H4D Case Study: From Classroom to Constellation: How Team Capella Space Turned H4D Tools into an Orbit‑Changing Startup

Capella Space was nearing Unicorn status when it was acquired by IonQ on July 15, 2025

With university classes starting back up this month, we thought we would revisit one of our first Hacking for Defense teams featured in The Hacking for Defense Manual: Solving National Security Problems with the Lean Methodology, and share its case history.

Capella Space was a spring 2016 cohort team in Stanford’s first Hacking for Defense course with a clear assignment: give the U.S. Navy’s Seventh Fleet uninterrupted maritime intelligence in the South China Sea. Optical satellites could not “see” through clouds or darkness, so commanders lacked detail on half the region at any moment. The team admitted they knew nothing about the Navy or its challenges, so they began the way all H4D teams do, by writing a tight problem statement, filling out a Mission Model Canvas and coming up with their own hypothesis.

Their first Mission Model Canvas was a series of placeholders. Beneficiaries were listed as the entire U.S. military, key activities and partners were speculative, and two hypotheses appeared: if the Navy could buy a synthetic aperture radar, or SAR, satellite that worked 24 hours a day, it would purchase it; if SAR existed, other government agencies and companies would become customers. The students needed data fast, but building hardware would take months and money they did not have, so they mocked up a slide deck. It showed grainy legacy government imagery beside clear commercial SAR frames. That simple PowerPoint was their minimum viable product, designed to test both hypotheses in just a week of interviews.

The slide deck did its job. Navy analysts told the team their main problem was not resolution but processing time. The first hypothesis collapsed. Interviews with the U.S. Coast Guard and oil and gas firms, however, revealed strong interest in higher resolution SAR that pierced darkness and clouds, so the second hypothesis held. The Seventh Fleet was out. The Coast Guard and commercial sector were in.

The pivot forced a deeper dive into Coast Guard operations. The team built an influence map to show relationships among search‑and‑rescue units, intelligence watch officers and mission commanders. With it they discovered that watch officers wanted better analytic tools, while commanders cared about sharper pictures. Each interview refined the canvas. The students learned that analysts, not commanders, would be the daily users, and that search‑and‑rescue teams measured success by how accurately they could locate vessels in distress. They also drew a workflow diagram to trace how imagery traveled from satellite to analyst to decision maker.

Throughout the course the rhythm never changed: form hypotheses, build a lightweight MVP, interview diverse stakeholders, document everything, update the canvas, repeat. The approach shielded the team from premature engineering. Had they rushed to build a Navy‑specific satellite, they would have missed the real market and wasted resources.

The class ended with the team earning an “A,” but the real payoff came 11 months later. The Defense Innovation Unit awarded Capella Space a $4 million contract to provide SAR‑enabled satellites. The money funded the company’s first test launch in December 2018 and, more important, validated its technology inside the Pentagon. A cooperative research and development agreement with the Army’s Space and Missile Defense Technical Center followed, giving Capella Space access to secure facilities and firsthand exposure to Army problem sets. A teaming agreement with optical communications firm Mynaric delivered both hardware and institutional knowledge that helped Capella meet Space Development Agency standards and win more opportunities.

Each partnership checked at least two boxes: access or resources/credibility. DIU offered funding and a direct pathway to defense users. The Army CRADA gave the startup a home inside military walls and deeper insight into end‑user workflows. Mynaric added flight‑qualified laser terminals and a resume of SDA compliance. Every deal illustrated a core H4D principle: good discovery makes you fluent in beneficiary pain, and that fluency attracts allies who can help accelerate deployment.

In 2023 Capella launched Capella Federal to focus solely on government and defense customers. The spinoff recruited the former assistant director of the CIA for the Near East as president and the former director of operations for U.S. Special Operations Command as board chair, which also proved that early beneficiary interviews had grown into lasting champions and vested allies. Today Capella Space counts the Army, Navy, Air Force, Space Force, National Reconnaissance Office and National Geospatial‑Intelligence Agency as clients. Senior officers call its SAR imagery “mission critical” and “indispensable.”

Capella Space’s journey offers a tight playbook for current H4D teams as well. Starting with a sponsor’s problem statement, teams should try to capture that pain point in one sentence. Then use the Mission Model Canvas to turn unknowns into more finely tuned ideas. Next up, build the smallest product or MVP that will confirm a hypothesis; slides and mock‑ups often work at the MVP stage. Interviews are critical to success and must be conducted widely and every detail recorded, especially contradictions. When data forces a pivot, move. Keep iterating until you know exactly what the true problem is, who the users of the solution are, how they measure success, and what value proposition each beneficiary needs. By seeking partners who give access, resources or credibility, ideally two of the three, momentum can be gained.

The project also underscores an unwritten rule: compliance is mandatory, but discovery comes first. No compliance means no sale, yet without discovery there is no viable solution to certify. Capella Space avoided that trap by letting interviews steer the technical roadmap, not the other way around. Instead of starting with code, they started with questions — and a humble PowerPoint.

The result is a constellation of Capella Space satellites now in orbit, a growing list of defense and commercial customers, and a company once born in a classroom that now helps operators worldwide see through storms and darkness. For anyone taking H4D, the lesson is clear: curiosity outweighs certainty, evidence beats opinion, intelligence and identifying the true problem, customers, champions and beneficiaries are key, and disciplined discovery can turn a student assignment into a global intelligence asset.

Capella Space’s most recent news is its acquisition by IonQ (NYSE: IONQ), a leading commercial quantum computing and networking company, completed in July 2025. The acquisition of Capella Space will further IonQ’s mission to develop the world’s first space-to-space and space-to-ground satellite quantum key distribution (QKD) network, enabling quantum-secure global communications. Using Capella Space’s technology, IonQ will begin developing a space-based QKD network by integrating Capella’s satellite infrastructure with its quantum technology. Once complete, the QKD network will enable secure communications that prevent encryption keys from being intercepted or copied without detection. It will also serve as a platform for additional quantum networking and sensing growth vectors. Capella customers will have access to rapid, ultra-secure SAR and remote sensing through the first quantum-enabled Earth observation platform. All of us at Hacking for Defense are thrilled for Capella Space and are excited to see the innovation this next chapter brings.

To read the full Capella Space case study in full, check out The Hacking for Defense Manual.

The Hacking for Defense (H4D) program has been taught at 70 colleges and universities around the world and has created 72 startups that have generated 660 jobs and raised more than $350 million. To learn more about the H4D course at Stanford University visit h4d.stanford.edu; to learn more about H4D around the world visit h4d.us. To learn more about The Hacking for Defense® Manual by Jeff Decker, PhD, visit Amazon.