Silicon Valley executives like Palantir, Meta and Openai are grabbing headlines to trade them Best of Brunello Cucinelli for Army Reserve UniformA quiet transformation is underway in the US Navy.
how? Well, Navy Chief Technology Officer Justin Fanelli says he has managed to get through the deficits over the past two and a half years, cutting back the prolonged procurement cycle that once made working with the military a startup nightmare. This effort represents an invisible but potentially meaningful remake that aims to make governments move faster and smarter about where it is committed.
“We’re more open to businesses and partnerships than ever,” Fanelli told TechCrunch in a recent Zoom interview. “We are more humble and listened than before and we know that when an organization shows how to do business differently, we want it to be a partnership.”
Today, many of these partnerships are being promoted through what Fanelli calls the Navy Innovation Employment Kit. It is a set of frameworks and tools aimed at bridging the so-called Valley of Death, dying on the road from prototype to production. “Your grandfather’s government had a spaghetti chart for how to get in,” Fanelli said. “It’s now a funnel. If you can show that you have an extra large result, we want to designate you as an enterprise service.”
In one recent case, the Navy was under the age of 8, a Somerville, Massachusetts-based cybersecurity startup, and within six months, went to pilot deployment from Request for Proposal (RFP). (One other Via client is the US Air Force.)
The new Navy approach works based on what Fanelli calls the “horiline” model borrowed and adapted from McKinsey’s innovation framework. Companies go through three phases: evaluation, structured pilots and scaling to enterprise services. The key difference from traditional government contracts is that the Navy has problems rather than pre-determined solutions.
“Hey, I want to solve this problem in a way that always has it.” “We have a problem, who wants to solve this, how do we solve it?” “Faneli said.
Fanelli’s overhaul naval technology is personal. Originally an Air Force scholarship cadet studying electrical engineering, he was disqualified from military service due to lung problems. Determined to serve anyway, he chose the Navy over a private sector offer over 20 years ago. Because he “wanted to be around people in uniform.” Since then, his career has played a role across defense, intelligence, DARPA and open source initiatives before returning to the Navy division.
The changes he overseen open the door to businesses that previously did not consider government work, and you may have thought it was a waste of time to give it a try. For example, Fanelli runs for one competition through the Defense Innovation Unit (DIU). The Navy was hoping for a small number of bidders for the niche cybersecurity challenge, but received many responses from companies that have never worked with DOD before but have already solved similar issues in the private sector.
Fanelli says his team has fully documented dozens of success stories, including venture-backed startups that used automation of robotic processes to zip two-year invoice backlog in just a few weeks. Another example was to deploy a network improvement of the aircraft’s airlines that saved 5,000 sailor time in the first month alone.
“It not only changed their availability, it also changed the way they could spend morale, Esprit de Corporation and other jobs,” Fanelli pointed out, explaining that the time saved is one of five metrics the Navy uses to measure the success of their pilot program. The other four are operational resilience, cost per user, adaptability and user experience.
As for what the Navy is currently looking for, Fanelli has outlined several high-priority areas, including AI, where the service is actively talking to its team. The Navy clearly wants to accelerate AI adoption beyond basic generator AI use cases, increasing its adoption into more agent applications, from onboarding and HR management to ship data processing. He also cited the “alternate” GPS, explaining that the Navy is rapidly adopting alternative precision navigation and timing software, particularly for integration with unmanned systems. He then mentioned “modernizing legacy systems,” saying that some of the aging technologies the Navy is about to update include air traffic control infrastructure and ship-based systems.
So, how much money do you want to spend every year? Fanelli said there was no freedom to provide a specific budget breakdown, but said the Navy is now allocating a single-digit percentage for emerging and commercial technologies and traditional defense contractors compared to traditional defense contractors.
As for the most common reasons why promising techniques fail when tried, he said it is not necessarily due to technical shortcomings. Instead, the Navy operates on a long budget cycle, and if new solutions do not replace or “off” existing systems, funding becomes a problem.
“If we’re profiting and measuring that profit, then we don’t have money. [getting to the startup] It’s been a year and a half and it’s a really bad story for investors and users,” explained Fanelli. Sometimes it’s not. And if you turn the public-private sector into more personal and personal private sectors and ride that wave, there is a lot of technical debt needed to cut down on anchors. ”
Before he ended the phone, he asked Fanelli if the Trump administration’s “America First” policy had any impact on these processes. Fanelli responded that the current focus on domestic manufacturing is in line with the Navy’s “resilience” goals. (He pointed to ongoing initiatives such as digital twins, additive manufacturing, and on-site production capabilities that can reduce supply chain dependencies.)
In any case, the Navy’s message to entrepreneurs and investors is very clear that it is a true alternative to the traditional commercial market, a pitch that appears to have gained traction in Silicon Valley, and is accepted into partnerships with the US government.
Meta CTO Andrew Bosworth said At a recent Bloomberg event In San Francisco, “There’s a much stronger patriotic foundation than people think they’re giving Silicon Valley credit.”
As longtime industry observers can demonstrate, this is a marked shift from the more skeptical attitude that characterizes much of the valley over the past few years. Currently playing rounds with interviewers at business media outlets and podcasts, Fanelli hopes to specifically attract that interest to the Navy. He told TechCrunch:
If you’re interested in listening to the full conversation with Fanelli, you can check it out Here.
