Military · Government

How do you get a Defense Tech Startup off the ground?

Patrick Larsen Defense Technology Startup and Helping Veterans, LION

July 27th, 2015

It looks like it takes 12-24 months to get revenue from the gov't. Is there a shorter path?
JV, subcontract, sole source, SBIR? 

Target customer is anyone who needs better data collection and display in dynamic environment: military, CIA, FBI, state and local law enforcement. 

We have a verified product idea: better integration of military command centers, soldiers in the field, and aerial assets using cloud infrastructure, machine learning, and augmented reality.  Verified by active duty military.

We have a good network and can contract senior officers and defense contracting executives. 

We have solid team.
Me: US Air Force Academy. US Navy rescue helicopter pilot. Booth MBA. Several startups and Amazon.
Cofounder 2: US Navy Academy. Navy SEAL. Harvard MBA. Startups and Fortune 500 product mgtm.
Cofounder 3: CTO. Microsoft (Bing, maps). Amazon (AWS and Amazon Now global Logistics). Salesforce. Great manager of devs.
As a founder, you’re always in fundraising mode (whether active or passive). In this course, we’ll teach you how to successfully raise follow-on capital, establish a valuation for your company, build an investor pipeline for your next round, and more.

Anonymous

July 28th, 2015

Patrick, B2G sales have a much longer sales cycle than most other verticals. They differ from B2B and B2C significantly enough to warrant separate goals and strategies. Depending on your marketing and sales abilities you can contract directly and get on the US DoD SBIR/STTR, CCR and ORCA. This is essentially the first step. You can also sell through a reseller or VAR who already has an existing contract. This only slightly reduces the paperwork and time. The B2G market while lucrative requires tremendous amounts of paperwork and time. Once all the paperwork is completed then it moves to RFP writing, response and relationship building.

Eli Castellanoos Operations at MiChefs Network

July 28th, 2015

I worked on a number of federal contracts and never had to wait that long to get paid. Are those terms coming from the contracting office or are they built into the procurement itself. Regardless, what you can do is look for smaller contracts to balance out. They usually have better terms and you can use those funds to offset this procurement. With the type of logistical technology you have there may be a need within other agencies or other departments within Homeland Security. And of course the shortest path would be to subcontract on a larger procurement but that may not be good in the long run because you may essentially be giving away your asset to the primary contractor. The best option is to look through the GSA schedule and identify set asides. Since your team is ex military, preferences exist and they normally have better terms that allow payment at much faster intervals. I did a lot of that work so if you have any questions feel free to contact me.

Kenneth Larson Retired Aerospace Contracts Manager, MicroMentor Volunteer and Founder "Smalltofeds"

August 3rd, 2015

EARLY REQUIREMENT TARGETING IS THE KEY TO SUCCESS IN SET ASIDE MARKETING

Effective set aside marketing reaches the agency decision makers with technical, budget and schedule authority before a synopsis of the requirement is posted on FEDBIZOPPS. 
The objective of this form of targeted marketing is to get concurrence from the government to set the program aside sole source if the company has an 8(a), or Hub Zone Certification or reserve it by one of the above group designation classes to eliminate the prospect of full and open competition involving large business.

Become known to targeted agency personnel by visiting their program offices and meeting the decision makers.  Bring a capability statement:

Present your qualifications openly, objectively and specific to their needs.  You must determine what those needs are through market research, trade magazines, research on what they are buying on FEDBIZOPPS, as well as postings on their web site that are future-program oriented.

Subscribe to periodicals like "Washington Technology" and other trade magazines.  Observe agency trends and analysis that impact your market segment.  There have been set aside programs marketed by small companies through acquainting agency management and technical personnel with capabilities they were not aware existed in the small business community or fulfillment of needs they in fact did not know they had.

Pay particular attention to FEDBIZOPPS "Sources Sought" or “Requests for draft RFP Comment”  on programs that have yet to be formally solicited. Obtain an appointment to present your capabilities to the decision makers (not the gate keepers).  Be courteous to contracting officers but understand they are not the individuals who make source selections. Understand that once the requirement is formally published on FEDBIZOPPS the gate closes on informal visits to the customer and the competition begins in the form of proposals by competitors.  It is too late at that point to set the program aside for a sole source or a small business designation if it has not occurred by the publication stage.

Cultivate teaming relationships with other firms in your industry and look for early opportunities in agencies, not only to prime a program but to bring a team of qualified contractors in lesser roles to fulfill them with you or join a team being led by a more experienced firm:
Understand the small business start up past performance challenge and work to meet it:
Attend small business outreach events by agencies and prime contractors.  Stay attuned to who is attending and research their needs and requirements.

Make a point to be present at bidders' conferences for existing solicitations that you may not choose to bid but which may lend insight into the agency needs and prime contractor relationships in the future.       

Jonathan Greene Business development executive, technology entrepreneur, start-up advisor

July 28th, 2015

Patrick, You clearly have a great team and have done some preliminary work in identifying customer need - my suggestion is that you look outside the defense community as well. While it can be a lucrative place for growing tech it is hit or miss in terms of funding. Really what you want to do is partner with a prime that has active contracts fulfilling the need that you can support. Otherwise its an uphill battle - feel free to contact me directly at jongreene@gmail.com - happy to give you my perspective in detail. JG

Lane Campbell Lifelong Entrepreneur

July 28th, 2015

Raise money from investors who you can convince your business will work.