7 Steps to Mobilize The Political Power of SBIR

Let’s say you worked at a company for more than 25 years.  Let’s say you had a proven track record as a solid performer.  In fact, you are so good that your boss signed you to an eight year contract eight years ago. However, since then, you have been in a constant state of limbo waiting for a long-term contract renewal.  You have been told 5 different times that one is coming, but each time it gets delayed and now more than 16 months have passed since your last long-term contract.  How would you feel?  Upset, disappointed, worried, undervalued?

Well if I am a small high-tech business that is exactly how I would feel right now.  The Small Business Innovation Research (SBIR) program has been in limbo since 2008.  It keeps getting extended, but only for a few months at a time.  The reasons boil down to (a) some members of congress want to expand the program to include venture owned firms and (b) congress has been embroiled in other “priorities” including the likes of Health Care Reform.  All of these delays in reauthorizing SBIR are happening while our nation is facing its worst unemployment crisis in decades.

Now here is the kicker – SBIR is a $2 billion annual program in which more than 7,000 different businesses have participated in during the last 5 years.  Many of these businesses have also been recipients of multiple SBIR awards.  So, the question I have struggled with is “Why doesn’t this constituency have the political power to expedite a meaningful reauthorization of SBIR?”  My analysis comes down to two things: (1) The ability to fund lobbyists and (2) The challenge of mobilizing the grassroots.

Lobbyists
A $2 billion “SBIR industry” may be considered small when compared to other industries in the Unites States.  However, other industries of this same size know the importance of investing money in federal lobbying.  For instance, the limousine industry was recently estimated to total $2.57 billion per year and the National Limousine Association spent $120,000 in federal lobbying in 2009.

When it comes to the SBIR, the industry is mainly represented by the National Small Business Association (NSBA) and its Small Business Technology Council (SBTC). The SBTC has done an outstanding job in waving the flag for SBIR authorization. However, while reports show that a total of $230,000 was spent by NSBA during last year (after querying all reports filed for 2009 and locating Q1-Q3), the NSBA uses these funds to lobby for a multitude of issues facing small businesses.  In fact, it is common for the NSBA to work on more than 20 different bills simultaenously.

I’m sure there are larger organizations that the limousine industry could have tied into, but the limousine business owners saw the benefit of funding a lobbying effort focused exclusively on their specific issues.  It is also important to recognize that while the limousine industry is seeking to influence legislation, their customers come from the private industry.  Conversely, every customer in the $2 billion SBIR industry is a federal agency.  Hence, the entire industry lives or dies by the federal legislation.  So the stakes are actually much higher for SBIR.  Consequently, I think it’s time that leaders within the 7,000+ SBIR recipient companies step up to the plate and fund their own lobbyist effort.

Grassroots
Most associations would absolutely love to have a membership base like the SBIR industry.  Here are the top five reasons why:

(1) Mass numbers
Unlike some industries that might be dominated by a small number of companies, the SBIR industry is flush with thousands of companies.

(2) Diverse geographic coverage
SBIR awardees can be found in every state and I am about 99% sure you can find them in every congressional district if you sample a few years.  Most industries have clusters in specific geographic areas.  The technologies found within SBIR are so diverse that it results in a diverse geographic scattering.

(3) Likeable People
The public likes small business owners and what they stand for.  Moreover, they love stories about how someone took an invention or technology and built a successful business around it.  The association of bankers, lawyers, realtors, doctors, limousine services, etc. just can’t bring that same feeling of “mom, baseball, and apple pie”.

(4) Jobs
Unemployment is at an all time high in decades and everyone on a federal, state, and local governmental level is talking about creating jobs.  The SBIR program represents a very tangible and visible way to help small businesses create jobs.

(5) Everyone is accounted for
Most industries rely on NAICS codes to identify the total number of participants in their industry.  These NAICS codes serve as a good way to estimate the total number of participants, but the end product is still only an estimate.  Furthermore, there is no way to pinpoint the exact total revenue generated by an industry.  Such statistics are based on extrapolations of basic statistics and assumptions.  When it comes to SBIR, the federal government can identify every company that has received an award and the exact amount of each award.

The problem is that all of these great attributes mentioned above remain fairly untapped when it comes to mobilizing a grassroots political force for SBIR.  The SBTC has worked to valiantly to organize SBIR companies and raise awareness for the industry. It has a membership program, provides timely and meaningful political updates, and represents the SBIR industry on Capitol Hill.  One of its most impressive activities was its annual Tibbetts awards where it recognized outstanding SBIR companies along with proponents of the SBIR program at a dinner in Washington DC.  It is also my understanding that the SBTC coupled this event with visits to congressional offices during the day.

This has been positive but it is obvious that the SBIR is out hustled by many industries when it comes to grassroots organizing.  If you have ever visited Capitol Hill there are always several different groups of people walking around with the identical polo shirts or t-shirts.  These people are members of a particular industry group that are pounding the marble floors in Washington DC to make sure that members of Congress understand the importance of their issues.

I have personally seen how these types of initiatives can be effective.  I participated for seven annual trips to Washington DC with the Citizens for Space Exploration. This group usually gathered about 150 people from 25-30 different states and we spent 2 ½ days making scheduled visits to 300+ congressional offices.  We also had an evening reception that was typically attended by 6-8 Congressional reps.  I can even remember one year when the NASA administrator attended the event.  The whole effort was about educating our elected officials about the importance of space exploration and funding a robust NASA budget.

While I was in Washington DC, I would run into several other different industry groups and associations.  One of the most interesting ones was the Ebay Sellers group.   They had members from all over the country and were very focused on educating elected officials about legislation related to internet sales.  When I visited one of the Ebay Chat boards to learn more about this effort, here is a quote I found from one of the participants: “Did we make a difference? I am certain we did. We didn’t go into the Congressional offices pretending to be experts on the issues facing our businesses. We did something better—we shared our unique success stories and reminded Congress that we were counting on them to protect this path for our businesses and also for the success stories of the future.”

Doesn’t this statement and approach sound like something that would be applicable to SBIR as well?

Solution
So, how would I get a lobbying and grassroots effort moving with the SBIR industry.  Here are the seven steps I would take:

1.  Form an SBIR Association
Develop a plan to establish an SBIR association and register for the appropriate non-profit designation.  The word “SBIR absolutely needs to be in found within the name of the organization, so that its identity is absolutely clear to everyone ranging from potential participants to staff at Congressional offices.

2.  Use the Power of 10
The effort to organize the association should be organic.  It needs to spring forward from the SBIR companies themselves.  I would start by trying to get 10 SBIR small business owners to step forward and act as both leaders and board members.  I would target the companies that are most active in terms of winning awards and consequently have the most to gain/lose.  I would set the membership fee at $1,000 for each company.  Each board member would also be charged with recruiting 10 additional members who would also be willing to pay a $1,000 membership fee.  This would result in a membership of 110 companies and a war chest of $110,000

3.  Get a Lobbyist
I would immediately set aside at least $60,000 for a lobbyist.  It would be nice to invest more, but this would be a good start.  Maybe in future years the association could work its way up to $100,000. However, $60,000 will get the effort moving especially if activity is condensed around key points during the year.

4.  Go electronic
The NSBA uses an electronic grassroots system to identify supporters, initiate letter writing campaigns, and provide political updates.  It is a very powerful system and they have used it support SBIR.  However, this tool needs to be used continually and maximized to its full potential.  It is important to tap into the advanced features it offers.  Maybe NSBA would allow the association to use this electronic system.  Or maybe the association gets its own system set-up so it has complete control of it.  Annual Cost: $10,000

5.  Fly to Washington DC
The association would organize an initiative for SBIR companies to gather in Washington DC to make visits to Congressional Offices.  In order to maximize attendance, the event would be scheduled around the Navy Opportunity Forum which already brings hundreds of SBIR companies to Washington DC in the May/June timeframe.  Participants will pay their own expenses associated with participating.  However, there will be some room rental fees and other expenses like printing educational materials.  Cost: $10,000

6.  Hire part-time staff
Organizing the fly-in to Washington DC will require manpower.  Someone also needs to handle basic bookkeeping, membership records, and manage the electronic grassroots system.  Cost: $25,000

7.  Promotional Campaign
The association needs to reach out to the larger base of SBIR companies to increase membership and spur participation in association activities.  However, funds are tight during the first year, so it will start with a single mailing to the 7,000 businesses.  Cost: $5,000

Of course these 7 steps are all dependent on the success of steps 1 and 2.  I also know how difficult it is to start a membership based organization.  However, it is a plan that could happen if leaders within the SBIR industry stepped forward.  It’s all about putting your fate in your own hands.  After all, isn’t that what small business is all about.