The Defense Intelligence Agency is getting ready to spend big on artificial intelligence and machine learning companies with the opening of a wide ranging funding opportunity. Read more
Former DIA CTO and Cognitio co-founder Bob Gourley joined TandemNSI founder on Forward Thinking Radio to talk about the cyber attack that shut down popular websites like Twitter and Etsy last Friday. Read more
Washington Business Journal: Ready, set, go: You have 5 minutes or less to pitch your product to a panel of national security leaders
Nov. 14, 2014 – Jill Aitoro, Senior Staff Reporter for the Washington Business Journal, outlines TandemNSI’s upcoming rapid-pitch event on Dec. 2.
By Jonathan Aberman as published in the October 12, 2014 edition of The Washington Post.
Over the past 25 years, our region has benefited from a symbiotic relationship between technology entrepreneurship and national security spending that has driven regional growth and a perception that Northern Virginia and the greater Washington area was recession-proof. But lately, another story is emerging.
Experts are telling us that job growth is greater in Detroit than Northern Virginia. The Obama Administration’s new chief technology officer comes to town from Silicon Valley after his old one “goes home” to the same place. Meanwhile, new office construction continues unabated and “see-through” buildings are delivered without tenants.
These are examples of a tapestry of events to which you should be paying attention.
Political leaders such as Virginia Gov. Terry McAuliffe and local business leaders such as Mike Daniels, one of the founders of the Northern Virginia Technology Council and a recognized authority on the national security industry, agree that our region is facing a new reality — it must retool its technology sector.
Changes in federal spending priorities, as well as the acceleration in the rate of innovation outside of the United States, have created an existential challenge to our national security industry. Our regional focus on technology services must be modified to embrace a greater focus on technology products. Otherwise we run the risk that other regions — most significantly Silicon Valley — take a greater share of federal spending on national security innovation, particularly in emerging industrial sectors. Worse, they will take leadership in these new industries, depriving our region of value-added jobs and economic opportunities.
There is a growing trend in the Defense Department and other national security agencies to look for technology innovations from “nontraditional” sources. Recently, the Defense Business Board recommended that the Pentagon look more at acquiring commercially available technology products from emerging and small businesses as a way to address our national security needs and requirements. Agencies such as the Defense Intelligence Agency, Defense Advanced Research Projects Agency, the Air Force and many others are using new models of engaging and contracting with nontraditional sources of innovation.
Through my work with TandemNSI, a public-private partnership among Amplifier Ventures, Arlington County and the Commonwealth of Virginia, I have first-hand knowledge of these activities and others that are pending. Take a look at our recent “Building a Bigger Tent for Technology Entrepreneurs” white paper for specific examples. The federal government is more innovative than you think.
The cybersecurity industry is an example of where the resources and assets of our region are being marshaled to provide innovative service and product offerings. It shows that we can change and adapt, although there is much work to be done. What is less appreciated perhaps is that cybersecurity is the current “flavor of the day” of a larger trend. The government is looking for innovation more broadly and rapidly than a technology service delivery business model can provide — and industrial sectors such as data analytics, robotics, material sciences, space, life sciences and others will follow the trend of rapid innovation that we currently see in cybersecurity. In short, the national security agencies’ appetite for technology product innovation will continue unabated and accelerate over time.
A number of months ago, I was with some national security program managers discussing their innovation needs, and shared with them the mission of TandemNSI and our 2,000-plus nontraditional performer members. I made the point that our region had a deep bench of talented people previously not involved in national security that were now looking to move rapidly in concert with our national security agencies to create new technologies and product companies.
“Wow,” said one of the meeting attendees, “you mean I don’t have to get on a plane and fly to California?”
Pentagon leaders have chosen to take a bite out of the military’s science and technology spending as overall budget numbers have flat lined following the passage of sequestration.
The result means the military has dropped its investment in innovation at a time when it might be needed most. The Pentagon is transitioning out of more than a decade of war in Iraq and Afghanistan and trying to redefine the military’s composition as new threats come into focus while old ones remain.
Those old ones choose not to fade away easily and continue to provide evolving threats. Russian armored vehicles have repeatedly crossed the Ukrainian border stoking memories of the Cold War, and U.S. warplanes have again been called on to launch airstrikes in Iraq. Yet, China’s military continues to evolve and Chinese military leaders have shown no interest in backing down as their influence spreads across the Pacific region.
However, the funds for the research that Pentagon leaders claim fuel the breakthroughs for the next generation of military equipment is going down, not up. This year, the U.S. military requested $500 million less than the $12 billion it spent last year out of the nearly $500 billion 2015 defense budget.
The overall $11.5 billion S&T budget breaks out to $5 billion for advanced technology development, $4.5 billion for applied research and $2 billion for basic research. While the budget is dropping, the Pentagon claims it remains committed to developing the next generation of technologies and weapons.
“Although the FY2015 request is slightly lower than the FY2014 enacted amount of $12.0 billion, the Department’s S&T program remains strong and continues the focus of Anti-access/Area-denial, and the re-balance to the Asia Pacific region,” the Pentagon wrote into its budget request.
Military brass across the services have stood up and said the failure to accomplish the research now will cause the U.S. to lose the decisive technological edge it currently enjoys. Therefore, the military has to execute a strategy that allows the services to attract innovative companies efficiently.
This has proven to be a challenge for the Pentagon as its acquisition system is currently constructed. Many of the companies doing research on the cutting edge of breakthrough technologies like 3-D printing, robotics and hypersonics are not the traditional defense industry powerhouses.
The Army is the latest service to show its lack of willingness to adopt the work of companies who fall outside the defense industrial giants. Earlier this month, it awarded contracts for the technology development phase of its next generation helicopter fleet. The industry’s old guard, Textron’s Bell Helicopter, Sikorsky and Boeing received contracts. Relative newbies, AVX Aircraft and Karem Aircraft, who also put in bids, were left out of the development program to replace the Apache and Blackhawk helicopters by the mid-2030s.
The military’s acquisition arm has to become comfortable with companies that fall outside the industrial giants if it is to keep up with the latest research and innovations within the fields the Pentagon wants to make the greatest strides.
Dan Doney, chief innovation officer at the Defense Intelligence Agency, recognizes this problem. It is why he helped create Needipedia after he saw so many entrepreneurs and small business leaders that had potential solutions for DIA, but didn’t know how to get those solutions before intelligence leaders. Needipedia lays out DIA’s needs and offers a relatively easy format for companies to offer their services. It seems like a basic idea, but agencies such as the Defense Department have not yet adopted a platform that simplifies the process in the same manner.
Fed Biz Ops could be seen as the Defense Department’s answer to Needipedia, but it takes quite a bit of homework to search and understand the Fed Biz Ops platform and the military nomenclature built into it. Doney has spoken at multiple TandemNSI events, including the one on Aug. 7, “Building a Bigger Tent for Technology Innovators: The Government is More Creative than You Think.” He explained the importance of simplifying the acquisition process to allow national security agencies to get access to the newest companies seeking the next technological breakthroughs.
The Defense Department has introduced programs to help attract nontraditional performers to government contracts. TandemNSI Managing Director Jonathan Aberman listed a few in his white paper, “Building a Bigger Tent for Technology Innovators: The Government is More Creative than You Think.” Programs like DARPA’s Cyber Fast Track Program have tried to institute workarounds to streamline the Pentagon’s acquisition process to keep up with the latest technologies in cyber security. But more can be done to attract these nontraditional performers.
Again, the Pentagon realizes it has a need to innovate now. A closer look at the Pentagon’s future budget plan shows less of an emphasis on system development in order to stash away more money for basic research, according to a report by Defense News. Put more simply, the Pentagon wants to produce fewer widgets now in order to fund a wave of new equipment and vehicles ten years or more in the future. While programs like the Army’s Ground Combat Vehicle might be getting cut, the Pentagon is protecting funding to develop more futuristic programs like the Air Force’s Long Range Bomber.
A program like the Long Range Bomber will require quite a bit of innovation as Air Force generals dream up an aircraft that can travel across the globe in merely a few hours. Nontraditional performers and smaller tech firms will have the answers to many of the questions the Air Force will need. The industrial giants will not have them all. To deliver a program such as the next generation bomber that Air Force leadership says is crucial to keeping the U.S. ahead of China; the Pentagon must improve its acquisition system and ability to work with technological entrepreneurs. Otherwise America’s defense industrial edge will be put at risk.
On August 7th, TandemNSI assembled a varied and respected panel of experts in national security and business to discuss some of the concepts raised in Jonathan Aberman’s recent White Paper titled: Building a Bigger Tent for Technology Innovators: The Government is More Creative than You Think. On the panel was Fernand Lavalle a partner at Jones Day, and a specialist in government contracting; Mike Daniels one of the founders of SAIC, and Chairman of Network Solutions, Global Logic and Invincea, among others; Michael Geertsen, a program manager at Defense Advanced Research Projects Agency; and Dan Doney, Chief Innovation Officer at the Defense Intelligence Agency.
Here are our top 7 takeaways from the discussion:
- “Non-traditional performers” (Geertsen’s tongue-in-cheek definition of a non-traditional performer is a company that hasn’t been to FedBizOps) defined by the panel more broadly as individuals and companies that aren’t currently working with the federal government, are innovating at a faster rate than the innovation rate prevailing in many agencies involved in national security. This is a mismatch that is getting worse, not better. And, nontraditional performers have much to contribute to national and economic security.
Fundamental reforms are needed to ensure that the government is able to continue to innovate. Making connections with nontraditional performers who have ideas that government doesn’t know it needs is a problem that national security agencies must solve in order to be on the right side of disruption. DIA’s NeedipeDIA and the CyberFastTrack Program are examples of experiments to address this challenge.
- Geertson says Aberman’s White Paper does a great job of collecting a bunch of different programs that the agencies could use to solve this problem of innovation mismatch.
- What works in Silicon Valley won’t work here because their approaches are insufficient to truly interact with the agencies. DC entrepreneurs “speak national security.” The issue is to create pathways to get those entrepreneurs more involved in making national security products instead of providing techology services. Dan Doney noted that it is going to be a long slog to accomplish this change, but it is imperative.
Daniels said that sequestration was a game changer that may be creating a new pattern of national security budgeting and funding. This was the result of a confluence that has been building over the last 25 years. The DC region’s government contracting companies will need to adopt to these new realities, and work with innnovative startups and entrepreneurs more closely. This is a big opportunity for our region, but one that needs to be met.
- Many of the things that have made our economy grow over the last 50 years have now been commoditized. We need to get federal R&D out into the world and commercialize new industrial opportunities. This is where the jobs will come from to support a continuation of the “American Dream.”
- Doney says that TandemNSI has convened resources and raised awareness of opportunities within the national security establishment. He is creating a new program to reach nontraditional performers that will be structured with tools he learned about through TandemNSI and Aberman’s White Paper. TandemNSI is making a huge difference, and more and more people in the agencies were paying attention. Aberman was clearly thrilled to hear this endorsement and promised to events that connect people and agencies as long as our community keeps coming!
Upcoming TandemNSI events:
Keep an eye open for more details of our fall schedule. It’s going to be great. September 17th Coffee and Donuts at AED’s offices at 1100 N Glebe Rd, Arlington, VA 22201 and September 25th Robotics evening at Tech Shop. With more to come. Have a great rest of the summer!
Related Articles: Pentagon Struggles to get Small-Biz Tech
TandemNSI held their first Deal Day event yesterday at Artisphere in Arlington. The day consisted of keynote addresses and four panel discussions covering the major stumbling blocks often cited in working with government agencies. Congressman Jim Moran from Virginia’s 8th District opened the day with compliments to those in the room for being the innovators who will bring change. SpaceX Deputy General Counsel, David Harris, provided fabulous detailing of how their business evolved with DARPA patiently watching through initial trial and error into one of several successful rocket launches and a mission to help people live on other planets. Later in the day Dr. Patrick Carrick of AFOSR highlighted the research programs the Airforce is conducting and how those impact their priorities.
Key take-aways include:
- Creative coupling is key. A company’s relationship with a government agency takes on many forms. Get creative in your thinking about the way the relationship should work. Talk to your PM to get help working through the issues and challenges of government contract work.
- The DC region provides the right environment for creating successful businesses. Silicon Valley may be an easier place to get funding but it’s a really hard place to create the team you’ll need to be successful. The DC region has less noise, great talent and consequently a more loyal workforce.
- The best technologies aren’t always the ones that get funded. Creating the team and a focused business is what impresses investors. Entrepreneurs can’t be good at everything so they will need to be open to bringing in expertise they don’t have. They also need to be open to morphing their business to accommodate what the market is saying
- Resist the natural distraction to follow the money that can lead you down a rabbit hole. Great businesses get bought. Is not a bad thing to say “no” to a relationship or contract that is not strategic.
- Think of working with the government as another way of servicing your country. Some people put on uniforms and others work with the government to solve problems.
- PM’s are willing to give you 30 minutes. Program Manager(s) contact information is made public for a reason. They are interested in talking with companies who have a succinct message that helps them solve a problem. Don’t be afraid to contact them with an idea.
Panel discussions topics consisted of:
- Finding out who is buying and who is selling featured Kevin DeSanto of KippsDeSanto, Peter LaMontagne of Novetta Solutions, Andrew Lustig of Cooley, Mark Spoto of Razor’s Edge
- How to “hack” the system of working with the government featured Steven Chen of Power Fingerprinting, Nick Lantuh formerly of NetWitness, Brendan Richardson of PsiKick, Peggy Styer of Blackbird Technologies
- Finding start-up cash featured Frank Barros of DHS, Christopher Rinaldi of DOD, John Williams DON SBIR-STTR Program
- Cutting edge opportunities according to National Security Agency Program Managers featured Dan Doney of DIA, Larry Holmes of ARL, Mike Geertsen of DARPA, Richard Guidorizzi of DARPA and Edward Baranoski of IARPA
We will let our favorite Tweets from the day provide highlights:
- NHLBI Small Business @NHLBI_SBIR #NHLBI loves to hear this! RT @TandemNsi: “As an investor, I like #SBIR Funded companies.” ~@schen101 #tandemddMike
- Leurdijk @leurdijk Less Da Vinci, more MacGyver. Great advice from todays #TandemDD cybersecurity entrepreneurship event @TandemNsi #dctech
- Startup VA @Startup_VA Blown away by today’s event. #VirginiaProud @TandemNsi! Cc @RichardGordon5 @jaberman @iAmJives @MACH37cyber @GovernorVA #startup #TandemDD
- Matt Whitaker @mattwhitaker12 #TandemDD David Harris of SpaceX – see government not just as a customer but as a collaborator or vendor
- John Casey @venturementors Christopher Rinaldi @DeptofDefense says “start with the customer in mind” #SBIR #TandemDD @TandemNsi — DOD #CustomerDiscovery.
- campus_entre @campus_entre Congressman J Moran talks #national security innovation & unlimited potential of human capital @TandemNsi #tandemdd pic.twitter.com/pPmrOEGxZO
Recent Articles About Deal Day
Event Summary: TandemNSI Panel Shares Encouragement and Strategies for Working with National Defense Agencies
TandemNSI assembled an experienced panel from both sides of the National Security Agency equation who candidly addressed questions like “how do I protect my IP if I work with the government?” and “how can small companies cut through the bureaucracy?”
Panelists included Dan Doney of DIA, Jason Matheny of IARPA, Anup Ghosh of Invincea, Mark Micire DARPA. Jonathan Aberman moderated but this audience came prepared with their own questions, and didn’t hold back.
It’s obvious from last night’s session that National Security Agencies are very interested in working with smart young companies. It was acknowledged that the agencies have some work to do to make this easier, but agencies have put many things into place to make the process less mysterious and overwhelming. Dan Doney talked about the Open Innovation Gateway program established by DIA to provide safeguards for entrepreneurs who are bringing IP to the table. NeedipeDIA has also been established so that DIA Program Managers can post requests for innovative solutions.
Anup Ghosh has first-hand experience working with National Security Agencies and gave pointers about concisely solving a problem or reducing costs. He went so far as to say that working with the government is better than working with angel investors because they don’t take a percentage of your company.
As with any government-oriented event, there were an appropriate number of acronyms thrown around. For example when questioned about the challenges small companies have in writing large proposals, Jason Matheny of IARPA suggested that young companies cut their teeth on SBIR Grants. These provide a great training ground for proposal writing and help companies create a track record. There was also talk about “seedling” BAA’s or Broad Agency Announcement Grants. This paper published by National Oceanic and Atmospheric Administration (NOAA) provides some clarity. Suggestions were also made about tracking agency Twitter feeds, FedBizOps, Google Alerts, Google Scholar Alerts, and Program Manager hot-lines to have a conversation with someone who could fund an idea. Of course, there’s no one place to find the entire list of Program Managers but this DARPA video provides some great context.
One of the best parts of the evening was when Mark Micire spent about 15 minutes with two self-proclaimed “guys working out of their basement” who were asking about how to break through. Mark explained that it really helps to know who DARPA serves (although DARPA has people on staff assigned to work between the entrepreneurs and actual soldiers to refine ideas). During this interaction, one gentlemen talked of his first-hand experience in Afghanistan and Iraq so he clearly knew the audience. Mark’s other advice was to concisely identify the problem and in plain language, the simple solution. DARPA is very interested in ideas related to doing more with less given troop draw-downs and budget changes. These gentlemen said they got what they came for.