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While Silicon Valley executives like those from Palantir, Meta, and OpenAI are grabbing headlines for trading their Brunello <\/a>Cucinelli<\/a> vests<\/a> for Army Reserve uniforms<\/a>, a quieter transformation has been underway in the U.S. Navy.<\/p>\n How so? Well, the Navy\u2019s chief technology officer, Justin Fanelli, says he has spent the last two and a half years cutting through the red tape and shrinking the protracted procurement cycles that once made working with the military a nightmare for startups. The efforts represent a less visible but potentially more meaningful remaking that aims to see the government move faster and be smarter about where it\u2019s committing dollars.<\/p>\n \u201cWe\u2019re more open for business and partnerships than we\u2019ve ever been before,\u201d Fanelli told TechCrunch in a recent Zoom interview. \u201cWe\u2019re humble and listening more than before, and we recognize that if an organization shows us how we can do business differently, we want that to be a partnership.\u201d<\/p>\n Right now, many of these partnerships are being facilitated through what Fanelli calls the Navy\u2019s innovation adoption kit, a series of frameworks and tools that aim to bridge the so-called Valley of Death, where promising tech dies on its path from prototype to production. \u201cYour granddaddy\u2019s government had a spaghetti chart for how to get in,\u201d Fanelli said. \u201cNow it\u2019s a funnel, and we are saying, if you can show that you have outsized outcomes, then we want to designate you as an enterprise service.\u201d<\/p>\n In one recent case, the Navy went from a Request for Proposal (RFP) to pilot deployment in under six months with Via, an eight-year-old, Somerville, Mass.-based cybersecurity startup that helps big organizations protect sensitive data and digital identities through, in part, decentralization, meaning the data isn\u2019t stored in one central spot that can be hacked. (Another of Via\u2019s clients is the U.S. Air Force.)<\/p>\n The Navy\u2019s new approach operates on what Fanelli calls a \u201chorizon\u201d model, borrowed and adapted from McKinsey\u2019s innovation framework. Companies move through three phases: evaluation, structured piloting, and scaling to enterprise services. The key difference from traditional government contracting, Fanelli says, is that the Navy now leads with problems rather than predetermined solutions.<\/p>\n \u201cInstead of specifying, \u2018Hey, we\u2019d like this problem solved in a way that we\u2019ve always had it,\u2019 we just say, \u2018We have a problem, who wants to solve this, and how will you solve it?\u2019\u201d Fanelli said.<\/p>\n Fanelli\u2019s drive to overhaul Navy tech is personal. Originally a scholarship cadet in the Air Force studying electrical engineering, he was disqualified from military service due to a lung issue. Determined to serve anyway, he chose the Navy over private sector offers more than 20 years ago because he \u201cwanted to be around people in uniform.\u201d Since then, his career has spanned roles across defense, intelligence, DARPA, and open source initiatives, before returning to the Department of the Navy.<\/p>\n The change he\u2019s overseeing is opening doors to companies that previously never considered government work and may have thought it a waste of time to try. Fanelli points, for example, to one competition run through the Defense Innovation Unit (DIU), wherein the Navy expected a handful of bidders for a niche cybersecurity challenge but received nearly 100 responses \u2013 many from companies that had never worked with the DoD before but were already solving similar problems in the private sector.<\/p>\n Fanelli says his team has documented dozens of success stories altogether, including a venture-backed startup that used robotic process automation to zip through a two-year invoice backlog in just a couple of weeks. Another example involved rolling out network improvements to an aircraft carrier that saved 5,000 sailor hours in the first month alone.<\/p>\n \u201cThat not just changed their availability, but it changed their morale, esprit de corps, how much time they could spend doing other tasks,\u201d Fanelli noted, explaining that time saved is one of five metrics that the Navy uses to measure the success of a pilot program. The other four are operational resilience, cost per user, adaptability, and user experience.<\/p>\n As for what the Navy is looking for right now, Fanelli outlined several high-priority areas, including AI, where the service is actively talking with teams. The Navy apparently wants to accelerate AI adoption beyond basic generative AI use cases into more agentic applications for everything from onboarding and personnel management to data processing on ships. He also cited \u201calternative\u201d GPS, explaining that the Navy is quickly adopting alternative precision navigation and timing software, particularly for integration with unmanned systems. And he mentioned \u201clegacy system modernization,\u201d saying that some of the aging technology that the Navy is looking to update includes air traffic control infrastructure and ship-based systems.<\/p>\n So how much money is it looking to put to work each year? Fanelli said he wasn\u2019t at liberty to provide specific budget breakdowns, but he said the Navy currently allocates single-digit percentages to emerging and commercial technology versus traditional defense contractors \u2014 a balance that he expects to evolve significantly as AI continues to advance.<\/p>\n As for the most common reason that promising technologies fail when trialed, he said it isn\u2019t necessarily because of technical shortcomings. Instead, he said, the Navy operates on long budget cycles, and if a new solution doesn\u2019t replace or \u201cturn off\u201d an existing system, funding becomes problematic.<\/p>\n \u201cIf we\u2019re getting benefit and we\u2019re measuring that benefit, but there\u2019s no money [getting to the startup] in a year and a half \u2014 that\u2019s a really bad story for their investors and our users,\u201d Fanelli explained. \u201cSometimes it\u2019s a zero sum game. Sometimes it\u2019s not. And if we\u2019re going to flip the public-private sector to more private and ride that wave, we do have a lot of technical debt that we need to cut anchor on.\u201d<\/p>\n Before ending our call, we asked Fanelli if the Trump administration\u2019s \u201cAmerica first\u201d policies are impacting these processes in any way. Fanelli answered that the current focus on domestic manufacturing aligns well with the Navy\u2019s \u201cresilience\u201d goals. (Here, he pointed to ongoing initiatives like digital twins, additive manufacturing, and on-site production capabilities that can reduce supply chain dependencies.)<\/p>\n Either way, the Navy\u2019s message for entrepreneurs and investors is very clearly that it\u2019s a genuine alternative to traditional commercial markets, and it\u2019s a pitch that appears to be gaining traction in Silicon Valley, where there\u2019s growing receptiveness to partnering with the U.S. government.<\/p>\n Said Meta CTO Andrew Bosworth at a recent Bloomberg event<\/a> in San Francisco: \u201cThere\u2019s a much stronger patriotic underpinning than I think people give Silicon Valley credit for.\u201d<\/p>\n It\u2019s a marked change from the more skeptical stance that characterized much of the Valley in previous years, as longtime industry observers can attest. Now, Fanelli \u2014 who has been making the rounds, taking with business media outlets and podcast interviewers \u2014 hopes to attract more of that interest to the Navy specifically. He told TechCrunch, \u201cI would invite anyone who wants to serve the greater mission from a solution perspective to lean in and to join us in this journey.\u201d<\/p>\n If you\u2019re interested in hearing our full conversation with Fanelli, you can check it out right here<\/a>.<\/em><\/p>\n<\/div>\n