Bridging the Valley of Death

Carlos Torrez

carlos_torrezNASA Program Manager for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs speaks with SpaceNews’ Reporter Debra Werner.

Carlos Torrez has a passion for helping small businesses. For more than 27 years, Torrez has moved up the ranks, working first as a NASA contracting officer, then business manager for SBIR and STTR, before taking the reins in January 2015 as NASA’s SBIR and STTR program manager, where he oversees efforts by NASA’s 10 field centers and four mission directorates to harness the expertise of thousands of small businesses and research institutions.

During his NASA career, Torrez has helped the agency expand its small business initiatives. Much of his work has focused on helping firms bridge the “Valley of Death,” where products or services languish after successful development. To bridge the valley, NASA now provides small companies with money to match funding from investors inside or outside the space agency.

Under Torrez’ leadership, NASA also has expanded outreach to the business community. Torrez organized a workshop in mid-September at the NASA Ames Research Center to introduce small business executives and research institutions to the NASA managers and technologists who need their help in tackling some of the space agency’s most vexing challenges, from machine learning and robotics to energy storage and synthetic biology.

Has NASA’s SBIR and STTR program changed during your career?

Absolutely. In operations alone, we have grown from a team of a few isolated people at two to three NASA centers to a strong team with offices at every NASA center. The Program Management Office resides at Ames Research Center — the heart of Silicon Valley. In addition, our program paved the way for changes in contract management not only at NASA but across the federal government. Today we see that firms are awarded their contracts on time and with ample performance periods.

How are you trying to bridge the Valley of Death?

Many companies that win phase 1 or phase 2 SBIRs and STTRs cannot get across that valley into successful commercialization, which leads to jobs creation, investment and continued innovation beyond what has been developed. We implemented initiatives that allow funding up to $1.5 million and, most importantly, tie in industry investment and resources.

Why is industry investment important?

When I speak with industry, the clear message I hear is that people don’t know how to connect with these small businesses, mine the technology and bring them into their supply chain. Because NASA does a lot of research and development investment, companies and angel investors told me that if a company had government investment, that would make them more comfortable investing. It’s hard for companies with technologies that are forward leaning, four to five years forward, to obtain investment without some sort of government backing.

Some of the investors include John Deere, Caterpillar and Kelly Moore Paints. Why are they interested in NASA technology?

They want to use autonomous systems to farm, or drones to look at the health of crops, or paint that is adaptable and flexible.

How do they get involved?

Let’s say a company has a phase 2 SBIR contract to develop paint to prevent rust for the space station. If the company sees a need for it in the commercial marketplace, it will talk to different paint manufacturers and find out there is interest. If one agrees to provide funding in exchange for an equity stake or data rights or a revenue stream, the company makes a proposal to NASA to partner to enhance the technology through further research, infusion or commercialization.

NASA also pairs small firms with large government contractors through the mentor protégé program. Why?

NASA’s Office of Small Business Programs provides money to large companies to mentor small businesses to help commercialize their products or infuse their product in NASA or another government agency. The small companies get the benefit of working with a large business and learning strategies for entering this marketplace.

Small businesses are defined as firms with 500 people or fewer. What is the average size of the companies that win SBIR and STTR contracts?

Five to eight people. They truly are small businesses.

What are some commercial products that stem from SBIR or STTR?

There are a lot of them in health monitoring and agriculture where companies have successfully commercialized technology or infused their technology within NASA. There is SBIR technology in all the current NASA missions.