Small Business Innovation Research: The first step to the next great idea

By Capt. Edward Lundquist, USN (Ret)

Bob Smith, director for the Department of the Navy’s Small Business Innovation Research (SBIR) program, finds it frustrating when he sees a hard-charging veteran who knows about some of the problems facing the fleet and the force and has a proposed solution — but doesn’t know about the SBIR program, or how it can turn ideas into capability.

SBIR topics, published three times a year at sbir.gov, list areas where 11 federal agencies – DoD among them — need help. Qualified small businesses can submit proposals to develop their ideas into technology these agencies can use.

“If you have an idea, it’s worth looking at the topics to determine if the Navy Department sees an opportunity for the SBIR community to solve their technical challenge,” Smith says.

Nick Karangelen is a former Navy submarine officer who now runs what he calls his “little innovation company,” Arlington, Va.-based Trident Systems. His company has been in business for 30 years and averages about 100 employees doing $30 million to $50 million a year in sales.

Karangelen says his company started as a services-oriented company doing simulation and modeling analysis and now focuses on system hardware development. Trident Systems has won a number of SBIR awards for NASA, DARPA, DHS, and the Air Force, Army, Navy, and U.S. Special Operations Command.

“We won our first SBIR in 1989 and never looked back,” Karangelen said. “We found that the SBIR program is by far the most important contract R&D source available to small companies in the DoD marketplace and has enabled many success stories.”

SBIR funding comes in three phases. The first phase is a basic concept white paper; Phase II can help develop the technology; and Phase III helps to transition the technology in existing systems and programs. Once a small business is selected for Phase II, they become eligible for the Navy’s SBIR STTR Transition Program (STP), which provides a structured program to help with commercialization, transition, and professional business assistance.

Having your idea be incorporated into a program of record doesn’t happen overnight. The average amount of time for a Phase I to achieve Phase III transition is five to seven years. 

“It can take 10 years or more to become successful, but some of them truly are ‘overnight sensations’ years in the making,” Smith says. “It requires an investment of blood, sweat and tears.”

If a Phase I SBIR effort is approved for Phase II funding, there’s a concerted effort to help the small business be successful, with training and business counselors who can look for ways to apply technology solution to other challenges, Smith says.

But before an idea can be submitted, there has to be a company behind it: “You have to become a business first, before we can get to the research,” Smith says.

Potential applicants “first need to understand the business of running a business, otherwise they can waste a lot of time and their technical solution gets lost,” Smith said. “If you’re thinking about doing this, now’s the time to make yourself a small business and understand the SBIR program.”

“You have to recognize where your weaknesses are,” Karangelen says. “If you don’t know anything about accounting, you hire an accountant. If you’re starting an engineering company and you don’t know anything about engineering, you’re at a disadvantage unless you have some really good engineers with you.”

Smith says there are state and local agencies to help small business owners get started. There are classes about forming companies, how to work with the federal government, and writing proposals, and local veterans’ organizations have advisors and support networks for small veteran-owned businesses.

The annual Forum for SBIR/STTR Transition, held each year concurrently with the Navy League’s Sea Air Space expo, has dozens of small businesses displaying their technology and sharing their success stories. 

“Reach out to small businesses that have succeeded, and learn from them,” Smith says. “You have to do your homework.”

Smith says organizations like MOAA and NDIA are helpful for making connections, as well as service-specific organizations such as the Navy League and Marine Corps Association and warfare specialty-related organizations such as the Surface Navy Association or Naval Association of Naval Aviation and their counterparts across the other military services. 

“[If] you want to do business with the DoD, and you have no DoD background, you better go and get somebody—whether it’s a consultant or a partner or an employee—that does,” says Karangelen.

Another resource is Bunker Labs (https://bunkerlabs.org/), created by military veteran entrepreneurs to support other military veterans coming off of active duty. They offer educational programming, mentors, events, and local networks to start and grow businesses.

“There are a lot of people who want these small businesses to succeed, because we want their solutions,” Smith says. “We need their solutions.”   

 
Rate this content