Five years ago, Google canceled a contract with the US Department of Defense government. That’s because thousands of employees protested that Google’s technology could be used for lethal drone targeting. But today, Silicon Valley is far less comfortable developing technology for the US Department of Defense.
Founders Fund’s Trae Stephens, Lux Capital’s Bilal Zuberi, Shield Capital’s Raj Shah, and In-Q-Tel’s longtime president Steve Bowsher announced today at a veterans startup event in San Francisco. He said, Mr. Shah said of the change in attitudes he personally observed:
Bowsher said, “Silicon Valley [Defense Department] During his 16 years at In-Q-Tel, the CIA’s venture fund, his team meets with about 1,000 companies each year, adding that “five to ten turned us down.” , saying they are not interested in working with the customer we represent. “
There’s a lot more to learn from our TechCrunch+ panel discussion, but we wanted to share some of our conversations centered around considerations when selling products to the U.S. government. This is because founders with commercial customers may increasingly consider selling their products and applications to the United States. U.S. Army. (This is especially true for AI, cybersecurity, and automation startups.)
For example, I spoke with an investor about Mission Creep. This means a way to prevent startups that have started working with governments from spending too much time responding to them for new demands they previously ignored. , commercial customers in the process.
Here Trey Stevens — also co-founder of Anduril, a maker of autonomous weapons systems that has been aggressively winning business from government agencies since its inception — believes that this kind of gradual change in goals “It’s exactly what makes it difficult to do both,” he said. [cater to civilian enterprises and the government] In the early stages. “
he said: [enable founders to] To do business with the Department of Defense early on, you need to make your product DoD for that use case. “
In-Q-Tel was an early supporter of Anduril, which Stephens said was grateful, adding that many companies that receive government funding, such as through the Small Business Innovation Research (SBIR) program, “You end up building all of these specific workflow steps that keep them away from the commercial business they need to make the business truly work. He said few organizations could be traced, or the company would die.”)
Relatedly, I asked how so-called dual-use companies handle intellectual property rights after they start selling to the government. For example, you can imagine a scenario where technology could help the NSA identify certain types of people making certain types of calls. The technology has commercial applications, but the government does not want it exposed to adversaries. Is there a way to pre-arrange it?
There was no easy answer here other than getting proper help and doing it ASAP.
Zuberi elaborated on one instructive story centered around one of Lux’s own portfolio companies. Mr Zuberi said: [National Science Foundation] forgive. Two guys started it in my office. I didn’t think much of it. I thought it would be nice to have it on my resume.Then they started a Series B raise, of which he had one [interested] Companies pay attention to any other contract [the team might] That NSF grant had a “if the government needs it” clause. [what you’re building], we can use it.So we had to wait 6 months to negotiate [someone] With the NSF who didn’t care about it at all to get it back. I was paying double his amount in the grant just to get rid of it and they said ‘No we can’t do this, we can’t take it back’.so you can I have a problem.
Again, much can be immediately gained from this discussion, including AI in military applications. We learned a lot — hopefully you will too.
