In the ongoing race to equip government with the best technologies available, “commercial-first” has become the new catchphrase. From new administration priorities to revamped acquisition pathways, the message is clear: the federal government wants to buy commercial technology in the door faster and at scale.
But while policy has evolved, the experience for startups trying to serve federal missions hasn’t kept pace. At Dcode, we’ve spent years working with emerging tech companies through our Federal Accelerator, helping them navigate the complex and often frustrating process of entering and scaling in the government market. In that time, we’ve seen the federal government make important strides – some of the most intentional coming in the last few months. The Department of Defense has stood up faster software acquisition pathways. OTA prototyping has become more accepted. And White House directives have emphasized cost-effectiveness, innovation, and scale. All this signals a serious attempt to break from legacy acquisition models that were never built with startups in mind.
But the federal market remains expensive, time-intensive, and high-risk. Most startups don’t walk away because the opportunity isn’t valuable; they walk away because they simply can’t afford to play the long game.
When companies come to us through the Federal Accelerator, we hear from many that the “valley of death” – the gap between R&D or pilots and scalable, repeatable contracts – is more of a cliff. Even the most promising tech can fall into it if there’s no clear path to transition from prototype to production, or if funding and contracting mechanisms aren’t aligned to keep up with the startup’s momentum.
Startups don’t need a shortcut, they need a map. Too often, they’re left trying to decipher org charts, contract clauses, and compliance requirements with little support. And while the pace of procurement has picked up in some areas, startups themselves are often moving faster. Perhaps most importantly, startups frequently encounter a trust barrier. Lacking decades of past performance or entrenched Beltway reputations, they’re asked to prove themselves again and again – even after successful demos or pilot contracts. There’s a persistent bias in the system toward buying from those who’ve sold before.
If the government is serious about harnessing innovation at scale, it can’t treat startups as outliers. It has to build acquisition models that assume their involvement from the outset – not as a workaround, but as a core feature of how tech gets bought and implemented.
That means designing procurement strategies that don’t just end in a pilot, but begin with a plan to scale. Codifying the path from prototype to program of record is essential—and not just in policy documents, but in how programs are funded, evaluated, and managed. Legacy vendors often have business models that allow them to pursue federal opportunities indefinitely, even without near-term outcomes. Startups don’t. They are accountable to investors, need clear return paths, and can’t afford to be paid for activity that leads nowhere.
To change that, program managers and contracting officers must be trained and empowered to buy differently. They need tools to assess commercial products on commercial terms, and the flexibility to contract rapidly. Funding streams must be structured to support not just experiments, but adoption.
Above all, it means recognizing that relationships are still everything. Startups need introductions, yes – but more than that, they need support navigating how decisions are made, how missions are prioritized, and how risk is managed. That’s not something you solve with a new portal or pitch day. That’s a cultural shift.
