Published: Sunday, 24 April 2022 20:37
An industry and government audience attends an event in Las Vegas, Nev., to discuss military use of commercial products. Credit: U.S. Air Force Many space technologies developed by entrepreneurs haven't been allowed a proverbial seat at the table
An “innovation steering group” assembled by Deputy Defense Secretary Kathleen Hicks to coordinate technology investments might have the noblest of intentions, but it is missing one critical perspective: the entrepreneur.
America’s space entrepreneurs are the heart and soul of the new space revolution, and their inputs are arguably the most important to consider when searching for better ways to work with space startups.
There are hundreds of space companies today with new and innovative ideas, products and services that would jump at the chance to sell to any of the various space agencies within the Defense Department. Yet they haven’t secured their proverbial seat at the table.
The department needs to listen to these individuals and not just the policy experts who have grown too comfortable speaking on their behalf. Apart from including them in the conversation, there are a few steps that the government can take today that will revolutionize the acquisitions process.
Many of the DoD task forces and meetings are largely unnecessary, because the best way to leverage the highly innovative startup culture is actually very simple: seek out the people who have founded these companies, who have sweated making payroll for their first five employees – not the ones clamoring to get on yet another government innovation board.
True government-industry collaboration comes only when you sit across from the steeliness in a founder’s eyes, the impatient bluntness of his or her speech, or the sincere pride in their step from having created something valuable for their business and their country.
The best way for the Pentagon to collaborate with innovative companies in a way that is more useful to the DoD is to buy the relevant products and services that are being created, and equally important, to not buy those that are not. What these companies and the investors who back them need is clear communication, and there is no clearer way to communicate preference than a contract to buy, regardless of size or scale.
Small funding to “demonstrate” a technology is also useful, but what most of these companies really need is investment capital to expand and grow in a profitable direction. And, in a change of pace from the traditional U.S. space investments, this funding must no longer come exclusively from the government, but from the legions of eager U.S. investors. Tens of billions in private capital from venture to major private equity and investment banks are ready to deploy every year for this purpose, far more than in the entire Space Force budget.
The truth is that most venture capitalists, while very smart on how to deploy the capital they raise from private investors, know very little about deploying the space capabilities our nation needs or how to run the companies that develop them. Our entrepreneurs need quick competitions to break up sole source contracting decades in the making with clear yes or no answers to their products and services. “Yes” is communicated with a contract, not by applause or photo ops. “No, thank you” suffices the opposite.
By triaging this way, the Pentagon will do everyone a favor. It will ensure innovators don’t waste time on useless capabilities, investors cut out the guesswork on profitability, and warfighters are able to leverage the creative innovation within the American free economy. It’s when we drag our feet and play in the gray area of “maybe someday” that leads to imploding SPACs, sleepless entrepreneurs worrying how to pay their employees, and warfighters still left with outdated technology.
The Space Force acquisition corps must pivot towards rapid and regular engagement with private industry to understand and seek out opportunities for clever ways to contract commercial products and services. Two prominent examples of this in action are NASA’s Commercial Resupply Services Program and Commercial Crew Program, and the Space Development Agency.
After a decade of congressional and bi-partisan support, commercial resupply and commercial crew changed NASA’s 50-year legacy of designing their own rockets. A very green SpaceX rose to that challenge and won, long before their first Falcon 9 flew. In so doing, the worldwide launch industry has been completely revolutionized, and has ultimately saved the country from national embarrassment of not having any access to space without Russian engines or complete rockets. Former NASA leaders Charles Bolden’s and Lori Garver’s willingness to risk personal professional failure in the face of critics did more to advance our nation’s space economy than anything since LBJ doubled down on the Apollo program after JFK’s assassination.
The same will be said of the Space Development Agency, as it now transitions into the Space Force. Charged with leading the next generation “national defense space architecture,” SDA is competitively acquiring satellite systems, building satellite constellations to support military users – and doing so with heavy participation from the commercial space industry.
Today’s bold entrepreneurs don’t need “encouragement” from Pentagon leaders to innovate. That is already in their nature. They do need to raise capital, however, and their potential investors are desperate for clear signals of where the government’s interest aligns with theirs. NASA’s commercial resupply and commercial crew programs were last decade’s promise because of SpaceX. The new generation of compact and capable satellites, the data services derived for them, the rockets that launch them, and the protocols that secure their cyber domain are all poised to do the same in their sectors, too.
Buy or don’t buy – it’s really that simple. Disingenuous studies that conclude with more questions than they started with only push more space startups towards the infamous “valley of death.” These creative entrepreneurs are not so much wedded to one technology they created as they are to solving customers’ needs. By making acquisitions more clear cut, we enable these business leaders to run their companies in a direction that makes sense for all parties involved: for the entrepreneur, their financiers and the warfighter customer.
Charles Beames is chairman of the SmallSat Alliance and executive chairman of York Space Systems, a satellite manufacturer supporting commercial and U.S. government customers.
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