In recent months, while high-profile Silicon Valley executives from companies such as Palantir, Meta, and OpenAI have dominated headlines by trading their designer vests for Army Reserve uniforms, an equally significant but less visible shift has quietly unfolded within the U.S. Navy.
Justin Fanelli, the Navy’s Chief Technology Officer, has spearheaded an ambitious two-and-a-half-year effort to dismantle bureaucratic hurdles and streamline the arduous procurement processes typically associated with government contracts, particularly those involving young and innovative startups. Fanelli’s initiative aims to position the Navy as a forward-thinking, adaptable client capable of partnering effectively with private-sector innovators.
Fanelli says his mission stems from a simple yet powerful principle: “We’re more open for business and partnerships than we’ve ever been before.” In practice, this means the Navy acknowledges it must be more receptive to outside ideas, committed to agile collaboration, and prepared to transform promising technological prototypes into scalable operational solutions.
Central to this effort has been the Navy’s newly developed “innovation adoption kit,” a strategic framework designed specifically to address the so-called “Valley of Death”—the infamous stage at which many promising technologies stall, caught between prototype and full-scale production. As Fanelli described it, the structured pathway replaces the government’s previous convoluted approach with a clear, open funnel leading from initial evaluation to comprehensive deployment.
An impressive example of this streamlined approach was recently demonstrated when the Navy partnered with Via, an eight-year-old cybersecurity startup based in Somerville, Massachusetts. In less than six months—from the initial Request for Proposal (RFP) through to pilot deployment—Via successfully introduced decentralized security measures protecting sensitive naval data. Moreover, Via’s success story with the Navy echoes the startup’s previous accomplishments with other military branches, including the U.S. Air Force.
Fanelli elaborated on what he calls the Navy’s new “horizon” model, adapted from McKinsey’s innovation framework. This approach divides startup engagement into three successive phases: initial evaluation of proposed solutions, structured piloting programs to test functionality in practical contexts, and, finally, scaling proven technologies to the status of enterprise-wide services. The critical insight in this model, Fanelli emphasized, is that the Navy now approaches startups differently: instead of prescribing specific solutions at the outset, it identifies problems and actively invites industry leaders to propose solutions that are innovative rather than merely incremental.
For Fanelli, the motivation behind overhauling Navy innovation practices is deeply personal. As a young Air Force scholarship cadet studying electrical engineering, he was disqualified from military service due to a respiratory condition. Nevertheless determined to serve, Fanelli chose the Navy over lucrative private-sector job offers more than two decades ago, driven by a desire to support those in uniform. Over his extensive career, he has developed wide-ranging expertise across defense, DARPA, intelligence, open-source software, and cutting-edge technology fields before returning to the Navy to lead its modernization efforts.
Fanelli’s overhaul has made significant progress already. In one recent competition overseen by the Defense Innovation Unit, the Navy anticipated a modest response for a cybersecurity challenge but instead received nearly one hundred submissions—many from startups unfamiliar with defense contracting yet already solving parallel issues in the commercial world.
Other success stories Fanelli shared included a venture-backed firm that employed robotic process automation to clear a two-year invoice backlog in just weeks, and another pilot program which implemented critical network upgrades aboard an aircraft carrier, saving the crew around 5,000 man-hours within the first month alone. Improvements like these, Fanelli noted, have broad-ranging implications beyond operational efficiency, notably improving morale and enabling personnel to focus their energies more strategically.
When evaluating startup partnerships, the Navy now uses five specific measures: time savings, operational resilience, cost-effectiveness, adaptability, and user experience. Fanelli also identified several current technology priorities for the Navy, including advanced applications of artificial intelligence beyond baseline generative models, alternative GPS solutions designed to provide precision navigation independent of traditional satellite systems, and modernization efforts targeting aging naval systems such as air traffic control infrastructure and shipboard technologies.
While Fanelli declined to provide detailed budget figures, he acknowledged that new commercial and emerging technologies today draw only single-digit portions of the Navy’s overall budget—an imbalance likely to shift dramatically as technology continues evolving, particularly with rapidly maturing AI capabilities. He also pointed out that some promising technologies have failed historically not because of technical flaws, but rather due to the Navy’s rigid annual budgeting practices which sometimes prevent ongoing funding for solutions that demonstrate real-world proven gains but do not immediately discontinue legacy systems.
Fanelli acknowledged current policy considerations highlighted by the Trump administration’s emphasis on domestic manufacturing—an approach which, he pointed out, aligns well with the Navy’s interest in boosting resilience through innovations such as digital twins, additive manufacturing, and local production capacities.
Overall, Fanelli explained, the Navy aims to present itself to entrepreneurs and venture investors as an attractive, innovative alternative market that merits serious consideration alongside traditional commercial opportunities. This reorientation seems to be resonating broadly in Silicon Valley, where attitudes toward military collaboration have shifted toward a more openly patriotic stance—a noticeable break from earlier skepticism about working closely with government entities. Fanelli and his team hope this changing perspective will encourage even more technology startups to forge meaningful partnerships with the Navy, shaping a new era of technological advancement and national security collaboration.
