TECHNOLOGYFool’s Gold: Overhyped Tech Startups Distract from Military Innovation
Technology startups almost never live up to all the hype they generate. Much of this innovation is fool’s gold. Often, these solutions are not developed beyond an initial concept. It’s a missed opportunity for the U.S. military. Startup companies often present the Pentagon with more cost-effective, swift, and adaptable solutions compared to the weapons systems typically provided by the handful of major contractors the Pentagon usually turns to.
Every day, all throughout the country, tech startups are building capital and equity against their newest artificial intelligence, machine learning, satellite-based, or unmanned system solution to an identified inefficiency in military operations. Secretary of Defense Lloyd Austin encourages them by promising to lower risk in the defense procurement process while increasing DoD investment with companies working with sensitive technologies.
Lured by the perception of a tech gold rush in DC and the promising application of new solutions in Ukraine, these companies tether themselves to venture capital funding, generating equity, goodwill, and publicity. These startups gain access to military bases and audiences through the retired generals and admirals on their payrolls. They promise to either modernize some existing capability or build a new solution to a problem vexing operational commanders. They move faster than the defense giants and offer cheaper and more adaptable solutions. Run mainly by former special operators and often championed by recently retired senior officers, these firms are closer to the modern battlefield than the big, established firms. More importantly, they are unbound by the lumbering layers of administration associated with the behemoth defense firms and can move faster on solutions.
And yet, these startups almost never live up to all the hype they generate. Much of this innovation is fool’s gold. Often, these solutions are not developed beyond an initial concept. Their systems require the kind of development requiring access and funding these firms do not have. Moreover, once exposed to the teeming world of regulations and requirements and budgeting and procurement and congressional oversight, they do not survive long enough to make it to market.
All these tech startups inevitably run against the Pentagon’s sluggish procurement bureaucracy and the brick wall of Federal Acquisitions Regulations 13 and 15, all of which tilt the field toward the select few giant contractors with fully functioning lobby and congressional engagement arms.
Generating revenue and gaining an audience with operational commanders is easy enough. However, once they enter the government contracting process, these companies can never develop enough equity to untie the bureaucratic knots. They burn through investments in the years of pushing the rock up the hill of bureaucracy. They lack the massive lobbying infrastructure necessary to gain government approval.
