Thursday, January 29, 2009

Focus on Economic Stimulus Revitalizes SBIR Reauthorization Push

Everyone says that creating jobs is the key to turning around the economy. It’s probably the only thing they do agree on! We evidently can’t look to big businesses to create jobs – they’re all cutting back and standing in line with palms outstretched – the modern day ironic equivalent of the bread line of the 1930s. So it seems to be up to small businesses to do the job creation. That’s easier said than done. Everyone knows that too. Slowly but surely the country is realizing that unless we figure out a way to innovatively stimulate small business better than we’ve ever done it before, we won’t get out from under this economic mess we’re in any time soon. So how do we do that?

Those of us who have been involved with it since the 1980s have always known that SBIR stimulates small business. SBIR itself was the stimulus for forming my two companies -- without that avenue of funding having been available neither one would have ever been launched. Together they created over 200 jobs and pumped tens of millions of Federal dollars into the Texas economy. Multiply that by the thousands of other small companies that have earned SBIR funding (yes -- SBIR money is competitively earned not just handed out) and created innovative technology solutions in response to expressed needs, and you begin to see the magnitude of the potential. What’s been missing is the stimulus to take the technology through its final evolution to make the transition from the laboratory to the marketplace.

Seems pretty obvious to me – we have a successful 27-year-old mechanism for stimulating small business innovation already in place. It’s called Small Business Innovation Research. (Gee, even the name is right!) Pump it up (both with money and improvements to administrative process to speed the money flow) and add to it the stimulus to take that final commercialization step. Do this now and we have the potential to create a significant number of jobs in a relatively short time frame.

I’m by no means alone in this thinking. Led by Jere Glover, a DC attorney (at one time the SBA’s General Counsel) who’s the Director of the NSBA’s Small Business Technology Council (SBTC), there’s a revitalized focus on getting the SBIR Program reauthorized and improved. In fact, if we don’t keep the pressure on, there’s a chance that SBIR could get lost in the shuffle and die. Jere puts it succinctly and bluntly: “Currently, the SBIR is set to expire on March 20th, 2009. Unless it is reauthorized, this program will go away, and Federal Agencies will no longer be required to allocate any of their R&D money to small businesses. We need your help to make sure this important legislation is taken up before it is allowed to expire.”

The SBTC is sponsoring a “Washington Fly-In” on February 9th and 10th, where those of us who understand SBIR’s importance and are willing to commit resources to support it, will make a coordinated effort to educate our legislators in both the House and the Senate on the importance of SBIR as an economic stimulus for small business. The SBIR Coach will be there, of course. We’ll be visiting with the small business liaisons of many of our Senators and Representatives to provide recommendations on how to improve the SBIR Program’s effectiveness so as to stimulate the maximum potential for private sector job creation. The objective will be to garner support and sponsorship for SBIR reauthorization as an economic stimulus.

Join us if you can. Click HERE to register to be a part of the group. The headquarters will be at the Westin DC City Center. You DC locals have no excuse not to participate! We’ll have a planning session at the Westin on Monday evening (Feb 9th). There’s to be a breakfast Tuesday morning (Feb 10th) in the Senate Small Business and Entrepreneurship Committee Hearing Room (Russell 432). We’ll be having a conference call on February 3rd to get everyone briefed on the event. Once you’ve registered you’ll get the details of that and more.

Some of you may be unfamiliar with the complex and somewhat contentious SBIR reauthorization issues. If you'd like to see my view of what the issues are, go to the "SBIR Reauthorization" page under the "SBIR Program" tab on my website: (Refresh your screen if the page doesn't show up under the tab. It's new and your cache may need clearing.)

I’m helping coordinate a Texas delegation. Executives from some of Texas’ most successful SBIR companies have already committed to attend. If you’d like to join our delegation, please let me know ASAP. We’ve already got appointments with both Senatorial offices and quite a few of those from the House. Add your voice to the chorus. In this game, there’s strength in numbers!

Here’s an idea: If you can’t attend the Fly-In, send me a letter to present on your behalf. Letters from all States are welcome!

And if you think that it’s only a few of us SBIR wags who are arguing for such small business economic stimulus, think again. I’ve seen several articles in the past couple of weeks that promote this thinking. To wit: “Use broader definition of shovel-ready in weighing economic stimulus”, “Entrepreneurs are key to job creation”, “Economic Recovery and the SBIR”, and “Nurturing The Soul Of America”.

I predicted earlier this month that SBIR wouldn’t get reauthorized by March 20th, but would simply be temporarily extended without improvement. How quickly my thinking has changed (on the timing, not the issues). Help me be wrong on this prediction!

Stay tuned…..

Tuesday, January 20, 2009

Will President Obama's Techonomics Program Impact SBIR?

Well, we now have a new President, and he's hit the ground running. The Obama administration has proposed federal legislation with an aggressive techonomics [click on the word if you don't know what that means] stimulus package that emphasizes innovative science and technology and calls for dramatic increases in short-term funding levels for R&D. Very significant increases over currently authorized amounts are proposed for the National Science Foundation (NSF), the Department of Energy (DOE), and the National Institute of Standards & Technology (NIST).

This got my attention, as any increases in funding for R&D in the NSF, DOE, and NIST should translate directly into increased funding for SBIRs in those agencies. That means more potential projects for all of us to work on!

Both the R&D and education provisions of the new House initiative harmonize with President Obama's promise to enhance innovation by providing short-term stimulus spending where it is needed, while providing a long-term basis for economic growth. But will it work?

I had a conversation with Dan Loague today. Dan is the Executive Director of the Capital Formation Institute (CFI), an educational organization whose mission is to be the "premier international research and educational entity in the fields of early stage capital financing and enterprise creation and growth." Dan's take on the Obama Techonomics stimulus package, and what it will take to make it work, is:

"Science, technology and research help create the raw materials of innovation, but it’s the buyers, sellers and markets, not inventions, that create jobs and income. Think about it: filling the barn with better paint will not get the barn painted. It’s going to take specific actions, not just hope that new ideas can somehow be turned into U.S. companies that find success the competitive global market.

We should now ask the following key questions:
(1) What part of the funding will actually help to produce jobs and new capital from science and technology? (2) How much of the money will be used to increase the launch of new products into the marketplace and the numbers of new consortia of science, technology and corporate solution seekers? (3) How much of the money will be devoted to helping create high impact jobs that will produce new subject matter experts?"

To focus attention on this, the CFI is sponsoring a RoundTable Teleconference on "Obama's Techonomics Program". It's tomorrow, Wednesday, January 21st, at 2PM EST. See the details at You'll find the call-in number there, along with pictures of the discussion leaders: Robert Boege (ASTRA), Ray Felts (Nine-Sigma), Connie Luthy (Medical Products Innovation), and Marc Oettinger (SURA).

The SBIR Coach will be participating in the call, raising issues pertinent to SBIR of course. I encourage you to join in as well.

Dan and I are now working on a CFI Roundtable Teleconference, to be scheduled in February, to focus on "Reinventing SBIR: Effecting order of magnitude scale improvements in Federal economic stimulus programs designed for small business." Improvements in SBIR will be the goal in the SBIR reauthorization activities to be undertaken with this new Congress, so this is timely and important. Stay tuned for details in upcoming Blog postings, and on the CFI website (

And, finally, to tie this all together, Tom Still of the Wisconsin Technology Network, highlighted the impact of SBIR on the country's economic health in his just published article ( on suggestions for economic stimulus priorities:

"[Congress must] Reauthorize the federal Small Business Innovation Research (SBIR) program. Launched 25 years ago, this program has enabled 700,000 small businesses to develop cutting-edge products. Eleven federal agencies granted about $2.3 billion in the latest year for merit-based research and development projects. Over time, SBIR and related programs have created 1.5 million jobs in small companies that typically employ high-wage scientists and engineers. It's a program that works - so why not reinvest?"
Indeed! Tune in to tomorrow's Teleconference, and participate! Please!
UPDATE: Wednesday, January 21st, 5PM CST
We had the Techonomics Teleconference this afternoon and it was great! Lots of good commentary and questions. The intended hour actually stretched to almost 90 minutes, and Dan said that he'd explore having an ancillary session to continue the discussion. If so, I'll report on it here.

Wednesday, January 14, 2009

The story behind the DOD's 6AM SBIR proposal submission deadline

Well, I'm sitting here in my LaZ-Boy recliner, my laptop in my lap, sipping my coffee in the pre-dawn darkness, and reminiscing about what happened six years ago this week. The DOD's winter SBIR proposal cycle just closed an hour or so ago, and I successfully accomplished the final upload of a client's 3rd version of the final draft of their proposal just a few minutes before the 6AM EST deadline. (The things I do for my clients!) Ever wonder why the DOD has a 6AM deadline? It's quite a story...

Back in 2003 the DOD had a 5PM EST deadline for SBIR proposal submissions. The DOD's electronic submission website had been enabled just a year or so earlier, thankfully eliminating those dreadful red-form paper cover pages (remember those?). Of course, everyone always worked right up to the deadline, causing intense pressure on the DOD's network resources and slowdowns as the deadline approached were common. The DOD's instructions included a warning that early submission was recommended. They thought that covered them.

I was working with a client on an Air Force proposal that January afternoon in 2003 as the 5PM deadline loomed. We finished around 3PM and tried to upload the proposal. No response. The site had crashed. The help-line was ringing busy. Talk about frustration! In desperation, as 5PM was just a few minutes away and the site was still down, we finally emailed the proposal to the Air Force's Topic Group Program Manager to time-stamp it, but that wasn't an official way to do it, and we knew that the proposal would probably not be accepted that way.

The next morning I called Ivory Fisher, then the DOD's SBIR Program Director, to ask what they were going to do about the situation, and was informed that their warning advising early submission was sufficient. Nothing needed to be done. Tough luck. Sadly, I predicted that he'd soon be in the middle of a storm of protest. I was right. The firestorm eventually drew Senator Ted Kennedy into it, and the DOD was forced by Congress to re-open the solicitation for three weeks in March to allow the submissions that were prevented by the site crash. Unfortunately that delayed the evaluations and awards, punishing those who had submitted early! Ivory retired soon after, for health reasons unrelated to the angst created by the problem.

My friend Jeff Bond (he had directed the BMDO's SBIR program previously) was appointed to succeed him as the DOD SBIR chief, and he was charged with fixing the system. In addition to increasing the submission site's network resources (I call it enlarging the funnel), he implemented the absolutely brilliant idea of moving the deadline from 5PM to 6AM! That effectively ensured that everyone wouldn't be clogging the funnel at the same time. It works! In the past six years I've only helped a client work to the 6AM deadline twice. Most of the time we finish by the end of business the previous day (or even earlier) without any pressure at all. Thank you Jeff!

By the way, Jeff retired from government service a few years ago and is now Grant & Proposals Director for the Association For Manufacturing Technology ( Any of you who are in the manufacturing arena should join this organization and enlist Jeff's counsel if you're desirous of learning about relevant funding opportunities. Give him my regards when you call him.

Time for another cup of coffee.....
NOTE: The January Issue of the SBIR Coach's Newsletter will be available by clicking on the following link: SBIR Coach's Newsletter - Jan-2009.

Friday, January 2, 2009

Some SBIR Predictions for 2009

For my first Blog of 2009, with the SBIR Program in flux at the same time that our leadership in Washington DC is about to undergo a major shift and with our nation's economy on life support, I thought it would be fun to offer some predictions and ask those of you who follow this Blog to offer your own contributions.

Prediction #1: The SBA will not raise the funding caps on Phase I and Phase II SBIRs independent of reauthorization activities. They announced the intent to do it last fall, and solicited comments, but we haven't seen any action yet. I doubt we will. The SBA has no real authority over the agencies, and the agencies will resist any efforts to interefere in their administration of their R&D budgets. The new SBA chief, Karen Mills, won't allow her boat to be rocked by this issue.

Prediction #2: The submission portal will undergo some major changes as the agencies rebel against being forced to use it. The SBIR grant application submission process is tainted by the extreme hassles of dealing with the vagaries of the arcane processes involved in using this portal. The Dept of Education has gone back to paper submissions rather than use it. Others will follow. Major changes will be announced in how works this year, increasing confusion. Problems will continue.

Prediction #3: The SBIR landscape will become even more competitive as entrepreneurship grows at the same time that agency R&D budgets are being trimmed. Whenever the economy receeds, and talented people find themselves without salaried positions, entrepreneurs emerge. SBIR is just about the only game in town for getting no-strings high-risk seed funding. There are some State initiatives (such as the Texas Emerging Technology Fund) that provide some early seed money, but the amount of money they make available is a drop in the bucket. The net result is more proposals competing with a shrinking pot as agency R&D budgets are trimmed as money is diverted to supporting operations. Remember, the SBIR pot is a percentage of the extramural R&D budget, not a fixed amount.

Prediction #4: Reauthorization of the SBIR program will not be finalized by the March 20th deadline, and we'll see a new continuing resolution to extend it, probably for a period of up to two years. This Congress has much more critical elements than SBIR to deal with, and this issue just won't generate sufficient buzz to rise to the surface in the short time between now and mid March. Besides, we need the full attention of our legislators to get things done right. With new players on key small business committees in both the House and the Senate, we need to educate them on the issues and garner support for improving the program, not weakening it. There's just not enough time to do what's needed, and we MUST avoid knee-jerk rammed through actions such as was done in House last summer, and in misunderstandings that result in obstruction such was done in the Senate this fall. The path of least resistance will be to delay action. That will give us time to marshal our forces to really evolve SBIR in a direction that will stimulate technology innovation rather than stifle it.

OK, that's enough of The SBIR Coach's neck sticking for today. What say you? Any comments on my predictions? Care to offer your own predictions? Let's get some dialog going! Click on the Comments link below and put your two cents worth in! If you'd rather comment in private, email me.

One more thing -- my monthly SBIR Coach's Newsletter provides education on SBIR issues. The January Issue will be available by clicking on the following link: SBIR Coach's Newsletter - Jan-2009. If you have a subject for which you'd like to see some special coverage in an upcoming issue, email me and suggest it.