The DoD and Silicon Valley can work together

Our team at BMNT Partners forges relationships between the military and the Silicon Valley. Many people point out to me the daunting challenge of this undertaking; the government bureaucracy is too overwhelming to work with private companies. While this is mostly true, we have found success by challenging old methods of engagement.

During my service in the Air Force, I witnessed the rise of technologists and incredible human achievement coming from the private sector from the explosion of the Internet to Space X’s extraordinary and improbable journey (both cases were a mix of private and government funding).  At the same time, I was experiencing enormous frustration in my first program management role; by the time I arrived our program was $10B over cost and 10 years behind schedule. Instead of aerospace engineering and program management, I spent the majority of my time consumed by Nunn-McCurdy reports and providing status to Congress. My frustration grew as I had little ability to influence the prime contractor on this program with award fee – they always received the majority of their fee regardless of performance. This experience shaped a deeply held belief that as nation we could do much better if we learned to work to work with private industry in a mutually beneficial way.  

This partnership can and should be done, and below are my five observations for better government interaction with private industry. I use Silicon Valley as my reference point, but these apply everywhere outside the traditional defense base.

  • Accurately articulate the problem.    Requests for Information (RFIs) on fedbizopps.gov are the mechanism the DoD uses to gain industry feedback. Given the travel restrictions “govvies” face, fedbizopps and industry days are often the only methods used to engage industry. This cycle encourages responses from the same traditional defense firms who can afford to spend money and time on RFI responses. And frankly, fedbizopps is confusing and uninspiring and it requires someone with a government acquisition background to navigate.

A better way we’ve found instead of industry days and RFIs is to hold a “hackathon” around a particular problem. For example, we worked with Christopher Zember, Director of the Defense Information Analysis Center, to identify areas within the DoD that the commercial sector could engage more effectively and efficiently. Instead of sending out a mass posting asking for people’s best ideas for military technologies, we narrowed the scope to a vexing and complicated problem the military faces that costs lives and money: supply chain resiliency. We brought together diverse teams drawn from academia, subject matter experts, military end users, venture capitalists and data analysts to scope the problems faced on the battlefield due to insecure movement of supplies. We gained an appreciation for problems by stories from users in the field and learned about emerging technologies in energy, water, and advanced manufacturing. Instead of the several month cycle required for an RFI, we derived a well-informed and accurate description of the state of commercial technologies applied directly to user problems. This process gave companies insight into military challenges and simultaneously fed back a more informed landscape of emerging technology to government requirement writers and program managers.

  • Clarify Signals and Expectations.  Government technology acquisition, compared to private industry, takes a long, painful, eye-stabbing time that most start-ups don’t have the resources to bear. It’s maddeningly difficult to gauge how much real funding from the DoD is available to give to private companies. The total picture is impossible to tell, even with access to government requirement and planning documents, and it’s challenging for any outsider to understand how real the opportunity for funding is from a particular office. We’ve seen companies go out of business chasing what they thought was real funding from the military because they were led on with unclear signals. Doing this will create a larger chasm and shut out the DoD entirely from anyone notable in the Valley. Understand your contract and funding plan and vet it internally before real engagement with any company – otherwise you are wasting their time and hurting their business.

For example, a company founder we work with was getting requests from a government office to participate on roundtable panels at conferences.   Side discussions and phone calls revealed several government program managers were interested in his technology.  He was just starting his company and in the process of fund raising.  Based on the feedback and invitations he was getting from these program managers, he spent money on plane tickets and conference fees to attend these sessions. I accompanied him to one conference to gauge how real the interest was by speaking with the program manager. The program manager informed me that yes they were very interested and felt his technology was the best they had seen to date and it would inform their subsequent RFP. When I asked about his budget, he responded that he had to go to "POM" for the funding. That is a 2-year cycle and is by no means definitive. I promptly steered the founder away towards a limited engagement with this office - no travel or lengthy discussions about his tech. He would have wasted another six months of his scarce resources, which would have caused his company irreparable harm. I’ve seen numerous examples of this type of engagement that is harmful to business.  

  •  Leverage strengths across the cultures. Often I get asked the question of why the Valley should care about the military when the profit potential, compared to the commercial sector, is low.  The DoD has many problems (just as every large organization faces) but their mission is challenging and unique. The solutions to these challenges have applications that expand further than the military and extend to the customer base the Silicon Valley wants to reach.  The differences in cultures can only help to strengthen the types of products Silicon Valley is producing.  How many entrepreneurs in Palo Alto have experienced a deployment, put their life in danger, lived abroad in challenging circumstances, or given 5-30 years of service to an ideal? The Silicon Valley talent base is amazing, but it needs diversity in its people and thinking to build better products that “change the world.” Although veterans from comprise less than 5% of the population, they come from all over the country with varying socioeconomic backgrounds. These different perspectives can only help Silicon Valley with its diversity issue and perception of myopia. At the same time, the military needs Silicon Valley style thinking to save lives and protect our service men and women without breaking the national budget.
  • Select projects carefully and set them up for success. Single use technology that only has a military purpose – ships, tanks, fighter jets – should be left to the traditional defense base. However, in areas where a commercial market exists and is growing – energy, cyber security, healthcare, data analytics, IoT, sensors, robotics, advanced manufacturing – the DoD should select projects from these industries and then set the program management offices up for success in execution. Technologies with commercials overlap will also attract investors that will reduce the taxpayer burden in development, fielding and sustainment. Furthermore, government program managers investing alongside venture capitalists or private equity will have a better due diligence process which will de-risk government investment. To encourage a public private cost sharing, easier treatment of IP is necessary by the types of contract mechanisms used. Contract vehicles, funding type, scope and IP treatment need to be set up prior to the start of the project to ensure a commercially friendly engagement. We've seen this model work well in our practice (Space X is a great example of receiving NASA funding following private investment).  The need for shared public and private cost models will increase as national budgets shrink and sustainment costs of legacy systems rise. 
  • Immerse yourself in the “ecosystem”   80% of time should be spent networking outside of the office to talk with scientists, VCs, start-up founders and academia. I’ve found that because national security issues are diverse and span across many disciplines, there is no shortage of people that I need to meet and learn from to inform my choices for investment and consulting.   The first year in the Valley was playing catch up to the culture of start-up land -- most of it was spent outside of my office. Beliefs that I held about the state of technology and possibilities were developed from my time working sensitive programs in the government and coming here was like learning a new language, but the experience has proved invaluable. We need more people from the government doing a similar exercise to keep up with a rapidly evolving battlefield.  
As a senior leader from an Army agency recently pointed out to me, the Silicon Valley is not some magical place that will fix all the ills of the DoD. He’s right. But there is enormous potential for our country if the two can learn to work together.