{"id":604513,"date":"2023-02-04T07:49:10","date_gmt":"2023-02-04T13:49:10","guid":{"rendered":"https:\/\/news.sellorbuyhomefast.com\/index.php\/2023\/02\/04\/when-the-government-is-the-customer-some-things-to-keep-in-mind\/"},"modified":"2023-02-04T07:49:10","modified_gmt":"2023-02-04T13:49:10","slug":"when-the-government-is-the-customer-some-things-to-keep-in-mind","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2023\/02\/04\/when-the-government-is-the-customer-some-things-to-keep-in-mind\/","title":{"rendered":"When the government is the customer (some things to keep in mind)"},"content":{"rendered":"
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Five years ago, Google backed away<\/a> from a Pentagon government contract because thousands of employees protested that its tech might be used for lethal drone targeting. Today, however, Silicon Valley has far fewer qualms about developing tech for the U.S. Department of Defense.<\/p>\n

So said four investors \u2014 Trae Stephens of Founders Fund, Bilal Zuberi of Lux Capital, Raj Shah of Shield Capital and longtime In-Q-Tel president Steve Bowsher \u2014 speaking at a startup event for military veterans<\/a> today in San Francisco. Said Shah of the shift in attitude that he has observed personally: \u201cThe number of companies, founders, and entrepreneurs interested in national security broadly \u2014 I\u2019ve never seen it at this level.\u201d<\/p>\n

Bowsher argued that the \u201creluctance of Silicon Valley to work with the [Defense Department] and intel community\u201d was always \u201coverblown,\u201d adding that across his 16 year with In-Q-Tel, which is the CIA\u2019s venture fund, his team has met with roughly 1,000 companies each year and just \u201cfive to 10 have turned us down, saying they weren\u2019t interested in working with the customers we represent.\u201d<\/p>\n

We\u2019ll have more from the panel in TechCrunch+ but wanted to share parts of our conversation that centered on Things to Consider when selling to the U.S. government, given that founders with commercial customers may be thinking increasingly trying to sell their products and applications to the U.S. military. (This is particularly true of AI and cybersecurity and automation startups.)<\/p>\n

We talked with the investors, for example, about mission creep, meaning how a startup that begins to work with the government can ensure it doesn\u2019t wind up spending the bulk of its time catering to the government owing to new requests \u2014 and ignoring earlier, commercial customers in the process.<\/p>\n

Here Trae Stephens \u2014 who also cofounded Anduril, a maker of autonomous weapons systems that has aggressively courted business from government agencies from its outset \u2014 said that this kind of gradual shift in objectives is \u201cexactly what makes it hard to do both [cater to civilian enterprises and the government] at an early stage.\u201d<\/p>\n

He said that a \u201clot of the programs that [enable founders to] do early business with the Department of Defense requires some, like, DoD-ization of your product for that use case.\u201d<\/p>\n

Though In-Q-Tel backed Anduril early on, for which Stephens said he is thankful, he offered that many companies that take money from government, including through its Small Business Innovation Research (SBIR) program, \u201cend up building all of these very specific workflow steps that take them away from the commercial businesses needed to make\u201d the business truly work. (Stephens relatedly noted that very few outfits can chase after the military exclusively, as did Anduril, because it \u201ctakes so long to get into production with the DoD that you have to be able to raise, basically, an infinite amount of seed dollars; otherwise, the company\u2019s going to die.\u201d )<\/p>\n

Relatedly, we asked how so-called dual-use companies deal with their intellectual property rights once they\u2019ve begun selling to the government. For example, you can imagine a scenario in which a tech helps the NSA identify certain types of people who are making certain types of calls, and while there are commercial applications for this tech, the government doesn\u2019t want it being released to adversaries. Is there a way to sort that out in advance, we wondered?<\/p>\n

Here, there was no easy answer other than: get the right help and do it as fast as possible.<\/p>\n

Zuberi recounted one cautionary tale centered around one of Lux\u2019s own portfolio companies. Said Zuberi: \u201cI have a company that received a $100,000 [National Science Foundation] grant. Two guys started it in my office. I didn\u2019t think much of it; I thought it was nice to have on their resume. Then they started to do a Series B raise, and one of the [interested] firms does diligence on what other contracts [the team might] have, and there was a clause in that NSF grant that said, \u2018Hey, if the government needs [what you\u2019re building], we can use it.\u2019 So we had to wait six months while we negotiated with [someone] at the NSF who didn\u2019t care about it at all to get that right back. I would have paid them double the amount of the grant just to make it go away, but they said \u2018No, you can\u2019t do this, we can\u2019t go back.\u2019 So you can<\/em> run into problems.<\/p>\n

Again, we\u2019ll have more from this discussion soon, including about AI in military applications; we learned a lot \u2014 hopefully you will, too.<\/p>\n<\/p><\/div>\n

Read More<\/a>
\n Connie Loizos<\/p>\n","protected":false},"excerpt":{"rendered":"

Five years ago, Google backed away from a Pentagon government contract because thousands of employees protested that its tech might be used for lethal drone targeting. Today, however, Silicon Valley has far fewer qualms about developing tech for the U.S. Department of Defense. So said four investors \u2014 Trae Stephens of Founders Fund, Bilal Zuberi<\/p>\n","protected":false},"author":1,"featured_media":604514,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21,284,46],"tags":[],"class_list":{"0":"post-604513","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-customer","8":"category-government","9":"category-technology"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/604513","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=604513"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/604513\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/604514"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=604513"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=604513"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=604513"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}