Jagged Technology, LLC — tagline “We may be rough, but we’re sharp.” — was the name of the (first) company that I founded.
The website read: “Jagged Technology executes R&D and provides consulting services in the fields of computer science, information processing, and computer systems software and hardware engineering. Our areas of expertise include storage systems, security architectures, network components, and virtualization and operating systems. Please contact [us] to discuss teaming, collaboration, sales, and employment opportunities.”
The company existed from late 2007 through early 2009. My business plan was to pursue Small Business Innovative Research (SBIR) contract awards, following in the footsteps of the successful group I had previously worked for. (That group had been part of a small government contracting business that had won numerous SBIR awards, but by the time I worked for them they had been acquired by a larger company and were no longer eligible to pursue SBIRs.)
I was wildly unsuccessful — other than in fulfilling my dream to found a business and work for myself — but I enjoyed every minute of it. There were a few things I did right:
- I earned revenue! Not very much, and I certainly came nowhere near turning a profit, but I was able to score some consulting work (evaluating storage system technologies and formulating research and product objectives) meaning that it wasn’t entirely a pipe dream.
- I had great mentors. Before starting Jagged I had the privilege to work with and learn from Dr. Tiffany Frazier and Dr. Chuck Morefield. Both were successful government-contracting entrepreneurs; Tiffany inspired me to dream big; Chuck took the time to sit down with me to describe what had worked for him when he took the plunge. While running Jagged I relied on Dr. Greg Shannon‘s advice and assistance in creating winnable (if not winning) SBIR proposals and partnerships.
- I had good ideas. After I dissolved the company and started working at my next job, I talked with one of the program managers on the phone (about the next round of SBIR solicitations). The PM recognized my name and mentioned that he’d really liked what I submitted during the previous round. (I managed not to scream “so why didn’t you fund it?!?”)
Of course, there were many things I did wrong, including:
- Not having a contract in hand before starting the company. Nearly every successful government contractor I’ve talked with has said that they already had a contract lined up before filing the paperwork. Doing so is especially important because it takes forever (often 9 months or longer) between when you first submit a proposal and when you start getting paid for the work. I assumed that I’d be able quickly to win one or more contracts and that business would grow rapidly after that.
- Not having a reputation or past performance with the customers I targeted. The ratio of submitted proposals to winning proposals was around 30:2 on many of the programs to which I proposed. Often the program manager was already working with a contractor to develop the SBIR topic and announcement (so there’s 1 of the 2 awards likely already earmarked) so in essence I was competing against 29 other companies — many of whom were actual established companies with existing products, intellectual property, and history of contract performance. And if the PM has actually worked with any of the other 29 companies on a previous program, then my already unfavorable odds get significantly worse.
- Overemphasizing the technical aspect of a proposal instead of all evaluated aspects. SBIRs are evaluated equally on technical merit, feasibility of successful execution, and commercialization strategy. My technical writeups were strong but the other two components (67% of the evaluation criteria) were usually weak; I typically listed only one or two people (me and a technical colleague) as lined up to execute the work and only one or two ideas on how I would partner with larger companies to commercialize the work. My early proposals were especially unbalanced since I entered entrepreneurship with the idea that if I proposed a superior mousetrap then the money would beat a path to my door. It would have made a significant difference in my chances for success if I had experienced partners as co-founders.
- Focusing my business plan on the SBIR program instead of building a diverse revenue stream. It is hard for me today not to be severely disappointed in the SBIR program. I poured significant time and money and opportunity into trying to come up with solutions to the government’s and military’s most urgent technological challenges; when I finally received a rejection notice (usually 9 to 12 months later) and I requested my legally required debrief, typically all I would get was a one-line memo saying that the evaluators “didn’t like my commercialization plan.” Well, what didn’t they like and how can I do better next time? Anyway, since I didn’t have contract in hand at the beginning (in retrospect) I would have been better served by focusing on commercially salable technology development — and sales — and using the SBIR program as a way to fund development of related but noncritical offshoot ideas.
- Not having opened a new cellular telephone account for business purposes. To this day I get people calling my personal cell phone to try to sell widgets or web hosting to Jagged Technology. On the plus side, registering your home address for a small business gets you signed up for all sorts of fascinating catalogs for boxes and shipping containers, plastic parts, and scientific glassware — I do enjoy receiving these catalogs, and it’s good to know that if I need a pallet of hazardous materials placards I know exactly whom to call.
The best thing to come out of having started Jagged Technology is a better understanding of how business works — for example, the complexity of balancing your product development schedule and projected contract or sales awards with the available resources (time, people, money) on hand to pursue the work; or the need to work in advance to establish a business area (for example by feeding ideas to program managers, and by visibly contributing to related product or community efforts) instead of simply responding to opportunities; or why a CEO spends his or her days talking with the chief finance officer, chief marketing officer, and chief operating officer instead of spending those days talking with project leads and engineers and salespeople. It’s not all about better mousetraps.
Just as I feel that I’m a better car driver after having taken the Motorcycle Safety Foundation RiderCourse, I feel as though I’m a better researcher, mentor, and employee today thanks to having immersed myself in founding Jagged Technology and having worked hard for eighteen months to make it successful.
And here’s hoping to more success (or at least more revenue) next time!