Is a $100 Million Enough?

Posted on March 5, 2024 by steve blank

This article first appeared in Inc.

Capitalism has been good to me. After serving in the military during Vietnam, I came home and had a career in eight startups. I got to retire when I was 45. Over the last quarter century, in my third career, I helped create the methods entrepreneurs use to build new startups, while teaching 1,000’s of students how to start new ventures. It’s been rewarding to see tech entrepreneurship become an integral part of the economy and tech companies become some of the most valued companies in the world.

What has made this happen is the relentless cycle of innovation and creative destruction of old industries driven by new startups with new tech and new business models (network television replaced by streaming services, Nvidia GPUs versus Intel CPUs, electric cars versus the internal combustion engine, film cameras versus smartphones, programmers versus AI), all fueled by venture capital.

It makes me wonder – are startups still founded by people with a passion for creating something new? Or has the motivation changed to accruing the biggest pile of cash?

When I was an entrepreneur, what got me up in the morning was building something amazing that people wanted to grab out of my hands and use. The thought that I might make a $1 million or even $10 million on the way was always in the back of my head, but that wasn’t why I did it.

I wonder if it’s different for today’s entrepreneurs.

Here’s a thought experiment: What if we told every new entrepreneur that regardless of how successful they were, their total compensation would be capped at $100 million.

How many aspiring entrepreneurs would decide it wasn’t worth starting a company? Would Steve Jobs, Jeff Bezos, Elon Musk, et al have quit earlier? Have picked other careers?

How many would decide it wasn’t worth sticking around after their company was large and successful? (Would that be a bad thing?)

Would entrepreneurship suffer? Would we get less innovation? If so, why?

Would the best and brightest move to other countries?

Then let’s run the same thought experiment with Venture Capitalists. Would they pick other careers? Invest less?

At $100 million would capitalism crumble?  Would we all be, heaven forbid, be “Socialists” or worse, to even have this conversation?

Questions
I’m curious what you think.

Should there be any limit?

If so, why?

Or why not.

What would be the consequences?

Filed under: Family/Career/Culture, Venture Capital | 47 Comments »

Leaving Government for the Private Sector – Part 1

Posted on October 10, 2023 by steve blank

Laura Thomas is a former CIA operations officer. Reading how she moved in 2021 from CIA ops into a quantum technology company offered insightful career transition advice for those leaving her agency. Most of her lessons were applicable to any government employee venturing out to the private sector.
Below is the first of her three-part series.

—-

At least a few times a month, people looking to jump ask about my transition, which has led to me consolidating my answers below. To be up front, some of what I write will be controversial and all of it is biased. Due to length, I’ve broken it up into a three-part series.

Is it really a big jump to the private sector? It wasn’t a big jump. At the Agency, 85% of my time was spent navigating bureaucracy and equities, arguing for resources and permission for operations, and dealing with the bottom rung of employees, all while making decisions with little data or data overload. Only 15% of my time was doing the more exciting operations. Though that 15% – along with the camaraderie of some of my colleagues – made the work deeply meaningful.

Industry is similar. Human nature is human nature, and I deal with many of the same challenges and pull many of the same levers of satisfaction. The difference is my decisions now aren’t life or death.

Another large difference is the greater level of autonomy I now have. Making decisions on the fly in operations is an extreme example of autonomy, of course, but there is always a back-end overhead. Depending on company culture, decision-making can be driven dramatically down with less overhead. As an example, I can make direct recommendations to Congress with no oversight, no internal reporting requirements, and with the trust of the CEO and Board.

Do you miss it? Yes. Nothing beats the rush of bumping a target who agrees to meet with you again or landing in a foreign country for the first time. I no longer know the stories behind the headlines, and I’m not the person making those stories happen. Aside from close friends, I am now treated as an “outsider” by former colleagues.

Fortunately, I still work with smart people solving hard problems every day. And there is still meaning in what I do. Raising tens of millions of dollars from investors to advance a technology faster than the Chinese Communist Party uses the same skillset. Learning how M&A deals are structured gives me the same thrill as first learning the mechanics of a surveillance detection route. It’s the excitement of being a beginner again, but one with deep and profound experiences, which blunts the downs and enhances the ups that you will face post-Agency.

Today, I get to move our national security mission in emerging technologies farther and faster in ways that I could not in government. And while there is some level of self-justification in these statements, there is nonlinearity in industry. You can move at exponential speed.

How do you transfer your old skills to your current role? Driving decisions, organizational change, and operations in a deep tech company presents many of the same challenges and opportunities as my time in government. Leading and managing people amid uncertainty, high degrees of change, and making decisions remain my day-to-day functions. My current role as a Chief of Staff is in many ways like a DCOS (deputy chief of station) or a traditional Chief of Staff in government. I work behind the scenes, and sometimes out front, to shape our company vision, strategy and then execute, measure, and refine. (Rather than giving away bags of cash in my old job, I now ask for money from investors.)

Relationship dynamics are the same, minus the burden of extreme secrecy. All the things that most of the outside world doesn’t understand as being critical to a handler-asset relationship are just as critical to relationships in industry. Judgment remains paramount.

In the Agency I dealt with a few difficult personalities focused on empire-building and metrics rather than running sound operations. You likely will still deal with this in industry, though there are far fewer layers and entrenched interests to deal with. Knowing how to navigate various stakeholders and interests, avoid landmines, and bring people together is an extremely useful skill in industry. If you’ve been a “doer” who knows how to communicate, work, and gain buy-in across an enterprise that is geographically dispersed, as well as with and against external third parties who are frenemies (or outright hostile), this will serve you well in industry. Talk about it when you’re seeking jobs and interviewing.

Did you make any resume missteps? Most often your resume is not what will get you a job, and submitting one to a recruiter or resume bank is not the right move. Odds are your resume is almost certainly written in government-speak, and probably more terrible than you realize. It likely talks about all the jobs you held (to the degree you can share) and the dates and maybe the general locations but says nothing about what you actually accomplished or how it specifically relates to industry. You probably won’t even get beyond the AI filter.

Having a resume that says you served in country X and wrote reports that went to policymakers, and “the President,” might get you a curiosity interview, but won’t get you a job. Unless you can translate how your skills provide commercial value, you won’t get hired.

For starters, first figure out which industry you want to work in, narrow it down, and work hard to get intros at the senior levels to a handful of companies (Board of Directors member, Advisory Board member, member of the C-suite (CEO, CTO, CFO, etc), and/or investor.) You have to do a lot of networking to create your list and build your network. Find a way to meet and captivate them with a story of what you did, and how your skills can transfer this to industry and add value to their company.

An early learning point for me came as I was speaking with a prospective VC about a job. He flat-out told me he didn’t understand my value to the company. He asked point blank, “How much money did you net the U.S. Government over your career, what exactly did you do in order to get those results, and how would you bring me those same returns?”

You will get asked a question like this.

My suggestion is to say something along these lines: “It’s exponentially harder to be hired by the Agency than it is to get into Harvard, and not only was I hired based on an assessment of my judgment and the ability to operate in ambiguous situations, I then was trained to do just that, and then did it for years.

I was entrusted to create and carry out some of the most sensitive and most important missions that the U.S. Government conducts, often with little direction. Not only did I have to plan and do them, I had to do so in secret, with lives on the line, which is hard to put a price tag on.

You can give me your toughest problem, and I will figure out how to solve it in record time with buy-in from those whom you rarely get buy-in, and position you for multiple shots on goal for future opportunities because I will have your company and sector wired. I can do for you what I did for our country: evaluate opportunity, mitigate risk, and make quick and smart decisions that attack problems differently than a typical insider would. I’ll turn my salary into millions of dollars in returns or investments within two years – not singlehandedly – but in a cooperative way that leverages many parts of the company. We’ll row in unison and we’ll row in the right direction.”

How did you get your current job? I networked nonstop and ran a full targeting campaign for multiple companies to get to their CEOs. I didn’t have a resume when I was looking for jobs. I had to find senior people who had left the agency who would vouch for me.

For my current company Infleqtion, I was introduced to a former senior Intelligence Community official who previously served on a board with the CEO, who made an introduction. When we met I asked the CEO his challenges and outlined how I might be able to help. Five months later, the CEO called and said he may have a job for me and invited me to visit and speak with others in the company for their input. I received an offer shortly thereafter.

Meanwhile, three years before I left the Agency I had done a cold outreach on LinkedIn to the person I suspected was the hiring manager for a job advertisement for a company that I liked. The person told me they wanted someone with more business experience for the role, but then came calling three years later when another role opened that they thought would be a good fit. Ultimately, I met each layer up in that company including the CEO.

This all came in handy when negotiating salary, title, and function. From the many, many hours of networking hustle, I received two job offers, which happened in parallel, and I negotiated around the same title and compensation levels. Throughout the entire process, I forwarded them relevant articles and commentary on opportunities to demonstrate my value. Ultimately, I chose Infleqtion because of its mission, its people, and its reputation amid US Government circles.

Action: A) If you’re an A-player, stay in government. B) If you’re an A-player and leave, do great things on the outside and return to government service at some point.

Coming up next:

•  Part II – what are the criteria for choosing your next role, the most common types of business roles that formers go into, and how to think about big vs small company risks and current markets.

•  Part III  – title, compensation (salary + equity + bonuses) and resources you can use.

Read the rest of Laura’s blogs at https://www.lauraethomas.com/

Filed under: Family/Career/Culture, National Security | Leave a comment »

Startups that Have Employees In Offices Grow 3½ Times Faster

Posted on February 14, 2023 by steve blank

This article previously appeared in EIX – Entreprenuers and Innovators Exchange.

Data shows that pre-seed and seed startups with employees showing up in a physical office have 3½ times higher revenue growth than those that are solely remote.

Let the discussion begin.

During the pandemic, companies engaged in one of the largest unintended experiments in how to organize office work – remotely, in offices, or a hybrid of the two.

Post-pandemic, startups are still struggling to manage the best way to manage return-to-office issues – i.e. employee’s expectations of continuing to work remotely versus the best path to build and grow a profitable company.

Before we can ask which is the best configuration, the first question is what, exactly do we mean by “remote work” versus “office work”? Today work configurations span the spectrum from no office (fully remote, default digital) to some office (flexible hybrid, synchronized hybrid, office first,) to office only.

James Kim at Reach Capital, an early-stage tech ed investor, surveyed their portfolio of 37 companies using the following taxonomy of how virtual and physical work could be configured.

Using this model James found that pre-seed and seed-stage startups that had employees returning to some type of office had 3½ times the revenue growth of startups that were fully remote.  Those are staggeringly large differences, and while other factors may play some role (see “What Does This Mean, below), the impact of the all-hands-on-deck approach can’t be ignored.

What might account for these differences? Not surprisingly, almost 90% of the responses from pre-seed/seed startups said team culture was influenced by work configuration. However, unexpectedly, self-reported team culture, eNPS (employee Net Promoter Score) and regrettable attrition – departures that hurt the company — are similar across work configurations.

So while the employees said regardless of the office configuration the team culture didn’t appear to change, the performance of very early stage startups (as measured by revenue growth) told a different story.

What Does This Mean?
The data is suggestive but not conclusive. See a full summary of the survey results here.

Let’s start with the data set. The survey sample size was 37 companies from the Reach Capital portfolio. That’s large enough to see patterns, but not large enough to generalize across all startups. Next, Reach Capital’s portfolio of companies are in education and the future of work. The revenue results by workplace configuration may be different in other markets.  Reach Capital’s investments are made in many regions including Brazil, so the geography is not limited to Silicon Valley.

Finally office configuration is only one factor that might influence a startup’s growth rate. Still the results are suggestive enough that other VC’s might want to run the same surveys across their portfolio of companies and see if the results match.

(BTW, Nick Bloom at Stanford and others have done extensive research with thousands of people on remote and hybrid work here, and here. Their research is mostly focused on employees working on independent day-to-day tasks such as travel agents. However, we’re interested in the very specific subset of creative knowledge workers in the early stage of startups. Specifically at the stage when startups are searching for product/market fit and a business model not when they are executing day-to-day tasks.

If the results appear elsewhere, then one can speculate why. Working from home may offer more distractions by chores, family, network issues. Do those little things add up to meaningful productivity differences?

Is it that in early-stage startups the random conversations between employees at unscheduled and unplanned times lead to better insights and ideas? And if so, is the productive brainstorming occurring inside of departments –e.g. engineer to engineer — or is it the cross-fertilization between departments – e.g. engineering to marketing?

Research since the 20th century has proven that informal face-to-face interaction is important for the coordination of group activities, maintaining company culture, and team building. This informal information gives employees access to new, non-redundant information through connections to different parts of an organization’s formal org chart and through connections to different parts of an organization’s informal communication network. In addition, research has found that creativity is greatly enhanced in a “small world network – a network structure that is both highly locally clustered and often a hotbed of unscheduled fluid interactions that support innovation. In other words, inside an early-stage startup.

For decades Silicon Valley company founders and investors have known this small world network effect as tacit knowledge. It has been a hallmark of the physical design of Silicon Valley office space –  from Xerox PARC to Pixar’s headquarters, to Google and Apple.

So perhaps the converse is true. Does remote work with ad hoc or fixed meetings via Zoom actually stunt the growth of creativity and new insights, just at the time a startup most needs them?  Are there new tools such as Discord and others that can duplicate the water cooler effect of physical proximity?

Either way, it’s the beginning of an interesting discussion.

What has been your experience?

Lessons Learned

  • Data from one VC shows pre-seed and seed-stage startups with employees that show up to the office have 3½ times the revenue growth of those that work remotely
  • Is the data valid? Is it the same in all markets/industries?
  • If it’s valid, why?
  • Is there a difference in remote vs. in-office productivity for creative tasks versus execution tasks?

Filed under: Covid-19/Recovery, Family/Career/Culture | 18 Comments »

I Can’t See You but I’m Not Blind

Posted on December 14, 2021 by steve blank

If I ask you to think of an elephant do you see an elephant in your head when you close your eyes?

I don’t. Regardless of how descriptive the imagery, story or text I can’t create any pictures in my head at all. 2% of people can’t do this either. This inability to visualize is called aphantasia.

I never knew this absence of mental imagery was even a thing until my daughter pointed out that she and I were missing something my wife and other daughter had. Ask us to visualize a rainbow or a sunset and we just see nothing. We can’t create pictures in our head of objects, people, places or experiences. Where others can visualize these things, we can’t. Not for people, memories, or images past or future. When people say visualize this in your mind’s eye I just thought that was a turn of phrase. It now dawns on me that other people were really seeing something in their heads.

If you want to see what aphantasia is like look at the picture of the Apple. Now close your eyes and try to imagine the apple, seeing it mentally in your mind’s eye. If you don’t see anything, you might have aphantasia.

For a more detailed test check out the Vividness of Visual Imagery Questionnaire.

(I’m also realizing that that when people describe that they can hear the sound of their voice in their head (a train of thought), that it wasn’t just a metaphor. But my thoughts are silent.)

My reaction to learning that most people can create visual images was “huh.”  I lived my entire life thinking the word “visualize” meant “think about what this means,” not actually being able to “see” it. Reading that other people actually see images in their head was like learning there was another sense that most people had that I was missing. I was bemused that I had lived my whole life with the equivalent of seeing the world in black and white and finding out that other people see the world in colors. (The one exception to this is that I often wakeup remembering visual images from my dreams.)

Handicap or Asset?

My inability to visualize doesn’t seem to have handicapped my imagination or creativity. I am constantly thinking about new things – I just don’t see them as pictures (or hear them.)

I’m not sure what it is I can’t do that others can. Perhaps I can blame my failure in sports on it? Or my inability to sing or dance? It likely explains why when my wife asks me what someone was wearing or what their house looked like, I come up empty. Or more telling, why I can’t visualize the descriptive language in poetry or in a novel.

What’s interesting is that lacking what most everyone else seems to be able to do may explain how I think, communicate and process information. Perhaps this explains how I go about the creative process. When I want to describe an event that happened, I don’t bring up the visual imagery of what the places or people looked like. Instead my stories are of what I remember about the facts/data/conversations around the event.

It might also explain why pattern recognition and abstract thought (the ability to think about principles, and ideas that are not physically present) come easier to me. Possibly because I’m not distracted by visual pictures associated with the data that others see. I just see raw data.

To work out complicated ideas, I often diagram ideas and concepts (but don’t draw pictures of things.) I break ideas and concepts down into simpler steps by drawing each part. This helps me simplify ideas so I can first explain it to myself and then to others.  I then translate the diagram into words.

At times the result has been transformative for more than just me.

The way I’m wired has given me (and likely other founders and those in other fields) an edge. So, how can others with aphantasia consciously harness that? And for those who do see pictures in your heads is there anything you can learn from those of us who don’t?

(I wonder if I could have benefited from a modified classroom curriculum if this had been discovered this early. Or if I could have been taught how to visualize. But what would have been have lost?)

Pluses and Minuses

When I first heard about aphantasia I wondered if those of us with it would tend to excel in certain fields and avoid others. I was surprised to find out that someone already ran a study that showed that people with low or no visual imagery are more likely to work in scientific and mathematical industries. And having hyperphantasia (people with the opposite condition – having an extremely vivid mental imagery) predisposes people to work in the arts. It makes me wonder if the response and recovery from trauma/PTSD has some correlation with those with the ability to visualize those memories versus those who don’t. (Here’s a great future study area for the Veterans Administration.)

We’re Just at the Beginning of Understanding

This latest recognition of aphantasia as a neurological difference is only a decade or so old (although references in the literature go back to the 1890’s.) My bet is that as science continues to explore neurodiversity (brain differences among people), we’ll gain a wider understanding that people experience, interact with, and interpret the world in many different ways.  And how that leads to different strengths in comprehension, pattern recognition and problem-solving. We’ll likely discover more connections.

I’m curious if there’s anyone else who can’t see pictures in their head.

Let me know.

Filed under: Family/Career/Culture | 34 Comments »

When There Seems to Be No Way Out – Customer Discovery for Your Head

Posted on November 11, 2021 by steve blank

As an entrepreneur at times you forget that being in charge doesn’t mean you have to know everything. When it feels like you’re trapped facing an unsolvable dilemma, and wrestling with a seemingly intractable problem, remember that “getting out of your head” is the personal equivalent of the Lean Startup mantra “get out of the building.”

Learning this was a big step in making me a more effective entrepreneur.

As a young, driven entrepreneur I prided myself on my ability to plan my way out of most business problems. But at times in my career I’d run into a problem I couldn’t solve. Sometimes these problems would keep me up at night worrying, thoughts racing around my head like a tornado between my ears. I’d imagine only the worst possible outcomes, thinking there were only black and white solutions, or no solutions. I’d get trapped in this loop with my wife telling me to “go to sleep,” until I finally passed out anxious and exhausted. At times this went on for days.

If the problems were about corporate politics, I’d show up the next day defensive and ready for a fight. (Relationships with sales versus my marketing department was a typical food fight and problem). If it was a meeting my boss called, I was convinced I was going to be fired (even though I couldn’t think of any rational reasons why). Half the time I’d be amazed to discover the problem or obstacle I had been worrying about didn’t even exist. I had magnified a comment, document, or an interaction, and my imagining the worst possible outcome let it spiral out of control.

It took me a long time to see there was an easy way to break this obsessive cycle and end up with much better options. The key, I found, was getting out of my head and talking to other people.

—

You are not alone

When I was younger, I didn’t realize:

  1. Often, the problems I experienced at work were common problems. Others have these problems now or encountered them before
  2. If others had the problems, then there were solutions or at a minimum, good advice was available
  3. If I had shared that I was stuck, and needed help, lots was available
  4. Not only was this true for problems at work, but even more so at home

1. These were common problems; others had these same problems now or encountered them before

When I was in the middle of trying to solve a problem, it never occurred to me that these problems were not unique to me. I felt they were my exclusively mine and that meant that I alone needed to solve them.

Since I hadn’t run into this problem before I assumed no one else had. (In hindsight this was likely due to my age/lack of experience.) Later in my career, I began to see common problems recur. But at the time, I never considered that others had encountered these same problems.

2. If others had faced these problems, then there were solutions or at a minimum, good advice was available

Here’s the critical opportunity that I missed. There was a whole world of people who went through, or were going through, what I was struggling with. Some of them had figured out how to solve it, some made bad decisions and didn’t solve it, but all had experience in seeing a resolution one way or the other. Some could tell you stories of what they went through, others could tell you what worked or didn’t, and a few had real wisdom to share. And often I would discover what I thought was a critical problem really wasn’t. It wouldn’t end my career, or no one would really care.

3. If I had only shared that I was stuck, and needed help, lots was available

Seek out the advice of others? Ask others for help? The thought never crossed my mind. (See item 1.) And if it had, I would have rejected it. Why? Well a loss of control, admission of failure, loss of stature, embarrassment, etc. I thought I should have all the answers.

Getting out of my head and asking for others for help also required a network of mentors/coaches and advisors. Early in my career I didn’t have any/many. Later I realized how valuable they were. As I began connecting I learned to ask not just about how to solve my specific problem, but also, what did they do when they felt stuck? How did they learn to do this rather than stay in their heads?

When I was an entrepreneur a face-to-face meeting or a phone call was the only way to get advice. That was a barrier to many. Today, the Internet has eliminated most of those obstacles. You can go online and with a simple search find others who have had the same issues you’re wrestling with and read how they solved them.

4. Not only was this true for problems at work, but even more so at home

Like most people, at times I had problems outside of work with personal issues like dating, marriage, etc., that made me distracted and less effective at work. I finally realized that getting out of my head at home gave me space to be more effective at work. However, it’s often even harder to ask for help because of embarrassment, denial, etc. On the other hand, there are entire support communities for non-work issues (psychologists, group therapy, etc.) There are even manuals that describe common psychological problems and their treatment.

Lessons Learned

  • The “get out of your head” strategy is the personal equivalent of the “get out of the building” mantra of the Lean Startup
  • Don’t spend a lot of time obsessing. Reach out to mentors, coaches and advisors for personalized advice. Use the web to find generic advice
  • “Getting out of my head” to seek advice and the wisdom of experience was a big step in becoming a more effective entrepreneur

Filed under: Family/Career/Culture | 7 Comments »

E Pluribus Unum – A Rallying Cry for National Service

Posted on April 13, 2021 by steve blank

This post previously appeared in Real Clear Defense.

 

The Latin phrase E Pluribus Unum – Out of Many, One – is our de facto national motto. It was a rallying cry of our founders as they built a single unified nation from a collection of states. It’s a good reminder of where we need to go.

Today as our country struggles to find the common threads that bind us, we need unifying, cohesive, collective, and shared national experiences to bring the country together again.

Here’s what we’ve done to get started.

And why I did it.

————-

Pete Newell, Joe Felter and I met over coffee in 2016 to discuss our common goal – how to get students in research universities who would never consider working on national security problems engaged in keeping the country safe and secure.

Today, our contribution to national service, Hacking for Defense, turned five years old. In this class, students learn about the nation’s emerging threats and security challenges while working with innovators inside the Department of Defense.

The result? The class teaches students entrepreneurship while they engage in what amounts to national public service. From our single class at Stanford, Hacking for Defense is now taught at 47 U.S. universities having graduated 500 teams and 2,000+ students.

Why Serve?
My interest in starting Hacking for Defense was rooted in my long belief in service – not just paying taxes or voting, but actual service. I had a great career as an entrepreneur, but always believed that at some point in your life you need to serve others – whether it’s God, country, community, or family. And I did so in my stints in the military and public service and as an educator.

Disconnection
Looking back it’s clear that our country was far more cohesive when millions of us had to physically share space and live and work with others who didn’t think like us or talk like us. The Air Force turned out to be the first melting pot I would encounter (Silicon Valley the next) where individuals from different classes and culture had the opportunity to share a common goal and move beyond the environment they grew up in. At each base I was stationed in, I hung out with a group that tutored each other, read books together, went on adventures together and learned together. And while most of us came from totally different backgrounds (before the Air Force, I never knew you put salt on watermelon, that Spam was food or muffuletta was a sandwich), as far as the military was concerned, we were all the same.

But a half-century ago, the country started to disconnect from each other and our government when we eliminated national service. In 1973, near the end of the Vietnam War, the U.S. ended compulsory military service and has since depended on an all-volunteer military.

One result of this experiment: the risk for the sons and daughters being sent into harm’s way is no longer evenly distributed across all segments of society. Many American families no longer have a personal vested interest in our nation’s decisions about foreign policy.

The unintended consequence of this decoupling is seemingly perpetual wars (we’ve been in Afghanistan for two decades). And with our country focused for two decades on fighting non-nation states – Al-Qaida and Isis – Russia re-armed and China has built weapons that have negated our strengths, matched our military, and threaten democracy around the world.

Even more corrosive to the nation is that without any type of mandatory national or public service – not just military service – we eliminated any unifying, cohesive, collective, shared national experience, or shared values.

Values
Instead our values are shaped by what we read on social media, where we find an echo-chamber of others who think like we do. Technology that was supposed to bring us together has instead sold out the country for partisanship and division, for profit over national interest. Others found it politically and/or financially profitable to create distrust in the government institutions that protect and bind us. The result is that we’re easy targets for disinformation by adversaries intent on undermining our government and its institutions.

The world isn’t a benign place. Our freedoms and values need to be defended. Throughout history the capacity of human beings to think up new ways to kill one another has proved endless. My parents, along with millions of others, lost parents, siblings, and extended family in Nazi-occupied Europe. Volunteering for national service for me was a partial payback for the country that welcomed them, sheltered them, adopted them, and allowed them to become Americans. And as much as we wish it and try, we will not eradicate violent conflict in our lifetimes or even in our children’s lifetimes. Today, the struggle for freedom and human rights continues across the globe. Ask the Uighurs, or the people in Hong Kong or Tibet what happens when their freedom is extinguished.

A Contribution to National Service
Five years ago, listening to Pete and Joe talk about the problems the Department of Defense (DoD) faced reminded me of what I noticed inside the parts of the government where I was now spending time. While there were smart, dedicated people serving their country, few of students from the schools I was teaching at were there. Few of my students knew what the DoD or other branches of government did. It just wasn’t part of their lives.

It dawned on us that building on the last national curriculum I created – the National Science Foundation I-Corps, we could hit the ground running and create our own version of a national service. We envisioned a national Hacking for Defense program across 50 universities.

It’s taken five years, but I’m proud we’ve accomplished just that. The class is now adding 1,000+ students a year, many of them choosing to change career paths to work in national service or the public sector after graduation.

Still, there’s much more we can and must do.

While my entrepreneurial career allowed me to work with people who built great products and companies, my national and public service careers connected me to those who’ve dedicated their lives to serving others. And I’ve concluded that a life lived in full measure will do both.

We need to scale the existing national and public service initiatives –AmeriCorps, YouthBuild, PeaceCorps,U.S. Digital Service, Defense Digital Service, and conservation corps– that today only reach 100,000 people. We need to offer every high school and college graduate – all 4 million of them – a shared national experience.

In the face of forces working to tear us apart, we must remember that we are stronger together, more resilient together, more successful together, than we are apart. Our challenge is to bring unity back to a nation that is built on different backgrounds and beliefs. E Pluribus Unum – Out of Many, One.

Hacking for Defense is our contribution to what hopefully will be a much larger effort to help unify the country.

Lessons Learned

  • E Pluribus Unum– Out of Many, One
  • We need to find the common threads that bind us
  • We need unifying, cohesive, collective, and shared national experiences and values will help bring the country together again
  • Hacking for Defense is our contribution

Filed under: Family/Career/Culture, National Security | 16 Comments »

The Rapture Happened but I Wasn’t Called

Posted on December 7, 2020 by steve blank

Last Friday the Secretary of Defense abruptly fired half of the Defense Business Board.
For some reason, he forgot me.

He appointed former Trump campaign officials Corey Lewandowski and David Bossie as chair and vice chair and nine other new members. (Update: the new chair is Chris Burnham and the new vice chair is Kiron Skinner. Both are current board members.)

The Defense Business Board is one of several advisory boards that serve as the pleasure of the Secretary of Defense. The business board is just what it sounds like – leaders from business who could offer best business practices to the department and nation.

Other defense advisory committees include Policy, Innovation, Science, Military Personnel Testing, Women in the Services, and on Sexual Assault. Each of these boards/committees is supposed to provide the Defense Department with the best nonpartisan information and advice available.

The reason I joined was to offer the Secretary of Defense insights that could transform and leapfrog the status quo, not just make us incrementally better. Not just 10% better advice but 10x advice.

After multiple board meetings I still couldn’t tell you what political party any of the board members were in, nor did any of them let their party affiliations color any of their advice. We were all volunteering our time to serving our county.

Over the last year the administration began replacing members of every defense advisory board with party loyalists.

Below is my resignation letter to the Secretary of Defense.

K&S Ranch
Pescadero, California
December 7, 2020

Acting Secretary of Defense Christopher Miller

I volunteered to serve on the Defense Business Board because our nation faces an unprecedented set of challenges. For the first time in a century, the United States is no longer guaranteed to win the next war. We face authoritarian governments in China, in Russia, in Iran and North Korea, governments that not only oppress their own people, Tibetans, Uighurs, those in Hong Kong, but that offer the world a dystopian vision of control.

The national power of a country – its influence and footprint on the world stage – is more than just its military strength. It’s the combination of a country’s diplomacy (soft power and alliances,) information/intelligence and its military and economic strength.

Nations decline when they lose allies, decline in economic power, they lose interest in global affairs, have internal/civil conflicts, or a nation’s military misses disruptive technology transitions and new operational concepts.

For the last century the U.S. was a global power that represented much more than just a strong nation. It stood for a set of values that set us apart. Freedom of speech and worship. Freedom from fear and the collective belief that we are one people with a continual aspiration to a more perfect union. To the rest of the world, we were the shining city on the hill, a beacon of justice and opportunity to emulate and aspire to.

When other nations required loyalty pledges to a party and launched ideological purges of their best and brightest, we recognized that they did so because they were weak. Their ideas and values could not withstand dissent or discussion. We celebrated what made the United States strong was that we embraced diversity of thought and acted collectively in the nation’s interest.

In exchange for ideological purity, the abrupt termination of more than half of the Defense Business Board and their replacement with political partisans has now put the nation’s safety and security at risk.

My service to the Department of Defense was a service to the country not to a party.

I hereby tender my resignation.

Steve Blank

Filed under: Family/Career/Culture, National Security, Technology Innovation and Great Power Competition | 37 Comments »

What’s Missing From Zoom Reminds Us What It Means to Be Human

Posted on April 27, 2020 by steve blank

Over the last month billions of people have been unwilling participants in the largest unintentional social experiment ever run – testing how video conferencing replaced face-to-face communication.

While we’ve discovered that in many cases it can, more importantly we’ve discovered that, regardless of bandwidth and video resolution, these apps are missing the cues humans use when they communicate. While we might be spending the same amount of time in meetings, we’re finding we’re less productive, social interactions are less satisfying and distance learning is less effective. And we’re frustrated that we don’t know why.

Here’s why video conferencing apps don’t capture the complexity of human interaction.

All of us sheltering at home have used video conferencing apps for virtual business meetings, virtual coffees with friends, family meetings, online classes, etc. And while the technology allows us to conduct business, see friends and transfer information one-on-one and one-to-many from our homes, there’s something missing. It’s just not the same as connecting live at the conference room table, the classroom or local coffee shop. And it seems more exhausting. Why?

What’s missing?
It turns out that today’s video conferencing technology doesn’t emulate how people interact with others in person. Every one of these video applications has ignored a half-century of research on how people communicate.

Meeting Location
In the physical world the space and context give you cues and reinforcement. Are you meeting on the 47th floor boardroom with a great view? Are you surrounded by other animated conversations in a coffee shop or sitting with other classmates in a lecture hall? With people working from home you can’t tell where the meeting is or how important the location or setting is. In a video conference all the contextual clues are homogenized. You look the same whether you are playing poker or making a sales call, in a suit or without pants. (And with video conferences people are seeing your private space. Now you need to check if there’s anything embarrassing lying around. Or your kids are screaming and interrupting meetings. It’s fatiguing trying to keep business and home life separate.)

In the real world you just don’t teleport into a meeting. Video conferencing misses the transitions as you enter a building, find the room and sit down. The same transitions are missing when you leave a video conference. There is no in and out. The conference is just over.

Physical Contact
Second, most business and social gatherings start with physical contact – a handshake or a hug. There’s something about that first physical interaction that communicates trust and connection through touch. In business meetings there’s also the formal ritual of exchanging business cards. Those all are preambles to establish a connection for the meeting which follows.

Meeting Space Context
In person we visually take in much more information than just looking at someone’s face. If we’re in a business meeting, we’ll scan the room, rapidly changing our gaze. We can see what’s on desks or hanging on the walls, what’s in bookshelves or in cubicles. If we’re in a conference or classroom, we’ll see who we’re sitting next to, notice what they’re wearing, carrying, reading, etc. We can see relationships between people and notice deference, hierarchy, side glances and other subtle cues. And we use all of this to build a context and make assumptions—often unconsciously —about personalities, positions, social status and hierarchy.

Looking in a Mirror While Having A Meeting
Before meeting in person, you may do a quick check of your appearance, but you definitely don’t hold up a mirror in the middle of a meeting constantly seeing how you look. Yet with the focus on us as much as on the attendees, most video apps seem designed to make us self conscious and distract from watching who’s speaking.

Non-Verbal Cues
Most importantly, researchers have known for at least fifty years that at least half of how we communicate is through non-verbal cues. In conversation we watch other’s hands, follow their gestures, focus on their facial expressions and their tone of voice. We make eye contact and notice whether they do. And we are constantly following their body language (posture, body orientation, how they stand or sit, etc.)

In a group meeting it’s not only following the cues of the speaker, but it’s often the side glances, eye rolls and shrugs between our peers and other participants that offer direction and nuance to the tenor of a meeting. On a computer screen, all that cross person interaction is lost.

The sum of these non verbal cues is the (again often unconscious) background of every conversation.

But video conferencing apps just offer a fixed gaze from one camera. Everyone is relegated to a one-dimensional square on the screen. It’s the equivalent of having your head in a vise, having been wheeled into a meeting wearing blinders while tied to a chair.

Are Olfactory Cues Another Missing Piece?
There’s one more set of communication cues we may be missing over video. Scientists have discovered that in animals, including mammals and primates, communication not only travels through words, gestures, body language and facial expressions but also through smells via the exchange of chemicals and hormones called pheromones. These are not odors that consciously register, but nevertheless are picked up by the olfactory bulb in our nose. Pheromones send signals to the brain about sexual status, danger and social organization. It’s hypothesized odors and pheromones control some of our social behaviors and regulate hormone levels. Could these olfactory cues be one additional piece of what we’re missing when we try to communicate over video? If so, emulating these clues digitally will be a real challenge.

Why Zoom and Video Teleconferencing is Exhausting
If you’ve spent any extended period using video for a social or business meeting during the pandemic, you’ve likely found it exhausting. Or if you’re using video for learning, you may realize it’s affecting your learning by reducing your ability to process and retain information.

We’re exhausted because of the extra cognitive processing (fancy word for having to consciously do extra thinking) to fill in the missing 50% of the conversation that we’d normally get from non-verbal and olfactory cues. It’s the accumulation of all these missing signals that’s causing mental fatigue.

Turning Winners Into Losers
And there’s one more thing that makes video apps taxing. While they save a lot of time for initial meetings and screening prospects, salespeople are discovering that closing complex deals via video is difficult. Even factoring out the economy, the reason is that in person, great salespeople know to “read” a meeting. For example, they can tell when someone who was nodding yes to deal actually meant “no way.” Or they can pick up the “tell me more signal” when someone leans forward. In Zoom all those cues are gone. As a result, deals that should be easy to close will take longer, and those that are hard won’t happen. You’re investing the same or more time getting the meetings, but frustrated that little or no forward progress occurs. It’s a productivity killer for sales.

In social situations a feel for body language may help us sense that a friend who’s smiling and saying everything is fine is actually have a hard time in their personal life. Without these physical cues—and the loss of physical contact—may lead to a greater distance between our family and friends. Video can bridge the distance but lacks the empathy a hug communicates.

An Opportunity for Innovators to Take Video Conferencing to the Next Level
This billion person science experiment replacing face-to face communication with digital has convinced me of a few things:

  1. The current generation of video conferencing applications ignore how humans communicate
    • They don’t help us capture the non-verbal communication cues – touch, gestures, postures, glances, odors, etc.
    • They haven’t done their homework in understanding how important each of these cues is and how they interact with each other. (What is the rank order of the importance of each cue?)
    • Nor do they know which of these cues is important in different settings. For example, what are the right cues to signal empathy in social settings, sincerity, trustworthiness and rapport in business settings or attention and understanding in education?
  2. There’s a real opportunity for a next generation of video conference applications to fill these holes. These new products will begin to address issues such as: How do you shake hands? Exchange business cards? Pick up on the environment around the speaker? Notice the non-verbal cues?
  3. There are already startups offering emotion detection and analytics software that measure speech patterns and facial cues to infer feelings and attention levels. Currently none of these tools are integrated into broadly used video conferencing apps. And none of them are yet context sensitive to particular meeting types. Perhaps an augmented reality overlay with non verbal cues for business users might be a first step as powerful additions.

Lessons Learned

  • Today’s video conferencing applications are a one-note technical solution to the complexity of human interaction
    • Without the missing non-verbal cues, business is less productive, social interactions are less satisfying and distance learning is less effective
  • There’s an opportunity for someone to build the next generation of video conference applications that can recognize key cues in the appropriate context
    • This time with psychologists and cognitive researchers leading the team

Filed under: Covid-19/Recovery, Family/Career/Culture | 22 Comments »

In a Crisis – An Opportunity For A More Meaningful Life

Posted on April 16, 2020 by steve blank

Sheltering in place during the Covid-19 pandemic, my coffees with current and ex-students (entrepreneurs, as well as employees early in their careers) have gone virtual. Pre-pandemic these coffees were usually about what startup to join or how to find product/market fit. Though in the last month, even through Zoom I could sense they were struggling with a much weightier problem. The common theme in these calls were that many of them were finding this crisis to be an existential wakeup call. “My job feels pretty meaningless in the big picture of what matters. I’m thinking about what happens when I can go back to work. I’m no longer sure my current career path is what I want to do. How do I figure it out?”

Here’s what I’ve told them.

In a Crisis – An Opportunity to Reflect
If you’re still in school, or early in your career, you thought you would graduate into a strong economy and the road ahead had plenty of opportunities. That world is gone and perhaps not returning for a year or more. Economies across the world are in a freefall. As unemployment in the U.S. passes 15%, the lights are going off in companies, and we won’t see them back on for a long time. Some industries will never be the same. Internships and summer work may be gone, too.

But every crisis brings an opportunity. In this case, to reassess one’s life and ask: How do I want to use my time when the world recovers?

What I suggested was, that the economic disruption caused by the virus and the recession that will follow is one of those rare opportunities to consider a change, one that could make your own life more meaningful, allow you to make an impact, and gain more than just a salary from your work. Perhaps instead of working for the latest social media or ecommerce company or in retail or travel or hospitality, you might want to make people live healthier, longer and more productive lives.

I pointed out that if you’re coming out of school or early in your career you have an edge –  You have the most flexibility to reevaluate you trajectory. You could consider alternate vocations – medical research or joining a startup in therapeutics, diagnostics, medical devices, or digital health (mobile health, health IT, wearable devices, telemedicine, and personalized medicine). Or become an EMT, doctor or nurse.  Or consider the impact remote learning has had in the pandemic. How can you make it better and more effective? What are ways you might help to strengthen organizations that help those less able and less fortunate?

Here are the steps you can take to get started:
Use the customer discovery methodology to search for new careers.

  1. Start by doing some reading and research, looking to the leading publications in the field you’re interested in learning more about. News sources for Digital Health and Life Sciences are different from software/hardware blogs such as Hacker News, TechCrunch, etc.

If you’re interested in learning more about a career in Life Sciences, start reading:

If you’re thinking about educational technology start by reading EdSurge

And if you’re thinking about getting involved in social entrepreneurship, read The Stanford Social Innovation Review as well as the social entrepreneurship sections of publications like Entrepreneur, Inc., Fast Company and Forbes.

  1. Get out of the building (virtually) and talk to people in the professions you’re interested in. (People on the front-line of the Covid-19 fight (e.g. first responders, health care workers) might be otherwise engaged, but others in the field may be available to chat.) Learn about the job, whether they enjoy it and how you can get on that career track.
  2. Get out of the building physically. If possible, volunteer for some front-line activities. Think about internships in the new fields you’re exploring.
  3. If you’re thinking of starting a company, get to know the VC’s. They are different depending on the type of startup you’re building. Unlike in the 20th century where most VC’s financed hardware, software and life sciences, today therapeutics, diagnostics, and medical devices, are funded via VC firms that specialize in only those domains. Digital health crosses the boundaries and may be founded by all types of firms. Get to know who they are.

Some of the Life Science VC blogs and podcasts:

For edtech the VC firm to know is Reach Capital

  1. Inexpensively pivot your education into a new field. An online education could be a viable alternative to expensive college debt. Coursera, EdX and ClassCentral have hundreds of on-line classes in medicine, health and related fields. Accredited universities also offer online programs (see here.) If you’re in school, take some classes outside your existing major (example here.)

My advice in all of these conversations? Carpe Diem – seize the day.

Now is the time to ask: Is my work relevant?  Am I living the life I really wanted? Does the pandemic change the weighting of what’s important?

Make your life extraordinary.

Lessons Learned

  • Your career will only last for 14,000 days
  • If you’re still in school, reconsider your major or where you thought it was going to take you
  • If you’re early in your career, now is the time to consider what it would take to make a pivot
  • In the end, the measure of your life will not be money or time. It’s the impact you make serving God, your family, community, and country. In the end, our report-card will be whether we left the world a better place.

Filed under: Covid-19/Recovery, Family/Career/Culture | 13 Comments »

You’re Not Important to Me but I Want To Meet With You

Posted on March 4, 2020 by steve blank

If you’re a busy startup founder, you’re likely delegating the task of scheduling key meetings about things you want/need to your admin. This is a mistake.

That’s because the dialog you have in setting up the meeting is actually the first part of your meeting, not some clerical task. Treat it this way and you’re much more likely to achieve the objective you’re hoping to. Here’s why:

A few weeks ago I got an email from a VC friend asking me to talk to a founder at one of his startups. The founder had sent him a note, “We’d love to partner with Steve on getting his frameworks and templates from his books – The Four Steps and The Startup Owner’s Manual – onto our product. Can you connect us to him?”

I told the VC, of course, and sent an email to the founder suggesting a couple of dates.

In response I got an email from him telling me how busy he was, but his admin would coordinate some dates for us…

If this doesn’t strike you as a red flag of a relationship that was broken before it started, and an opportunity wasted, let me point out what went wrong.

Who’s Doing the Ask?
Outside of a company there are two types of meetings; 1) When you want something from someone, 2) When they need something from you.  This meeting fell into the second category – a founder wanted something from me and wanted my time to convince me to give it to him. Turning the scheduling over to an admin might seem like an efficient move, but it isn’t.

What Message Are You Sending?
A startup CEO handing me off to an admin sent a few signals.

First, that whatever his ask was really wasn’t that urgent or important to him. Second, that he didn’t think there was any value in forming a relationship before we met.  And finally, that he hadn’t figured out that gathering data in premeeting dialog could help him achieve his objective.

Instead, skipping the one-on-one dialog of personally setting up the meeting signaled to me that our meeting was simply going to be a transactional ask that wasn’t worth any upfront investment of his time.

Why, then, would meeting be worth my time?

What Gets Missed
When I was in startup, I treated every pre-meeting email/phone call as an opportunity for customer discovery. If I wanted something from someone – an order, financing, partnership, etc., I worked hard to do my homework and prepare for the meeting.  And that preparation went beyond just finding mutually agreeable meeting times.

 Early on in my career I realized that I could I learn lots of information from the premeeting dialog. That initial email dialog formed the basis of opening the conversation and establishing a minimum of social connectivitywhen we did meet.

I always managed to interject a casual set of questions when I was setting up a meeting. “What type of food do you like? Do you have a favorite restaurant/location?” If they were going be out of town for a while, ask if are they traveling on vacation? If so, ask “where?” And talk about the vacation.  And most importantly, it allowed me to confirm the agenda, “I’d like to talk about what our company is up to…” and telegraph some or all of the ask, “and what to see if I can get ….” Sometimes this back and forth allowed both of us to skip the meeting completely and I got what I wanted with a simple email ask. Other times it laid the foundation for an ongoing business relationship.

The key difference with this approach is in understanding that the dialog in setting up the meeting is actually the first part of your meeting.

Of course, in a company with 1,000s of people, it’s possible that the CEO is too busy to get on email or to call someone whose time he wants for every meeting. However, CEOs of major corporations who are winners will get on the phone or send a personal email when there’s something that they want to make happen.

Lessons Learned

  • The dialog in setting up the meeting is actually the first part of your meeting
  • Don’t miss the opportunity
  • If you want something from someone, don’t outsource scheduling your meeting

Filed under: Family/Career/Culture | 22 Comments »

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