The Department of War Directory

Posted on December 16, 2025 by steve blank

TL;DR   DoW Directory revision 3 is Online here, Order a print copy here.

In November 2025 the Department of War (DoW) unveiled the biggest changes in 60 years of how they will buy weapons and services. This month Congress, with bipartisan support, rapidly made them into law in the National Defense Authorization Act (the NDAA) – 3,096 pages of legislative text and 636-page Joint Explanatory Statement.

This is a top-to-bottom transformation of how the DoW plans and buys weapons, moving from contracts that prioritized process and how much a weapon costs, to how fast it can be delivered. It’s the Lean Startup plan for the Department of War.

Instead of buying custom-designed weapons, the DoW will prioritize a “commercial first” strategy – buying off-the-shelf things that already exist and using fast-track acquisition processes, rather than the cumbersome existing Federal Acquisition Regulations. To manage all of this, they are reorganizing the entire Acquisition ecosystem across the Services.

December 2025 Directory Update – Now Available Online and in Print
Our December 2025 update to the Directory (Online here, Print copy here) describes the New Warfighting Acquisition Organizations – The Portfolio Acquisition Executive and the Capability Program Managers.

If you’re a startup trying to sell to the DoW, until now the biggest barrier has been a lack of information. That changes with this 3rd edition of the 2025 DoW Directory.

Online here, Order a print copy here.


Filed under: Air Force, Gordian Knot Center for National Security Innovation, National Security, Navy | 4 Comments »

The Department of War Just Shot the Accountants and Opted for Speed

Posted on November 11, 2025 by steve blank

Last week the Department of War finally killed the last vestiges of Robert McNamara’s 1962 Planning, Programming, and Budgeting System (PPBS). 

The DoW has pivoted from optimizing cost and performance to delivering advanced weapons at speed. Taking decades to deliver weapons is no longer an option. The DoW has joined the 21st century and adopted Lean Methodology.

Two organizations ought to be very concerned – China and the defense prime contractors.

Secretary of War Pete Hegseth unveiled the biggest changes in 60 years of how the Department of War (DoW) plans for and buys weapons and services. These changes aren’t a minor attempt at reform. It’s a top-to-bottom transformation of how the DoW plans and buys weapons, moving from contracts that prioritize how much a weapon costs to how fast it can be delivered. 

Instead of buying custom-designed weapons, the DoW will prioritize buying off-the-shelf things that already exist, and using fast-track acquisition processes, rather than the cumbersome existing Federal Acquisition Regulations. To manage all of this, they are reorganizing the entire Acquisition ecosystem across the Services. These changes implement every piece of good advice the DoD had gotten in the last decade and had previously ignored. 

The DoW is being redesigned to now operate at the speed of Silicon Valley, delivering more, better, and faster. Our warfighters will benefit from the innovation and lower cost of commercial technology, and the nation will once again get a military second to none.  

It’s big, bold and brave and long overdue.

Background
In 1962 Robert McNamara, the then-Secretary of Defense (and ex CFO of Ford), discovered he had inherited a Defense Department whose spending was out of control. During the 1950s the Air Force built five different types of fighter planes, three generations of bombers, and three generations of ICBMs. The Navy had created a fleet of nuclear-powered attack and ballistic missile submarines and aircraft carriers. The Army bought three generations of its own nuclear-capable missile systems. Many of these systems duplicated capabilities of other services. But most importantly, the Services, in their rush to buy new technology, hadn’t adequately budgeted for the cost of operating, training, maintaining, and sustaining what they had bought. 

In response, Secretary McNamara imposed the discipline of a Chief Financial Officer. He put in place a formal system of Planning (capability gaps, risks, scenarios, threats assumptions), Programming (5-year plans, affordability, quantities, phasing, unit fielding plans) and Budgeting that has lasted 60+ years. An entire defense university was created to train tens of thousands of contracting officers how to follow the detailed rules. Large contractors (the Primes) learned to work with this paperwork-heavy Defense acquisition system and lived with the very long time it took the DoD to buy. 

The Problem
This unwieldy and lethargic acquisition system was adequate for over half a century when our adversary was the Soviet Union who had an equally complex acquisition system, or ISIS and Al Qaida who had none.

However, in the last decade it became painfully obvious that our acquisition system was broken and no longer worked for the world we lived in. Our existing defense industrial base suffers from schedule overruns and huge backlogs; cost increases have become the norm. We’ve been outpaced by adversaries. China, for example, implemented a much more agile system that delivered weapons in a fraction of the time it took us. 

We needed a defense industrial base we could count on to scale in a crisis rather than one that will wait for money before taking action.

The war in Ukraine showed that even a small country could produce millions of drones a year while continually iterating on their design to match changes on the battlefield. (Something we couldn’t do.) Meanwhile, commercial technology from startups and scaleups (fueled by an immense pool of private capital) has created off-the-shelf products, many unmatched by our federal research development centers or primes, that can be delivered at a fraction of the cost/time. But the DoW acquisition system was impenetrable to startups. 

Our Acquisition system was paralyzed by our own impossible risk thresholds, its focus on process not outcomes, and became risk averse and immoveable. 

We needed an acquisition system that could deliver needed things faster.

Reminder: What Did Our Acquisition System Look Like Until Last Week?
The Army, Navy, Air Force, Marines and Space Force train soldiers, sailors and airmen, and specify and buy the weapons for their Service. (It’s the Combatant Commands, e.g. INDOPACOM, CENTCOM, etc., who fight the wars.)

One of the confusing things about Acquisition in the DoW is that it is more than just the buyers of equipment. In the DoW Acquisition with capital “A”, includes the entire end-to-end process – from concept, requirements, prototyping, testing, buying it, to using it and maintaining it.

In each of the Services, the current Acquisition system started with a group that forecast what the Service would need in the future and wrote requirements for future weapons/services/software. This process could take a year or more. Next, Service laboratories developed the technology, tested prototypes and concepts. This could take 3 to 6 years. Next, a vendor was selected and began to prototype and refine the systems. This added another 3 to 4 years. Finally, the system was ready to be built and delivered. It could take 1 to 2 years to deliver weapons in low rate production, or 5 to 10 years for something complex (e.g. aircraft, ships,  spacecraft). In the system we’re replacing the time from when a need was turned into a requirement to delivery of a weapon would take 8 to 16 years. As you can imagine, given the rate of change of current technology and new warfighting concepts our own Acquisition process was an obstacle to building a modern War Department.  

As an example, the Army’s current Acquisition system has 32,000 civilians and military (program managers, contracting officers, etc.) If you include the long tail of sustainment that’s another 165,000+ people. The Acquisition system in the Army (representative of the other services) looks like this:

What Was Wrong With this Process?

  • Responsibility in the Acquisition system was scattered across multiple, siloed organizations with no one individual responsible. 
  • The existing system was designed to acquire individual products (weapons, services, etc.) with a Program Executive Office to manage each effort that only indirectly solved warfighter problems. 
  • Requirements were written so that most everything the DoW bought was bespoke and required development from scratch. 
  • Acquisition was process-focused with rigid rules that emphasized compliance to contracting rules. 
  • Compliance to the rules and processes overrode speed of delivery
  • Weapons and systems development used sequential “waterfall” development processes which precluded learning, pivots and iterative design. ​
  • The result was that speed of delivery was on no one’s priority list.

Why Is The Warfighting Acquisition System A Big Deal?
While previous administrations tried to go around the process, this new system confronts it head on. It is a revolutionary  transformation in the Department of War. It was clearly designed by people who have worked in industry and understand commercial Lean Processes. This transformation will solve the DoW critical Acquisition problems by:

  • Prioritizing speed of delivery
  • Moving the focus from process to outcomes
  • Organizational redesign of the Acquisition process
  • Changing what weapons we ask for and how we prioritize what we need to buy
  • Changing the preferred vendors the DoW will buy from
  • Changing the contracting methods the DoW will use
  • Changing how we measure and reward success 
  • Changing how we educate Acquisition professionals
  • Insisting that disparate systems/vendors interoperate 

The New Warfighting Acquisition Organization – The Portfolio Acquisition Executive
To cut through the individual acquisition silos, the services are creating Portfolio Acquisition Executives (PAEs). 

Each Portfolio Acquisition Executive (PAE) is responsible for the entire end-to-process of the different Acquisition functions: Capability Gaps/Requirements, System Centers, Programming, Acquisition, Testing, Contracting and Sustainment. PAEs are empowered to take calculated risks in pursuit of rapidly delivering innovative solutions.

PAE Offices Are Matrix Organizations
Portfolio Acquisition Executives (PAEs) are organized as a matrix organization – using people from existing organizations – requirements, PEOs, sustainment, contracting etc. The PAEs themselves will have a small staff for coordination.

Portfolios Around Common Problems
In the past, Acquisition was organized by weapon systems and managed by Program Executive Offices. Portfolios will organize instead around common Warfighting Concepts, technologies, or operational integration needs.

Multiple Portfolios In Each Service
Each of the services are consolidating and reorganizing the functions of what were their Program Executive Offices into Portfolios. Program Executive Offices/Officers (PEOs) will become Capability Program Executives (CPEs), and act as a Portfolios’ acquisition arm.

(The examples below are from the Army. Other Services will have equivalent organizational designs for their Portfolios.)

The acquisition chain of authority runs directly from Capability Program Manager to PAE to the Service Acquisition Executive (SAE), with no intermediate offices or approval layers. (The Service Acquisition Executive for the Army is the Assistant Secretary for Acquisition, Logistics & Technology. For the Navy/Marines, the Assistant Secretary for Research, Development & Acquisition. For the Air Force/Space Force the Assistant Secretary for Acquisition, Technology & Logistics.)

The Army Has 6 Portfolio Acquisition Executives
For example, the Army will likely reorganize its 12 existing PEO offices to become part of 6 portfolios aligned with Army Warfighting Concepts and functions. Each of the 6 portfolios headed by a PAEs will be commanded by a Major General.

The likely 6 Army Portfolios are: 1) Maneuver, 2) Maneuver Air, 3)  Fires, 4) C2/CC2,  5) Agile Sustainment and Ammo, and 6) Layered Protection and CBRN. One additional portfolio, called the PIT, will likely include the Army’s Innovation at the Edge activities.

Army PAE Maneuver will likely combine elements of PEO Soldier, PEO Ground Combat Systems, Future Capabilities Division and Maneuver Divisions, Test and Evaluation Integrator, Strategic Contracting Office, and others. This portfolio will likely have the Abrams tank, XM30 Mechanized Infantry Combat Vehicle (replacing the M2 Bradley), the ISV (Infantry Squad Vehicle), Soldier Borne Mission Command program (SBMC), Next Generation Squad Weapon (NGSW), Soldier Borne Sensor (SBS) program, and Organization Clothing and Individual Equipment (OCIE).

Authority to Make Trade-offs
PAEs now have the authority to make trade-offs between cost, schedule and performance and apply flexible funding between weapons systems to rapidly deliver capabilities to the warfighter. This means focusing on fielding “good enough” technology instead of waiting for a product that meets every single requirement.

Army PAE Maneuver Air will likely combine elements of Program Executive Office Aviation, Aviation and Missile Command, Futures Command Future Vertical Lift team DEVCOM Aviation & Missile, and others. It will likely include the Long-Range Assault Aircraft (FLRAA) the Bell V-280 Valor (to replace the UH-60 Black Hawk), Uncrewed Aircraft Systems (UAS), Rotary and Fixed Wing, and Autonomy.

Program Executive Officers (PEOs) are Now Capability Program Executives (CPEs)
Inside each portfolio is a Capability Program Executive (CPE), typically a Brigadier General or a civilian SES. Capability Program Executives have similar roles and responsibilities as today’s PEOs. They are the Acquisition leader responsible for cradle-to-grave management of their programs within their portfolio.

Streamlined Layers of Bureaucracy
97 Army acquisition programs may be reassigned to align with the Army PAE reorganization. 46 organizations that were writing requirements likely will be consolidated into 9 Future Capability Directorates.

Army PAE Fires will likely combine elements from Program Executive Office Missiles and Space, Enterprise Information Systems, the Rapid Capabilities and Critical Technologies Office, Fires System Center, and others. It will likely include the Integrated Battle Command System (IBCS), Patriot/PAC-3, Precision Strike Missile (PrSM), Long-Range Hypersonic Weapon – Dark Eagle (LRHW), Common Autonomous Multi-Domain Launcher (CAML), Guam Defense and Golden Dome.

DoW Will Buy Commercial First
One of the biggest changes is the mandate for PAEs to buy Commercial Off the Shelf (COTS) products, modify them if necessary and only buy bespoke products as a last resort. This change by itself is going to send shockwaves through the existing Prime contractors.

It’s telling everyone that the playing field is now open to everyone. Forget who has more lobbyists on K-Street. Speed, mission impact, and innovation is what will be rewarded. What this means for startups is that if you can execute and deliver (not just PowerPoints) you can become a supplier to the DoW.  

Incentive Compensation to PAEs and Program Managers
PAEs will be judged on whether they deliver systems to the warfighter on time and on schedule. PAEs and Program Managers will have “incentive compensation” tied to “capability delivery time, competition, and mission outcomes. (How they’ll pay that kind of compensation for a member of the military remains to be seen.)

Incentives and Scorecards for Contractors
They’ll be managing their contractors with “time-indexed incentives” to make sure contractors deliver on time and on budget, using “scorecards” to keep tabs on how each portfolio is doing.

Army PAE C2/CC2 (Command and Control/Counter Command and Control) will likely combine elements of PEO Command, Control, Communications and Network.. And include NGC2, TITAN, TENCAP, Next Generation Constructive, STE

Non-Traditional Entry Points
Companies selling to the DoW previously had to comply with the impenetrable DFAR and FAR – the Defense and Federal Acquisition Regulations – with over 5,000 pages of complex rules. It was designed for buying Aircraft Carriers, not startup technology. 

Now the DoW is telling PAEs to toss those and use Non-FAR regulations like OTAs (Other Transaction Authorities). OTAs are not subject to the extensive, rigid rules and regulations of the DFAR. They allow for greater flexibility, speed, and allow the DoW to work with a broader range of innovative commercial companies. For startups this means massively reduced documentation, shorter timelines, and fewer barriers to working with the DoW.

PAEs Will Use Lean Methodology
Rather than fixed requirements and using waterfall development processes, the services are now insisting that vendors use Lean Methodology to set incremental and iterative delivery targets. That means they can field “good enough technology” that can be incrementally updated in the field and improved on a more frequent cadence.

The only requirement for each increment is that they need to target 1) an initial fielding date,
2) set a maximum cost of each unit and 3) meet the minimum standards for mission effectiveness. Other than that, PAEs have the authority that other attributes of the weapons/software can remain tradable throughout development to allow incremental enhancements and rapid delivery of subsequent increments. This includes the ability to waive technical standards and environmental and other compliance requirements, unless they are mandated by statute or safety.

One other interesting Lean mandate is that each PAE will set up lean technical advisory processes to inform accelerated decision-making, ensuring technical rigor without sacrificing speed.

Weapons Will Be Able to Talk to Each Other – By Design
The new PAEs are also tasked with insisting that all weapons across their programs use Modular Open System Architectures, including by asserting government purpose rights over critical software interfaces — a move that allows the Pentagon to retain the data rights needed to avoid “vendor lock” (weapon systems that can only be modified and/or repaired by the company that designed it).

Army PAE Agile Sustainment will likely combine elements of PEO Combat Support and Combat Service Support, PEO Solider and PEO Joint Program Office Armaments and Ammunition. It will likely include next generation Common Tactical Truck (CTT,) Family of Medium Tactical Vehicles (FMTV), 155mm, 6.8mm ammunition.

Two Vendors Through Initial Production
The DoW has painfully learned that having only one vendor selected leads to cost overruns and late projects. A new idea is that each critical acquisition program will have at least two qualified sources through initial production. While this will cost more upfront, it gives government leverage when it is strongest and enables them to re-compete modular components and find alternative suppliers if needed.

Design For Rapid Scale In a Crisis
PAEs have been told to establish acquisition strategies that decouple design from production to allow additional third-party suppliers to surge and rapidly scale manufacturing capacity in a crisis. They are to put in place  guidelines for wartime consumption rates through manufacturing and supply chain partnerships and alternative sources.

Army PAE Layered Protection and CBRN (Chemical, Biological, Radiological, and Nuclear) will likely combine elements of PEO JPEO-CBRND. It will likely include Joint Chemical Agent Detector, UIPE, Decontamination Family of Systems, Biometrics

PAE Officers Now Have More Time To Learn On the Job
A complaint from past acquisition program managers is that they would only be there for two or three years, and then off to their next assignment. Two years was not enough time to see a program through. Now PAEs will have 4-year tours, extendible for another 2 years.

PAEs Top to Bottom
Every military service has 60 days to tell the Secretary of War a list of portfolios it is proposing to be initially stood up. A full implementation plan is due in 90 days. All major acquisition activities across all Services are going to be transitioned to PAE portfolios within two years. 

Army PIT is the Army’s innovation initiatives at the edge. It’s the front door for startups wanting to partner with the Army. 

  • The PIT includes the Joint Innovation Outpost, the Global Tactical Edge Acquisition Directorate (G-TEAD) Marketplace, the FUZE program, and Disruptive Technologies. 
  • The G-TEAD Marketplace merges Prize Challenge events (e.g., Army xTech Program) and DEP submissions through open call announcements.
  • FUZE brings together the Army SBIR/STTR seed funding, MANTECH (Army Manufacturing Technology program), TMI (Tech Maturation Initiative) and XTech the Army’s scouting program. 

Reeducation Camp – Warfighting Acquisition University
To retrain/reeducate contracting and acquisition officers, the “Defense Acquisition University” will become the “Warfighting Acquisition University.” They have been ordered to stop compliance-focused training operations and in six months transform into a competency-based education institution.

The university will pivot to offer experiential team-based programs that work on real DoW challenges (does that ever sound like a description of Hacking for Defense.) And they’re going to have their students get out of the building and take part in industry-government exchanges. In the next six months they’re going to prioritize education and rotation programs to get their students exposure to commercial industry practices, manufacturing and operational expertise, and real-world problem-solving. All to develop Acquisition executives critical thinking and agile and rapid decision-making skills. (Note to DAU: we’ve been building these programs for a decade at the Stanford Gordian Knot Center for National Security Innovation. Our national security classes are in 60+ universities and we’re happy to help.)

The Joint Staff – Coordinating the Needs of All the Services
While each of the Services generated their own weapons requirements, plans and budgets, they all had to be approved by the Joint Staff (which reports to the Secretary of War) through a process called the JCIDS (Joint Capabilities Integration & Development System). In theory this was to coordinate each of the Service’s needs so they weren’t duplicating each other, to ensure that they were interoperable, and to give the Combatant Command a voice; and tie all the requirements to joint concepts – all of this needing to be done before Service weapons programs got funded and built.

The problem was that JCIDS moved at the speed of paperwork, not war, so the Secretary of War eliminated it earlier this year. (They kept part of it called the Joint Requirements Oversight Council but reoriented it from validating documents to identifying joint operational problems, which will drive the priorities for the entire department of War.) 

In JCIDS’ place the Secretary of War created three new organizations:

  • The Joint Acceleration Reserve, a pool of money set aside to quickly field promising capabilities.
  • The Requirements and Resourcing Alignment Board (RRAB) that will tie money directly to the top warfighting priorities and how much money each will get from the new Joint Acceleration Reserve.
  • The Mission Engineering and Integration Activity brings government, industry, and labs together early on to rapidly experiment, test, and prototype new tech.

It’s interesting to note that none of these changes at the Joint Staff have seemed to (at least publicly) filter down to the charter of the Services Portfolio Acquisition Executives (PAEs). The achilles heel of the Services Acquisition process appears that they are still planning to put the Requirements and Capability gap analysis up front.  Here’s why that’s a problem and how to fix it.

Foreign military sales
One other tangential decision in this redesign was not in acquisition but in sales. The DoW wants a greater emphasis on selling our weapons to our Allies. They’ve moved two agencies responsible for those functions – the Defense Technology Security Administration DTSA and the Defense Security Cooperation Agency (DSCA) – from OSD Policy to OSD Acquisition and Sustainment. 

This move is about selling more of our equipment, but makes no mention of buying any equipment from our allies.

Inferred But Not Mentioned
Pretty interesting that in this reorg no one has noticed that Elbridge Colby – Under Secretary for Policy – had three organizations taken away from him.  

  1. Defense Technology Security Administration DTSA
  2. Defense Security Cooperation Agency (DSCA)
  3. The Joint Production Accelerator Cell (JPAC) now renamed the Wartime Production Unit (WPU)

All three organizations were handed to Michael Duffey the Under Secretary for Acquisition & Sustainment. Regardless of the public statements the optics are not a vote of confidence.

Bigger and Better?
It appears that the Office of Strategic Capital may have been swallowed up by the Economic Defense Unit run by George Kolitdes. From all appearances the Economic Defense Unit is tasked to decouple our economy from China, using private and public capital. That means considering how to on-shore the critical components like minerals, chips, batteries, motors, PNT, etc.) The Acquisition announcement was how to buy things. This Economic Defense Unit is how do we ensure the things we buy are made with parts we know we can have an assured supply of?

Summary

  • Startups and the DoW are now speaking the same language – Lean, feedback from the field, pivots, iterative and incremental product design, speed to delivery.
  •  The DoW mandate to first buy commercial-off-the-shelf products is a once-in-a-lifetime opportunity for every startup and scaleup.
    • But you have to deliver. Don’t hand wave with PowerPoints.
    • DoW will be ruthless in shutting down and freezing out non-performers.
  • The use of Non-Federal Acquisition Regulations will eliminate huge amounts of paperwork. 
    • It eliminates one of the reasons to subcontract with a prime or other company 
  • DoW needs to be ruthless in reforming the compliance culture
  • Who to talk to in each service and how will they do business will be unclear for at least the next six months
    • Reorganizations will create uncertainty of who is the front door for startups, how the new rules apply, and who can commit to contracts.
    • The Army appears to be further along than the other services in putting a PAE organization in place.
  • In theory this is a knife to the heart of the Primes’ business model. 
    • They will flood Congress and the Executive Branch with infinite capital to change these rules.
    • It’s a race between private capital and public company lobbying money
  • Let’s hope these changes stick

Thanks to Pete Newell of BMNT for the feedback and insight.

Filed under: National Security, Technology Innovation and Modern War | 7 Comments »

How to Sell to the Dept of War – The 2025 PEO Directory – Now with 500 more names

Posted on October 15, 2025 by steve blank

The October 2025 PEO Directory – Update 2.

The Department of War (DoW) is one of the world’s largest organizations.  If you’re a startup trying to figure out who to call on and how to navigate the system, it can be – to put it politely – challenging.Those inside the DoW have little perspective of how hard it is to understand what to an outsider looks like in an impenetrable, incredibly complex system.

Insiders know who to call, and prime contractors have teams of people following broad area announcements and contracts, but if you’re startup, you have none of those relationships. (And with the advent of Social Media even our adversaries have better knowledge.)

If we’re serious about building a next generation defense ecosystem (not just buying the next shiny object), then this is the directory the Department of War should be publishing.

Until then, here’s the second update to the Department of War PEO Directory.
500 new names/organizations in this DoW phonebook and startup Go-to-Market Strategy playbook.

(See Appendix H for a summary of the changes.)

Downloads of the Directory can be found here.

Sign up for timely updates here.

Filed under: Air Force, Hacking For Defense, National Security, Navy | Leave a comment »

No Science, No Startups: The Innovation Engine We’re Switching Off

Posted on October 13, 2025 by steve blank

Tons of words have been written about the Trump Administrations war on Science in Universities. But few people have asked what, exactly, is science? How does it work? Who are the scientists? What do they do? And more importantly, why should anyone (outside of universities) care?

(Unfortunately, you won’t see answers to these questions in the general press – it’s not clickbait enough. Nor will you read about it in the science journals– it’s not technical enough. You won’t hear a succinct description from any of the universities under fire, either – they’ve long lost the ability to connect the value of their work to the day-to-day life of the general public.)

In this post I’m going to describe how science works, how science and engineering have worked together to build innovative startups and companies in the U.S.—and why you should care.

(In a previous post I described how the U.S. built a science and technology ecosystem and why investment in science is directly correlated with a country’s national power. I suggest you read it first.)

How Science Works
I was older than I care to admit when I finally understood the difference between a scientist, an engineer, an entrepreneur and a venture capitalist; and the role that each played in the creation of advancements that made our economy thrive, our defense strong and America great.

Scientists
Scientists (sometimes called researchers) are the people who ask lots of questions about why and how things work. They don’t know the answers. Scientists are driven by curiosity, willing to make educated guesses (the fancy word is hypotheses) and run experiments to test their guesses. Most of the time their hypotheses are wrong. But every time they’re right they move the human race forward. We get new medicines, cures for diseases, new consumer goods, better and cheaper foods, etc.

Scientists tend to specialize in one area – biology, medical research, physics, agriculture, computer science, materials, math, etc. — although a few move between areas. The U.S. government has supported scientific research at scale (read billions of $s) since 1940.

Scientists tend to fall into two categories: Theorists and Experimentalists.

Theorists
Theorists develop mathematical models, abstract frameworks, and hypotheses for how the universe works. They don’t run experiments themselves—instead, they propose new ideas or principles, explain existing experimental results, predict phenomena that haven’t been observed yet. Theorists help define what reality might be.

Theorists can be found in different fields of science. For example:

Physics                    Quantum field theory, string theory, quantum mechanics
Biology                     Neuroscience and cognition, Systems Biology, gene regulation
Chemistry                Molecular dynamics, Quantum chemistry
Computer Science   Design algorithms, prove limits of computation
Economics               Build models of markets or decision-making
Mathematics            Causal inference, Bayesian networks, Deep Learning

The best-known 20th-century theorist was Albert Einstein. His tools were a chalkboard and his brain. in 1905 he wrote an equation E=MC2 which told the world that a small amount of mass can be converted into a tremendous amount of energy. When he wrote it down, it was just theory. Other theorists in the 1930s and ’40s took Einstein’s theory and provided the impetus for building the atomic bomb. (Leo Szilard conceived neutron chain reaction idea, Hans Bethe led the Theoretical Division at Los Alamos, Edward Teller developed hydrogen bomb theory.) Einstein’s theory was demonstrably proved correct over Hiroshima and Nagasaki.

Experimentalists
In addition to theorists, other scientists – called experimentalists – design and run experiments in a lab. The pictures you see of scientists in lab coats in front of microscopes, test tubes, particle accelerators or NASA spacecraft are likely experimentalists. They test hypotheses by developing and performing experiments. An example of this would be NASA’s James Webb telescope or the LIGO Gravitational-Wave Observatory experiment. (As we’ll see later, often it’s engineers who build the devices the experimentalists use.)

Some of these experimentalists focus on Basic Science, working to get knowledge for its own sake and understand fundamental principles of nature with no immediate practical use in mind.

Other experimentalists work in Applied Science, which uses the findings and theories derived from Basic Science to design, innovate, and improve products and processes.

Applied scientists solve practical problems oriented toward real-world applications. (Scientists at Los Alamos weretrying to understand the critical mass of U-235 (the minimum amount that would explode.) Basic science lays the groundwork for breakthroughs in applied science. For instance: Quantum mechanics (basic science) led to semiconductors which led to computers (applied science). Germ theory (basic science) led to antibiotics and vaccines (applied science). In the 20th century Applied scientists did not start the companies that make end products. Engineers and entrepreneurs did this. (In the 21st century more Applied Scientists, particularly in life sciences, have also spun out companies from their labs.)

Scientists


Where is Science in the U.S. Done?
America’s unique insight that has allowed it to dominate Science and invention, is that after WWII we gave Research and Development money to universities, rather than only funding government laboratories. No other country did this at scale.

Corporate Research Centers
In the 20th century, U.S. companies put their excess profits into corporate research labs. Basic research in the U.S. was done in at Dupont, Bell Labs, IBM, AT&T, Xerox, Kodak, GE, et al.

This changed in 1982, when the Securities and Exchange Commission ruled that it was legal for companies to buy their own stock (reducing the number of shares available to the public and inflating their stock price.) Very quickly Basic Science in corporate research all but disappeared. Companies focused on Applied Research to maximize shareholder value. In its place, Theory and Basic research is now done in research universities.

Research Universities
From the outside (or if you’re an undergraduate) universities look like a place where students take classes and get a degree. However, in a research university there is something equally important going on. Science faculty in these schools not only teach, but they are expected to produce new knowledge—through experiments, publications, patents, or creative work. Professors get grants and contracts from federal agencies (e.g., NSF, NIH, DoD), foundations, and industry. And the university builds Labs, centers, libraries, and advanced computing facilities that support these activities.

In the U.S. there are 542 research universities, ranked by the Carnegie Classification into three categories.

R1: 187 Universities – Very High Research Activity
Conduct extensive research and award many doctoral degrees.
Examples: Stanford, UC Berkeley, Harvard, MIT, Michigan, Texas A&M …

R2: 139 Universities – High Research Activity
Substantial but smaller research scale.
Examples: James Madison, Wake Forest, Hunter College, …

R3: 216 Research Colleges/Universities
Limited research focus; more teaching-oriented doctoral programs.
Smaller state universities

Why Universities Matter to Science
U.S. universities perform about 50% of all basic science research (physics, chemistry, biology, social sciences, etc.) because they are training grounds for graduate students and postdocs. Universities spend ~$109 billion a year on research. ~$60 billion of that $109 billion comes from the National Institutes for Health (NIH) for biomedical research, National Science Foundation (NSF) for basic science, Department of War (DoW), Department of Energy (DOE), for energy/physics/nuclear, DARPA, NASA. (Companies tend to invest in applied research and development, that leads directly to saleable products.)

Professors (especially in Science, Technology, Engineering and Math) run labs that function like mini startups. They ask research questions, then hire grad students, postdocs, and staff and write grant proposals to fund their work, often spending 30–50% of their time writing and managing grants. When they get a grant the lead researcher (typically a faculty member/head of the lab) is called the Principal Investigator (PI).

The Labs are both workplaces and classrooms. Graduate students and Postdocs do the day-to-day science work as part of their training (often for a Ph.D.). Postdocs are full-time researchers gaining further specialization. Undergraduates may also assist in research, especially at top-tier schools.

(Up until 2025, U.S. science was deeply international with ~40–50% of U.S. basic research done by foreign-born researchers (graduate students, postdocs, and faculty). Immigration and student visas were a critical part of American research capacity.)

The results of this research are shared with the agencies that funded it, published in journals, presented at conferences and often patented or spun off into startups via technology transfer offices. A lot of commercial tech—from Google search to CRISPR—started in university labs.

Universities support their science researchers with basic administrative staff (for compliance, purchasing, and safety) but uniquely in the U.S., by providing the best research facilities (labs, cleanrooms, telescopes), and core scientific services: DNA sequencing centers, electron microscopes, access to cloud, data analysis hubs, etc. These were the best in the world – until the sweeping cuts in 2025.

Engineers Build on the Work of Scientists
Engineers design and build things on top of the discoveries of scientists. For example, seven years after scientists split the atom, it took 10s of thousands of engineers to build an atomic bomb. From the outset, the engineers knew what they wanted to build because of the basic and applied scientific research that came before them.

Scientists Versus Engineers

Engineers create plans, use software to test their designs, then… cut sheet metal, build rocket engines, construct buildings and bridges, design chips, build equipment for experimentalists, design cars, etc.

As an example, at Nvidia their GPU chips are built in a chip factory (TSMC) using the Applied science done by companies like Applied Materials which in turn is based on Basic science of semiconductor researchers. And the massive data centers OpenAI, Microsoft, Google, et al that use Nvidia chips are being built by mechanical and other types of engineers.

My favorite example is that the reusable SpaceX rocket landings are made possible by the Applied Science research on Convex Optimization frameworks and algorithms by Steven Boyd of Stanford. And Boyd’s work was based on the Basic science mathematical field of convex analysis (SpaceX, NASA, JPL, Blue Origin, Rocket Lab all use variations of Convex Optimization for guidance, control, and landing.)

Startup Entrepreneurs Build Iteratively and Incrementally
Entrepreneurs build companies to bring new products to market. They hire engineers to build, test and refine products.

Engineers and entrepreneurs operate with very different mindsets, goals, and tolerances for risk and failure. (Many great entrepreneurs start as engineers e.g., Musk, Gates, Page/Brin). An engineer’s goal is to design and deliver a solution to a known problem with a given set of specifications.

In contrast, entrepreneurs start with a series of unknowns about who are the customers, what are the wanted product features, pricing, etc. They retire each of these risks by building an iterative series of minimum viable products to find product/market fit and customer adoption. They pivot their solution as needed when they discover their initial assumptions are incorrect. (Treating each business unknown as a hypothesis is the entrepreneurs’ version of the Scientific Method.)

Venture Capitalists Fund Entrepreneurs
Venture capitalists (VCs) are the people who fund entrepreneurs who work with engineers who build things that applied scientists have proven from basic researchers.

Unlike banks which will give out loans for projects that have known specifications and outcomes, VCs invest in a portfolio of much riskier investments. While banks make money on the interest they charge on each loan, VCs take part ownership (equity) in the companies they invest in. While most VC investments fail, the ones that succeed make up for that.

Most VCs are not scientists. Few are engineers, some have been entrepreneurs. The best VCs understand technical trends and their investments help shape the future. VCs do not invest in science/researchers. VCs want to minimize the risk of their investment, so they mostly want to take engineering and manufacturing risk, but less so on applied science risk and rarely on basic research risk. Hence the role of government and Universities.

VCs invest in projects that can take advantage of science and deliver products within the time horizon of their funds (3–7 years). Science often needs decades before a killer app is visible.

As the flow of science-based technologies dries up, the opportunities for U.S. venture capital based on deep tech will decline, with its future in countries that are investing in science – China or Europe.

Why Have Scientists? Why Not Just a Country of Engineers, Entrepreneurs and VCs (or AI)?
If you’ve read so far, you might be scratching your head and asking, “Why do we have scientists at all? Why pay for people to sit around and think? Why spend money on people who run experiments when most of those experiments fail? Can’t we replace them with AI?”

The output of this university-industry-government science partnership became the foundation of Silicon Valley, the aerospace sector, the biotechnology industry, Quantum and AI. These investments gave us rockets, cures for cancer, medical devices, the Internet, Chat GPT, AI and more.

Investment in science is directly correlated with national power. Weaken science, you weaken the long-term growth of the economy, and national defense.

Tech firms’ investments of $100s of billions in AI data centers is greater than the federal government’s R&D expenditures. But these investments are in engineering not in science. The goal of making scientists redundant using artificial general intelligence misses the point that AI will (and is) making scientists more productive – not replacing them.

Countries that neglect science become dependent on those that don’t. U.S. post-WWII dominance came from basic science investments (OSRD, NSF, NIH, DOE labs). After WWII ended, the UK slashed science investment which allowed the U.S. to commercialize the British inventions made during the war.

The Soviet Union’s collapse partly reflected failure to convert science into sustained innovation, during the same time that U.S. universities, startups and venture capital created Silicon Valley. Long-term military and economic advantage (nuclear weapons, GPS, AI) trace back to scientific research ecosystems.

Lessons Learned

  • Scientists come in two categories
    • Theorists and experimentalists
    • Two types of experimentalists; Basic science (learn new things) or applied science (practical applications of the science)
    • Scientists train talent, create patentable inventions and solutions for national defense
  • Engineers design and build things on top of the discoveries of scientists
  • Entrepreneurs test and push the boundaries of what products could be built
  • Venture Capital provides the money to startups
  • Scientists, engineers, entrepreneurs – these roles are complementary
    • Remove one and the system degrades
  • Science won’t stop
    • Cut U.S. funding, then science will happen in other countries that understand its relationship to making a nation great – like China.
    • National power is derived from investments in Science
    • Reducing investment in basic and applied science makes America weak

Appendix – How Does Science Work? – The Scientific Method
Whether you were a theorist or experimentalist, for the last 500 years the way to test science was by using the scientific method. This method starts by a scientist wondering and asking, “Here’s how I think this should work, let’s test the idea.”

The goal of the scientific method is to turn a guess (in science called a hypothesis) into actual evidence. Scientists do this by first designing an experiment to test their guess/hypothesis. They then run the experiment and collect and analyze the result and ask, “Did the result validate, invalidate the hypothesis? Or did it give us completely new ideas?” Scientists build instruments and run experiments not because of what they know, but because of what they don’t know.

These experiments can be simple ones costing thousands of dollars that can be run in a university biology lab while others may require billions of dollars to build a satellite, particle accelerator or telescope. (The U.S. took the lead in Science after WWII when the government realized that funding scientists was good for the American economy and defense.)

Good science is reproducible. Scientists just don’t publish their results, but they also publish the details of how they ran their experiment. That allows other scientists to run the same experiment and see if they get the same result for themselves. That makes the scientific method self-correcting (you or others can see mistakes).

One other benefit of the scientific method is that scientists (and the people who fund them) expect most of the experiments to fail, but the failures are part of learning and discovery. They teach us what works and what doesn’t. Failure in science testing unknowns means learning and discovery.

Filed under: National Security, NIH (National Institutes of Health), NSF (National Science Foundation) | 23 Comments »

How To Sell to the Dept of War – The 2025 PEO Directory

Posted on September 10, 2025 by steve blank

Announcing the 2025 edition of the DoW PEO Directory. Online here.

Think of this PEO Directory as a “Who buys in the government?” phone book.

Finding a customer for your product in the Department of War is hard: Who should you talk to? How do you get their attention? What is the right Go-To-Market Strategy? What is a PEO and why should I care?

Ever since I co-founded Hacking for Defense, my students would ask, “Who should we call in the DoW to let them know what problem we solved? How can we show them the solution we built?” In the last few years that question kept coming, from new defense startups and their investors.

At the same time, I’d get questions from the new wave of Defense Investors asking, “What’s the best “Go-To-Market (GTM)” strategy for our startups?

PEOs, PMs, PIAs, PoRs, Consortia, SBIRs, OTAs, CSOs, FAR, CUI, SAM, CRADAs, Primes, Mid-tier Integrators, Tribal/ANC Firms, Direct-to-Operator, Direct-to-Field Units, Labs, DD-254… For a startup it’s an entirely new language, new buzzwords, new partners, new rules and it requires a new “Go-To-Market (GTM)” strategy.

How to Work With the DoW
Below are simplified diagrams of two of the many paths for how a startup can get funding and revenue from the Department of War. The first example, the Patient Capital Path, illustrates a startup without a working product. They travel the traditional new company journey through the DoW processes.

The second example, the Impatient Capital Path, illustrates a startup with an MVP and/or working product. They ignore the traditional journey through the DoW process and go directly to the warfighter in the field. With the rise of Defense Venture Capital, this “swing-for-the fences” full-speed ahead approach is a Lean Startup approach to become a next generation Prime.

(Note that in 2025 selling to the DoW is likely to change – for the better.)

Selling to the DoW takes time, but a well-executed defense strategy can lead to billion-dollar contracts, sustained revenue, and technological impact at a national scale. Existing defense contractors know who these DoW organizations are and have teams of people tracking budgets and contracts. They know the path to getting an order from the Department of War. But startups?

Why Write the PEO Directory?
Most startups don’t have a clue where to start. And selling to the Department of War is unlike any enterprise or B-to-B sales process founders and their investors may be familiar with. Compared to the commercial world, the language is different, the organizations are different, the culture of risk taking (in acquisition) is different, and most importantly the go-to-market strategy is completely different.

Amazingly, until last year’s first edition of the PEO directory there wasn’t a DoW-wide phone book available to startups to identify who to call in the War Department. This lack of information made sense in a world where the DoW and its suppliers were a closely knit group who knew each other and technology innovation was happening at a sedate decades-long pace. (And assumed our adversaries didn’t have access to our DoW web pages, LinkedIn and ChatGPT.)

That’s no longer true. Given the rapid pace of innovation outside the DoW, and new vendors in UAS, counter UAS, autonomy, AI, quantum, biotech, et al, this lack of transparency is now an obstacle to a whole-of-nation approach to delivering innovation to the warfighter.

(This lack of information even extends internally to the DoW. I’ve started receiving requests from staff at multiple Combatant Commands for access to the PEO Directory. Why? Because “…it would be powerful to include a database of PEOs to link to our database of Requirements, Gaps, and Tracked Technologies to specific PEOs to call.”)

This is a classic case of information asymmetry, and it’s not healthy for either the increasingly urgent needs of the Department of War or the nascent startup defense ecosystem.

Our adversaries have had a whole-of-nation approach to delivering innovation to the warfighter in place for decades. This is our contribution to help the DoW compete.

2025 PEO Directory Edition Notes
The first edition of this document started solely as a PEO directory. Its emphasis was (and is) the value of a startup talking to PEOs early is to get signals on what warfighter problems to solve and whether the DoW will buy their product now or in the future. Those early conversations answer the questions of “Is there a need?” and “Is there a market?”

This 2025 edition of the PEO Directory attempts to capture the major changes that are occurring in the DoW – in organizations, in processes and in people. (For example, the PEO offices of the three largest new defense acquisition programs — Golden Dome, Sentinel and Columbia – will report directly to the Deputy Secretary of War, rather than to their respective Services. And the SecWar killed the cumbersome JCIDIS requirements process.)

What this means is that in 2025 the DoW will develop a new requirements and acquisition process that will identify the most urgent operational problems facing the U.S. military, work with industry earlier in the process, then rapidly turn those into fielded solutions. (That also means the Go-to-market description, people and organizations in this document will be out of date, and why we plan to update it regularly.)

What’s New?
This 2025 edition now includes as an introduction, a 30-page tutorial for startups on how the DoW buys and the various acquisition and funding processes and programs that exist for startups. It provides details on how to sell to the DoW and where the Program Executive Offices (PEOs) fit into that process.

The Directory now also includes information about the parts of the government and the regulations that influence how the DoW buys – the White House Office of Management and Budget (OMB), and the Federal Acquisition Regulations (FAR).  It added new offices such as Golden Dome Direct Reporting Program, DIU, AFRL, DARPA, MDA, CDAO, OSC, IQT, Army Transformation and Training Command, SOCOM, and others.

To help startups understand the DoW, for each service we added links to the organization, structure, and language, as well as a list of each Service’s General Officers/Flag Officers.

Appendix B has a linked spreadsheet with the names in this document.

Appendix C has a list of Venture Capital firms, Corporate Investors, Private Equity firms and Government agencies who invest in Defense. In addition, the Appendix includes details about the various DoW SBIR programs, a list of OTA Consortia, Partnership Intermediary Agreement (PIA) Organizations, and Tribal/Alaska Native Corporation (ANC) Companies.

Appendix D now lists and links to the military and state FFRDC test centers where startups can conduct demos and test equipment.

Appendix E added a list and links of Defense Publications and Defense Trade Shows.

Appendix F has a list of all Army system contractors.

A few reminders:

  • This is not an official publication of the U.S. government
  • Do not depend on this document for accuracy, completeness or business advice.
  • All data is from DoW websites and publicly available information.

Thanks to this year’s partners helping to maintain and host the Directory: Stanford Gordian Knot Center for National Security Innovation, America’s Frontier Fund and BMNT.

This edition of the PEO Directory is on-line so it can be updated as the latest changes become available.

Send updates and corrections to updates@americasfrontier.com

You can access and download the full document here.

Filed under: Corporate/Gov't Innovation, Gordian Knot Center for National Security Innovation, Hacking For Defense, National Security, Technology Innovation and Great Power Competition, Venture Capital | Leave a comment »

Teaching National Security Policy with AI

Posted on June 10, 2025 by steve blank

The videos embedded in this post are best viewed on steveblank.com

International Policy students will be spending their careers in an AI-enabled world. We wanted our students to be prepared for it. This is why we’ve adopted and integrated AI in our Stanford national security policy class – Technology, Innovation and Great Power Competition.

Here’s what we did, how the students used it, and what they (and we) learned.

Technology, Innovation and Great Power Competition is an international policy class at Stanford (taught by me, Eric Volmar and Joe Felter.) The course provides future policy and engineering leaders with an appreciation of the geopolitics of the U.S. strategic competition with great power rivals and the role critical technologies are playing in determining the outcome.

This course includes all that you would expect from a Stanford graduate-level class in the Masters in International Policy – comprehensive readings, guest lectures from current and former senior policy officials/experts, and deliverables in the form of written policy papers. What makes the class unique is that this is an experiential policy class. Students form small teams and embark on a quarter-long project that got them out of the classroom to:

  • select a priority national security challenge, and then …
  • validate the problem and propose a detailed solution tested against actual stakeholders in the technology and national security ecosystem

The class combines multiple teaching tools.

  • Real world – Students worked in teams on real problems from government sponsors
  • Experiential – They get out of the building to interview 50+ stakeholders
  • Perspectives – They get policy context and insights from lectures by experts
  • And this year… Using AI to Accelerate Learning

Rationale for AI
Using this quarter to introduce AI we had three things going for us: 1) By fall 2024 AI tools were good and getting exponentially better, 2) Stanford had set up an AI Playground enabling students to use a variety of AI Tools (ChatGPT, Claude, Perplexity, NotebookLM, Otter.ai, Mermaid, Beautiful.ai, etc.) and 3) many students were using AI in classes but it was usually ambiguous about what they were allowed to do.

Policy students have to read reams of documents weekly. Our hypotheses was that our student teams could use AI to ingest and summarize content, identify key themes and concepts across the content, provide an in-depth analysis of critical content sections, and then synthesize and structure their key insights and apply their key insights to solve their specific policy problem.  They did all that, and much, much, more.

While Joe Felter and I had arm-waved “we need to add AI to the class” Eric Volmar was the real AI hero on the teaching team. As an AI power user Eric was most often ahead of our students on AI skills. He threw down a challenge to the students to continually use AI creatively and told them that they would be graded on it. He pushed them hard on AI use in office hours throughout the quarter. The results below speak for themselves.

If you’re not familiar with these AI tools in practice it’s worth watching these one minute videos.

Team OSC
Team OSC was trying to understand what is the appropriate level of financial risk for the U.S. Department of Defense to provide loans or loan guarantees in technology industries?

The team started using AI to do what we had expected, summarizing the stack of weekly policy documentsusing Claude 3.5. And like all teams, the unexpected use of AI was to create new leads for their stakeholder interviews. They found that they could ask AI to give them a list of leaders that were involved in similar programs, or that were involved in their program’s initial stages of development.

See how Team OSC summarized policy papers here:

If you can’t see the video click here

Claude was also able to create a list of leaders with the Department of Energy Title17 credit programs, Exim DFC, and other federal credit programs that the team should interview. In addition, it created a list of leaders within Congressional Budget Office and the Office of Management and Budget that would be able to provide insights. See the demo here:

If you can’t see the video click here
The team also used AI to transcribe podcasts. They noticed that key leaders of the organizations their problem came from had produced podcasts and YouTube videos. They used Otter.ai to transcribe these. That provided additional context for when they did interview them and allowed the team to ask insightful new questions.

If you can’t see the video click here

Note the power of fusing AI with interviews. The interviews ground the knowledge in the teams lived experience.

The team came up with a use case the teaching team hadn’t thought of – using AI to critique the team’s own hypotheses. The AI not only gave them criticism but supported it with links from published scholars. See the demo here:

If you can’t see the video click here

Another use the teaching team hadn’t thought was using Mermaid AI to create graphics for their weekly presentations. See the demo here:

If you can’t see the video click here

The surprises from this team kept coming. Their last was that the team used Beautiful.ai in order to generate PowerPoint presentations. See the demo here:

If you can’t see the video click here

For all teams, using AI tools was a learning/discovery process all its own. By and large, students were largely unfamiliar with most tools on day 1.

Team OSC suggested that students should start using AI tools early in the quarter and experiment with tools like ChatGPT, Otter.ai. Tools that that have steep learning curves, like Mermaid should be started at the very start of the project to train their models.

Team OSC AI tools summary: AI tools are not perfect, so make sure to cross check summaries, insights and transcriptions for accuracy and relevancy. Be really critical of their outputs. The biggest takeaway is that AI works best when prepared with human efforts.

Team FAAST
The FAAST team was trying to understand how can the U.S. improve and scale the DoE FASST program in the urgent context of great power competition?

Team FAAST started using AI to do what we had expected, summarizing the stack of weekly policy documents they were assigned to read and synthesizing interviews with stakeholders.

One of the features of ChatGPT this team appreciated, and important for a national security class, was the temporary chat feature –  data they entered would not be used to train the open AI models. See the demo below.

If you can’t see the video click here

The team used AI do a few new things we didn’t expect –  to generate emails to stakeholders and to create interview questions. During the quarter the team used ChatGPT, Claude, Perplexity, and NotebookLM. By the end of the 10-week class they were using AI to do a few more things we hadn’t expected. Their use of AI expanded to include simulating interviews. They gave ChatGPT specific instructions on who they wanted it to act like, and it provided personalized and custom answers. See the example here.

If you can’t see the video click here

Learning-by-doing was a key part of this experiential course. The big idea is that students learn both the method and the subject matter together. By learning it together, you learn both better.

Finally, they used AI to map stakeholders, get advice on their next policy move, and asked ChatGPT to review their weekly slides (by screenshotting the slides and putting them into ChatGPT and asking for feedback and advice.)

The FAAST team AI tool summary: ChatGPT was specifically good when using images or screenshots, so in these multi-level tasks, and when you wanted to use kind of more custom instructions, as we used for the stakeholder interviews.  Claude was better at more conversational and human in writing, so used it when sending emails. Perplexity was better for researchers because it provides citations, so you’re able to access the web and actually get directed to the source that it’s citing. NotebookLM was something we tried out, but it was not as successful. It was a cool tool that allowed us to summarize specific policy documents into a podcast, but the summaries were often pretty vague.

Team NSC Energy
Team NSC Energy was working on a National Security Council problem, “How can the United States generate sufficient energy to support compute/AI in the next 5 years?”

At the start of the class, the team began by using ChatGPT to summarize their policy papers and generate tailored interview questions, while Claude was used to synthesize research  for background understanding. As ChatGPT occasionally hallucinated information, by the end of the class they were cross validating the summaries via Perplexity pro.

The team also used ChatGPT and Mermaid to organize their thoughts and determine who they wanted to talk to. ChatGPT was used to generate code to put into the Mermaid flowchart organizer. Mermaid has its own language, so ChatGPT was helpful, so we didn’t have to learn all the syntax for this language.
See the video of how Team NSC Energy used ChaptGPT and Mermaid here:

If you can’t see the video click here

Team Alpha Strategy
The Alpha Strategy team was trying to discover whether the U.S. could use AI to create a whole-of-government decision-making factory.

At the start of class, Team Alpha Strategy used ChatGPT.40 for policy document analysis and summary, as well for stakeholder mapping. However, they discovered going one by one through the countless numbers of articles was time consuming. So the team pivoted to using Notebook LM, for document search and cross analysis. See the video of how Team Alpha Strategy used Notebook LM here:

If you can’t see the video click here

The other tools the team used were custom Gpts to build stakeholder maps and diagrams and organize interview notes. There’s going to be a wide variety of specialized Gpts. One that was really helpful, they said, was a scholar GPT.
See the video of how Team Alpha Strategy used custom GPTs:

If you can’t see the video click here

Like other teams, Alpha Strategy used ChatGPT to summarize their interview notes and to create flow charts to paste into their weekly presentations.

Team Congress
The Congress team was exploring the question, “if the Department of Defense were given economic instruments of power, which tools would be most effective in the current techno-economic competition with the People’s Republic of China?”

As other teams found, Team Congress first used ChatGPT to extract key themes from hundreds of pages of readings each week and from press releases, articles, and legislation. They also used for mapping and diagramming to identify potential relationships between stakeholders, or to creatively suggest alternate visualizations.

When Team Congress weren’t able to reach their sponsor in the initial two weeks of the class, much like Team OSC, they used AI tools to pretend to be their sponsor, a member of the defense modernization caucus. Once they realized its utility, they continued to do mock interviews using AI role play.

The team also used customized models of ChatGPT but in their case found that this was limited in the number of documents they could upload, because they had a lot of content. So they used retrieval augmented generation, which takes in a user’s query, and matches it with relevant sources in their knowledge base, and fed that back out as the output. See the video of how Team Congress used retrieval augmented generation here:

If you can’t see the video click here

Team NavalX
The NavalX team was learning how the U.S. Navy could expand its capabilities in Intelligence, Surveillance, and Reconnaissance (ISR) operations on general maritime traffic.

Like all teams they used ChatGPT to summarize and extract from long documents, organizing their interview notes, and defining technical terms associated with their project. In this video, note their use of prompting to guide ChatGPT to format their notes.

See the video of how Team NavalX used tailored prompts for formatting interview notes here:

If you can’t see the video click here

They also asked ChatGPT to role play a critic of our argument and solution so that we could find the weaknesses. They also began uploading many interviews at once, and asked Claude to find themes or ideas in common that they might have missed on their own.

Here’s how the NavalX team used Perplexity for research.

If you can’t see the video click here
Like other teams, the NavalX team discovered you can customize ChatGPT by telling it how you want it to act.

If you can’t see the video click here

Another surprising insight from the team is that you can use ChatGPT to tell you how to write better prompts for itself.

If you can’t see the video click here
In summary, Team NavalX used Claude to translate texts from Mandarin, and found that ChatGPT was the best for writing tasks, Perplexity the best for research tasks, Claude the best for reading tasks, and notebook LM was the best for summarization.

Lessons Learned

  • Integrating AI into this class took a dedicated instructor with a mission to create a new way to teach using AI tools
  • The result was AI vastly enhanced and accelerated learning of all teams
    • It acted as a helpful collaborator
    • Fusing AI with stakeholders interviews was especially powerful
  • At the start of the class students were familiar with a few of these AI tools
    • By the end of the class they were fluent in many more of them
    • Most teams invented creative use cases
  • All Stanford classes we now teach – Hacking for Defense, Lean Launchpad, Entrepreneurship Inside Government – have AI integrated as part of the course
  • Next year’s AI tools will be substantively better

Filed under: Customer Development, Gordian Knot Center for National Security Innovation, National Security, Technology Innovation and Great Power Competition | 2 Comments »

How To Find Your Customer In the Dept of Defense – The Directory of DoD Program Executive Offices

Posted on September 17, 2024 by steve blank

Finding a customer for your product in the Department of Defense is hard: Who should you talk to? How do you get their attention?

Looking for DoD customers

How do you know if they have money to spend on your product?

It almost always starts with a Program Executive Office.

The Department of Defense (DoD) no longer owns all the technologies, products and services to deter or win a war – e.g.  AI, autonomy, drones, biotech, access to space, cyber, semiconductors, new materials, etc.

Today, a new class of startups are attempting to sell these products to the Defense Department. Amazingly, there is no single DoD-wide phone book available to startups of who to call in the Defense Department.

So I wrote one.

Think of the PEO Directory linked below as a “Who buys in the government?” phone book.

The DoD buys hundreds of billions of dollars of products and services per year, and nearly all of these purchases are managed by Program Executive Offices. A Program Executive Office may be responsible for a specific program (e.g., the Joint Strike Fighter) or for an entire portfolio of similar programs (e.g., the Navy Program Executive Office for Digital and Enterprise Services). PEOs define requirements and their Contracting Officers buy things (handling the formal purchasing, issuing requests for proposals (RFPs), and signing contracts with vendors.) Program Managers (PMs) work with the PEO and manage subsets of the larger program.

Existing defense contractors know who these organizations are and have teams of people tracking budgets and contracts. But startups?  Most startups don’t have a clue where to start.

This is a classic case of information asymmetry and it’s not healthy for the Department of Defense or the nascent startup defense ecosystem.

That’s why I put this PEO Directory together.

This first version of the directory lists 75 Program Executive Offices and their Program Executive Officers and Program/Project Managers.

Each Program Executive Office is headed by a Program Executive Officer who is a high ranking official – either a member of the military or a high ranking civilian – responsible for the cost, schedule, and performance of a major system, or portfolio of systems, some worth billions of dollars.

Below is a summary of 75 Program Executive Offices in the Department of Defense.

You can download the full 64-page document of Program Executive Offices and Officers with all 602 names here.

Caveats
Do not depend on this document for accuracy or completeness.
It is likely incomplete and contains errors.
Military officers typically change jobs every few years.
Program Offices get closed and new ones opened as needed.

This means this document was out of date the day it was written. Still it represents an invaluable starting point for startups looking to work with DoD.

How to Use The PEO Directory As Part of A Go-To-Market Strategy
While it’s helpful to know what Program Executive Offices exist and who staffs them, it’s even better to know where the money is, what it’s being spent on, and whether the budget is increasing, decreasing, or remaining the same.

The best place to start is by looking through an overview of the entire defense budget here. Then search for those programs in the linked PEO Directory. You can get an idea whether that program has $ Billions, or $ Millions.

Next, take a look at the budget documents released by the DoD Comptroller –
particularly the P-1 (Procurement) and R-1 (R&D) budget documents.

Combining the budget document with this PEO directory helps you narrow down which of the 75 Program Executive Offices and 500+ program managers to call on.

With some practice you can translate the topline, account, or Program Element (PE) Line changes into a sales Go-To-Market strategy, or at least a hypothesis of who to call on.

Armed with the program description (it’s full of jargon and 9-12 months out of date) and the Excel download here and the Appendix here –– you can identify targets for sales calls with DoD where your product has the best chance of fitting in.

The people and organizations in this list change more frequently than the money.

Knowing the people is helpful only after you understand their priorities — and money is the best proxy for that.

Future Work
Ultimately we want to give startups not only who to call on, and who has the money, but which Program Offices are receptive to new entrants. And which have converted to portfolio management, which have tried OTA contracts, as well as highlighting those who are doing something novel with metrics or outcomes.

Going forward this project will be kept updated by the Stanford Gordian Knot Center for National Security Innovation.

In the meantime send updates, corrections and comments to sblank@stanford.edu

Credit Where Credit Is Due
Clearly, the U.S. government intends to communicate this information. They have published links to DoD organizations here, even listing DoD social media accounts. But the list is fragmented and irregularly updated. Consequently, this type of directory has not existed in a usable format – until now.

Filed under: Air Force, Gordian Knot Center for National Security Innovation, Hacking For Defense, National Security, Navy | 3 Comments »

Security Clearances at the Speed of Startups

Posted on August 13, 2024 by steve blank

Imagine you got a job offer from a company but weren’t allowed to start work – or get paid – for almost a year. And if you can’t pass a security clearance your offer is rescinded. Or you get offered an internship but can’t work on the most interesting part of the project. Sounds like a nonstarter. Well that’s the current process if you want to work for companies or government agencies that work on classified programs.

One Silicon Valley company, Palantir, is trying to change that and shorten the time between getting hired and doing productive work. Here’s why and how.

Over the last five years more of my students have understood that Russia’s brutal war in Ukraine and strategic competition with the People’s Republic of China mean that the world is no longer a stable and safe place. This has convinced many of them to work on national security problems in defense startups.

However, many of those companies and government agencies require you to work on projects with sensitive information the government wants to protect. These are called classified programs. To get hired, and to work on them, you need to first pass a government security clearance. (A security clearance is how the government learns whether you are trustworthy enough to keep secrets and not damage national security.)

For jobs at most defense startups/contractors or national security agencies, instead of starting work with your offer letter, you’d instead receive a “conditional” job offer – that’s a fancy way to say, “we want you to work here, but you need to wait 3 to 9 months without pay until you start, and if you can’t pass the security clearance we won’t hire you.” That’s a pretty high bar for students who have lots of other options for where to work.

Types of Security Clearances
The time it takes for the clearance process depends on the thoroughness and how deeply the government investigates your background. That’s directly related to how classified will be the work you will be doing. The three primary levels of classification (from least to greatest) are Confidential, Secret, and Top Secret. The type and depth of background investigations to get a security clearance depends on what level of classified information you will be working with. For example, if you just need access to Confidential or Secret material they would do a National Agency Check with Law and Credit (NACLC). The government will look at the FBI’s criminal history repository, do a credit check, and a check with your local law enforcement agencies. This can take a relatively short time (~3 months).

On the other hand if you’re going to work on a Top Secret/SCI project, this requires a more extensive (and much longer ~6-9 months) background check called a Single Scope Background Investigation (SSBI). Some types of clearances also require you to take a polygraph (lie-detector) test.

How Does the Government “Clear” you?
The National Background Investigation Services (NBIS) is the government agency that will investigate your background. They will ask about your:

  • Drugs and Alcohol (hard drugs, addiction, chronic drinking, etc.)
  • Criminal conduct (felonies..)
  • Financial stability (they’ll run a Credit Bureau Report)
  • How you’ve used IT systems (e.g. have you hacked any?)
  • United States allegiance
  • Foreign influence (do you own property overseas? Foreign investments, etc.)
  • Psychological conditions and personal behavior.
  • Travel History (have you lived or gone to China, Russia, Iran, North Korea, Syria, etc.)
  • Plus, they will talk to your friends, relatives, current and ex-significant others, etc. to learn more about you

Palantir’s Accelerated Student Clearance Plan
Palantir wants their interns and new hires to hit the ground running and work on the toughest and most interesting government problems from day one. However, these types of problems require having a security clearance. The problem is that today, all companies start an application for a security clearance the day you show up for work.

Palantir’s idea? If you get an internship or full-time offer from Palantir while you’re still in school, they will immediately employ you as a contractor. This will let them start your security clearance process while in school before you show up for work. That means you will be cleared ~9 months later in time for your first day on the job. Think of this like a college early admissions program. (If you’re interning, Palantir will hold your clearance for you if you come back to Palantir the following year.)

Why Do This?
Obviously this is a long-term strategic investment in Palantir’s college talent, but it also affects the entire defense ecosystem – to create a broader team of America’s best engineers who are able to support our country’s most critical missions. And they are encouraging other Defense Tech companies to implement a similar program.

I think it’s a great idea.

Now what are the other innovative ideas Silicon Valley can do to attract a national security workforce?

Filed under: National Security | 8 Comments »

Why Large Organizations Struggle With Disruption, and What to Do About It

Posted on July 30, 2024 by steve blank

Seemingly overnight, disruption has allowed challengers to threaten the dominance of companies and government agencies as many of their existing systems have now been leapfrogged. How an organization reacts to this type of disruption determines whether they adapt or die.

I’ve been working with a large organization whose very existence is being challenged by an onslaught of technology (AI, autonomy, quantum, cyberattacks, access to space, et al) from aggressive competitors, both existing and new. These competitors are deploying these new technologies to challenge the expensive (and until now incredibly effective) legacy systems that this organization has built for decades. (And they are doing it at speed that looks like a blur to this organization.) But the organization is also challenged by the inaction of its own leaders, who cannot let go of the expensive systems and suppliers they built over decades. It’s a textbook case of the Innovators Dilemma.

In the commercial world creative destruction happens all the time. You get good, you get complacent, and eventually you get punched in the face. The same holds true for Government organizations, albeit with more serious consequences.

This organization’s fate is not yet sealed. Inside it, I’ve watched incredibly innovative groups create autonomous systems and software platforms that rival anything a startup is doing. They’ve found champions in the field organizations, and they’ve run experiments with them. They’ve provided evidence that their organization could adapt to the changing competitive environment and even regain the lead. Simultaneously, they’ve worked with outside organizations to complement and accelerate their internal offerings. They’re on the cusp of a potential transformation – but leadership hesitates to make substantive changes.

The “Do Nothing” Feedback Loop
I’ve seen this play out time and again in commercial and government organizations. There’s nothing more frustrating for innovators than to watch their organization being disrupted while its senior leaders hesitate to take more than token actions. On the other hand, no one who leads a large organization wants it to go out of business. So, why is adapting to changed circumstances so hard for existing organizations?

The answer starts at the top. Responding to disruption requires action from senior leadership: e.g. the CEO, board, Secretary, etc. Fearful that a premature pivot can put their legacy business or forces at risk, senior leaders delay deciding – often until it’s too late.

My time with this organization helped me appreciate why adopting and widely deploying something disruptive is difficult and painful in companies and government agencies. Here are the reasons:

Disconnected Innovators – Most leaders of large organizations are not fluent in the new technologies and the disruptive operating concepts/business models they can create. They depend on guidance from their staff and trusted advisors – most of whom have been hired and promoted for their expertise in delivering incremental improvements in existing systems. The innovators in their organization, by contrast, rarely have direct access to senior leaders. Innovators who embrace radically new technologies and concepts that challenge the status quo and dogma are not welcomed, let alone promoted, or funded.

Legacy – The organization I’ve been working with, like many others, has decades of investment in existing concepts, systems, platforms, R&D labs, training, and a known set of external contractors. Building and sustaining their existing platforms and systems has left little money for creating and deploying new ones at the same scale (problems that new entrants/adversaries may not have.) Advocating that one or more of their platforms or systems are at risk or may no longer be effective is considered heresy and likely the end of a career.

The “Frozen Middle” – A common refrain I hear from innovators in large organizations is that too many people are resistant to change (“they just don’t get it”.) After seeing this behavior for decades, I’ve learned that the frozen middle occurs because of what’s called the“Semmelweis effect” – the unconscious tendency of people to stick to preexisting beliefs and reject new ideas that contradict them – because it undermines their established norms and/or beliefs. (They really don’t get it.) This group is most comfortable sticking with existing process and procedures and hires and promotes people who execute the status quo. This works well when the system can continue to succeed with incremental growth, but in the face of more radical change, this normal human reaction shuts out new learning and limits an organizations’ ability to rapidly adapt to new circumstances. The result is organizational blinders and frustrated innovators. And you end up with world-class people and organizations for a world that no longer exists.

Not everyone is affected by the Semmelweis effect. It’s often mid-grade managers / officers in this same “middle” who come up with disruptive solutions and concepts. However, unless they have senior champions (VP’s, Generals / Admirals) and are part of an organization with a mission to solve operational problems, these solutions die. These innovators lack alternate places where the culture encourages and funds experimentation and non-consensus ideas. Ironically, organizations tend to chase these employees out because they don’t conform, or if forced to conform, they grow disillusioned and leave for more innovative work in industry.

Hubris is managerial behavior of overconfidence and complacency. Unlike the unconscious Semmelweis effect, this is an active and conscious denial of facts. It occurs as some leaders/managers believe change threatens their jobs as decision-makers or that new programs, vendors or ideas increase the risk of failure, which may hurt their image and professional or promotional standing.

In the organization I’ve been working with, the internal engineering group offers senior leaders reassurances that they are responding to disruption by touting incremental upgrades to their existing platforms and systems.

Meanwhile because their budget is a zero-sum game, they starve innovators of funds and organizational support for deployment of disruptive new concepts at scale. The result is “innovation theater.” In the commercial world this behavior results in innovation demos but no shipping products and a company on the path to irrelevance or bankruptcy. In the military it’s demos but no funding for deployments at scale.

Fear of Failure/Risk Aversion – Large organizations are built around repeatable and scalable processes that are designed to be “fail safe.” Here new initiatives need to match existing budgeting, legal, HR and acquisition, processes and procedures. However, disruptive projects can only succeed in organizations that have a “safe-to-fail” culture. This is where learning and discovery happens via incremental and iterative experimentation with a portfolio of new ideas and failure is considered part of the process. “Fail safe” versus “safe-to-fail” organizations need to be separate and require different culture, different people, different development processes and risk tolerance.

Activist Investors Kill Transformation in Commercial Companies
A limit on transformation speed unique to commercial organizations is the fear of “Activist Investors.”  “Activist investors” push public companies to optimize short-term profit, by avoiding or limiting major investments in new opportunities and technology. When these investors gain control of a company, innovation investments are reduced, staff is cut, factories and R&D centers closed, and profitable parts of the company and other valuable assets sold.

Unique Barriers for Government Organizations
Government organizations face additional constraints that make them even slower to respond to change than large companies.

To start, leaders of the largest government organizations are often political appointees. Many have decades of relevant experience, but others are acting way above their experience level. This kind of mismatch tends to happen more frequently in government than in private industry.

Leaders’ tenures are too short – All but a few political appointees last only as long as their president in the White House, while leaders of programs and commands in the military services often serve 2- or 3-year tours. This is way too short to deeply understand and effectively execute organizational change. Because most government organizations lack a culture of formal innovation doctrine or playbook – a body of knowledge that establishes a common frame of reference and common professional language – institutional learning tends to be ephemeral rather than enduring. Little of the knowledge, practices, shared beliefs, theory, tactics, tools, procedures, language, and resources that the organization built under the last leader gets forwarded. Instead each new leader relearns and imposes their own plans and policies.

Getting Along Gets Rewarded – Career promotion in all services is primarily driven by “getting along” with the status quo. This leads to things like not cancelling a failing program, not looking for new suppliers who might be cheaper/ better/ more responsive, pursuing existing force design and operating concepts even when all available evidence suggests they’re no longer viable, selecting existing primes/contractors, or not pointing out that a major platform or weapon is no longer effective. The incentives are to not take risks. Doing so is likely the end of a career. Few get promoted for those behaviors. This discourages non-consensus thinking. Yet disruption requires risk.

Revolving doors – Senior leaders leave government service and go to work for the very companies whose programs they managed, and who they had purchased systems from (often Prime contractors). The result is that few who contemplate leaving the service and want a well-paying job with a contractor will hold them to account or suggest an alternate vendor while in the service.

Prime Contractors – are one of our nation’s greatest assets while being our greatest obstacles to disruptive change. In the 20th century platforms/weapons were mostly hardware with software components. In the 21st century, platforms/weapons are increasingly software with hardware added. Most primes still use Waterfall development with distinct planning, design, development, and testing phases rather than Agile (iterative and incremental development with daily software releases). The result is that primes have a demonstrated inability to deliver complex systems on time. (Moving primes to software upgradable systems/or cloud-based breaks their financial model.)

As well, prime contractors typically have a “lock” on existing government contracts. That’s because it’s less risky for acquisition officials to choose them for follow-on work– and primes have decades of experience in working through the byzantine and complex government purchasing process; and they have tons of people and money to influence all parts of the government acquisition system—from the requirements writers to program managers, to congressional staffers to the members of the Armed Services and Appropriations committees. New entrants have little chance to compete.

Congress – Lawmakers have incentives to support the status quo but few inducements to change it. Congress has a major say in what systems and platforms suppliers get used, with a bias to the status quo. To keep their own jobs, lawmakers shape military appropriations bills to support their constituents’ jobs and to attract donations from the contractors who hire them. (They and their staffers are also keeping the revolving door in mind for their next job.) Many congressional decisions that appear in the National Defense Authorization Act (NDAA) and in appropriations are to support companies that provide the most jobs in their districts and the most funds for their reelection. These come from the Prime contractors.

What to Do About It?
It starts at the top. Confronted with disruptive threats, senior leaders must actively work to understand:

  • The timing of the threat – disruption never comes with a memo, and when it happens its impact is exponential. When will disruption happen that will make our core business or operating concepts/force design obsolete? Will our competitors get there first?
  • The magnitude of the threat – will this put a small part of our business/capabilities at risk or will it affect our entire organization?
  • The impact of the threat – will this have a minor impact or does it threaten the leadership or the very existence of the organization. What happens if our competitors/adversaries adopt this first?
  • The response to the threat- Small experiments, department transformation, and company or organization-wide transformation – and its timeline.

Increase Visibility of Disruptive Tech and Concepts/Add Outside Opinions

  • To counter disruptive threats, the typical reporting relationship of innovators filtered through multiple layers of management must be put aside.
    • Senior leaders need a direct and unfiltered pipeline to their internal innovation groups for monthly updates and demos of evidenced-based experiments in operational settings.
    • And the new operating concepts to go with it.
  • Create a “Red Team” of advisors from outside their organization.
    • This group should update senior leaders on the progress of competitors
    • And offer unbiased assessment of their own internal engineering/R&D progress.
  • Stand up a strategic studies group that can develop new business models/ new strategic concepts usable at the operational level – ensure its connection with external sources of technical innovation
  • Create a “sensing” and “response” organization that takes actual company/agency/service problems out to VC’s and startups and seeing how they would solve them
    • However, unless senior leaders 1) actively make a point of seeing these first hand (at least biannually), and have the mechanism to “respond” with purchase orders/ OTA’s, this effort will have little impact.

Actively and Urgently Gather Evidence

  • Run real-world experiments – simulations, war games, – using disruptive tech and operating concepts (in offense and defense.)
  • See and actively seek out the impact of disruption in adjacent areas e.g. AI’s impact on protein modeling, drones in the battlefield and Black Sea in Ukraine, et al.
  • Ask the pointy end of the organization (e.g the sales force, fleet admirals) if they are willing to take more risk on new capabilities.

These activities need happen in months not years. Possible recommendations from these groups include do nothing, run small experiments, transform a single function or department, or a company or organization-wide transformation.

What Does Organization-wide Transformation look like?

  • What outcome do we desire?
  • When do we need it?
  • What budget, people, capital equipment are needed?
    • What would need to be divested?
  • How to communicate this to all stakeholders and get them aligned?
  • In the face of disruption/ crisis/ wartime advanced R&D groups now need a seat at the table with budgets sufficient for deployment at scale.
  • Finally, encourage more imagination. How can we use partners and other outside resources for technology and capital?

Examples of leaders who transformed their organization in the face of disruption include Microsoft CEO Satya Nadella and Steve Jobs from Apple, in defense, Bill Perry, Harold Brown and Ash Carter. Each dealt with disruption with acceptance, acknowledgment, imagination and action.

Much more to be said about transformation in future posts.

Filed under: Innovation Doctrine, National Security | 6 Comments »

Secret History – When Kodak Went to War with Polaroid

Posted on May 16, 2024 by steve blank

This part 2 of the Secret History of Polaroid and Edwin Land. Read part 1 for context.

Kodak and Polaroid, the two most famous camera companies of the 20th century, had a great partnership for 20+ years. Then in an inexplicable turnabout Kodak decided to destroy Polaroid’s business. To this day, every story of why Kodak went to war with Polaroid is wrong.

The real reason can be found in the highly classified world of overhead reconnaissance satellites.

Here’s the real story.

In April 1969 Kodak tore up a 20-year manufacturing partnership with Polaroid. In a surprise to everyone at Polaroid, Kodak declared war. They terminated their agreement to supply Polaroid with negative film for Polacolor – the only color film Polaroid had on the market. Kodak gave Polaroid two years’ notice but immediately raised the film price 10% in the U.S. and 50% internationally. And Kodak publicly announced they were going to make film for Polaroid’s cameras – a knife to the heart for Polaroid as film sales were what made Polaroid profitable. Shortly thereafter, Kodak announced they were also going to make instant cameras in direct competition with Polaroid cameras. In short, they were going after every part of Polaroid’s business.

What happened in April 1969 they caused Kodak to react this way?

And what was the result?

Read the sidebar for a Background on Film and Instant Photography

Today we take for granted that images can be seen and sent instantaneously on all our devices — phone, computers, tablets, etc. But that wasn’t always the case.

Film Photography
It wasn’t until the mid-19th century that it was possible to permanently capture an image. For the next 30 years photography was in the hands of an elite set of professionals. Each photo they took was captured on individual glass plates they coated with chemicals. To make a print, the photographers had to process the plates in more chemicals. Neither the cameras nor processing were within the realm of a consumer. But in 1888 Kodak changed that when they introduced a real disruptive innovation – a camera preloaded with a spool of strippable paper film with 100-exposures that consumers, rather than professional photographers, could use. When the roll was finished, the entire camera was sent back to the Kodak lab in Rochester, NY, where it was reloaded and returned to the customer while the first roll was being processed. But the real revolution happened in 1900 when Kodak introduced the Brownie camera with replaceable film spools. This made photography available to a mass market. You just sent the film to be developed, not the camera.

Up until 1936 consumer cameras captured images in black in white. That year Kodak introduced Kodachrome, the first color film for slides. In 1942, they introduced Kodacolor for prints.

While consumers now had easy-to-use cameras, the time between taking a picture and seeing the picture had a long delay. The film inside the camera needed to be developed and printed. After you clicked the shutter and took the picture, you sent the film to a drop-off point in a store. They sent your film to a large regional photo processing lab that developed the film (using a bath of chemicals), then printed the photos as physical pictures. You would get your pictures back in days or a week. (In the late 1970s, mini-photo processing labs dramatically shortened that process, offering 1-hour photo development.) Meanwhile…

Instant Photography
In 1937 Edwin Land co-founded Polaroid to make an optical filter called polarizers. They were used in photographic filters, glare-free sunglasses, and products that gave the illusion of 3-D. During WWII Polaroid made anti-glare goggles for soldiers and pilots, gun sights, viewfinders, cameras, and other optical devices with polarizing lenses.

In 1948 Polaroid pivoted. They launched what would become synonymous with an “Instant Camera.” In its first instant camera — the Model 95 – the film contained all the necessary chemicals to “instantly” develop a photo. The instant film was made of two parts – a negative sheet that lined up with a positive sheet with the chemicals in between squeezed through a set of rollers. The negative sheet was manufactured by Kodak. Instead of days or weeks, it now took less than 90 seconds to see your picture.

For the next 30 years Polaroid made evolutionary better Instant Cameras. In 1963 Polacolor Instant color film was introduced. In 1973 the Polaroid SX-70 Land Camera was introduced with a new type of instant film that no longer had to be peeled apart.

A Secret Grudge Match

To understand why Kodak tried to put Polaroid out of business you need to know some of most classified secrets of the Cold War.

Project GENETRIX and The U-2 – Balloon and Airplane Reconnaissance over the Soviet Union
During the Cold War with the Soviet Union the U.S. intelligence community was desperate for intelligence. In the early 1950s the U.S. sent unmanned reconnaissance balloons over the Soviet Union.

Next, from 1956-1960 the CIA flew the Lockheed U-2 spy plane over the Soviet Union on 24 missions, taking photos of its military installations. (The U-2 program was kicked off by a 1954 memo from Edwin Land (Polaroid CEO) to the director of the CIA.)

The U-2 cameras used Kodak film, processed in a secret Kodak lab codenamed Bridgehead.  In May 1960 a U-2 was shot down inside Soviet territory and the U.S. stopped aircraft overflights of the Soviet Union. But luckily in 1956 the U.S. intelligence community had concluded that the future of gathering intelligence over the Soviet Union would be with spy satellites orbiting in space.

Air Force – SAMOS –  1st Generation Photo Reconnaissance Satellites
By the late 1950s the Department of Defense decided that the future of photo reconnaissance satellites would be via an Air Force program codenamed SAMOS.

The first SAMOS satellites would have a camera that would take pictures and develop them while orbiting earth using special Kodak Bimat film, then scan the negative and transmit the image to a ground station. After multiple rocket failures and realization that the resolution and number of images the satellite could downlink would be woefully inadequate for the type and number of targets (it would take 3 hours to downlink the photos from a single pass), the film read-out SAMOS satellites were canceled.

Sidebar– Kodak Goes to The Moon

While the Kodak Bimat film and scanner never made it as an intelligence reconnaissance system around the earth, it did make it to the moon. NASA’s Lunar Orbiter program to map the moon got their Kodak Bimat film and scanner cameras from the defunct SAMOS program. In 1966 and ‘67 NASA successfully launched 5 Lunar Orbiters around the moon developing the film onboard and transmitting a total of 3,062pictures to earth. (The resolution of the images and the fact that it took 40 minutes to send each photo back was fine for NASA’s needs.)

CIA’s CORONA – 2nd Generation Photo Reconnaissance Satellites
It was the CIA’s CORONA film-based photo reconnaissance satellites that first succeeded in returning intelligence photos from space. Designed as a rapid cheap hack, it was intended as a stopgap until more capable systems entered service. Fairchild built the first few CORONA cameras, but ultimately Itek became the camera system supplier. CORONA sent the exposed film back to earth in reentry vehicles that were recovered in mid-air. The film was developed by Kodak at their secret Bridgehead lab and sent to intelligence analysts in the CIA’s National Photographic Interpretation Center (NPIC) who examined the film. (While orbiting 94 miles above the earth the cameras achieved 4 ½-foot resolution.) CORONA was kept in service from 1960 to 1972, completing 145 missions.

Film recovery via reentry vehicles would be the standard for the next 16 years.

Sidebar – The CIA versus the National Reconnaissance Office (NRO)

With the CIA’s success with CORONA, and the failure of the Air Force original SAMOS program, the Department of Defense felt the CIA was usurping its role in Reconnaissance. In 1961 it was agreed that all satellite Reconnaissance would be coordinated by a single National Reconnaissance Office (the NRO). For 31 years satellite and spy plane reconnaissance was organized as four separate covert programs:

Program A – Air Force satellite programs: SAMOS, GAMBIT, DORIAN…
Program B – CIA satellite programs: CORONA, HEXAGON, KEENAN…
Program C – Navy satellite programs: GRAB, POPPY …
Program D – CIA/Air Force reconnaissance Aircraft: U-2, A-12/SR-71, ST/POLLY, D-21…

While this setup was rational on paper, the CIA and NRO would have a decades -long political battle over who would specify, design, build and task reconnaissance satellites. The CIA’s outside expert on imaging reconnaissance satellites was… Edwin Land CEO of Polaroid.

The NRO’s existence wasn’t even acknowledged until 1992.

Air Force/NRO – GAMBIT – 3rd Generation Film Photo Reconnaissance Satellites
After the failure of the SAMOS on-orbit scanning system, the newly established National Reconnaissance Office (NRO) regrouped and adopted film recovery via reentry vehicles.

Prodded by the NRO and Air Force, Kodak put in an “unsolicited” proposal for a next-generation imaging satellite codenamed GAMBIT. Kodak cameras on GAMBIT had much better resolution than the Itek cameras on CORONA. In orbit 80 miles up, GAMBIT had high-resolution spotting capability – but in a narrow field of view. This complemented the CORONA broad area imaging.  GAMBIT-1 (KH-7) produced images of 2-4 feet in resolution. It flew for 38 missions from July 1963 to June 1967. The follow-on program,  GAMBIT-3 (KH-8), provided even sharper images with resolution measured in inches. GAMBiT-3 flew for 54 missions from July 1966 to August 1984. The resolution of GAMBITs photos wouldn’t be surpassed for decades.

CIA – HEXAGON – 4th Generation Film Photo Reconnaissance Satellites
Meanwhile the CIA decided it was going to build the next generation reconnaissance satellite after GAMBIT. Hexagon represented another technological leap forward. Unlike GAMBIT that had a narrow field of view, the CIA proposed a satellite that could photograph a 300-nautical-mile-wide by 16.8-nautical-mile-long area in a single frame. Unlike GAMBIT whose cameras were made by Kodak, HEXAGON’s cameras would be made by Perkin Elmer.

CIA Versus NRO – HEXAGON versus DORIAN
In 1969 the new Nixon administration was looking to cut spending and the intelligence budget was a big target. There were several new, very expensive programs being built: HEXAGON, the CIA’s school bus-sized film satellite; and a military space station: the NRO/Air Force Manned Orbiting Laboratory (MOL) with its DORIAN KH-10 film-based camera (made by Kodak). There was also a proposed high-resolution GAMBIT-follow-on satellite called FROG (Film Read Out GAMBIT) – again with a Kodak Bimat camera and a laser scanner.

In March 1969, President Nixon canceled the CIA’s HEXAGON satellite program in favor of the Manned Orbiting Laboratory (MOL), the Air Force space station with the Kodak DORIAN camera. It looked like Kodak had won and the CIA’s proposal lost.

However, the CIA fought back.

The next month, in April 1969, the Director of the CIA used the recommendation of CIA’s reconnaissance intelligence panel – headed by Edwin Land (Polaroid’s CEO) to get President Nixon to reverse his decision. Land’s panel argued that HEXAGON was essential to monitoring arms control treaties with the Soviet Union. Land said DORIAN would be useless because astronauts on the military space station could only photograph small amounts of territory, missing other things that could be a few miles away. In contrast, HEXAGON covered so much territory that there was simply no place for the Soviet Union to hide any forbidden bombers or missiles.

Land’s reconnaissance panel recommended: 1) canceling the manned part of the NRO/Air Force Manned Orbiting Laboratory (MOL) and 2) using the DORIAN optics in a robotic system (which was ultimately never built) and 3) urging the President to instead start “highest priority” development of a “simple, long-life imaging satellite, using an array of photosensitive elements to convert the image to electrical signals for immediate transmission.” (This would become the KH-11 KEENAN, ending the need for film-based cameras in space.)

The result was:

Over the next two years, Land lobbied against the GAMBIT follow-on called FROG and after a contentious fight effectively killed it in 1971. But most importantly Nixon gave the go-ahead to build the CIA’s KH-11 KEENAN electronic imaging satellite – dooming film-based satellites – and all of Kodak’s satellite business.

Why Did Kodak Go to War With Polaroid?

Finally we can now understand why Kodak was furious at Polaroid. The CEO of Polaroid killed Kodak’s satellite reconnaissance business.

Kodak’s 1970 annual report said, “Government sales dropped precipitously from $248 million in 1969 to $160 million in 1970, a decline of nearly 36 percent.” (That’s ¾’s of a billion dollars in today’s dollars.)

The DORIAN camera on the Manned Orbiting Laboratory and the very high-resolution GAMBIT FROG follow-on were all Kodak camera systems built in Kodak’s K-Program, a highly classified segment of the company. In April 1969 when MOL/DORIAN KH-10 was canceled, Kodak laid off 1,500 people from that division.

Kodak also had 1,400 people in a special facility that developed the film codenamed Bridgehead. With film gone from reconnaissance satellites, only small amounts were needed for U-2 flights. Another 1,000+ people ultimately would be let go.

Louis Eilers had been Kodak president since 1967 and in 1969 became CEO. He had been concerned about Land’s advocacy of the CIA’s programs that shut out Kodak of HEXAGON. But he went ballistic when he learned of the role Edwin Land played in killing the Manned Orbiting Lab (MOL) and the Kodak DORIAN KH-10 camera.

Kodak’s Revenge and Ultimate Loss
In 1963 when Polaroid launched its first color instant film — Polacolor –  Kodak manufactured Polacolor’s film negative. By 1969 Polaroid was paying Kodak $50 million a year to manufacture that film. (~$400 million in today’s dollars.) Kodak tore up that manufacturing relationship in 1969 after the MOL/DORIAN cancelation.

Kodak then went further. In 1969 they started two projects: create their own instant cameras to compete with Polaroid and create instant film for Polaroid cameras – Polaroid made their profits on selling film.

In 1976 Kodak came out with two instant cameras — the EK-4 and EK-6 –and instant film that could be used in Polaroid cameras. Polaroid immediately sued, claiming Kodak had infringed on Polaroid patents. The lawsuit went on for 9 years. Finally, in 1985 a court ruled that Kodak infringed on Polaroid patents and Kodak was forced to pull their cameras off store shelves and stop making them. Six years later, in 1991, Polaroid was awarded $925 million in damages from Kodak.

Epilogue
1976 was a landmark year for both Kodak and Polaroid. It was the beginning of their 15-year patent battle, but it was also the beginning of the end of film photography from space. That December the first digital imaging satellite, KH-11 KEENAN, went into orbit.

After Land’s forced retirement in 1982, Polaroid never introduced a completely new product again. Everything was a refinement or repackaging of what it had figured out already. By the early ’90s, the alarms were clanging away; bankruptcy came in 2001.

Kodak could never leave its roots in film and missed being a leader in digital photography. It filed for bankruptcy protection in 2012, exited legacy businesses and sold off its patents before re-emerging as a sharply smaller company in 2013.

Today, descendants of the KH-11 KENNEN continue to operate in orbit.

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