Tough Tech Today with Meyen and Miller

Launching dual-use ventures, featuring Katy Person of the MIT Innovation Initiative

September 08, 2020 Jonathan Miller, Forrest Meyen, and Katy Person Season 1 Episode 3
Tough Tech Today with Meyen and Miller
Launching dual-use ventures, featuring Katy Person of the MIT Innovation Initiative
Chapters
0:46
Introducing Katy and the MIT Innovation Initiative
2:23
What are “dual-use ventures”?
3:25
Examples of dual-use ventures
4:14
Updating legacy systems
5:47
Origins of dual-use technology
6:41
Defense-oriented startups: in Boston and beyond
8:51
DOD funding of “innovation”
9:15
AFWERX and its Open Topic Solicitation
10:18
The unique approaches by each branch of the U.S. military
11:32
How the U.S. government thinks about “acquisitions”
13:07
About Open Topics and integrating startups into defense
14:21
Taking advantage of the “Small Business Set-Asides”
15:58
Venture capital, DOD contracting, and dual-use startups
17:54
New technological trends like robotics, hypersonics, and medical research
19:14
Influences of DARPA and BARDA
20:13
Where are the undersubscribed federal government contracts?
21:52
Katy’s motivation for serving mission-oriented organizations
23:43
Beware the government contracting ‘trough of disillusionment’
24:22
The three phases of dual-use venture contracting
26:09
Draper is a contractor ally for space startups
27:40
Contrasting the DOD with NATO and non-US defense organizations
30:30
The pervasive nature of ITAR regulation
31:09
Evaluating national ‘innovation’ approaches
31:52
The need for more students entering STEM (Science, Technology, Engineering, Mathematics)
32:46
A U.S. Space Force opportunity?
34:11
Putting together the puzzle of government innovation cells and tech entrepreneurs
34:56
MIT’s ‘Dual-use incubator’ and Louisiana Tech’s STTR program
37:30
Resources for aspirational dual-use entrepreneurs
Tough Tech Today with Meyen and Miller
Launching dual-use ventures, featuring Katy Person of the MIT Innovation Initiative
Sep 08, 2020 Season 1 Episode 3
Jonathan Miller, Forrest Meyen, and Katy Person

Dual-use ventures – tough tech startups pursuing commercial relationships with the private sector and federal government, are a unique class of companies with whom Kathryn "Katy" Person, of the MIT Innovation Initiative, works daily.

"[Working with the United States government, such as the Department of Defense,] is not for everyone and not for every business. It depends on whether you come in mission-focused... and it depends on your business strategy," says Katy. As a military veteran with a background in U.S. Army acquisitions, Katy observes "the trough of disillusionment occurs between Phase II and Phase III" of government contracts, and there is a delicate, strategic relationship that may harm or benefit a dual-use venture and with whom it chooses as allies, whether prime contractors, venture funds, government liaisons, university research hubs, and other entities.

In this episode, we discuss the challenges tough tech entrepreneurs face balancing the myriad of funding opportunities and challenges afforded to dual-use ventures serving the private sector and federal government.

---------------
Show Notes

* Episode page, transcript, and podcast listening links: https://toughtechtoday.com/launching-dual-use-ventures-featuring-katy-person-of-the-mit-innovation-initiative/
* Katy Person on LinkedIn: https://www.linkedin.com/in/katyperson/
* MIT Dual-use Ventures Incubator program: https://innovation.mit.edu/mission-innovation-program_incubator/
* jmill’s article, Who’s Your Ally? How Tech Startups Navigate Venture Capital and Federal Funding: https://medium.com/@iamjmill/whos-your-ally-e2ff6068cd3a

---------------
Topic Timecodes

00:46 Introducing Katy and the MIT Innovation Initiative
02:23 What are “dual-use ventures”?
03:25 Examples of dual-use ventures
04:14 Updating legacy systems
05:47 Origins of dual-use technology
06:41 Defense-oriented startups: in Boston and beyond
08:51 DOD funding of “innovation”
09:15 AFWERX and its Open Topic Solicitation
10:18 The unique approaches by each branch of the U.S. military
11:32 How the U.S. government thinks about “acquisitions”
13:07 About Open Topics and integrating startups into defense
14:21 Taking advantage of the “Small Business Set-Asides”
15:58 Venture capital, DOD contracting, and dual-use startups
17:54 New technological trends like robotics, hypersonics, and medical research
19:14 Influences of DARPA and BARDA
20:13 Where are the undersubscribed federal government contracts?
21:52 Katy’s motivation for serving mission-oriented organizations
23:43 Beware the government contracting ‘trough of disillusionment’
24:22 The three phases of dual-use venture contracting
26:09 Draper is a contractor ally for space startups
27:40 Contrasting the DOD with NATO and non-US defense organizations
30:30 The pervasive nature of ITAR regulation
31:09 Evaluating national ‘innovation’ approaches
31:52 The need for more students entering STEM (Science, Technology, Engineering, Mathematics)
32:46 A U.S. Space Force opportunity?
34:11 Putting together the puzzle of government innovation cells and tech entrepreneurs
34:56 MIT’s ‘Dual-use incubator’ and Louisiana Tech’s STTR program
37:30 Resources for aspirational dual-use entrepreneurs

Show Notes Transcript Chapter Markers

Dual-use ventures – tough tech startups pursuing commercial relationships with the private sector and federal government, are a unique class of companies with whom Kathryn "Katy" Person, of the MIT Innovation Initiative, works daily.

"[Working with the United States government, such as the Department of Defense,] is not for everyone and not for every business. It depends on whether you come in mission-focused... and it depends on your business strategy," says Katy. As a military veteran with a background in U.S. Army acquisitions, Katy observes "the trough of disillusionment occurs between Phase II and Phase III" of government contracts, and there is a delicate, strategic relationship that may harm or benefit a dual-use venture and with whom it chooses as allies, whether prime contractors, venture funds, government liaisons, university research hubs, and other entities.

In this episode, we discuss the challenges tough tech entrepreneurs face balancing the myriad of funding opportunities and challenges afforded to dual-use ventures serving the private sector and federal government.

---------------
Show Notes

* Episode page, transcript, and podcast listening links: https://toughtechtoday.com/launching-dual-use-ventures-featuring-katy-person-of-the-mit-innovation-initiative/
* Katy Person on LinkedIn: https://www.linkedin.com/in/katyperson/
* MIT Dual-use Ventures Incubator program: https://innovation.mit.edu/mission-innovation-program_incubator/
* jmill’s article, Who’s Your Ally? How Tech Startups Navigate Venture Capital and Federal Funding: https://medium.com/@iamjmill/whos-your-ally-e2ff6068cd3a

---------------
Topic Timecodes

00:46 Introducing Katy and the MIT Innovation Initiative
02:23 What are “dual-use ventures”?
03:25 Examples of dual-use ventures
04:14 Updating legacy systems
05:47 Origins of dual-use technology
06:41 Defense-oriented startups: in Boston and beyond
08:51 DOD funding of “innovation”
09:15 AFWERX and its Open Topic Solicitation
10:18 The unique approaches by each branch of the U.S. military
11:32 How the U.S. government thinks about “acquisitions”
13:07 About Open Topics and integrating startups into defense
14:21 Taking advantage of the “Small Business Set-Asides”
15:58 Venture capital, DOD contracting, and dual-use startups
17:54 New technological trends like robotics, hypersonics, and medical research
19:14 Influences of DARPA and BARDA
20:13 Where are the undersubscribed federal government contracts?
21:52 Katy’s motivation for serving mission-oriented organizations
23:43 Beware the government contracting ‘trough of disillusionment’
24:22 The three phases of dual-use venture contracting
26:09 Draper is a contractor ally for space startups
27:40 Contrasting the DOD with NATO and non-US defense organizations
30:30 The pervasive nature of ITAR regulation
31:09 Evaluating national ‘innovation’ approaches
31:52 The need for more students entering STEM (Science, Technology, Engineering, Mathematics)
32:46 A U.S. Space Force opportunity?
34:11 Putting together the puzzle of government innovation cells and tech entrepreneurs
34:56 MIT’s ‘Dual-use incubator’ and Louisiana Tech’s STTR program
37:30 Resources for aspirational dual-use entrepreneurs

Katy Person :

Having tours in Afghanistan, obviously I want my friends who are still over there and those who I haven't met have the best tools, the easiest tools, to do their jobs. Military personnel have a lot of glass balls that they juggle. If we can really make the tools that they have less complex to use, and that's gonna be really helpful.

Announcer :

Welcome to Tough Tech Today with Meyen and Miller. This is the premiere show featuring trailblazers who are building technologies today to solve tomorrow's toughest challenges.

Jonathan :

Welcome to Tough Tech Today. Today we have the honor of speaking with Katy Person. Now I want to say on a on a personal professional level, Katy and I've been working together for a couple of years through the MIT Innovation Initiative where we've co-authored studies on innovative innovation ecosystems associated with the Department of Defense and the ways that it can improve the way that it's working with young companies, venture capital, etc. More recently, we've been working together on articles that help speak to entrepreneurs who are building these technologies, so that they can get the help they need to be able to steward them toward both the private sector and, in some cases, to toward government as a client. So with that introduction, Katy, could you tell us what your role is at MIT currently?

Katy Person :

Yes, so I'm the program manager for Mission Innovation programs. It's evolved quite a bit since it was stood up two years ago, from the research that you talked about to right now, where the focus is dual-use ventures and incubator structure around that to help them find federal opportunities as well as commercial market plays.

Jonathan :

So then you must have you're seeing must be seeing startups on a daily basis and I think it'd be great for us to dig into that. But first, I want to clarify the term 'dual use'. Could you elaborate on that?

Katy Person :

Yeah, in some sectors, it's kind of a dirty word because we associate with misapplication or misuse, but just dictionary wise, it's a technology or a venture that has a military application, but also a commercial – enterprise or consumer – application.

Forrest Meyen :

Now, when you say military, do you mean that the application is only the military or it could be a government application, in addition to the military, I'm just coming from this from like the space perspective as sometimes we have stuff that's dual-use for space, but not quite the military.

Katy Person :

Yeah, so I've thought a lot about this and kind of wrestled with it. Dictionary-wise, just literally, it is military. If there is a space application, that can also be maybe the core technology can also be shared in a military application. And that would be a dual-use technology.

Jonathan :

What would be an example of a company or technology that historically has gone down that pathway of serving to somewhat different client or customer bases that we would retroactively apply the term 'dual-use' to?

Katy Person :

There's one that I work with, that's a smart engagement platform. It's something that they started with a commercial application. It probably traditionally isn't thought of as a military application, but since the Department of Defense is so large, and probably the largest single entity that buys things – it buys all business enterprise solutions, it buys all medical kinds of devices – so it also purchased this smart engagement platform.

Jonathan :

How much would be then traditional corporate enterprise products and services, is that a one to one mapping onto that the government broadly, like the US government, let's say, would be potentially a customer of these products and services?

Katy Person :

Yeah, I think so. The nuances that the Department of Defense has, is a long time. It's a legacy organization, and it's very slow moving with a lot of bureaucracy. To actually replace a current system is either very challenging or just not going to happen. When the Department of Defense procures something, it really has to look at what it already has and see first if it can be improved, because it's just so expensive to replace these kinds of legacy systems,

Forrest Meyen :

The companies that you're working with, the startups, are these all MIT-affiliated companies, are they current students, are they people have been graduated awhile?What's the sort of makeup of the types of companies that you help?

Katy Person :

It's really a mix. Most of them are alumni. Some are postdocs, some are recently departed postdocs. Many of them have PhDs from MIT. And so they have this long history with MIT and have been in this ecosystem for a while.

Forrest Meyen :

And is it always MIT Technology that is licensed from MIT? What's the basis of the technology?

Katy Person :

Not necessarily. There are some companies that license-out lab-based technology, and maybe they're a postdoc who was in that lab and that was something they saw a commercial application for government application they want to spin out. But a lot of times it's something somebody worked on maybe what we consider dorm-based, but maybe the other organizations consider it garage-based, that kind of technology. Definitely companies formed around that. Since this is a tough tech podcast, we also emphasize tough tech so we do prefer working with lab-based for at least where the core of their technology was from a lab and maybe it's evolved since there or maybe part of it still is in the lab

Jonathan :

With your role and our pre-existing associations with MIT as a preeminent research institution, it's phenomenal on many levels in that respect. However, with the dual use ventures and the kinds of companies and techniques that we've all seen over the past decades that have evolved, what would you say in terms of the the non-MIT folks?Because that's the majority of folks and there's no reason that the good ideas would only come from like one particular group that's in Cambridge, Massachusetts. Are you seeing some trends or, in terms of the ecosystems that are outside of, say, Cambridge, Massachusetts, that are producing some of these cool technologies and great teams?

Katy Person :

Yeah, so some of the only ones I really work with are MIT, but I am on a lot of calls with the Department of Defense and tech startups that are trying to also apply for a certain solicitation that's hosted by the Department of Defense, usually the Air Force. So it seems like a lot of the tech startups are coming from Texas, usually Austin. I don't hear a lot of people from California, not as many from Silicon Valley as I would think. Definitely from the D.C. area, maybe just because they're more familiar with federal government and opportunities. I just attended one that was hosted by the state of Ohio, one of their agencies. And that's because of the link with the Air Force Research Lab being located in Dayton. So that's a hot location as well. It's a little bit of everywhere. Being based in Cambridge, I always think, oh, it should be completely Cambridge. But it's really such a small portion when I attend on these calls that are actually from Cambridge or even greater Boston.

Forrest Meyen :

What types of things is the Department of Defense doing to partner with these small companies? It's a slow moving organization, but what sort of innovation are they trying to do? To speed up the cycle of funding so these companies don't starve before they can get a contract?

Katy Person :

Yes, in the last maybe 8 to 10 years, there's been this huge ramp up and really in the last couple of years, with the creation of AFWERX, it has really led the way in their contracts cycles, how fast to award money from the submission of the proposals and who they're reaching out to because a lot of those solicitations are very precise with what the DOD is seeking. So AFWERX created an Open Topic solicitation, and there has been at least one joint solicitation in February, where if you're in a general theme such as flying orbs, which is the flavor of today, then you can propose for, for some funding and for a contract, so that that really opens up the reach of who can apply and who should be applying to these solicitations. Each of the services has their own way of thinking about innovation and how to reach more people. The army has the Army Applications Lab, which is really focused on connecting with VCs. That's really been their target way to meet new people meet new startups and see what's in the market. The Navy has NavalX, Naval Agility Cell, and they have these Tech Bridges, where they're located on naval bases, but they're really for startups to reach out to and say, 'I have this great technology, where in the world do I interact with the Navy?' and that person plays the role of matchmaker to the program executive office within the Navy that's working on that kind of work.

Jonathan :

There's a lot to unpack there with what you said. A contextual question could be helpful. I've heard what you said in terms of like there's the different branches of the military having their own ways of doing things. If I'm an entrepreneur, or maybe a family member or friend is working, hoping to get into this space, could you help me understand the overall process by which the Department of Defense thinks about new technologies and how it goes about the acquisition process of that, which I understand is a little different than on typical startupland where we're like, 'Yeah, I got acquired for hopefully millions of dollars'. It's a little bit different meaning of the word in the military.

Katy Person :

I understand your question in two different ways. So if I'm a startup, it kind of starts with what kind of startup are you? Do you have some kind of scientific discovery or technology mechanism that you've engineered that you think you can place into some that will solve some kinds of different problems? And in that case, you have to figure out what your use cases are for that and how you can really scale that innovation, whether it's building out a system, whether it's retrofitting it for different use cases. That's different than if you're a team of engineers, and you want to solve interesting problems, and you have an area of expertise in you know, X, Y, or Z. So the latter is a classic DOD entry point. You have this area of expertise you go through www.dodsbirsttr.mil. Look through all of the solicitations you see which one fits, you apply to it, and hopefully you get awarded your contract. But if you have this, this technology, a scientific discovery, that you want to get into the DOD process, it's only been until recently that you can easily. That would be an Open Topic that the Air Force regularly hosts and sometimes the other services add on to their joint topics. That would be maybe these different challenges, like AFWERX Challenge. SOFWERX has different challenges. They're saying, 'you know, we have this problem, solve it in any way you can'. So you could bring a biotech solution or you could bring, a robotic solution or whatever your area of expertise. If you think it fits, then you can propose a solution. The other way you talked about your question is from the DOD's perspective of how they want to integrate startups. It really kind of feels – and I don't like saying this because my early career was in the military and in government – it does feel like sometimes the Small Business Set Aside is an afterthought.

Jonathan :

What is a Small Business Set Aside?

Katy Person :

The Small Business Set Aside is specifically for those businesses that have fewer than 500 people, or depending on your NAICS code, when you're trying to figure out where you fit in the government, what you're offering. There's a specific definition, maybe if you're nanotechnology, it might be a certain dollar volume that identifies you as a small business. But then you go and register as a small business with the federal government. And then you're able to apply for small business set asides, which are specific solicitations that only small businesses can compete for. I see these in two buckets, the DOD has the regular VAs that are not tech based. These are a lot of service based. Maybe you're a landscaping company and you need to mow the lawns and do all the landscaping for Hanscom Air Base. And that's maybe a small business set aside. But then the tech in 1982, there was a federal directive that came down and was initiated that established the SBIR program, Small Business Innovation Research. That's where engineers and scientists, if you want to work in that field, that's where you go to either sbir.gov. National Science Foundation has these, NIH has these, and then dodsbirsttr.gov has these. Even the USDA has these these. There's a tremendous number of agencies that are required, based on their budgets, that they a certain percentage is mandated that it has to go to small businesses.

Forrest Meyen :

When you have a startup that is thinking about pursuing dual use ventures and maybe they have some VCs or people funding them, what's the reaction that you see from them? And are you able to communicate the value of pursuing a dual use venture? Or for sometimes it just not worth it?

Katy Person :

I mean, it's tough. I think if a tech startup has a lot of VC interests, then the VCs are gonna steer whether they want that startup to pursue DOD contracts or government contracts. It may not be in alignment with with their requirements for ROI, which Jonathan laid out nicely in his blog series that's on the innovation.mit.edu website.

Forrest Meyen :

Check it out.

Katy Person :

But it is it's tricky, right because species, you know, Depending on the VC and what they want, if they're comfortable with DOD contracts, it's really going to depend on, on whether that fits into the startups business strategy. DOD is not for everyone, it's not for every business. It really it just kind of depends on whether you come in really mission focused, and you say, you know, what I do I have this inertial navigation system, or, you know, whatever it is, and it and I really see it on Navy ships. Like if that's how you come in at it, then that's where you start and then see whether there's some commercial applications for, you know, for Merske or for some other major ship companies. But it just really depends on your business strategy.

Jonathan :

That's really interesting. What kinds of technological trends are you seeing and how has that changed over the past few couple of years?

Katy Person :

For what the DOD is seeking?

Jonathan :

It's on the DOD side, that's definitely part of it, though also, because of your role working within the startup ecosystem where it's not just the market pool or tech push, there are both sides of that market.

Katy Person :

Yeah. With the startups that I talk to, there's quite a few that are in robotics, some are in hypersonics. Although it's hard, some a lot are in coming out of labs with cancer research and saying, you know, what, I know DOD pays money for good research – is this possible? I think kind of a lot of those, there's a little bit on sustainability but it is mostly very classic defense things or very classic healthcare things coming out of MIT, from who I get to see.

Jonathan :

Well, that's interesting that on the health care and medical side of things. What kind of influences are you seeing from say, DARPA, the Defense Advanced Research Projects Agency and BARDA, the Biomedical Advanced Research and Development Authority.

Katy Person :

I don't see either one of those. I understand that they do a lot of funding, they do a lot of SBIR cycles. They're rolling several cycles, at least DARPA is. I actually don't have BARDA on my – I'm not watching it as much as I am the other ones. A lot of times we don't necessarily recommend DARPA because it is either early or specific or over subscribed without applications, but it doesn't mean that it's not mean if if that's what your lab research deals with, then that solicitation matches, that's definitely a worthy opportunity for funding your research.

Forrest Meyen :

So where's the most under-subscribed area?

Katy Person :

Yeah, there's a there's a lot of –

Forrest Meyen :

I guess it won't be undersubscribed once everyone listens to this.

Katy Person :

Yeah.

Forrest Meyen :

Find out the secret.

Katy Person :

I've heard rumors that sometimes they just pan out. I just go with the rumor and I tell a startup, you know, I heard this rumor that nobody is applying for this STTR. So I do hear the STTR. So generally less applied for the SBIRs, particularly in DOD because nobody knows what an STTR is. And that's different than NSF. NSF is widely subscribed. Everybody in universities have heard of National Science Foundation, and there's wonderful commercialization programs like iCorps to help gain some traction with NSF. I think as far as volumes of dollars, when we look at, it's like, almost $2 billion from the last data batch, which was 2018 for the volume of SBIR and STTR dollars that strictly DOD issued, as opposed to the second largest which was NIH. And then the third largest was the National Science Foundation. And that went all the way down to Department of Education has a program, and USDA. Department of Energy is pretty high up there, I want to say but I'm not certain. There's probably eight or nine agencies in there.

Jonathan :

You mentioned that you have some background in army acquisitions. I know that's not the only part of your background that have and that is relevant to this. What keeps you engaged and really working to help continue sort of developing this part is a really important part of startups and the way that the government is able to benefit collectively?

Katy Person :

Yeah, I think it's a couple things. I think having tours in Afghanistan, obviously, I want my friends who are still over there, and those who I haven't met, to have the best tools, the easiest tools, to do their jobs. Military personnel have a lot of glass balls that they juggle. If we can really make the tools that they have less complex to use, then that's going to be really helpful and more effective. The other side to that is that the DOD needs to access the largest amount of human capital that it can so that it brings in the best minds to solve these tough problems and the SBIR and STTR programs are probably the largest mechanisms to do that. And so this is a great opportunity for people who are interested in helping be part of this solution with these tough problems to come in and to contribute. The tough part is really getting it through the acquisition system into a phase three, integrated into major Defense Acquisition Program, where maybe A tech startup's algorithm is then part of an aerial delivery system or whatever.

Forrest Meyen :

What percentage do you think makes it to that part?

Katy Person :

It's extremely low. Jonathan and I have talked about the trough of disillusionment is between phase two and phase three. As for your audience, SBIR and STTR has a phase one and phase two. But then phase three is not under small business dollars. You're either lucky enough to get a sole source and you've really made a compelling case which I think is rare, or you compete against large major defense primes. So probably the best way to get across that trough of disillusionment is to potentially partner with one of those defense primes to get your piece of the puzzle into a larger contract.

Jonathan :

So then if, for the listeners, then that means that if we're okay, on phase one, congratulations, phase two, maybe we're going beyond like a prototype stage, maybe some semblance of what we might call like a product-market fit. But then phase three, the gloves are off and we are as a little company up against Boeing, Lockheed, and all the rest. Is that correct?

Katy Person :

I would, I would kind of fine tune it a little bit where depending on the solicitation a phase one it's technically, by definition, a feasibility study. And that can be both in the technical sense or some of them are simply making sure that you're finding the right customer. Like for the some of the open topics, they give you that three month contract to identify with whether there is somebody in the airforce who says, Yes, I absolutely need this, I will run a pilot with it. Phase Two is where you're completing your prototype and actually putting it into a pilot program, running it, testing it. Maybe not formal tests, like you might think of a tack or government has very formal testing procedure, but this is kind of just a pilot program to see how it goes. And then phase three is, in a lot of ways, it's kind of like your equivalent of production. If you're a tech company and you're not going into production, it might be maintaining an algorithm or a piece of software or whatever that is that you've developed, maintaining it, polishing it, making it better, that kind of thing.

Forrest Meyen :

Yeah definitely for that next phase and going on you really helps to have partners. Just to plug, Draper is a place that you can come to find people that can partner with you. We work with a lot of DOD customers and we love having companies to help integrate into some of the systems that our customers want.

Katy Person :

Yes, Primes have figured out ways to work with startups because they recognize the maybe that they're attractive to have some new kinds of innovation happening that they're a part of, or if it makes their proposal to a major contract more attractive, they need small businesses to be a part of it or a company from North Dakota So all of those defense practices, some way of interacting with startups, some are through investment. Some are strictly through vendor services. BAE Fast Labs claims to be through strictly vendor services. Whereas, Jonathan, what was the company that maybe it was Lockheed Ventures? What was it that it's actually a VC, right?

Jonathan :

Yeah, Lockheed Ventures, Boeing HorizonX, which has some sort of like an accelerator component to it for sort of quasi venture capital and dual use and help build the startup, all at the same time. The United States Department of Defense is, of course a major influencer in sort of the global military industrial system. But it's not the only one in town, certainly.Could you help us in our our listeners or viewers to paint a little of a contrast between maybe like the DOD and NATO, or some of the other major influencers globally?

Katy Person :

NATO, what I've heard from talking with startup founders, and also with members of NATO who run these kinds of organizations is you can both apply to the formal solicitations. But then you can also kind of run a pilot programs where you're kind of there, there may they may not be investing initially, but maybe you need the data or some kind of CRADA agreement where you're providing them something for free until they buy it. So it's it is not entirely different from the DOD where they do have the ability to sole source but it's not widely widely, always accepted. The other other kinds of organizations.. I'm trying to think if there... did you mention any other ones, Jonathan?

Jonathan :

I know NATO though I am of course, there's some of the nationalistic militaries like China, Russia, Israel, etc. That would be maybe not NATO, but also very, probably very different way of going about their business.,

Forrest Meyen :

How do we measure up with our innovation approach? Because this seems like it's a competitive point for the United States, right, that we need to incentivize our technology in a better way than than other countries can.

Katy Person :

Yeah. So I think to address like, first I don't want to miss the opportunity to talk about ITAR, which, you know, if you sell to the US government, you have to get it approved before you sell it to another government.

Jonathan :

I'll put you on the spot? What's that acronym mean?

Katy Person :

international trade and regulation.

Forrest Meyen :

International traffic on arms.

Jonathan :

There's so many acronyms in this in this field to keep track of

Katy Person :

international traffic and arms regulation, is that right? It may not be right. Yeah, it might be something....

Forrest Meyen :

I believe that it is. In space, we deal with it every day.

Jonathan :

Hence why...

Forrest Meyen :

If it flies in space, U.S.-only, then let other people worry about the rest.

Katy Person :

Sit? Yeah. So basically the Department of State has to prove whether you can sell to another nation. A lot of times you'll be surprised that something is considered under ITAR regulation. (I guess that's redundant.) Under ITAR, if it's a piece of software that, you know, is specifically crafted to go into a US aircraft or like a US Air Force aircraft, then that is under it, even if it has commercial applications. It is very pervasive. When we talk about competition and whether DOD is able to keep up. I mean, that's like, that's like the elephant in the room. Like, I think it's accepted that the US can't keep up with China. China's able to strategically fund companies in a way that we're not able to whether because of case law, or because of the population size, human capital in deep tech areas, all kinds of reasons. I really fear that the US... we don't have enough students or young people who plan to go into these deep tech areas, so that we have this human capital in the future. And so I think this is this is the number one national security issue. We need more US citizens, Americans, in STEM and going into STEM in the future and mid careers transitioning into STEM to get this expertise. And at least know how to apply it and work it, even if they're in, in policy or in some kind of other... just understanding how to work with it. And it's also the basis to the future of our economy. It's the heart of our future and national security and economy. So it's a really big deal. And I think Congress has recognized this through their proposal, their bill for the National Science Foundation to get even more money and to be called the National Science and Technology foundation. I can't remember what the bill is called, but this just came out a few weeks ago. And so there's there's definitely plenty of attention to this. But it really feels very far off to me.

Jonathan :

Is there a role or an opportunity with say, the newest branch of the US military, the US Space Force to be able to, from the ground up, sort of refresh, rethink how acquisitions are done and to expedite it perhaps to get a little bit more toe to toe with some of the other military groups, globally?

Katy Person :

So I think some of the infrastructure they won't be able to like the regulation, is there a Federal Acquisition Regulation. Those are solid in there. They're, they're hiring everybody brand new, because it's brand new. So there's the potential where they could hire the kinds of people who can think in a little bit different way. Whether they're doing that or not, I don't know. And certainly, it sounds like their leadership is committed to being more innovative and recognizing and solving trying to solve as best as they can these acquisitions challenges. And so I think that that's I mean that that in and of itself is the first step but it is not going to be without its own challenge with already built infrastructure with the regulation, the case law, all of that, those kinds of things that they're founded in.

Forrest Meyen :

So not quite starting fresh. What's the your favorite part about your job?

Katy Person :

I get to talk with a mix of DOD, people who are trying to buy things or trying to be that matchmaker that innovation sell. And then I also get to talk with the startups. And every day my day is packed with eight meetings of, you know, maybe it's five of startups and three with DOD and trying to put together the puzzle. As long as I can add value to both systems, both kinds of people, then I get a lot of gratification out of my job. So hopefully I am if you're listening and you're one of these people, please lean on me to continue to do this.

Jonathan :

And that's a good lead into some of your most recent work in terms of growing MIT's STTR program. How do you feel that this program, which my understanding is it's currently for, like MIT affiliates, it's kind of restricted to that, which is a large pool, fortunately. However, it's not everybody. So how do you feel that this could become a model of one way to help foster that sort of academic linkage, and the deeper tough tech research that's going on to make it so that it supports not just the private sector, but also the public more broadly?

Katy Person :

So with the STTR, the startups always lead, right. MIT is the subcontractor to a startup in each solicitation, which really is refreshing, puts a lot of onus on the startup and also emphasizes our faculty, Dr. Fiona Murray's, five stakeholder model where all of the stakeholders come to your round table. So government isn't calling all the shots or industry isn't calling all the shots... universities, VCs, startups. So startups are the CEOs, they are coming here and they're the the primes for the US. We are not the first to do this model. I definitely know of at least one other university that's doing this. And I have to credit Louisiana Tech for creating this and doing this. And there's a lot of interesting models out in places we don't suspect and leveraging federal opportunities where where they can be leveraged. Hopefully this model is replicated. It can be a little bit of a hard sell when you're talking about a $50,000 contract and MIT is getting $15,000 for three months. We go to Central Office and they're like, you're not you're not very high on my priority list. Maybe I don't know if that's what they say. But I, I feel like they could say that because $15,000... and it's the same amount of overhead as maybe a larger contract. So there is that negative for universities and nonprofits doing this. But I mean, we hope to touch as many great MIT deeptech startups that need this kind of education and programming around this so that they can apply in the future and get their Phase IIIs.

Jonathan :

The work that you spoke on has almost a whole different world in terms of vocabulary, mentality, the philosophy of the work itself. Are there some resources that you have found useful, and that you may suggest to our audience that they can use to get smarter about some of these topics that you've touched on? Because there's a lot there.

Katy Person :

Yeah, definitely. So SBIR.gov for sure. That's the first place anybody should go if they're thinking about applying to federal opportunities. They have a great eligibility guide on there. And so you know, whether you're eligible, even if you have VC investment, it will, it will walk you through whether you're eligible for these kinds of opportunities. There's a nonprofit, Eastern Foundry, and they have a series of videos to get you kind of through some of the bureaucratic 'register on the site, and then this one, and then this one, and then this one.' And as you go through this, this is really helpful. And so Eastern Foundry has this great website... all these tutorials. And one of the, the other is the National Science Foundation has their timeline on their website, and it breaks it down: first you apply for you know, you write your three-page pitch and then if you get accepted, you apply. This kind of timeline is really useful for any kind of agency. DOD doesn't make you do a three-page pitch first. But NSF has so much so many people who apply. So they need to add this step I suspect. And so it breaks down what this process is and what the times look like. And that it may not be exact for other agencies, but it at least gives you an idea of what you're looking at.

Jonathan :

Thank you. I'll also put in a plug on your behalf for MIT Innovation Initiative's work under the banner of Mission Innovation, the thought leadership that you, Dr. Murray, and a whole host of other folks on the team are continuing to build out to help document and and provide some directionality to the the entrepreneurs, the academic researchers, the government representatives and everyone else would that's within this the stakeholder system to be able to make, make things go smoother and and get built faster and in a more healthy, safe way. Katy, thank you so much for for investing your time with us today it's been a real pleasure. We've worked together in the past and into the future. Now to be with you to be able to share your knowledge with with our audience – it's such an honor for us to have you on the show.

Katy Person :

That's very kind of you. Hopefully I didn't get too much into jargon. I'm happy to dig into any kind of specifics in future episodes or questions or whatever that you hear from your audience.

Forrest Meyen :

Love that! Thank you very much. We really appreciate it. Thanks for joining us on this episode of Top Tech Today. If you enjoyed the show, please leave a like on YouTube, subscribe and hit the bell. Or if you're listening as a podcast, please leave a five star review. In two weeks, we will be sitting down with Will Dickson and Trinity Torrest of Fedtech, a startup incubator and accelerator that helps companies commercialize their technologies through the support of the federal government.

Introducing Katy and the MIT Innovation Initiative
What are “dual-use ventures”?
Examples of dual-use ventures
Updating legacy systems
Origins of dual-use technology
Defense-oriented startups: in Boston and beyond
DOD funding of “innovation”
AFWERX and its Open Topic Solicitation
The unique approaches by each branch of the U.S. military
How the U.S. government thinks about “acquisitions”
About Open Topics and integrating startups into defense
Taking advantage of the “Small Business Set-Asides”
Venture capital, DOD contracting, and dual-use startups
New technological trends like robotics, hypersonics, and medical research
Influences of DARPA and BARDA
Where are the undersubscribed federal government contracts?
Katy’s motivation for serving mission-oriented organizations
Beware the government contracting ‘trough of disillusionment’
The three phases of dual-use venture contracting
Draper is a contractor ally for space startups
Contrasting the DOD with NATO and non-US defense organizations
The pervasive nature of ITAR regulation
Evaluating national ‘innovation’ approaches
The need for more students entering STEM (Science, Technology, Engineering, Mathematics)
A U.S. Space Force opportunity?
Putting together the puzzle of government innovation cells and tech entrepreneurs
MIT’s ‘Dual-use incubator’ and Louisiana Tech’s STTR program
Resources for aspirational dual-use entrepreneurs