{"id":39241,"date":"2020-01-30T10:16:45","date_gmt":"2020-01-30T10:16:45","guid":{"rendered":"https:\/\/one.sightlinemg.com\/defensenews\/uncategorized\/2020\/01\/30\/tech-startups-still-face-the-pentagons-valley-of-death\/"},"modified":"2026-08-07T23:09:43","modified_gmt":"2026-08-07T23:09:43","slug":"tech-startups-still-face-the-pentagons-valley-of-death","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/defensenews\/global\/2020\/01\/30\/tech-startups-still-face-the-pentagons-valley-of-death\/","title":{"rendered":"Tech startups still face the Pentagon\u2019s \u2018valley of death\u2019"},"content":{"rendered":"
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If venture capital and the Pentagon can come together, the results could be game changing. But \u2013 how do they get there?<\/figcaption><\/figure>\n\n\n

WASHINGTON \u2015 Brooklyn-based technology startup goTenna launched in 2014 with a candy bar-sized gadget that pairs with smartphones to create off-grid, no-network communications.<\/p>\n\n\n\n

Though it was originally a commercial product, the company has received millions of dollars\u2019 worth of government business since 2015, mostly with the U.S. Department of Homeland Security but also with Special Operations Command, the Air Force, the Navy and the Army. About 150,000 devices have shipped.<\/p>\n\n\n\n

The Army has spent millions of dollars with goTenna, but the service cannot give the company one of the most important things for a small business \u2015 the certainty of recurring revenue.<\/p>\n\n\n\n

\u201cNow the funding is out, and even the program officer for that program doesn\u2019t know where we go next within the Army,\u201d goTenna founder and CEO Daniela Perdomo said at a Defense News-hosted roundtable in December. \u201cThat\u2019s in part why we\u2019ve been spending more time, frankly, on civilian public safety. Because even though DHS is consistently [under funding restrictions], they seem to be moving. They seem to move faster.\u201d<\/p>\n\n\n\n

Click here for all the stories and videos from Culture Clash 2.0: An Economic Crossroads.<\/b><\/a><\/p>\n\n\n\n

That sort of inconsistency and confusion is why tech startups dealing with the Pentagon, as well as investors, so dread the gap between their innovative product\u2019s development and the Pentagon\u2019s sluggish decisions to launch. That gap has a nickname: \u201cthe valley of death.\u201d<\/p>\n\n\n\n

The Pentagon has experimented with a variety of means to buy emerging technologies, an important goal as it seeks to preserve its edge against Russia and China. But one truism \u2015 affirmed in a recent report from the Ronald Reagan Institute<\/a> \u2015 is that the federal government has been unable to fully adapt its practices to promote and harness private sector innovation, despite making strides.<\/p>\n\n\n\n

Addressing the House Armed Services Committee on Jan. 15<\/a>, former Under Secretary of Defense for Policy Michele Flournoy said the valley of death between a product\u2019s development and the moment that product becomes part of a program of record remains an obstacle. She said that\u2019s partly because acquisitions officials don\u2019t use the new authorities granted by Congress over recent years.<\/p>\n\n\n\n

The excitement of receiving development money from the Department of Defense stands in stark contrast to what often follows.<\/p>\n\n\n\n

\u201c[Startups] win the prototype competition: \u2018Great, we love you.’ And that\u2019s in, like, FY19,\u201d Flournoy said. \u201cAnd then they are told, \u2018OK, we are going to have [a request for proposals] for you in \u201921,\u2019 and [the startups] are like: \u2018OK, but what do I do in \u201920? I have got a 10-year hole in my business plan, and my investors are pressuring me to drop the work on DoD because it\u2019s too slow, it\u2019s too small dollars.\u2019\u201d<\/p>\n\n\n\n

How would Flournoy fix it? She advised the Pentagon to hire tech talent \u2015 \u201csmart buyers and developers and fielders of new technologies\u201d \u2015 and create a bridge fund for firms in competitive areas like artificial intelligence, cybersecurity and quantum computing. (The idea seemed to resonate with Texas Rep. Mac Thornberry, who is the panel\u2019s top Republican and the author of multiple acquisitions reform laws passed in recent years.)<\/p>\n\n\n\t