How shared equipment dramatically lowers barriers to deep tech R&D

In the same way that AWS dramatically lowered the bar to start a software company, you’re seeing the same thing of multiple labs-as-a-service companies that is making it easier to spin up a deep tech company. That’s this trend that’s starting to happen to lower the bar and barrier to entry to start one of these companies.

 

There are many companies that are building the AWS for fermentation, production, lab automation, on and on…

 

If you raise $2 million, you can’t afford to go spend $500K on some expensive equipment but if 20 startups are sharing the same equipment then some company can amortize that. Easier access to shared equipment makes a big difference in research and development.

That was Greg Rosen and John Melas Kyriazi on the Venture Stories podcast, “Deeptech, Biotech, and New Computing Platforms.” Of course, AWS stands for Amazon Web Services cloud platform.

Deep tech is when companies do significant R&D work to solve new problems and take on significant risk. It is different from many consumer facing startups that are enabled by tech, like existing APIs, but are developing something really new.

The shared services / enterprise tools aspect lowers barriers to entry. And this is something that the DOD does not excel at. The Air Force has taken the lead with building enterprise tools for software, but as Dr. William Roper describes, “Digital transformation… is harder to fit into the budget process.” Usually, the DOD budgets for end-item programs that are compartmentalized, requiring the contractor to develop the system full stack rather than leveraging enterprise tools.

The DOD pays major primes for expensive tooling and other enablers. The primes then have a monopoly on the capabilities. More of this should reside within government (e.g., wind tunnels) or within companies whose business model is to rent capabilities out to smaller firms to lower barriers (e.g., lab equipment, expensive tooling). This means that DOD budgets are not always based on military outputs, but a “program” can be an enabling intermediary capability.