In a notable departure from decades of sluggish procurement and red tape, the U.S. Navy is swiftly repositioning itself as a serious partner for technology startups. Behind this transformation is Justin Fanelli, the Navy’s Chief Technology Officer, who has spent the last two and a half years dismantling barriers that once discouraged startups from engaging with the military. His mission: to streamline defense contracting and fast-track innovation from the private sector into Navy operations.
While Silicon Valley figures like those at Palantir, Meta, and OpenAI have drawn headlines for donning military uniforms or exploring defense partnerships, Fanelli has been implementing quieter but potentially more impactful changes. His focus is on cutting procurement timelines, rethinking problem-solving frameworks, and making the Department of the Navy more welcoming to agile tech companies that previously saw defense work as unapproachable or unviable.
Instead of prescribing specific solutions, Fanelli and his team now lead with open-ended problems and challenge startups to respond creatively. Using a three-phase model adapted from McKinsey — evaluation, structured pilot testing, and scaling to enterprise — the Navy is inviting startups into the fold with fewer bureaucratic hurdles. This new “Innovation Adoption Kit” is designed to bridge the so-called “Valley of Death,” a stage in the innovation pipeline where promising tech often fails to make it from prototype to deployment.
One example of success under this new framework is the partnership with Via, a Somerville-based cybersecurity startup. The Navy moved from issuing a request for proposal to launching a pilot with Via in under six months — a dramatic shift from past government timelines. Via’s decentralized security infrastructure helps protect sensitive digital identities without relying on single, easily compromised data centers. The U.S. Air Force is also among its clients.
Fanelli’s approach is rooted in real operational need. Rather than simply chasing buzzwords, the Navy is measuring impact through specific, practical metrics: time saved, operational resilience, cost per user, adaptability, and user experience. A pilot project aboard an aircraft carrier that introduced improved networking infrastructure saved 5,000 sailor hours in just one month. Another startup used robotic process automation to eliminate a two-year invoice backlog in under two weeks. These tangible results are changing perceptions both inside the Navy and within the startup ecosystem.
Areas where the Navy is actively seeking private-sector solutions include advanced AI, alternative GPS technologies, and legacy system modernization. AI adoption, Fanelli noted, is moving beyond text generation into more autonomous and agent-driven solutions for tasks like personnel onboarding and real-time ship operations. Meanwhile, alternative precision navigation and timing tools are being rapidly integrated into unmanned systems as a backup to GPS. Outdated technologies like air traffic control systems and shipboard hardware are also slated for upgrades — opportunities ripe for startups offering adaptable, modern software and hardware solutions.
Though Fanelli declined to reveal exact budget figures, he admitted that only a small portion of the Navy’s technology funding currently goes to emerging and commercial tech vendors. He expects that to change significantly as the military becomes more reliant on AI and software-defined infrastructure. One major hurdle, however, remains: budget cycles. Even when pilot projects succeed, funding delays can stall implementation and frustrate both military users and startup investors. In some cases, funding isn’t available unless a new technology replaces an older one — a zero-sum equation that makes transitioning to newer systems even more difficult.
Fanelli, who was once a scholarship cadet in the Air Force but disqualified due to a medical condition, chose to join the Navy out of a deep desire to serve. With a career that spans DARPA, intelligence, and open-source technology, he brings a broad perspective to his current mission: remaking how the Navy thinks about innovation and partnerships.
Despite political shifts and administrative changes, Fanelli believes the current national focus on domestic manufacturing and resilience aligns well with the Navy’s innovation goals. He pointed to efforts like digital twins, additive manufacturing, and on-site production as examples of how the service is working to minimize supply chain vulnerabilities while boosting technological self-sufficiency.
Silicon Valley, long wary of government entanglements, is beginning to warm up to the opportunity. Meta CTO Andrew Bosworth recently remarked that there’s a deeper patriotic streak in the tech world than many assume — and that sentiment appears to be growing. The Defense Innovation Unit recently saw nearly 100 submissions for a niche cybersecurity challenge, many from first-time Department of Defense participants who saw a real-world need and a clear path to implementation.
Fanelli is optimistic that this changing tide will draw even more startups into the fold. His message is simple: if your technology can help solve a critical problem, the Navy wants to hear from you. In his words, “I would invite anyone who wants to serve the greater mission from a solution perspective to lean in and to join us in this journey.”
