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Steve Blank Innovation and Entrepreneurship November 2019
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Tools</a></li> <li class="page_item page-item-62"><a href="https://steveblank.com/secret-history/">Secret History</a></li> <li class="page_item page-item-68"><a href="https://steveblank.com/books-for-startups/">Books for Startups</a></li> <li class="page_item page-item-11025"><a href="https://steveblank.com/slides/">Slides/Videos</a></li> <li class="page_item page-item-25609"><a href="https://steveblank.com/raising-money/">Raising Money</a></li> </ul> </li> </ul> </div> <!-- End Obar --> <div class="narrowcolumnwrapper"><div class="narrowcolumn"> <div id="content" class="content"> <div class="post-25495 post type-post status-publish format-standard hentry category-educators-summit category-teaching" id="post-25495"> <h2><a href="https://steveblank.com/2019/11/19/we-needed-a-bigger-room-the-lean-educators-summit/" rel="bookmark">We Needed a Bigger Room – The Lean Educators Summit</a></h2> <div class="postinfo"> Posted on <span class="postdate">November 19, 2019</span> by steve blank </div> <div class="entry"> <p>It’s a bit bittersweet. We used to be able to fit all the Lean Educators in my living room and have space left over. No longer.</p> <p>Turns out we needed a bigger room for the <a href="https://go.venturewell.org/LLPEvent2019Reg" target="_blank" rel="noopener">Dec 4th-5th Lean Educators Summit</a>.</p> <p>The good news is that if we’ve turned you away or you were on the waiting list we moved to a bigger venue.</p> <hr /> <p>It’s been almost a decade since we first started teaching the Lean Methodology. It’s remade entrepreneurship education, startup practice and innovation in companies and the government. But in all that time, we haven’t gotten a large group of educators together to talk about what it’s been like to teach Lean or the impact it’s had in their classrooms and beyond. It dawned on us that with 10 years of Lessons Learned to explore, now would be a good time.</p> <p>This one class launched the <a href="https://www.nsf.gov/news/special_reports/i-corps/" target="_blank" rel="noopener">National Science Foundation I-Corps</a> program, (designed to help turn our country’s best academic research into companies), the <a href="https://sbir.cancer.gov/programseducation/icorps" target="_blank" rel="noopener">I-Corps @ the National Institute of Health,</a> <a href="https://www.energy.gov/eere/technology-to-market/energy-i-corps" target="_blank" rel="noopener">I-Corps @ the Department of Energy,</a> I-Corps @ NSA, <a href="http://hacking4defense.stanford.edu" target="_blank" rel="noopener">Hacking for Defense</a> and <a href="http://web.stanford.edu/class/msande298/" target="_blank" rel="noopener">Hacking for Diplomacy</a>, <a href="https://hackingforlocal-oakland.weebly.com/" target="_blank" rel="noopener">Hacking for Cities</a> and <a href="http://hacking4impact.berkeley.edu/" target="_blank" rel="noopener">Hacking for Non-profits</a>. Hacking for Oceans is coming next.</p> <p><strong>Educators Sharing Best Practices<br /> </strong>So, for the first time ever, Jerry Engel, Pete Newell and Steve Weinstein and I are getting all educators from all these groups together for a “share best practices” summit – December 4th – 5th.</p> <p><em>We’re going to cover:</em></p> <ul> <li>The effectiveness of our programs [including I-Corps and Hacking for Defense]: What we have learned so far and how to make it better</li> <li>Customer Discovery and Lean Innovation in Academic Settings vs Non-Academic Settings such as incubators and accelerators</li> <li>Tech Commercialization: innovators vs. entrepreneurs – motivating scientists and engineers</li> <li>Lean Innovation in the Enterprise, Not-for-Profit and Government – what’s different</li> <li>International: Success and Challenges of Lean Innovation and Customer Discovery in Europe and Asia [and South America? Australia?]</li> <li>What’s next for Lean and entrepreneurial education</li> <li>and much more…</li> </ul> <p>Agenda is below.</p> <p>Register <a href="https://go.venturewell.org/LLPEvent2019Reg" target="_blank" rel="noopener">here</a><a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/lean-innovation-educators-summit-publicagenda-e1574150712189.png?ssl=1"><img data-recalc-dims="1" fetchpriority="high" decoding="async" data-attachment-id="25494" data-permalink="https://steveblank.com/2019/11/19/we-needed-a-bigger-room-the-lean-educators-summit/lean-innovation-educators-summit-publicagenda/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/lean-innovation-educators-summit-publicagenda-e1574150712189.png?fit=1672%2C4186&ssl=1" data-orig-size="1672,4186" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Lean Innovation Educators Summit PublicAgenda" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/lean-innovation-educators-summit-publicagenda-e1574150712189.png?fit=120%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/lean-innovation-educators-summit-publicagenda-e1574150712189.png?fit=409%2C1024&ssl=1" class="aligncenter size-full wp-image-25494" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/lean-innovation-educators-summit-publicagenda-e1574150712189.png?resize=468%2C1172&ssl=1" alt="" width="468" height="1172" /></a></p> <p>See you <a href="https://go.venturewell.org/LLPEvent2019Reg" target="_blank" rel="noopener">there</a>!</p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2019/11/19/we-needed-a-bigger-room-the-lean-educators-summit/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20We%20Needed%20a%20Bigger%20Room%20-%20The%20Lean%20Educators%20Summit&body=https%3A%2F%2Fsteveblank.com%2F2019%2F11%2F19%2Fwe-needed-a-bigger-room-the-lean-educators-summit%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. 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Some of the best and brightest wanted to work for defense contractors or corporate research and development labs. And the best startups spun out of Stanford were building components for weapon systems.</p> <p>Indeed, Silicon Valley was born <a href="https://www.youtube.com/watch?v=ZTC_RxWN_xo" target="_blank" rel="noopener">as a center for weapon systems</a> development and its software and silicon helped end the Cold War.</p> <p>During World War II the United States did something its adversaries did not; it enlisted professors and graduate students as civilians <a href="https://books.google.com/books?id=VPskHTl6xk8C&pg=PA201&lpg=PA201&dq=osrd+universities+ww2&source=bl&ots=eEuxFa9VXP&sig=ACfU3U1uQnVcjwXb78LX-rqmo4ElruBvAA&hl=en&sa=X&ved=2ahUKEwicwdfX2NblAhXTsJ4KHWc-BHAQ6AEwEHoECFwQAQ#v=onepage&q=osrd%20universities%20ww2&f=false" target="_blank" rel="noopener">in 105 colleges and universities</a> to build advanced weapon systems — nuclear weapons, radar, etc. After World War II, the military-academic relationship that was so effective against Germany and Japan mobilized to face the Soviet threat and almost every research university (Massachusetts Institute of Technology, Stanford, Caltech, Harvard, Columbia, Johns Hopkins, University of Michigan, University of Wisconsin, Cornell, University of Chicago, and many others) continued to engage in weapon systems research during the Cold War.</p> <p>Unique among them was Stanford, which provost Fred Terman (the father of American <a href="https://books.google.com/books?id=JJKgq1YCkeAC&pg=PA210%20-%20v=onepage&q&f=false" target="_blank" rel="noopener">electronic warfare and electronic intelligence in World War II)</a>) built as a center of excellence in microwaves and electronics. Rather than focus the university inward on research, Terman took the radical step of encouraging Stanford professors and graduate students to start companies applying engineering to pressing military problems. The companies they started in the 1950s and 60s were based on <a href="https://www.amazon.com/gp/product/0520205413">Stanford’s defense contacts and contracts — microwave components,</a> electronic warfare, and intelligence systems, and then the first wave of semiconductor companies. As there was no venture capital, these early startups <a href="https://www.amazon.com/gp/product/0520205413" target="_blank" rel="noopener">were funded by early sales to weapon systems prime contractors</a> and subcontractors.</p> <p>But this quarter-century relationship between the military and universities ended with a bang in 1969. In the middle of the Vietnam War, student riots protesting military research forced the <a href="https://books.google.com/books?hl=en&lr=&id=URFq34yxCaYC&oi=fnd&pg=PA109#v=onepage&q&f=false" target="_blank" rel="noopener">end of classified work on most college campuses</a>. One of the unintended consequences was that many of the academics went off to found a wave of startups selling their technology to the military. For example, at Stanford after student riots in April 1969 shut down the Applied Electronics Laboratory, James de Broekert ,who was building electronic intelligence satellites, left the university and co-founded three Silicon Valley military intelligence companies: Argo Systems, Signal Science, and Advent Systems.</p> <p>Within a decade, the rise of venture capital in Silicon Valley enabled startups to find commercial customers rather than military ones. And from then on, innovation in semiconductors, supercomputers, and software would be driven by startups, not the government.</p> <p>After 9/11, with the memories of the fall of the twin towers, this ecosystem of military, academic, corporate, and startup actors coalesced for the decade as U.S. companies felt a patriotic duty to help their country defeat a common enemy.</p> <p>But the 2013 Snowden revelations damaged that tenuous relationship yet again. In hindsight the damage wasn’t the result of what the United States was doing, but over the Pentagon’s inability and unwillingness to own up to why it was doing it: After the intelligence failure of 9/11, security agencies overcompensated by widespread, warrantless datamining as well as electronic and telephonic surveillance, including on U.S. persons.</p> <p>Without a clear explanation of why this had been done, startups, which were already being funded by ever-increasing pools of venture capital, abandoned cooperation with the Defense Department and focused on high returns on social media and commercial applications. The commercial applications of big data, machine learning, artificial intelligence, drones, robotics, cyber, quantum computing, and biotechnology are the core foundations on which the Pentagon needs to build the weapons of the 21st century. Yet the development of these advanced technologies is now being driven by commercial interests, not the Defense Department.</p> <p>America’s adversaries understand this. China is tightly integrating its defense establishment with startups, companies, and academia in <a href="https://www.cnas.org/publications/reports/understanding-chinas-ai-strategy" target="_blank" rel="noopener">“military-civilian fusion.”</a> Russia, Iran, and North Korea have also fused those activities.</p> <p>Reconstituting the tightly connected military-academic-commercial ecosystem that the Defense Department once had requires the Pentagon to relearn skills it once had, overcoming decades of avoiding the political and social issues of what it takes to rally the nation against a common threat. Today, every government agency, service branch, and combatant command is adopting innovation <em>activities</em> (hackathons, design thinking classes, innovation workshops, et al.) to tap into the creativity of a new generation of soldier — born into a digital world, comfortable with technology, and willing to improve and enhance America’s ability to fight and win.</p> <p><strong>The Government Can’t Act Like a Startup<br /> </strong>However, those activities are not enough. The government isn’t a bigger version of a startup and can’t act like a startup does. Innovation activities in government agencies most often result in innovation theater. While these activities shape and build culture, they don’t win wars, and rarely deliver shippable or deployable products.</p> <p>Startups dream in years, plan in months, evaluate in weeks, and ship in days. At times this means startups operate at speeds so fast they appear to be a blur to government agencies. It’s not that these companies are smarter than Defense Department employees, but they operate with different philosophies, different product development methodologies, and with different constraints.</p> <p>The table below summarizes a few of the salient differences. Some of the most important are the least obvious. <em>Startups can do anything</em>. They can break the law and apologize later (as <a href="https://www.vice.com/en_us/article/8xwxyv/uber-became-big-by-ignoring-laws-and-it-plans-to-keep-doing-that">Uber,</a> <a href="https://www.cnbc.com/2018/05/23/unwelcome-guests-airbnb-cities-battle-over-illegal-short-term-rentals.html">Airbnb</a>, and <a href="https://www.cnbc.com/2019/03/19/tesla-and-elon-musk-lawsuits-overview.html">Tesla</a> did), but a government official taking the same type of risks can go to jail.</p> <p><em>Urgency and risk-taking</em> in a startup are integral parts of the culture, felt by 100 percent of early-stage employees. The urgency servicemembers feel on the battlefield is felt by few in government agencies, and most often there are negative incentives for risk-taking. In a startup cluster (Silicon Valley, Beijing, Tel Aviv) a failed entrepreneur is known as “experienced.” In a government agency, they’re likely known as being out of a job.</p> <p><em>Innovation at speed </em>is a given at a startup but the exception in a government agency. Advances in commercial technologies are occurring at no less than two, and up to ten, times the speed of comparable Pentagon-developed or acquired systems. Some of the speed is simply due to development methodologies. Waterfall development is still used by most defense contractors, resulting in updates of systems measured in years. With Agile development, used by all startups, updates can occur in weeks or sometimes days, or even hours. Some of the speed differences are because commercial companies and academics face Darwinian competitive pressures for revenue or recognition. These force rapid technical advances in fields such as machine learning, artificial intelligence, robotics, big data, and analytics.</p> <p>The very definition of a contractor implies a contract. And a government contract starts with fixed requirements that only change with contract modifications. That makes sense when the problem and solution are known. But when they are unknown the traditional methods of contracting fail. Startups recognize that when new circumstances arise, they can <em>pivot </em>— make substantive changes to their products without any new contracts.<a href="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/startup.png?ssl=1"><img data-recalc-dims="1" decoding="async" data-attachment-id="25487" data-permalink="https://steveblank.com/2019/11/12/why-the-government-is-isnt-a-bigger-version-of-a-startup/startup/" data-orig-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/startup-e1573501956647.png?fit=2425%2C4204&ssl=1" data-orig-size="2425,4204" data-comments-opened="1" data-image-meta="{"aperture":"0","credit":"","camera":"","caption":"","created_timestamp":"0","copyright":"","focal_length":"0","iso":"0","shutter_speed":"0","title":"","orientation":"0"}" data-image-title="Startup" data-image-description="" data-image-caption="" data-medium-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/startup-e1573501956647.png?fit=173%2C300&ssl=1" data-large-file="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/startup-e1573501956647.png?fit=468%2C811&ssl=1" class="aligncenter wp-image-25487 size-full" src="https://i0.wp.com/steveblank.com/wp-content/uploads/2019/11/startup-e1573501956647.png?resize=468%2C811&ssl=1" alt="" width="468" height="811" /></a>Existing contractors have learned how to master the arcane defense acquisition system and live with the slow decision-making and payment processes. In some agencies, large contractors seem to “own” sections, offices, organizations, or programs. Often former government employees, at the level of GS-15 and below, will leave as staffers and return the next day working for large Beltway contractors, working or managing the same programs they previously worked. This relationship between government agency and contractor further impedes and often rejects innovation or disruption. Officers know they will likely lose their post-retirement future if they seek radical change.</p> <p>This symbiotic relationship between government agencies and incumbent contractors is also a barrier to new entrants, in particular to startups with the very technologies the Department of Defense now needs. While the Pentagon has made efforts to reform the process (Other Transaction Authorities, TechFAR, mid-tier contracting, <a href="https://kesselrun.af.mil/" target="_blank" rel="noopener">accelerators</a>…) there is still a fundamental misunderstanding of what financial incentives would attract the best and brightest investors to guide their companies to work with the Defense Department. There are no incentives for prime contractors to invest in new ventures and none to acquire new ventures. And there is no plan for how to <em>rapidly </em>insert and deploy startup technologies into weapon systems.</p> <p>So, the question is: What’s next? How do leaders in government think about and organize innovation in a way that makes a difference?</p> <p>The answer is that, yes, government agencies need to be more agile. And yes, they need to fix the systemic internal issues that hinder their own innovators’ contributions. But, in addition, what they are missing is a comprehensive plan to build a 21st-century defense innovation ecosystem — reintegrating the military, academia, and private enterprise. To harness <em>both </em>their own internal innovators and this new external ecosystem the Defense Department needs what I call an <em>innovation doctrine</em> to organize their efforts to rapidly access and mobilize talent and technology. The Pentagon can build a mindset, culture, and process to fix this. This doctrine would let the country again capture the untapped power and passion of the best and brightest to leapfrog adversaries and win wars.</p> <div class="sharedaddy sd-sharing-enabled"><div class="robots-nocontent sd-block sd-social sd-social-official sd-sharing"><h3 class="sd-title">Share this:</h3><div class="sd-content"><ul><li class="share-print"><a rel="nofollow noopener noreferrer" data-shared="" class="share-print sd-button" href="https://steveblank.com/2019/11/12/why-the-government-is-isnt-a-bigger-version-of-a-startup/" target="_blank" title="Click to print" ><span>Print</span></a></li><li class="share-email"><a rel="nofollow noopener noreferrer" data-shared="" class="share-email sd-button" href="mailto:?subject=%5BShared%20Post%5D%20Why%20The%20Government%20is%20Isn%E2%80%99t%20a%20Bigger%20Version%20of%20a%20Startup&body=https%3A%2F%2Fsteveblank.com%2F2019%2F11%2F12%2Fwhy-the-government-is-isnt-a-bigger-version-of-a-startup%2F&share=email" target="_blank" title="Click to email a link to a friend" data-email-share-error-title="Do you have email set up?" data-email-share-error-text="If you're having problems sharing via email, you might not have email set up for your browser. 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