Tough Tech Today with Meyen and Miller

Venturing into federal tech, featuring Will Dickson and Trinity Torres of FedTech

September 22, 2020 Jonathan Miller, Forrest Meyen, Will Dickson, and Trinity Torres Season 1 Episode 4
Tough Tech Today with Meyen and Miller
Venturing into federal tech, featuring Will Dickson and Trinity Torres of FedTech
Chapters
1:41
Situational Awareness: FedTech
3:14
Accelerator for commercializing federal research
4:23
Starting at FedTech's Fellowship program
5:01
Startup demographics
7:27
Finding federal intellectual property (IP)
9:44
Example: Commercializing a Navy materials breakthrough
10:48
The secret sauce is in customer discovery
12:26
Bringing a non-engineering skillset to an engineering-driven environment
14:14
"I come from three generations of military"
14:36
Taxpayer-funded tech portfolios
15:29
Ways to think about where tech is developed
16:41
"billion dollar markets" vs "mission-driven"?
17:18
Non-dilutive capital is a big selling point for working with federal tech
18:58
Government contracting is slow... what to do about it?
20:29
The US Navy's NavalX approach
20:38
The US Dept. of Defense's Defense Innovation Unit, DIUx
21:04
Crossing the valley of death with venture capital, allies, and more
21:51
"The government is slow to buy, and slow to stop buying"
22:14
HOw to get more diversity of voices in the room?
24:44
What is "tough tech" to FedTech?
27:08
How many FedTEch companies have venture funding?
28:34
'Tech push' and 'market pull'
30:13
How does FedTech get paid?
31:27
How do government labs license their tech?
32:34
As a startup itself, how is FedTech navigating its growth?
34:15
Cultural impressions
34:54
How do you get smart on such a wide variety of technical topics and markets?
37:36
What are the trends in government acquisition needs?
38:54
"It's an awesome time to be alive if you're a deep tech startup in the US"
39:44
Building the tech pipelines
40:13
The emergence of the US Space Force
41:44
Surprise! the government communicates the best through social media
42:36
Improving federal relationships with small tech companies
45:17
Getting more women involved in government acquisition and tech startups
47:24
The privileged role of governments to financially support frontier science and engineering
50:54
FedTech is accepting applications for startups and mentors for its upcoming programs
Tough Tech Today with Meyen and Miller
Venturing into federal tech, featuring Will Dickson and Trinity Torres of FedTech
Sep 22, 2020 Season 1 Episode 4
Jonathan Miller, Forrest Meyen, Will Dickson, and Trinity Torres

What happens to the ideas generated across the United States federal government’s research initiatives? Will Dickson and Trinity Torres walk us through the pathways of taxpayer-funded technological advancements and opportunities for a diverse pool of private citizens-entrepreneurs to find commercial success licensing patents owned by the U.S. government.

The United States government generates vast amounts of intellectual property across its many research organizations, national laboratories, and other technical divisions. Unbeknownst by many citizens, novel technologies are available for licensing and may be a boon to ‘proto companies’ (not-quite-yet-born startups). FedTech is an organization that conducts programs oriented to supporting the exploration of tech commercialization through federal partnership with the private sector.

Our discussion spans how to find federal intellectual property, the integration of complementary non-engineering skillsets into an engineering-driven culture, and considerations for how various groups such as NavalX and the Defense Innovation Unit are changing government funding for and acquisition of tough technologies. 

For audience members interested in dual-use ventures and public-private partnerships and funding avenues, check out our interview entitled “Launching dual-use ventures”, featuring Katy Person of the MIT Innovation Initiative.

Show Notes

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Show Notes Transcript Chapter Markers

What happens to the ideas generated across the United States federal government’s research initiatives? Will Dickson and Trinity Torres walk us through the pathways of taxpayer-funded technological advancements and opportunities for a diverse pool of private citizens-entrepreneurs to find commercial success licensing patents owned by the U.S. government.

The United States government generates vast amounts of intellectual property across its many research organizations, national laboratories, and other technical divisions. Unbeknownst by many citizens, novel technologies are available for licensing and may be a boon to ‘proto companies’ (not-quite-yet-born startups). FedTech is an organization that conducts programs oriented to supporting the exploration of tech commercialization through federal partnership with the private sector.

Our discussion spans how to find federal intellectual property, the integration of complementary non-engineering skillsets into an engineering-driven culture, and considerations for how various groups such as NavalX and the Defense Innovation Unit are changing government funding for and acquisition of tough technologies. 

For audience members interested in dual-use ventures and public-private partnerships and funding avenues, check out our interview entitled “Launching dual-use ventures”, featuring Katy Person of the MIT Innovation Initiative.

Show Notes

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Trinity Torres :

The work that Will's doing really, really inspires me to still be helping further that military's mission and be in the technical space

Will Dickson :

Think about technologies developed in a government lab – or just tech developed anywhere in the US – and then application space in the government, which includes the military and the DOD, and then application space in the civilian commercial sphere even globally... we have programs that do everything.

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.

Forrest Meyen :

Welcome to this episode of Tough Tech Today, today, we will be talking with Will Dickson and Trinity Torres from FedTech. I know Will Dickson from his days in the Boston startup community, he graduated from MIT with material science, spent some time in Michigan working for GM and came back to Boston to hang out in the Boston startup community. And recently, a year ago, he left and joined FedTech.

Jonathan :

And we also have Trinity. Trinity is from William & Mary. And she were there she studied public policy and psychology. Then that led her down the path of corporate strategy in hospitality industry, where she worked for Hilton, and got involved into the technical and entrepreneurial scene. That's led her to where her present position as a new incoming fellow with FedTech. Welcome, Will. Welcome, Trinity.

Will Dickson :

Awesome, great to be here.

Jonathan :

So it would be really helpful to give a context for our audience in terms of FedTech and the orbit that it operates. And could you could you open up for us? Well, on that?

Will Dickson :

Yeah, definitely. I think it's a really unique one. Unless you are somehow funded to work with the government, it's out of most people's minds. At FedTech, we sit at the intersection of entrepreneurship, breakthrough technologies, and the US government, both in the spin out and the spin in model. So our biggest product today, which we run for many years now we call our startup studio, in through this one, we've worked with 40+ federal labs. So NASA, Army Research Lab, Air Force Research Lab, a lot of the Department of Energy labs as well. And we work with these federal federal labs here to take that technology and commercialize it through entrepreneurship. So a little bit different tech transfer model. To date, we formed over 190 teams, and spun out 50 to 60 companies, startups that are seeded with this awesome federal IP (intellectual property), license it to the startup and go expand and make a big impact. So that's kind of our biggest program. The second one that we run in which I get to lead is our customer accelerators program. Today, we run this, interestingly, in partnership with the Department of Defense and the Department of Energy for two different programs and a few other ones here and there. But through the custom accelerators are more of a spin in, we're finding those non traditional breakthrough technology startups that have some sort of application in one of those organizations, but also represent a major opportunity just in the commercial space to commercialize some really cool, deep tech, tough tech breakthrough technology ventures. We run these custom accelerator programs on average between 3-6 months, and involves a lot of custom educational programming for onboarding, you know, coming from General Motors, I understand that there's a lot of times huge disconnect between a startup and a large organization that wants to partner with them, versus the traditional venture model, which is, hey, go make your pitch, you can sign a term sheet and in a month or two, onboarding to a large organization, very difficult. So a lot of the roots for the accelerator program are rooted in that sort of unique perspective. But of course, we do a lot of the other business development stuff for these startups as well. And being as your myself a lot of empathy for technical founders. For these deep tech ventures, almost all the founders or technical founders across the US. Our two final portfolios at FedTech... we do some light tech scouting from our unique perspective in this advanced federal R&D (research and development) engineering space, as well as internal innovation training, where we apply the lessons learned from coaching, work with entrepreneurs in the deep tech space, to really large organizations, either the executive level or just portfolio program managers or senior scientists who are looking to be a little bit more lean in their thinking and apply some of the lessons of entrepreneurship.

Forrest Meyen :

And Trinity, you just joined FedTech as part of a program, can you explain exactly what you're doing?

Trinity Torres :

Yes. So this is week two for me, so have jumped in full force. FedTech has been rapidly expanding. Will, you mentioned that a year ago, you're one of five people. Now I think the team's around 15 or 16. So what they've been doing as they continue to scale is doing a three month fellowship program, where you jump in and you work in the different areas of the business. So I'm going to be handling most of the marketing and communications pieces, but also working with our startup studios. It's a three month program.

Jonathan :

So the FedTech program, as I understand it, it's an accelerator. Right? And then the could you walk us through the demographics of the types of participants that you've been seeing so far over the cycles?

Will Dickson :

It's really diverse, which is something that makes me really proud, not only diverse and people's background, but just location, you know, coming from the Boston ecosystem, seeing the value of that close knit physically, geographic center community, most of our participants come from all over the US and most of our programming even before COVID was already 80% virtual to enable really anybody to help to start or launch one of these deep tech ventures. The demographic we work with for aspiring entrepreneurs, right, because the startup studio is pre company formation. And so we're working with entrepreneurs that are a little bit more seasoned. These are all just recent college grads, like the traditional sexy startup founder, you know, these are people with a lot of professional experience, looking to take the next step in the entrepreneurship world, but don't really have that technology background, or just the seed of cool tech to start a company around. That's a really unique [value proposition.]... We have people who are either currently professionals or large corporates, we have researchers, we even have people have gotten out of the professional world for a few years, quasi retired, wanting to come back into entrepreneurship. The demographic across our accelerators program, right, which we start with existing startups and help accelerate them in specific markets, primarily the DOD and DOE. For that one, the demographic again, it's a mostly technical team, technical founder, someone who's done research postdoc for many years, stumbled upon some amazing breakthrough technology discovery, and especially in the in the government gap, maybe a phase one SBIR program, or something where some little seed funding from the government but really doesn't know how to take it to the next step, and do that technology transition. But again, national, working with startups from all over the United States, all type of tech verticals as well. We at FedTech, we work across everything in the current accelerator cohort for the army I'm running right now, we have two biotech companies, multiple wireless communications, machine learning companies, material science innovations, one or two other just fundamental physics breakthroughs. So really fascinated as a previous engineer, that's what gets me up every day is like this is really cool tech, that we're helping make an impact in the world.

Forrest Meyen :

So for the startup studio, you mentioned that you're taking technologies and from the government IP and allowing entrepreneurs to figure out how to commercialize it. How do you get that chest of IP to offer to the startups? Like, is there a lab that you've partnered with that has particularly suggested something? Or is there just like a catalog, and you pick something out?

Will Dickson :

Yeah, that's it. That is actually a fascinating question to solve is what IP is able to be commercialized? Right, so we have an awesome team within FedTech, led by a guy who's awesome, he's actually the, I think, the third most tenured employee at FedTech. He leads our tech scouting. So our process is we develop these really strong relationships with the labs, there are some public forums where labs will publish, 'Hey, here's a patent we filed recently, you know, if anyone wants to license it, talk to us,' but we go a little bit deeper, really get to know the scientists doing the forefront research, and then try to do our analysis of whether something's ready, right? There's a lot of factors about whether or not this tech is ready, when we're building, you know, building our chest, per se. Do we think that there's at least a few markets out there for it? Is it at a high, high enough technology readiness level, where if we pair it up one entrepreneur, they're not just going to be forced to do four more years of research to get it to an engineering thing? And also, just the demographic of that scientists engineer, right is are these engineers in the federal space, these researchers excited about the potential to commercialize their technology because they're such an integral piece of the team, most times they don't join the founding team, but to have that technical advisor who can help demystify things, clarify things provide a little feedback, feedback, and kind of what the realm of the possible is for different tech is an immense thing. So it is a complicated process. And I'm not sure there's one answer, we've taken a spin but developed a lot of strong relationships with, some examples in the labs, NASA, Los Alamos National Lab, Sandia, all the Department of Defense labs, we run a program with NSIN for that one, but really great, diverse group of labs across the US at all I've really cool tech that can make an impact in the world via entrepreneurship.

Forrest Meyen :

Can you walk us through an example of like a specific piece of technology and tell us the story about how that worked out with the founders in the startup studio?

Will Dickson :

Yeah, there's a material science innovation, so of course I love that one. We started with a lab technology from one of the Naval Research Labs. The technology was around this glass foam material. So, as material science, it has some pretty interesting properties potentially for, you know, unique bootsy buoyancy properties compared, you know, as well as lightweight and volumetric manufacturing capability. The researcher had done some proof of concepts of the tech characterize it, but kind of stopped... it was on the shelf, they weren't there, there were no obvious applications to take to the next step. So through the startup studio program, we recruited these awesome founders, I think they both had technical degrees and run MBA programs, or business savvy people, did a ton of customer discovery, that's really the core tenant of our program. So they interviewed all types of customers in most of our over the eight weeks, most of these entrepreneur teams, they do between 50 and 100 customer discovery interviews, so this is the secret sauce that big corporations don't have and don't have time for. So we're empowering them to do that. And they found this interesting application, actually, back in the Navy, for underwater, I forget what it's used for.... underwater unmanned vehicle systems. And they took the tech, they successfully, demonstrated there was a market for it licensed the technology from the lab, won some early government contracts for startups, to develop that tech a little bit more. And, you know, instead of it just being a test tube, developed it to a bigger scale, where they could actually do proof of concept demonstrations for full, you know, small vehicle and underwater drone applications. In now, they actually sell their product, which is an iteration of the initial technology, back into the Navy. That story, to me, is one of the most powerful ones, because it just shows that, that the entrepreneurship and startup journey in the deep tech space is so unpredictable, nonlinear, that you really, by empowering entrepreneurs to do the non scalable customer discovery, take risks, do everything that a federal lab really is not in the rright position to do, they're gonna they might find application or a market for it that was initially just not even thought of. So I think that, to me, that's one of the most powerful stories we've had so far in the material science space. So obviously proud of that one.

Jonathan :

That's really interesting, Will. Something I'm curious about, then on with your journey, where you have a background that it gives you maybe it's safe to say that was generally non technical and and in hospitality, which is perhaps sufficiently different from, you know, deep sort of underwater material science play. So can you talk to us what was the attraction to joining FedTech? And then, we can go into where I think that the skills that you bring would be absolutely complimentary to some of these deeply technical to engineering driven use cases.

Trinity Torres :

It is definitely a career pivot. When I was in undergrad, I was loosely involved in an entrepreneurship center, I had worked on artificial intelligence, student-like aids, and we pitched it. It didn't continue on, but kind of was like that was my first opportunity to kind of be a little bit in the tech space and help build out more of the marketing and our pitch deck. Then I graduated, went to hospitality. But when I was furloughed, I was so bored, and I was trying to figure out what to do. And I ended up getting brought into a student startup called Dive that's based out of Austin, Texas, which was designing a app. That's an alternative to GroupMe, which is a popular app on campuses as like a communications app. And that really reminded me of how much I love the technical space, how much I love entrepreneurship, and how much I loved being a part of a small team where you can really try your hand at a lot of different things. So I stopped applying for big corporations and started looking at the D.C. technical space. That led me defining FedTech and finding a fellowship program. As soon as I talked to Ben, I had an initial screening call, I really fell in love with the mission of FedTech. My background is military, I come from three generations of military, and so even the work that Will's doing really, really inspires me to still be helping further the military's mission and be in the technical space.

Jonathan :

Oh, yeah, that's, that's a fascinating history. So that military affiliation, then going back to in terms of how FedTech is structured, that these this would be technologies that are generated on taxpayer dollars as part of the normal sort of acquisitions process of new technology, new capabilities, and so now FedTech is in position to be able to say 'Okay, these patents or portfolio is underutilized or not commercialized, and it's up for the taking, up for the licensing,' to be able to then say, 'Okay, well, we're going to add entrepreneurs, engineers, etc, to get it increased in TRL (Technology Readiness Level) level, and then see if there is a marketable opportunity there.' Is that is that the general approach?

Will Dickson :

Yeah, I think maybe clarifying these we have a it's all again, like the company's grown, it's been so awesome to ride this wave. We've a lot of different ways to think about it. So if you think about technologies developed in a government lab, or just tech developed anywhere in the US, and then application space in the government, which includes the military and the DOD, and then application space in the civilian commercial sphere, even globally, we have programs that do everything, right, we spent out, we spent out tech from the federal labs to go to commercial, we spin out of tech to go back into the military applications, we will take tech that wasn't developed in the federal labs, not on taxpayer dollars, and align it into those military applications with really rapid tech transition thing. So that's a that's probably the way I like to think of it.

Forrest Meyen :

So your accelerator program is the opposite direction, right? You got the type of a person coming in, and they just they don't know what to do to get the stuff to market.

Will Dickson :

Yeah, yeah, exactly. A lot of the founders are previously successful in the accelerator program, some are doing a few million [US dollars] in revenue each year. But they've stumbled upon, you know, this hypothesis that they have that, hey, you know, it's again, it's to me very different from the venture space, right? Where it's really every decision is predicated on, is there a billion dollar market? And do I have a chance to win in it? Right? Where's the military one is much more mission driven. And it's interesting to compare and contrast those, and we provide all those options, who are the participants of our programs, but a lot of them, they're successful, but they stumbled upon they applied to a prize competition, went to an industry day with the military, and they say, 'Hey, my tracking technology, there may be there's a pain point in the military that I can help solve as well.' So it's not always that they're just technical founders without business skills, a lot of times they're trying to enter a new market, and understand, a extremely complex regulatory environment that you have to sell and do business.

Forrest Meyen :

Do you find a lot of the founders are also mission-driven? Like they really have a strong desire to serve the United States? Or are they just primarily looking for a place to give them some equity free-capital as they develop the technology?

Will Dickson :

Yeah, yeah. That's it. That's usually the biggest selling point we have is like, 'Hey, let us help you access this non dilutive capital to help commercialize technologies.' But it varies. Yeah, a lot of them are mission-driven. And I'll clarify – all the programs that we work on today, I don't think even really there any that are really enabling the type of lethal force that you might think about when you think about military. A lot of them are just life-saving and operations, optimization technologies. What inspires me are some of these founders, one of them in our previous cohort, he's developed this nanoparticle-based blood clotting accelerant. He stumbled upon a biomarker that is really tied to clotting acceleration versus clotting initiation. And, you know, he developed this in his lab, you know, not not primarily thinking military applications, and, through the xTechSearch search program with the Army, and we support that with the accelerator forum, he, he then was able to quantify how many deaths on the battlefield are there from, you know, core bleeds that you can't do a tourniquet around, right? You need something that's room temperature stable, you can inject that helps, you know, stop the bleeding until you can get to an ER, and in something like that, right. It's not necessarily the scary stuff you talk about, but it's life saving technology that has drastic implications, both in the military and outside the military.

Forrest Meyen :

One of the knocks on working with the federal government, of course, is how slow it often is, and that a lot of startups run out of runway before they even get a contract in hand with the military. Is there ways that you can help with that? Or is that just a barrier that that is going to prevent a lot of companies from working with the US government?

Will Dickson :

You've hit the nail on the head. Maybe a quick overview: the DOD is representing some of the advanced stuff that they do at the government... they realize this and so the US Air Force has this AFWERX program that will award contracts very rapidly with just a pitch deck and give you the chance to to figure out the market within the military. The army has this xTechSearch program and they've run an innovation combine program, different iterations of open topic versus closed topic that gives actual prize money. There's no strings attached, you can use that for vacation if you wanted to. They give prize money to incent, to help fill these little gaps in government contracting, while people figure it out, just realizing it is difficult to figure out even with our help, sometimes it's just very mythical creatures, in terms of working with the government. The Navy is taking a different approach with NavalX, looking at the regional spokes model, to really just help spend time with entrepreneurs. At the higher level, the last big one, the Defense Innovation Unit at the DOD level, they have done a great job of going and finding the problem sets within the military, translating them getting the money ready to go, so that when a startup comes and proves that they can solve a problem, you can inject a ton of cash, you know, we're talking in the tens / hundreds of millions of dollars into a viable startup that can take something to the next level. So it is difficult. But I think one other thing to add to your original question about just the federal space being very slow to work with, we try to take a very holistic approach to every funding sources small business could use, right and you and you do kind of start with that. Is it worthwhile investment for your time money impact and measure that stuff first? But, you know, can you fill in with some venture capital dollars? Can you work with a strategic partner that gives you non financial resources, you know, like someone who's going to do some testing for you, or using a machine that you would have had to pay a lot of money for? Can we plug that in to cross these different valleys of death, even partnering with other startups? That's an exciting one, I think we've seen very recently a lot of these innovation programs that we run are getting big enough, where we got company x doing this thing that dovetails perfectly with company y will introduce them and they're like, man, we're gonna go after these bigger contracts together.

Jonathan :

I mean, it's absolutely right, that that there's a saying that there's that 'the government is slow to buy and slow to stop buying.' So, you know, once you get those wheels turning, then then there's some sort of figurative inertia that is can be really beneficial to a small or large company that starts to get as part of the larger acquisition contracts. Now, some of this discussion strikes me as it sounds like, it could be perceived that, hey, anyone can do this. This is this is difficult, but we could bring anybody into to do this kind of taking technology or inventing one and then getting it commercialized. But that we know that it's quite difficult. Trinit, with your focus on marketing communications, how might we be able to sort of walk that line between saying, 'Yeah, we need a lot of different voices in the room to be able to get that diverse thinking,' yet, this is this is difficult work.

Trinity Torres :

Yeah, I definitely think Will can fill in some gaps here. Even the initial conversations I've been a part of, I think we're really looking for is people is what we really try to do is match up people with the background with the technology. We want the teams to be successful, we want people to come in with at least some technical knowledge of the invention. So I think that's something that FedTech has really been trying to do. And they look at personality aspects as well. And team diamond dynamics, right, because you're matching different people from all across the nation together. Will, I'm sure you can elaborate more on that, too.

Will Dickson :

Maybe the core waterline, you got to be above to access a lot of these opportunities, you got to be a real deep tech, tough tech startup. The government doesn't fund apps for cats or new grocery delivery models. They they fund deep technology ventures under the hypothesis that by playing a major role in that, you know, because it takes time, because it's a nonlinear pathway, they're gonna, raise the tide for everybody at the end of the day. So maybe that's the number one thing is, you got to be working on something that really is a deep, tough tech, whatever you want to call it type venture. And then like Trinity was saying, the background and willingness to learn and adapt, some of the least successful entrepreneurs, we've worked with our people who maybe have a little too much confidence, they're like, 'Hey, I'm from the venture world, I know what I'm doing. You know, I don't really need your help. Just make me an intro.' We find those people just don't win contracts, you know, and they don't understand the system, they miss out on opportunities. So I think the personnel and being open to diverse opinions and feedback from people from our network is a major one as well, in terms of, you know, are you ready to access both the market, which is a great business opportunity, but also just the access to resources that are available to elevate the deep tech tough tech ecosystem in the US.

Jonathan :

It's an important designation there in terms of like, the, like FedEx, perception of a deep tech or tough tech kind of company. For us, it's like this view as well. Something 'tough tech' would probably not be an app. And moreover, it's probably something that's difficult to Google, to type in 'What is blah?' that it's not just there's a bunch of hits on that, that you got to really sort of dig into it. Do you have a does FedTech have somewhat of a definition around that, though, that type of technology, and what that threshold is?

Will Dickson :

We could talk for hours about what that definition may or may not be? Because it I mean, there's a lot of ways to skin it right? Is it tough, because the path to market is tough and undefined? Is it tough? Because it took some team of super smart people 10 years to develop? Is it tough, because it's just something no one understands yet? A lot of ways to skin it. But for me, it's really something that requires, you know, a deep knowledge, you know, on the business, the business access of going to market with something growing, growing a team, turning tech into a product, it requires not only just the MBA skills, you know, the Hey, you know, how do we do accounting and legal and, you know, market strategy, but, you know, how do we contextualize it to something that may take a year or two to develop? You know, like, how do you move those milestones around? And there's really not, you know, there's there's very few, I think programs like educational programs that teach that kind of stuff out there. And that's where you see that, you know, I love the demographic of interacting with people who have technical backgrounds or love for technology. And I've learned about it throughout their lives, who've now pivoted to doing the business stuff. And this is this is something I say as well to never get off topic, but a lot of our internal innovation stuff, working with scientists and trying to try to really like digest and teach a lot of these basic business Lean Startup design thinking models, is that I like is, you can go from being a technical expert to a, you know, 80% business expert pretty quickly. Can't go the other direction, though, you know, so having that background and passion for the tech first, I think is one of the primary, you know, functions as well, of any successful detect venture, is you got to have that mission tech, focus. And then add the business stuff on top of that.

Forrest Meyen :

You also mentioned how people that come from a VC capital space, they might not quite understand the the whole mechanics of building a tough tech venture or venture that you're going to pursue, you know, partnership with the federal government. How many of the companies that you work with actually have venture funding?

Will Dickson :

Yeah, so in the lead, we'll just talk about the accelerators portfolio, because those are already established small businesses, the other ones are maybe pre seed looking at the SBIR dollars from the government. But across accelerators, I want to say like 40 ish percent, you know, maybe a little bit less than half. I think part of the reason for that is one, I think most venture capitalists just do not understand what that defense market and timeline looks like one, there's no McKinsey reports on how big the DOD market is for certain technology application space that you can just Google to put in your pitch deck. Number two, that tech transition plan again, we pride ourselves on being able to demystify that and coach people to what that looks like. But I think in general, you're not going to look and say, 'hey, you've successfully proven the government is a billion dollar market', but I don't trust that you can get there, right, because I just don't understand it. So I think a lot of it is is really just an educational opportunity, which I see a lot of, you know, a lot of organizations popping up to try to align these things defense innovation unit, does a ton of work with venture capitalists to try to partner and stuff.

Jonathan :

Go back to how you mentioned that with the FinTech accelerator, that there is a design thinking and other kind of sort of philosophies or methods to be able to help develop and commercialize the technology. When working with tech, though, there's sometimes the view of like a tech push or a market pool. And with the tech, it can feel like sometimes we've got a really big hammer, and we're looking for the awesome nail to hit with that. What's the philosophy of FedTech to help guide these teams in terms of avoiding that mental foreclosure on we're going to try to go after this one particular problem. And when there's a whole wider scope of different kinds of problems that they could solve, how do you go through that problem definition, scoping process?

Will Dickson :

Yeah, I mean, yeah, fascinating. Yeah, the philosophy of that is, I'm not 100% sure, we've settled on just a straightforward kind of slogan for that. But I mean, frankly, we we, through our programs, at least, we don't let people really think about pursuing advancing technology milestones. The way I think it was like technical people are gonna want to do that naturally. So we're going to try to pivot their mind their mind focus through our FedTech programs purely on the business development strategy side. Versus Hey, you know, we're going to coach you through how to leverage $120,000 and go from TRL 3 to 4. That's something we actively do not plan because we figure most of our technology founders and people are they're going to be doing that anyway. We don't have to help them with that.

Jonathan :

With the equity free access to IP that may be generated from the US government or from other sources, what is the the funding engine for FedTech itself? How do you get paid, ultimately?

Will Dickson :

It's very diverse funding sources. I'm sure it'll be fun for someone to come audit us. A lot of times, we are assisting the government in their mission. So we run some of the most founder friendly programs, you know, we're funded and partner with a lot of these federal research agencies or the DOD, Department of Energy, because their mission is to is to make an impact, right transition technologies. And they don't ever really do it via entrepreneurship, right. FedTech is sitting at that intersection of entrepreneurship, the government, and these breakthrough technologies, we can help them in that mission. So none of our programs do we take equity at this point. Most of the programs come with funding of their own as well for a lot of these companies. So, super, super founder and entrepreneurial friend, friend of us most of our stuff were funded in partnered with a lot of these big agencies and assisting them in their mission.

Forrest Meyen :

And what about the startup studio? Those pieces of IP? Are there royalties attached to that? Or are they exclusive licenses? Is the government getting a return on their buck for sending the technology out?

Will Dickson :

The interesting thing to the I mean, the government, if they're not like a university, where they're motivated by profit, for the most part, you know, they want to return on investment, obviously, on taxpayer dollars. So when they license something, they want to have some sort of revenue stream. But it's really up to every lab, every lab likes to do a little bit differently. Some exclusive, some non non exclusive, we help a lot in this process, consulting with the startup, helping make it very smooth. But at the end of the day, that's a conversation with the emerging startup out of the startup studio, and the lab itself. Yeah, there's no like, say, 'here's exactly how it's going to be,' there, it's all up to the negotiations between the teams and the labs.

Forrest Meyen :

FedTech is like a startup, too. Can you talk a little bit about, you know, some of the challenges that you guys have had, you know, growing FedTech from tripling in size in just the year that you've been there? And then a little bit about where you plan to go?

Will Dickson :

For me, that's been a super interesting experience. It's something that I love, just being a part of all the business decisions hiring. I think I mean, it's, it's interesting, because I think you see, most publications, and people say, what's the number one problem for startups is hiring. And that's true, you know, because you don't a lot of time for startups, you don't hire to like after you need that person to have started and be an expert in something. And so it's not like, 'Hey, we're annually, we're gonna go recruit 10 people, and we'll figure out what to put them in six months after the fact' like big companies work. So the hiring thing has been interesting, working with the federal government ourselves we deal with the same problems as our startups, which is a great way to develop empathy for them a big believer that empathy drives a lot of great educational content decision making. And so, you know, we deal with contracts that take a long time to get awarded, we deal with having to figure out the contracting vehicle that you're going to need to do the type of services or product that you're proposing. You know, we deal with trying to approach these large, huge organizations that there is no obvious buyer or customer that we can just say, 'Hey, you know, can we sell you this program?' We're doing the long form business development, sales, customer discovery, just like our startups. So we get in we always say we just like to eat our own dog food. So anything we do we you know, we do the customer discoveries, the Lean Startup experiment, pivot if we have to.

Forrest Meyen :

So Trinity you've been there a couple of weeks. What do you feel like the culture is at FedTech?

Trinity Torres :

Honestly, I've been so impressed. This is the first time I've ever had to start a job virtually as I'm sure a lot of other people are in this boat too. And so I was very nervous about coming on onboarding virtually. But it's been amazing. Everybody's really willing to help. I was talking to Jonathan earlier that it's really nice to be able to have my hand in so many different pots and kind of be involved in working with Will, working with the startup studios, working with the accelerators, spread across organization. So it's been a great experience

Jonathan :

with the variety of topic areas that FedTech touches on in terms of the venture studio and and other forms, how do each of you to get smart on any of these given topics? Because there's such a range from underwater radio stuff to probably space satellite things and AI everywhere. So how do you how do you do it? What are some some tips that our audience may be able to take away for how you get smarter on these things?

Will Dickson :

Awesome, awesome questions. Especially as we grow our team, that's one thing I think we consistently hear from from new hires is like, hey, how do I, how do I learn about like, hey, run a cohort of 10 different technologies, how do I help them at all? You know, I don't understand what their tech transition plan is. I mean, I think a few simple rules of thumb conferences, following blogs and websites that are subject matter specific in the day of 2020 and the Internet, there is a blog or website that writes articles on every single topic under the sun. The last one, I think, aside from the normal educational things is our FedTech mentor network has become super, super strong. It's one of the things we're most proud of, and open call for anyone to go to FedTech.io, click one of our portfolios and apply, but we maintain this awesome diverse network of people who are previous entrepreneurs, technical experts, ex government program managers, venture capital people, really every kind of slice of the deep tech ecosystem. That mentor network helps fill the gaps for us, frankly, a lot of times when it comes to the technical transition pathway. So it's an awesome resource that we built, really proud of, and huge kudos again, to FedTech for start in 2015. But it's really only been the past year and a half, two years that we've experienced this exponential growth. And a lot of that is due to our founder, Ben Solomon, being the type of guy who's going to go walk out meet people, you know, he found the D.C. iCorps program. And you know, having that mentor network hub to build upon has been really a blessing for us to come and hit the hit the ground running with these new programs.

Jonathan :

And for your Trinity as you've been getting up to speed on on things do you sometimes feel like you're just gonna open up your head and just pour all that that new knowledge in?

Trinity Torres :

I was joking that my first week I just had a long list of acronyms. And every time I learned a new one, I would just write it down. But yeah, I I definitely, as well said, using every resource available online and asking lots of questions and leaning on the experts. But yeah, lots of learning steep learning curve.

Forrest Meyen :

So what are some of the trends that you're seeing right now? Where is the demand from the government? Are there particular areas that they're very interested in?

Will Dickson :

Oh, yeah, man. Yeah, great question. Love this stuff. I'm curious what you guys have seen from your perspectives, as well as kind of more maybe a little bit more outsider than even we are at FedTech. But I think the number one from the DOD, is this concept of multi domain operations. So that we coach all of our companies to write their proposals within the context of that, that's like a doctrine that gets published every 10 years, I think, maybe usually on presidential cycles. But it that's, that's what they're marching towards, you know, they you'll see the Army of 2028, Air Force of 2028. It's been it's like a 10 year plan that they're, you know, getting off the ground executing here. So that's like the number one topic, I guess, that they're focused on. But in general, it's really about non traditional partners. There is this frustration from the especially the DOD but really the whole government, that there's man's like, hey, am I not getting the best stuff because I'm just perpetuating like an insider's club. All the big companies do business with the government, they have 10-, 20-, 100-person teams that all they think about is their relationship building and figuring out, you know, the regulatory system and the contract vehicles that startups don't have. And so that it's an awesome, awesome time to be alive if you're a deep tech startup in the US, because all these government agencies, not just the DOD, the DOE, but even labs, like NASA have awesome small business programs that you can work with if your technology applies in their space, and they're only moving to be friendlier and friendlier for people who don't know how to work with government, two person teams. People nationally, not just the ones that you don't have to be in a Boston, you don't have to be in an Austin, Texas, to access the network. It's a great democratization of these early tech dollars that 10 years ago 99.999% what have gone to like the top 20 government contractors, right? So I think it's an awesome that's like one of the biggest trends and part of the reason why we'd FedTech are growing right because you know, if the government says they want to do that, a lot of times they need someone to come from from the outside perspective and build the pipeline, build these programs to tech to transition technology, because unfortunately giving away money does not always solve the problems. I've worked with a lot of programs who you know, they started a price competition or something? And then a year later, they're like, 'Well, okay, where, where's the tech, why hasn't it transitioned?' And so they're learning, you know, you need more formal type programmatic stuff, which we step in there and build form

Jonathan :

Could either have you speak to the emergence of the US Space Force, and as that fourth branch of the military is starting to sort of come online, are you noticing a change in either the technologies that are generated for it, or the way that acquisitions are occurring, since with this fourth branch, yet inspired by maybe like the US Air Force kind of carved out of that, but this is an opportunity for the US DOD to 'get it right' in terms of the way that they can can reinterpret some of the sort of contracting and acquisition law? Are you seeing implications of that?

Will Dickson :

They haven't published anything aside from a high level doctrine about what the Space Force is going to do. But internally, you're obviously looking at the same sort of stuff I am, but you see, you know, great articles come out about, Hey, you know, the, you know, the spate the new space force, you know, commanding general is forcing the team to think more critically about, you know, let's build an acquisition program from the ground up versus copying something that existed. So I'm pretty pumped, you know, for me, like, I'm excited to get involved with them. And I think for any sort of space tech type startup it's going to be awesome. There's gonna be a lot of dollars spent, a lot of startup friendly programs, I think, in the next year or two, you know, the government has fiscal years, right. And the the 2021 fiscal year will start here in just one month [2020Q3]. So might be another year till you start to see the major outflows of dollars. But, you know, I would encourage everyone in the end the other the other secret I'll share with you guys here is the government communicates best by social media, which is a very non intuitive thing that I've stumbled upon websites, a lot of times suck, written in the 90s, links don't work. But the LinkedIn profiles, and the Twitter profiles are super active talking about finding opportunities and days to go talk with people. So the

Forrest Meyen :

Follow their LinkedIn! And their Instagram accounts!

Jonathan :

Trinity, I'm sure you have a point of view with your background in psychology, communications and marketing, corporate strategy, why is the US government best at communicating on these platforms?

Trinity Torres :

I don't know. I guess maybe that's because they know where we all spend our time!

Jonathan :

Yeah, but you know, no Tik Tok channel! Well, I have a question for each of you, what are your priorities now? We are looking over the next quarter or two, what's on the hot plate that you want to cook?

Will Dickson :

Yeah, I can start I think the big one for us is, you know, getting some getting some great wins that we can talk about for full on tech transition, right. You know, everyone talks about stuff like SBIR prize competitions. But it's a long road after that stuff to really transition technology to the full acquisition space is that is how it's framed within the government. And so, for us, we're doing a lot of work to develop relationships, and frankly, just demystify what that process looks like. Because like we said, for almost the entirety of the government's existence, it's been dominated by the big players. Why would they demystify for other people? So for me, I think that that's one of our big goals. A cool success story that I think is coming down the pipeline, a company called Vita Inclinata, great company, super smart founding team out of Denver, Colorado. They developed a load stabilization system. So underneath helicopters primarily, you know, if they're holding something that downwash from just the blades, will spin whatever's there, you know, it could be human, could be cargo, whatever, but it actually, you know, they did a great job of measuring that market defining the problems face, and, you know, start engaging with AFWERX over a year ago now in our xTech accelerator, but they actually have successfully gotten Congress, you know, from a top down level, to set aside funds that could be spent on their technology in the upcoming fiscal year. And you know, still some work to get over the line with kind of coming from the bottom up and meeting him in terms of being able to buy that stuff and sell that stuff, but could be a really phenomenal success story. Everyone asked me for the reason for it, because they had a very obvious life saving technology that for some reason was not there today. That's not going to be the same story for everybody where I'm going to go to Congress, and that's how it's gonna work. And then you don't have to worry about the bureaucracy, but could be a great success story and just driver for more and more programs in the future to prove that these AFWERXs and xTechSearches of the world, of the DOD, really do work in helping startups engage in transition, groundbreaking tech that for some reason the big guys didn't think about.

Forrest Meyen :

So if you got a clear value proposition, that's the that's the key point to getting Congress to fund it.

Will Dickson :

Maybe clear value proposition that has to do with saving human lives or something. Yeah.

Forrest Meyen :

Well, that's as clear as it can be, right?

Will Dickson :

Yeah, yeah. If you measure something like that, and you you have an opportunity to save, it doesn't get any better.

Forrest Meyen :

Trinity, what are your goals?

Trinity Torres :

My biggest goal will be continuing to make sure we are bringing in the best entrepreneurs and building out our recruiting and marketing efforts, making sure that we continue to diversify with the people that are coming in and get more women into the program as well.

Forrest Meyen :

Do you have a strategy for getting more women involved?

Trinity Torres :

We'll do some more targeted ads and continue to build relationships with some local entrepreneurship groups that are focused on women and also national groups as well.

Will Dickson :

Yeah, I'm curious, Jonathan and Forrest, what's your perspective on this mythical government beast in enabling the tough techs? Like, do you think they are the solution, you know, like venture capital doesn't want to, doesn't want to play a lot of times? It is a you're kind of hypothesis that the government should be stepping up to to fill in the gaps for all the deep tech stuff in the US?

Forrest Meyen :

I don't think they should necessarily be there to fill in, all the gaps. I think it does have to be aligned with their mission, not just their to create general technology. So, you know, I definitely think it's a great role that the government can have, I mean, there's definitely things that you can only do with the government. And so those things that you can do with the government that also will benefit society at large significantly or are aware, I think the focus probably should be, I mean, I helped out with some of the geology, mapping for like Mars 2020. When I'm doing that, you know, I'm always thinking about, right, like, commercial applications for things and, and you look at Mars planetary science, and there's not really a commercial market for that back on Earth. So there's some things right, that the government does that just has a general benefit for mankind, knowing where our places in the universe and so I think things have to be aligned with that, that, you know, greater good.

Jonathan :

I agree.

Will Dickson :

Jonathan, go ahead.

Jonathan :

Governments are in a position to a privileged position to be able to, to think that they're going to be around for decades or centuries. When you can have that almost dynasty thinking, that changes the economics to the point that you can almost not necessary worry about the economics, we can invest in something like a space shuttle program as a government because the dollars are too big, and the the commercial value is just not obvious. And so governments are awesome for doing that. And then we have, so these, these smaller groups, like a DARPA, that can look for like, 'well, these are really frontier, that frontier areas, and we can invest in the cool people doing that.' Where the other other form of non governmental risk capital comes in, venture capital being one part of that, is what can help keep things more grounded, in my opinion, so they are connected to the market and the sensitivities of the humans that are ultimately gonna have to use or invest themselves into to building these kinds of products, companies, technologies, and so there's absolutely a lot of room for everybody involved. The government can best provide the big thinking, the big missions, and occasional support where the private sector is like, we're where we want to think like, you know, three to five year timelines max right. Now, that's, that's how I can see where things can, it's a dance, but they can work together.

Will Dickson :

Yeah, that's, I think, that's, that's fascinating. You made me think about two other things, maybe you know, societal trends, even globally, that I would hope would kind of line up with this kind of, hey, maybe more people focus on these, like forces saying the mission driven applications versus 'I want to get super rich.' You know, I think, you know, you see even the publicly traded markets, right? And investors start to ask more questions about the sustainability of the company, your your, your impact to people versus just returns right, you know, like even having indices for, you know, the, how much your CEOs making versus the lowest paid person. I would like to think that that trend will inspire a lot of people to say, Hey, I'm not just going to start a business to get filthy rich, you know, be Bill Gates, Jeff Bezos rich, I want to like all live comfortably, but I want to make this huge impact to my people into the world. That was the that was the other trend I was gonna mention is in the US, especially the wealth disparity, and that the frustration with individuals making such ridiculous sums of money because they they follow this traditional market driven path versus mission impact things. So hopefully kind of the government incentives and forward thinking will align with kind of the societal, like just people's trends, and you know, inspire a nice kind of growth spurt of businesses that are founded more around the impact, versus 'Hey, I'm going to get super rich.'

Jonathan :

Great point. We are coming to the end of the show, and give you each a position to say any final comments or advice or takeaways for our audience members.

Will Dickson :

Trinity, I'll let you go first.

Trinity Torres :

I'm just going to do a big plug, please apply, our applications are live for our startup studios in the fall. So if you have a technical background, if you are interested in any of the things we talked about, please apply for our programming. We always have an open call for mentors as well. So if that's something you'd be interested in, please check out our website.

Will Dickson :

I love it. It's like being on the Jimmy Fallon Show, you're lke, here's my movie coming up, go watch the movie! I think I think the one the one thing that, you know, I'll just leave with is that, you know, we, we want to empower as many people as possible to make an impact in the world. And we believe that technology is one of the best ways to do that. So even if you're not confident that you're a tech person, confident that you belong in the you know, don't don't worry about the imposter syndrome, we pride ourselves in building our programs to empower anybody to have this impact. And we'll bring the technology to the table for a lot of it. So I'll leave it at that. And again, you know, from Trinity psych, please go to our website, FedTech.io, sign up to be a mentor. We host tons of big conference style events and pitch days that are probably interesting to a lot of this community as well. Thanks for having us on the podcast here proud to be a part of this tough, deep tech ecosystem. We're trying our best to help out.

Forrest Meyen :

Right, so thank you very much. Well, thank you, Trinity. We appreciate having you on this episode of Tough Tech Today. Hopefully we'll catch you again on a later episode. Thank you.

Will Dickson :

Awesome. Thanks

Jonathan :

Thanks for tuning in for this episode. Feel free to send suggestions, comments or things that didn't understand to us. We're really happy to talk with you and we appreciate all your feedback. Our next episode is with Orin Hoffman, a venture partner at MIT's The Engine, an investment group that's focused on frontier technologies. We're really excited to have him on the show. So stay posted when we released the new episode. Sign up, like subscribe, and then we'll see you on the next show. Stay tough!

Situational Awareness: FedTech
Accelerator for commercializing federal research
Starting at FedTech's Fellowship program
Startup demographics
Finding federal intellectual property (IP)
Example: Commercializing a Navy materials breakthrough
The secret sauce is in customer discovery
Bringing a non-engineering skillset to an engineering-driven environment
"I come from three generations of military"
Taxpayer-funded tech portfolios
Ways to think about where tech is developed
"billion dollar markets" vs "mission-driven"?
Non-dilutive capital is a big selling point for working with federal tech
Government contracting is slow... what to do about it?
The US Navy's NavalX approach
The US Dept. of Defense's Defense Innovation Unit, DIUx
Crossing the valley of death with venture capital, allies, and more
"The government is slow to buy, and slow to stop buying"
HOw to get more diversity of voices in the room?
What is "tough tech" to FedTech?
How many FedTEch companies have venture funding?
'Tech push' and 'market pull'
How does FedTech get paid?
How do government labs license their tech?
As a startup itself, how is FedTech navigating its growth?
Cultural impressions
How do you get smart on such a wide variety of technical topics and markets?
What are the trends in government acquisition needs?
"It's an awesome time to be alive if you're a deep tech startup in the US"
Building the tech pipelines
The emergence of the US Space Force
Surprise! the government communicates the best through social media
Improving federal relationships with small tech companies
Getting more women involved in government acquisition and tech startups
The privileged role of governments to financially support frontier science and engineering
FedTech is accepting applications for startups and mentors for its upcoming programs