Palmer Luckey wears his banishment from Silicon Valley like a badge of honor.
The 26-year-old, founder of pioneering Irvine virtual reality firm Oculus VR, readily told fellow attendees at the March 12 Business Journal Excellence in Entrepreneurship Award event that “I used to work for Facebook. But I was fired.”
That blunt summation misses a few steps from a career that, less than a decade in, already stands far apart from those of other Orange County technology executives.
As a teenager, the home-schooled Luckey took apart smartphones and fixed them for cash.
Later he would enroll in California State University-Long Beach—his planned major was journalism—but eventually dropped out.
Not a bad career move. He ended up figuring out from his side job “that the solutions to the problems virtual-reality engineers weren’t able to solve were right inside his phone,” noted a Time Magazine cover story on Luckey—when he was just 22.
Oculus—a maker of virtual reality hardware and software products—was founded in 2012. Eighteen months later, Facebook swooped in and bought it for $3 billion.
It’s one of the fastest-ever multibillion-dollar exit transactions on record, and vaulted Luckey’s wealth to a figure the Business Journal estimates at around $800 million.
Because of Luckey’s work, “virtual reality is no longer in the future,” said Michael Hahn, regional vice president for HomeStreet Bank, in introducing Luckey, one of five winners at the entrepreneur event (see profiles of other winners, pages 1, 4, 6 and 8).
Oculus—which would soon grow to nearly 350 employees—and Luckey decamped to Silicon Valley after the sale.
The honeymoon didn’t last long. He parted ways with Facebook in 2017 after his Republican-leaning politics caused consternation at the parent company, although Facebook has disputed that was the reason.
Shortly thereafter, Luckey started Anduril Industries, another OC-based firm that uses artificial intelligence and virtual reality to monitor large areas and, in the company’s words, “allow warfighters, first responders and law enforcement to act quickly with the best information available.”
Last year, the company reportedly received a $41 million investment from Founders Fund, a venture capital firm headed by billionaire Peter Thiel, who, like Luckey, has been a prominent supporter of Donald Trump.
Luckey late last year was quoted as stating there have been no new defense companies worth more than $1 billion since the end of the Cold War—a fact his startup is trying to rectify.
Anduril has quickly become one of the most closely watched technology firms in the defense industry, making him a twice successful entrepreneur. Couldn’t he downplay his unceremonious exit at his prior Menlo Park-based employer?
“No, I want to be honest. The news is out there,” he said at the event held at Hotel Irvine.
“And—it turned out fine” in the end, he noted.
SoCal Supporter
The Facebook experience served as a good lesson for Luckey on the importance of choosing a good home base to start a company.
“I grew up in Long Beach. My grandfather lived on Lido when I was growing up,” the current resident of Newport Beach said at the event.
Fondness for the area made the decision easy to start Oculus in OC rather than Los Angeles or Long Beach, he said.
“I really like Orange County,” Luckey said. “When I sold my company, I moved to Silicon Valley. I didn’t like it there.”
He doesn’t pull any punches on the reasons why.
“The weather is worse, the people are worse, the costs are worse.”
As for OC, it’s “one of the best entrepreneurial environments in the entire world.”
“After Facebook fired me, I decided I definitely was going to come back down here and start another company—and a whole bunch of people left my previous company and followed me down here. So other people agree[d].”
Anduril now employs more than 50 people and is in rapid growth mode; a new office near John Wayne Airport that has the capability to hold hundreds of workers will open next month.
Luckey’s looking to pull talent from other area software companies like Irvine-based gaming firm Blizzard Entertainment Inc.—he sent out a tweet advertising job openings at Anduril right after the gaming company announced a round of layoffs—while also tapping the region’s base of workers familiar with military-related work. He’s also hired some heavy-hitters in Washington D.C. political circles to help secure government contract work.
The company’s website currently lists about a dozen engineering-related openings, most in Irvine.
Workers in Silicon Valley see a stigma attached to working with, or getting funding from, the government and military; that’s not the case in OC, he has said.
Luckey said he gets lots of people asking where they should set up their businesses.
For some, Silicon Valley still makes sense, especially “if your customers are there.”
But if not, “it doesn’t make sense to put yourself in one of the most expensive, most regulatory-constrained places in the U.S.”
DHS, DOD Work
Despite returning to OC, national reports still often refer to Luckey as being tied to Northern California; a recent national report spoke of his work with Anduril as a way to bring “some of that Silicon Valley ingenuity to the defense industry.”
Continued growth at the Irvine firm could change perceptions.
Earlier this year, Anduril gathered national headlines for the implementation of its first big technology product, a large-scale security surveillance system called Lattice.
Lattice uses a combination of radar sensor-clad surveillance towers, drones and artificial intelligence to monitor large areas, and is being used by the Department of Homeland Security for work along the U.S.-Mexico border to prevent unauthorized entry into the country.
This month, investigative online news publication The Intercept reported that Anduril won a contract with the Pentagon as part of Project Maven, a “secretive initiative to rapidly leverage artificial intelligence technology from the private sector for military purposes.”
“The first phase of the research has been completed,” according to The Intercept report, which said the initial plans are “to deploy virtual reality battlefield management systems for the war in Afghanistan.”
Anduril has confirmed its contracts with Homeland Security, but has not commented on the Pentagon work.
Luckey doesn’t see another quick exit in store for Anduril, as was the case with Oculus.
Noting the company’s 12-year lease for its new Irvine headquarters, “we’re going to be here a long time,” he said at the event.
“I don’t plan on moving again. I don’t like getting fired by Silicon Valley people.”
