Space executives took the stage at TechCrunch Disrupt on Monday to talk about the challenges and opportunities of building out dual-use technology, or tech that has both a defense and a commercial use case.
The dual-use strategy can be tricky for young startups to manage, however, because they run the risk of diluting their focus by trying to sell to both the Department of Defense (DOD) and commercial companies, True Anomaly CEO Even Rogers warned. True Anomaly, which is developing software and hardware to enable mobile satellite operations, “is not a space company,” he said. “We’re a defense company.”
But staying focused can get challenging for startups if their investors are not fully aligned with their mission, he said. “When investors start to push the dual-use thesis … it can dilute the focus, particularly at an early stage, and it just requires very open and honest conversations with investors and a very careful selection of who’s around the table,” he said.
With the rapid industrialization of space, however, there are more commercial opportunities emerging for startups.
“There are no clear bright lines between commercial and government in space,” Slingshot Aerospace CEO Tim Solms said. “Dual use is upon us. … There are no defense-only or commercial-only operations out there right now. There is a lot of blend in there, so you have to be able to navigate both.”
Both agreed that the term “dual use” is “idiosyncratic,” as Rogers put it, especially now that space is a strongly contested domain.
For startups that are looking to sell to the government, there’s been a huge effort inside the DOD to work with small businesses and procure technologies outside the traditional defense and aerospace primes. As Debra Emmons, CTO of The Aerospace Corporation, said onstage, the government has stood up the Defense Innovation Unit, the Office of Strategic Capital, and other funding mechanisms to bring private and public money together.
Many of these programs are to assist companies at the early stage, however, so a dual-use strategy could be a hedge against the government’s relative slowness to sign on new companies to programs of record.
“I do think we are looking at a place where we need to really bring in more on those later stages,” Emmons said.
But startups that want to work with the government need to understand that there will be additional hurdles to jump and more relationship-building and trust that need to be established. The relationship-building is especially important; to some extent, the defense tech winners will be those companies that can navigate government most effectively, not necessarily those that have the best technology.
“The tech is table stakes,” Rogers said. “The talent is table stakes. What you have to master is a go-to-market strategy that starts with operational advocacy, clarity about the operational requirements.”
Solms agreed: “Number one, focus on the mission, understand the mission. Don’t come to a point solution. You’re not trying to solve a thing; you’re trying to support a mission.”