For years, startup founders have been sounding the alarm about the expanding graveyard of small technology companies that have tried to partner with the Department of Defense. After walking the well-known “valley of death” that is the DOD procurement process, many companies simply run out of the time and cash necessary to survive. Others have been forced to pursue legal action in the name of self-preservation. Despite these growing warning signs, many small tech companies are still facing the difficult choice between serving their country by providing innovative defense solutions — or taking them elsewhere.
As a veteran founder of a late-stage startup in Silicon Valley, I’ve made it my life’s mission to improve the lives of others, starting with the people who serve others first. When I founded Sparta Science, I had no connections within the DOD and no friends in the industry, but I had a solution that would improve the lives of our nation’s soldiers and bolster our national defense.
Despite those who cautioned me otherwise, I considered it the highest priority, and privilege, to serve our nation as an entrepreneur. Today, I still believe that private technology companies hold the solutions needed to outpace foreign adversaries, but we can only sacrifice so much.
It’s clear that the DOD recognizes the pressing need to make changes, but the window for effective implementation has almost disappeared. Headlines lamenting our increasing defense tech lag relative to adversaries like China and Russia appear in tandem each year with the passage of the National Defense Authorization Act, particularly as it relates to artificial intelligence. This year is no exception.
In his keynote address to the Reagan National Defense Forum this December, Secretary of Defense Lloyd Austin reiterated that the integration of commercially available technologies is the only way the U.S. military will maintain its competitive advantage against its foes, while acknowledging the steep barriers startups face attempting to work with the DOD. Lengthy bureaucratic processes, stringent requirements and obscure points of entry dissuade innovators to the point where many “don’t even want to try.” His words echoed across Silicon Valley, receiving affirmation that companies are ready to take their tech and walk if conditions don’t improve.
Yet despite the $768.2 billion budget approved in this year’s NDAA that includes increased focus on leveraging commercial investment in artificial intelligence, stark challenges remain. Private innovators struggle to move beyond research and development into procurement. Even with the seeming promise of Small Business Innovation (SBIR) programs, forward progress continues to be stalled by limited grant amounts that do little to offset the steep costs of operation. And with few large venture capitalists willing to back companies seeking government procurement, founders like me are faced with a choice: keep trying to break through the DOD at the risk of your livelihood, or walk away.
With nearly $117 billion earmarked in this year’s NDAA for research and development in new science and technology, it’s clear that the DOD recognizes the dire need to better leverage technology from the commercial sector — at the imperative of our national security. Other important measures featured in this year’s NDAA include the creation of a Chief Digital and AI Officer (CDAO) position and a new pilot program designed to increase the speed of transition for emerging technologies in the DOD.
Though these changes are promising on paper, action must be quickly taken to ensure the survival of small tech startups. To supplement efforts for rapid acquisition, a joint program office should be formed to field technologies that serve myriad purposes across industries. For companies beginning the procurement process, a clear pathway should be identified to improve the transition rate from inception to adoption. Transparent sponsorship within the DOD for companies must be increased to level the playing field for those without connections. Additionally, the Authorization to Operate process must be overhauled — both to increase timeliness and to establish a mechanism between services and industrial base companies that enables sharing of software and the rapid integration of capabilities across platforms, systems and services.
Much of the funding in the NDAA is earmarked to address critical infrastructure needs, especially cybersecurity. However, too often we omit focus on our most important systems — humans. Operational units within the military embody the principle that “humans are more than hardware,” yet there remains an obvious disconnect between the boots on the ground and what the larger contacts fund. While it’s important to protect our nation’s information and cybersecurity systems, we cannot overlook the health needs of our service members, the ultimate guarantors of our national defense.
Above all, these changes must be expeditiously implemented by subject matter experts if our nation is to stay ahead of our adversaries. Failure to change acquisition processes and incentives from the status quo will leave our national security at risk, much less the fate of small tech businesses — and we no longer have the luxury of time.