Four years ago, when I founded LIFT Aircraft to develop drones capable of human flight, the military market wasn’t on my radar. There is abundant opportunity in consumer and commercial markets, and my perception of the military was that it’s too slow and bureaucratic to engage with startups. That perception changed drastically two years ago when I ran into a friend and fellow entrepreneur at a co-working space and tech hub based in Austin, Texas, called Capital Factory.
My friend’s company had just been awarded a Small Business Innovation Research grant by AFWERX, and he encouraged me to meet with the U.S. Air Force, insisting the service would be interested in LIFT. My immediate response was to decline, but he persisted and offered to walk me down the hall to its office and make introductions. AFWERX, Army Futures Command and the Defense Innovation Unit have all taken up residence at the Capital Factory to find startups with interesting technology that can be applied to military problems.
Two months after that serendipitous meeting, LIFT was awarded a Phase I SBIR grant, which was just enough funding to support pursuing the possibility there might be customers in the Department of Defense for Hexa, our piloted drone. Before I could even begin that discovery, we found that the Air Force was about to launch a new program dedicated to accelerating the development of electric, vertical takeoff and landing aircraft — aka flying cars.
The timing was fortuitous: We already had full-scale prototypes built and were one of only a few companies in the world to be flying manned. We were quickly offered more in-kind support for airworthiness evaluation, acoustic testing, crash simulation, environmental testing and more critical testing to advance our product development. Ironically, they were moving faster than our startup!
We were offered a larger Phase 2 contract under which the Air Force would provide funding for flight testing. Our biggest concern was that we would be pulled off our critical path to meet requirements for the Air Force. Instead, we learned the contract would fund precisely the development and testing necessary to progress to consumer flights. We would receive funding for work we needed to do, regardless of DoD involvement.
I’ve heard many senior people in the DoD acknowledge that its traditional methods of procurement are not able to keep pace with modern innovation and advancements. Technology is moving too rapidly and in too many directions for warfighters to undertake traditional, requirements-driven and decades-long development programs.
A valuable lesson was learned from the evolution of the small drone market. Before the DoD was able to understand the military use cases for small drones, the market was dominated by Chinese company DJI, which snapped up 80% of the market share. Without support from the Federal Aviation Administration or the DoD, U.S. drone developers never had a chance. Ultimately, the U.S. military recognized the need for drones, but the supply chain had been lost to China, creating huge difficulties for military procurement that still linger today.
AFWERX and Agility Prime are shining examples of a new approach to innovation the DoD has undertaken in the past couple of years. The new mantra is “dual use” — identifying promising new tech that could have both commercial and military use, and leaning in to support startups, sometimes even before specific military missions and use cases are identified. Research and development funding is often matched by venture capital, significantly reducing risk.
There will be plenty of investments in technologies that never make it to operational military use, but the cost of missing one or two that result in must-have capabilities for national defense is too high.
While it remains to be seen if LIFT and other startups will be able to win large programs of record normally awarded to the major defense primes, the DoD is proving to be a great first customer to many startups and is getting a low-cost look at the latest innovations that just might one day be of strategic national interest.
Matt Chasen is the founder and chief executive of LIFT Aircraft.