New Help for Transitioning SBIR-Funded Technology to Commercialization (Phase III)

Companies that win SBIR awards, and get funding for demonstrating feasibility (Phase I) and developing the proof-of-concept prototype (Phase II) often find themselves stymied to take the technology further. Funding for commercialization (Phase III) is very hard to arrange and obtain -- it isn't provided via the required agency R&D budget set-aside as is Phase I and II. The "normal" processes for getting such projects funded are just too daunting and competitive for most small businesses to undertake. But there's actually many sources of help, some new, and some not so new.

About seven years ago I received the distinct honor of being invited to join a distinguished national Panel of experts on small business technology development and commercialization. This Panel is convened several times a year by the Washington Office of the National Technology Transfer Center (NTTC) for the purpose of advising businesses (both large and small) and research institutions (both universities and Federal labs) who are conducting research and development funded by the DOD's Missile Defense Agency (MDA). The advice is specifically focused on issues relating to the transitioning of their technology to end use, and, hopefully, eventual insertion into MDA systems.

MDA has sponsored and NTTC has administered this enlightened Technology Applications Review (TAR) program for over twenty years (I'm still one of the newbies). The invited companies present the status of their MDA funded technology development progress, their plans for transitioning it to commercialization, and their assessment of the resources they'll need to accomplish the plans. History shows that the majority of these TAR participants have been SBIR-funded small businesses, usually at the level of Phase II. The Panel provides critical feedback on their plans, and offers suggestions for new strategic business positioning, tactical approaches for implementing the plans, new ideas for applications of the technology, and referrals to individuals to contact for further guidance and help.

Well, the NTTC convened our third TAR meeting of 2008 last week in San Diego. Four very interesting SBIR companies made their presentations, and we on the Panel provided much spirited feedback. The company executives all went away with "to do" lists of actions to be taken, some strategic, some tactical. Two of the companies were actually making a repeat TAR appearance, having been so impressed with the quality of the advice they had received in their prior visit that they were back for another dose of reality. We'll have another session next week in Washington DC with five more SBIR companies making presentations. I can hardly wait!

While the NTTC/MDA sponsored TAR is, in my opinion, the most focused and, arguably, the best support mechanism out there for promoting transitioning of an SBIR company to commercialization success, there are other initiatives for companies who are not MDA funded to take advantage of. The DOD began what's known as the Commercialization Pilot Program (CPP) back in 2006. It's evolving and still pretty "new". It's been implemented by the Army, Navy, and Air Force, to provide direct support to smooth the way for SBIR companies to obtain Phase III funding for commercialization. Support is available via the CPP for a variety of business functions, as well as for removing roadblocks to working with Defense Prime Contractors.

The Army, Navy, Air Force, and the MDA, themselves hold regular events designed to promote commercialization of small business developed technologies, many of which focus on SBIR. Just today I received notice of a conference on transitioning "disruptive" technologies from "non-traditional" sources (e.g., small SBIR companies) to the Army's ARDEC. The event will be held next January. Click HERE for more information. In future Blog posts I'll take a close look at what each of the Federal agencies (all of them - not just DOD) are doing (or, in some cases, not doing) to promote Phase III.

And, finally, the SBIR re-authorization legislation will very likely provide some funding for more Phase III support for all of the agencies, as well as the requirement to actively support the transition of SBIR technology to commercialization. All the more reason for us to get behind the effort to convince our legislators to do this right.
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PS: 11/3/08. I sent out an SBIR Coach's Newsletter issue today that answers the question: What is Phase III? If you're at all confused about that, you'll want to read this. If you'd like a copy, please write to me. To get on the Newsletter mailing list, click the button on the margin at the left (be sure to answer the confirming email you'll get). Every issue has opt-out buttons, and your email address privacy is strictly guaranteed.
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NOAA Announces New "Water and Wind" SBIR Topics with Surprising Subjects

The big dogs in the SBIR Program are the Department of Defense and The National Institutes of Health, together accounting for over $1.5 Billion of the $2.2+ Billion worth of SBIR projects funded each year. The next tier of agencies, NSF, DOE, NASA and Homeland Security, together fund another $450 Million worth of projects. The remaining five participating agencies (Commerce, Education, Transportation, Agriculture, and the EPA) don't have a lot of SBIR money to spend (do the math), and sometimes get lost in the SBIR shuffle. That's unfortunate, as they do fund interesting projects in worthwhile technologies. (To see the SBIR priorities of all of these agencies, go to the SBIR Gateway's Agency Program Links page, and click on the agency you'd like to explore.)

A case in point is the National Oceanic and Atmospheric Administration (NOAA), a branch of the Department of Commerce. NOAA announced their new SBIR Topics today, with a Jan 14, 2009, proposal due date. NOAA's SBIR budget is very small -- they anticipate awarding only ten Phase I grants of $95K each in this round -- but the projects are fascinating. Their four Topic Areas are Ecosystems, Climate, Weather and Water, and Commerce and Transportation. Don't think you can predict what they're looking for, as the variety of technologies being sought is quite broad. To see the Topics and Sub-Topics, surf to NOAA's SBIR web-page and click on the download link for the 2009 NOAA SBIR Solicitation.

Having just ducked the worst of Hurricane Ike, and watched while my favorite vacation places were destroyed, I was especially taken by NOAA's Topic 8.1.9SG: "NOAA is looking for proposals to develop new building methods and materials that can be utilized in both the retrofitting and new construction of structures in coastal areas to reduce the wind and water damage sustained during severe weather events."

There's something for everyone here, with other technologies involving biology, meteorology, chemistry, electronics, sensors, physics, and mathematics. Even SCUBA technology is involved!

NOAA doesn't get the attention that the big dogs get, so the number of SBIR proposals they receive is a lot smaller. Competition is about on par, however, with approximately 10% of the applications getting funded. But, they tend to get overlooked by the companies who are experts in technologies that aren't obviously NOAA-centric. So, overcome your skepticism, take a good look, and call the SBIR Coach if you'd like some help in improving the odds.

SBIR and other technology funding in the current crisis.

The current economic crisis certainly caught most of us by surprise. Crooks manipulating the credit markets suddenly found themselves without the reserves to cover their subprime loan losses, and their house of cards began to collapse. We trusted the watchdogs to keep us safe, but the crooks were tossing them goodies, and they didn't bark the alarm. The result is a plummeting of the stock market and a virtual freezing of the credit market. The losses are staggering.

Will this crisis affect our ability to get money for our businesses? Sure, at least for a while. Family and friends funding will be harder to tie down as people, even those who love you, feel the need to be more cautious with their financial reserves. Bootstrapping will be more difficult as your customers stretch their accounts payable timelines out to well beyond 30 days. Lines of credit may be withdrawn, and surely difficult to get expanded, as banks find their money sources restricted. Equity investors will tighten up on their governance and look for risk reduction wherever they can find it. New Angel or VC investment will be even harder to secure, and valuations are certain to be even further reduced. It will be tougher to find sources of debt or equity money for a while. Tighten your belts, it's going to get rough.

So what about Grant funding? Will SBIR be affected? Probably not in the availability of funds, but it will most certainly get more competitive. The SBIR budget is a fixed percentage (2.5%) of the largest Agency R&D budgets, and if those budgets are reduced, the SBIR pot will be proportionately smaller. My sense says that we'll see even more applications and it will become even harder to win funding. That's what happened following 9-11 when the economy dipped. As belts get tightened, smart people get "downsized". Many of them have entrepreneurial spirits and small businesses get born. SBIR is a way many of them actually get started.

Entrepreneurial spirit is innovative in nature. Unfortunately, Wall Street's penchant for "financial innovation" is taking the hit with a big share of the blame for this crisis, and whenever innovation is attacked, SBIR ducks for cover. SBIR is up for reauthorization, now with a deadline in March, 2009, for Congressional action to improve and expand it, or at least, continue it. There's always the danger that it could be eliminated, and that would be a crushing blow to American innovation and entrepreneurship.

We'll need to be involved as a small business community to educate and inform our legislators in the new Congress of the value of SBIR, to ensure that the program continues to foster the creation of innovative technology.

The SBIR Coach will be involved. Hopefully you will too. Stay tuned....

SBIR Coach to speak at Dallas Nanotech event this week

I've neglected my Blog this month. No excuses, other than having been exceptionally busy helping clients prepare DOD Phase I and Phase II proposals and dodging Hurricane Ike. I promise to be more prolific in October.

I'll be a speaker at the NanoTX'08 Conference and Expo to be held this week in Dallas. My talk will highlight (surprise!) SBIR opportunities for nanotechnology development. I'll also be on two Panels, one for Nanotech Investment Issues and another on Nanotech Workforce Issues. If you'd like copies of any of my presentations, just send me an email.

With the Wall Street turmoil of the past couple of weeks, it's a darned good thing that the extention of the SBIR Program to next March was accomplished. There's no way that our esteemed Congressional officials would have paid any attention to what small businesses needed when big businesses were teetering on the brink!

I'll get back to SBIR technology transition to commercialization issues soon. Promise. If any of you who read this have some questions or issues you'd like me to address, let me hear about them, either in a comment here, or an email to me.

Fred

FLASH: SBIR given reprieve to March 2009

I had intended to continue discussion of the goings on at the "Beyond Phase II" SBIR technology commercialization conference I attended this week (see yesterday's post), but that will have to wait until another day, as I want to tell you about the behind-the-scenes action that apparently has given the SBIR Program a temporary reprieve until March 20, 2009.

According to Rick Shindell of The SBIR Gateway in his SBIR Insider report dated today (9/05/08): "Earlier this year, Senate Small Business Committee Chair, John Kerry (D-MA) wrote a short bill, S.3029, 'To provide for an additional temporary extension of programs under the Small Business Act and the Small Business Investment Act of 1958, and for other purposes.' It was cosponsored by his ranking member, Olympia Snowe (R-ME), and was passed in the Senate by Unanimous Consent on May 15, and by voice vote in the House on May 20. President Bush signed the bill into Public Law 10-235 on May 23, 2008. Its potential applicability to SBIR was kept low keyed in order to not interfere with reauthorization efforts that were underway in both the House and Senate. "

While not mentioning the SBIR program by name, this bill is interpreted by most legal eagles in the Government as applying to the SBIR situation, and steps have been taken to make sure that all of the participating agencies recognize the application of this law to SBIR and do not shut down their programs at the end of this month.

So, the SBIR reauthorization fight is temporarily delayed for a while, but it will be rejoined in the Spring, and there will be a lot of work to do to reconcile the differences of opinion that exist between the House and the Senate. You can bet that the The SBIR Coach will be in the middle of the fray!

Keep your pencils sharpened [talk about an out-of-date metaphor!] as, when the debate resumes, we'll be writing letters to our elected officials in the new Congress to encourage them to do the right thing for SBIR. Stay tuned for further developments, and thank you for your support.

Promoting paths to SBIR technology commercialization

The SBIR Coach is at the DOD sponsored "Beyond Phase II" SBIR technology commercialization conference in Palm Desert CA this week. In addition to hearing excellent "technology transition" presentations from NASA, the Department of Homeland Security, and the Department of Defense, I'm enjoying meeting and chatting with the key SBIR liaisons at some of the country's biggest Prime contractors, including Boeing, Lockheed Martin, Northrop Grumman and Raytheon. I'm representing the interests of several clients who can't be here, and have made some very promising contacts for them.

The Agencies and the Prime contractors are actively working together to encourage integration of SBIR funded technologies into systems produced by the larger companies and ultimately deployed into end use. For the SBIR companies it's the follow-on funding (called Phase III) that turns prototypes into products. For the big companies it's the opportunity to integrate innovative bits of technology that improve performance into their systems. For the Agencies, it's solving problems and fulfilling missions. Everybody wins.

The Conference organizers, led by my friend Andy Talbert, have provided all of the presentations on a USB drive given to each attendee -- the welcome replacement to the big books of presentations we used to get! Click HERE (and then click "Agenda") to see the Conference Agenda. If there's a particular presentation you'd like to see and chat about, send me an email and I'll be happy to send it to you.

Today, among other things, we hear much more about the DOD's Commercialization Pilot Program and what the States are doing to support SBIR technology transition into commercialization. More on this in tommorow's post.

DOE announces new SBIR topics

The US Department of Energy (DOE) announced its 2009 SBIR topic area list this week. There are 60 topic areas for which applicants can propose projects, many of them in the clean and renewable energy sectors of interest to Green Technology initiatives. This is a preliminary notice, with the official opening of the DOE's 2009 SBIR solicitation to come in mid-September. Monitor the SBIR Gateway for the official opening announcement.

The DOE uses the Grants.gov website and process for acceptance of SBIR proposals, and if you haven't used this mechanism before, I encourage you to prepare in advance and get registered now. The State of Connecticut (which will host the Fall National SBIR Conference in November) has put together an excellent presentation on the multi-step Grants.gov registration process that you can dowload by clicking HERE. Most of the Federal Agencies that offer SBIR grants use Grants.gov, and, fortunately, you only have to go through this registration process once.

SBA Announces Intent to Raise SBIR Award Limits - They Want Your Comments

The SBA has announced the intent to raise SBIR award limits to $150K for Phase I and $1M for Phase II. See the announcement on the Federal Register by clicking here.

In their announcement, they say: "SBA is authorized by statute to adjust the award amounts once every 5 years to reflect economic adjustments and programmatic considerations." Note that the SBA has never before chosen to take such action.

Your comments are being solicited. Here's the information you'll need:

DATES: Comments must be received on or before September 15, 2008. SBA intends to make these comments available to the public.

ADDRESSES: You may submit comments, identified by "RIN 3245-AF61" by any of the following methods: (1) Federal Rulemaking Portal: http://www.regulations.gov, follow the instructions for submitting comments; (2) Mail: Office of Technology, 409 Third Street, SW., Washington, DC 20416; or (3) Hand Delivery/Courier: Edsel Brown, Assistant Director, Office of Technology, 409 Third Street, SW., Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT: Edsel Brown, Assistant Director, Office of Technology, at (202) 205-7343. You may also e-mail questions to technology@sba.gov.

Thanks to my friend Rick Shindell at The SBIR Gateway for having provided this information via his SBIR Insider Newsletter. Before you provide your comments, you might want to read his August 20th issue for an analysis of why the SBA chose to take this action now with the reauthorization bill being considered by the Senate (S.3362) having the same new limits.

Boeing wants to help you win DOD SBIRs and STTRs

The Boeing Corporation continues its support of entrepreneurial technology development by providing a list of Boeing people who are interested in collaborative support of SBIR and STTR projects sponsored by the Department of Defense's 2008.3 SBIR and STTR solicitation. It's very rare that the DOD will offer new STTR topics this late in the year. Typically all STTR opportunities are open only in the Spring.

If the topic you're planning to respond to appears on Boeing's list, it would be a productive strategy to seek collaborative support for your application from Boeing. They'll provide letters of support (when appropriate) with the objective of participating in development (Phases I and II) leading to the ultimate commercialization of the developed technology (Phase III) by integrating it into Boeing solutions.

The DOD will begin accepting proposals on August 25th and proposals are due by September 24th. You have one more week (effectively until August 22nd) to contact the DOD Technical Point of Contact on the topic for clarification of the requirements. All serious applicants are strongly encouraged to do so.

If you'd like a copy of the Boeing list, please send me an email request. My website has my email address.

Contact your Senators today and urge them to reauthorize SBIR!

Now that the Senate Committee on Small Business and Entrepreneurship has approved an SBIR reauthorization bill (S. 3362) the important steps are to secure full Senate and then House approval, so it can be sent to the President for signing into law. S. 3362's reauthorizing language offers an acceptable compromise (from the radical changes that we opposed in HR. 5819) that many of us who advocate for small business causes can support. Remember, without congressional action, the SBIR Program will expire at the end of September.

One way you can help is to encourage (dare I say demand) that your Senators support (and even co-sponsor) S. 3362 when they return from recess in September. The SBTC and NSBA have joined in providing a template letter that you can edit if you wish, and have sent sent over your signature to both Senators from your State. Please take a few minutes today to send this letter.

I sent it off this morning to both Texas Senators. With the NSBA's template it's painless and easy! Just do it! Get it done!

It's also effective to call your Senators' DC offices (ask for their "Small Business Legislative Aide") to urge their support and co-sponsorship of S. 3362. The Capitol Switchboard number is (202) 224-3121.