Navigating the challenging landscape of start-up success can often feel like embarking on a journey without a map. Shockingly, 20% of businesses fail within the first year, and a staggering 60% meet their demise within the first three. When it comes to start-ups reliant on government contracts, the risks only intensify. Interestingly, failure is not limited to poorly run businesses with subpar products. Even exceptional start-ups, led by extraordinary individuals, frequently fall into this treacherous trap.
One major obstacle lies in short runways that lead to cash flow problems. Misunderstood capabilities or purposes can also hinder progress, as can an over-reliance on tenuous and unreliable innovation grants. Additionally, the inability to connect with the right people further compounds the challenges.
What further complicates matters in the public sector is the lack of a level playing field. Dominant market leaders often tilt the system in their favor, overshadowing small and innovative start-ups. How can a new and groundbreaking military business hope to compete with the likes of BAE Systems?
Does this sound all too familiar? You are not alone. Karve's founding team has been intimately involved in government procurement on a global scale. We have witnessed first-hand the desperate need for innovative technology to reach end-users. However, despite the best intentions, a disproportionate number of these businesses faltered, not due to their lack of product capability, but rather due to their struggle to navigate the system and adapt to the challenges encountered.
This is precisely why we established Karve: to prevent you from becoming another unfortunate statistic. We are dedicated to empowering revolutionary companies to succeed, ensuring game-changing technology reaches those who need it most.
To accomplish this, a wholly novel and radical approach is necessary. With that in mind, we present five tips for successfully delivering innovative technology into the Defense & Security market. While not exhaustive, they certainly increase the chances of success.
(1) Find a mandate then align to an operational risk
Navigating through bureaucratic processes can often be exasperating. That's why it's crucial to align yourself with a strategic mandate that guides the direction of your capabilities (beyond the formally advertised system requirement). For instance, if a government policy document highlights the need for transformation in relation to specific problems, and your solution addresses those particular problems, you have a mandate. Without one, your idea may remain just a "cool" concept that users appreciate superficially, while other technologies constantly take precedence over yours. Establishing this anchor point enables you to present the benefits of your technological solution to customers within the context of something they are actively encouraged to pursue.
Once you have a mandate, you can further increase the likelihood of gaining traction by identifying a real-time operational problem that carries risk, whether it's operational, political, or financial. These risks can act as a launchpad for overcoming the startup's "valley of death." If a capability gap exists or a risk remains unaddressed, it will require someone in a position of authority to sign off on that gap not being resolved. Therefore, if you can provide a practical and affordable solution to the problem, backed by a strategic mandate, investing in the technology becomes a logical choice.
(2) Commercial pathways
It's a recurring pattern: a company finds itself with numerous interested users who have the financial capacity to invest in their technology, but there's no practical commercial mechanism available for them to do so. Traditional commercial procurement pathways may be an option, but they often operate on timescales that stretch over decades, rather than months or years. Therefore, if your objective is to gain traction and secure funding in the short-term, it's essential to align yourself with a Defense user group that possesses the authority to write contracts or has the capability to leverage commercial resources within the Defense ecosystem to achieve their goals. While not all user groups will have the ability to exclusively adopt your specific solution, some will. Whether it involves time-limited competitions or short-term trial purchases, the commercial aspects surrounding any technology development discussions cannot be overlooked.
(3) Gaining end-user buy-in
The significance of user technology buy-in is often underestimated, and it requires little explanation. This is especially true when the user group holds significant influence within the Defense ecosystem. Once you achieve their buy-in, the team becomes internal advocates for your solution, even if they cannot explicitly designate your company as the preferred option. However, they can exert pressure to expedite delivery timelines based on real-time requirements and advocate for prioritizing projects, programmes, and initiatives over others. Their support can significantly impact the success and prioritisation of your solution theme.
(4) Ensuring scalability
As Western nations continue to explore bilateral agreements and pursue efficiencies, more and more multi-nation procurement opportunities are arising. In simple terms, this means that you conduct the commercial hard yards once with one particular user-group but can access multiple nations under the same framework. For example, you establish the contract with the UK via such an opportunity, but access all NATO states. Two such examples are NSPA and DIANA.
(5) Layered funding sources
Relying on a single funding opportunity is, quite frankly, risky. Especially considering the multitude of opportunities available internationally. The key lies in identifying scalable and enduring opportunities rather than banking on one major breakthrough. Therefore, we recommend pursuing multiple complementary funding streams that deliver short, medium, and long-term financial returns, ensuring that you are not solely dependent on one significant pay out.
In practice, this could involve securing two research and development (R&D) funding sources for the first six months while concurrently aligning with a more enduring capability project that provides returns beyond the first year. It is also worth considering partnerships with other providers who are already delivering technology to the Defense sector. Is there an opportunity for your technology to enhance an existing project or programme that has already overcome the initial risky period of uncertainty? By diversifying funding sources and exploring collaboration, you can increase your chances of sustained success and financial stability.
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While success does not come with guaranteed shortcuts, developing a meticulously crafted and intelligent strategy for scaling your technology can greatly improve your chances of achieving it.
If you are interested in gaining further insights into how Karve can support you with Market Insight or assist in developing and executing your growth strategy, we invite you to contact our team at:
