Throughout my various stints as a CIO, I’ve had a number of opportunities to assist sales teams as they worked to land or close significant deals. But even more frequently, I was brought in to help with discovery — essentially determining whether a prospective customer was a good fit for our product.

In my experience, the sales teams that are most successful have a complete and well-established discovery playbook that allows them to determine whether a potential customer is the right customer for the organization to have at its current stage.

For fledgling startups, this is especially critical. New technologies are inherently fluid, and they require customers willing to make a long-term bet. Startups also have to move quickly and efficiently. The discovery process can’t be long and protracted, so its foundations must be sound.

Whether you’re pursuing customer number five, 50 or 500, the process of determining if there’s a fit remains largely the same. Here are some tips for approaching discovery in the early days and as your organization scales.

Start with key questions to determine fit

Determining whether your solution or technology is right for a prospective customer is critical. But it’s just as important to know whether that customer is a good fit for you. Questions to ask yourself might include:

• Is your tech displacing an existing product? If so, there’s at least a logical fit from a solutions standpoint.
• When was the last time they purchased new technology? As a startup, you don’t want to spend months going back and forth before deployment. You want your product in use and generating feedback.
• Are they forward-looking? Some customers truly want to invest in cutting-edge technologies. Some are just going through the motions because it’s what their bosses expect. Others are just trying to learn or plan for the future. Figure this out early on.
• Do they care enough about getting it right to spend the time and money required? New technologies necessitate ongoing investment and two-way participation to improve and evolve over time. Get a sense of how effective they would be as collaborators.
• Have they been burned in the past? Some companies have a tremendous appetite for new technologies but have simply tried too many that haven’t worked. Find out what other technologies they’ve tested, what worked and what didn’t.
• Are they the type of customer you’d want other prospects speaking to as a reference? If not, they’re not the ideal early customer.

In these times of heightened tensions and global volatility, I believe startups can play a critical role in our defense, space and national security ecosystem by bringing the very latest innovation to public institutions, some of whom lag startlingly far behind.

Startups and active investors in the sector are uniquely positioned to support the defense efforts of the West and the mission to keep our societies safe. Let’s not mince our words: Right now, we are already locked in hybrid warfare with Russia, a nuclear-armed superpower, while tensions with another, China, simmer just below the surface. Despotic regimes threaten our values and way of life, and few would predict that is set to change anytime soon.

Yet despite all this, much of the technology and venture capital industry has shown little inclination to engage with the defense establishment. Prior to Russia’s invasion of Ukraine, over dinner with friends and co-workers, you risked triggering anguished disapproval (and far worse), by stating that you believe startups should work with the likes of the Pentagon, NATO and Western governments in general. Today you largely garner a very different response: murmurs of assent.

The very latest, most powerful technologies offer an edge to those who create and possess them – as we have seen in some of the Western firepower deployed in Ukraine, alongside Ukrainian battlefield innovation. The brutal truth is that in resting on our laurels, the West has allowed those who wish us harm to catch up, and in some instances, surpass our capabilities – and the tech industry is partially to blame.

For example, in 2018, thousands of Googlers signed a letter to their boss, Sundar Pichai, declaring that “Google should not be in the business of war.” Specifically, they were protesting their employer’s involvement in a U.S. Department of Defense initiative, Project Maven, which was using Google AI tools to analyze military drone footage. “Building this technology to assist the US Government in military surveillance – and potentially lethal outcomes – is not acceptable,” they wrote.

This uncompromising and combative stance ultimately led to the decision by Google’s management not to renew its lucrative Maven contract, and soon afterwards it also withdrew from contention for the Pentagon’s cloud computing contract known as the Joint Enterprise Defense Infrastructure cloud (JEDI) – reportedly worth $10B over ten years.

Google employees were far from alone in confronting their bosses over perceived collaboration with the Trump administration, which was widely reviled in progressive-leaning tech circles. Around the same time, Microsoft employees called on CEO Satya Nadella to stop working with Immigration and Customs Enforcement (ICE), Amazon workers protested their company’s development of surveillance tech, while Salesforce employees signed a petition calling for its leaders to “re-examine” the company’s contract with US Customs and Border Protection (CBP)”.

What a difference a few years make. Fast forward to 2022 and a combination of COVID-19 and its legacy, stressed and unstable global supply chains, Russia’s war with Ukraine, the first threat of food insecurity in the U.S. or in the West since WW2, and increased tensions with China have prompted a sharp rethink from much of the tech and venture capital industry on its responsibilities towards government.

Today, in marked contrast to most other verticals, investment in aerospace and defense startups is surging. Between January and October 2022, according to PitchBook, VCs invested $7B in 114 aerospace and defense tech deals, which placed the sector on a trajectory to surpass 2021’s record $7.6B total. In 2018, VCs invested just $1.4B in those industries. (A part of this, notes PitchBook, may be due to the fact defense and aerospace are rather more recession-proof than, say, consumer or enterprise products.)

I’m immensely proud that Techstars is one of the most active investors in this category. With almost about 100 investments overall in aerospace, defense and space tech, we are one of only three VCs to have participated in more than 20 space startup deals since 2000, while 25% of the firms selected for 2022 NASA Small Business Innovation Research contracts were Techstars-backed companies. One of our portfolio companies, Slingshot Aerospace recently closed a $40.8M Series A-2 funding round. Its clients include the U.S. Air Force, the U.S. Space Force, and NASA.

Yet there is much ground to make up. A blog post from defense tech company Anduril that was cited in The Information put it this way:

“Despite spending more money than ever on defense, our military technology stays the same. There is more AI in a Tesla than in any U.S. military vehicle; better computer vision in your Snapchat app than in any system the Department of Defense owns; and, until 2019, the United States’ nuclear arsenal operated off floppy disks.”

Recent relative calm convinced us, erroneously, that we were living in a stable, post-conflict world where threats to our way of life and maneuvers by bad actors could somehow be ignored or wished away. In this scenario, much of the Valley could persuade itself that it could refuse to build products that are designed to harm and kill (even when that is not their overt aim). Such stances now seem naive and idealistic at best; posturing at worst.

Back in 2018, the hashtag #TechWontBuildIt was used to protest Big Tech’s government contracts. Not only must we build, but there is little time to waste.

Organizations must quickly adapt their application security strategies to address new threats fueled by AI.

They include:

• More sophisticated bot traffic.
• More believable phishing attacks.
• The rise of legitimate AI agents accessing customers’ online accounts on behalf of users.

By understanding the implications of AI on identity access management (IAM) and taking proactive measures, businesses can stay ahead of the AI curve and protect their digital assets. Here are the top three actions organizations preparing their application security for a post-AI world need to consider in their security strategies:

Defend against reverse engineering

Any app that exposes AI capabilities client-side is at risk of particularly sophisticated bot attacks looking to “skim” or spam those API endpoints — and we’re already seeing examples of reverse engineering AI-powered sites to get free AI computing.

Consider the example of GPT4Free, a GitHub project dedicated to reverse engineering sites to piggyback on GPT resources. It accumulated an astonishing 15,000+ stars in just a few days in a blatant public example of reverse engineering.

To prevent reverse engineering, organizations should invest in advanced fraud and bot mitigation tools. Standard anti-bot methods like CAPTCHA, rate limiting and JA3 (a form of TLS fingerprinting) can be valuable in defeating ordinary bots, but these standard methods are easily defeated by more complex bot problems like those facing AI endpoints. Protecting against reverse engineering requires more sophisticated tooling like custom CAPTCHAs or tamper-resistant JavaScript and device fingerprinting tools.

The facts are clear: Startups are finding funding increasingly difficult to secure, and even unicorns appear cornered, with many lacking both capital and a clear exit.

But equity rounds aren’t the only way for a company to raise money — alternative and other non-dilutive financing options are often overlooked. Taking on debt might be the right solution when you’re focused on growth and can see clear ROI from the capital you deploy.

Not all capital providers are equal, so seeking financing isn’t just about securing capital. It’s a matter of finding the right source of funding that matches both your business and your roadmap.

Here are four things you should consider:

Does this match my needs?

It’s easy to take for granted, but securing financing begins with a business plan. Don’t seek funding until you have a clear plan for how you’ll use it. For example, do you need capital to fund growth or for your day-to-day operations? The answer should influence not only the amount of capital you seek, but the type of funding partner you look for as well.

Start with a concrete plan and make sure it aligns with the structure of your financing:

• Match repayment terms to your expected use of the debt.
• Balance working capital needs with growth capital needs.

Your term of repayment must be long enough so you can deploy the capital and see the returns. If it’s not, you may end up making loan payments with the principal.

Say, for example, you secure funding to enter a new market. You plan to expand your sales team to support the move and develop the cash flow necessary to pay back the loan. The problem here is, the new hire will take months to ramp up.

If there’s not enough delta between when you start ramping up and when you begin repayments, you’ll be paying back the loan before your new salesperson can bring in revenue to allow you to see ROI on the amount you borrowed.

Another issue to keep in mind: If you’re financing operations instead of growth, working capital requirements may reduce the amount you can deploy.

Let’s say you finance your ad spending and plan to deploy $200,000 over the next four months. But payments on the MCA loan you secured to fund that spending will eat into your revenue, and the loan will be further limited by a minimum cash covenant of $100,000. The result? You secured $200,000 in financing but can only deploy half of it.

With $100,000 of your financing kept in a cash account, only half the loan will be used to drive operations, which means you’re not likely to meet your growth target. What’s worse, as you’re only able to deploy half of the loan, your cost of capital is effectively double what you’d planned for.

Is this the right amount for me at this time?

The second consideration is balancing how much capital you need to act on your near-term goals against what you can reasonably expect to secure. If the funding amount you can get is not enough to move the needle, it might not be worth the effort required.