we need to rethink about how we do business on the Internet and what does it mean to interact as businesses over these networks. And I think until we address some of those fundamental challenges and really disrupt our thinking, we are in for a long haul from a cybersecurity perspective. And it is a battle that, you know, will be tough to win because the attackers are able to innovate. Innovate. They are able to take advantage of these new advances. And we need to make sure that we have, you know, at least a parallel track to counter that innovation ourselves from a cyber defense perspective.

All right, Matt, let's transition and talk about some technology trends here, because we capture five in our report of risk and opportunities. And I think this is where there's some huge opportunities for business if they can mitigate the risk of these and the first one was the fact that it's the convergence of these technologies that are producing the risk and opportunities. And this convergence of technologies is enabling a refactoring of work and a new digitalization. This is allowing organizations to re architect and rework their business model to create new capabilities and bring those to market markets and assess new markets. So and it's the convergence of technology. We specifically hit on that because it's not just one thing, it's how that one thing relates to everything else. Whether it's in the network or it's your new cloud computing capabilities, or it's the emerging computer quantum computer capabilities, or the sensors and IoT devices. It's not just one, it's all of these things together. I think the important point to make here is as we look at these converging technologies to create business impact, we need to think about the security components and mitigating the risk. It's great having 5G, 6G Wi Fi 6. It's important to think through the security dynamics of that. For example, it's great having automated robotics in your manufacturing plant. It's important to think through who's controlling those robots and can they be changed. So this convergence is the critical trend.

Yeah, no, I agree. And you know, the, the convergence has allowed for a great amount of adaptability and merging of capabilities and the economic opportunity associated with that. But we do need to build in security from the beginning. I mean, this is, I'm a broken record with regards to how many times I've articulated this. But you know, know, if, if you're building a new robotics factory or a new medical testing device or you know, some new technology, you have to have security involved in the program from the beginning. We can't continue down this production lines of, you know, we build a technology and then we try to retrofit security. It needs to be an active participant and it probably needs to be a very active component of the budget. I don't know what the right number is, but it's probably like, you know, 10, 15, 20% of any new technology development initiative needs to be allocated to security so that you are building these things robustly. So the convergence is great. But convergence also introduces vulnerability. So we need to be, be modeling that out and we need to be conscious about how we are going to manage those risks and make sure that security has a seat at the table. Because our ability to derive long term benefits from these technologies, from the convergence of technology is incredibly dependent on our ability to keep them secure and trustworthy. It doesn't necessarily have to be that a cyber attacker takes down your system. If you are building things that allow for the erosion of public trust in what you've built, that obviously is going to have a very impactful consequence on your business as well.

Another theme that we captured in this report and we write about fairly extensively on our site is the trend towards automation. And this by, we say automation, not just robotics, although robotics is important, but also the process automation. And this trend is occurring at the same time when new sensors are being fielded, new communications paths and all of this is providing positive benefits that are going to allow a lot of businesses to re architect. It's also accelerating the reshoring of manufacturing back into the U.S. one statistic our research revealed was that the sales of industrial robotics are up 40% in the first quarter of this year, which is dramatic and is an indication of this big wave of reshoring and automation.

Yeah, and that, you know, the automation and the introduction of these advanced robotics allows for economic development. I mean the reason that we offshored that is because we really didn't have the labor environment in the U.S. u.S. To allow for, you know, the rapid development and of some of these factories and the huge human labor capital cost associated with that. So to the extent that we're able to take advantage of technologies as the differentiator in that space, that means that we can reintroduce those from an onshoring perspective to be items that are produced in the United States. I think Tesla is a great exemplar of that. Right. Just the, the drone fly through of the Tesla factory to me was incredible. I mean the, there's, there's just a handful of humans. Right. You know, the robots are kind of completely constructing those cars in a way that's, that's, that's very robust and resilient and has proven to be scalable in what is one of the, you know, hardest in industries to be a new entrant. Entrant into Tesla has excelled. So I think we'll see that approach applied, you know, not only to physical manufacturing but also to what we would call some of the digital manufacturing and the coupling of sensors to make business processes more efficient or to understand the environment. So you know, for me, the next phase from an IoT perspective is definitely a data science, machine learning phase. We've built the sensors, we're collecting the data and now it is going to be how do we conduct the analysis to derive the benefit and adapt our behavior and you know, how we build things and conduct business based on the output of those sensors. All right.

Another that we ought to talk about, Matt, is the Metaverse. A lot of people are talking about the Metaverse now. I, I, I, I did a search on the site and Metaverse was first mentioned@ooda loop.com in 2003. You had a research analyst who was tracking those kind of topics. So the Metaverse is also a term that, you know, you mentioned snow crash earlier. The first use of the word metaverse was in Neil Stevens book Snow Crash. And then a lot of folks now got excited about the concept when Mark Zuckerberg said he was going to transition Facebook to be a Metaverse company. There's a lot of investment occurring right now to build this next generation of the Internet. We have been writing about the vision, what it can be, how businesses can move to there, and some of the risk associated with the metaverse, including new ways of conducting cross Prime. But it's the business impact that I like to focus on. New ways of doing commerce, new ways of exchanging value and new ways of doing analysis as well as new ways of enjoying life and having entertainment.

Yeah, yeah, we're, you know, obviously still early stages of the, the developments are kind of rapidly accelerating and I think we'll see see new entrants from a metaverse defined as a fully immersed environment, but then a metaverse that also serves as an overlay for the real world through the augmented reality and some of those technologies. Lots of thoughts here. I think the impact on business will be relatively profound, especially in a post pandemic world where we do have this ability to work from home. But what we've found is that the working from home and the interacting over zoom, you know, et cetera, lacks some of that human component, that human interaction. And I think the metaverse will be viewed as a way to collaborate and engage in brainstorming and communication and other ways that are a little bit more productive than just a 2D interface. Huge privacy and security implications though as well. I mean, we're concerned about how our mobile devices are tracking us now. We're concerned about how cookies are tracking us from website to website and what some of these, you know, big e commerce sites are doing with our data. That level of data privacy impact in the metaverse is even more profound. You know, now you have the ability to track somebody's gaze, where their eyes are and you know, where that exactly correlates to what they're seeing in the metaverse. And that'll be used to, you know, not only understand them from a psychological perspective, but to manipulate them from a consumer perspective. So from, you know, my viewpoint, the best advances in the Metaverse are going to be coupled with another item that's on our list which is the, the blockchain technologies which will allow us to maybe, you know, introduce technologies that, that have a little bit more digital self sovereignty associated with them. John Robb and I had, you know, great Uticast where we talked about digital self sovereignty. So I'd encourage people to go watch that, that it's come up on other Uticasts as well. But I think we need to build those types of capabilities in the system where I interact in the Metaverse. But I've got granular controls over the data that's collected about me and, and how it's used. And the other piece of it too is, you know, how do we represent property? And the blockchain is showing itself to be, you know, fairly robust component of that. Not only for what does property look like? You know, here I have a piece of land on a street, but what intellectual property looks like. How do authenticate that I am wearing real Nike sneakers in the Metaverse? Well, it's because those sneakers are an NFT that is verifiable and they were minted by Nike itself. Right. So lots of interesting things that are going to happen there. I still, you know, think that we're, we're a ways away from a comfortable immersive environment. But I think the augmented component of that, where, you know, maybe you're overlaying in your current view an element of the Metaverse, or you have this blended convergence of the physical and digital world, I think becomes interesting. I was an early Google Glass user as part of that early adopter program. I love the technology and I see that that's coming out again. Microsoft obviously has their HoloLens initiative. It's alleged that Apple has augmented reality. So I think that'll be the stutter step. And then my last point on the economic opportunity associated with Meta Metaverse. I don't get real excited about the companies that are building the Metaverse environments, you know, the people that are giving me the avatars and creating the conference room for me to sit in. What I think becomes fascinating is those companies that are going to focus on the API layer with real world data. How do I pull in the data about Bob Goerley? You know, because either I recognized his face through my Google Glass augmented reality or I'm interacting with him in the Metaverse or how do I build it? You know, data, almost Oracle type data like we see with the chain link in the blockchain world that allows me to interact with the real world while being in the metaverse. So I think there'll be a fascinating suite of technologies that emerge there over the near term that'll be fun to watch as well.

Right. Well, let me just say that, you know, we don't have the metaverse yet, but we have hints of what is coming. For example, Fortnite is not the universe, but, man, it's a huge hint. Hint at things that are coming. And same with Roblox. And another early, early hint was Second Life, which is still around. And I want to mention Second Life because they were also a pioneer in a digital store of value. They were Linden Dollars, as you recall. And so this is an early attempt at, like, a cryptocurrency. But the problem is that is just in Second Life, we need an interoperable store of value that will cut across the entire metaverse. And that is where the cryptocurrencies come in, something that can be easily exchanged if it's not the single common denominator. Which leads to another assessment in our list of technologies here, you phrased this one as creative destruction in the blockchain environments. Is your description of what's happening now.

Yeah, one last transition thought. You know, now that you mentioned Second Life. The reason Second Life was so successful years ago wasn't because I could log into Second Life and play a game. It was because they just presented you with a virtual representation of a world to do what you will. So people built nightclubs, IBM built an island for people to collaborate. Universities built campuses. There was no defined right way to exist in Second Life. There was no defined path with what you should do. So I think the successful metaverse technologies that get adopted will be ones that mimic that. We're going to want to replicate what we do in. In the real world in the metaverse. So, sure, yeah, we're going to want to play games and watch movies and do that fun sort of stuff. But it's going to be the collaboration and the real world kind of, you know, sense of existence is going to be interesting. We mentioned the tie into blockchain. I still am incredibly long on the value and disruptive potential associated with blockchain. You know, web, three NFTs, et cetera, that entire ecosystem. Ecosystem. Unfortunately, what we've seen over the past two years is such a rapid acceleration of those technologies because they were so accessible in a completely unregulated environment. You know, for something that has such a nexus to Real world fiat currency that we built this, you know, kind of incredible house of cards, and I call it creative destruction because I really do feel like the underlying technologies that exist have incredible promise. The business problems that they're going to solve, that they're going to allow for automation, the transparency that they're going to introduce is still going to be incredibly disruptive, but we need to let a lot of the current ecosystem kind of die off. The analogy I often use is, you know, we, we need to let the house burn to the ground, but the foundation is still good, and we're going to build a new house on top of the foundation. So it has been an environment, unfortunately, it's been ripe with fraud, it's been ripe hype with poor design, poor technology. You know, the introduction of concepts like an algorithmic stablecoin, which I know you and I talked about, we could never wrap our heads around that, yet attracted hundreds of billions of dollars in investment into the ecosystem. That stuff all needs to kind of get. Get washed out with the tide and, you know, we'll see who's still standing and we'll build solutions on those underlying technologies. So still very long on the disruptive potential. Still a big fan of multiple components of the ecosystem. I just feel like we. It is a necessary transformation that unfortunately is very destructive and very painful. That is happening right now and needs to happen.

Yeah. Another component that we frequently write about on our site is the lessons learned when it comes to crime. In cryptocurrency, we track every major breach, every major incident in our cyber incident database so we can look for root causes and try to capture lessons learned so those that are building new projects and trying to secure old projects can benefit from these lessons. And it's amazing to me how many projects have not learned the lessons of traditional cybersecurity when they are fielding a cryptocurrency project.

Project. Yep. And that will be a differentiator because this is an area where we have seen just incredible innovation on the attacker side and the way that they're able to exploit the poor design of these systems, it comes back. And if you hang out with, with us and the UDA network enough. This is a recurring theme. We talked about this four years ago with the emergence of a lot of these corporate AI initiatives, that there is tremendous benefit to be derived, derived from those technologies, but that you have to build the security in from the beginning. And back then we provided a road map for how do you think about security in AI to make sure that you're able to Derive the business benefits, but then minimize the vulnerability and the risk associated with that. In some of them are just lessons learned from 20 years of securing critical infrastructure. Because, you know, a system running AI is still a system that has an operating system and has network connectivity and pathways that you need to secure. And there are common methods that we'll use to do so. Some of them are a little bit more innovative, securing, you know, robustness of the algorithms that you're using in your machine learning, the resiliency and integrity of the training data. Right. So we provided this model for how you need to think about cybersecurity and AI. We have also provided a similar model for how you think about cybersecurity and blockchain and web3.3. And again, it's those same types of foundational elements. Your, your NFT is likely deployed on some sort of cloud server that needs to be adequately secured, that has AWS key pairs that need to be secured. But then there's new elements of it, similar to what we saw with AI. You are writing smart contracts. You need to take an adversary perspective to those contracts and review them for the potential for somebody to exploit them and do harm. You are building interactions with other elements of the ecosystem. You know, whether it's some of these APIs out to the real world or interaction with other blockchains or other cryptocurrencies, you need to make sure that the mechanism by which you're engaging in those interactions is also secure. And then the, the management of the, the underlying organization associated with it, we're still seeing attacks. And if you look at that database, there are still people that'll go and eng phishing attacks against executives or technologists in these firms that have, you know, what we referred to as kind of the multi sig authority, where if you get enough of their keys together, you can make changes to the underlying code and they're successfully social engineering them and getting those keys and engaging in this large scale fraud. So it's happening where individuals are being social engineered out of cryptocurrency value, but also institutions are being social engineers engineered. So the one thing you know, if this is a space that excites you and you feel like your organization is going to derive value from these underlying technologies, have a conversation, bring in experts again to think about cyber security as part of the design process of what you're building.

You know, Matt, this is a good segue into our concluding section in this report, which is strategic actions. You know, every business, every government organization, every individual is different. And you will need to tailor this action list for you. But we list several that are kind of the, so what, you know, what do you need to do because of the geopolitical environment, the cyber risk and the technological changes that are underway? We list three broad overarching actions. The first being improving your decision intelligence as an organization. Something that you and I have helped companies do for years.

Years. Yep. Yeah. And I'm going to make a blatant plug for the work that we're doing with OODA Loop, where we are, for our members. You know, it's a member based structure providing that decision intelligence. We're tracking these disruptive technologies and the impact they could have on your business. We're tracking what's happening in the cyber security threat environment. We're tracking what's happening in the geopolitical environment. And we're doing so in a way that is, you know, you know, completely objective. You know, we're not, our research team are not journalists. We're not being paid by sponsors to cover a particular topic. We're covering it because it represents information that our members need to make decisions about the future. So if there's any one way where, you know, if you've gotten value from the Uticast and you would love to interact with the people that we're interviewing in this collective community of experts that are, you know, the people in the room thinking through these, these risks, take a, take a close look at what we're doing with the OODA Loop and become a member there. Because that, you know, from our perspective is the number one value proposition that we're providing out to the broader community. Obviously we're still directly consulting and working with CEOs and boards of directors and, and happy to help out in those engagements. But I view the OODA Loop as a collective endeavor. The members drive the research agenda. The members meet once a month and the membership is comprised of some of the top subject matter experts in the world, along with executives, you know, current and past executives with lots of great perspective, lessons learned, questions and observations about the world.

You know, Matt, that hits on our second action very, very well, which we had spelt out that to mitigate these risks, you really need continuous, thorough, informed, informed action. Not just if it's a cyber risk, not just action by the CISOs, if it's technological risk, not just action by the CTO, if it's a geopolitical risk, not just action by your chief risk officer. The leadership team needs to be informed so they can take continuous action. And I, I think you Hit that very well.

Absolutely. I mean our, our company is named after the OODA Loop for a reason, right? It is a loop. It is not, not a single cycle. It is a, it is a recurring loop. It is a constant process. And if you're going to survive and thrive in today's environment, you need to be, you need to be doing this dynamic, you know, decision making. It can't just be static decision making.

And the third action we call out in our list is the all of this. This is really an age of uncertainty and ambiguity and avuca world. All of this says scenario planning is of critical importance to informing your actions. Scenario planning being the creation of realistic future scenarios of what may come to pass so you can build action plans to better position you for whatever happens. All of this that we've been through in this document calls for the need for more professional, rigorous scenario planning planning for organizations.

Yeah, yeah. And it's, you know, we have the quote on our UDA.com website, right that you know, all of our information is about the past and all of our decisions are about the future. And the scenario planning is just a useful tool for you to, to test different decision making scenarios around different futures and potential different outcomes. Right. So you're thinking through a number one, you know, how do I take advantage of opportunity that exists? You need to be thinking through the scenarios associated with that. How do I manage the risks that I'm going to be confronted with, thinking through what those risks are, what those future environments look like and what actions do I need to be taking now in order to confront and manage those risks. So you know, it is an activity that we, that we highly encourage. We do do some of that with our membership at OODA Loop as well. We did what I thought was an incredibly robust strata game on the global computer chip supply chain and also in our monthly meetings confronting some of these issues with the membership just in ad hoc conversations and thinking about these future scenarios. So it definitely is a tool I feel like organizations should be taking advantage of. The cost to potential downstream impact is exponential. You're not paying of a lot lot to think through these scenarios. How you would make decisions, how you manage for future risk based on a. The risks you're able to avoid and the opportunities that you're able to exploit.

Right.

And I guess, you know Bob, in closing and Amazingly we went 90 minutes and I bet we could go another 90 minutes just talking about the, the great Uticast first. Thanks everybody for your support. We encourage you to subscribe, you know, if you're just an occasional watcher of the utic, that's fine. But if you subscribe, it helps us expose new audiences because we are dependent, as all others are, on the YouTube algorithms and people associating us, you know, with other content that they're finding valuable. So we certainly would encourage you to do that. Check out what we're doing at OODA Loop. Check out the list of books written by our oodacast authors. Certainly some incredible knowledge contained in there. And last, lastly, on October 18th, we're going to bring this collective community together for Utakan. For those unfamiliar, we were planning to hold an Uticon in March of 2020 and had to cancel it. And we've been keeping people excited and informed and drawing on this perspectives of all these great folks that we're interviewing through udacast. But the reality is that if you want to meet them in person and see them on stage stage and talk about what the the issues and risks and opportunities are over the next five to ten years, come join us in the Washington, D.C. area on October 18th because that's what we'll be focusing on. So you know, the the details around UTACAST are@UDA.com and we'll also link them in the show notes below. So thanks, Bob. This was a great conversation and I look forward to recording our episode 200 Look Back.

All right, thanks Matt.

Take care. Thanks for listening to this OODA Loop production. For the latest analysis on cybersecurity technology and global risks, please visit www.oodaloop.com.