The Defense-Tech investment trap: Why the old model fails today

For a long time, investing in defense technology (Defense-Tech) was seen as tainted. Many investors stayed away.

The industry tried to fix this by calling it “dual-use.” But this model still puts the primary focus on the military, and that is a critical mistake today.

My core warning is this: Companies built solely on the promise of military/government contracts are highly likely to fail. The procurement process is currently too long and too difficult.

I suggest a better, safer, and smarter approach: Civilian-First Dual-Use.

What does Civilian-First mean?

It means a company with military-applicable tech must focus on and succeed in the civilian market first.

Using the military market is seen only as a strategic hedge or a future growth option—something to use only when the product and timing are right.

Why is Civilian-First better?

➡️ Defense Sales are Hard and Slow (For Now): Governments and defense organizations want to accelerate procurement due to geopolitical tensions. However, today, selling to them is still incredibly slow and complicated because of tough legacy rules and long processes. This slow path often kills startups.

➡️ Stronger Product: By succeeding in the tough civilian market, the product becomes more mature and reliable before it gets to the military. The civilian market is the best test.

➡️ The Geopolitical Hedge: Success in the civilian world brings crucial revenue and proof that the technology works, making the investment much less risky. This revenue base allows the company to survive and mature while waiting for the inevitable shortening of military procurement cycles driven by global conflicts and competition.

I strongly advise against investing in traditional Defense-Tech startups today. Instead, I recommend investing only in companies that are proven winners in the civilian world first keeping the defense hedge for later. This is the only smart path forward in the current environment. This is Civilian-First Dual-Use.

In the picture - Grini and myself enjoying the Defense-Tech great event