In these days of increased tensions and global turmoil I believe that startups can play an important role in our defense as well as national security ecosystem by bringing the modern technology to public institutions, a few of them are shockingly in the midst.
Entrepreneurs, as well as active investors within the industry are in a unique position to help our defense forces of the West and to protect our society. We must not be hesitant to say We are currently in the middle of a hybrid war with Russia which is an nuclear-armed superpower. Meanwhile, tensions with another superpower, China are simmering just beneath the surface. Undemocratic regimes are threatening our principles and ways of living, and only a few could have predicted that the situation is likely to change in the near future.
But despite this it is true that the vast majority of the technology and venture capital business has been reluctant to work with the military establishment. Prior to the Russian invasion of Ukraine at dinner with colleagues and friends it was possible to trigger the wrath of your peers (and even worse) in the event that you said you think startups should cooperate with organizations like The Pentagon, NATO and Western governments generally. Today, you’re generally greeted with an entirely different reaction with a few murmurs of approval.
The most recent, and effective technologies give an edge to those who develop and use them – as we’ve seen in certain aspects of Western weapons used in Ukraine as well as Ukrainian technological innovation on the battlefield. It is a brutal fact that, by resting on its achievements and ignoring the challenges ahead, the West has let people who want to harm us to catch up and, in some cases exceed our capabilities. The tech industry is partly responsible.
For instance, in the year 2018 more than a million Googlers have signed a letter addressed to the company’s boss Sundar Pichai, stating they believed that “Google should not be in the war business.Particularly, they protested Google’s involvement with the U.S. Department of Defense initiative called Project Maven, which was employing Google AI software to analyse drone footage from military drones. The development of this technology to aid the US Government in military surveillance with potentially deadly consequences is not acceptable the authors wrote.
This hard-hitting and aggressive stance eventually led to the management of Google’s not to extend it’s lucrative Maven contract. Shortly afterward, it pulled out of the running for the cloud computing contract with the Pentagon, known by the name of Joint Enterprise Defense Infrastructure cloud (JEDI) which is believed to be worth $10 billion over 10 years.
Google employees weren’t the only ones to confront their bosses regarding their perceived cooperation in the Trump administration that was widely condemned within tech circles that are progressive. At the exact time Microsoft workers urged CEO Satya Nadella quit work on behalf of Immigration and Customs Enforcement (ICE), Amazon workers protested their company’s work on surveillance technology, and Salesforce employees submitted an online petition asking its executives to “re-examine” the company’s contract with US Customs and Border Protection (CBP)”.
What a difference a few years can make!. Now, fast forward to 2022 and COVID-19 along with its legacy fragile and stressed supply chains around the world and Russia’s conflict with Ukraine and the first real threat of food security within the U.S. or in the West since World War II and escalating tensions with China are prompting a drastic revision from the venture capital and tech business on their responsibilities to the government.
Today, in stark contrast to the majority of other industries, investments in startups for defense and aerospace is on the rise. Between the months of January and October 2022 According to PitchBook, Venture capitalists invested $7 billion in 114 defense and aerospace deals in technology, putting the industry on a path to beat the record of $7.6B total. As of 2018, the VC group put in only $1.4B in these industries. (A portion of that, according to PitchBook is related to the fact that that defense and aerospace are much more resilient to recessions than, for instance consumer or enterprise goods.)
I’m extremely happy of the fact that Techstars is among its most engaged investors in this field. With close to 100 investments across the fields of aerospace, defence and space technology Techstars is among three VCs who have participated at more than 20 space-related startups since the year 2000. In addition, over 25% of the companies selected to participate in the 2022 NASA Small Business Innovation Research contracts were Techstars-backed businesses A portfolio company of ours Slingshot Aerospace recently concluded an $40.8M Series A-2 financing round. Its customers include NASA, the U.S. Air Force, the U.S. Space Force, and NASA.
Recent calm and peace made us believe, incorrectly, that we live in a safe post-conflict environment in which threats to our way of living and the actions of undesirable actors can be brushed aside or avoided. In this situation, a lot of the Valley might be able to convince itself to create products specifically designed to kill and harm (even even if that’s not the primary objective). This kind of stance is now seen as to be naive and unrealistic at best, but a pathetic stance at the worst.
In 2018 the hashtag #TechWontBuildIt was used to oppose the government’s contracts for Big Tech. Not only do we need to construct, but there’s no time to waste.