The Defense Department’s Silicon Valley innovation unit is borrowing a staple of the West Coast startup ecosystem to discover emerging technologies and connect with innovators — it’s hosting demo days.
In late October in Silicon Valley, the Defense Innovation Unit – Experimental, or DIUx for short, hosted a “Cyber Showcase” — essentially a forum for private startups to pitch their ideas — with Adm. Michael Rogers, commander of the U.S. Cyber Command and director of the National Security Agency and OnPoint Technologies, the private venture arm of the DOD and Army.
DIUx — launched in August by Defense Secretary Ash Cater as an outreach effort to connect DOD with innovators out West — selected six private cyber technology startups of varying maturity to pitch their products and services for about 12 minutes each to Rogers. OnPoint Technologies then made a deal to invest in each of those startups, according to George Duchak, director of DIUx.
“It was much like the events you see in the Valley almost every day,” Duchak said Wednesday during a webcast keynote, adding that the team plans to host other similar events.
Because DIUx is not a funding entity itself, Duchak said after OnPoint made its seed offer to the companies, 20 to 25 venture capitalists in the audience were encouraged to join in to make deals — “to either syndicate or potentially individually invest additional funding to make sure those technologies meet DOD needs as well as the commercial needs,” he said.
Rather, the unit is meant to be just that sort of the matchmaker. “Our charter is really to match a technology with a user, and we have no investment funds of our own,” Duchak said. “And that’s not a bad thing, because if a user likes the technology and wants to put his own skin in the game, probability of transition is much higher … you know, it’s always easier to spend someone else’s money.”
“While we don’t have our own dollars, we know where to go to hook the technology up with the potential sources of funding,” he added.
This sort of outreach is just part of DIUx’s still-developing engagement model, which will have members of its planned about-13-person team actively looking for tech solutions, listening for new ideas pitched to DIUx, vetting those innovations, and then connecting the dots between startups and investors.
DIUx’s first year is all about figuring out how best to engage with innovators around Silicon Valley and how to scale that model to other hubs around the country, Duchak said. He envisions the unit growing to between 50 and 100 members, including other elements to support the different military branches’ operations — the Cyber Command and Air Force are already on board. Anything bigger, he said, “the less agile you become. We want to stay small intentionally; we want to stay agile intentionally.”
But so far, being embedded in the Silicon Valley ecosystem has proven beneficial to Duchak. “I’ve learned more being on the ground here in the past two months than I had in the previous three years” as director of the Air Force Research Laboratory’s Information Directorate visiting for a week every month or two, he said.
“There’s difference between being a techno-tourist and a being a native,” Duchak added. “I think [Silicon] Valley companies were getting a little bit fatigued with folks from the U.S. government coming out to the valley and going to the traditional Googles, Apples, Facebooks, etc., the larger companies and going, ‘Show me how to innovate.'”
DIUx, though, gives DOD an opportunity to get in front of other smaller players who typically can’t afford the distraction surrounding such a visit, he said. “For small companies, it’s all about cash flow. And if you’ve got an innovative small company with just a few people that are trying to get a product to market, and then you have a government official that wants to come out there and talk to them, that’s a day that they’re not devoting to developing their product to get to market, and it’s lost revenue for them.”
Contact the reporter who wrote this story at Billy.Mitchell@FedScoop.com, or follow him on Twitter at @BillyMitchell89.