Scott Dewis spent a decade in the world of Hollywood, creating visual effects for TV shows such as Alias, Lost, Fringe, FlashForward, CSI and Pushing Daisies, and developing interactive video games for clients like Disney and Warner Brothers. As he discovered when his Victoria, British Columbia company, RaceRocks Digital, was approached in 2010 to provide higher fidelity animations for a virtual maintenance trainer, swimming with Hollywood sharks only partially prepared him for the peculiarities of the Canadian defence industry.
Today, the rebranded RaceRocks 3D focuses on providing simulation and virtual training support as well as interactive marketing and visualization to defence companies. As the company transitioned to defence, Dewis, the CEO and cofounder, learned a few key survival skills that he recently shared with other small businesses at WESTDEF 2013 in Calgary.
It’s been a long three years for RaceRocks: we’ve made plenty of mistakes, and learned almost as many lessons. We now boast five primes as clients, have our Facility Clearance, and doubled last year’s revenues in one quarter this year. While we’re not quite ready to declare ourselves a success story, we admit we’ve become a blip on the radar.
With the federal government’s Industrial and Regional Benefits (IRB) Investment Framework and an emphasis on Key Industrial Capabilities, the same opportunities will present themselves to other small enterprises. Primes are looking for partnerships to fulfill their IRB obligations and will partner with SMEs to help win contracts. Accordingly, I thought I would share four practical lessons learned for breaking into the defence industry.
First, get help! Defence is a small, tightly knit, risk adverse community, and a lot of the deals are done in Ottawa. For a Western company, no matter how great your offering, you will need at least one champion in Ottawa; someone you trust who can advise you, introduce you to the defence family, and teach you the acronym-laden language. People outside government don’t realize it, but in Canada we have three official languages: English, French, and defence. If your industry calls it a motor but defence calls it a small rotating actuator, you now call it a SRA.
Second, wear a suit and tie! In Victoria, only lawyers and used-car salesmen wear suits; in Ottawa it’s part of the culture. A suit may not win a contract, but it will ensure you and your team look like you belong.
Third, defence is risk-adverse. If you give anyone reason to believe your company may not be around in 10 years, no prime will be interested. The defence industry commonly works on programs that span 15 or more years and thus require stability. Some tips:
• Consistently show up where your potential partners are going to be, (preferably not always wearing the same suit). Your company needs to be represented at CANSEC, DEFSEC, WESTDEF, everywhere the primes are.
• Your track record matters: when asked how long RaceRocks 3D had been in business, I happily, and obliviously, replied one year; the proper and complete answer should have been 11 years in 3D, and one year providing defence-specific services.
• Recognize the importance of security. Understanding security requirements is critical. Even if you are not handling controlled goods, securing your clearance shows a potential client that you have been vetted, and is an important step in any due diligence process.
• Relationships matter; you will not become a trusted member simply through phone calls. Be ready, and be happy to jump on a plane at a moment’s notice to meet with potential and existing clients. People deal with you, they want to look you in the eye, and know who you really are.
Once you are accepted into the industry, and assuming you deliver, you should plan on holding on to long-term relationships. Having recently been through the security certification process, I can attest to the fact that the hurdles are significant, and only worth it to the people and companies that value long-term commitments.
Finally, be prepared. Defence sales cycles move slowly. Build a strong company first, a defense company second. We were warned it would take at least three years to get rolling in defence. We had a few successes early on and thought, no way, we’ll be rolling in one! We are now in our third year and are hoping to get rolling very soon.
Build company revenues independent of defence, and ride out the wait. Also, avoid depending on government subsidies or funding to build the company; the company will be much stronger for it, and more viable in the long run.
Sometimes it will seem that larger companies are standing by to watch you fail, but usually it’s really a test to see if you are stable, and safe to work with. The fact is, the larger companies need your company to survive the lifespan of a program, so this test is necessary, and yes, it’s also painful.
To the primes, SME’s have a lot to offer: we have untapped talent and unsubsidized entrepreneurial spirit. We will build the best small rotating actuator you’ve ever seen, and we’ll even do it wearing a suit.
To other small companies, get face-to-face, embrace the culture, be risk averse, build a strong company first, then focus on defence, and wear a suit, preferably not purple or paisley. There is a lot to be excited about for SMEs in defence today, so stick with it.
