Cutting Through the Smoke in the Defense Market ~ 24 Tips for 2024

I’ve been in and around the defense industry most of my life.? It really doesn’t get any more sensical with age or experience; nor do I.? As the saying goes, “It’s complicated.”? Still, there are some truisms that I’ve learned.? Here is my take on 24 of them in 2024.? You may not agree with some or all, but the beauty of running a business alliance with hundreds of members is that at least some of you will.

1.???? Take advice about how to be successful in the defense industry.? Most small business leaders ask for it, and that’s admirable.? In my experience however, most don’t actually heed the advice in the end.? Think about taking at least some of it.? One of our Members went to every single field demonstration the Pentagon puts on, trying to get the DoD to buy their water purification product.? They didn’t, but the experience led to countless other opportunities.??

2.???? Give knowledge away; stop hoarding it.? I mean this quite literally.? The most successful members we’ve had are the collaborative ones, and the ones that don’t try to patent everything that moves.? Invent it, maybe protect it as a trade secret, move it to market quickly, profit from it, and then move on to another innovation.

3.???? Having said that, do try to protect your IT systems, and your information.? The DoD’s Cybersecurity Maturity Model Certification (CMMC) requirement is here (sort of... long story), and you can market that as a competitive separation.? And yes, the Chinese continue to steal everything.? Get at least level 3 certified, and get connected to help if you need it.? Spend on that before patent protection.

4.???? Partner with others.? Let’s face it, most of you aren’t assembling F-35s or stealth destroyers.? You have a great technology, but what application is it for?? Several of our Members make sensor technologies that belong on UAVs; and several of our Members make really cool UAVs that could benefit from a new purpose in life.? Reach out, connect, and go to market together somehow.

5.???? Show up, and get noticed... and keep showing up.? A Defense Alliance Member went to a major ground vehicle prime contractor with updates on their cable assemblies for seven years before getting picked up on an urgent defense contract with enormous margins.? If you believe in your innovation, act like it.

6.???? Assume someone has done it before.? So many entrepreneurs I’ve come across have said “no one else makes what I make.”? It’s almost never true.? And even if it is, you may be assuming that someone cares.? Your job is to convince the DoD they need what you’re selling, not bring them something you think they should buy.

7.???? Connect to the end user.? The Pentagon is a behemoth, whose buying arm is generally far removed from those who actually use what they buy.? Are you in the middle of North Dakota, and think you can’t find the customer?? Think again.? The National Guard is in your county, and a retired infantry Soldier is in your neighborhood.? Don’t be lazy - the end user is everywhere.

8.???? Look at R&D even if you have no intention of doing Research & Development.? The beauty of the defense market in the U.S. is that we really don’t protect what we’re buying, despite the aforementioned CMMC requirement.? We put what most of what we need on full display for all to see.? Just the act of exploring research requirements can reveal a treasure trove of contacts and connections to instantly provide you with market insights.

9.???? Build relationships:? DoD is a relationship-driven market.? OK, they all are, let’s not kid ourselves.? And don’t think that because defense is public, and driven by “fair” competition and the like, that favoritism doesn’t occur.? Of course it does.? Be that company that’s answering the need, and has also taken the time to get to know the customer.

10.? Hire someone who knows how to lead the defense market side of your business.? But don’t try too hard to find the perfect person - she/he doesn’t exist, because it’s that complicated.? Look for someone who combines a passion for the market (hint-hint:? hire a Veteran), with some solid, related technical knowledge of the product (hint-hint:? hire a Veteran).? In other words, invest in this part of your business; and know that the human capital piece is the most valuable.

11.? Lead with an actual solution to a problem.? Too many companies show up with assumptions of what the actual problem is (see “connect to the end user,” above), or lead their pitch with cost or “value” or having a special designation (8a certified, woman-owned, etc.).? Instead, hit hard and fast with evidence that you know what the customer wants, and how your solution is better.

12.? Don’t let perfection be the enemy of sales.? This is related to #11, in the sense that you shouldn’t assume the government buyer wants the perfect solution.? DoD is an imperfect customer driven by values that often contradict getting the best product at the best value to the Warfighter.? Surely you want to strive for that, but focus on what the buyer is telling you they want.? Sometimes that means providing capabilities that are more limited, but better meet the cost or time requirements they’re looking for.

13.? Ignore the noise:? Seriously, there’s so much noise out there:? maybe the next president will de-fund this or that program; maybe a contract values price over performance and you had no way of knowing; maybe a program manager is replaced and priorities on a research project change overnight.? That’s out of your domain, so remain focused on what you do well, and build on that.

14.? Embrace the plethora of assistance that exists to make you successful as a defense market supplier - a lot of it is free, from places like your local APEX Accelerator, SBA District Office, Manufacturing Extension Partnership, U.S. Commercial Service, your state SBIR entity, Defense Alliance, National Defense Industrial Association (NDIA), etc.? Don’t know some of these organizations, or don’t have time to connect with them?? See #10, above.

15.? Run your defense business like our warriors’ best interest is your prime reason for existence, not profit.? If you do, you might find out that bringing excellence to our warriors at all costs is what ultimately brings you success as a business.

16.? “Beg forgiveness, rather than ask for permission.”? This is an unwritten value in the Navy, because it reinforces mission accomplishment over all else.? What I mean by that, in reality, is to focus on delivering for the customer first, and complying for the auditor second.? Both are really important, and we don’t want businesses cutting legal corners, in any scenario.? The point is that if something is worth achieving for our warriors, then administrative and bureaucratic requirements can learned along the way, and overcome.? Be transparent with your customer, and ask for help where you need it.

17.? Create your opportunity:? Many businesses look for the perfect government solicitation to “fit” their innovation, often waiting in vain for someone to “bite.”? But sometimes a DoD customer is waiting for someone to tell them what they need.? One of our Members convinced a customer they were thinking about communications encryption the wrong way; that an infinitely continuous changing of the security key was the answer to network security, not full-on protection of the static key itself.? Get the end user to buy off on your idea as their requirement.

18.? Market your innovation like it’s the holy grail - if you can justify it.? Assume everyone has done what you’re proposing; that the requirement has been met; that your audience will assume that you’re bringing yet another iteration of what’s already in the field.? Bottom line:? blow them away, with the quality of your presentation, the knowledge of what a new system will bring, and how you can make them look good in the process.

19.? Think “dual use.”? The defense buyer is always interested in knowing that your product not only meets their needs, but also “fits” somewhere, in some way, in the civilian market.? That’s because they have to care, by law, that you remain a viable supplier for the long term; and because it’s in their best interest to ensure that your business elsewhere will drive cost and performance for them.

20.? Start thinking in two and five year increments... two years because that’s the DoD budget cycle and that time period drives decisions - such as knowing that if you can demonstrate return on investment for a product’s initial cost in under two years, you’re a hero by definition; and that all major programs’ priorities shift substantially every five years, like clockwork.? The Pentagon doesn’t even realize this; but we do, which is why we’re such an amazing alliance.

21.? Talk the talk.? This is the “know the culture” lecture that people get, and rarely follow.? You should know, for instance, that the Army considers its helicopters to be airborne Jeeps, while the Navy considers its helicopters to be expensive, complex weapons and sensor systems that are part of its extended combat-centric network (and of course this relates again to #7 and #10, above).

22.? Consider International Sales.? Sure, you have to consider complying with yet another acronym – International Traffic in Arms Regulations (ITAR) – but oftentimes foreign buyers have less tape than U.S. ones; and non-U.S.-procured defense products quite often end up in the hands of our own Warriors.? It’s a vast market that may include folks hungry for your innovation.? Check out the U.S. Commercial Service in your area to find out who they are.

23.? Re-work your company’s strategic plan to include growth in the defense market.? But this time produce an actionable one.? It shouldn’t be just a list of stated goals, but a detailed Plan of Action and Milestones (POA&M) that holds you and your charges accountable.? Our most successful members do this in “bite-sized” portions – generally 90-day increments that take a step, review the results, and iterate the continued path forward.

24.? Finally, to borrow from the U.S. Marine Corps, “embrace the suck.”? If you want the defense industry to act “normal,” then you don’t belong in the defense industry.? It’s that simple.

So there you are:? 24 things you can do and think about to help bring small business success in the defense market in 2024.? There’s a lot more, but we need to save some for future years’ updates.? Meanwhile, market like it’s 2099.

Chip Laingen ~ 2024