Undiluted

Episode Transcript

For more information, visit https://www.seas.harvard.edu/news/2022/02/finding-right-frequency.

This is Undiluted, the show about the amazing founders and companies who've used government R&D grants, contracts, and sales to build their products, grow their companies, and keep their equity. We're Katy Person, Gene Keselman from MIT, and Geoff Orazem from FedScout. And on today's show we talked to Alex, Ben, and Isaac, the founders of Distributed Spectrum about building a business, finding DOD customers, and getting federal funding while still in college.

Right or wrong. I think that today's dominant founder narrative is based on Mark Zuckerberg. Smart techie at elite university has a big idea. They drop out to follow their dreams, get funded along the way and go on to change the world and become fabulously wealthy. 

Now, whether this is a repeatable model or even a desirable model, I think is open to debate. But what is certain is that startups have radically changed most of our lives through their product and innovations. And that the DOD is taken notice. 

If you're listening to this show, you probably know that the DOD has a half dozen programs and organizations whose mission is to engage America's technology innovators. Including programs aimed at universities to find the next Zuckerberg. And to convince them to turn their energies to the country's national security needs. 

And honestly, I've been a bit skeptical of the DOD could convince undergraduates to ignore Hollywood's glamorized startup persona, to ignore venture capital, and to take the quieter and largely overlooked world of federal funding. Which is why I was so happy to meet Alex, Ben and Issac from Distributed Spectrum. What they're building is clever. These commercially available radio-frequency detection systems to identify cyber attacks. But I'm more interested in how they're building it and how their peers at Harvard School of Engineering are reacting. 

In some ways they are following the Zuckerberg playbook. But they found ways to do it while keeping their equity and mitigating risk. First, they took prestigious internships during their summers so that if their business failed, they could quickly get jobs. Second, instead of dropping out, they took a leave of absence to work on their tech. Third, the avoided DCs, who likely would've pushed them to stay at a school and go full-time on their business. And instead they competed for in one DOD hackathons to fund their development and mature their customer discovery. Fourth after their leave of absence, they came back to Harvard and completed their degrees while continuing to pursue federal funding and customers. And finally they got great support from NSIN, the DOD program that targets universities and students. 

As a side note, we also have an interview with their NSIN coach Kedar who shares his perspectives on the Distributed Spectrum story. It's nice to hear that these programs work. But also left this conversation, feeling incomplete while Harvard has celebrated and shared their success. My read was that their peers still don't realize that there's a different way to build and fund a business. 

Distributed Spectrum: One of my friends always introduces me to new people as this guy works for a defense contractor. And I'm like, okay, sure. the word is somewhat out because there was a, SEAS article, which is like the school of engineering and applied sciences article about our NSF grant that came out a couple of months ago. And that's relatively well-publicized, it was on like their Twitter and stuff. So people know that we have research funding and they, know that we're doing this. I think more of the Department of Defense-related stuff and like the fact that we were like heavily pursuing SBIRs and stuff is really more of a word of mouth type deal.

I think that because the knowledge around how this ecosystem works is so low, I've never had anyone come up to me and say, oh, congrats on your SBIR that's really cool that you're doing this, non-dilutive funding route through to the federal government. So it's more oh, just congrats on the funding, glad you guys are doing a startup. And then if you get into a deeper discussion with them, you can say oh, hey, we have a ton of money that's completely non-dilutive. And then they're like, what? that's amazing. Like how does this thing exist? But it's really not that well-known. I think that most of the interactions that I've had around campus have been like, oh, you're doing a startup. That's cool, I see you got funding, that's amazing. But it has, but it's not tied directly back to the funding vehicle. 

It is very funny, just how different kind of our path feels from a lot of our other friends who are startups, for sure, because there's obviously the very well popularized, coming up with some idea for a consumer product, raising money to do that, building out a team, going through marketing and that whole element. And it's just funny, like being in a completely different position from that. 

Yeah. We know a bunch of people who are like trying to get users on a particular product by, becoming viral across campus. And for us it's yeah, we're trying to write a white paper that might get accepted in a couple months by some agency and the Department of Defense. It's just so like completely out of left field for most people. And I think the reactions are pretty positive, but it's just so like outside the norm of what, people think is a normal path for a startup.

And I, I'd definitely be curious to see. more people start becoming aware of opportunities like this. Obviously, I think timing is a big deal in a lot of these startups want to move very quickly and get users quickly and raise money quickly. And, stuff like the NSF ever took a really long time, but I would definitely be interested to see if over the next couple of years, as the government gives more funding. And as younger entrepreneurs start to realize that this can be an opportunity to see if more people start getting into it. But honestly, like Alex has said, I think most other starters you've seen on campus. Like I say, pretty much every startup I've seen on campus has not been going down this route.

Yeah. Which is shocking. it's not shocking that it's not shocking in one sense, but it's shocking. Another, it's not shocking because I know that nobody knows about it, but it is shocking that nobody knows about it. Because it is such a good way to get initial money into a company. You get to do research and development for no cost, except that you have to like, do the research and development. It's really amazing, and it's kind of a shame, honestly, that more people at Harvard don't know about it, but this was really clear, at least to me, when we were doing the NSIN hackathon initially, if we ran a hackathon that had the prize pool that Matt hacks did at Harvard, everyone would be like, oh my God, this is the most amazing things ever happened. We were the only team from Harvard. I don't think that many other people knew about it. So yeah, it's just like such an undiscovered route of being able to bootstrap a company. 

And I think entities like NSIN are making very good progress. Um, basically I started working on building out projects of different calibers and different disciplines around middle school. I think I started building websites. Like the first website I ever made was a cooking website. Cause I really liked to cook in middle school. So I like posted some recipes on that and I fell more in love with the technology side of it, rather than the actual like production and cooking and distribution element of it.

And then from there I started building out electronics projects and making mobile apps and that kind of stuff throughout high school. And then in college is when I really fell in love with radio technologies and radio systems, just for the ability to use this invisible, but still pervasive resource to enable all sorts of really interesting technical applications.

And radio is one of those things where it’s present in our day-to-day lives and we can see radio infrastructure, but very few people actually understand how it works and understand just how fundamental it is to a lot of the key technologies that underpin modern society. So I think that element of it was really interesting to me. And then basically around my junior year of college, before we all took a year off, I got an idea for a thesis to basically use really low cost radio spectrum monitoring technology, to enable all sorts of interesting applications, either at the urban scale or in industrial environments. Other things of that nature.

And the pandemic really provided us with a natural opportunity to take some time off from school, to work on this. Primarily because we didn't want to take classes online, but also we all wanted to work on a venture together since we all met freshman year. 

Yeah, I would say we were talking about not necessarily doing, radio, spectrum monitoring, but we were talking about doing some sort of company non-school related thing together. Pretty much like the first month that we had met each other, maybe September of 2017.

And you guys started doing that first ever class, we all took together. Our first semester of college, was CSFT, which was Harvard, interests, yes, course. And I wasn't part of this because I had never coded before, but Alex and Isaac did their own project together and actually started talking about turning that into a company.

Yeah. we were a bit full of ourselves at the end of that class because we made what we thought was a very cool project. It was essentially just a really simple neural network to figure it out best matches between people that you could see in real time and people in the Harvard Facebook database, because we were all meeting so many people at the beginning of freshman year, it was so hard to remember everyone's names. So we wanted to have a quick, who's contained in this picture-type algorithm. We thought that was super cool, and we talked for another month or two about building a company. And they're like, there's probably a lot of moral issues with this, and we're not sure, how well it's going to scale, so that died, but the idea to do something together didn't.

Geoff: What other ideas did you guys have along the way?

Distributed Spectrum: Oh, there's been so many iterations. Yeah. For a while, we wanted to do stuff around augmented reality and virtual reality and that kind of stuff. It would basically be like either Isaac or Ben would come up with some idea and then we would collectively discuss it for a while and either determined yeah, maybe this would work or maybe this wouldn't work, but it wasn't really that serious until we actually had the opportunity to spend time to work on something. Yeah. Because it was always like, we have to go back to school, cause until the pandemic, we were like, oh, we could do this after school. But job security is a thing we care about. And all of us during this time, it had internships that would be able to support us in life if we needed to move out of our parents' houses. So until the pandemic, we didn't really have the opportunity to do anything that was outside the traditional norms of go to class and maybe do some research, maybe get an internship in tech and that was about it.

Yeah. And I think none of us were ever really considering dropping out. I think we all enjoyed being in school and thought we would get a lot out of finishing our degree and graduating. Like Alex said, the pandemic really gave us the opportunity to have a year off to try something new. If it works, great, if it doesn't, then we go back to school. And so it really gave us the chance to, have a year before we graduated, where it didn't feel like we were taking some huge risk about, doing a startup right after graduation. It didn't feel like we were taking the risk of dropping out, but we had this nice middle ground of a year with no consequences almost to just try something.

Yeah. I totally remember that actually, when we all lived together during the pandemic year, 20, 21. And, I remember thinking if we just have enough revenue to pay the rent that we're paying, I'll be happy. And that was great because I think if we had done this, after we graduated, it would feel a lot more like if we don't have revenue, we have to stop this company immediately,

Katy: So it sounds like you are at the end of your second year, so can you take us a little bit through what kind of things were your focus? Was it the technology, and then what about customer discovery, what about funding, revenue?

Distributed Spectrum: And that like, I’m sure we will talk about this more later, but our current focus for our business and where we’ve gone would not have been compatible with us starting right out of college after we graduate. Because it’s just you know how long it would take to actually develop traction and be able to learn about the market and other things like that. 

Geoff: It's funny. I advise a fair number of companies and the best thing I'm always looking for is somebody who starts off saying, hey, I've met a customer and they have a need. And then they build their company backward from that. The scenario that gives me a little anxiety is when somebody says, hey, I've got a technology and I'm going to go commercialize it. But you guys weren't even on a third path where it sounds like you, you said, Hey, we have time. Let's go find the technology and find the customer, which is just a totally new model of inspiration to start something.

Distributed Spectrum: Yeah, I think the fact that we had time was a hundred percent luck. And then we were thinking about what technology would be like to build. And obviously, Alex has been interested in radios for a while. So we got into that and then we spent a few months thinking, okay, this is only going to be viable if we find a few markets. So that was, yeah. 

Yeah. I wouldn't say it was necessarily quite that abstract concept. We weren't intending to do this, but here's what happened. yeah, but like we also had envisioned from the beginning of the type of platform that we wanted to build that would enable all sorts of applications in the future.

So you're talking about abstract. It was abstract in the sense that we had an idea for a radio system that could detect and classify signals across a variety of different environments. And then we had, made some assumptions about where that would be useful and the types of problems that would solve. 

Yeah. So I think, early on, especially for the first, maybe five or so months, we didn't realize how important customer discovery was. We all had this vague idea that like, yeah, at some point we should have a customer who wants to buy this, but we, I don't know if we thought that our tech was gonna be so ubiquitous that everyone wanted, the second it was built or more that we just wanted to focus on building the tech because we didn't think we could market anything that wasn't even in a prototype stage yet.

But we certainly spent the first, few months, basically just building and doing some preliminary tests to see if our idea was even reasonable. And by the time we got into, October or November of 2020, we started realizing that we actually want to have some pilots and have somebody pay to install this wherever they were just to see if they would actually find use for it.

So it was at that point that we realized that we wanted to look for commercial markets. And that's also when we stumbled across maybe a month later, across the NSF, SBIR program. And then we realized that, it's just like the perfect value prop for us because it gives us research and development funding without dilution. As you guys I'm sure know, and just allows us to continue iterating on our product while finding customers. It was basically perfect because the other route for us was trying to build a more, fleshed out, minimally viable product and then start raising money. So that was like maybe the first five months, which was very technically focused, not super consumer focused.

Once we got into the ecosystem of, just knowing what, sivers were and that type of thing. We got more introduced to the DOD community in particular through NSIN. So in January of 2021, Alex, I think while just searching the internet for things like these stumbled across an NSIN hackathon, that was, I think, intended for people to just come in and pitch their ideas.

We entered it as well. And I think partially because, we were living together and pursuing this full time when many other teams were like college teams. And partially because, we had, what I think was a pretty decent idea. We won that hackathon and that got us like very into the DOD ecosystem. It gave us a bit of money too, which felt good. it was like a 25 K initial grant, or initial contract. That's when we started realizing that we had to, if we were going to start selling to DOD, understand DOD customers, learn how to speak the lingo. Figure out that a lot of the aspects of our system that we thought were really novel, like using ultra low cost sensors and reducing the cost significantly for making networks was less important than modularity and being able to integrate with any system under the sun and provide outputs in a very open way that could be, transferred across multi-agency projects, for example.

So that time, I think between January and maybe February and March of 2021 was a very transitional period where we were thinking, we're going to be doing industrial spectrum monitoring and trying to lower the cost and improve our network algorithms as much as possible to we're going to focus very hard on making the system really easy, really easily integratable into existing system. 

I think a couple of things to add one is like when we started out and I think this has been a pretty common theme, none of us are really comfortable with kind of the, hyping up our technology and misleading people and exaggerating what we have. And so I think it was really important for us to, before we started reaching out and telling people we could solve all their problems. We actually wanted to make sure that we could build it and make sure that we had an understanding of what it could actually do. So I think that was very important for us in the early stages. And then again, we for the first, I don't know, four or five months didn't really think too much about government and defense applications and customers. And so it was really after the hackathon, when we had the opportunity to talk to, people in the army who had been deployed and were telling us about all the issues they had with communications and with the radio technology that they had, that we realized how much of a gap there was and how much of a, space there was for us to come in and provide a solution.

And I think that particular element of the hackathon that was interesting to us was that exact element where we got to interact with real stakeholders who would actually be using our system in the field. And up to that point, it had been very difficult to have those conversations. So having some mechanism that kind of lowered the barrier for us to have those conversations and learn more about defense markets, the defense ecosystem and particular defense problems was very interesting.

Geoff: The thing I was really curious about. I actually just finished watching Silicon Valley. And as you're describing the  NSIN pitch event, I'm thinking back to that scene in season one, where they're at the tech, was it the tech crunch, disrupt pitch events? I'm imagining y'all in that same scenario, except in that movie or the show the team of competing is in the same boat as everybody else.

They're in their mid twenties, I hate to say they all look alike, but here you are. I assume at the time that you're pitching, you're probably what 20 give or take. And my experience of DOD pitch events is it's all people who look like me, mid forties defense backgrounds. what was that like?

Distributed Spectrum: It was actually not quite like that. In fact, we were, I think on the kind of like older and more established side of the people pitching as hard as that is to believe. It was a hackathon and the idea was that it just brought in mainly college students from around the country to try and solve this problem. And so the way it worked is we had, I think it was what two weeks to, form teams and to, discuss ideas and come up with a presentation, to be able to then try and, continue working on it. if you won the pitch. So we actually came in with a huge advantage because we didn't have only two weeks to form our team and to get started.

We already knew what we were doing and the problem that they were trying to solve, of vehicle cyber secure, really aligned with what we were doing anyways. So we actually came in with a big advantage and, compared to, I think a lot of the other teams who were doing this in their free time I think in a pitch event to a panel of SOCOM and said something along the lines of oh, you guys are young enough to be our kids or something.

Yeah. We went to another event. The Thunderstorm Contested Logistics event in Virginia is in early November of last year. I don't think was there anyone under 40? I don't think so. They were like a couple of other startups, but they were definitely more established. Yeah. And then maybe they had employees who are like under 40, but like the people who had run those things know like they were, either ZOD or, people who have been contractors for 20 years. It's really interesting. There's no young department defense contractors, which is, I think now surprising to me given like the entire funding ecosystem that exists, maybe that it takes a while to get your first SBIR. So if you fold before the first year, it's not going to go so well. But after that it seems like I don't know how hard is what we've done for young people. I'm not really sure. 

I think you get just the time that we had. Yeah. Yeah. We certainly got really lucky with that. but you can imagine if you were like willing to spend a year that you could do something like this, or even if you applied for a SBIR, like during your junior year of college, as part of a research project. By the time you graduate, you might have some thing to go on. But I don't think it's something that anyone thinks about. I certainly didn't know about this program in college. 

Katy: I think that’s a tribute to, you are a tribute to NISN’s success because it’s relatively nascent organzation and I believe it’s designed to reach out to people who haven’t considered DOD. Can you talk a little bit about your technology and the used cases that are most relevant right now?

Distributed Spectrum: Yeah, definitely. So the goal of our company is to build a modular RF spectrum monitoring platform that can be used to solve a variety of different challenges across different environments. So basically the goal of the platform is to detect, classify and in some instances, localized radio transmitters, that could take a bunch of different forms. In something like an industrial environment, this would be useful for detecting and localizing transmitters that might be interfering with the operations of industrial manufacturing equipment or robots running around in warehouses and other things of that nature, because there's not really too many or any for that matter low cost systems that can perform that capability of both detecting and then localizing those interfering devices across that industrial environment.

So having that capability provides this insurance for companies to be able to say, hey, we can immediately tell when a transmitter is going to impact our operations and then also find out where it is such that we can remove it or mitigate the problem. And there's also lots of other commercial applications that are along those same lines. Like for example, detecting, intentional jamming across cities. If you're a spectrum enforcement agency or the things of that nature. On the defense side, our focus is really understanding the radio spectrum to identify potential threats. So in the case of using, individual sensors on platforms, this could be something like detecting if somebody is attempting to jam your communications, detecting if your communications equipment's malfunctioning or transmitting on a frequency in a way that it's not supposed to. Part of our system is the ability to have a distributed network of sensors across a broad area. So that could be useful for things like deploying really low cost sensors on low-cost drones, across an urban environment that's not necessarily, a friendly area and then being able to build out maps of transmitters across different frequencies. So our goal is to build this platform that has these disparate capabilities of signal detection, signal classification, and localization, and then make it very easy to tailor that platform for particular use cases and reduce the research and development time necessary between those iterations cycles.

Yeah. And in fact, one of the things that we found in our early NSIN days was that the complex, distributed network, localization, all the algorithms that we were developing, we didn't need to use all of those to meet a particular use case. We talked to one soldier who was talking about when he's, in his Bradley, if this radio on his roof stops working, he really wants to know why, because if it's because you know what, there's just some hardware malfunction, that's fine. You can get out and diagnose it. But if it's because you're in the middle of an electromagnetic warfare attack, you don't want to get out because you're going to get shot. And so we never considered that use case because we thought that was essentially trivial, right? Like you just have a radio sensor on there. And we have an algorithm that will detect whether a frequency is being jammed by an enemy actor. So that is just something we could just put there. And it was already something we had developed and was maybe, a third of our system at that point. That's just like a particular application of a subset of our system that ends up being really useful in the field that we just hadn't considered before.

And so I think that's one of the main goals of our platform is to have, a very general system that is modular so that it can fit, different sets of inputs, different sets of outputs. And we can really tune very easily to any sort of application that comes up. 

And on that modularity side, one of the most important elements for both the defense and the commercial side is being able to tie in with existing information systems. Like for example, being able to report where transmitters are, an attack is really important because that allows us to basically deploy our system to a variety of different stakeholders, essentially with very little effort required. 

Yeah. I can't count the number of times we were asked in the early days, can you output over A tack? Do you enable jazzy to there were a bunch of we had never considered were even important at all, by being able to enable things like, inter-agency communication, a simple output system that would, enable people to just use this as soon as they plug it in, which is a tech is like incredibly important for DOD related work.

And there's also elements of our system that we had just built in because we thought they would make it easier on our end were very important for the defense ecosystem. Like for example, detecting and classifying all the signals locally and only reporting signals out over, low bandwidth communication links. We just thought it would be easier, but turns out that also enables things like signature reduction, where it's extremely important to not, be able to show where the actual transmitters are and where your devices are.

Geoff: I'd love to pull on that thread around that, the interactions you've had with end users. Because one thing I hear perennially from companies, startups, and even established vendors is how difficult it is to get connected to an end-user. And I was just curious if you could, I know you've been through a variety of programs that are supposed to enable this. I was curious if you could just share your experiences with each and what you've done to successfully get in the room with, with an end-user.

Distributed Spectrum: Yeah. So like you said, at the beginning, it was definitely difficult. We had, a couple of good early contact and I think, especially early on when we really were just doing basic research to figure out what problems were. People were willing to talk to us, but we got shut down very quickly on quite a few fronts just trying to learn about the problems that people had, especially on the DOD side, and the two NSIN programs that we did first, the hackathon and second, their vector accelerator were really important for that. So the first one, like we mentioned was being able to talk to, troops who had been on the ground and who had dealt with radio issues in the field and understanding what all their problems are.

And then the second was through the NSIN Vector program. So this is one that we got in after we won that first hackathon. And it was really important for us because they had very specific, pitch days, we weren't pitching to investors, but we were pitching to potential customers. And so it was one really great exposure and practice for us to understand, how we could phrase our value proposition and like what kind of things we're asking for. And it also just gave us so much more exposure to the different types of problems that were out there and the different types of customers that we hadn't even really considered before. We ended up getting, through that, the offer to, go down to New Jersey to an arsenal and, start doing a sensor, set up down there and for intrusion detection system. And I think that was a really big boost for us to understand. More markets and more actual customers. 

And then one of the other sides of that is more traditional route where we would find solicitations that come out through a variety of different channels, respond to those, make it to successive rounds in that process. And that element was very difficult for us just because it's the three of us. So we don't really have a lot of time to spend writing white papers and responding to RFIs. So I think that honestly is one of the bigger barriers for, these startups like us, where there's only few individuals, it's we don't really have the time necessary in order to pursue a lot of those traditional routes where, you look on sam.gov for opportunities and you try and respond to those.

Yeah. I also think that with respect to RFIs RFPs and all the other things that come out, like when you're starting out, unless you hire somebody who is ex DOD or has, written these things before you don't know what the heck you're doing. There are many things that will just sink your application that you would never think about, you can write normal things in a research paper that will get you laughed out of the room. And if you don't make it exactly clear a whole bunch of things that are really important, to a particular solicitation, if you don't know exactly what systems are being used and what requirements that they will have, even though that they're, even if they're not stated in the RFI or RFP, directly, like you're not going to get the award.

I think that the barrier to entry, if you do the right steps is not incredibly high, but knowing what those steps are, is difficult and was for us for a while, until we went through the NSIN programs and got to talk to a bunch of people. 

And then what are the other avenues that has actually been relatively easy for us and I think it's easy for other startups is responding to some of these demonstration events like effects or. For sure. And those are nice because the actual requirements for applying to go to those is not particularly high. You can write a short white paper and we didn't really realize how valuable those events are for that customer interaction element, where people are attending these events, looking for technologies that are going to help them with their day to day problems. That's one of the things we're definitely trying to do more. And one of the things that I think works well about the current defense startup ecosystem. 

We initially started out being totally commercial. And then we said, once we got DOD money inside the, like the clear need on the DOD side of that. Okay. what if we just provide this to the entire department of defense and the answer is you can't actually really do that unless you're an already established defense contractor. You definitely have to have commercial traction and the commercial market. And I think the logic for that, at least on the DOD side kind of makes sense. If you're not a commercially viable product, like who's to say that you're not going to go out of business in the next six months and they won't be able to procure from you. But yeah, so we have definitely had to, since we've started looking at DOD things, also focus on commercial things and building out businesses on essentially two avenues. 

And one of the other things that is a little bit difficult about that for us is, with just three of us, that's kinda stretching us a little thin.

So yeah. It's. Yeah. But yeah. Oh, I'll problems to be solved and hopefully in the very near future. Yeah, I think it's funny because we can see all of our proposals over the past two years and you can see the steady progress from just being absolutely terrible and having no idea how to write anything for either defense or commercial markets, to I think the place where we are now, where we know how to talk about our technology, such that defense stakeholders can understand what we're doing and frame it in the lens of their own problems. But there's still a lot of work to be done in that regard where, we're always learning new things about basically explaining what we think are clear technical concepts in the language of people that actually experienced the problems that we're trying to solve. 

Yeah. And I think there have definitely been a few other very key resources that have kind of helped that journey of writing white papers that are not going to get us laughed out of the room. The first is our main NSIN advisor Kedar he was running the first hackathon that we won, was not involved with the Vector program, but we've pretty much talked to him every week or every other week for the past year and a half. And he's always throwing, different resources our way and, telling us different things to look out for. But one of the things that he's been really helpful for is helping us understand the language of the DOD and how we actually need to, pitch ourselves. If we have a RFI from SOCOM and need to understand something from their perspective and understand how they think about these problems, that's something that us by ourselves are never going to be able to just figure out. And so being able to have some connection, to be able to talk to someone who's worked with them or has experienced with them in a way that they can help work through exactly how to describe our problem in their language. So those kinds of things, and just talking to as many people as possible to try and build up that level of experience and familiarity with different branches of the government and the DOD has been really helpful. The other person who we got introduced to very early on, is Dan Lilly, who is the senior advisor for the Massachusetts Small Business Development Office and he has been incredibly helpful. He's a completely free resource. And this is honestly like for anybody or for anybody in the state of Massachusetts, who is looking to submit SBIR proposals. Like he is incredibly helpful, he will give you very harsh and honest feedback, but it is so helpful because he's just seen so many applications and knows what the office of looking for and knows, the way that early startups are thinking and how to help translate that into an actually good SBIR proposal.

And the nice part about that is I think there's equivalent resources across all the other states funded through the federal government. 

Also I think that before we move on from this, I just wanted to say that we have certainly gotten ridiculously better at writing proposals and speaking DOD, but I think that compared to defense, established defense contractors, we're still like pretty new, pretty young. It's still takes us a lot of effort to understand even one particular solicitation, we have to, reach out to our network, figure out who's worked in this space, figure out what language to use, what systems are already on board. Because usually the request, will say something like, here's a big, general concept. It will be like, wow, that fits perfectly into our technology. And then we'll ask what system are we integrating this into? And it turns out this is like big arcane system. That's a particular thing. So we have to have our proposal directly address how we're going to integrate our stuff into their stuff, which is not immediately obvious at all from just reading what's out there. For each of these things, if we want to even be close to winning or being considered, it takes a considerable amount of effort on our time. Whereas I think a big defense contractor, like Raytheon, for example, would just be able to go in-house to somebody who's written to this particular group before and say, hey, how do we write this? Or go write this? So we're better, but it still takes a considerable amount of effort and a lot of advising to get us to where we think we're even remotely competitive.

Geoff: Since you brought up dual use and since you're only a team of three, I'm curious, how have you thought about balancing the time that you're spending on your commercial pursuits versus your DOD pursuits and thinking about balancing the revenue and the funding on each side to create the runway you need.

Distributed SPectrum: Yeah. So I think that essentially what we've been doing so far, I would say decent success is taking DOD funding enough, such that first of all, we can still fulfill all the requirements of whatever contracts we get, but also such that will provide us enough runway, to pay us like a moderate salary, just so that we can live. And that will take up, probably 75% of our time or so, and then just try and focus the rest on commercialization. I think that it's worked so far, especially because we've been in school and, neglecting our classes. But I think that once we hire a few more people, we'll be able to more easily split time between DOD and commercial. Because right now, like all three of us have done both. And we've basically been having one focus that switches back and forth between the three of us all the time. And yeah, ideally that doesn't happen. Ideally we have a few people performing on a contract and a few other people working on commercial market and marketing stuff. 

And I think we've all come to understand the different timelines between the DOD and the commercial market. So for us, we are currently working on two contracts, have a lot of work to do on them, but understand that, it might be a six month break before our next contract and it might take another year to get a follow on contract. And so I think we really understand the importance of having commercial revenue in between that and supplementing that. And that's something that we haven't had yet. Most of the time that we're not working directly on performing our contract, trying to develop our commercial office. 

Yeah. So this also, I just want to add, might change, in a couple years or so, because we're still, at least according to the DOD, a developing technology, right? Our TRL was five. Once we, get a couple more demonstrations, we'll probably increase that slightly. But until we get, up to nine, we're not going to be really procured, until we get to phase three, we're not going to have recurrent revenue from department defense and that's probably another couple of years away. So once that happens, then we will have a similar sort of relationship with DOD as we do with commercial, as in, we're just, building our product, selling it, making iterations, that type of thing, but we're still doing R&D because we can do R&D by using DOD resources. And the nice part is about being a dual-use venture, is that the progress we make in either areas not mutually exclusive by any means, and that's the points of having entities that work with the department of defense also show good commercial traction is that the time and effort we put into building out our commercial products will then benefit directly the product we market to the department of defense and vice versa. Whereas like the research development time we put into our products to the department of defense will also help our commercial product. So there is that element of synergy to it too, which is really nice. And I think one of the whole points of why being dual-use is so important. 

Yeah. the first contract that we're working on is our, our NSF SBIR phase one. We applied for that ages ago. I want to say in December of 2020, and heard back about a year later, and then we're like, oh, I guess we're starting this contract now.

Katy: So one of the mechanisms that I haven't heard other teams talk about is that you talked about being a sub on an STTR or SBIR, how did you ever come up with that?

Distributed Spectrum: Um, the subcontract that we have it's an air force STTR phase two, really came out of nowhere for us. I think one of the big themes that we've learned over the past two years is just to never say no to a call. We've had so many connections and good things happen to us that just have come out of nowhere. And there have been a lot of calls that we were, hesitant about thinking like, oh, do we want, really want to talk to some VC? We're not really interested in taking money, is this really worth our time? And it is always okay. Not always, but on average it has been absolutely worth our time. Through a connection through a VC's family, got in contact with this other really cool startup. Who's building some really cool, LIDAR mapping technology. And we got on the phone with them just because they thought we might have some synergies, some ways to work together and we walked through what we were both doing. And they were like, we have been working on a air force, phase one. We've been looking for ways to augment our product offerings, moving forward into a phase two. Do you want to be a subcontractor for us and help us, run this project to integrate our two technologies to make, and new technology to be able to combine both LIDAR and RF mapping. This was before we heard back from our NSF SBIR. So before this, the only two sources of revenue we had were, winning the hackathon and then winning. And NSIN’s program. And so it really worked out perfectly for us because they were a much more developed startup than we were. They had traction they'd already done their own phase one. And really the breaking that we've been looking for with some way to get us more legitimacy, as much as the hackathon and vector helped, we still had not had, a real customer and a real person who we could point to, to say look, these people have used our technology. It's worked successfully. And getting that first break in was really difficult. And by being a subcontractor and you're being able to prove to another startup, not to a government entity that, we could fulfill their needs and that we could, build this technology for them. That really was just a much easier first break. And for us, to earn their trust and then to be brought in as a subcontractor. And I think that's gained us a lot of legitimacy that has helped us, on other proposals and other commercial offerings since then.

Geoff: Since you mentioned it, I was curious if you'd share a little bit more about your analysis of going after VC funding. Yeah, I think that is the most typical. Certainly the methodology that's glamorized in Hollywood.

Distributed Spectrum: Yeah. So we're going to be incredibly biased here because I think that the VC hype for young Harvard students who have a cool technology is very different from the VC landscape for people without the luck and resources. I think that essentially now, we've had to turn down VCs who at least had preliminary interest. And we could probably raise pretty much a runway that we would like, a decent runway without too much problems with. But that’s after a couple of years of building relationships with VCs and being like, hey, you know, at some point we'll raise and like here's some revenue in here we'll add you to our mailing lists that you can, keep track of what we're doing. And so that's worked for us so far, but two things. One is I think that we are basically lucky because there's a huge amount of hype surrounding, startups that come out of, prestigious research institutions basically. And second, we actually don't know if we're right, because we haven't tried to raise yet. We've had people say, oh, I'm interested. Let's have another call add me to your mailing list. I'll, keep in touch and all stay interested. but we haven't actually asked them for a check yet, so we're not sure. 

And I think for us, especially since we were starting our year off and really just trying to experiment, first of all, with the technology, we want to control the company and we didn't want to have to have to, bring in and dilute our company when we didn't have to. So I think those first two sources of revenue, even though they were pretty small for us were a really big deal to understand that, okay yeah. Like we can sustain ourselves and we don't need to take funding if we don't have to. And I think that gave us the kind of confidence to continue, even when we're waiting to hear back from NSF and before we had to subcontract to not have to rely on outside funding. And I think also we were all three of us were, in the fortunate position where, you know, as Isaac mentioned, we'd had, good summer internships before. And we felt like even if we don't make revenue for another year, we're going to be fine. And we can still pay rent and we can still, live in a reasonable way. And so I think then, especially once we got NSF and once we got our subcontract. It's plenty of money for the three of us to sustain the company for two, three years, really have a lot of runway. And we really felt like we didn't have to give up control and dilute our company if we didn't have to. I think now what we're starting to think about when we go full time, is okay, do we want to hire more people? How much more could we do if we had another few engineers, somebody who's managing sales, somebody who's writing white papers. And I think that kind of idea is very attractive to us. And so it's really making us consider now at the stage where we have revenue and we can raise a reasonable amount of money without giving up a ton of control on our company. Then it becomes a lot more attractive to think about, okay, how much more could we grow and how much more quickly if we had additional money to hire people.

And it's amazing as well, because I think as we've started to consider about, taking VC funding, one of the things that we've heard is, wow, like it's so impressive that you guys have all this revenue and, in such short time we have customers. We understand a lot of, the demand that the DOD has. And even for companies who really want to, raise a lot of money quickly, if you can get an initial SBIR, this is something that we've been told looks very good to VCs as a demand signal and as an initial revenue, that I think is definitely gonna help us if, and when it becomes time for us to actually raise money.

Geoff: Absolutely. I advise a dual-use VC and having SBIR money's a wonderful validator of the technology and frankly, a way to mitigate the technology risk for that VC. Their check isn't going for you to develop your prototype. That's already built with somebody else's cash.

Distribute Spectrum: Exactly.

Geoff: If anybody is listening right now, who would you want to reach out to you?

Distributed Spectrum: So I think there are two classes of people and I'm going to name two of them and you guys are going to name like six more. But anyway, I think that on the DOD side, we are essentially looking for people with unmet sensing goals who want to understand the radio spectrum want like a cheap modular system that they can just add on to something, to provide radio situational awareness. We'd love to partner with you. We'd love to, take some SBIR money and, develop prototype specifically for you. Yeah, we're basically looking to increase our TRL on the DOD side. So any way we can get our tech into operational environments and anyway way we can move toward, a phase three with an end-user, where we provide our tech basically to an entire system, we would love to talk to people who are interested in that.

I think on the commercial side, again, we're essentially looking for customers who want to install, probably not, 10,000 of our sensors, but maybe, on the order of 100 or 200 of ours as a more medium scale pilot. So that could be anyone like somebody who runs a regional airport or, an airport that needs, spectrum monitoring, signal awareness, localization, that type of thing. Or somebody who runs a factory who wants to make sure that all their machines have higher uptime, and won't be susceptible to radio threats. Or I guess, spectrum regulators want to make sure that for a particular event, a marathon or whatever, there won't be people interfering with first responder communications.

And I think really the main element of that, that we want to highlight is just being able to deploy our system into end environments, to increase our TRL. It's really hard for us to actually find those contacts, even if they don't pay us, we'd still want to install a system to perform those tasks, like detecting of transmitters or interfering with communications. Detecting if somebody is trying to jam a particular use case. One of the other things that we're focused on is basically building a lower cost single sensors that can be deployed onto something like a robotic platform or a drone to both provide communications awareness for that particular platform and also network multiple those sensors together.

We've already delivered our first sensor note in our first system that is being used by a real customer. And, through our NSF SBIR, we've been doing a ton of R&D and running tests in our own environments. But really as Alex and Isaac have mentioned, what we really want to be able to do now is run more pilots with real customers. So for anybody out there who has unmet sensing needs, who's willing to do a free demo, let us install some sensors, let us help you solve your problems. That's really what we're looking for. 

Also, if you, or you or somebody, has a secure area like a skip for example, any place that's secured, like secret top secret level facility, one of the things that we, one of our initial ideas, which we would still love to do, is to set up a few sensors around there to make sure that any unauthorized transmitters don't get in. And if they do they're immediately localized. That was one of the things that we thought would be super useful because existing systems that do this, that provide persistent monitoring of a secure area are prohibitively expensive. So we would love to explore that tech further. That's some of the tests that we're doing right now in our own environment, pretending it's like a secure area and trying to, perturb it and localized transmitters in it. So that would be a super cool demo for us as well. But yeah.

One thing that we were told very early on when we were doing this is it's going to take a year for you to get any kind of reasonable revenue and traction, and I don't think really took that to heart and really understood the implications, the ramifications of that. And obviously there were points where, there were questions about whether or not what we're doing is viable, whether or not we should continue and keep going. And it basically turned out exactly like we were told. It was like, it took a year. Then we started getting, real revenue and things were snowballing from there, but just understanding that element that it's not going to come quickly, at least for now is important to understand.

I have another piece of advice, which is you might come into this thinking that you don't know what you don't know, but you don't know what, you don't know what you don't know. There is just so much stuff that we got through advisers and obviously, Kedar has been incredibly helpful and has introduced us to his network. He's probably been like one of those useful people for us on the DOD side, with respect to our gaining understanding. But it doesn't have to be one person just talk to as many people as you possibly can, take good notes. And over the course of a year, you'll learn a ton. And I think had we not done that we wouldn't be anywhere. We've just learned so much from all the people that we've talked to.

That was Alex, Ben, and Issac from Distributed Spectrum. And we know that understanding the federal market can be challenging, so for more interviews, classes, and content go to fedscout.com.