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EXECUTIVE EDITOR
Jenny Servo, Ph.D.
MANAGING EDITOR
Julie S. Krull
20 19
DESIGNER
Danielle Palumbo
This mini-mag is a companion to the Phase III magazine that Dawnbreaker has produced since 2008. We felt that another publication that shared information regarding the Small Business Innovation Research (SBIR) program would help those who aspire to Phase III commercialization success. As Commercialization is also a metric of success for organizations involved with technology transfer, topics of interest to universities and federal labs will also be included.
FEATURES
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INVESTMENT
WEBSITE
DIVERSITY
BENCHMARKS
Before you Approach an Angel
How do I Know if my Website is Working?
Under-represented State: Alaska
Why are TRLs Important?
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FINDING MARKET INFORMATION
Precision Agriculture
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IN VE S TMENT
Before you Approach an Angel BY CHRISTOPHER KAUFMAN, PH.D.
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There comes a time in every young start-up’s life when its thoughts turn to fundraising. But with those thoughts come many questions. How do you know if you are ready? What do you need to do to prepare? How do you choose the right financial partner? In this article we will explore the initial steps a company should take when preparing for fundraising, with a focus on Angel investors, as they are often the first step in a venture’s financial journey.
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Let’s first set the stage by defining what an Angel is and how they differ from venture capitalists (VCs). Business Angels are accredited private investors that invest their own funds in small and mid-sized businesses that are at an early stage. Angels can operate solo or in organizations. Besides financial support, they often provide experience and business skills to the companies in their portfolio, depending on their level of industry and entrepreneurial experience. Similar to VCs, Angels expect a financial return, but are considered to be “patient money,” in that they are investing their own money and can be more patient on a return. VCs on the other hand, view return on investment (ROI) as the ultimate goal since they are investing third party money. Unlike VC firms, which tend to focus on particular technology areas for their portfolio and not as much on geography, Angels believe in giving back to their communities and focus on investing locally and regionally. That said, pairing
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with an Angel with a relevant background to your technology will still be important. The amount invested varies as well between Angels and VCs. Angels invest smaller amounts per investment, usually at or below a seed or pre-seed stage VC firm. In 2018, the average Angel deal size was about $350K. This level of funding is suitable for the early stages of a start up’s life when money is needed for feasibility and early development. While typically not as actively involved in the business management of their portfolio as VCs, Angels still provide more than just money. They provide “smart money” through being proactive in developing the business through their experience in company building, company functionality, industry, and providing contacts for potential partners, customers, and follow-on financing. Now that we’ve covered what an Angel is and how they differ from VCs, let’s turn to how you will know when to start the process and what the first steps should be. Knowing when to raise capital is not simple to pinpoint and will depend on your individual circumstances. A more manageable question might be - why are you raising the money? The investor, whether Angel or VC, will be looking for an ROI, so they will want to see a viable path for the returns. You will need to ask yourself what you want to accomplish with
the funds. It is advised to develop a roadmap need to prepare before approaching an Angel. with viable and discrete milestones that you will need to achieve to be successful. These mile- CHECKLIST – WHAT YOU NEED BEFORE YOU stones should be for all aspects, including tech- APPROACH AN ANGEL nical, customer discovery, prototyping, testing, manufacturing, and intellectual property, as ap- 1. PATIENCE propriate. Meeting those milestones will reduce Be aware that the process of raising funds will your risk of failure and increase your company’s usually take much longer than expected and you valuation in the eyes of the investor. Having that may face several rejections before finding a willroadmap planned out will allow you to specifi- ing investor. Therefore, plan accordingly – don’t cally answer the questions of how much money wait until your bank account is almost dry before you need to raise, what will you use the funds starting the process. Desperation will be a red for, and how far along your road map will they flag to any potential investors. take you. The roadmap should allow you to identify inflection points in the development of your 2. THE RIGHT TEAM company and product that are suitable for initi- If you have not already done so, you should ating the next round of fund raising, if required. have a compelling team in place. As little Sage advice is to only raise as much as you need as two founders can be sufficient, given to get to the next level. It may seem counterintu- they have impressive credentials and itive that you shouldn’t raise as much as you can, motivation. Meaning that investors but by raising just as much as you need you will will need to know that you have the keep your team lean and focused on the goal. background and experience to This will also resonate with the investor as they deliver on your promises, and will see you’ve laid out your roadmap with clear that you have skin in the goals for both tasks and fund raising. Additional- game. If you’re not all ly, raising too much in one round could lead to a in on your venture, through comdown round in a future raise. mitting all Returning to the timing question, bear in mind or the that raising outside capital too early can cost you more in equity than later funds. The further along your roadmap you can progress via bootstrapping and Friends and Family funding will serve to de-risk your team and innovation, resulting in a higher valuation and the founders retaining more equity. Once you’ve decided that the time for fundraising is right, you will
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majority of your time, and also committing your own funds, then that will be a red flag to the potential investor.
ing a customer base. Also it shows that you are working daily at running things quickly and optimizing effectively and economically.
3. A COMPREHENSIVE BUSINESS PLAN OR 5. A TARGET LIST OF ANGELS OR ANGEL GROUPS BUSINESS MODEL CANVAS This should describe in detail how you plan to You will need to start by doing your homework. execute your brilliant idea. It should lay out how You will want to target a group of Angels that you will bring your idea to market, overview of have an interest in what you are doing. As Anthe competitive landscape, financial overview, gels tend to focus locally, you should start lookand timelines. Your roadmap you developed ing within your community. In addition to web searches at such sites would fit in here as well. as Angel Capital AssoAs part of the process of ciation and Angel List, developing your busiconsider local pitch ness plan, you should competitions, as Anbe validating the margels often attend such ket need and prodevents to find potential uct-market fit through new investments. You customer discovery will want to build a tarinterviews. This will be get list of at least five important not only for possibilities. As fund the success of your naraising takes more time scent business, but also than you expect, you in demonstrating to will want to be pitchthe potential investor ing in parallel if possithat there is a customer need and a desire to satisfy that need with ble. Also, be sure to pre-qualify your target list your innovation. Additionally, you will want to you are developing by ensuring they have exstart developing your executive summary and perience in the technology domain or business pitch deck in advance of seeking meetings with model of your company. Review their websites, investors. There are many resources online for blogs and other social media feeds to learn as pitch deck preparation (such as Guy Kawasaki, much as you can about them. Do they seem like Steve Blanks, and Mark Suster), and is a subject a fit and someone you would want to work with? Do they have the right focus on technology or best covered in its own article. social interest that matches yours? Also, be sure to confirm that their fund size and typical invest4. PROOF OF CONCEPT Angel investments sit between early ideas that ment size matches your investment needs, and are funded by bootstrapping, friends and fam- that they have funds available. It would be a ily, and SBIR/STTR grants, and revenue gener- waste of time to pitch a fund that is either too ating ventures funded by seed and later stage big or too small for what you are seeking, or has VC investment. That means while you will need already invested all their funds for that cycle. to show proof of concept of your innovation and validation of market need and interest, you 6. WORK YOUR NETWORK! don’t need to have a minimally viable product Now that you have your target list ordered by (MVP) or demonstration of customer traction. priority, it’s time to work your network via LinkeThat said, the further along that pathway you dIn and other resources to obtain a warm introcan get in terms of de-risking your innovation duction. Rarely does a cold call or cold applicaand the market, the more attractive you will be tion gain traction with investors. You are looking for investment. At the very least you should be for someone that is known and trusted by both able to demonstrate discipline and focus in sys- you and the Angel, as a high-quality referral will tematically trying different approaches to grow- help you get a meeting. Also, look through the 6
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Angel’s portfolio companies for known connections. Networking and presenting at various pitch competitions and other investor events is another great way to make connections within the investor community. At least a few weeks to a month before you want to start meeting Angels, send out a short email to your list of referrers asking for an introduction. You want to make this as easy as possible for the referrers. Keep your email short and clear. Send a separate one for each request with a clear subject line. State what you are developing in one or two sentences, describe the team in one or two sentences, as well as any market validation or traction. Then briefly explain why you are interested in meeting that person or group and your fund-raising process. For example, they’ve invested in a similar company. Then close the email with the reason why you think they can introduce you and ask if they know them well enough to make the introduction. If you have done this correctly, and your potential referrer is willing, then they should be able to forward your email to the Angel or group with
only an introductory sentence added. Now that you’ve properly prepared and you have a warm or soft introduction, prepare and send your application materials. Refer to their website for details on the process and desired documents. Don’t dump a lot of extraneous material on them right away as it will just bury your signal among the noise. They may at first want only a brief document such as an investor profile, one-page executive summary, or a quad chart. If they ask for a business plan, send them a brief version that is no more than 10 pages. Usually though they will want to start with a summary and a pitch deck until they decide if they want to invite you in to meet with them. If all works out, you will be invited in for a first meeting. Depending on the group, it may be an initial one-on-one meeting to learn more about you, or it could be a formal pitch to the group. Either way come practiced and prepared and remember, the goal is always to get to the next meeting. Good luck!
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How Do I Know If My Website Is
WORKING? BY JULIE S. KRULL
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Maybe a more specific query would be – is my website doing its job? Perhaps when you first launched your site, you envisioned it would generate new business. Maybe you developed a fully-functional e-commerce site to sell your products, complete with user accounts and check-outs. Or, it could be completely void of any intricate functionality and merely prompt visitors to want to learn more and follow up with you directly. Others may fall somewhere in the middle. The point is, every website has an objective, but sitting down to assess whether or not users are interacting with your site the way they should is a process all its own. The term “user flow” or “user journey” describes the path taken by a typical visitor to your site in order to complete a task. There may be multiple tasks within the same site: Signing up for email alerts, subscribing to a blog, completing a contact form, purchasing a product, etc. For sites of the other channels. Remember, finding ways to without all the bells and whistles, maybe that streamline the user experience should always be task is something as simple as contacting you at the top of your list. via email. To see the navigation trends of your users, be sure your website is equipped with 2. Page Performance a Google Analytics code. If you work with a de- Google Analytics Home Page → Pages Report veloper, they will handle this step. If not, visit https://analytics.google.com/analytics/web/ This view gives a holistic picture of which pages where you will need to register for a new account are the most popular. If the goal of your site is for and follow the steps to create a new property. users to fill out a contact form and nobody is getting to the contact page, you’ll obviously want to Google provides this free and easy-to-generate make some corrections. Let’s say you published code as a means to gain insight on user behav- a press release this past week with a link to your ior and overall website performance. While the leadership team. Your “team” page should have breadth of information can at times seem over- a visible spike during the dates that press release whelming, here are a few key areas you’ll want to was in circulation. Be sure you play with the date box in the upper right-hand corner and click the assess: “compare to” box within it to see any notable differences within certain weeks. 1. User Flow Go to Audience → Users Flow 3. Overall Site Statistics This will generate a flow diagram on how visitors are coming into your site, and where they go The home page of Google Analytics will give you once inside. Since Dawnbreaker is a U.S. company a nice snapshot of visitor trends. Are your users serving U.S. clients, I like to hone in on the Unit- spending a good amount of time digesting infored States (click on the country in that first column mation on your site? Is your audience accessing and select “View only this segment”). Then I ana- the site via desktop or mobile device? Are they lyze the pages one by one. In the second column navigating throughout the site or are they “bounc(starting pages), click the first box, which in this ing” as soon as they get there? Which countries case is the home page, and select “highlight traffic are they coming from? This can all be answered through here.” You will then start to see a very dis- on the dashboard on the home page of Analyttinct pattern of where users are going, and where ics, and within any of these stats, one can dig even they are dropping off your site. One of my favorite deeper. Be sure you click on the small “Insights” things to do within any website is to delete redun- icon in the upper right-hand corner, which acts dancy. If you created ten different ways to get to a as almost a newsfeed of interesting statistics that single page and visitors are only using two, get rid may be worth viewing. MINI-MAG
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W E B SI TE
PageSpeed Insights Google
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https://developers.google.com/ speed/pagespeed/insights/
Is your website loading at optimal speed, or are long load times driving your customers away? Speed is the norm these days, and nothing irritates users more than having to wait for a website to appear. This free and super simple tool from Google tells you how your site is stacking up – just type your website in for an analysis in under one minute. It will also show you some quick fixes and opportunities to speed up your page load. Share these with your web developer no less than once a month.
https://developers.google.com/
Another great tool from Google is the Mobile-Friendly test. Not speed/pagespeed/insights/ surprisingly, over 70 percent of all time spent online is from a mobile device. Because of this, websites should be responsively designed. What does this mean? In short, a site will “respond” automatically to whichever device is being used for access. The look of a site on a desktop should look different than on that of a tablet or a cell phone. If it doesn’t, there may be an issue. To test the responsiveness of your website, run this quick check.
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Mobile-Friendly Test Google
https://search.google.com/ test/mobile-friendly https://search.google.com/ test/mobile-friendly
Backlink Checker Ahrefs
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https://ahrefs.com/backlink-checker
Other websites linking to your site is one of the many components of Search Engine Optimization (SEO). Sites that have good-quality incoming links (or backlinks as they are commonly called) tend to rank higher on search engine results pages within Google and other popular search engines. How do you know who’s linking to your site? This free tool will tell you. A good long-term SEO strategy is to steadily increase high quality links to your site from reputable sources. This may include news outlets, blogs, other businesses, and social media accounts, to name just a few.
https://ahrefs.com/backlink-checker
Here, we come to the other major component of the overall SEO picture – keywords. When creating copy for your website, you must implement keywords in order to get organic traffic to your site. Which keywords should you use? Are there variations or synonyms of most-searched phrases? This handy keyword tool will be your guide. For instance, here are Dawnbreaker, we provide commercialization services. I would do a quick check by typing in “commercialization.” Any keywords related to this will appear and will give me a better idea of other popular keywords I should be implementing on the website.
SpyFu www.spyfu.com
www.spyfu.com
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Keyword Tool https://keywordtool.io/ https://keywordtool.io/
If all of this seems a little daunting, it helps to take a quick peek into what your competitors are doing. Are they on top of their Search Engine Marketing game with a multi-tiered Pay Per Click (PPC) campaign, or are they just coasting with some consistent organic traffic? You start to wonder what their keyword list looks like. Look no further than SpyFu. Just type in your competitor’s website, and SpyFu will show you a wealth of information you can use strategically. While the free version of the software does have limited results (you can only see the top 5 keywords), there is enough information to give you a big-picture view – and if you want to dig deeper, there’s always the option…with a fee.
Alaska
an under-represented state QUICK FACTS
735,720
in total population
3 million lakes &
3,000 rivers
CURRENT ECONOMY
330,223 jobs
22,687 unemployed
25%
17 of the 20
$21 billion
$54 billion
of oil produced in the US
in total wages
Did You Know?
highest mountain peaks
GDP
Natural Resources are the top contributor to Alaska’s $54 billion Gross Domestic Product (GDP).
Alaska has larger migration flows (both in and out) compared to other U.S. states.
Alaska is enjoying steady population growth.
Other industries rounding out the top 5 (representing 67% of Alaska’s total economy) include:
At more than 12 percent, no state has had larger migration flows than Alaska over the past 25 years, which means the constant coming and going of residents is important in defining the size and characteristics of Alaska’s population.
From 2010 to 2015, Alaska grew at a rate of 3.97%, making it the 24th fastest growing state during that time period. The population of Alaska continues to grow at a healthy rate, considerably faster than the U.S. average of 0.9%.
• • • • •
Natural Resources ($14 billion) Government Spending ($10 billion) Transportation (mostly pipelines) ($7.9 billion) Real Estate ($5.3 billion) Healthcare and Hospitals ($3.9 billion)
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Why Are TRLs
IMPORTANT? BY PETE HUNT, MBA, PE
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Are you developing a new technology for potential use in NASA’s ARTEMIS program, intended to return astronauts to the lunar surface by 2024? Or maybe your technology has a DoD application within the new hypersonic missile systems being developed? If so, there’s a technology maturity assessment tool you need to become familiar with called Technology Readiness Levels (TRLs). TRLs are used by both mission and civilian agencies to measure the readiness of a new technology or component to be added to a system. US Government agencies and even the European Union’s research framework program, Horizon2020, use TRLs to evaluate technology maturity levels and assess risk. At first glance, the study of TRLs appears to be a
System test, launch, and operations
System/subsystem development
Technology development
Actual system “flight proven” through successful mission operations
TRL 8
Actual system completed and “flight qualified” through test and demonstration (ground or flight)
TRL 7
System prototype demonstration in a target/space environment
— —
TRL 6
—
Basic technology research
System/subsystem model or prototype demonstration in a relevant environment (ground or flight)
TRL 5
Component and/or breadboard validation in a relevant environment
TRL 4
Component and/or breadboard validation in a laboratory environment
TRL 3
Analytical and experimental critical function and/or characteristic proof-of-concept
— —
Research to prove feasibility
TRL DEFINITION: Technology Readiness Levels (TRLs) provide a systematic measurement system to assess the maturity of a technology. They provide a consistent method for comparison of maturity between different types of technologies in the context of a specific system, application, and operational environment.
TRL 9
—
Technology demonstrations
very dry topic. However, for those that take the time to learn about TRLs and understand how to apply them, they soon realize they are a critical tool used to develop technology roadmaps and risk mitigation strategies. This article will attempt to demystify TRLs and provide insight into how you will benefit from understanding them.
—
TRL 2
Technology concept and/or application formulated
—
TRL 1
Basic principles observed and reported
FIGURE G.4-1 Technology Readiness Levels
Source: NASA Systems Engineering Handbook, Appendix G: Technology Assessment/Insertion1
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After the Apollo program ended in 1972, NASA began to see large schedule delays and cost overruns in their programs. In the 1980’s, Werner Gruhl, Chief, Cost and Economic Analysis Branch, NASA Headquarters, reviewed actual and target costs on several programs. He found that the use of immature technologies and the lack of clear requirements, led to excessive delays in schedule and cost overruns. To help address these problems and identify areas of risk, NASA implemented the use of TRLs. Many of you are familiar with the thermometer scale published in the NASA Systems Engineering Handbook, Appendix G: Technology Assessment/Insertion shown below. This “thermometer” provides the basic TRL definitions to help determine the maturity of a technology as it relates to an end operational system using a scale from 1 to 9. TRL MATURITY So why are TRLs considered important? The Government Accountability Office (GAO) has conducted several studies on TRLs. One such study was released in July 1999, “Better Management of Technol-
ogy Development Can Improve Weapon System Outcomes.” This report looked at 23 technologies; 4 commercial and 19 DoD. The TRLs ranged from 2 to 9 at the time when they were included in product design. The analysis overwhelmingly found that programs inserting mature technologies had minimal cost overruns and smaller schedule slippage. Programs starting with immature technologies saw significant increases in costs and schedule delays. For example, the Comanche Helicopter and the BAT (Brilliant Anti-Armor Submunition) Programs had technologies ranging from TRL 2 to 5. They saw cost growth of 101% and 88% and schedule slippage of 120% and 62%, respectively.2
Use of immature technologies in a system results in cost overruns and schedule slippage To minimize product launch risk, the GAO report recommended that DoD adopt a disciplined and knowledge-based method for assessing technology maturity, such as TRLs. This led to the requirement for all major US government acquisition programs to demonstrate that Critical Technology Elements (CTEs) must achieve TRL 6 at program initiation. A technology element is "critical" if the acquired systems depend on this technology element. If a technology element or its application is new or novel, it is considered critical if it is necessary to achieve the successful development of a system, its acquisition or its operational utility. CTEs can be hardware, software, or manufacturing processes or life cycle related at the subsystem or component level. A March 2007 GAO report examined 62 DoD acquisition programs and found that only 16 began with mature technologies (TRL 7 or greater). These saw an average of 2.6% cost growth and 1-month schedule slippage. In contrast, those
that started with immature technologies at TRL 6 or lower saw an average of 32% cost growth and 20-month schedule slippage.3 ADVANTAGES of TRLs Many US and international agencies have adopted some version of the TRL scale to help assess the maturity of a technology as it applies to the end use. Starting with NASA and expanding to the DoD, DOE, NOAA (which uses Readiness Levels or RLs)4, today TRLs are also used internationally by NATO, the European Space Agency (ESA)5, France’s National Center for Space Studies (CNES)6, Japan, the oil and gas industry, and many other organizations. Agencies use TRLs to help them understand the maturity between different technologies in the context of a specific system or operational environment. TRLs provide information on risk – with lower TRLs presenting higher risks relative to cost overruns and schedule slippage. Risk levels decrease as you move towards TRL 9. This information is used to help agencies and program managers make decisions on funding and potential insertion of the technology in a program. For example, a technology cannot be included in a DoD program if it has not reached TRL 6. This is done to help limit risks related to schedule slippage and cost overruns.
1
https://www.nasa.gov/sites/default/files/atoms/files/nasa_systems_engineering_handbook_0.pdf “Better Management of Technology Development Can Improve Weapon System Outcomes,” GAO, July 1999, https://www.gao.gov/assets/160/156673.pdf 3 “Defense Acquisitions – Assessments of Selected Weapons Programs,” GAO, March 2007, https://www.gao.gov/new.items/d07406sp.pdf 4 NOAA, NAO 216-105B Handbook – Revised 21-Mar-2017, https://www.corporateservices.noaa.gov/ames/administrative_orders/chapter_216/Handbook_NAO216105B_03-21-17.pdf 5 http://sci.esa.int/sci-ft/50124-technology-readiness-level/ 6 https://gns.cnes.fr/en/technology-readiness-levels-e-3 2
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SBIR/STTR and TRLs So how does this relate to you – an SBIR/STTR Phase I awardee? During Phase I, referred to as “the concept development stage” your research will progress between TRLs 1 and 3 as you demonstrate the proof-of-concept. SBIR/STTR Phase II projects advance technologies into increasingly complex test environments which are the hallmarks of TRLs 4 - 6. Once you approach TRL 4 - testing in a laboratory environment - you can expect the costs and resources required to achieve the next TRL will increase significantly. To achieve TRL 5 and 6, you will be expected to conduct tests in increasingly complex and relevant environments. By TRL 7 the principal investigator must be ready to conduct demonstrations in an operational environment. As a small business, it is unlikely that you will have ready access to operational environments and will therefore need to work closely with an agency program office in order to test your prototype in an operational environment. For this reason, system integrators and relevant agency programs with greater access and deeper pockets become involved with SBIR/STTR technologies once TRL 6 is achieved. Beyond TRL 6, most of the funding required for T&E will be considered Phase III funding, which means nonSBIR dollars, such as outside investment from an agency, prime contractor, or other source. With the advent of successive Phase II awards, it is also possible that sequential Phase II awards may cover some of these expenses.
USING TRLs Understanding when opportunities for test and evaluation in relevant and operational environments are available and what the associated costs will be for participation are critical for planning purposes. Knowledge of the testing requirements to satisfy TRL 5 and 6, (testing in a relevant environment), and later to achieve TRL 7, (demonstration in an operational environment), will allow you to begin planning for these activities. Some items a small business should seek to understand related to achieving higher technology maturity includes: • What type of facilities do you need to gain access to? • How do you find out about T&E opportunities for your technology? • Who controls access to the facilities or the operational environment? If the technology will be used in a DoD program, they will have specific testing requirements and guidelines to follow and their systems will be controlled by the DoD agency or a large prime contractor. The company will need to develop relationships with these groups. • How much funding will be required and where will these funds potentially come from to advance the technology maturity? In many cases, Phase III dollars, from nonSBIR funding sources, will be required to move from a TRL 6 to TRL 9. These are some of the questions a company should consider early in the development process. Information on these items will help in planning for the development and eventual transition/ commercialization of the technology. Companies should use TRLs to help them determine where they currently are in the development process, what will be required to achieve the next TRL, and what testing requirements are required. When assessing risk for a project, it can broadly be broken down into four categories: technical, business (producibility), cost, and schedule risk. Technical risk is an estimate of the potential that the proposed technology will not meet the necessary performance requirements. Business risk is an estimate of the potential for the failure of
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the supplier of the proposed technology to either produce the product in a timely manner or in adequate quantities or to be able to provide support for the product throughout the operational lifetime. Cost risk is an estimate of the potential for the proposed effort to fail to meet target costs for development, acquisition, and maintenance. Schedule risk is an estimate of the potential for the effort proposed to not meet scheduled deadlines. Understanding the TRL requirements will help you develop mitigation strategies for these risks during the technology development process.
Assess four types of risk: • • • •
TECHNICAL RISK BUSINESS RISK COST RISK SCHEDULE RISK
To help you assess the TRL of your technology there are a number of tools available including TRL Calculators which are available online7, published guidelines by the DoD and other groups8, and if possible seeking a 3rd party review to validate your assessment. Be careful not to over-inflate TRLs as it could waste time and money for both you and the agency.
7 8
Request your free copy of Dawnbreaker's TRL HARDWARE/SOFTWARE poster here.
DAU, Acquisition Community Connection, Science and Technology Management, https://www.dau.mil/cop/stm/lists/tools/allitems.aspx Government Accountability Office Best Practices, Technology Readiness Assessment Guide, GAO-16-410G, August 2016, https://www.gao.gov/assets/680/679006.pdf
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| Market Snapshot |
Precision
Agriculture BY ELIZA GOUGH, MLS
A
griculture, in its most general sense, is the science and art of cultivating plants and livestock and is credited with shifting civilization from hunter gatherers to permanent settlements. Today, the agricultural landscape is increasingly complex as society looks for new, more efficient, and environmentally sound ways to address the water-food-energy nexus. The USDA reports that within agriculture, the greatest technology push has been in precision agriculture (also known as site-specific management or smart agriculture) where sensing, information technologies, and mechanical systems enable crop and livestock management.
Major factors contributing to the growth of the smart agriculture market include the increasing adoption of advanced technologies in various agricultural applications such as precision farming, smart green houses, livestock monitoring, and fish farm monitoring. Changing weather patterns due to increasing global warming have driven the adoption of advanced farming technologies to enhance farm productivity and crop yield. Farmers or growers across the globe are increasingly adopting advanced farming devices and equipment such as steering and guidance, sensors, yield monitors, display devices, and farm management software. MarketsandMarkets reports that the smart agriculture market is estimated to be worth $7.53 billion in 2018 and is projected to reach $13.50 billion by 2023, at a compound annual growth rate CAGR of 12.39% between 2018 and 2023. 18
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Within the smart agriculture market, yield monitoring is the most widely used application; as a result, this segment held the largest market share in 2017. Yield monitors can be a combination of various components such as mass flow sensors, moisture sensors, ground speed sensors, GPS receivers, and a task computer located nearby, which controls the integration and interaction of these components. In terms of these enabling technologies, soil moisture sensors are defined as sensors that are used in determining moisture/water content in soil, which helps farmers with efficient farm practices. According to BCC Research, the global soil moisture sensor technologies market should reach $274.4 million by 2022 from $131.3 million in 2017 at a CAGR of 15.9% from 2017 to 2022. It should be noted that soil moisture sensors are used in other verticals such as construction, envi-
FIN DING M ARKET INFO RM AT ION
"...smart agriculture requires high initial investment, efficient farming tools, and skilled and knowledgeable farmers or growers." ronmental science, climate research, and more. While there are many factors driving growth in this space, the high cost of technologies, and limited exposure among farmers who would utilize them is seen as restraining the market. Furthermore, smart agriculture requires high initial investment, efficient farming tools, and skilled and knowledgeable farmers or growers. The USDA notes that despite the push toward integrating smart or precision techniques, acceptance by the agricultural community has been hesitant and weak, although most producers admit they will have to adopt these technologies eventually.
Key players in the smart agriculture market include Deere & Company (US), (Trimble) (US), AGCO (US), AgJunction (US), Raven Industries (US), AG Leader Technology (US), DeLaval (Sweden), GEA Group (Germany), Precision Planting (US), SST Development Group (US), Teejet Technologies (US), Topcon Positioning Systems (US), DICKEY-john Corporation (US), CropMetrics (US), Agribotix (US), The Climate Corporation (US), ec2ce (Spain), Descartes Labs (US), Gamaya (Switzerland), Granular (US), Prospera Technologies (Israel), Autonomous Tractor Corporation (US), Decisive Farming (Canada), Hexagon Agriculture (Brazil), and Autocopter Corp (US).
MINI-MAG
19