Technology startups attract a lot of attention from the investment community because of their potential to leverage their intellectual property to create multi-billion dollar companies and even entire new industries.
But most technologists are just that – science wonks – with little to no business, management, marketing, or capital markets experience. How can they take their big idea from the garage to a point where it could serious attract the attention of the investment community? Through an SBIR.
According to the SBIR.gov website, “The Small Business Innovation Research (SBIR) program is a highly competitive programs that encourages domestic small businesses to engage in Federal Research/Research and Development (R/R&D) with the potential for commercialization.”
My guest this is week is Roger London, a technology investment expert who has worked with a number of companies that started in the SBIR program and are now moving toward commercializing their intellectual property with the help of private capital.
Please join us to learn more about how the SBIR program helps technology companies bring their ideas to market.
What follows is a computerized transcription of our entire conversation. Please excuse any typos!
Frank Felker 00:22
Thank you, Dude Walker. Yes, indeed. I am Frank. Welcome back to Radio Free Enterprise. My guest today is Roger London, a retired angel investor and current technology investing expert based in Columbia, Maryland. Roger London, welcome back to Radio Free Enterprise.
Roger London 00:40
Thank you for having me, Frank.
Frank Felker 00:44
You and I first met, I can’t believe it’s been seven years, we were just talking about that. 2014, we shared the stage and an event at George Washington University called Semper Startup that was focused on helping Vetrepreneurs get their startups up and running. And then a couple years later, you were kind enough to appear as a guest on the audio podcast edition of Radio Free Enterprise.
And now we’re back together again, to talk about something called SBIR, and how it’s a potential channel to help technology startups find their way to a point where they might be able to attract the attention of venture capitalists or the investment community at large. So I want to start with this Roger, and I’m going to pick this up and read it because I’m sure I would not be able to memorize this.
This is the definition of SBIR from the SBIR.gov website. “The Small Business Innovation Research Program is a highly competitive program that encourages domestic small businesses to engage in federal research slash research and development with the potential for commercialization.”
Now, that sounds like a lot of federal gobbledygook. What exactly does that mean? or just in general, if we were to try to tie together a company that’s got some technology they want to bring to market, and they’re trying to work with one of the government agencies through SBIR? Well, how does that all come together? Roger?
Roger London 02:18
Well, I’m pleasantly surprised that their definition if you if you think about it and go through it slowly is actually pretty spot on. So the government, I don’t remember when decided to help small businesses try to bridge that valley of death that you’ve heard about all the time. You know, it’s too early for investors to get in the technology might yet be a little squishy for the customers to feel comfortable with.
So the government decided to take a slice of every agency’s budget and put it into SBIR our funding, I think it’s three and a half or $4 billion a year now. And, you know, it’s percentage of agency budget so that, you know, VOD and NIH and HHS and DHS have a larger, you know, shareholders of money distributed for SBIRs.
Frank Felker 03:15
Let me let me just give an example. I think it’d be easier to tie it together with a real-life example. Maybe a month or so ago, I had a guy on who’s from a med tech startup, that medical technology. And they’ve got this wild machine that you put on your head and it connects to your brain with electrodes on your skull and all kinds of stuff. And it has a variety of applications, some of which are good for people who have communication difficulties, like they have ALS or other ways that they just can’t speak. But it also as my guest told me it has military applications and other scientific applications. Let’s say this guy were to try to use SBIR to advance their product or get to market. How would that work? Does he reach out to the D od? What where do you start? Sure, so
Roger London 04:08
some simple googling SBIR SBIR.gov. He each agency issues BA broad agency announcements, and they tell the public that for instance, upcoming for DOE, I think it’s April 21 is the deadline for one of their SBIRs. So they have a topic list on the website. If you have a technology that addresses one of their high areas of need one of their high energy targets. Then you submit an application for it. That goes to see quenches a bit of a sequence to it so SBIR ones is 50 to $250,000. It generally takes six or 12 For you to, to start the testing and the SBIR one purpose is to validate the tech, you know, to prove that it works, whether it’s just a mathematical model, whether it’s on a lab bench, just prove that the tech works. If you get the SBIR1, and you prove that it works, you can submit for an SBIR to SBIR 2s and so your med tech company could prove that their technology works. And then in six or 12 months, they could reapply for phase two. And phase two, again, depending on the agency are like a half $1,000,000.02 million and a half. Oh, wow. And you can use that money for a year to two years. I find that most entrepreneurs try to milk out everything over those two years, and I’m constantly banging him on the head like you getting the same amount of money, can’t you, you know, accelerate time to market and get out. But you don’t have to be clear. So anyway. So you can use it up to two years. And so what you use that money for is ideally, you have a commercialization partner or somebody that wants to do an MVP test a potential customer that’s willing those products. So you can prove the MVP works in working conditions, right and scale environments. And
Frank Felker 06:28
Let me interrupt you because I want to, I always try to put myself in the seat of let’s say, in this case, a scrambling startup founder who’s trying to find some money or trying to find a way to bring their big idea to market. So let me just make sure I understand. So these application periods only happen once a year, is that correct?
Roger London 06:50
They could be once or twice a year, they’re spaced throughout the years not the same date every year.
Frank Felker 06:54
It’s not like I can just fill out an application anytime I want and see if anybody’s interest.
Roger London 07:00
There are exceptions for the but for the large part, correct. You have to follow a schedule.
Frank Felker 07:04
And then it’s probably more Is it a requirement that my technology is in alignment with one of the things that the agency is interested in? That you mentioned, they would have a list of it my technology is not in alignment. Am I wasting my time to put in an application?
Roger London 07:23
Most likely, because, you know, just like when you go to an investor, you’re not you’re competing for the dollars that they’re going to spend somewhere. And so if the investor has priority needs, they put those dollars against that to same with the agencies. So you may have a great technology that could solve huge problems. But if it’s not, you know, a high demand for them, it doesn’t matter.
Frank Felker 07:48
It makes perfect sense. And I’m so glad I asked you that question because just like within an investor, they are an investor. And so you’ve got to be in alignment with what they’re thinking. Okay, so then let’s say you said this one was coming up in April, let’s say I put in my application, how long before I hear whether I’ve been accepted or not?
Roger London 08:08
So it’s and it has been accelerating? They’ve gotten better at it. So it takes a month to a couple of months, a few months, depending upon the agency used to take six months or eight months, right? Yeah,
Frank Felker 08:21
I was going to say that sounds pretty fast for the Feds.
Roger London 08:24
Yeah, it is. And like, so many things I want to say I want to make I don’t want to leave anything out.
Frank Felker 08:30
But I’m trying part of my job here is to try to guide you down the path from the perspective of the questions that the person listening wants to know. And so right here, what I’m trying to do is just take you through the sequential, what happens next kind of thing? So let’s say it’s 90 days, and I hear back, when do I get my money?
Roger London 08:50
Not too long after that. Real. Yeah. So. So this SBIR to, you know, if you hadn’t gotten a one and done well on it, you’re not going to get it to you can’t just start in the middle. So for the folks who had a one for DOE, Department of Energy, and it worked out well. And their review board likes what they did. And they proved that they, they proved what they said they could prove. That’s really the point.
Then they say okay, so for phase two, part of your application is up to a 10 or 12 or 15-page commercialization plan. So you’re going to tell them during or after your phase two, how you’re going to commercialize this. So they’re really keen on not just investing into research for research’s sake. The purpose of this and they’ve gotten better at it over time is to help things get into market. So I can’t tell you how many brilliant engineers and scientists I’ve talked to who had A game changing stuff, but they had no idea how to get it to market.
And so their commercialization plan really buried them because they just thought it was the magic mousetrap that everybody would, you know, right up to where they didn’t know how to sell it. Right, they didn’t know how to, to say the right messaging, or they didn’t know the true value proposition to the client, there’s a lot of similarities in most SBIR winners or whether their shortfalls are, and we can talk about that
Frank Felker 10:27
I was going to say, and these are areas where you’re able to really help them and bring it to commercialization. And believe me, we will get to that. But as again, I’m kind of going down the yellow brick road one step at a time. Alright, so we won a phase one grant, and we get our money. And that’s, and we have to have 12 months, you say to spend that or two months?
Roger London 10:50
Yeah, I always try to get clients to compress it because the writers, time kills all deals, right? It just shortens your time to market.
Frank Felker 10:59
You got to have that sense of urgency or you are lost revenue. Okay, and so then I apply for my phase two, and what you just stated it, but if you could just quickly recap, what do I have to have done successfully? during phase one to qualify? I had to prove the technology. Is there anything else I had to do?
Roger London 11:20
largely No, I mean, and even in the phase one, they’re kind of looking for larger Mark bigger problems. They’re, they’re hoping that you can court cure cancer, not a headache,
Frank Felker 11:31
I got it. Okay. So.
Roger London 11:32
So if it, if you can prove even just mathematically, right or on a lab model, that this thing will work, if you give me money later, I’ll prove that this math that I just did, I can do out in the field. So that’s the phase two is for?
Frank Felker 11:52
I like that. Well, and yeah, this is the kind of public good that people look to their federal government to provide efficiently. Okay, so I did that in phase one, and I applied for phase two, do I get a response back faster? In phase two, because there’s fewer of us, and you already know who I am,
Roger London 12:11
there are fewer of you and you do have a relationship with the agency. That’s a really good point. But the process still is the same. And there’s more to actually evaluate in phase two the risk. Something like 30% of all phase one, winners get a phase two grant. So still, that’s it more than half don’t get it? Yeah. But you know, it’s just like with if you’re thinking about the venture world, you know, how many people get a phased A B round? Right? got an A round? Right? It just keeps getting skinnier, right as you go down. So it’s just, it’s just the same.
Frank Felker 12:53
Okay. Now, you say, Have you said to me in a pre-interview meeting, that you think that this, these programs are widely under used? Why do you say that? How might they be better used?
Roger London 13:09
Well, I mean, you’re getting the honestly the cheapest capital that you could, it’s possible, but I mean, that is possible. So you’re getting money that doesn’t impact your balance sheet or your cash flow, because it’s not like a loan that you’ve got to pay back, you’re getting money that doesn’t dilute your equity, which means you have more to negotiate with, with investors later, where things work out well, for you, your pile is bigger, right? The government doesn’t get any equity. And you don’t have to share IP rights, intellectual property rights. So I mean, this is one of those programs that I think does really great work, the more effective at it they get, the better.
But a large driver at it was that old chicken or egg. problem was that you can’t get investor money until you have, you know, a proven tech or customers or you know, everything has been de risked. But you can’t do that unless you have some money. So the purpose of this this government program is to try to bridge that gap, where you can spend money on research because investors hate to spend money on research, right? So you can develop the thing, you can prove that it works. In phase two, ideally, you prove that it works with a customer in a customer environment. Right? So it’s not just working in a, in a lab, sterile environment. It’s working out in the street with dirt and rocks and people stepping on it or whatever, you know, the tech. That’s great.
Frank Felker 14:42
Yeah. And these are experiences that these types of technologists need to have, because
14:48
they’re widget based off of all the feedback, right, so I want to
Frank Felker 14:53
make one thing. I want to make sure that one thing is clear, because I wasn’t clear about this until I asked you previous Like, this is only for technology research and for technology, business models, not for other types of research or other types of businesses. Is that correct?
Roger London 15:13
Yeah, they’re funding widgets, for the most part, not service companies.
Frank Felker 15:17
Okay, high tech widgets,
15:19
high tech widgets.
Frank Felker 15:20
All right. And could you just lay out maybe just a few ideas? For example, cybersecurity, med tech, I don’t know. And a few of the agencies that are really engaging with this.
Roger London 15:34
Sure. Well, I mean, God is probably the biggest tent. And each of their branches, has SBIR funds allocated to it all the way down to, you know, a DHS their s&t, so DOD has DARPA.
Frank Felker 15:50
Okay, now, if we can real quickly DOD is Department of Defense, and DHS Department of Homeland Security. And DARPA is defense applications research. I lost it right there program..
Roger London 16:05
agency, I forget it’s for rapid prototyping is really what it’s for. And,
Frank Felker 16:10
okay. And so, obviously, Department of Defense is a real big one. Now, don’t you also work with the Department of Energy?
Roger London 16:20
I do. I just happened to build a My background is in military and DHS, DOJ, and DHS and the intelligence community largely, I happen to strike up, a woman attended a entrepreneur conference entrepreneur presentation I gave. And she said, You know, I would love for all of my grant winners, she was a pivotal in the DLP programs. And she said, I would love for my entrepreneurs, my winners to hear this because I was talking about different kinds of capital available for entrepreneurs, I promoted SBIR in my presentation, and things that entrepreneurs need to think about, you know, common issues that stop entrepreneurs from being successful. And it was, you know, there was no rosy picture about entrepreneurship. I was pretty direct and pretty honest, some of it was a little brutal. But she said my my grant winners would really appreciate this. So I’ve been speaking to her SBIR r1 and SBIR two grant winners for a couple of years, then I got invited by EPA to do it with them.
Frank Felker 17:31
Environmental Protection Agency. Right, sorry.
Roger London 17:37
And so I have met some fantastic people, I think the folks running the SBIR programs at there’s two agencies really care about the agencies and the mission statement, but also the people that they invest in and how the programs work, are they infected? effective? Can they improve them? So? You know, I find that in most of the SBIR programs that I’ve worked with,
Frank Felker 18:04
and so, on SBIR.gov and you may not know this answer this question, this is kind of a tech minutia. But would I be able to maybe find a list of the agencies that have SBIR programs
Roger London 18:18
there, there is more than enough stuff out there. And it’s pretty easy to navigate through to you.
Frank Felker 18:23
Excellent. Okay, so I feel as though I’m getting a pretty good picture, I’ve got it some kind of a widget ID and I apply for and receive, we’ll just say for the sake of argument, a phase one grant from Department of Energy for a new way of capturing solar energies. Right. And then over the course of a few months and an accelerated rate, with a sense of urgency, I proved the technology either on a breadboard or a spreadsheet or actual out there on a roof somewhere.
And then I apply for and receive a phase two grant. And it seems to me from our conversations, roger that this is sort of where you started leaning in. This is like your sweet spot that the company has completed the phase one, they’ve maybe they’re about to apply or they have applied, or they have received their phase two grant. And now your business expertise and your investment, capital and community relationships and expertise really come to bear to help them. Is that right?
Roger London 19:30
Yes, I I get hired by a lot of SBIR1 companies during their, their project. And during that time, I try to I exercise them. And I asked them a lot of things to get them to make sure a lot of these entrepreneurs don’t know what they don’t know. Right. Sometimes they don’t know what’s important to think about and you know, you can’t make a first impression twice as the saying goes. So as they’re doing their one, I want them to think about, who are all the stakeholders? If this thing becomes real gets to market? Who are all the stakeholders, right? Who are the potential channel partners, or their wholesalers in the middle? Or their contractors in the middle? Who’s the eventual customer? Right? What’s the whole ecosystem look like?
And what’s the value proposition to each of them. And so even back in the phase one, we start to work on messaging a little bit, right, making sure that you’re getting the what’s in it for me clear to who each of the stakeholders, because it’s important that they start thinking about that. So as they’re validating their phase one, they’re thinking about the goal line of who their customer is, right? In your solar example, their customer might end up being the contractors who install solar panels on the roof and not the homeowners themselves. rating. So you have to know what your customer wants for them, it might be making more margin, it might be, you know, easier to install, or fewer returns, or that’s the value prop to the contractor to the homeowner. All I want to know is how much energy is saving me. Right? So the value prop changes for each of the stakeholders.
Frank Felker 21:23
May I interrupt you? Because I have to figure that everything you just said there all the questions that you posed and all the stakeholders that you identified, is that an area where most of these technologies, like you said, they didn’t even know what they didn’t know that they didn’t even think that these were things that they needed to take into consideration?
Roger London 21:43
Yes, and especially early in a phase one. And considering that when you’re done, you’re one you apply for the two and part of it is a commercialization plan. So you have to have thought of these things in your commercialization plan and clearly articulate. We know who the stakeholders are, we know what the value prop of our tech is to all of them. Here’s what we think it is, here’s how we’re going to play in this ecosystem. And, you know, here is our messaging to each of our stakeholders, you know, you also have to have your go to market plan and the commercialization plan for phase two. So you have to start thinking about and actually DOE and all agencies have a little market research money that they have a contractor that will do market research for you.
So I try to have them maximize the market research from these other from these contractors for for the agencies, to say make sure that they research who the stakeholders are, right? And if you when you do the go to market, who are you going to go to market with make sure they’ve done the research to show you that is because when you do the commercialization plan for your phase two app, you have to have a go to market strategy. And so is your you can’t just say we’re going to go to trade shows and we’re going to send out some emails.
You know, I read recently, one of a potential client was saying that we’ve reached out to the top 15 companies in this marketplace. And they think that’s great. And being glass is half empty as a former investor, right and as a consistent what’s wrong with this picture? sending an email to everybody doesn’t do anything. You don’t know if they’re involved, though, you know, if you if you survey 100 people and ask them if they would like this product. If all 100 say yes, all you know is that 100 people would like this, you still have zero customers, right? But a lot of entrepreneurs hang their hat on when people like something.
Frank Felker 24:09
Right? Well, and as you and I know, until somebody pulls out a checkbook or a credit, right? You got nothing. You got squat.
Roger London 24:15
in the chair clear.
Frank Felker 24:17
Right? That’s right. Okay, now with that in mind, I’m trying to think Didn’t you talk about it in our previous conversation about the idea of even getting them in a relationship with a prospective client? In other words, a company that will help them test their widget, and if it works, we’ll at least through you know, agree to verbally will become a customer? Is that something you help them with as well?
Roger London 24:46
Well, I help them evaluate the terms. I don’t do any specific negotiating for them. Right or I don’t go find a company for them. they’ll, they’ll say, Oh, this company has a standard sheet. They, you know, contract that they do. And we look through the terms and see if there’s, you know, minimum standards and timeframes. And, you know, what we’re really looking for is something like a contribution agreement, the entrepreneur is going to bring this to the table, they’re going to contribute This is this much tech will help update your manufacturing line will pay for these things that have to be adjusted in your manufacturing line. You bring your resources of the plant and the manufacturing line to there.
And then we’ll test it in one of your you know, maybe it’s a system of a larger component of a larger system. So then we’ll put our new widget that we both built into your, you know, systems that you sell, and we’ll test it, we’ll make sure that it is 20%, faster, and 30%, lighter, and cost 10% less to build and you know, blah, blah, blah, all of these things that we thought it would be, we want to prove the value proposition during phase two.
Frank Felker 26:03
Now, and I want to put the link to our previous interview, and I will put it in the show notes for this interview. But we talked a lot, and you know, how does a company communicate with the investment world? And what is it that investors want to hear, and you talked about green lights, and red flags and all kinds of stuff. And I’m sure all of this applies here. But with a lot of times when startup company that’s not doing SBIR rings in investment capital, one of the things they’re looking for is a strategic investor. Maybe this person has a Rolodex where they know, you could partner with this guy, I know this guy from 20 years ago, this company over here, I know will buy this widget if it works, it seems so that’s sort of absent from this. And maybe it’s okay because they haven’t gotten to that point yet. But what would you recommend to a startup who’s maybe in the middle of phase two, about how more successfully than just sending an email to reach out and potentially develop relationships with partner companies.
Roger London 27:10
So I mean, how to market to them as a long, you probably know, marketing better than I do. The actual tools, I work with a marketing, firm automotive that does this. But the, the way that they do it depends on who you’re trying to build a relationship with. What I’d like to say, based off of what you just said, is there’s different levels of phase two partners right at, at the, the least valuable, but still very valuable is somebody who agrees to test your widget in a scalable environment, to prove that it works. It’s a, it’s a customer, you know, Adam, and there’s no guarantees, they’re just going to, they agreed to try it. So that’s better than nothing.
The second layer is a is a potential customer who will agree to try it, and you can negotiate with them that if it works, under these pre-approved pre agreed conditions, that you’ll buy it, you’ll buy x over some period of time, you know, and that can always grow, but it’s a, if it works, you know, next most valuable or type of strategic partner in that phase two would be a potential customer who’s willing to buy it, and or could be a strategic investor. So corporate venture capital CDC is I believe, really underrated, just like these SBIRs, underutilized and under known that that’s not the right word, not very well known as great sources of capital.
And so a corporation, like I used to be a corporate VC for Nokia. And my job was to go out and find things that we would embed into our platform and a couple of years. So we would invest in things that we could become the anchor customer for. And most VCs won’t participate unless there is an anchor customer. So we took out the risk for other investors, as Nokia, by investing in something, you know, getting all the hair off of it, trying it putting it in our platform, and now we’ve got we’re putting our money where our mouth is now other VCs will clearly follow that investment in later rounds, because it’s the market has proven it will adopt it.
Frank Felker 29:42
Right, that it’s interested. This is such great information. Roger, I really appreciate you show good experience.
29:48
Now,
Frank Felker 29:49
let’s say we’re coming to the end of the phase two. And I love that, you know, get all the hair off of it. But we’re coming to a sort of a hairy period here. Because now you know, we’re Running out of that sweet federal money. And we’ve either done or we haven’t done what we set out to do. What What does success look like coming out of phase two? And what should his startup company really look to be doing after that, so.
30:17
So
Roger London 30:19
I’ll put that in three buckets. One is a investor bucket. One is a continued government bucket. And the third is just moving forward without investor money or agency anymore, and just selling directly to the market. So hopefully, you’re in a position where you don’t need more money, you know, the Tech has been validated, maybe you’re just going to build a lifestyle business, you’re not trying to conquer the world and sell a million units a month, or whatever it is, you just want to make sure your kids go to college, right, and that you don’t have to sell the house and the last kid to pay for the other kids to go to college. So the investor bucket, you know, investors invest, specifically VCs, especially, but angels, also an equity.
But the angels and VCs are probably the next home of investors sources for phase two graduate, they want to make sure that the technology they want de risked companies, and they look at three different things, when you’re de risking, I want to make sure the tech is de risked. And that is done through the phase one and phase two, proven that it works. So they the investors want to see that the technology risk has been removed that it works, right.
The second thing is they want the de-risked team. This is VCs and angels. So part of your phase two and your commercialization plan is that you’re supposed to talk about the management team. And make sure that the SBIR Review Board knows, hey, I’m just an engineer. I’ve never run a company before. And I realize that I am self-aware. And I realized that I need salespeople and or operators with business experience, right? Maybe a CFO, this and that. And I have a plan to build that out. Maybe starting toward the end of my phase two, I might bring on somebody who can help me with licensing, right, and the phase two money can pay for this. So or I might bring on somebody who can help me manage all the different pilots I got, they can become the role of coo later on, right.
So if you prove that you are self-aware about your management skills and deficits, that VCs can now feel that the team is being de risked, you know, you’ve heard the expression that they bet on the jockey not the horse, that’s usually true. So here, you want to give them comfort that the team has a plan, right, and that holes will be filled appropriately. And then the last thing that that investors like to do, and of course, I’m making a gross generalization here, but I think this is fairly true, that they want to make sure that the market interest has been de risked.
And so they want to make sure that customers want to buy the stuff. And so during your phase two, you’re getting the MVP out there with a customer, you’re getting customer validation. And then if you can show I’ve got some letters of intent, right from the people who were doing my pilot testing. And so that is an opportunity for you to de risk the market risk by generating that those potential customers. So that’s the, that’s two of the three buckets, the last bucket for the phase to graduate is to continue doing business with the government.
This is really important that the government SBIRs have sort of an SBIR to A to B, A to C, where they can put some more money. And if you meet certain conditions, like if you have outside matching money, they’ll match it. And there’s a few other things which aren’t worth going into at this point. But the most important thing is that the there is such a thing as called the SBIR three, and the SBIR. Three is a non-compete, bid and contract that you can get with your SBIR parent agency.
So for instance, DOD wants you to build some widget that gives extra battery life to the warfighters. Right costs like $200 a day for all the batteries that they use in the thermal in addition to that. So you build something that will dramatically lower the weight and the and increase the power and the durability and performance of the batteries that were fighters have to carry, you do your phase one, you do your phase two, well, if this thing works, and warfighters tried it as part of your SBIR, too, as part of your validation, well, you can then go to God, and God can give you a contract without putting that contract out to bid for these new types of batteries that you have.
Roger London 35:22
And the no bid non-compete, you’ll have to be an SBIR to winner, right to get that. But that’s a way to fast track your tech from lab to market. In a non-compete, I mean, that is such a huge advantage. And it’s nothing illegal, right, you’re supplying a solution to something that they didn’t have anywhere in the market, that was the point of putting out the SBIR. So by now having an SBIR that had that provides a solution that nobody else offers, after it’s proven that it works. DOD is like we’re on this, you know, they’ll go to army and you know, contract with this or that. But so that’s really huge.
And so I’ll make one more point, and now shut up. The difference between getting a grant with DOD and the grant with getting in with getting a grant at NIH, for instance, is sorry, NIH doesn’t own hospitals, pharmaceuticals, or any of that stuff. So it could never be an SBIR three winner. Right, DOD buys and uses the stuff, right? They got the army in the Navy and the marine numbly and all these people DHS buys and uses this stuff. But EPA is a guidance agency is a rulemaking agency. Right? So if you build a great new solar panel for your roof, EPA doesn’t have anywhere to install those. That’s very interesting, right? Or do he doesn’t.
So if you have something that is energy saving, and you could get a grant at DOE, or you could also give it a DOD because it helps so warfighters or DHS because it helps Border Patrol or whatever. Those of those latter ones have a phase three possibility to it, you know, the direct no bid contract. Now I would offer I would suggest that you try for both grants, you can’t get two grants at the same time to do the same thing. Okay, so if you got approved by both go with the DOD one. Right. But in case the God when didn’t work, you could still get DLP to fund your research, right and get you to the proof-of-concept point, get you to the MVP trials. And now you’re sort of on your own for the phase three, but it’s still the free money, right? It’s not allowing you not to pay it back at all. So all those great advantages.
Frank Felker 38:04
That is a great nugget to take away from this conversation. Crazy. Now we’re just about out of time, Roger, but there’s a couple of I wouldn’t say personal questions, but more about you that I’d like to ask. And I want to start with this, which is you know, you’re at a point in your investing career who your life and whatever, you don’t need this, you don’t need this aggravation. Why? What is it that brings you to wanting to help these companies that are trying to find a way through this process?
Roger London 38:38
It is I am semi-retired. Now I work with a lot of these kind of entrepreneurs, but I have always been energized by innovation by entrepreneurs. Most entrepreneurs are high energy, right, which you have to be and the ones that know that they don’t know everything, right? And the ones that know that they can get some advice from somebody. I really like helping these folks I’ve mentored I hundreds and hundreds of companies have. And so I really enjoy it. And so learning, you know, over the past year, I’ve learned about nuclear fusion, I’ve learned about battery tech, I’ve learned about solar. I’ve learned about water purification and underground. What’s your columns? I forgot the word already. Awkward. Tables, aquifers, thank you.
So I’m learning about all these new cool things. And you know, I know enough to be dangerous at a cocktail party. And I still couldn’t, you know, I still want to know a lot but I really like helping the entrepreneurs and I see myself as sort of an overwatch position making sure that they don’t step on any landmines. If there’s To pass in front of them, making sure that they know that there’s a third possible path. And then that they make an informed decision on those three. Right, sometimes they don’t even know there’s a third path.
And you know, just try to make sure they don’t get hosed by contractors or by people that want to do a strategic partnership with them, or investors that are coming in, and just taking bigger slice than they really than it’s really worth or so, you know, I’m not looking for any equity, I’m not looking for a long-term thing. I’m just here to help you get to phase two, if you’re in phase one, if you’re in phase two, I’ll try to help you get commercialization and get money get to the point, right, where you get all those things later. So that’s a lot of fun. That
Frank Felker 40:46
Yeah, and I love that you said, because you enjoy it, it’s a lot of fun. You have a passion for it. You’re a lifelong learner, you like dealing with high energy entrepreneurs, like helping people, it’s all great stuff.
Roger London 40:59
What? And as an aside, they have to be comfortable with my direct nature. Because, you know, I just tell them what I see. And, you know, they,
Frank Felker 41:14
yeah, well, as you know, business is different relationships in business are different. And even in The Godfather, you know, Oh, it’s nothing personal, Sonny is strictly business, you just have to sort of put on a different face in business. Now, if somebody did want to reach out to you, and maybe learn more, or ask whether or not you could help their company, what’s the best way for them to do that?
Roger London 41:42
So I’ve got a on my LinkedIn page, I’ve got my one-page website that I just put up to show folks what I do and areas where I can help. They can contact me by email.
Frank Felker 41:57
So maybe LinkedIn is the best way? Sure. All right. Well, I there’s one question I always like to ask on the way out, Roger. And that’s whether or not there’s a question I should have asked you that I haven’t, or a thought that’s come to you during our conversation that you wanted to share before we go?
Roger London 42:18
Well, there are many I’d like to share. But with limited time, I would say one of the things that I consistently see with almost all innovation entrepreneurs, and especially SBIR is because they tend to be more scientific and engineering, technical oriented, is their product roadmap really needs to be tightened up. And somebody was telling me, I should claim it as my own, but they use the notion of you build your product roadmap based off of putting your features into three categories, game changer, showstopper, or distraction. If you have a game changer tech, you know, and the example is, is ring doorbell, right? They’ve got a tech, nobody has ever had a way to look at your phone and see who’s at the door. Right, awesome tech, then a showstopper might be well, if the if the original ring doorbells cost two grand, well, that was a showstopper. So if you’re adding things that get it to two grand, you’re taking away the market, you know, you’re putting too much stuff in there. So you have to, you have to make sure that you’re not building a feature map that’s actually hurting your time to market. And then the last bucket is distraction.
And this is really a good example of in the ring doorbell. You know, their first camera had lousy video files, he might be too harsh at work, but the video wasn’t very good wasn’t HD. But the time it would have taken them to develop an HD camera, put in that form factor, get it in the price range where they needed it to be, would have really delayed their time to market and wouldn’t have made a difference in the adoption. Right? Oh, I would have lost is that year, two years and all the money, right and the opportunity costs and so that polishing the cannonball sometimes can really, really hurt somebody. Because in that absence of a year, somebody else might come in, you never know who else is out there. You just don’t have any time to waste. So I would encourage you to think about your project roadmap, your development roadmap in those three buckets.
Frank Felker 44:41
Roger London, thank you so much for sharing all this information, experience, and wisdom with us today.
Roger London 44:47
My pleasure. I hope everyone gets some value from it. Thank you, Frank.
Frank Felker 44:52
Thank you, Roger. Thanks again to Roger and thank you for joining us. Until next time, I’m Frank Felker san, I’ll see you on the radio.
Dude Walker 45:01
Forgiving your entrepreneurial sins with a gentle wave of his microphone here is Frank Felker.
