When we launched Meridian, we did so around a relatively simple belief: there is no shortage of interesting technology being developed in the UK, but connecting that innovation to genuine operational need remains a significant challenge.
We designed the programme to help address that problem. Rather than running a traditional accelerator, we wanted to work closely with a small number of companies, understand what they are building and where it can create value, and help them develop credible routes towards customers, contracts, investment and scale.
We are now beginning to get beneath the surface of the ten companies in our inaugural cohort.
Onboarding has been completed and we have moved into detailed discussions across product, commercial, technology and operational roadmaps. These sessions take us beyond the initial proposition and into the substance of each business: the customer problem, the technology, what has already been demonstrated and what needs to happen next.
The learning is also going both ways. Working this closely with emerging technology companies gives Defence Holdings earlier visibility of new capabilities, a better understanding of the challenges founders face and the opportunity to develop relationships that may become relevant to our wider Product Ecosystem, commercial activities and investment strategy.
A number of recurring themes are beginning to emerge, and I thought it would be useful to explore them in more detail.
Over the coming weeks, I'll be sharing a series of observations from our work with the cohort, covering everything from founder motivations and routes to market to technology defensibility, investment and the changing nature of the defence industry.
These aren't intended to be definitive conclusions or a set of instructions for building a defence business. They are observations from the conversations we're having and the work we're doing, and I expect some of our thinking will continue to develop as the programme progresses.
Two themes provide a useful starting point.
Mission focus matters
One of the most encouraging observations from our early engagement with the cohort has been the genuine mission focus of the founders.
There is a generation of entrepreneurs being drawn towards defence because they want to apply their technology and expertise to important problems. The increased availability of capital in the sector clearly plays a role, but it isn't the whole story.
What's particularly interesting is the different routes that have brought people into the industry.
Some of the founders we are working with come from technology backgrounds and would probably never have imagined themselves building a defence business five years ago. The growing overlap between defence and areas such as AI, autonomy, cyber, communications and infrastructure resilience is bringing new people and capabilities into the sector.
Others have previously worked in the civil service or wider public sector and have subsequently taken the entrepreneurial route. For them, building a defence technology business can represent a continuation of their commitment to public service, but through a different means.
Having experienced some of the challenges facing government and public sector organisations firsthand, they are now looking to develop technologies and businesses that can help address them.
I find that particularly encouraging. We have founders bringing fresh technical perspectives into defence alongside people with direct experience of the organisations and environments these technologies are intended to serve.
Defence needs both.
But there's another dimension to mission focus that I think is equally important. It concerns the distinction between recognising defence as an attractive commercial market and genuinely committing to the mission of the customer.
Defence customers can generally tell the difference between someone selling enterprise technology into a new sector and someone who has taken the time to understand the operational problem they are trying to solve.
That doesn't mean every founder needs a military background or decades of defence experience. In many cases, the most valuable innovations will come from people outside the traditional defence industry. But it does mean approaching the customer with a willingness to understand their environment, the consequences of failure and the practical realities of deploying technology in support of operational requirements.
There is a difference between demonstrating what a technology is capable of and demonstrating why it matters to the person who will ultimately depend on it.
That distinction also has important consequences for product development.
In many technology markets, a founder can develop something interesting, launch it, attract users and improve the product through relatively short feedback cycles. Defence presents a different set of challenges. Operational requirements can be highly specific, access to end users is often difficult, and there can be a considerable distance between demonstrating an interesting capability and getting something evaluated, procured and deployed.
A founder may have developed genuinely impressive technology, but its most valuable application may not be the one they initially imagined.
This is where I think mission focus can become a genuine advantage.
If the objective is simply to find a defence application for an existing technology, there is a risk of becoming attached to the original proposition. If the objective is to solve an important operational problem, there is a stronger reason to listen to customers, challenge assumptions and adapt the technology when the evidence suggests it is necessary.
That willingness to adapt matters enormously for early-stage businesses, particularly when engineering resources and capital are limited. There will almost always be more potential applications than a small team can realistically pursue.
Through Meridian, we are spending time understanding which customer problems each company is addressing, what evidence exists to support the proposed application and how that should influence the next stage of product development.
We're also interested in how founders respond when those discussions challenge their original assumptions. Changing direction isn't necessarily an admission that the original idea was wrong. It can be an indication that a business is getting closer to understanding where its technology has the greatest value.
The commitment we're seeing among the founders is encouraging. What matters now is how effectively that commitment translates into products that meet genuine customer requirements and can ultimately be adopted and deployed.
The reality of dual-use
A second theme emerging from our discussions concerns the reality of building a dual-use technology business.
Dual-use has become an increasingly prominent part of the conversation around defence innovation. The proposition is attractive: a technology developed for one market can also create value in another, potentially giving a business access to a much broader commercial opportunity.
And in many cases, that is absolutely true.
But one of the questions we keep coming back to is whether defence is the company's primary market or a secondary application of its technology.
There is no universally correct answer, but the distinction has significant consequences. What makes this particularly interesting is that the answer may look quite different depending on whether you're a founder, an investor or a customer.
For investors, dual-use can be attractive because it provides access to different revenue streams and the potential to scale beyond the constraints of defence procurement. A business with substantial commercial applications may appear less dependent on defence spending cycles and individual government customers.
For founders, dual-use can preserve the ambition of building a technology company with a much larger addressable market. It offers the prospect of applying the same underlying capability to defence requirements without necessarily limiting the company's future growth to that sector.
But the defence customer may have a very different perspective.
If a technology is intended to support a mission-critical capability, the customer needs confidence that the supplier will remain committed to its requirements, particularly when those requirements become difficult, expensive or commercially inconvenient.
A supplier may have excellent technology and a compelling growth strategy, but what happens when a major commercial customer demands the same engineering resources needed to support an operational defence requirement? Where does the defence customer's priority sit when the business has competing commercial obligations?
This is a question I think defence customers should be asking more frequently, particularly when evaluating emerging suppliers whose longer-term commercial ambitions may extend well beyond the defence market.
It isn't an argument against dual-use. In fact, access to multiple markets can create a stronger, more resilient business with greater resources to invest in its technology. But the benefits need to be considered alongside the implications for customer commitment, product priorities and long-term support.
For some businesses, defence is clearly the primary customer. Their technology is being developed around a particular operational requirement, with commercial applications offering additional opportunities over time.
For others, the commercial market is considerably larger, with defence representing a valuable but more specialised application of the underlying capability.
What our conversations are reinforcing is that a technology can be dual-use without the business necessarily being ready to operate in two markets.
The distinction matters because the same underlying technology may require very different approaches to product development, integration, security, distribution and customer support.
A commercial customer might prioritise ease of adoption, price and integration with existing software. A defence customer may place greater emphasis on resilience, information assurance, interoperability or performance in constrained operational environments.
Those requirements are not necessarily incompatible. But satisfying both can create competing priorities for a small engineering team.
There are also significant differences in how the business develops commercially. Defence can involve extended periods of customer engagement, technical evaluation and procurement before a capability reaches deployment. A business pursuing that market needs the resources and financing strategy to support those timescales.
A technology may have applications across several markets, but that doesn't automatically mean the business has several commercially viable routes to revenue. Each market needs to be understood in terms of customer demand, the development required, the route to procurement and the resources needed to reach it.
I think this is particularly important at an early stage, when the temptation to pursue every potential application can be considerable.
A founder may see defence and commercial markets as two distinct growth opportunities, but if every new customer requires a different product, different engineering priorities and a different delivery model, the company can quickly find itself operating two development programmes with the resources of one.
By contrast, where a business can maintain a common underlying technology and adapt it for different customer environments, there may be a much stronger opportunity to scale without continually rebuilding the product.
That distinction can influence some of the most important early decisions a company makes, from technical architecture and recruitment to partnerships and capital allocation.
It is one of the reasons we're looking at product, technology and commercial roadmaps together through Meridian. The decisions are closely connected, and understanding the potential of a technology requires an equally clear understanding of the business being built around it.
We aren't looking for every company to become defence-first, nor do we believe that founders should necessarily abandon one market to pursue another.
What matters is understanding where the initial commercial focus sits, what needs to be demonstrated in each market and whether the company has the resources and commitment to pursue those opportunities effectively.
Dual-use can be a considerable advantage, but the existence of two potential markets doesn't automatically create two viable businesses.
What comes next
These first two observations highlight something that is becoming increasingly clear through our work with the cohort: understanding the technology is only one part of understanding the business.
The motivations of founders, the customers they choose to serve and the commercial decisions they make can be just as important in determining whether an interesting capability develops into something that can be deployed at scale.
For Defence Holdings, this is part of the value of working so closely with the cohort. We're developing a better understanding of emerging technologies and the people behind them, while also gaining insight into where capabilities may align with customer requirements and our wider activities.
The experience is also reinforcing our confidence in the way Meridian has been structured. By working individually with each company across its product, commercial, technology and operational roadmaps, we can focus on the particular challenges facing that business rather than applying a standard programme of support to every founder.
That depth of engagement is proving valuable in understanding not only what each company is building, but the decisions that will influence its ability to grow and reach customers.
Not every company will lead to a commercial relationship, product opportunity or investment, nor should that be the measure of the programme's success. The value comes from developing the understanding and relationships that allow us to recognise where there is a genuine reason to work together.
In the next article, I'll explore two further observations: why channel strategy can be as important as the technology itself, and how the increasing convergence of defence and national security is creating new opportunities and challenges for emerging technology companies.
Both are featuring in our discussions with the cohort and have implications for how businesses think about their customers, partnerships and routes to market.
Meridian's purpose is Connecting Innovation to Operational Need. The more time we spend working with these businesses, the clearer it becomes that achieving that requires us to understand not only what the technology can do, but what it takes to turn that capability into something customers can actually use.
