Steve Blank's Blog, page 24

Entrepreneurs are Everywhere Show No. 39: Jeremy Johnson and Michael Eidsaune

The existence of a problem doesn’t mean there’s a solution to that problem. Wanting to create impact is great. But to do it, you need to actually have a sustainable business model.

I don’t recommend anyone become an entrepreneur. It’s too hard. It’s too painful. Starting a business is too risky. There are better ways to make a living. Yet I can’t imagine doing anything else.

One mistake was trying to build out too much tech too quickly. We thought that the tech was going to be the solution, that if we added more features, it would solve the problem. We were wrong.

Identifying a problem doesn’t mean you’ve automatically created a business.

And building a startup is not for the faint of heart.

The tools and temperament needed to get from startup idea to startup success were the focus of the guests on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Jeremy Johnson

Joining me in the Stanford University studio were

Jeremy Johnson, founder of Andela, which embeds talented software engineers on the African continent into top engineering organizations worldwide
Michael Eidsaune, co-founder of Carely, a software platform that facilitates communication among families caring for sick or elderly relatives

Michael Eidsaune

Listen to my full interviews with Jeremy and Michael by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

Jeremy Johnson is an education innovator. Prior to founding Andela, he co-founded 2U, an education technology startup that went public in 2014.  Outside of Andela, Jeremy serves on the board of the Young Entrepreneur Council and the education non-profit PENCIL and co-authored a book Education & Skills 2.0: New Targets & Innovative Approaches.

Before founding 2U, Jeremy developed Zinch, intended to be a virtual guidance counselor to help low-income students navigate the college application process. He explains why it didn’t get off the ground:

It was a great idea, but a terrible company.  

It turns out the existence of a problem doesn’t mean there’s a scalable or profitable way to solve that problem — or at least at the time.

The goal was to help low-income students better understand the college application process.

For the past 30 years great colleges have approached recruitment by creating a list of names from the PSATs and then sending out glossy brochures. Often they  don’t think about it through the lens of what is the best way to spend or allocate resources to try to get better students. So while Zinch was trying to create an offering that would support low-income students that wasn’t where the majority of college recruitment dollars were being spent. So it was tough.  We couldn’t charge the low-income students we were looking to help enough to keep the business going.

In the end we learned that wanting to create impact is great. But to be able to do it, you need to actually have a model that sustains it.

If you can’t hear the clip, click here.

The effort was a good learning experience, he says:

The beauty of trying things when you’re 21 and have no idea what you’re doing is that you get the chance to make a lot of mistakes really quickly and learn from them.

One mistake we made was trying to build out too much tech too quickly and thinking that the tech was going to be the solution, that if we added more features, it would solve the problem.  We were wrong.

We thought, ‘Why don’t we think through all of the different potential users that might use a system and how they might want to interact with it?’

We tried to boil the ocean in the most literal sense.

If you can’t hear the clip, click here

Prior to founding Carely, Michael Eidsaune earned his MBA in finance and spent several years in investment management, eventually earning his level 1 CFA certification. He also worked for a time as a contract negotiator for the US Air Force.

The idea for Carely was sparked by personal family experience. Michael started the company with his father-in-law, working on it part-time, while he worked with the Air Force.

Since its founding four years ago, Carely has seen ups and downs. Michael’s vision and passion have gotten him through it:

I don’t recommend anyone do this. It’s too hard. It’s too painful. Starting a business is too risky. There are better ways to make a living that are much safer.

And yet, while I would never recommend anybody do this, I can’t imagine doing anything else.

If you can’t hear the clip, click here 

—

An experienced team made all the difference to 2U finding success, Jeremy said:

We had a phenomenal early group of people that were brought together to try to address the problem.

You might look at it and say, “In some ways, that team is overkill for an early-stage company. These people are overqualified for what they’re doing.”

But it turns out that when you’re growing really quickly, having folks who have been through it a couple times before is really useful in the early days, even to make sure that you’re able to really grow effectively while maintaining culture.  

If you can’t hear the clip, click here

Andela selects and trains world-class tech talent from Africa and matches them with U.S. companies. Here’s how Jeremy came up with the idea for Andela, and why he decided to create the company even though he was still working on 2U at the time:

A good friend invited me to Nairobi to give a talk for the MasterCard foundation on the state of online education around the world. That kicked off this long conversation about how you might try to leverage this evolution of education technology to create scalable impact in places where tuition couldn’t be the driver of growth.

At the same time, I’d gotten to know a young Nigerian serial entrepreneur who had become sort of a friend and mentee, and was building something similar to 2U but focused on Africa. Through those two experiences I became more and more familiar with the continent. As I was thinking through the notion of what would become Andela, my initial thinking was, “We’ve just gone public. We’ve got a lot of work to do. This is not something I can spend time on. I could potentially fund it and put the team together, but I’m busy.”

At the same time I thought, “This should exist in the world.” We put a small team together, funded it initially, put a pilot together. We were looking for four students for the program, four developers in training, and we ended up getting 700 applicants in a week.

We got that down to six finalists. I went to Nigeria to meet that first cohort, interview them and try to pick four from the six. I realized after half a day of interviews that each one of them would’ve run circles around my classmates at Princeton.  

If you can’t hear the clip, click here

Jeremy dropped out of Princeton to become an entrepreneur. Here’s what he says about founders going to college:

You’re never going to convince someone to work with you because you have a degree.

You’re never going to come up with a different strategy for how you approach the world. You’re never going to raise funding or bring in different teams by virtue of your degree.

A college degree is great if you’re looking to get hired. But if your goal is to be an entrepreneur then it’s a little bit different and folks care a little less about it.  

If you can’t hear the clip, click here

—

Carely was built to foster communication among family members with sick or elderly relatives in a nursing home, assisted living residence or hospice care.  

At first Michael and his co-founder thought they’d be selling to individual users, but after talking with service providers, they realized there was a bigger opportunity:

I took our prototype – a PowerPoint presentation — out and sat down with several CEOs of a hospice organization, a nursing home, home-care company and said, “Hey, this is something we think we would use as a family. Tell me why it won’t work.”  

In doing that, we learned that the problem was more applicable than just our family — that lots of people were dealing with this idea of miscommunication and frustration wrapped around care giving.

We realized that there was a value proposition there for the actual industry. The providers of care actually liked the product and would pay for it because when a family’s not doing a good job communicating with each other around their loved one, it’s often the facility or the care provider that has to step in and play middleman to those conversations.

If you can’t hear the clip, click here

A pivotal meeting with nurses at Hospice of Dayton in Ohio helped them figure out what features to build:

It was a bit like leading sheep to wolves, and became one of our biggest learning moments.

The reality is nurses don’t have a lot of extra free time to learn a new system and to try something new. They wanted something that would help improve the lives of their clients’ families. They loved that part of the company. But they didn’t want to have to learn a new system and learn a new task and add something to their to-do list at the end of the day.

So we just said, “OK, if you guys don’t want that piece of it, we’ll leave it out.”

At this time, we hadn’t even built the product yet. We hadn’t invested any money into development, so we just didn’t develop that piece.

If we’d built the product first, however, we would have wasted months and thousands of dollars.

This is a perfect example of why it’s important to talk to customers. For the first six months we spent only a couple of hundred bucks.

If you can’t hear the clip, click here

Somewhere along the line, however, Michael and his co-founder stopped listening to customers. Here’s what happened:

We got the product out; we got paying customers.

We thought we figured it out. We assumed we had product-market fit and all we had to do was keep selling.

The problem was had the wrong business model at the time. Our revenue model was wrong.

We were charging a really high up-front annual fee to these providers and the end result of that was a pretty long sales cycle. It involved lots of face-to-face selling and it wasn’t enabling us to scale the product very quickly.

It took about 2 months to realize we needed a new pricing strategy, from, an average $5,000 to $10,000 a year per provider to about a $99 a month provider fee.

We tested the new strategy with several customers in the pipeline and it took our sales cycle from about 60 days to 1 week. Plus, it enabled us to scale much more quickly with much less effort.

But by then we were so far along our original path. My co-founder didn’t quite agree with the change of direction because it was going to involve us taking on some outside capitol.

I made the tough decision to go against what he wanted to do and it led to us kind of breaking up the company at the time.

If you can’t hear the clip, click here

Listen to my full interviews with Jeremy and Michael by downloading them from SoundCloud here and here (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere : Stan Gloss, co-founder of BioTeam; and Matt Armstead, co-founder of Lumos Innovation.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com  describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show

Hacking for Defense in 2 minutes

Hacking for Defense in 2 minutes.

If you can’t see the video click here

Hacking for Defense class here

Hacking for Diplomacy class here

Filed under: Hacking For Defense, Teaching

Entrepreneurs are Everywhere Show No. 38: Ryan Smith and Lane Merrifield

If you don’t value your product neither will your customers. No  one used it when we gave it away for free. Freemium was a going out of business strategy.

When a reporter asked, “Your kids must think you’re the coolest dad in the world,” I couldn’t answer the question, because I realized that I hadn’t seen my kids in three weeks.

I learned that making a complicated thing look easy is extremely hard.

—

People appreciate things more when they pay for them. And no amount of business success is enough if you don’t have time with your family.

Values – who and what founders and customers hold dear – were the focus on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Ryan Smith

Joining me in the Stanford University studio were

Ryan Smith, co-founder of Qualtrics insight platform
, founder of Fresh Grade learning collaboration solution

Lane Merrifield

Listen to my full interviews with Ryan and Lane by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

Ryan Smith co-founded Qualtrics in 2002 with his father in the family basement. Their goal was to make sophisticated research simple. As CEO, Ryan has grown Qualtrics to one of the fastest-growing technology companies in the world.

In the early days of building Qualtrics, Ryan tried giving the product away to entice customers to use it. Their reactions surprised him:

There’s something about people appreciating something they have to pay for.

Our pricing model was something like $5,000 a school. For the big schools we tried to give it away, but in every school we gave it away to, no one ever used it.

I remember that at Wharton I gave it to them free, went back a year later and there were only, like, five people using it.   We had to charge them to get them to use it. Now there’s thousands of users across campus.  

If you can’t hear the clip, click here

Lane Merrifield is a co-founder and CEO of FreshGrade, a learning collaboration and portfolio tool focused on enhancing teachers’ lives and making students’ learning visible. Lane’s first startup was Club Penguin, the largest online virtual world for kids, which was acquired by The Walt Disney Company in 2007 for $350M.  Lane served as Executive Vice President at Disney for five years before returning to his entrepreneurial roots to become an angel investor and launch FreshGrade. 

Lane also founded Wheelhouse, a Canadian organization that supports other entrepreneurs through mentorship, access to early stage capital, and connections to global business networks and executive expertise. 

Lane explained that and his co-founders, Lance Priebe and Dave Krysko, built Club Penguin to give their kids a safe place to play online. It quickly became a hit, but that success had a dark side, Lane says:

It totally consumed my life.

I was sitting in a press interview in Australia talking about Club Penguin, and the reporter asked, “Your kids must think you’re the coolest dad in the world.” I gave her some pat answer –“Well, they like to play it once in a while, but to them I’m just dad” — but I almost couldn’t answer the question, because I realized in that moment that I hadn’t seen my kids in about three weeks.

Ironically, this thing that I built for them now had me traveling around the world and being a pretty crappy dad.

If you can’t hear the clip, click here

—

Finding early customers for Qualtrics was difficult, Ryan says. It was a challenge to convince companies to think past the traditional method of hiring consultants or researchers to test user experience:

At first I tried to call business and enterprises. But in the corporate world in 2002, no one was ready for it.

I specifically remember calling one airline, and they said, “Hey look, if our customers aren’t happy, they’ll just call us.” Now today that mindset seems silly.

In the meantime, we had this case study that said academics were really ready for us. So we started in the academic market — because they would actually buy. I remember selling Angela Lee at the Kellogg School of Business, and Angela referred it to someone at Wharton, who referred it to someone at Columbia and Duke, and the rest is history.  

Ironically, though, academics are horrible customers. They have a laundry list of features they want that are more than you can listen to in an hour. They’re hard to service and support because they want to talk to someone as smart as them, which is almost impossible, and they have no money. No MBA business model would ever come out with, “Hey we’re going to go target the academics.”

If you can’t hear the clip, click here

Still, academics made up Qualtrics’ core market for five years. Over time, students at those institutions took the product with them into their corporate jobs, growing Qualtrics’ customer base.

While it looked to the world like Ryan and his team planned to grow that way, nothing could be further from the truth.

Everyone comes up now — the VCs, the market – and they say, “Hey wow, that was a beautiful business model. You guys were geniuses.”

I kind of start laughing because no one ever thought we were geniuses; it was desperation. Typically that’s when innovation comes out. You innovate when you’re desperate.

If you can’t hear the clip, click here

One important lesson Ryan learned was how difficult it is to make a complicated thing seem seamless:

Everything my dad wanted to build was way too complex for anyone to understand. So we had this built-in test where we’d see if I could figure it out, because if I could figure it out, then others could.  

I learned that making a complicated thing look easy is extremely hard.

If you can’t hear the clip, click here

—

Club Penguin launched with modest expectations. Lane and his team built a virtual world to give their kids a safe place to socialize online, thinking others might like it, too. They were in for a big surprise:

Our hope was just to be able to find enough people out there that we could keep it sustainable. We bootstrapped it. We took out lines of credit on our homes; we maxed out credit cards. There were no investors.

We hired a few people part-time, we contracted a lot of work, we’d pay as often as we could, and we started a subscription business, which back in the day was insanity. It was freemium, but the term freemium didn’t exist yet. It was try and then buy.

Through some of these mini-games that my co-founder, Lance, had created, we had a small audience initially. But when we rolled out the virtual world, it grew from a few thousand kids to 30,000 or 40,000 within about a month.

If you can’t hear the clip, click here

Built before Facebook existed, the company was at the cutting edge for scale, which attracted potential investors, but also presented some interesting challenges:

We had some great VCs come out of the woodwork, and we said, “Listen, have you dealt with infrastructure problems like this before? We have hundreds of thousands of concurrent users logging into servers that are meant to be having long, 2-, 3-, 4-minute sessions, and we’re having millisecond sessions, and our servers can’t handle that?”  

We brought in experts from IBM, we worked with the biggest service providers in the world, and some of the largest data centers.  They all had no idea what to do with us, because they were used to a database and the web, and the web sessions last for minutes at a time. At this point in time, we had hundreds of thousands of users. We were basically hacking these servers to do what we needed them to do.

If you can’t hear the clip, click here

Like most founders, Lane and Ryan are glad to pay their success forward.

Today, in addition to running FreshGrade, Lane mentors other founders. He tells them this:

Know why you’re doing what you’re doing. Don’t focus on the what, don’t tell me about the market opportunity, don’t tell me, “I’m Uber for this” or “I’m Slack for that.”

I don’t care about that. Tell me why are you building what you’re building.

If you can’t hear the clip, click here

He said that because the Club Penguin team was clear about their “why,” they embraced being acquired by Disney in 2007:

Our goals weren’t about an exit. I didn’t even know what the term “exit” meant. For us, it was about taking Club Penguin to the next level.  

By the time we were acquired we had millions of users, we had a massive demand for consumer products, massive demand internationally. We needed to translate the game into other languages. We didn’t have any of the infrastructure to do that.

Disney gave us more resources to make our vision happen.

If you can’t hear the clip, click here

Ryan counsels other founders to never give up. Qualtrics has 8500 customers today, but back in his father’s basement in 2002, things weren’t so rosy. This memory helped him keep things in perspective along the way:

I remember thinking, “We’re in the basement, no one knows about us. We need to go to a trade show and get some exposure.” I called this trade show company that was putting on this great marketing event in New York City.

I borrowed my brother’s trade show booth and flew to New York. We took the train from the airport, because we couldn’t afford a taxi, and  I sat on the train with this trade show booth in a bag between my legs. I remember specifically hauling that thing up the stairway and coming out of the subway station pretty close to Wall Street.

Fast-forward ten years. We were hosting a Qualtrics Live event for our customers in New York City in a hotel in the same neighborhood where the trade show had been. We now had 250 New York customers there; the room was full.  Coming out of the hotel walking around the street, I was looking for somewhere to eat, and I passed that subway station. I could almost picture myself as a young kid hauling that trade show booth up the stairs.

It was kind of surreal, a message like, “Don’t give up. Trust your ideas.”

I can’t tell you how many times I’ve had to rely on that memory and the lessons I learned from hauling that trade show booth up the stairs.

If you can’t hear the clip, click here

Listen to my full interviews with Ryan and Lane by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere : Jeremy Johnson, founder of Andela; and Michael Eidsaune, co-founder of Carely.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com  describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show

Hacking for Diplomacy – Solving Foreign Policy Challenges with the Lean LaunchPad

Hacking for Diplomacy is a new course from the Management Science and Engineering department in Stanford’s Engineering school and Stanford’s International Policy Studies program that will be first offered in the Fall of 2016.

Join a select cross-disciplinary class that takes real problems from the U.S. State Department and asks students to use Lean Methods to test their understanding of the problem and deliver rapid-fire innovative solutions to pressing diplomacy, development and foreign policy challenges.

Syrian Refugees, Human Trafficking, Zika Virus, Illegal Fishing, Weapons of Mass Destruction Detection, ISIS on-line propaganda, Anti-Corruption…

What do all these problems have in common? The U.S. Department of State is working on all of them.

The U.S. Department of State manages America’s relationships with 180 foreign governments, international organizations, and the people of other countries with 270 embassies, consulates, and other posts. The management of all these relationships is called diplomacy. 70,000 State Department employees (46,000 Foreign Service Nationals, 14,000 Foreign Service Employees and 11,000 in the Civil Service) carry out the President’s foreign policy and help build a freer, more prosperous, and secure world.

The State Department has four main foreign policy goals:

Protect the United States and Americans
Advance democracy, human rights, and other global interests
Promote international understanding of American values and policies
Support U.S. diplomats, government officials, and all other personnel at home and abroad.

At a time of significant global uncertainty, diplomats are grappling with a set of transnational and cross-cutting challenges that defy easy solution. These include the continued pursuit of weapons of mass destruction by states and non-state groups, the outbreak of internal conflict across the Middle East and in parts of Africa, the most significant flow of refugees since World War II, and a changing climate that is beginning to affect both developed and developing countries.  And that’s just on Monday.  The rest of the week is equally busy.

Hacking for Diplomacy

In a world of complex threats, dynamic opportunities, and diffuse power, effective diplomacy and development require institutions that adapt, embrace technology, and allow for experimentation to ensure continuous learning. This means developing new and innovative ways to think about, organize and build diplomatic strategies and solutions.  Stanford’s new Hacking for Diplomacy class is a part of this effort.

Hacking for Diplomacy is designed to provide students the opportunity to learn how to work with the Department of State to address urgent foreign policy challenges. While the traditional tools of statecraft remain relevant, policymakers are looking to harness the power of new technologies to rethink how the U.S. government approaches and responds to  the problems outlined above and other long-standing challenges. In this class, student teams will take actual foreign policy challenges and a hands-on approach that will require close engagement with officials in the U.S. State Department and other civilian agencies. They’ll learn how to apply “lean startup” principles, (“mission model canvas,” “customer development,” and “agile engineering”) to discover and validate agency and user needs and to continually build iterative prototypes to test whether they understood the problem and solution.

Each week, teams will use the Mission Model Canvas (a variant of the Business Model Canvas used for government agencies and non-profits) to develop a set of initial hypotheses about a solution to the problem and will get out of the building and talk to relevant stakeholders and users. As they learn, they’ll iterate and pivot on these hypotheses through customer discovery and build minimal viable prototypes (MVPs). Each team will be guided by a sponsor from the State Department bureau that proposed the problem and a second mentor from the local community.

Real Problems

In this class, student teams select from an existing set of problems provided by the Department of State. Hacking for Diplomacy is not a product incubator for a specific technology solution. Instead, as teams follow the Mission Model Canvas, they’ll discover a deeper understanding of the selected problem, the challenges of deploying the solutions, and the host of potential technological solutions that might be arrayed to solve them. Using the Lean LaunchPad Methodology the class focuses teams to:

Deeply understand the problems/needs of State Department beneficiaries and stakeholders
Rapidly iterate technology solutions while searching for product-market fit
Understand all the stakeholders, deployment issues, costs, resources, and ultimate mission value
Produce a repeatable model that can be used to launch other potential technology solutions

National Service

Today if college students want to give back to their country they think of Teach for America, the Peace Corps, or AmeriCorps. Few consider opportunities to make the world safer with the State Department and other government agencies. Hacking for Diplomacy will promote engagement between students and the Department of State and provide a hands-on opportunity to solve real diplomacy, foreign policy and national security problems.

Like its sister class, Hacking for Defense, our goal is to open-source this class to other universities. By creating a national network of colleges and universities, Hacking for Diplomacy can scale to provide hundreds of solutions to critical diplomacy, policy, and national security problems every year.

We’re going to create a network of entrepreneurial students who understand the diplomatic, policy, and national security problems facing the country and get them engaged in partnership with islands of innovation in the Department of State. This is a first step to a more agile, responsive and resilient, approach to diplomacy and national security in the 21st century.

Lessons Learned

Hacking for Diplomacy is a new class that teaches students how to:

Use the Lean LaunchPad methodology to deeply understand the problems/needs of State Department customers
Deliver minimum viable products that match State Department needs in an extremely short time


The class will also teach the islands of innovation in the Department of State:

how the innovation culture and mindset operate at speed
how to identify potential dual-use technologies that exist outside their agencies and contractors (and are in university labs, or are commercial off-the-shelf solutions)
how to use an entrepreneurial mindset and Lean Methodologies to solve foreign policy problems


Register for the inaugural class at Stanford starting September 29th now

Filed under: Hacking for Diplomacy, Lean LaunchPad, Teaching

Hacking for Defense & Hacking for Diplomacy – Educator/Sponsor Class

There is nothing more powerful than an idea whose time has come

Victor Hugo

On September 7th – 9th we are holding our first Hacking for Defense & Diplomacy – class for Educators and Sponsors, training educators how to teach these classes in their universities and sponsors how to select problem sets and manage their teams.

Sign up here.

An Idea Whose Time Has Come

Our first Hacking for Defense class was a series of experiments. And like all good experiments we tested a set of hypotheses. Surprisingly the results blew past our expectations – and we had set a pretty high bar. (see the final Hacking for Defense class presentations here). Based on those results we believe that we can do the same with Diplomacy so working with the State Department’s innovation cell in Silicon Valley we will prototype the Hacking for Diplomacy course at Stanford this fall.

A few of the student and sponsor comments about the class:

“Absolutely amazing class. Experiential learning is very effective to really grasp what we claim to know intellectually.”  – computer science grad student

 “One of the best classes I’ve ever taken, and it turned me onto a whole new career path.”  – MBA student

 “We’re still blown away what students who knew nothing about our agency could learn and deliver in such a short period of time.”  – sponsor

First, would students to sign up for a class that engaged them in national service with the Department of Defense and Intelligence Community?

Result: I’ll admit my hesitancy was because I brought my memories of U.S. college campuses circa the Vietnam War (and the riots and student protests at Stanford). So I was astonished how ready and eager students were for a class that combines the toughest problems in national security, with learning Lean Innovation methods. We had more applicants (70+) for the 32 seats in this class than we usually get in our Lean LaunchPad entrepreneurship class. And early indications are that Hacking for Diplomacy will be at least as popular.

Second, could we find islands of innovation inside the DOD, the Intelligence Community and State Department willing to engage students to work on real problems? And could those sponsors work with us to scrub those problems so they were unclassified but valuable to the sponsors and the students?

Result: We solicited 8 problems for the students to work on and had to shut down the submission process after we reached 24 from the DOD.  We’ve now built a national clearing house for DOD/Intel problems that other schools can use. The Department of State has already given us 15 problems for our upcoming Diplomacy class.

Third, would students be turned off by working problems that weren’t theirs, in particular from the DOD and Intel community?

Result: We surveyed student motivations before and after the class and were surprised to find that a large percentage became more interested and engaged in national service. Over half the student teams have decided to continue working on national security projects. At the end of class two teams were funded by SOCOM (U.S. Special Operations Command) to continue prototyping over the summer. One team closed a $200k seed round in the middle of the class. Multiple teams have been engaged by government, prime contractor and VC firms for follow-on discussions/engagements.

Fourth, would the same Lean Startup methodology (business model design, customer development and agile engineering) used in the Lean LaunchPad and NSF I-Corps class work here?

Result: Hell yes.

Fifth, would other schools be interested in offering this class?

Result: Seven schools have already added Hacking for Defense classes: UC San Diego, University of Pittsburg, University of Southern California, Stanford, University of Rochester, Georgia Tech and Georgetown University. 15 more schools are in the pipeline. NDU (the National Defense University) – National Security Accelerator (NSTA), the Stanford University Hacking 4 Defense Project and JIDA (the Joint Improvised-threat Defeat Agency) have all teamed up to fund the expansion of the Hacking for Defense class to other universities. The Department of Energy Advanced Manufacturing Office has also lent its support to the expansion. If our Hacking for Diplomacy goes well this fall, we intend to scale it as well.

The Educator/Sponsor Class

We learned a lot developing the Hacking for Defense class, and even more as we taught it and worked with the problem sponsors in the DOD/Intel community. Now we’ve created a ton of course materials for educators (syllabus, slides, videos) and have written a detailed educator’s guide with suggestions on how to set up and run a class along with best practices and detailed sample lessons plans for each class session. And for sponsors we have an equally robust set of tools on how to get the most out of the student teams and the university. And we’re excited it to share it all with other educators and sponsors in the DOD/Intel community.

So on September 7 through 9th at Stanford we will hold our first 2.5-day Hacking for Defense & Diplomacy Educator and Sponsor Class.

We’ll provide you all the course materials (syllabus, slides, videos) along with an educator’s guide with suggestions on how to set up and run a class along with detailed sample lessons plans for each class session. You’ll also

Meet with other instructors and problem sponsors and experience the Hacking for Defense/Diplomacy methodology first hand
Learn how to build H4D teaching teams and recruit student teams to participate
Learn what makes a good student problem and how problem sponsors can increase their Return On Investment for supporting the course
Engage with the original Stanford Hacking For Defense course authors (Pete Newell, Joe Felter and I) and students from the original H4D cohort
Engage directly with potential government problem sponsors

Life is series of unplanned paths and unintended consequences – Hacking For Defense

A year ago as I started helping government agencies put innovation programs in place, a student in my Stanford class who had served in the special forces pointed out that the Lean methodologies I was teaching sounded identical to what the U.S. Army had done with the Rapid Equipping Force (REF) commanded by then Colonel Pete Newell.

The REFs goal was to get out of the building and into the field to get a deep understanding of soldiers’ problems, then get technology solutions to these problems into the hands of front-line soldiers in days and weeks, instead of the military’s traditional months and years. The REF had permission to shortcut the detailed 100+ page requirements documents used by the defense acquisition process and could use existing government equipment or buy or commercial-off-the-shelf technologies purchased with a government credit card or its own budget.

When Pete Newell retired to Silicon Valley he teamed up with Joe Felter, another retired colonel, who had a career as a Special Forces and foreign area officer (among other things, Joe led the Counterinsurgency Advisory and Assistance Team (CAAT) in Afghanistan) and was now teaching at Stanford’s Center for International Security and Cooperation (CISAC). Together Pete and Joe had formed BMNT to create an “insurgency” in Silicon Valley to help accelerate the way the Department of Defense acquires new technology and ideas and integrates cutting-edge innovation into the organizations defending our country.

The Hacking for Defense & Diplomacy classes were born from the intersection of BMNTs work with the Department of Defense in Silicon Valley and my work in Lean Innovation.

We had five goals for the class:

Teach students Lean Innovation – the mindset, reflexes, agility and resilience an entrepreneur needs to make decisions at speed and with urgency in a chaotic and uncertain world.
Offer students an opportunity to engage in a national public service. Today if college students want to give back to their country they think of Teach for America, the Peace Corps, or Americorps or perhaps the US Digital Service or the GSA’s 18F. Few consider opportunities to make the world safer with the Department of Defense, Intelligence Community, State Department or other government agencies.
Teach our sponsors (the innovators inside the Department of Defense (DOD), Intelligence Community (IC) and State Department) there was a methodology that could help them understand and better respond to rapidly evolving asymmetric threats. (By rapidly discovering the real problems in the field using Lean methods, and then articulating the requirements to solve them, defense acquisition programs operate at speed and urgency to deliver timely and needed solutions.)
Show our DOD/IC/State sponsors that civilian students can make a meaningful contribution to problem understanding and rapid prototyping of solutions.
Create the 21st Century version of Tech ROTC by having Hacking for Defense and Hacking for Diplomacy taught by a national network of 50 colleges and universities. This would give the Department of Defense (DOD), Intelligence Community (IC) and State Department access to a pool of previously untapped technically sophisticated talent, trained in Lean and Agile methodologies, and unencumbered by dogma and doctrine.

It looks like we’re on our way to achieving all of these goals.  Join us.

Lessons Learned

Hacking for Defense and Hacking for Diplomacy are classes students want

7 universities have signed up to teach it


Hacking for Diplomacy is being piloted this fall
We’re offering a 2½ day seminar for educators who want to offer either class

Filed under: Hacking For Defense, Teaching

Why the Navy Needs Disruption Now (part 2 of 2)

The future is here it’s just distributed unevenly – Silicon Valley view of tech adoption

The threat is here it’s just distributed unevenly – A2/AD and the aircraft carrier

This is the second of a two-part post following my stay on the aircraft carrier USS Carl Vinson. Part 1 talked about what I saw and learned – the layout of a carrier, how the air crew operates and how the carrier functions in context of the other ships around it (the strike group.) But the biggest learning was the realization that disruption is not just happening to companies, it’s also happening to the Navy. And that the Lean Innovation tools we’ve built to deal with disruption and create continuous innovation for large commercial organizations were equally relevant here.

This post offers a few days’ worth of thinking about what I saw. (If you haven’t, read part 1 first.)

The threat is here; it’s just distributed unevenly – A2/AD and the aircraft carrier

Both of the following statements are true:

The aircraft carrier is viable for another 30 years.
The aircraft carrier is obsolete.

Well-defended targets

Think of an aircraft carrier as a $11 billion dollar portable air force base manned by 5,000 people delivering 44 F/A-18 strike fighters anywhere in the world.

The primary roles of the 44 F/A-18 strike fighters that form the core of the carrier’s air wing is to control the air and drop bombs on enemy targets. For targets over uncontested airspace (Iraq, Afghanistan, Syria, Somalia, Yemen, Libya, etc.) that’s pretty easy. The problem is that First World countries have developed formidable surface-to-air missiles – the Russian S–300 and S-400 and the Chinese HQ-9 – which have become extremely effective at shooting down aircraft. And they have been selling these systems to other countries (Iran, Syria, Egypt, etc.). While the role of an aircraft carrier’s EA-18G Growlers is to jam/confuse the radar of these missiles, the sophistication and range of these surface-to-air missiles have been evolving faster than the jamming countermeasures on the EA-18G Growlers (and the cyber hacks to shut the radars down).

This means that the odds of a carrier-based F/A-18 strike fighter successfully reaching a target defended by these modern surface-to-air missiles is diminishing yearly. Unless the U.S. military can take these air defense systems out with drones, cruise missiles or cyber attack, brave and skilled pilots may not be enough. Given the F/A-18’s are manned aircraft (versus drones), high losses of pilots may be (politically) unacceptable.

Vulnerable carriers

If you want to kill a carrier, first you must find it and then you have to track it. In WWII knowing where the enemy fleet located was a big – and critical – question. Today, photo imaging satellites, satellites that track electronic emissions (radio, radar, etc.) and satellites with synthetic aperture radar that can see through clouds and at night are able to pinpoint the strike group and carrier 24/7. In the 20th century only the Soviet Union had this capability. Today, China can do this in the Pacific and to a limited extent, Iran has this capability in the Persian Gulf. Soon there will be enough commercial satellite coverage of the Earth using the same sensors, that virtually anyone able to pay for the data will be able to track the ships.

During the Cold War the primary threat to carriers was from the air – from strike/fighters dropping bombs/torpedoes or from cruise missiles (launched from ships and planes). While the Soviets had attack submarines, our anti-Submarine Warfare (ASW) capabilities (along with very noisy Soviet subs pre-Walker spy ring) made subs a secondary threat to carriers.

In the 20th century the war plan for a carrier strike group used its fighter and attack aircraft and Tomahawk cruise missiles launched from the cruisers to destroy enemy radar, surface-to-air missiles, aircraft and communications (including satellite downlinks). As those threats are eliminated, the carrier strike can move closer to land without fear of attack. This allowed the attack aircraft to loiter longer over targets or extend their reach over enemy territory.

Carriers were designed to be most effective launching a high number of sorties (number of flights) from ~225 miles from the target. For example, we can cruise offshore of potential adversaries (Iraq and Syria) who can’t get to our carriers. (Carriers can standoff farther or can reach further inland, but they have to launch F-18’s as refueling tankers to extend the mission range. For example, missions into Afghanistan are 6-8 hours versus normal mission times of 2-3 hours.)

In the 21st century carrier strike groups are confronting better equipped adversaries, and today carriers face multiple threats before they can launch an initial strike. These threats include much quieter submarines, long-range, sea-skimming cruise missiles, and in the Pacific, a potential disruptive game changer – ballistic missiles armed with non-nuclear maneuverable warheads that can hit a carrier deck as it maneuvers at speed (DF-21d and the longer range DF-26).

In the Persian Gulf the carriers face another threat – Fast Inshore Attack Craft (FIAC) and speedboats with anti-ship cruise missiles that can be launched from shore.

The sum of all these threats – to the carrier-based aircraft and the carriers themselves –  are called anti-access/area denial (A2/AD) capabilities.

Eventually the cost and probability of defending the carrier as a manned aircraft platform becomes untenable in highly defended A2/AD environments like the western Pacific or the Persian Gulf. (This seems to be exactly the problem the manned bomber folks are facing in multiple regions.) But if not a carrier, what will they use to project power?  While the carrier might become obsolete, the mission certainly has not.

So how does/should the Navy solve these problems?

Three Horizons of Innovation

One useful way to think about in innovation in the face of increasing disruption / competition is called the “Three Horizons of Innovation.” It suggests that an organization should think about innovation across three categories called “Horizons.”

Horizon 1 activities support executing the existing mission with ever increasing efficiency
Horizon 2 is focused on extending the core mission
Horizon 3 is focused on searching for and creating brand new missions

(see here for background on the Three Horizons.)

Horizon 1 is the Navy’s core mission. Here the Navy executes against a set of known mission requirements (known beneficiaries, known ships and planes, known adversaries, deployment, supply chain, etc.) It uses existing capabilities and has comparatively low risk to get the next improvement out the door.

In a well-run organization like the Navy, innovation and improvement occurs continuously in Horizon 1. Branches of the Navy innovate on new equipment, new tactics, new procurement processes, more sorties on newer carriers, etc. As fighter pilots want more capable manned aircraft and carrier captains want better carriers, it’s not a surprise that Horizon 1 innovations are upgrades – the next generation of carriers – Ford Class; and next generation of navy aircraft – the F-35C. As a failure here can impact the Navy’s current mission, Horizon 1 uses traditional product management tools to minimize risk and assure execution. (And yes, like any complex project they still manage to be over budget and miss their delivery schedule.)

Because failure here is unacceptable, Navy Horizon 1 programs and people are managed by building repeatable and scalable processes, procedures, incentives and promotions to execute and the mission.

In Horizon 2, the Navy extends its core mission. Here it looks for new opportunities within its existing mission (trying new technology on the same platform, using the same technology with new missions, etc.) Horizon 2 uses mostly existing capabilities (the carrier as an aircraft platform, aircraft to deliver munitions) and has moderate risk in building or securing new capabilities to get the product out the door.

An example of potential Naval Horizon 2 innovations is unmanned drones flying off carriers to do the jobs fighter pilots hate such as serving as airborne tankers (who wants to fly a gas tank around for 6 hours?) and ISR (Intelligence, Surveillance and Reconnaissance), another tedious mission flying around for hours that could be better solved with a drone downlinking ISR data for processing on board a ship.

However, getting the tanker and ISR functions onto drones only delays the inevitable shift to drones for strike, and then for fighters. The problem of strike fighters’ increasing difficulty in penetrating heavily defended targets isn’t going to get better with the new F-35C (the replacement for the F/A-18). In fact, it will get worse. Regardless of the bravery and skill of the pilots, they will face air defense systems evolving at a faster rate than the defensive systems on the aircraft. It’s not at all clear in a low-intensity conflict (think Bosnia or Syria) that civilian leadership will want to risk captured or killed pilots and losing planes like the F-35C that cost several hundred million dollars each.

Management in Horizon 2 works by pattern recognition and experimentation inside the current mission model. Ironically, institutional inertia keeps the Navy from deploying unmanned assets on carriers. In a perfect world, drones in carrier tanker and ISR roles should have been deployed by the beginning of this decade. And by now experience with them on a carrier deck could have led to first, autonomous wingmen and eventually autonomous missions. Instead the system appears to have fallen into the “real men fly planes and command Air Wings and get promoted by others who do” mindset.

The Navy does not lack drone demos and prototypes, but it has failed to deploy Horizon 2 innovations with speed and urgency. Failure to act aggressively here will impact the Navy’s ability to carry out its mission of sea control and power projection. (The Hudson Institute report on the future of the carrier is worth a read, and a RAND report on the same topic comes out in October.)

If you think Horizon 2 innovation is hard in the Navy, wait until you get to Horizon 3. This is where disruption happens. It’s how the aircraft carrier disrupted the battleship. How nuclear-powered ballistic missile submarines changed the nature of strategic deterrence, and how the DF-21/26 and artificial islands in the South China sea changed decades of assumptions.  And it’s why, in most organizations, innovation dies.

For the Navy, a Horizon 3 conversation would not be about better carriers and aircraft. Instead it would focus on the core reasons the Navy deploys a carrier strike group: to show the flag for deterrence, or to control part of the sea to protect shipping, or to protect a Marine amphibious force, or to project offensive power against any adversary in well-defended areas.

A Horizon 3 solution for the Navy would start with basic need of these missions (sea control, offensive power projection – sortie generation) the logistic requirements that come with them, and the barriers to their success like A2/AD threats. Lots of people have been talking and writing about this and lots of Horizon 3 concepts have been proposed such as Distributed Lethality, Arsenal Ships, underwater drone platforms, etc.

Focussing on these goals – not building or commanding carriers, or building and flying planes – is really, really hard.  It’s hard to get existing operational organizations to think about disruption because it means they have to be thinking about obsoleting a job, function or skill they’ve spent their lives perfecting. It’s hard because any large organization is led by people who succeeded as Horizon 1 and 2 managers and operators (not researchers). Their whole focus, career, incentives, etc. has been about building and make the current platforms work. And the Navy has excelled in doing so.

The problem is that Horizon 3 solutions take different people, different portfolio, different process and different politics.

People: In Horizon 1 and 2 programs people who fail don’t get promoted because in a known process failure to execute is a failure of individual performance. However, applying the same rules to Horizon 3 programs – no failures tolerated – means we’ll have no learning and no disruptive innovations. What spooks leadership is that in Horizon 3 most of the projects will fail. But using Lean Innovation they’ll fail quickly and cheaply.

In Horizon 3 the initial program is run by mavericks – the crazy innovators. In the Navy, these are the people you want to court martial or pass over for promotion for not getting with current program. (In a startup they’d be the founding CEO.) These are the fearless innovators you want to create new and potentially disruptive mission models. Failure to support their potential disruptive talent means it will go elsewhere.

Portfolio: In Horizon 3, the Navy is essentially incubating a startup. And not just one. The Navy needs a portfolio of Horizon 3 bets, for the same reason venture capital and large companies have a portfolio of Horizon 3 bets – most of these bets will fail – but the ones that succeed are game changers.

Process: A critical difference between a Horizon 3 bet and a Horizon 1 or 2 bet is that you don’t build large, expensive, multi-year programs to test radically new concepts (think of the Zumwalt class destroyers). You use “Lean” techniques to build Minimal Viable Products (MVPs). MVPs are whatever it takes to get you the most learning in the shortest period of time.

Horizon 3 groups operate with speed and urgency – the goal is rapid learning. They need to be physically separate from operating divisions in an incubator, or their own facility. And they need their own plans, procedures, policies, incentives and Key Performance Indicators (KPIs) different from those in Horizon 1.  

The watchwords in Horizon 3 are “If everything seems under control, you’re just not going fast enough.”

Politics: In Silicon Valley most startups fail. That’s why we invest in a portfolio of new ideas, not just one. We embrace failure as an integral part of learning. We do so by realizing that in Horizon 3 we are testing hypotheses – a series of unknowns – not executing knowns. Yet failure/learning is a dirty word in the world of promotions and the “gotcha game” of politics. To survive in this environment Horizon 3 leaders must learn how to communicate up/down and sideways that they are not running Horizon 1 and 2 projects.

Meanwhile, Navy and DOD leadership has to invest in, and clearly communicate their innovation strategy across all three Horizons.

Failure to manage innovation across all three Horizons and failure to make a portfolio of Horizon 3 bets means that the Navy is exposed to disruption by new entrants. Entrants unencumbered by decades of success, fueled by their own version of manifest destiny.

Lessons Learned

Our carriers are a work of art run and manned by professionals

Threats that can degrade or negate a carrier strike group exist in multiple areas
However, carriers are still a significant asset in almost all other combat scenarios


Speed and urgency rather than institutional inertia should be the watchwords for Horizon 2 innovation
Horizon 3 innovation is about a clean sheet of paper thinking

It’s what Silicon Valley calls disruption
It requires different people, portfolio, process and politics


The Navy (and DOD) must manage innovation across all three Horizons

Allocating dollars and resources for each


Remembering that todays Horizon 3 crazy idea is tomorrow Horizon 1 platform

Thanks to the crew of the U.S.S. Vinson, and Commander Todd Cimicata and Stanford for a real education about the Navy.

Filed under: Hacking For Defense, Navy, Science and Industrial Policy, Technology

Why the Navy Needs Disruption Now (part 1 of 2)

The future is here it’s just distributed unevenly – Silicon Valley view of tech adoption

The threat is here it’s just distributed unevenly – A2/AD and the aircraft carrier

Sitting backwards in a plane with no windows, strapped in a 4-point harness, wearing a life preserver, head encased in a helmet, eyes covered by googles, your brain can’t process the acceleration. As the C-2 A Greyhound is hurled off an aircraft carrier into the air via a catapult, your body thrown forward in the air, until a few seconds later, hundreds of feet above the carrier now at 150 miles per hour you yell, “Holy Shxt.” And no one can hear you through the noise, helmet and ear protectors.

I just spent two days a hundred miles off the coast of Mexico aboard the U.S.S. Carl Vinson landing and taking off on the carrier deck via a small cargo plane.

Taking off and landing is a great metaphor for the carrier. It’s designed to project power – and when needed, violence.

It’s hard to spend time on a carrier and not be impressed with the Navy, and the dedicated people who man the carrier and serve their country. And of course that’s the purpose of the two-day tour. The Navy calls its program Outreach: Americas Navy. Targeting key influencers (who they call Distinguished Visitors,) the Navy hosts 900/year out to carriers off the West Coast and 500/year to carriers on the East Coast. These tours are scheduled when the carriers are offshore training, not when they are deployed on missions. I joined Pete Newell (my fellow instructor in the Hacking for Defense class) and 11 other Stanford faculty from CISAC and the Hoover Institution.

I learned quite a bit about the physical layout of a carrier, how the air crew operates and how the carrier functions in context of the other ships around it (the strike group.) But the biggest learning was the realization that disruption is not just happening to companies, it’s also happening to the Navy. And that the Lean Innovation tools we’ve built to deal with disruption and create continuous innovation for large commercial organizations were equally relevant here.

The Carrier

U.S. aircraft carriers like the Vinson (there are 9 others) are designed to put the equivalent of an Air Force base anywhere on any ocean anywhere in the world. This means the U.S. can show the flag for deterrence (don’t do this or it will be a bad day) or to control some part of the sea (to protect commercial and/or military shipping, or protect a Marine amphibious force – on the way or at a place they will land); and project power (a euphemism for striking targets with bombs and cruise missiles far from home).

On an aircraft carrier there are two groups of people – the crew needed to run the carrier, called the ship’s company, and the people who fly and support the aircraft they carry, called the Air Wing. The Vinson carries ~2,800 people in the ship’s company, ~2,000 in the Air Wing and ~150 staff.

Without the Air Wing the carrier would just be another big cruise ship. The Air Wing has 72 aircraft made up of jet and propeller planes. The core of the Air Wing are the 44 F/A-18 strike fighters.

The F/A-18 strike fighters are designed to do two jobs: gain air superiority by engaging other fighter planes in the air or attack targets on the ground with bombs (that’s why they have the F/A designation). Flying on missions with these strike fighters are specially modified F/A-18’s – EA-18G Growlers that carry electronic warfare jammers which electronically shut down enemy radars and surface-to-air missiles to ensure that the F/A-18s get to the target without being shot down.

Another type of plane on the carrier is the propeller-driven E-2C Hawkeyes, which is an airborne early warning plane. Think of the Hawkeyes as airborne air traffic control. Hawkeyes carry a long-range radar in a dome above the fuselage, and keep the strike group and the fighters constantly aware of incoming air threats. They can send data to the fighters and to other ships in the battle group which identifies the location of potential threats. They can also detect other ships at sea.

The other planes in the carrier’s Air Wing are 16 helicopters: 8 MH-60S Nighthawk helicopters for logistics support, search and rescue and special warfare support; and 8 MH-60R Seahawks to locate and attack submarines and to attack Surface targets. They carry sonobuoys, dipping sonar and anti-submarine torpedoes. And last but not least, there is the plane that got us on the carrier, the C2-A Greyhound – the delivery truck for the carrier.

You’re not alone

Carriers like the Vinson don’t go to sea by themselves. They’re part of a group of ships called the “carrier strike group.”  A strike group consists of a carrier, two cruisers with Tomahawk cruise missiles which can attack land targets, and two destroyers and/or frigates with Aegis surface to air missiles to defend the carrier from air attack. (In the past, the strike group was assigned an attack submarine to hunt for subs trying to kill the carrier. Today the attack subs are in such demand they are assigned by national authorities on an as-needed basis.) The strike group also includes replenishment ships that carry spare ammunition, fuel, etc. (The 150 staff on the carrier include separate staff for the strike group, Air Wing, carrier, surface warfare (cruisers with tomahawk missiles) and air defense (Aegis-armed destroyers.)

The strike group also receives antisubmarine intelligence from P-3/P-8 anti-submarine aircraft and towed arrays on the destroyers, and additional situational awareness from imaging, Electronic Intelligence (ELINT) and radar sensors and satellites.

Before our group flew out to the carrier, we were briefed by Vice-Admiral Mike Shoemaker. His job is aviation Type Commander (TYCOM) for all United States Navy naval aviation units (responsible for aircrew training, supply, readiness, etc.) He also wears another hat as the commander of all the Navy planes in the Pacific. It was interesting to hear that the biggest issue in keeping the airplanes ready to fight are sequestration and budget cuts. These cuts have impacted maintenance, and made spare parts hard to get. And no pay raises make it hard to retain qualified people.

Then it was time to climb into our C-2 Greyhound for the flight out to the aircraft carrier. Just like a regular passenger plane, except you put on a life vest, goggles, ear plugs, and over all that a half helmet protecting the top and back of your head while enclosing your ears in large plastic ear muffs. Then you and 25 other passengers load the plane via the rear ramp, sit facing backwards in a plane with no windows and wait to land.

On the U.S.S. Vinson

Landing on an aircraft carrier is an equally violent act. When you make an arrested landing, a tail hook on the plane traps one of the four arresting cables stretched across the deck, and you decelerate from 105 mph to zero in two seconds. When the plane hit the arresting wire on the carrier deck, it came to a dead stop in 250 feet. There was absolutely no doubt that we had landed (and a great lesson on why you were wearing head protection, goggles and strapped into your non-reclining seat with a four-point harness). As the rear ramp lowered, we were assaulted with the visual and audio cacophony of crewmen in seven different colored shirts on the deck swarming on and around F-18s, E2Cs, helicopters, etc., all with their engines running.

Captain Doug Verissimo and his executive officer Captain Eric Anduze, welcomed us to the carrier. (One of my first problems onboard was translating Navy ranks into their Army/Air Force equivalents. For example, a navy captain equals an Air Force/Army Colonel, and a rear admiral is a brigadier general, etc.)

Then for the next two days the carrier’s public affairs officer led us on the “shock and awe” tour. In four years in the Air Force I had been stationed on four fighter bases, three of them in war zones, some with over 150 planes generating lots of sorties. But I had to grudgingly admit that watching F­-18s landing on a 300-foot runway 60 feet above the water, on a pitching deck moving 30 mph at sea – one a minute – at night – was pretty impressive.  And having us stand on the deck less than 50 feet away from these planes as they landed trapping the arrestor wires, and launched via a catapult was a testament to the Navy’s PR acumen. Most of crew on the flight deck are in their late teens and maybe early 20s. (And for me, hard to believe 4 decades ago in some other life I was doing that job.) Standing on the deck on a Navy carrier, it’s impossible not to be impressed with the precision choreography of the crew and the skill of their pilots.

Our group climbed the ladders (inclined at a 68-degree angle – there are no stairs) up and down the 18 decks (floors) of the ship. We saw the hangar deck where planes were repaired, the jet engine shop, jet engine test cell, arresting cable engine room, the bridge where they steer the ship, the flag bridge (the command center for the admiral), the flight deck control and launch operations room (where the aircraft handler keeps track of all the aircraft on the flight deck and in the hangar), and the carrier air traffic control center (CATCC).

At each stop an officer or enlisted man gave us an articulate description of what equipment we were looking at and how it fit into the rest of the carrier.

(What got left out of the tour was the combat direction center (CDC), the munitions elevators, ships engines and any of the avionics maintenance shops and of course, the nuclear reactor spaces.)

During lunch and dinners, we had a chance to talk at length to the officers and enlisted men. They were smart, dedicated and proud of what they do, and frank about the obstacles they face getting their jobs done. Interestingly they all echoed Vice-Admiral Shoemaker’s observation that the biggest obstacles they face are political –  sequestration and budget cuts.

Just before we left we got a briefing from the head of the Carrier Strike Group, Rear Admiral James T. Loeblein about the threats the carrier and the strike group face.

Then it was off to be catapulted back home.

It’s clear that the public affairs office has a finely tuned PR machine. So if the goal was to impress me that the Navy and carriers are well run and manned – consider it done.

However, it got me thinking… new aircraft carrier’s cost $11 billion. And we have a lot of them on order. Given the threats they are facing are they going to be viable for another 30 years? Or is the aircraft carrier obsolete?

Tomorrow’s post will offer a few days’ worth of thoughts about carriers, strike groups and how the Navy can continue to innovate with carriers and beyond.

Lessons Learned – part 1 of 2

Our carriers are a work of art run and manned by professionals
Lots more in part 2, in the next post…

Thanks to the crew of the U.S.S. Vinson, and Commander Todd Cimicata and Stanford for a real education about the Navy.

Filed under: Hacking For Defense, Navy, Science and Industrial Policy, Technology

Entrepreneurs are Everywhere Show No. 37: Michael Ingle and Graeme Gordon

I simply wasn’t happy in corporate America. I was a square peg in a round hole and needed to be someplace where I could think creatively.

You are 100% responsible for your own decisions, your career, your failures, your success. You can’t rely on anybody else.  

Self-motivation, drive and creativity are key entrepreneurial traits that can’t be discounted or ignored, say the guests on today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Michael Ingle

Joining me in the Stanford University studio were

, founder of Clean Sleep mattress sanitizing service
, founder of Sneak Guard, creator of safe responsible storage containers

Graeme Gordon

Listen to my full interviews with Michael and Graeme by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

ran away from home at age 14 with $140 and a dream of bettering himself. In the years since, he’s been driven to succeed. Before founding Clean Sleep, he worked for Boeing as a teenager, did mechanical drafting and design for a combustion engineering company, ran a beach volleyball bar with friends and founded Quick Set Concrete.

He says that being on his own from a young age provided a critical learning experience:

I didn’t really have a childhood, but I don’t regret anything. Every step along the way has put me where I’m at today and has driven me as an entrepreneur. I realized how important relationships are, and how important hard work is.

It taught me that in the end, you are 100% responsible for your own decisions, your career, your failures, your success. You can’t rely on anybody else.

If you can’t hear the clip, click here

 founder of Sneak Guard had 20 years of manufacturing and retail marketing experience working for companies like Ashley Furniture and Mattress Giant. Over the years, he dabbled in startup ideas, but frequently returned to the safe haven of a steady paycheck.

Working in corporate America, he gained enormous experience that serves him today, he says, but his heart wasn’t in working for others. Instead, he yearned to channel his creative energies.

When you’re hooked to getting a paycheck for over 20 years with the great benefits, stepping away from that is difficult, but I simply wasn’t happy in corporate America.

I didn’t fit. I was a square peg in a round hole. I’m entrepreneurial and creative. I needed to be someplace where I could think creatively.  

I’m definitely a happier person now, doing my startup.

If you can’t hear the clip, click here

—

Partner disagreements and a lack of planning killed Michael’s beach volleyball bar venture, but he doesn’t consider it a failure:

It cost me about $80,000, but the way I look at that is it was tuition money. It cost me what it cost me to learn what I learned, and I used that, and moved into the next deal, Quick Set Concrete.

There was a bit of serendipity around that opportunity, he says:

I didn’t really know a lot about construction, but a friend of mine said, “Well, I can run the crews and do the work if you can get the business,” so I said, “OK, let’s just figure it out.” With $24, I started the company: $3.99 to print your own business cards, and 20 bucks to register with the comptroller.

It’s still around, and we’ve evolved into adding dirt work and masonry to our scope.

If you can’t hear the clip, click here

Both Michael and Graeme started their companies after identifying a personal need. Michael came up with the idea for Clean Sleep in one sleepless night after falling asleep on his bare mattress.

SneakGuard was developed after Graeme’s 4-year-old daughter managed to open a prescription medicine child safety cap. The experience pushed him, once and for all, out of his corporate comfort zone. Here’s what he did:

I quit my job, went out and raised some capital from angels, strictly on a drawing, basically, and a concept.

I went out and talked to customers, friends. I did all these focus groups. I actually built prototypes, sat down with people and asked them, “What do you think of this? Would you buy it? How much would you buy it for? How much space can it take up, because it’s going to go in your refrigerator, if you want it to?”

I did a lot of groundwork before I moved forward.

If you can’t hear the clip, click here 

The customer feedback he received led him to a market he hadn’t considered:

I learned SneakGuard was a good product for cannabis, because once you take the air out of the container, it’ll make it the cannabis last longer. Also, there are some real problems with edibles like cookies and gummies.

There have been liability cases where parents have actually been charged with criminal charges for kids getting hold of dad’s pot cookies, so it’s a big part of our market.  

But it’s an interesting challenge to approach. Safety doesn’t pay attention to borders. Cannabis is legal in some states, and it’s not legal in others. Even though we’re selling a container and not cannabis, it’s a difficult pitch to retail America, because they don’t want to have anything to do with it.  

If you can’t hear the clip, click here

Initially, things were going well for the company Graeme originally named SnoopGuard. He quickly received orders and amassed an inventory of containers.

His launch was short-circuited by a lawyer, though:

We got a cease and desist letter from a very well-known celebrity whose name had the word Snoop in it.  

Although the U.S. Patent Office gave me the registered mark that I owned for SnoopGuard, that was a pivot point for me because we had already produced product that had the name on it.

Lack of time and money kept me from fighting it. It really tore my heart out, but I decided I’d have to make a really quick recovery, or potentially not recover.

I changed the name to SneakGuard, then had to change the product, throw away a lot of original product and move on.

If you can’t hear the clip, click here

—

Although a February appearance on the reality TV show SharkTank brought Clean Sleep some brand recognition, Michael is struggling to find a scalable business model.

Until I got the machine to work, I hadn’t even thought about the business plan. I just knew that this was a huge problem, that everyone has a mattress.

Then I realized, “Okay, this is a perfect franchise model.” That’s how we starting writing our projections.

I spent every dollar I had to go to the best franchise attorneys, and got the franchise disclosure documents done, and agreements, and everything else. I thought a franchise model was the ticket.

But through a lot of trial and tribulation, we’re still growing the company into the Dallas/Fort Worth metroplex. So now we’ve decided to push franchising off until we can figure out how to scale the business.

If you can’t hear the clip, click here

Because Clean Sleep is creating a new market, Michael recognizes he must educate consumers who don’t know about his product or understand why they should clean their mattress. Looking back he wishes he’d spent more time and money on sales and marketing to do that, because things have been tough financially:

I’ve spent a lot of money on this company.

To this day, I don’t know how I’ve managed. I’ve got everything except my underwear in this thing. 

If you can’t hear the clip, click here

Listen to my full interviews with Michael and Graeme by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Ryan Smith, co-founder of Qualtrics; and , founder of Fresh Grade.

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.

Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com  describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show

Entrepreneurs are Everywhere Show No. 36: Jim Semick and Peter Arvai

Given all that I’ve seen in my career I don’t sweat the small stuff.

We didn’t talk about product; we didn’t talk about organization or raising money. We talked about our values, we talked about our hopes and dreams for the world, and that helped us realize why we were doing this project together.

Startups aren’t only for twentysomethings. And a founding team needs more than a complementary skill set.

Experience and vision were the focus of today’s Entrepreneurs are Everywhere radio show

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Jim Semick

Joining me in the Stanford University studio were

Peter Arvai, co-founder of Prezi, an interactive presentation platform
Jim Semick, co-founder of ProductPlan, which sells web-based software for building visual product roadmaps

Peter Arvai

Listen to my full interviews with Jim and Peter by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

Peter Arvai – cofounder of Prezi dreamed of being a particle physicist but working in a startup changed his career path.

In Sweden, he founded omvard.se a company that aggregates data on treatment outcomes for hospital patients. Soon after, he developed the world’s first mobile newsreader so people could follow TED Talks from their mobile devices.  

Prezi’s founding team is a classic startup mix of hacker, hustler and designer. However, Peter says the company’s success is also driven by the co-founders’ shared values and vision:

For us, it was about really getting clear about why we were doing what we were doing. When the three of us met in a café in Budapest we didn’t talk about product, we didn’t talk about organization or raising money. We talked about our values, we talked about our hopes and dreams for the world, and that helped us realize why we were doing this project together.

No matter how much you know your co-founders, you need to have more than understanding of them. You need an element of love, because you will have conflicts, you will have issues and then you need to have the foundation to work those through.

If you can’t hear the clip, click here

Prior to founding ProductPlan, Jim Semick was part of the founding team at AppFolio, helping validate and launch its first products. Before AppFolio, Jim created the product requirements for GoToMyPC and GoToMeeting which was acquired by Citrix.

Jim lectures at University of California Santa Barbara and elsewhere on the process of discovering successful business models.

Having started ProductPlan in midlife, Jim found that his age and the knowledge he’s acquired have given him an edge:

I think that my experience with validation and launching other products has helped me immensely. So does my experience as a writer and instructor. I’m able to communicate effectively and that has contributed to ProductPlan’s success.

Given all that I’ve seen in my career I don’t sweat the small stuff.

Plus, having a family motivates me to make this successful.

If you can’t hear the clip, click here

—

Peter says they launched Prezi in the middle of the 2008 crash, with the audacious goal of taking on Apple, Microsoft and Google. To say it was an uphill battle at first would be an understatement. However they got early signs that they might be on to something:

Most people thought we were very wrong. Again, remember, everyone was losing their job, no one was willing to invest and so we had to bootstrap Prezi in the beginning.

We went a full year without raising any serious money.

We launched Prezi at a startup competition. Unfortunately we came in second place, but within five minutes of introducing Prezi, the moderator asked the audience, “How many of you would be willing to pay for this?” and half of the audience members raised their hand.  

That was the first time we knew that we were onto something really meaningful.

If you can’t hear the clip, click here

Peter and his co-founders were committed to making Prezi a global company. In doing so, they applied lessons Peter learned from working previously at Mobispine, a mobile communications company that developed the first mobile newsreader so people could watch TED talks from their smartphones:

At Mobispine we fell into the trap of thinking too local.  When we shipped,  Mobispine worked perfectly in the Stockholm subway. But then I went to other places in the world and it didn’t work.  We didn’t understand what would work in the rest of the world. 

One of the key things that I took away from the experience was that if you want to build a global company, you really have to understand the specific conditions in each of the places that you are going to.  You have to think globally from day one. 

If you can’t hear the clip, click here

—

Although Jim enjoyed bringing new products to market while working for others, starting ProductPlan allowed him fulfill the dream of being be master of his own fate:

I’ve always wanted to create a product that lived beyond me.

In my last job, when I was doing customer discovery, even though I was very invested and very passionate about the products, it was really for the organization, for someone else’s company. It wasn’t for myself.

This time, at ProductPlan it was for myself. That actually makes a real difference.  I get so much more satisfaction out of this.

If you can’t hear the clip, click here

Jim offered this advice for entrepreneurs doing customer discovery:

People want to be nice; people want you be successful. And it’s human nature to want to hear good stuff about what you’ve built.  But believing it all will put you out of business. 

You need to ask polite, but challenging questions to confirm that you’re not hearing these false positives.

If someone tells you: “I love the idea,” ask, “Why do you love the idea?” That takes you down a path, because so many entrepreneurs take that answer at face value and they run with it and say, “Everyone says they love the product,” which may or may not be the truth.  

If someone says, “I love the idea,” you need to ask them whether they’d give you the money they have in the wallet _right now_.  If they won’t they really didn’t love it that much!

If you can’t hear the clip, click here

Listen to my full interviews with Jim and Peter by downloading them from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere : , founder of Clean Sleep ; and , founder of Sneak Guard .

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111. 

Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com  describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show

Entrepreneurs are Everywhere Show No. 35: Jessica Mah and Peggy Burke

At 19 I thought that I would be able to work really hard on my startup, and then in a year we’d have break out success. We’d raise this money, users would just grow like crazy, and we’d have a huge company, and I’d be able to retire before I turned 25.  …  Just like in the movies.

What happened?

Well, I’m 25 and that’s still not the case.

Getting funding and press attention doesn’t automatically equal success. And world-class entrepreneurs never quit.

How founders cope with startup challenges was the focus of today’s Entrepreneurs are Everywhere radio show.

The show follows the journeys of founders who share what it takes to build a startup – from restaurants to rocket scientists, to online gifts to online groceries and more. The program examines the DNA of entrepreneurs: what makes them tick, how they came up with their ideas; and explores the habits that make them successful, and the highs and lows that pushed them forward.

Jessica Mah

Joining me in the Stanford University studio were

Jessica Mah, founder of InDinero, provider of accounting software and tax services for small businesses
, founder of 1185 Design digital brand agency

Peggy Burke

Listen to my full interviews with Jessica and Peggy by downloading it from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interviews are below.

Jessica Mah started InDinero in 2010 to help entrepreneurs with their accounting and tax needs after going through the same challenges with her own businesses.

Jessica has been starting her own Internet businesses and programming since middle school. She left high school at 15 to attend Simon’s Rock Early College, then studied computer science at the University of California, Berkeley.

She has been featured in the Forbes and Inc. 30 Under 30 lists, and was on the cover of Inc. Magazine’s Inc. 5000 issue in 2015.

Early on, however, it looked like InDinero would fail. Their initial product was nice-to-have, but people didn’t want to pay for it, Jessica explained:

Everything was going so well. I was able to get the money pretty easily up front, and I was able to get the press. The fairy tale was supposed to have a successful end right there.

But we were about to burn a $700,000 hole in our bank account in the next 12-months if we didn’t do something. We were depending on investor funding, but with $60,000 in revenue no one would fund it.  

I was turning 21 when I realized all this was going down the hole. I was really fricking scared.

I tried to pitch this to investors again. No one was interested.

I looked at my cash balance, and thought, this is going to blow up in flames in the next four months if I don’t do something drastic.

I talked it over with some friends that night, and decided the next morning we’d have to cut all of our costs.  

We got rid of the hot tub in our office and told everyone that they’d have to find a new job.

If you can’t hear the clip, click here

Jessica ran things as lean as she could for the next few months while figuring out what to do. Here’s how she discovered what her customers actually wanted:

I worked backwards from the optimal solution: What would people pay hundreds of dollars a month for, thousands of dollars a year for, that isn’t too far off from what we’re doing today?

I went to a customer’s office and I watched him use my software. He was paying us $20 a month, and he’s like, “Why the hell am I doing all this myself? Why can’t I just pay you thousands of dollars, and you’ll make this problem go away for me?”

A lightbulb hit, “Aha.”

If you can’t hear the clip, click here

is a 30+-year design executive with expertise in creating global brands. She and her company, 1185 Design, has developed the brands of enterprise companies like Cisco, SAP, Sun Microsystems, VeriSign, Semens, Adobe; consumer products companies like Sears, Chiquita, Apple, Stanford Hospital & Clinics; and over 350 startups.

When Peggy first arrived in Silicon Valley, she worked for Boole & Babbage, before founding her own firm. She quickly learned that running a startup was no picnic, but she was driven to succeed:

I pushed through some of the most difficult challenges. A lot of my competitors – those that were much larger, smaller, every size — just completely blew up and went away. They gave up. They had to. It was too hard.  

But I never gave up.

If you can’t hear the clip, click here

She often went without sleep in the early days of building the business:

The biggest challenge was time.

I would run around all day long meeting with clients. Then I would have to come back and work all night long. I would never ever present anything that I didn’t think was “legendary.”

If you can’t hear the clip, click here

Especially difficult were the days after the Internet bubble burst:

2001 was a staggering blow to technology. Everything disappeared. It went from a massive fire hose of incredible work — lots and lots and lots of money to spend on branding and events and really pushing the envelope — to a complete turnoff. It’s as if somebody pulled the plug on the entire thing.

I had 60 people at the time. I cut the company in half. That was excruciating.

If you can’t hear the clip, click here

—

Jessica learned an important lesson about hiring:

I thought, wow, it’d be great to work with friends, but it was horrible.

It wrecked our friendships. It was very hard for me to be direct and candid and strict with them. It was very conflicting, and it was hard to keep myself honest and separate the two from each other.

If you can’t hear the clip, click here

Looking back, she realizes she had a too-rosy view of what doing a startup would be like:

I wish I had a better appreciation for how difficult it would be to accurately forecast where I’d be 12 months or 18 months from now. I should have just kept more of an open mind for where I could have been, and thought more about the failure cases.

I thought all about the good upside, I didn’t think about the risks and the problems I might run into at all.  

If you can’t hear the clip, click here

Today, she constantly challenges herself

Every 6 months I go through a small internal crises where I wonder, am I on the path to success? That path keeps on changing.  

For me now, I really do want to build a big company here. When we first started the business, I’m not sure if that was so crystal-clear. Now, I’m really driven by the idea of having a really big company that impacts thousands or millions of people.

If you can’t hear the clip, click here

—

Peg credits Silicon Valley’s pay-it-forward culture to giving her a leg up when she was starting out:

Peggy : When I resigned from Boole & Babbage, I had no clients at all.

I had $3,000 in the bank and I was sending my parents money, so there was no support, no safety net at all. I spent a $1,000 a month on my car and my rent and my expenses. I thought, “I can do this.”

My first client was Boole & Babbage. My boss at the time said, “We’d like to put you on a retainer.” For a $1,000 a month, they retained me.

Steve :  How did you get new clients?

Peggy : I networked. I shared an office in Palo Alto with my friend Elizabeth Horn. Elizabeth was making a film called My Dinner With Apple. Everyone you could possibly imagine related to Steve Jobs, including Andy Cunningham, came in and Elizabeth interviewed them in her office.  

I was introduced to Andy. I was introduced to David Kelly. I was introduced to all kinds of people who, to this day, are some of my best friends in the world. Elizabeth opened the doors to these introductions.

And, Pitch Johnson who was the chairman of the board at Boole & Babbage and a venture capitalist, took me around and introduced me to every venture capital firm in Silicon Valley at the time. I started working with startups and venture capitalists.

He took an interest in my business. He was incredibly generous.  

If you can’t hear the clip, click here

Here’s how she stays a step ahead of her competitors:

Peggy : Every three months I sit down and I try to define what tomorrow’s agency looks like, what the agency of five years from now looks like.

I put it on a board, make a few notes. Then we’ll have retreat for the company. I take all of these notes, split them up, give them to different teams, and say, “Go brainstorm this.”

Steve: Because if you don’t do it, some competitor’s doing for you.

Peggy : Absolutely.  

If you can’t hear the clip, click here

Listen to my full interviews with Jessica and Peggy by downloading it from SoundCloud here and here. (And download any of the past shows here.)

Next on Entrepreneurs are Everywhere: Jim Semick, founder of ProductPlan and Peter Arvai, co-founder of Prezi. 

Tune in Thursday at 1 pm PT, 4 pm ET on Sirius XM Channel 111.  

Want to be a guest on the show? Entrepreneurship stretches from Main Street to Silicon Valley, from startups to big companies. Send an email to terri@kandsranch.com  describing your entrepreneurial journey.

Filed under: Customer Development, SiriusXM Radio Show