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<li><a href='https://steveblank.com/2011/01/'>January 2011</a></li> <li><a href='https://steveblank.com/2010/12/'>December 2010</a></li> <li><a href='https://steveblank.com/2010/11/'>November 2010</a></li> <li><a href='https://steveblank.com/2010/10/'>October 2010</a></li> <li><a href='https://steveblank.com/2010/09/'>September 2010</a></li> <li><a href='https://steveblank.com/2010/08/'>August 2010</a></li> <li><a href='https://steveblank.com/2010/07/'>July 2010</a></li> <li><a href='https://steveblank.com/2010/06/'>June 2010</a></li> <li><a href='https://steveblank.com/2010/05/'>May 2010</a></li> <li><a href='https://steveblank.com/2010/04/'>April 2010</a></li> <li><a href='https://steveblank.com/2010/03/'>March 2010</a></li> <li><a href='https://steveblank.com/2010/02/'>February 2010</a></li> <li><a href='https://steveblank.com/2010/01/'>January 2010</a></li> <li><a href='https://steveblank.com/2009/12/'>December 2009</a></li> <li><a href='https://steveblank.com/2009/11/'>November 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href="https://steveblank.com/secret-history/">Secret History</a></li> <li class="page_item page-item-68"><a href="https://steveblank.com/books-for-startups/">Books for Startups</a></li> <li class="page_item page-item-11025"><a href="https://steveblank.com/slides/">Slides/Videos</a></li> <li class="page_item page-item-25609"><a href="https://steveblank.com/raising-money/">Raising Money</a></li> </ul> </li> </ul> </div>  <div class="narrowcolumnwrapper"><div class="narrowcolumn"> <div id="content" class="content"> <div class="post-27437 post type-post status-publish format-standard hentry category-educators-summit" id="post-27437"> <h2><a href="https://steveblank.com/2021/05/24/back-to-the-classroom-the-educators-summit/" rel="bookmark">Back to the Classroom – The Educators Summit</a></h2> <div class="postinfo"> Posted on <span class="postdate">May 24, 2021</span> by steve blank </div> <div class="entry"> <p><a href="https://us02web.zoom.us/meeting/register/tZwufu6trTsqEt3gTqg9lQYKG-gRdkoPbaFE">Register Here</a></p> <p>In 2020 over 1,000 educators joined us online to learn and share how to teach during the pandemic. Now we’re heading back into the classroom and the world has changed. What is the “new normal” for Lean Education? Will using video to “get out of the building” still play a role? What roles do diversity, equity and inclusion play in future syllabi?</p> <p>Join me, our guest speaker Dr. <a href="https://haas.berkeley.edu/faculty/tyson-laura/">Laura Tyson</a><u>,</u> our panelists Brandy Nagel, Ivy Shultz, Michael Camp and Jim Hornthal and hosts Jerry Engel, Pete Newell, Steve Weinstein and your peers for a robust discussion to these questions at the 4th edition of <a href="https://www.commonmission.us/summit-events/june-2021-summit" target="_blank" rel="noopener">Lean Innovation Educators Summit</a> on June 3rd, 1 – 4pm EDT, 10am – 1pm PDT.</p> <p><strong><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image.jpg?ssl=1"><img data-recalc-dims="1" fetchpriority="high" decoding="async" data-attachment-id="27443" data-permalink="https://steveblank.com/summit-image/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?fit=892%2C384&ssl=1" data-orig-size="892,384" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="summit image" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?fit=300%2C129&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?fit=468%2C201&ssl=1" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?resize=468%2C201&ssl=1" class="aligncenter size-full wp-image-27443" alt="" width="468" height="201" srcset="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?w=892&ssl=1 892w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?resize=300%2C129&ssl=1 300w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?resize=150%2C65&ssl=1 150w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/summit-image-e1621660938387.jpg?resize=768%2C331&ssl=1 768w" sizes="(max-width: 468px) 100vw, 468px" /></a><a href="https://steveblank.com/wp-content/uploads/2021/05/Classroom-LLP-text.jpg"><br /> </a>Why<br /> </strong>The Pandemic has changed everything. After a year plus in the virtual teaching environment how much will stick and what will return to pre-pandemic norms? How much of our virtual  “getting out of the classroom” teaching methods will remain? The business landscape crippled some industries while others have exploded. Which ones will rebound? The funding environment for our students continues to be on fire. Will that continue? How will the push for diversity, equity and inclusion affect educators?</p> <p><strong>What<br /> </strong>The event will begin with a fireside chat with Dr. <a href="https://haas.berkeley.edu/faculty/tyson-laura/">Laura Tyson</a> former Dean of the Berkeley Haas School of Business and former Chairman of the National Economic Council. The respondent panel will include, <a href="https://www.linkedin.com/in/brandynagel/">Brandy Nagel</a> (<em>Georgia Tech</em>), and <a href="https://www.linkedin.com/in/ivyschultz/">Ivy Shultz</a> (<em>Columbia University</em>), <a href="https://www.linkedin.com/in/michael-camp-0136b71/">Michael Camp</a> (<em>Ohio State</em>), <a href="https://www.linkedin.com/in/hornthal/">Jim Hornthal</a> (<em>UC Berkeley). </em>To learn from each other and share ideas, we’ll then go into breakout sessions so you can discuss the topics from the fireside chat and share best practices with your peer Lean educators from around the world.</p> <p><strong>How<br /> </strong>This session is <em>free</em> to all but limited to Innovation educators. You can register for the event <a href="https://us02web.zoom.us/meeting/register/tZwufu6trTsqEt3gTqg9lQYKG-gRdkoPbaFE">here </a>and/or learn more on our <a href="https://www.commonmission.us/summit">website</a>. We look forward to gathering as a community of educators to shape the future of Lean Innovation Education.</p> <p><strong>When<br /> </strong>See you on June 3<sup>rd</sup> 1pm – 4pm EDT, 10am-1pm PDT.</p> <p>Bring your best ideas!</p> <p>Register <a href="https://us02web.zoom.us/meeting/register/tZwufu6trTsqEt3gTqg9lQYKG-gRdkoPbaFE">here</a></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2021/05/24/back-to-the-classroom-the-educators-summit/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20Back%20to%20the%20Classroom%20-%20The%20Educators%20Summit&body=https%3A%2F%2Fsteveblank.com%2F2021%2F05%2F24%2Fback-to-the-classroom-the-educators-summit%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. 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Pete is now CEO of <a href="https://www.bmnt.com" target="_blank" rel="noopener">BMNT,</a> a company that delivers innovation solutions and processes for governments.</span></p> <p>Here are Pete’s 5 principles that will accelerate innovation.</p> <hr /> <p><span style="font-weight: 400;">To help a large Defense organization wrestle with how to increase the velocity of innovation in their ranks Steve Blank and I spent the better part of last week with our heads together reviewing everything we learned in the five years since we merged the concepts of problem curation and Lean while launching the innovation pipeline.</span></p> <p style="text-align: center;"><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?ssl=1"><img data-recalc-dims="1" decoding="async" data-attachment-id="27431" data-permalink="https://steveblank.com/pipeline-picture/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?fit=695%2C386&ssl=1" data-orig-size="695,386" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="pipeline picture" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?fit=300%2C167&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?fit=468%2C260&ssl=1" class="aligncenter size-full wp-image-27431" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?resize=468%2C260&ssl=1" alt="" width="468" height="260" srcset="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?w=695&ssl=1 695w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?resize=300%2C167&ssl=1 300w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/pipeline-picture.png?resize=150%2C83&ssl=1 150w" sizes="(max-width: 468px) 100vw, 468px" /></a><b>The original Innovation Pipeline sketch – 2016</b></p> <p><span style="font-weight: 400;">I spent yesterday sifting through the most recent lessons learned and results from a series of accelerators BMNT is running for the intelligence community. Then last night I watched the final presentations from the inaugural Hacking for National Security course in Australia before jumping over to teach Stanford’s Hacking for Defense® (H4D) class.</span></p> <p><span style="font-weight: 400;">Looking back on the week I’m blown away by how far we’ve come since we merged the two methodologies five years ago and by how fast we are discovering the pathways toward solving incredibly hard problems. Some examples:</span></p> <ul> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">In less than six weeks a Stanford H4D team has redefined a problem related to security vetting and radicalization while also describing the pathway a solution could follow to deployment within the Department of Defense and the Intelligence Community.</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">A Navy team recently sourced 80 problems, then curated down to one priority problem to solve. In less than 60 days they created 26 MVPs while interviewing over two dozen companies. They then incubated and delivered a solution that will help get large vessels back to sea faster, potentially saving the Navy $20M-$30M a year.</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">In just three weeks, the DIA MARS team sourced 100 problems from nearly 400 people, then curated and selected five priority problems to focus on. In eight weeks, five teams conducted more than 125 interviews (across 53 stakeholder organizations) and 12 experiments to deliver five validated proofs-of-concept and the evidence needed to confidently invest resources to prototype three of the five based on their user desirability, technical feasibility and organizational viability.</span></li> </ul> <p><span style="font-weight: 400;">What I observed from the week’s deep dive: Whether it is an agency cross-functional team or a university-based “Hacking for” team we are accelerating, five key concepts drive the foundation for this increasing pace of learning and solution delivery. They are</span></p> <ol> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">The power of Lean Methodology is supercharged when discovery begins with a well-curated and prioritized problem. Getting to one well-curated problem requires access to a source of hundreds of them. </span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Problem curation doesn’t stop until discovery is complete — t</span><span style="font-weight: 400;">he process of trying to discover the solution to a problem helps define the actual problem</span><span style="font-weight: 400;"> (and for .gov folks the actual requirement for the future solution).</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Stakeholder mapping and nailing the value propositions for beneficiaries, buyers, supporters, advocates and potential saboteurs are critical to building a pathway through the phases of the innovation pipeline and transitioning a solution to deployment. </span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">The key to understanding value propositions is in building interviews that are based on a set of hypotheses (about the problem, the stakeholder and potential solutions to be explored) and data to be captured while using minimum viable products (just enough “product” to increase the efficacy of a conversation and increase the speed of learning).</span></li> <li style="font-weight: 400;" aria-level="1"><span style="font-weight: 400;">Innovation happens because of people and it takes a village. Whether academic-based like our Hacking for Defense teams or internal organizational Integrated Product or Cross-Functional Teams (IPTs/CFTs), accelerator teams perform best when supported by:</span> <ol> <li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Teachers – who can ground teams in a common framework and language for the discipline of innovation and entrepreneurship.</span></li> <li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Coaches – who can walk teams through the practical application of innovation tools in context with the problem they are trying to solve.</span></li> <li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Mentors – who will provide relentlessly direct feedback to teams and challenge them on the quality of the hypotheses, MVPs and the analysis of what they’ve learned, while driving them through each pivot rather than letting them get bogged down in “analysis paralysis.”</span></li> <li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Advisors – who will provide alternative viewpoints that will enable teams to see clearer pathways through bureaucracies.</span></li> <li style="font-weight: 400;" aria-level="2"><span style="font-weight: 400;">Connectors – who will help teams rapidly grow their networks to gain new insights from unique partners not yet discovered.</span></li> </ol> </li> </ol> <p><span style="font-weight: 400;">If your organization is running innovation activities or an accelerator and these five principles aren’t part of their program they are likely wasting your organization’s time and resources, and contributing to Innovation Theater instead of deploying solutions to real problems.</span></p> <p><span style="font-weight: 400;">—–</span></p> <p><span style="font-weight: 400;">Next up we’ll dig into how the innovation pipeline serves a parallel process for managing innovation </span></p> <p><b>Enterprise Innovation for the 21st Century</b></p> <p><span style="font-weight: 400;">Today’s environment requires separate systems for innovation and execution that operate with parallel and sometimes overlapping processes</span></p> <p><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?ssl=1"><img data-recalc-dims="1" decoding="async" data-attachment-id="27424" data-permalink="https://steveblank.com/untitled-6/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?fit=468%2C533&ssl=1" data-orig-size="468,533" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Untitled" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?fit=263%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?fit=468%2C533&ssl=1" class="aligncenter size-full wp-image-27424" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?resize=468%2C533&ssl=1" alt="" width="468" height="533" srcset="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?w=468&ssl=1 468w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?resize=263%2C300&ssl=1 263w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/Untitled.jpg?resize=132%2C150&ssl=1 132w" sizes="(max-width: 468px) 100vw, 468px" /></a><br /> <iframe loading="lazy" width="100%" height="61" scrolling="no" frameborder="no" src="https://w.soundcloud.com/player/?url=https%3A%2F%2Fapi.soundcloud.com%2Ftracks%2F1055815534&width=false&auto_play=false&hide_related=false&visual=false&show_comments=false&color=false&show_user=false&show_reposts=false"></iframe></p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2021/05/19/these-five-principles-will-accelerate-innovation/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20These%20Five%20Principles%20Will%20Accelerate%20Innovation&body=https%3A%2F%2Fsteveblank.com%2F2021%2F05%2F19%2Fthese-five-principles-will-accelerate-innovation%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. 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AI, machine learning, autonomy, cyber, quantum, access to space, semiconductors, biotech are all being driven by commercial companies. At the front-end of these innovations are startups – organizations the Department of Defense hasn’t previously dealt with at scale.</p> <p>They’re now learning how.</p> <p><a href="https://www.linkedin.com/in/mrinal-menon/" target="_blank" rel="noopener">Mrinal Menon</a> is one of my Hacking for Defense students at Stanford where he’s currently in the MBA program. He’s a former U.S. Navy Surface Warfare Officer. <a href="https://www.linkedin.com/in/deckerjeff/" target="_blank" rel="noopener">Jeff Decker</a> is a co-instructor of the <a href="https://www.h4d.us" target="_blank" rel="noopener">Hacking for Defense</a> class and the Stanford program director. Jeff is an Army Second Ranger Battalion veteran.</p> <p>Mrinal and Jeff’s article below explains how startups can adapt and thrive while working with the Defense Department. And how the Department of Defense is learning to work with startups.</p> <hr /> <p><a href="https://www.fastcompany.com/90634168/why-the-defense-industry-could-be-the-most-transformative-market-for-startups"><img data-recalc-dims="1" loading="lazy" decoding="async" data-attachment-id="27399" data-permalink="https://steveblank.com/fast-company-logo/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/fast-company-logo.png?fit=472%2C90&ssl=1" data-orig-size="472,90" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="fast company logo" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/fast-company-logo.png?fit=300%2C57&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/fast-company-logo.png?fit=468%2C89&ssl=1" class="alignleft wp-image-27399" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/fast-company-logo.png?resize=200%2C38&ssl=1" alt="" width="200" height="38" srcset="https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/fast-company-logo.png?resize=150%2C29&ssl=1 150w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/fast-company-logo.png?resize=300%2C57&ssl=1 300w, https://i0.wp.com/steveblank.com/wp-content/uploads/2021/05/fast-company-logo.png?w=472&ssl=1 472w" sizes="auto, (max-width: 200px) 100vw, 200px" /></a><br /> This article previously <a href="https://www.fastcompany.com/90634168/why-the-defense-industry-could-be-the-most-transformative-market-for-startups" target="_blank" rel="noopener">appeared in Fast Company</a>.</p> <p>At a time when young companies struggle to find technology sectors <a href="https://hbr.org/2020/02/a-survival-guide-for-startups-in-the-era-of-tech-giants">not dominated by Silicon Valley’s giants</a>, most startups remain oblivious to one of the largest markets in the world, the U.S. Defense Department. The military awarded <a href="https://about.bgov.com/news/fiscal-2020-pentagon-contracting-hits-record-445-billion/">$445 billion</a> in contracts in 2020. By comparison, last year’s global market for software-as-a-service, one of the hottest sectors for startup creation and investment, <a href="https://www.gartner.com/en/newsroom/press-releases/2020-07-23-gartner-forecasts-worldwide-public-cloud-revenue-to-grow-6point3-percent-in-2020">was estimated at $104 billion</a>.</p> <p>There’s a willing market here, too. The Pentagon <a href="https://www.nytimes.com/2018/03/15/technology/military-artificial-intelligence.html">is eager for help</a> from the nation’s innovators. The military is <a href="https://www.defense.gov/Explore/News/Article/Article/2567486/artificial-intelligence-key-to-maintaining-military-economic-advantages-leaders/">clamoring</a> for cutting-edge technologies in areas like artificial intelligence, machine learning, and autonomy. To attract interest the Defense Department is handing out <a href="https://www.sbir.gov/analytics-dashboard?agency_tid%5B%5D=105729&program_tid%5B%5D=105791&year%5B%5D=2020&year%5B%5D=2019&year%5B%5D=2018&year%5B%5D=2017&year%5B%5D=2016&year%5B%5D=2015&year%5B%5D=2014">unprecedented</a> numbers of small contracts and in 2020 seeded 1,635 firms with more than $1.5 billion in early funding.<a href="https://www.govexec.com/technology/2019/09/so-many-innovation-hubs-so-hard-find-them/159798/"> Dozens</a> of outreach programs across the military now offer quick revenue to early-stage companies. A startup could land a contract <a href="https://www.nsic.mil/">worth up to $3 million</a> within months of entering the defense market.</p> <p>This emerging opportunity reflects the urgency of keeping pace with rivals like China and Russia, who are <a href="https://www.state.gov/wp-content/uploads/2020/05/What-is-MCF-One-Pager.pdf">furiously integrating</a>commercial technologies like AI, quantum computing, and unmanned systems into their armed forces. If former Google CEO <a href="https://www.forbes.com/sites/jonathanponciano/2021/03/07/google-billionaire-eric-schmidt-warns-of-national-emergency-if-china-overtakes-us-in-ai-tech/?sh=3976db3a199f">Eric Schmidt’s prediction</a> about China overtaking the United States in AI comes to pass, the People’s Liberation Army could be better prepared than the U.S. military for future conflicts in which <a href="https://www.militarytimes.com/news/your-air-force/2018/08/27/the-homeland-is-no-longer-a-sanctuary-amid-rising-near-peer-threats-northcom-commander-says/">cyberattacks</a> and <a href="https://www.army.mil/article/239210/swarm_warning_the_future_of_unmanned_aerial_systems">drone swarms</a> play a larger role than warships and fighter jets. Without adopting cutting-edge commercial technologies, the U.S. military may be rendered obsolete.</p> <p>Yet, for every newly minted success like <a href="https://www.cnn.com/2020/09/30/tech/palantir-ipo/index.html">Palantir</a> or <a href="https://news.crunchbase.com/news/surveillance-defense-company-anduril-reportedly-reaches-unicorn-status-as-a16z-cuts-late-stage-checks/">Anduril</a>, thousands of companies struggle to find follow-on opportunities after receiving early innovation contracts. Historically, more than <a href="https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/181120_NewEntrantsandSmallBusiness_WEB.pdf?GoT2hzpdiSBJXUyX.lMMoHHerBrzzoEf">80% of new entrants exit the defense market</a> before they have a chance to see recurring revenue. Anduril founder Palmer Luckey has <a href="https://twitter.com/anduriltech/status/1202044910561452032">sardonically noted</a> that the only defense companies to reach unicorn status in the past 30 years have all been founded by billionaires able to endure long gaps in funding. To truly compete with technologically advanced rivals, the Defense Department will ultimately need to enable a broad pool of innovative founders to succeed. Until this ecosystem materializes, however, building a successful defense business is likely to take years of grueling effort. Before committing to work with the military, startups must look past the allure of early money and carefully assess whether the defense market is right for them.</p> <p><strong>The Key Questions For Startup<br /> </strong>Despite the Pentagon’s newfound enthusiasm for innovation, startups in the defense market continue to encounter longstanding obstacles. Most companies face uncertainty when trying to bridge prototyping awards with more permanent follow-on contracts. Startups that successfully fulfill innovation contracts don’t automatically scale. Instead, their solutions must still <a href="https://www.defensenews.com/2020/01/30/tech-startups-still-face-the-pentagons-valley-of-death/">compete for funding in a formal budgeting and acquisition process before being eligible for widespread adoption </a>. This ordeal takes <a href="https://acquisitiontalk.com/2020/03/podcast-leaping-the-valley-of-death-with-matt-steckman/">two years or more</a>, during which startups should anticipate little or no revenue as they try to push their product through the bureaucracy.</p> <p>While earning the first $1 million in the defense market can be relatively easy, landing the next $10 million is extremely difficult. Before committing to work with the military, startups should carefully consider whether the defense market is right for them by asking three questions.</p> <p><em>Is there strong interest for the product?<br /> </em>Those that offer solutions to high-priority problems have the best chance of sourcing funding and follow-on awards. Startups should assess how well their technologies align with the needs outlined in the defense budget, <a href="https://www.hqmc.marines.mil/Portals/142/Docs/CMC38%20Force%20Design%202030%20Report%20Phase%20I%20and%20II.pdf?ver=2020-03-26-121328-460">various</a> <a href="https://www.army.mil/e2/downloads/rv7/2019_army_modernization_strategy_final.pdf">modernization</a> <a href="https://dod.defense.gov/Portals/1/Documents/pubs/2018-National-Defense-Strategy-Summary.pdf">strategies</a>, and problems posed by <a href="https://aal.army/">defense innovation hubs</a>. For example, “flying taxi” startup Joby Aviation <a href="https://evtol.com/news/joby-aviation-us-military-airworthiness-approval-evtol/">aligned its electric vertical takeoff and landing aircraft</a> with the Air Force’s <a href="https://agilityprime.com/#/">stated interest</a> in advancing the market for air mobility vehicles. The 3D mapping company Hivemapper <a href="https://www.defensenews.com/land/2020/01/24/army-picks-6-to-work-on-autoloader-for-extended-range-cannon/">found traction with the Army</a> by targeting its need to <a href="https://aal.army/assets/files/pdf/infosheet-faar.pdf">autonomously resupply field artillery units</a>.</p> <p><em>Is the company prepared to endure revenue gaps?<br /> </em>As noted, companies may go years without defense revenue while trying to bridge early contracts with larger opportunities. During this period, startups will need to sustain business development activities and may incur <a href="https://www.fedramp.gov/follow-up-fedramp-costs/">additional regulatory and compliance costs</a> to ensure their product is usable by the military. Investors are also likely to express impatience with the long timelines of defense sales. The best prepared companies can either raise sufficient funds to keep operating or count on revenue from other sources. Palmer Luckey’s Anduril has <a href="https://www.bloomberg.com/news/articles/2020-07-01/anduril-startup-backed-by-peter-thiel-is-valued-at-1-9-billion">aggressively pursued financing</a>to sustain growth. Recently public enterprise-AI firm C3.ai entered the defense market having already built a <a href="https://www.forbes.com/sites/alexkonrad/2017/07/11/siebels-second-act/?sh=4aa2274e664d">successful commercial business</a> in the energy vertical. Similarly, <a href="https://www.iconbuild.com/technology">3D-printing homebuilder Icon’s</a> technologies have applications that extend well beyond national security use cases to commercial housing markets.</p> <p><em>Can I balance the needs of my defense and commercial customers?<br /> </em>The best-positioned startups solve fundamentally similar problems for both military and commercial users. Satellite imagery firm Orbital Insight’s <a href="https://orbitalinsight.com/">Go platform</a>, for example, automates imagery analysis for defense analysts, investors, and agribusiness alike. Some amount of customization is inevitable given that military users often have specific mission requirements or technical constraints. However, companies that can serve military customers without fundamentally altering their existing product roadmap are likely to be most successful.</p> <p>Incidents like <a href="https://www.fedscoop.com/google-project-maven-canary-coal-mine/">Google’s withdrawal from Project Maven</a> have highlighted the potential for conflict when commercial companies decide to work with the military. This tension tends to be lower at startups where an early team willingly signs on to pursue defense business. Regardless, companies should be mindful of the reputational impacts working with the DoD could have on their existing business.</p> <p><strong>The Case for Optimism<br /> </strong>Companies eyeing the defense market have reason to be optimistic. There are a growing number of efforts to remove obstacles to partnerships between high-tech startups and the military. For example, the Air Force last year created the <a href="https://breakingdefense.com/2020/03/afventures-debuts-with-550-million-in-startup-awards/">Strategic Financing (STRATFI)</a> program. STRATFI provides the Air Force’s most promising commercial innovators, a list which includes Icon and Orbital Insight, quick access to large contracts worth up to $15M. Another positive sign is President Biden’s nomination of former Symantec CEO <a href="https://www.linkedin.com/in/michaelabrownceo/" target="_blank" rel="noopener">Mike Brown</a> to oversee the <a href="https://www.fedscoop.com/mike-brown-dod-acquisition-and-sustainment-nomination/">Pentagon’s purchases of new technologies</a>. As director of the Defense Innovation Unit (DIU), Brown has spearheaded investments in commercial technologies and helped C3.ai, Joby Aviation, and other Silicon Valley standouts navigate funding gaps. If confirmed, Brown could accelerate much needed reforms to military acquisition processes.</p> <p>A startup that makes it through the hurdles may find a massive market with a stable set of customers eager for better technology solutions. The U.S. government pays its bills on time, defense budgets are shielded from short-term volatility, and contracts may be guaranteed for multiple years. 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