More tech start-ups and ventures than ever are attempting to work with the United States Department of Defense (DoD). Yet despite the DoD wanting to work with them, a relationship between the two has traditionally had a very low probability. One of the biggest reasons start-ups and ventures fail is because they misunderstand how their technology fits into the DoD.
The Hacking for Defense Initiative at Stanford University has researched go-to-defense market strategies and transitioned university technologies and commercial products to the DoD for the past three years. The result has been the incorporation of more than a dozen companies that have landed lucrative DoD contracts and now help solve the most pressing national security problems. Lessons learned from these experiences clearly indicate the characteristics that separate defense marketplace successes and failures.
Solutions are insufficient to win defense customers
Ventures with rapidly emerging technologies and/or commercial products typically assume they have a defense product. As such, their initial narrative to defense personnel sounds something like this:
The Air Force uses drones and therefore could use better drones. We provide better drones. The value we offer the Air Force is better drones. Finally, our drones are better than the competition.
Narratives like this focus deeply on the venture’s solutions ignoring the customer. Narratives like this require would-be customers to: 1) understand the technology; 2) recognize the value of the technology across their defense organization, and; 3) identify who could benefit from the solution and why. Consequently, no matter how valuable a technology or product might be to the government, In fact, narratives like these repel customers because it effectively asks a potential defense customer to determine the solution’s value rather than conveying the solution’s value.
Crafting winning narratives requires ventures to know who the customer is, the problems that customer faces, the value the customer needs to overcome those problems, how they measure success, and lastly, how this new solution can deliver that value. Here are three tips to help ventures craft winning narratives for the defense marketplace:
Know Defense Department Needs
The first question ventures entering the defense marketplace want to answer is “Who are my customers?” However, answering “What problem can my solution solve?” should be primary. Identifying problem solutions can lead to defense personnel who have problems and are interested in solutions.
The purpose of each document is to ensure that relevant government organizations are on the same page. The needs and priorities of each document will become more specific the smaller the issuing organization. Guidance issued by the Secretary of Defense pertains to all Defense Department organizations while Department of Navy guidance only pertains to the Navy and Marine Corps. While the information will be general, it helps ventures determine how their solutions fold into the priorities and needs of the DoD, potential customers, and, most importantly, the words and phrases government personnel use to describe their problems.
Second, ventures should search for real-life instances of problems their solution solves. Finding real-life news stories indicates potential customers (e.g. those interviewed or mentioned by the media) by suggesting why the problem is important. Such information is also highly useful in facilitating a conversation about how the solution could have helped mitigate that problem.
Citing strategic guidance and real-world examples generates a sense of immediacy around solving the problem, which tees up a conversation for ventures to learn exactly who faces these problems and how the solution aligns to meet defense needs. The formula is simple: talk context first, and then how your solution aligns with that context.
Align Technology to Needs
Following an understanding of DoD priorities and needs and general organizations that might be interested in a solution, ventures need to gain greater granularity on exactly who their customers are. Ventures can do this by matching the value a solution provides to specific people with a problem that solution can solve.
Ventures should begin by learning how potential customers measure better. A better drone, for example, could be one that flies farther, longer, carries a heavier payload, and/or costs less. The term “better” is tethered to a specific customer’s needs. Knowing metrics of success will lead you to learn which potential customers would most benefit from the solution. The best way for ventures to accomplish this is to talk to potential customers and learn exactly what new solutions need to do to be better. Once ventures understand their customers key metrics of success, they can then discuss how the solution aligns to customer needs.
Demonstrate Superiority
The final piece is demonstrating how/why a venture’s solution is superior to current solution(s) being used and the competition. To accomplish this, ventures not only need to understand the value a customer wants (e.g. fly farther, longer, etc.) but how much improvement is necessary for the customer to consider a new solution.
For example, does the Air Force customer need a new drone to fly 2x or 10x farther than the current capability? Knowing this threshold will help ventures evaluate the opportunity. If the threshold for improvement is high, then ventures may need to conduct significant engineering to accomplish that goal, which may not be worth the time. A high threshold for improvement could also disqualify ventures from the opportunity if they simply cannot produce on the level expected. However, learning that your customer has a low threshold of improvement may indicate an important opportunity for your company. This can be achieved by asking customers about the benefits and shortcomings of existing capabilities and the baseline of improvement needed to move the needle on a problem.
Conclusion
The defense marketplace represents a real opportunity for many ventures. Ventures fail because they are unable to gain customers. These three steps will help ventures identify potential customers and link the value their solution delivers to meeting customer needs. The steps are simple but the process is time consuming; doing them will dramatically increase a venture's chances of success.
by Jeff Decker, program director and co-instructor of Hacking for Defense at Stanford University.
