Celadyne’s Guide to Government Contracts: Navigating DOE and DOD as a Deep Tech Startup
Patience isn’t typically associated with startup success, but for deep tech companies pursuing government contracts, it’s essential. In a recent episode of Category Visionaries, Gary Ong shared how Celadyne Technologies learned to navigate the complex world of government funding, revealing crucial differences between Department of Energy (DOE) and Department of Defense (DOD) contracts.
The Learning Curve
“Patience,” Gary emphasizes when asked about securing government contracts. “I think it took us a couple of tries three or four times before we ever got our first government contract.” This persistence proved crucial for Celadyne’s early growth, but success required understanding the distinct approaches needed for different agencies.
Understanding DOE’s Perspective
The Department of Energy has a specific focus that shapes their funding decisions. “In the case of Department of Energy, they’re looking for pretty high risk research, but has a very clear commercial timeline as well as impact,” Gary explains.
But there’s a crucial catch that many startups miss: “At the end of the day, the DOE is interested in funding research, but they can’t really buy your product and help you commercialize it, right? They can give you money to commercialize it, but you need an end user and you need a customer.”
The DOE Strategy
Celadyne’s successful approach to DOE funding involved:
- Having clear commercial applications
- Securing end-user support
- Demonstrating market impact
“From all of our DOE contracts, we usually have an end user in mind, who is willing to take the material off our hands after the development already,” Gary notes. “Once you get the letters of support and you actually get the end user interested, I found that it’s much easier to get DOE grants.”
The DOD Difference
The Department of Defense presents a different opportunity altogether. “For the DOD, it’s a little bit different, because the DoD, Department of Defense, they’re an actual end user,” Gary explains. This fundamental difference requires a completely different approach to customer discovery and solution development.
Breaking DOD Stereotypes
Many founders avoid DOD contracts, viewing the department as overly bureaucratic. Gary challenges this perception: “A lot of people think of DOD as like really risk averse, slow, kind of behemoth of a thing. And I’ve heard some founders say they don’t want to work with DOD, et cetera. We have actually found DOD to be great customers.”
Contrary to common belief, Gary found the DOD to be highly innovative: “We found them to be actually really risk tolerant and have specifications that I would consider very, very ambitious because the things they need to really fulfill missions are definitely on the aggressive side.”
The Power of Empathy
Success with DOD contracts comes down to understanding their real-world needs. Gary shares a pivotal moment when a soldier demonstrated the weight of their current battery equipment: “That vest, I kid you not, felt like it was like a hundred pounds. It was insane, right? And he’s like, oh, and that’s just the batteries, right? You don’t have the weapons and everything yet.”
This firsthand experience transformed Gary’s understanding of the DOD’s needs: “It was a big moment of revelation. After that, I was kind of like, all right, time to basically build something that’s, like, really good for them. Because I was like, this is just insane. I consider this kind of inhumane, right? You shouldn’t need to lug that much batteries around on a mission.”
For deep tech founders considering government contracts, Celadyne’s experience highlights the importance of understanding each agency’s distinct needs and perspectives. While the DOE seeks to fund innovative research with clear commercial applications, the DOD can be both customer and development partner, provided you truly understand their operational needs.