Stanford Seminar - Silicon Valley & The U.S. Government: Anduril Industries’ Trae Stephens

Trey's Journey to Palantir

• Despite facing challenges, Trey persisted and gained admission to Georgetown University.
• After graduating, he joined the intelligence community and recognized Palantir's potential.
• He advocated for its adoption within the government but faced resistance.
• Trey eventually joined Palantir, despite having no prior venture capital experience.

Early Challenges at Palantir

• The early days at Palantir were challenging, with slow revenue growth and multiple iterations of product development.
• Trey identified the delay in hiring a lobbyist as a tactical mistake, emphasizing the need for both outsider and insider strategies.
• Trey transitioned into sales and eventually led Palantir's Leverage team, the company's sales force.

Delian Asparouhov's Venture into Defense Tech

• Delian Asparouhov, recruited by Peter Thiel, joined Founders Fund as a venture capitalist despite his lack of finance experience.
• To learn about venture capital, Asparouhov attended over 500 pitch meetings, resulting in successful investments in Flexport and Expaanse.
• Recognizing his expertise in defense tech, Asparouhov proposed creating a 21st-century defense prime company, which Peter Thiel supported.
• Asparouhov recruited his co-founding team by reaching out to close friends and former colleagues, including Palmer Luckey, Brian Schimp, Matt Grimm, and Joe Chen.

Building Anduril using Lean Startup Principles

• The company, Anduril, was built using Lean Startup principles, involving a lot of guessing and testing.
• They started by hiring a lobbyist on the first week and within three days, they met with government officials who became their first customers.
• The founders avoided mistakes made in previous defense startups by not following the advice of consultants and retired generals.

Just War Theory and Ethical Engagements

• Just War Theory focuses on leveraging technological advantages to deter conflicts, not conducting violence.
• The goal is to develop precise weapons that eliminate specific targets without causing collateral damage, as exemplified by the successful strike against al-Zawahiri.
• The intersection of religion, defense, government, and Silicon Valley is explored, emphasizing the importance of moral codes and natural rights in shaping ethical engagements.

Challenges in the Defense Technology Sector

• The defense technology sector faces challenges due to the high complexity of defense systems and the need to attract top talent.
• Unlike the Enterprise SAS sector, successful individuals cannot easily start companies due to high customer acquisition costs.
• The defense tech sector requires a lot of capital, know-how, and relationships to succeed.

Advice for Young Entrepreneurs in Defense Tech

• Young people passionate about defense tech should gain experience and skills before starting their own companies.
• Founders should focus on developing their superpowers rather than trying to be well-rounded.
• Entrepreneurs should not become discouraged when they hear "no" but instead should learn from it and keep moving forward.

The Importance of Lobbying and Changes in the US Department of Defense

• Lobbying is essential for any business with a regulatory component, and founders should hire lobbyists from day one.
• The US Department of Defense is undergoing significant changes, creating opportunities for new companies.
• The US government no longer owns the most advanced technology, and some of it is available off the shelf.
• The Department of Defense is still organized to buy from traditional contractors and has not fully adapted to buying from commercial companies and startups.
• The US is facing a potential adversary with more people, technology, and dollars invested in the problem, which is changing how the Department of Defense thinks about commercial technology and national security.

"Hacking for Defense" Program

• A class called "Hacking for Defense" has been started at Stanford and is now in 60 universities in three countries, graduating thousands of students who are now affiliated with the Department of Defense or the intelligence community.
• Individuals can start their careers as technologists and end up helping the country think about national security while also starting a business and making money.