Dual-Use Is a Strategy, Not a Category (Nor a Trap)
The term “dual-use” is something of a lightning rod in the startup world, sparking debates about its meaning and usefulness. In these virtual pages, Jake Chapman wrote that “reliance on dual-use technology is a trap,” arguing that timing issues, intellectual property controls, and commercial interests undermine the essential prioritization of defense needs. Others have worried that categorizing projects as dual-use excludes them from a range of funding sources or banking services. Some founders have even discovered that if they are categorized as having dual-use technology, they are assumed to be working in conflict with environmental, social, and governance guidelines. These barriers stymie our ability to invest in and build solutions for our collective security.
Our experience from MIT, working with startups across a range of critical technologies exploring defense and commercial civilian markets, is to define dual-use as a strategy, not a category. The technologies that can serve both military and civilian purposes are so wide that as a category, dual-use has a diminishing meaning. In reality, early stage founders build a capability and, as good entrepreneurs, consider the best market fit across commercial and military markets as necessary and with a clear focus. In other words, dual-use is a market strategy that might be deployed defense-first, commercial-first, or both (when economically effective due to scale constraints in some niche defense markets). This is not a cop-out. To assume up front which strategy an entrepreneur might take is to remove their agency and expertise and the fundamentally exploratory nature of venture building.
The historical origins of the term dual-use lie in the post–World War II era, when it focused on a narrow set of nuclear materials with the potential to be deployed in military (weapons) and civilian (power) applications. Today, it is used loosely to cover an extraordinarily wide range of companies whose products and services might solve military as well as civilian problems. In investment settings, until recently, large funders like the European Investment Fund have precluded ventures building dual-use solutions for defense. Others only considered these ventures appropriate for backing if commercial markets were explored first or constituted the majority of sales. But each of these boundary conditions is increasingly blurred. For the European Investment Fund, so-called dual-use investment is now welcomed, and the boundary is simply drawn to exclude ammunition and weapons. But dual-use as a category continues to confuse investors and markets as it lacks a clear, useful definition.
Instead of playing with category boundaries, for venture teams and their investors, dual-use must be understood as a strategy that shapes plans and priorities and emphasizes ethical adoption in all use cases. A dual-use strategy (regardless of whether it puts defense first or in parallel with civilian use cases), like any market entry strategy, is about making tradeoffs: which solution to build and for whom, how to test it, how to fund it, and how to appropriately deploy it. For example, a company could start off working with military procurement offices to navigate the U.S. Federal Acquisition Regulation and later, perhaps, move on to engaging business development teams with traditional commercial companies, or vice versa. Some entrepreneurs will be successful focusing on defense customers alone (if the market is large enough), and some will attempt and then outright reject those customers in favor of commercial ones, while still others will discover a defense market after years in civilian markets. Regardless of the precise path, a dual-use strategy needs a clear language and strategic framework to effectively move from one side to the other at that appropriate stage in a venture’s lifecycle.
Language and Translation
Pursuing a dual-use strategy that effectively attends to both military and commercial customers means building a dual identity and establishing the ability to work in different contexts. It’s rather like being bilingual, but it’s more than just being able to speak perfect French and English. Instead, the better analogy is knowing how to operate seamlessly in the cultural context of France and the United States. Indeed, aiming to succeed in both commercial and mission-driven markets (including those across defense and national security) is a choice that comes with a variety of challenges.
As a starting point for deploying a dual-use strategy in whatever order your team chooses, our goal is to teach entrepreneurs to “speak mission” and vice versa. To put it differently, we aim to translate the strategic pathways and milestones for commercial ecosystems into defense ecosystems and back again. Without a shared language (or at least a dictionary), startups, investors, and government stakeholders risk being misaligned, confused, and unable to seize the opportunities that lie before them. And the more opportunities that are seized, the bigger the industrial base becomes for our collective national security. From our experience, the starting point for speaking the language of dual-use highlights three dimensions: customers, funding, and technology.
The commercial and defense markets are vastly different. Typical commercial markets have fierce competition, a focus on rapid innovation, and a direct relationship between customers and products. They have demanding customers who focus on economic efficiency. In contrast, the mission market often operates within a more structured environment, with long timelines, stringent regulations, and a complex web of stakeholders that may lie between the capability and the end user but often focus more on end capabilities. Within both markets, there are customers, but the way customers are described and the way they make choices differ dramatically. And likewise, their buying process is distinctive.
Mission-driven organizations have multiple stakeholders, including program executives, end users, acquisition authorities, influencers, gatekeepers, and more. Each brings distinct needs and priorities, all of which have to be aligned to drive the decision to authorize, fund, purchase, and operationalize a capability for use “in the field.” When commercial customers make their purchasing decisions, their processes are typically driven by direct market demand, techno-economics, shorter urgent timelines, and more straightforward transactions. They can “single-source,” or select one supplier without concerns about violating rules that force competitive searches. They can issue purchase orders, sign letters of intent, or enter into master service agreements without navigating layers of bureaucratic approval. Decisions are more likely to be based on considerations such as return on investment and competitive advantage. Negotiations focus on price, delivery schedules, and performance metrics.
In contrast, government customers operate under a complex set of regulations and with a specialized vocabulary. Agencies must adhere to the Federal Acquisition Regulation and the Defense Supplemental, which mandate procedures like full and open competition and require formal solicitation processes such as requests for proposals, requests for information, and broad agency announcements. Terms like justification and approval and source selection are important to fully grasp, and you must know the difference between cost-plus, fixed price, and indefinite delivery/indefinite quantity contracts. Compliance with policies like the Buy American Act, small business set-asides, 8(a), and specific government socio-economic goals adds complexity, but in moments of urgent need, these can be overcome and the government customer operates at pace.
The second dimension where language matters is funding. Commercial ventures often rely on capital referred to as “dilutive,” funding from investors such as angels (individuals investing their own money) or venture capitalists (institutional investors investing others’ money) who take an equity stake in the venture. Terms like seed funding, series A/B/C rounds, and pre-money valuation are common in these discussions. As described by Brian McCarthy in these pages, the “valley of death” where seven in ten startups fail within the first few years is exacerbated by limited funding for research contracts and complex processes. Startups may negotiate term sheets outlining investment terms, including instruments like convertible notes. Government funding, on the other hand, is generally “non-dilutive” and comes in forms such as grants and contracts from discrete government offices. While this funding usually does not require giving up equity or ownership, the contractual complexities that come with this type of funding are equally important to appreciate. Government funding can provide opportunities to support some of the research and development but in its later and larger phases involves a labyrinth of regulations and compliance requirements where startups must understand statements of work and deliverables, and must adhere to strict reporting metrics. When it comes to funding, intellectual property rights can also be a significant consideration, with concepts like government purpose rights and data rights affecting how a startup can leverage its technology.
The third dimension where language matters is technology. While the underlying solution might be similar for commercial and defense contexts, the way technological progress is described and measured can differ significantly. In defense and wider government settings, technology is often discussed in terms of strict specifications, requirements, and compliance with standards such as military specifications and technology readiness levels. While the goal is to acquire capabilities that meet mission needs, these precise technology requirements are designed to ensure compatibility and effectiveness within the broader mission system. Mission users expect evidence of progress through formal processes such as field trials, operational tests and evaluations, and simulations like war games that replicate real-world scenarios. They focus on meeting rigorous criteria, with extensive documentation and adherence to protocols like configuration management and risk management.
In contrast, commercial customers emphasize features, benefits, user experience, and value propositions. Within a clear and often demanding focus on unit economics (driven by a demand for significant margins and low costs), they are interested in attributes like performance, scalability, and usability, with evidence of progress shown through prototypes, beta releases, and pilot programs. Development methodologies are more fluid, employing agile practices and focusing on rapid iteration based on customer feedback. Metrics such as user engagement, customer satisfaction scores, and net promoter scores are critical. Understanding these differences is crucial for startups pursuing a dual-use strategy; they must adeptly translate their technological capabilities into the language and metrics that resonate with each distinct market to avoid misalignment.
In recent years, government and defense customers have been integrating commercial methodologies and language into their organizations. Not content with the slow pace of market adoption, they have started to attempt to integrate terms such as valley of death, proof of concept, and scaling. And indeed, as more ventures move between commercial and defense markets, the lines continue to be blurred. That said, without an appreciation of the mapping from the language of one context to the other, startup ventures, their investors, and government stakeholders risk confusion and may be unable to seize the opportunities that lie before them.
A Strategy Framework
Beyond these essential semantics, the complexities of navigating both commercial and mission-driven markets require a structured model for success.
We do not advocate that leaders of a startup venture necessarily pursue a dual-use strategy from the start (i.e., defense and civilian). Rather, whatever your start point — whether it’s on the mission side and eventually moves into commercial markets, or vice versa — it is essential to appreciate that if you ultimately engage in both, you need to be able to map and translate successful milestones in one to the other to be efficient in how you use your resources.
At MIT, we have developed the Dual-Use Readiness Levels™ framework as a guide to help startup teams understand the language of both sides of the strategy, tack from one to another at the right time, and evaluate readiness across five critical dimensions: commercial funding, mission funding, commercial customers, mission customers, and technology. When put into practice, this framework establishes a common language between a startup and its potential customers, whether they are military mission–focused organizations or more traditional commercially focused ones.
By utilizing these dual-use readiness levels, we have found that startups can better navigate market complexities, secure diverse funding sources, and achieve growth. They can also appreciate the misunderstandings that arise when moving from one world into the other, and the need to build a team that is bilingual and has the characteristics of both contexts. By removing some of the debate around categories and focusing on strategies, we can accelerate the pace at which allies and partners are building the next generation of essential capabilities to the most significant challenges of our time. And we hope this alleviates some of the ambiguity that limits investors and their limited partners.
To demonstrate the ways in which dual-use is a strategy, not a category — and one that can be pursued in different orders and over different time frames — consider the team of Air Force veterans pursuing master of business administration degrees at Harvard and MIT in 2016. With their expertise in atmospheric physics and machine learning, they founded ClimaCell, a company with the ambitious goal of revolutionizing weather forecasting. While recognizing the potential of their technology in both commercial and defense sectors (and with a deep instinctive pull toward mission), they embarked upon a journey that started with commercial aviation, building strong sales in weather and climate security with over 120 clients in business verticals. In 2021 they expanded their strategy to incorporate government customers, first the National Aeronautics and Space Administration and then the United States Air Force, to support “data-as-a-service from its spaceborne radars.” Turning from commercial to military customers was the realization of a strategic dual-use vision articulated at the outset by the team. But it required the leadership to navigate the complexities of these two markets, working to drive efficiencies and perfect the product accuracy with commercial customers and then take more ambitious steps with military ones. At each point in their journey, they chose to emphasize one market and one identity over another, making key strategic choices at each milestone. Today, this “dual-use venture” known as Tomorrow.io has significant funding from venture capitalists and government agencies. It provides mission-critical weather intelligence to industries ranging from aviation and energy to defense and national security and has a team that balances the priorities and requirements of very different customers. The team is effectively bilingual.
Few entrepreneurs have the sorts of backgrounds that easily combine military and commercial markets as extensively as the Tomorrow.io team. Nor do all ventures explicitly focus on one market with an eye to learning and expansion into another. Take iRobot, founded decades before Tomorrow.io by a group of roboticists from MIT’s Artificial Intelligence Lab. They focused their early work solely on robots for military applications, leading to the creation of the PackBot, a ruggedized robot used for bomb disposal, reconnaissance missions in Afghanistan, and, unexpectedly, in search and rescue missions after 9/11. But what today would have been deemed a defense company ended up making a strategic decision to extend into the commercial space and develop the Roomba, a robotic vacuum cleaner. Its rapid popularity in the consumer market (and the very nascent defense market) set the company on a path of incredible commercial success at a time when the defense market pathway was not as clear or lucrative, and the company eventually sold off its military division.
Other ventures like Shield.AI are laser-focused on military markets but still emphasize the long-term potential for their AI-based drone piloting technology in complex commercial settings such as offshore oil and gas inspection. When Shield.AI approached the military, they already understood the programs of record they were hoping to access and had insight into the government procurement opportunities. Their chosen starting point was U.S. Special Operations Command, whose ability to work rapidly with startups is unique in the U.S. Department of Defense context. As they sought to expand, they chose to work closely with larger contractors as part of a wider systems integration effort as well.
As the range of technologies relevant to servicemembers has grown from highly specialized hardware platforms to widely available but nonetheless critical technologies, a widening landscape of solutions has the potential to benefit from well-executed strategies. Indeed, among the critical technologies listed by the United States as essential to its economic and national security, only a small number are “defense only” in their application, suggesting that defense-first or dual-use strategies are more essential than ever for our collective future. That said, for most founders, investors, and customers, it is challenging to understand and operate in two distinctive contexts, with different language, pathways, and cultures.
Our message to these founders and their investors is to recognize the opportunity as a strategic choice, not a categorical one. At times, military and commercial civilian contexts are mutually reinforcing with activities undertaken in support of one path being beneficial in the other. More typically, the pathways are conflicting or diverging, and pursuing both can be distracting and difficult, especially at the start. Cutting through the noise around dual-use as a category (or trap) and instead reframing it as a strategy, we are educating and expanding the community of entrepreneurs, investors, and innovators who aim to have an impact on “the mission.”
Gene R. Keselman is a lecturer at MIT School of Management, the executive director of MIT Mission Innovation Experimental,and managing director of MIT’s venture studio, Proto Ventures. He is also an officer in the U.S. Air Force Reserve.
Dame Fiona Murray is associate dean of innovation at the MIT School of Management. She is vice chair of the NATO Innovation Fund and sits on the Defence Innovation Advisory Panel at the U.K. Ministry of Defence.
