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1Clear out junk files and repair common Windows errors2Scan for outdated or missing drivers - takes under a minute3Repair Windows errors before they cause bigger problemsStartups can add new technologies and suppliers to the U.S. defense industrial base, but winning a contract is only one step toward military adoption. The Department of Defense (DoD) is pursuing a broader supplier base and more flexible acquisition, while programs such as DIU and SBIR/STTR offer different ways to identify and develop potential solutions. Testing, integration, a government customer and follow-on funding still matter.
Why startups matter to the defense industrial base
DoD defines the defense industrial base as private-sector companies of all sizes that build military hardware and weapons systems. Startups can contribute commercial technologies, new approaches and additional sources of supply alongside established contractors. Their participation is one part of a larger effort to make the industrial base more diverse and resilient—not evidence that a particular company will win work or deliver a fielded capability.
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The department’s National Defense Industrial Strategy, released January 12, 2024, sets four priorities:
- Resilient supply chains
- Workforce readiness
- Flexible acquisition
- Economic deterrence
The strategy also calls for commercial off-the-shelf acquisition where applicable and a more diverse supplier base. DoD’s October 2024 implementation plan describes six initiatives for carrying the strategy forward, connecting the high-level priorities to departmental action.
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Supplier diversity has a practical dimension: dependence on a small number of sources can create risk. In a May 1, 2024 article, DoD cited a report released in early 2022 saying that 90% of missiles came from three sources. That figure applies specifically to missiles; it should not be read as a measure of concentration across the entire defense industrial base. DoD’s account of the statistic makes the case for competition and resilience, but does not establish what share of defense procurement startups receive.
How a startup can engage with DoD
There is no single startup-to-contract route. A company may engage around a specific military need, seek a research or prototype opportunity, or work with an organization that scouts commercial technologies. These routes differ in how a problem is identified, what stage of development is funded and who must support adoption.
| Route or stage | What it can help with | What it does not establish |
|---|---|---|
| DIU or other government engagement | Connecting commercial technology with a potential defense need | A purchase, service-wide adoption or successful integration |
| SBIR/STTR | Small-business research and development, with a potential path toward a viable product or service | Guaranteed Phase III funding or a follow-on award |
| Prototype development | Developing and demonstrating a proposed solution | That the prototype is ready for operational use or will be procured |
| Testing, integration and procurement | Addressing the work required to fit a capability to a government user and acquire it | Commercial success beyond the government customer |
DoD said in July 2024 it was exploring ways to lower barriers to entry for small and nontraditional businesses. In July 2025, its acquisition-reform account again described an aim to engage a broader range of companies, including startups and nontraditional vendors, to fuel competition and innovation. These are statements of intent, not published evidence of award rates or startup outcomes.
What DIU contributes—and what transition requires
The Defense Innovation Unit (DIU) works with commercial technology, but finding a promising product is not the same as getting it into military use. DoD’s July 2024 account identifies military services and other departmental organizations as critical partners in transition and integration. A startup therefore needs more than an interested innovation office: a government user and partners able to evaluate, integrate and support the technology are central to adoption.
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DoD Under Secretary of Defense for Acquisition and Sustainment Michael P. Duffey said in July 2025, “What once took a decade must now be delivered in months or weeks to stay ahead of the threat.” This captures the department’s stated urgency; it is not a measured promise that a startup’s acquisition will take months or weeks. DoD’s acquisition-reform account describes the goal of delivering innovative capability at speed and scale.
How SBIR/STTR Phase III can support a transition
SBIR/STTR can support research and development by small businesses. DoD’s policy description defines Phase III as work funded by non-SBIR government sources, private sources or both, to develop a prototype into a viable product or a non-R&D service. In other words, Phase III describes a possible bridge beyond the SBIR award itself; it is not a promise of additional money or procurement.
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For a startup, the distinction between development funding and adoption is important. A prototype may need further development, testing and integration before it is useful to a military organization. Phase III can provide a funding pathway for that work, but the company still needs a credible customer need and funding source. The policy description is in DoD’s SBIR/STTR policy document.
What the evidence does—and does not—show
The official sources describe strategy, programs and stated objectives. They do not establish a startup’s typical time to contract, the proportion of startup prototypes that become awards, startup share of DoD procurement, or a general success rate for transition into service. A company should treat government engagement as an opportunity to compete and validate a solution, not as a forecast of revenue or deployment.
The central business question is whether a startup can connect its technology to a specific defense need and sustain the work required beyond an initial demonstration. A dual-use customer base or private funding may support development while a defense opportunity matures, but the sources cited here do not compare commercial strategies or quantify which approach is more successful.
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