About the American Security Challenge

"Critical to our national security mission is the intersection of the entrepreneur, the investment community and the ultimate user….and at the end of the day it is the American Security Challenge. You are helping America meet it (this mission) with this Challenge and I thank you.

Governor Tom Ridge
Former Department of Homeland Security Secretary

 

The American Security Challenge (ASC) is a program that pro-actively scouts innovation communities for technologies with capabilities matching the requirements of national security customers/users including the federal Defense and Intelligence Community, private sector Critical Infrastructure Owners and Fortune 500 companies.

The objective of the American Security Challenge (ASC) is to bring innovative national security technology to the attention of potential customers, investors, strategic partners and serial entrepreneurs so that the probability of new technologies getting to market is increased while the time/cost it takes to get to market is decreased. 

Methodology/Process

ASC’s endgame is to identify innovative technologies with capabilities that best address the requirement of ASC customers in the defense and intelligence communities as well as the Fortune 500.  A technology “shopping list” (see Technology Security Categories list) is generated that reflects the real-time needs and requirements of ASC clients. 

ASC (and ASC Licensees) strategically distribute this shopping list to its national and international network including venture capitalists, angel investors, university and federal labs, academia, entrepreneurs, service providers (mentors, attorneys, accountants, consultants, recruiters, i-bankers, etc) corporations, technology and scientific associations, incubators, technology transfer offices and other technology hotspots where Client’s requirements may not be known.

Innovative tech companies are referred to the ASC site where they submit their technology through ASC’s proprietary tech scouting platform. Non-confidential information is collected that provides an efficient profile of the company, its technology and customer applications.

Over 100 ASC Reviewers use a proprietary scoring methodology that generates an effective crowdsourced evaluation.  Reviewer teams are a cross section of expertise providing business, technical, military, civilian, industry, customer, financial and entrepreneur perspectives for a well-rounded review rather a typical groupthink scoring that occurs from just one or two viewpoints.  Scoring examines the technology’s uniqueness, value to the customer, scalability, competitive insulation as well as company stability and management. Reviewer scores and comments are provided back to the Challengers providing meaningful feedback from experts representing multiple expert perspectives on the technology and market.

The ASC model is similar to a venture capital screening model that evaluates 100 companies to identify the 25% or so that separates the wheat from the chaff. The higher scoring companies are invited to submit more detailed (still non-proprietary) for more detailed evaluation by a different Reviewer team. After the 2nd round of reviews, the top scoring companies are referred to ASC clients with technologies that match different clients’ requirements. For instance, Client ABC would be matched with the top Challengers in their interest areas which include data mining, forensics, fuel cells and signal intelligence. Client XYZ would be matched with the top Challengers in XYZ’s interest areas of malware detection, data mining, information assurance, high speed processing and reverse engineering.

Search and screening results are kept in a proprietary database, which is constantly updated as innovators launch new products, land blue chip customers, obtain outside capital or sell their business.  This frequently refreshed database represents unique and innovative solutions of which most large public or private buyers of security technology are not aware.

ASC works in conjunction with the non-profit National Security Initiative, a marketing, research and event management firm in the defense sector as well as the National Security Operations Corporation who provides the tech scouting and vetting expertise.

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How does it benefit the Innovators and Customers

ASC is the intersection of supply (innovative emerging technology companies), and demand (the eventual customer/user) with support from the enablers who provide value to the emerging companies (service providers, investors, advisors, channel partners, etc).

Tech Seller (Innovator)

Collect market feedback
Determine actual interest with market feedback

Qualified opportunities
Customers have current need with approved budget and contract vehicle

Increase revenue
Expand sales pipeline and participate in sales opportunities with new prospects and shortened sales cycle

Investor exposure
Qualified investors are seeking companies with customer traction. Pilots generate revenue as well as increase investor interest

Increase network
The ASC community is thought leaders in the security market including serial entrepreneurs, early stage investors, technical experts, sales channels, distribution partners, licensing candidates and merger or acquisition options

Tech Buyer (Customer)

Solve problems faster
ASC can broadcast requirements to a large community quickly

Extend reach
Requirements gain exposure in technology communities not previously reached

Choices screened
ASC screens through and provides feedback and short list of most viable qualified options

More confident decisions
Comfort in knowledge that extensive scouting produced broad base of alternatives which were screened against requirements

Broader alternatives
Buyers enjoy a greater number of choices as well as alternatives from different sectors (ie a gaming tech applied to simulations/training or a social networking algorithm applied to intelligent pattern recognition, etc)

The innovative companies (supply) represent not just startups but growing and more mature companies that benefit from increased exposure to new prospective customers.  CEO’s of growing companies cannot have too many qualified sales leads.  Even innovators not selling to the “security or government” markets benefit from ASC’s program allowing them to more efficiently and effectively test these new markets, which might be very receptive to adopt their technology currently used in non-security or non-government applications. 

ASC increases the innovative companies’ exposure and resulting sales/relationship opportunities (sales contracts, teaming, licensing, joint venture, sales channel or distribution, merger or acquisition) with the customers and enablers (advisors, directorships, investors, legal or accounting assistance, staffing support, etc) in the ASC community.

The customer/users (demand) represent federal Defense and Intelligence Community, private sector Critical Infrastructure Owners and Fortune 500 companies.  These organizations are constantly upgrading and modifying their enterprise to prevent or respond to a litany of evolving threats.  Some bolster their technological arsenal with the support of large systems integrators and/or others have their own network of technology sources.  In either case, ASC extends their reach into pockets of technology they would not otherwise access. 

Of course, ASC’s program generates technology/vendor choices the client already knew about, but ASC also generates choices they did not know.  This comprehensive coverage provides the peace of mind when clients consider a new technology that it has made its decision from a pool of the most viable solution providers.

Innovative technologies that pass through the ASC screening are frequently piloted (stress-tested) by the customers/end users to determine if a technology can address priority security challenges faced online, on the battlefield, at the border, in the airport or at the shopping mall.  These technical/application challenges include but are not limited to network security, IED detection/mitigation, reduced vehicle fuel consumption, identity theft, asset tracking, perimeter surveillance, data analysis, portable/renewable power, information assurance, passenger/cargo screening, data fusion, email/wireless communications, etc.

By pooling the purchasing power of a number of client customers, ASC can scout the market, identify, screen and manage the process for a fraction of one full time employee.

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Background

ASC provides tech scouting services on an annual contract basis for organizations seeking innovative technologies to deploy through contract or sub-contract, resell, license, invest, merge or acquire.

ASC and its Licensing Partners (see Licensing) identify and review innovative technologies from across the country and the world.

This current activity is greatly advanced from our part-time origins as a once a year technology competition.

In 2007, Mr. London was approached by the Department of Homeland Security to organize a technology competition as he had done in the past. This competition, similar in process to the popular business plan competitions would be held at the end of the annual Homeland Security S&T Stakeholders Conference.  After learning more about the requirements, Mr. London formed the non-profit National Security Initiative to be the events operator.  Although Mr. London had substantial experience with technology scouting, early stage capital, security technology and requirements screening, he had little event management or sponsorship sales experience so he turned to Kristina Tanasichuk to co-found the 2008 event.

Knowing that entrepreneurs are always more attracted to opportunities that have financial incentives, Mr. London obtained a commitment from an early stage investor to provide a $100K investment in a Challenger they select.  ASC received 75 submissions that first year and six finalists gave impressive demonstrations to a standing room only crowd as the Homeland Security S&T Stakeholders Conference concluded.  Original Secretary of the Department of Homeland Security, the Honorable Tom Ridge was nominated and received the first Patriot Award establishing a very high bar as did the keynote speaker, DHS S&T Undersecretary Jay Cohen for future Patriot Award winners and speakers.

The following year, DHS S&T again scheduled the American Security Challenge as the closing event for its 2009 Annual Stakeholders Conference.  Leveraging the success of the first year, Mr. London sought greater financial incentives for awards and obtained commitments from Chart Venture Partners to provide a Series A investment (normally $250K to $2.5M) to a Challenger they select as well as commitments from Alion Science and Technology Corporation to team with Challengers meeting their criteria.  Those incentives helped attract 200 companies to the 2009 Challenge netting over $10M in teaming agreements, sub-contracts and investor term sheets.  Delighting another packed house with an encore appearance, Governor Ridge keynoted the event and presented the 2009 Patriot Award to his nomination Admiral James Loy.

That success motivated Mr. London in Q4 2009 to commit full time to the Challenge program.  Unable to commit more time to the Challenge due to her full time work at the Homeland Security & Defense Business Council and her enthusiastic part-time work founding and operating Women in Homeland Security, Ms. Tanasichuk resigned as the American Security Challenge Executive Director but still advocates for it through her public/private network.

The 2010 program increased its stakeholder community from just DHS S&T to include the defense and intelligence community at large.  Leveraging the increased importance and popularity in high value prizes, ASC upped the ante in 2010 with Pilot Award Partners who agreed to test drive Challenge winners they select in a pilot program within their own enterprise or a clients.  If the pilots proved successful, discussed would ensue regarding a larger follow on transaction (deployment, licensing, etc).   In addition, Investor Award Partners similarly agreed to advance Challenge winners they selected to the top of their due diligence pipeline for possible investment.  Fourteen winners were selected who presented to an invitation only audience.  The 2010 program maintained the legacy of blue chip speakers, Patriot Award winners and content.

2011 saw the American Security Challenge morph from a once a year competition to a full time tech scouting service. Go to tech scouting services for more details.

See each link for more information about the 2008, 2009 and 2010 programs.

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Methodology

Over 100 ASC Reviewers use a proprietary scoring methodology that generates an effective crowdsourced evaluation.  Reviewer teams are a cross section of expertise that provides business, technical, military, civilian, industry, customer, financial and entrepreneur perspectives for a well-rounded review rather a typical groupthink scoring that occurs from just one or two viewpoints.  Scoring examines the technology’s uniqueness, mission criticality, value to the customer, scalability, competitive insulation as well as company stability and management.

Search and screening results are kept in a proprietary database, which is constantly updated as innovators launch new products, land blue chip customers, obtain outside capital or sell their business.  This frequently refreshed database represents unique and innovative solutions of which most large public or private buyers of security technology are not aware.

ASC works in conjunction with the non-profit National Security Initiative, a marketing, research and event management firm in the defense sector as well as the National Security Operations Corporation who provides the tech scouting and vetting expertise.

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What Others Say About ASC

"INSA is delighted to Partner with the American Security Challenge which will provide substantial and unique new value to our current stakeholders, as well as enhance our appeal to a broader community.

ASC's model is proven to accelerate the deployment of important technology into the marketplace and provide substantial value to both the innovative community as well as the end customers…both of which are major stakeholders in our membership."

Frances Fragos Townsend, INSA Chairwoman
Former Deputy National Security Advisor to the President
Former Chair of the Homeland Security Council to President

“This is useful for ArcSight to explore all these new technologies.  We picked up a large number of pilots…and will have our product facing folks get involved to talk about the value to our customers.  We are very excited about it; it is a valuable experience for the whole company.”

ArcSight- Award Partner

“The process was streamlined and we are thrilled with the qualified sales and investor prospects that resulted from the Challenge.  We have a great product and this (ASC) exponentially increased our exposure to valuable transaction candidates.”

AginCourt- Challenger

"We were absolutely amazed; the benefits have been fantastic. We ended up actively pursuing relationships with seven companies. That's a phenomenal win for us…and really pays tribute to the veracity of the American Security Challenge."

Raytheon- ASC Award Partner

"We closed today officially with a $1.9m investment into a company you referred us just 10 weeks ago!!  Thanks for all your help.  We would never have learned about that company and a few others that we are tracking now without the hard work from you and your team at American Security Challenge.  "

Blue Heron Capital - Award Partner

"I've been involved in evaluating technologies for decades. The ASC platform has mastered the art of efficiently collecting the right amount and type of company data, in combination with a smart but simple standardized scoring system that is ultimately captured in an easy to use and sort database as well, perhaps better than any evaluation management system I've been a party to.”

Bob Flores, former CTO of CIA and now
President of Applicology, an advisory firm in the National Security sector.

“The American Security Challenge addresses a spectrum of security challenges.  It’s rare that we get to cross pollinate with DOD or other defense companies and share ideas as we don’t normally talk with each other.”

TD Ameritrade- Founding Sponsor

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Successful Case Studies

Below are examples of general searches and hard target searches for a previous tech scouting efforts.

Case Study #1- Broad Search for Various Cyber Technologies
The Client provided ASC a "shopping list" of technology applications, which ASC folded into its master shopping list. ASC searched for these applications (data mining, network security, data fusion, etc) among others for its 2010 American Security Challenge, which generated 165 applicant submissions. ASC screened down the applicants and provided short lists to the Client in the various applications sought. From this short list, the Client selected six to pilot as well as two on standby in the event any of the first six were not able to proceed with a pilot. As of this writing, those pilots are underway and to be completed in 2011. Applicants were selected for potential acquisition, licensing, resale to Client customers, insertion into Client solution suites and/or deployment into Client's own enterprise.

Case Study #2- Broad Search for Companies to sub-contract with to DOD client
The Client provided ASC a "shopping list" of technology applications, which ASC folded into its master shopping list. ASC searched for these applications (renewable energy, fuel cells, unmanned platforms, signals intelligence, network security, biometric data collection, etc) among others for its 2010 American Security Challenge, which generated 165 applicant submissions. ASC provided the higher scoring companies in the areas sought by Client producing seven companies the Client is considering for different division relationships, as well as partnering with a Challenger for a specific DOD opportunity.

Case Study #3- Hard Target Search (for specific technology)
The Client sought a data mining solution to a specific and pressing problem. Immediately after engagement, Tech Scout and client produced a sanitized or public scenario that described functionality desired by Client without disclosure of the specific application. The scenario was broadly described as "seeking a solution that would allow the customer to identify patterns and trends in substantial volumes of data. For example, the ability to identify unique entities that were purchasing oil stocks on the first and third Thursday of every month with an "m" in it.

Scout broadcast this need through its network and within 45 days Tech Scout identified and had begun screening 135 vendors with possible solutions. Within the first 60 days, the top 20 possible solution were identified. With assistance from the Client's system integrator matching solutions against specific requirements, scalability, functionality, performance, form factor, etc. the top four candidates within the first 90 days. The Client completed its own due diligence on the top four and selected one vendor to "test-drive" in a pilot (small-scale controlled simulation of a live environment) within the first 120 days. Client was satisfied with the testing that occurred over the next two months and roughly 180 days after requirements were selected, the Client entered into discussions for larger scale deployment. The resulting contract was the first contract between that vendor and the Client, which recently entered into a subsequent eight-figure multi-year contract.

Case Study #4 Hard Target Search (for specific technology)
The Client was considering integrating a graph database solution into their system to address a specific and pressing problem. The Client was prepared to take one year for the conversation and budgeted more than a million dollars for the project.

The sanitized problem set described very large multiple medical databases of patients, hospitals and diseases with millions of records with frequent category heading modifications and additions causing schema changes degrading performance.

The Client's requirements were broadcasted and within 45 days 60 possible solutions were identified. Graph databases were a new concept and innovation was very bleeding edge with little traction. Two weeks of screening left 12 possible solutions and further screening with Client consultant identified the top four solutions matching against specific requirements, scalability, functionality, performance, form factor, etc. NOTE- these four were very different and included a federal national lab, a startup with 30 people, a European 10 year old company and a huge multi-billion dollar US based software solution vendor.

Within the first 120 days, the Client completed its own evaluation of the top four and determined that none of the solutions would satisfactorily address their problems. Although not delivering a viable solution, the Client was very pleased with the scouting efforts as it determined that the current graph database solutions did NOT provide them the performance they sought. The scouting effort saved a million dollar expense, a year of certain conversion challenges and summarily not making the wrong decision.

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