Allied Minds: Boston Firm Details First Two Startups in Federal Deal
Boston investment firm Allied Minds made headlines recently for a new licensing agreement with the Defense Department—one that Allied Minds says is the first of its kind, allowing for far-reaching privatization of technology developed by the government.
It’s hard to argue with the idea of trying to build more businesses on top of the many billions of dollars dedicated to research and development in the federal budget—especially with the economy still growing slowly and some 12 million people in the U.S. unemployed.
But just what kind of companies might be created from this new initiative? To get a couple of examples, I chatted recently with John Serafini, the director of Allied Minds Federal Innovations, the subsidiary formed to handle the federal spin-outs.
Two companies already have been started under AMFI: Allied Communications and Broadcast Routing Fountains. They’re focused on advanced technologies for wireless and Internet networking—the kind of hardcore IT infrastructure that you’d expect to emerge from federal R&D.
These two very early stage initiatives also illustrate Allied Minds Federal Innovations’ approach to building startups. When the firm finds promising research that fits an investment thesis, it forms an incubation-stage company that it can use as a vehicle for getting the technology more ready for the market, Serafini says. Then, if all goes right, the startup can grow and eventually be handed off to day-to-day management.
Allied Communications is the first example. The startup is focused on trying to find ways to help ease the shortage of wireless spectrum—a critical issue as consumers and businesses alike consume more bandwidth with mobile devices and applications.
One way Allied Communications hopes to do this is by developing software that can act as a traffic cop for the apps being used on smartphone handsets, spreading out their calls to the network to smooth out spikes in demand.
“Perhaps if you received your e-mail three to five seconds later than you had previously anticipated, you can reduce the overall load,” Serafini says. “It’s just being able to manage the expectations of the users while also balancing it against the load.”
A second technology targeted by Allied Communications would allow wireless carriers and federal agencies to share spectrum more efficiently. As the need for wireless spectrum increases, federal officials have said it would be better to find ways of sharing spectrum currently used by the Defense Department and other agencies, rather than vacating certain chunks of the airwaves and selling them off for completely private-sector use.
A third technology is aimed at helping commercial 4G carriers share resources with first responders, like police and firefighters. Congress has allowed first responders to use a particular chunk of spectrum for their needs, and has allocated $7 billion to build a national network.
“The question then becomes, how do commercial carriers and first responders use the same network resources at the same time while allowing for first responders to always maintain prioritization in the event that it’s necessary for them to use the network?” Serafini says.
That transition will take place over several years, he adds, as leaders in the public safety world work with state officials and the wireless carriers to define how the new first responder network will be built.
The second early stage company started under Allied Minds’ new federal R&D initiative is called Broadcast Routing Fountains. The startup was developed by scientists at The Aerospace Corp., a federally funded R&D lab in El Segundo, CA.
The idea behind Broadcast Routing Fountains is to improve security for Internet routers, which can be vulnerable to malicious attackers who gum up the networks by, for example, lying about their IP addresses or their locations.
Broadcast Routing Fountains says it can help avoid these kinds of attacks by setting up a second, separate channel for verification information, based on satellite networks. That would make it much harder for attackers to use fake IP information, since they’d have to overcome a second network.
The critical part of getting this technology into commercial use, Serafini says, is broad adoption by Internet service providers. And that means it has to be tested extensively to show the benefits are real.
“What I’m doing is trying to incubate the technology in essentially a closed intranet environment,” he says. “And there’s a number of DOD, Homeland Security, and intelligence community networks where the value proposition of the technology would be quite evident, and would be quite helpful to that network.”
Keep an eye out for more subsidiaries like these from Allied Minds Federal Innovations. And if the firm’s federal research partnership goes as planned, there could be quite a few of them to keep track of—the company says it plans to start with a $100 million investment in the partnerships, generating about 20 companies in the first year.