James Gayner MBE provides a comprehensive overview of how startups can engage with the defence and national security sectors. Learn how to navigate the complex procurement landscape, build relationships with prime contractors, and overcome the hurdles faced by SMEs in this challenging but rewarding space.

The defence and national security sectors offer immense opportunities for innovation, but they also come with their unique challenges—especially for startups and SMEs. James Gayner MBE, who has extensive experience working with the Ministry of Defence (MOD) and the defence industry, shared his insights during a recent Cyber Runway: Scale session provided by the Department for Science, Innovation & Technology and hosted by Plexal, where I attended on behalf of Cyber Tzar, the Enterprise Supply Chain Risk Management platform. From building relationships with prime contractors to understanding procurement cycles, this session provided a wealth of knowledge for entrepreneurs looking to make an impact in the defence space.

Contents

Defence Deep Dive with James Gayner MBE

This video is publicly available on the Plexal YouTube playlist for the Cyber Runway programme.

Key Insights and Findings

Here are the key findings, insights, and advice from the “Defence Deep Dive with James Gayner MBE” Cyber Runway Scale session.

The Defence Sector’s Slow Procurement

• Selling to the Ministry of Defence (MOD) and national security agencies is complex and slow, often requiring patience and perseverance, with procurement cycles spanning months or even years.
• MOD and allied nations like the US are undergoing strategic reviews, further impacting procurement timelines.

The Importance of Relationships

• Building strong relationships with primes (large contractors) and key stakeholders within MOD is essential for success. SMEs must navigate a web of stakeholders, including senior responsible owners (SROs), operators, and programme owners.
• Personal connections, networking at events, and fostering long-term partnerships are crucial to gaining traction.

Challenges with Defence Innovation Initiatives

• While initiatives like Defence and Security Accelerator (DASA) provide opportunities for pilots and proof-of-concept funding, they often fail to lead to substantial contracts. Companies should not rely solely on DASA for growth but instead view it as a stepping stone.
• Defence contracts through MOD can still be difficult to achieve, with obstacles like the “valley of death” (the gap between initial funding and securing a long-term contract) threatening many SMEs.

Dual-Use Approach for Startups

• Startups are advised to pursue dual-use strategies, targeting both commercial and defence markets to mitigate the risks associated with the slow defence sales cycle. Defence should account for 25% of a company’s market strategy, with 75% focused on commercial sectors.
• SMEs should also aim for 75% of defence-related contracts through primes and only 25% directly from MOD to balance risk.

Insights

• Cultural Shifts in MOD: There is an increasing openness within MOD to agile, disruptive innovation, and new procurement models, though many of the old, slow-moving processes remain entrenched.
• Strategic Importance of the US Market: Gaining traction with the US Department of Defense (DoD) can significantly enhance a startup’s credibility when approaching the UK MOD. Being a “fast follower” of the US is often part of the UK’s defence strategy.
• Security and Compliance as Essential Barriers: SMEs must prioritize obtaining security clearances (e.g., SC, DV) and certifications (such as Cyber Essentials or ISO standards) to be eligible for defence contracts.

Advice

1. Patience and Persistence: Success in the defence sector requires long-term commitment, and startups should be prepared for an extended timeline to achieve meaningful contracts.
2. Engage with Primes Early: Building relationships with large primes such as Raytheon, Kinetic, and others is key to gaining entry into the MOD supply chain.
3. Focus on Dual-Use Applications: To avoid the risks associated with reliance on defence contracts, startups should ensure that their products or services are also applicable to the commercial sector.

Conclusion

Breaking into the defence and national security sectors is a long game, requiring patience, persistence, and a strategic approach. As James Gayner MBE explained, the key to success lies in building strong relationships with both prime contractors and key government stakeholders while ensuring your solution has dual-use potential for both commercial and defence markets. With the right mindset and approach, SMEs can thrive in this challenging but rewarding sector.