Doing SBIR - Nelson's Perspective
What is SBIR?
$1B a year, no equity, no repayment. A
government subsidy for small-business technology development with
two phases for each project. You compete for both phases.
Phase I - $100,000 to show it's feasible;
Phase II - $1,000,000 for a prototype.
After the million, the government may buy a zillion
(hah!), or forget you exist and just use your technology royalty-free. Some agencies, like BMDO's SBIR
used to do, help
with marketing and maybe more R&D money (at least when I ran it).
Winning an SBIR
|Chances of winning vary a lot. The raw statistics (only 10
percent of proposals funded for Phase I) tell a misleading story.
NSF and Air Force, for example, see vastly different worlds yet claim the same criteria. To keep it fuzzy, the government keeps its SBIR literature vague and mumbles in public.
|| You need a view of the agency and market strategy for
using SBIR since most marketable products need a lot more than $1
million. Remember, your strategy must consider the opportunity
cost and a source of the real money and business during and after SBIR.
|The novice SBIR proposer can either send in
cold proposals (which probably have a better chance in
SBIR than anywhere else in government) or shop the idea around
the government to find some friendly ears who can help shape it. Schmoozing helps a lot in DOD and NASA where a lot of topics are written, and most proposals decided, by low level, technically smart people. To know them is to know them.
||Since the veteran SBIR company wants the agency to
pony up more money, it can plead commercialization. It may
work. Since the feds don't see commercialization the way you
do, and since they don't know markets, and since they cannot
judge marketability claims (even though many think they can),
many simply use your commercial story as a rationalization to
fund government technology. A credible fantasy may actually get
you some SBIR. Just don't deceive yourself about how SBIR money will advance your company's commercial prospects.
|Fast-Track, a new DOD approach promises a place near the head of the line for a project with third-party cash. It started in 1996 with 52 of 56 qualified applicants winning. (It is a rigidized version of my approach at BMDO.)
||Who should try? High-tech start-ups, established companies with new technology, product improvers (especially for DOD and NASA), and research houses seeking a government sponsor. (Even though I discouraged such houses at BMDO,
almost all agencies love predictable results.)
More Information links
Or consult a grey-head
who decided 10,000 SBIR proposals from 3500 companies and gave
$300M to 700 companies of whom a dozen went public with a present
market cap over $1 billion.