This newsletter adapts the talk I gave yesterday at the Xponential Europe conference in Düsseldorf, Germany.
There is a temptation to view the current U.S. defense market as chaotic.
What we see isn’t chaos.
It is concentrated movement in a specific direction.
If you are using a 2026 playbook that was developed even a few months ago, it’s already out of date. The system is being reconfigured in real time — what I describe as rebuilding the airplane in flight. It’s important to look deeper at what’s happening before our eyes.
What has changed is the alignment of forces.
Right now, five forces are aligned in ways we have not seen in thirty years, creating a defense demand signal that is likely to remain wide open for the foreseeable future.
The companies that understand this moment will find opportunity.
While those that mistake headlines for structural change may struggle to gain traction. Where should you look more closely?
3 Structural Changes
Three changes are shaping how companies must approach Washington today.
First, speed is no longer a slogan, it is a metric for government and must be a KPI for you.
Decision timelines are compressing.
Documentation burdens are being reduced.
Portfolio structures are replacing slower program requirement structures.
The emphasis is increasingly on rapid prototyping, modular architectures, and the ability to scale production quickly.
Second, the government is behaving more like an investor.
Decision makers are asking familiar venture-style questions:
- How quickly can this capability scale?
- How resilient is the supply chain?
- Does this investment strengthen the industrial base?
- How quickly does capability translate into operational advantage?
The language of return on investment has moved from Silicon Valley into the national security environment. Failure to answer these questions early will waste time and likely derail your effort.
Third, government deals are funded, not sold.
Executive orders, declarative announcements, headlines, and pilot programs can create the appearance of momentum. But contracts require appropriated dollars positioned in the right place within the existing budget structure. Companies that track where funding actually sits (rather than where attention is focused) consistently outperform those chasing press releases.
4 Fiscal Years Are Always In Motion
One of the most common mistakes companies make is focusing exclusively on the current budget year.
In reality, four fiscal years are unfolding simultaneously:
- FY26 is executing now
- FY27 is being shaped in Congress
- FY28 is being built inside the Pentagon
- FY29 is where new ideas are formed
Many firms enter the process at the execution year because that is where visible contracts exist.
But by then, much of the real positioning has already occurred.
The companies often cited as success stories such as Palantir, Anduril, and SpaceX, are not simply responding to RFPs. They are stark exceptions that prove the changing rules. They are also shaping requirements, influencing budget lines, and aligning policy discussions years in advance. Don’t overlook the levels of risk and political leverage they are deploying; those are competitive advantages, but not a reason to chase their model.
This is why narrative velocity is not the same as structural velocity.
Headlines move quickly. Bureaucracies move deliberately. Understanding the difference is a competitive advantage.
5 Forces We Have Not Seen Aligned in 30 Years
Several large-scale dynamics are reinforcing one another:
- Acquisition reform is accelerating decision timelines
- Regulatory reform is reducing procedural friction
- Budget expansion is increasing available capital
- Industrial recapitalization is strengthening domestic capacity
- Geopolitical acceleration is reinforcing urgency
Any one of these would be meaningful.
Together, they create unusual momentum.
We have seen acquisition reform cycles before.
→ Who can forget Better Buying Power 1.0, 2.0 and 3.0?
We have seen budget growth before.
→ But not this percentage growth.
We have seen geopolitical tension before.
→ But not multi-hemisphere kinetic operations at once.
What’s different now is their convergence.
What This Means for Companies
This market rewards boldness, but it punishes undisciplined optimism.
Proximity to headlines does not equal proximity to decisions. Proximity to the White House does not necessarily mean proximity to program funding.
The organizations gaining traction right now are those that:
- Understand where funding sits before pursuing contracts
- Engage across multiple fiscal years simultaneously
- Align capability development with industrial base priorities
- Recognize that policy influences capital allocation
- Build U.S. presence intentionally and credibly
This is a learnable process.
Many international companies have successfully positioned themselves to compete as fully integrated participants in the U.S. market, often through partnerships, acquisitions, joint ventures, or targeted investment in domestic production.
The opportunity exists. But it requires adapting to how Washington actually works.
A simple question worth asking:
→ How much of what feels obvious right now has not yet been integrated into how your company operates?
Because the companies that align early tend to benefit disproportionately as funding begins to flow.
The defense demand signal is strong for the foreseeable future.
Understanding the structure behind that signal remains the differentiator.
Are you interested in going deeper into the 3-4-5 brief? You can access a narrated slide deck from the Xponential Europe presentation I gave in the Capitol Currency® program (For a limited time, give it a try for free).
Here Is Where I Plug In
If you are trying to gain federal funding, or shape outcomes before it’s “real,” that is exactly what I help you do. I orchestrate sound positioning early.
Contact me here and tell me your primary target and message. I will personally respond with where your strategy is strong and where it is vulnerable.
Cleared Hot:
Not yet ready to work together? Read my latest book, digital copy for free here, or Kindle/Paperback on Amazon.
I wrote Cleared Hot because too many great teams treat their first award like a finish line. It’s not. It’s clearance into new airspace.
In military aviation, “Cleared Hot” is the final call before decisive action. In federal sales, it’s the moment when preparation, alignment, and confidence converge, so you can execute with momentum, not just hope.
In Cleared Hot: The Flight Path to Sustained Federal Funding, I share the flight plan I’ve used with defense companies to move beyond survival and win again and again.
