Hacking for Defense @ Stanford 2017 – Lessons Learned Presentations

We just finished our second Hacking for Defense class at Stanford. Eight teams presented their Lessons Learned presentations.

Hacking for Defense is a battle-tested problem-solving methodology that runs at Silicon Valley speed. It combines the same Lean Startup Methodology used by the National Science Foundation to commercialize science, with the rapid problem sourcing and curation methodology developed on the battlefields in Afghanistan and Iraq by Colonel Pete Newell and the US Army’s Rapid Equipping Force.

Goals for the Hacking for Defense Class
Our primary goal was to teach students entrepreneurship while they engaged 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 or other government agencies.

Our second goal was to teach our sponsors (the innovators inside the Department of Defense (DOD) and Intelligence Community (IC)) that there is a methodology that can help them understand and better respond to rapidly evolving asymmetric threats. That if we could get teams to rapidly discover the real problems in the field using Lean methods, and only then articulate the requirements to solve them, could defense acquisition programs operate at speed and urgency and deliver timely and needed solutions.

Finally, we also wanted to show our sponsors in the Department of Defense and Intelligence community that civilian students can make a meaningful contribution to problem understanding and rapid prototyping of solutions to real-world problems.

The Class
Here’s a brief description of the Lean Methodology our students used:

If you can’t see the video click here

Our mantra to the students was that we wanted them to learn about “Deployment not Demos.” Our observation is that the DOD has more technology demos than they need, but often lack deep problem understanding.  Our goal was to have the students first deeply understand their sponsors problem – before they started building solutions. As you can imagine with a roomful of technologists this was tough. Further we wanted the students to understand all parts of the mission model canvas, not just the beneficiaries and the value proposition. We wanted them to learn what it takes to get their product/service deployed to the field, not give yet another demo to a general. This meant that the minimal viable products the students built were focused on maximizing their learning of what to build, not just building prototypes.

(Our sponsors did remind us, that at times getting a solution deployed meant that someone did have to see a demo!)

The Hacking for Defense class was designed as “fundamental research” to be shared broadly and the results are not subject to restriction for proprietary or national security reasons. In the 10 weeks the students have, Hacking for Defense hardware and software prototypes don’t advance beyond a Technology Readiness Level 4 and remain outside the scope of US export control regulations and restrictions on foreign national participation.

Results

  • Eight teams spoke to over 800 beneficiaries, requirements writers, program managers, warfighters, legal, security, customers, etc.
  • Seven out of the eight teams realized that the problem as given by the sponsor really wasn’t the problem. Their sponsors agreed.
  • Received from a problem sponsor mid-live stream broadcast “we are working funding for this team now.”
  • Over half the student teams have decided to continue working on national security projects after this class.

This is the End
Each of the eight teams presented a 2-minute video to provide context about their problem and then gave an 8-minute presentation of their Lessons Learned over the 10-weeks. Each of their slide presentation follow their customer discovery journey. All the teams used the Mission Model Canvas, Customer Development and Agile Engineering to build Minimal Viable Products, but all of their journeys were unique.

The teams presented in front of several hundred people in person and online.

21st Century Frogman

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The video of the team presenting is below.  You can see all their slides right below this video.

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VA Companion

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Austra Lumina

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The video of the team presenting is below.  You can see all their  slides right below this video

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Xplomo

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The video of the team presenting is below.  You can see all their slides right below this video

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Seacurity

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The video of the team presenting is below.  You can see all their slides right below this video

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Surgency

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The video of the team presenting is below.  You can see all their slides right below this video

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Broadcom

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The video of the team presenting is below.  You can see all their slides right below this video

If you can’t see the slides click here

 


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The Innovation Insurgency Spreads
Hacking for Defense is now offered at eight universities in addition to Stanford – Georgetown,  University of Pittsburgh, Boise State, UC San Diego, James Madison University, University of Southern Mississippi, and later this year University of Southern California and Columbia University. We established Hacking for Defense.org a non-profit, to train educators and to provide a single point of contact for connecting the DOD/IC sponsor problems to these universities.

The Department of Defense has expanded their use of Hacking for Defense to include a classified version, and corporate partners are expanding their efforts to support the course and to create their own internal Hacking for Defense courses.

Another surprise was how applicable the “Hacking for X…” methodology is for other problems. Working with the State Department we offered a Hacking for Diplomacy class at Stanford.

Both the Defense and Diplomacy classes created lots of interest from organizations that have realized that this “Hacking for X…” problem-solving methodology is equally applicable to solving public safety, energy, policy, community and social issues internationally and within our own communities. This fall a series of new “Hacking for X…” classes will address these deserving communities. These include:

If you’re interested in learning how to apply a “Hacking for X…” class in your workplace or school we’ve partnered with the 1776 incubator in Washington DC to offer a 2-day “Hacking for X…” certification course 26-27 July for those interested in learning how. Sign up here.

It Takes a Village
While I authored this blog post, these classes are a team project. The teaching team consisted of:

  • Joe Felter a retired Army Special Forces Colonel with research and teaching appointments at Stanford’s Center for International Security and Cooperation (CISAC), the Hoover Institution, and the dept. of Management Science and Engineering. Joe is the incoming Deputy Assistant Secretary of Defense for South and Southeast Asia.
  • Pete Newell is a retired Army Colonel currently a Senior Visiting Research Fellow at the National Defense University’s Center for Technology and National Security Policy and CEO of BMNT Partners.
  • Steve Weinstein a 30-year veteran of Silicon Valley technology companies and Hollywood media companies.  Steve is CEO of MovieLabs the joint R&D lab of all the major motion picture studios.

Our teaching assistants were all prior students: Issac Matthews our lead TA, and Melisa Tokmak, Jared Dunnmon, and Darren Hau.

We were lucky to get a team of 25 mentors (VC’s and entrepreneurs) who selflessly volunteered their time to help coach the teams. Thanks to the team Lean Startup mentors: Paul Dawes, Tom Bedecarre, Kevin Ray, Craig Seidel, Daniel Bardenstein, Roi Chobadi, Donna Slade, and Rafi Holtzman and other advisors; Lisa Wallace, Peter Higgins, Steve Hong, Robert Medve.

We were privileged to have the support of an extraordinary all volunteer team of professional senior military officers representing all branches of service attending fellowship programs at Stanford’s Hoover Institution, and Center for International Security and Cooperation (CISAC) and Asia Pacific Research Center (APARC) at the Freeman Spogli Institute (FSI). These included: Colonel Lincoln Bonner (US Air Force), Colonel Curtis Burns (US Army), Captain Kurt Clark (US Coast Guard), Lieutenant Colonel Kurt Helphinstine (US Air Force), Colonel Seth Krummrich (US Army)), Commander Leo Leos (US Navy), Lieutenant Colonel Eric Reid (US Marine Corps), Colonel Mike Turley (US Army), and Colonel Dave Zinn US Army.  Additional volunteers from the active duty military providing support to our teams included  Lieutenant Colonel Donny Haseltine (US Marine Corps), Captain Jason Rathje (US Air Force), Major Dave Ahern US Army) and, Major Kevin Mott (US Army).

And finally a special thanks to our course advisor Bill Perry, former Secretary of Defense and Professor Emeritus, and Tom Byers, Professor of Engineering and Faculty Director, STVP.

Dalhousie University Commencement Speech – 2017

Light a path for the better angels

Thank you, Chancellor McLellan, President Florizone, Dean Charlebois, Dr. Hewitt, and Dr. Kilfoil for the invitation to speak today and thank you for the honorary degree.

I’m honored to speak at a university whose motto is: Pray and Work.
It’s pretty close to the one I had as an entrepreneur, which was – Pray it Will Work.

First, my congratulations. Your degree is a big deal. This is your day, not mine.

At worst, a commencement speaker is all that stands between you and lunch. At best, I can give you something to think about as you embark on the next chapter in your life.

What, I wondered, would I have said to a group of graduates living on the edge of a revolution the day writing was invented, or the year after Gutenberg printed the first book, or when radio reached into the homes of millions.  What advice would I have given to those about to enter a world no one had ever experienced?

Whether you like it or not, or know it or not, you’re coming of age at just that extraordinary time in human development.

Let me be honest about my bias.  I love technology. I’ve spent my life at the center of innovation in Silicon Valley –  doing eight startups in 21 years, and the last 15 years in academia teaching others innovation and entrepreneurship. I was present at the creation of the first microprocessors, participated in the PC revolution, built video games, and shipped software on the first Internet browsers. And I’ve watched how, in a blink of an eye, technology went from products used by the very few, to ending up in the pockets of billions, bringing social change and corporate disruption.

But nothing, absolutely nothing, I’ve experienced, will come close to what you’re going to see.

Only a few generations have been granted the role of determining whether a revolution in communication will allow our better angels – or our darker angels – to win. You leave here with incredible opportunity, but also with immense responsibility.

Half the world now owns a smartphone. On an average day, you’ll look at your phone over 200 times. You’ve gone through college interacting with your friends and connecting to the world using Facebook, Instagram, WhatsApp, Snapchat, Twitter, Tinder, Pandora, Pinterest, Uber, YouTube and other apps I don’t even know. Living “phone forward” and connecting to the world through this software seems normal – to you.

You communicate, interact and network with each other in a way that’s unique in the history of our species. Faster, with infinitely more data, in shorter bursts, with more connections to more people and places.

We now know that the way we consume information changes our brains. Whether new forms of communication physically change our gray matter, or just cause us to use different parts of it, is still open to debate. But clearly, our brains process information differently depending on the form of communication we’re engaged in.

Your brains have been rewired to process all this Net-based information. Your brains are dealing with the world in a different way than humans ever have.

That kind of profound shift has occurred only six times in the entire 200,000-year history of Homo Sapiens. And you, here today, are the vanguard of the seventh wave.

Each time this happened, the human race made major leaps forward. Your generation, all of you graduating today, are our unintended science experiment. Have we have given you a gift or a curse?

Let’s look at what happened the six other times our brains were rewired.

If you remember from your anthropology class, modern humans emerged about 200,000 years ago, and with them, spoken language. For the next 195,000 years, we passed information on to one another via stories. You sat by a fire, looked at the stars and listened to a storyteller recount creation myths, hero myths and stories for entertainment, and your imagination was engaged as you filled in the details.

Over thousands of years, these storytellers rewired their own brains into something different from those who were simply listening. Storytellers trained to memorize outrageously long narratives, more than most humans alive today can.

Storytellers had new brains.

After more than 100,000 years of telling stories, something unprecedented happened. A few merchants in the Mideast created writing, at first to keep track of crops.

I think it’s appropriate to remind a university class that some of the oldest written inscriptions were not only about crops, but also the celebration of beer.

With written text, the minds of the readers required a whole new way of processing information. We now had to first learn how to read, and then we had to understand what the words were trying to tell us.

Readers and writers of language had new brains.

The written word also meant that information could now be standardized. Our better angels blossomed.

We could formalize laws, create religious texts, and communicate orders to coordinate activities farther than the spoken word could travel. Written language enabled the creation of large societies and with them, governments.

Our darker angels also found ways to use the written word – to dominate and oppress others.

But in 1440, Gutenberg rocked the world when he invented the printing press.

Until the middle of the 15th century, most people couldn’t read. The mass production of books changed that. Within 50 years, books created an information explosion across Europe – 10’s of thousands of titles, and 10’s of millions of copies of books. Our better angels soared as printed books became the Internet of the Renaissance.

Readers of books now had new brains.

And mass production of printed books fueled a reconfiguration of our society, not just our brains. With the printing press, it only took a couple of months to spread Martin Luther’s 95 Theses over much of northern Europe. The result was the Protestant Reformation, which ushered in a new era of political, intellectual and cultural change.

Our darker angels were frightened by the free and unfettered access to information – and banned books – and burned heretics that challenged church and state dogma.

It took about two centuries from the appearance of the book to the emergence of what we would now call newspapers – mass communication had arrived.

The first weekly newspapers appeared in Italy and Germany, and quickly spread through Europe.

In Canada, the first newspaper ever was right here – the Halifax Gazette.

By the end of the 19th century mass circulation papers had developed the characteristics that your parents would recognize today—headlines, illustrations, entertaining stories – all designed to shortcut critical thinking, and stir passion and emotion to sell newspapers and, of course, advertising.

Now, newspaper readers had a daily or weekly stream of “clickbait” headlines.

Readers of newspapers had new brains.

The next wave was Radio. It gave us instantaneous communication to national audiences.  Advertisers immediately figured out how to turn those engaged audiences into consumers. And some governments learned how to turn radio into a weapon of mass deception.

Radio meant that we could now hear the voices of storytellers again. As our brains were newly engaged, our imaginations were required to translate the spoken words into mental pictures.

Listeners to radio had new brains.

It wasn’t more than 30 years from widespread radio that television came onto the scene. TV was something different than just radio with voices.

Our better angels shined a light into homes and battlefields across the world. It changed for the better how we viewed race, gender and class.

But our darker angels dimmed our imaginations. We could gaze all evening and disengage our brains.

Viewers of television had new – and slightly diminished –  brains.

For decades, the phrase “As seen on TV” sold as many products as it obliterated much critical thinking.

Not only did this work for commercial products, but it also extended to politicians.  A handsome, young, telegenic politician could capture a country.

And that brings us to today.

I don’t have to explain the Internet to you. You live it, you’re immersed in it. But let me take a minute to contrast it with the world I grew up in. I spent my first seventeen years in a city where there were just three major TV channels, three major newspapers, and no Internet. If I wanted to look something up, I had to go to library.  If I wanted to connect with a friend, I used a hardwired phone at a desk at home, or paid for each call by physically putting money into a phone in a booth.  And that was in New York City.  The rest of the world had much, much less.

The Net is like we invented writing, the printing press, radio, TV and the Internet in the same decade.  That’s the world you’re graduating into – immersed in social media, with infinite facts and continuous news.

The seventh wave in communication and brain rewiring has arrived. You think and process things differently from how your parents, grandparents and any other humans who have ever lived.

When each of the other six waves initially arrived, the early adopters were the more agile outliers. But ultimately, governments and companies figured out how to master the new technology and individuals lost, as the power of the state, and power of profit, controlled the new media. The same is true for the Internet.

Today, China, Russia, North Korea and other countries have locked their citizens behind a great firewall. They control what their citizens can see and access. Yet at the same time, Facebook, Google, Twitter and the rest of social media capture more personal information on you than any government security agency — except their goal is to profit from your presence.

So, What Does This Mean For You?
You’ve been in a university where information distribution in your classroom was not a democracy. There were voices of expertise and authority, you had certified data providers called professors. You didn’t vote on whether you believed what you were taught; in fact, you were graded on how well you understood it.

But you’re entering a world where you won’t have such certainty. Let me give you an example of the challenges you are going to face in a 24/7 Internet world on a personal level, as a citizen, and in your career.

You deal in streams of short-form information – 140 characters, pictures and messages that disappear. The question for you is: how will you deal with issues that are more complex than soundbites, and require deep dives?

Every generation has had to deal with “fake news” – deliberate misinformation spread by storytelling, books, newspaper, radio and TV. It had different names in the past — “yellow journalism,” propaganda, misinformation.

But unlike in previous generations, fake news today is like a social disease – you catch it from your “friends.”

And the feeling of validity that comes from hearing something from someone you know makes social media much more powerful than what you see on TV or read in a newspaper.

In your generation, Facebook is one of the leading sources of fake news. And that’s a shame, since Facebook is not a news source, it doesn’t originate news, it’s just a distributor of news – one designed to get you to spend time on their site, click on their ads and gather your personal information.

Today, AP and Bloomberg already have bots that write sports stories and earnings reports. Soon machines will make the news by optimizing stories for clicks. Before long computers will create fake videos – and we won’t be able to tell the difference between what was created by a human and what’s computer generated.

What kind of skills will you need to operate in a world of real and fake manufactured data coming from friends? Will you vote for people who value facts or manufacture them?

Will you let darker angels win as you add fire to the flame, or will you seek out and spread real news?

We’ve become digital junkies.
Information consumption and engagement with social media means these platforms have become your emotional drug dealers. “Likes” and thumbs up and posting on social media are addictive, at times like a chemical dependency. They provide immediate rewards after each interaction. They prey on the “fear of missing out” – of the moment or event. Your sense of identity and your values are now validated by a crowd.

Research shows that talking about your own views generates more emotional rewards than listening to conflicting ones. This becomes a self-reinforcing system as you seek out sources of information and other people that support your world view.  It creates a polarized world.

Addiction is one of our perpetual dark angels. You need a purpose-driven life to survive in a world where social media is monetizing both your emotions and your time spent looking at ads.

Finally, the Net has the power to pull us apart as well as bring us together
Each wave in the last 200,000 years – storytelling, writing, books, newspapers, radio, TV and the Net – started with the optimistic view that if we could communicate faster and more efficiently it would bring out the better angels of our nature. We could be more cohesive, we could be smarter, we could learn new things that would help us make the world a better place. All these things happened, and yet…

At each step forward, our darker angels found a way to use these tools, too.

In spite of that, today the human race is in a better place than in any time in human history. Each advancement in our capabilities to communicate gave us the ability to reject a world dominated by violence and ignorance for a world where knowledge and cooperation drove civilization forward.

Most revolutions are not obvious when they happen. When the first scribe wrote on a tablet, no one said, “This is the day everything changes.”  When the first Bible came off Gutenberg’s press, no one said, “There will be billions of these.”

I do not believe that any of you would exchange places with any other generation.

But the question is whether you’ll tell your children that this decade was the beginning of a new dark age, or whether it was the time of something new and wonderful. When it was the time the Internet and social media allowed us to work faster and more collaboratively. When scientific discoveries and technological breakthroughs were integrated into the fabric of society faster than they had ever been before. And when how businesses operated changed forever.

Now graduates of 2017, as you turn back to your phones, light a path for the better angels. The world is counting on you.

Thank you.

If you can’t see the video click here

Fireside Chat with Sebastian Thrun

I did a fun fireside chat with one of my most favorite people –  Sebastian Thrun – at the Udacity conference. Sebastian is the embodiment of a renaissance person. I first heard about him when his driverless car won the 2005 DARPA Grand Challenge. He founded Google X and led the development of the Google self-driving car. He was a Professor of Computer Science at Stanford and before that at Carnegie Mellon University.

And he asks great questions.

If you can’t see the video click here

1:17     Hacking for Defense (Why did we create it?  What is it?)

3:30   Lean Startup (What is it? How it started, How did the class get on Udacity)

5:30   Pricing (Customer Validation, Sales, Pricing)

8:30  Customer Discovery (What is the Lean Stack)

10:13 What Advice Would You Give to Yourself at 18?

12:37 Small Businesses vs. Scalable Startups (Should I take Risk Capital)

15:48 Can you Teach Entrepreneurship?

19:03 What’s the Craziest Problem I’ve Ever Seen? (The Navy SEAL’s)

21:25 How Do You Find Out What Customers Really Want? (Customer Discovery, Pivots)

Innovation, Change and the Rest of Your Life

I gave the Alumni Day talk at U.C. Santa Cruz and had a few things to say about innovation.

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Even though I live just up the coast, I’ve never had the opportunity to start a talk by saying “Go Banana Slugs.”

I’m honored for the opportunity to speak here today.

We’re standing 15 air miles away from the epicenter of technology innovation. The home of some of the most valuable and fastest growing companies in the world.

I’ve spent my life in innovation, eight startups in 21 years, and the last 15 years in academia teaching it.

I lived through the time when working in my first job in Ann Arbor Michigan we had to get out a map to find out that San Jose was not only in Puerto Rico but there was a city with that same name in California.  And that’s where my plane ticket ought to take me to install some computer equipment.

39 years ago I got on that plane and never went back.

I’ve seen the Valley grow from Sunnyvale to Santa Clara to today where it stretches from San Jose to South of Market in San Francisco.  I’ve watched the Valley go from Microwave Valley – to Defense Valley – to Silicon Valley to Internet Valley. And to today, when its major product is simply innovation.  And I’ve been lucky enough to watch innovation happen not only in hardware and software but in Life Sciences – in Therapeutics, Medical Devices, Diagnostics and now Digital Health.

I’ve been asked to talk today about the future of Innovation – typically that involves giving you a list of hot technologies to pay attention to – technologies like machine learning.  The applications that will pour of this just one technology will transform every industry – from autonomous vehicles to automated radiology/oncology diagnostics.

Equally transformative on the life science side, CRISPR and CAS enable rapid editing of the genome, and that will change life sciences as radically as machine intelligence.

But today’s talk about the future of innovation is not about these technologies, or the applications or the new industries they will spawn.

In fact, it’s not about any specific new technologies.

The future of innovation is really about seven changes that have made innovation itself possible in a way that never existed before.

We’ve created a world where innovation is not just each hot new technology, but a perpetual motion machine.

So how did this happen?  Where is it going?

Silicon Valley emerged by the serendipitous intersection of:

  • Cold War research in microwaves and electronics at Stanford University,
  • a Stanford Dean of Engineering who encouraged startup culture over pure academic research,
  • Cold War military and intelligence funding driving microwave and military products for the defense industry in the 1950’s,
  • a single Bell Labs researcher deciding to start his semiconductor company next to Stanford in the 1950’s which led to
  • the wave of semiconductor startups in the 1960’s/70’s,
  • the emergence of Venture Capital as a professional industry,
  • the personal computer revolution in 1980’s,
  • the rise of the Internet in the 1990’s and finally
  • the wave of internet commerce applications in the first decade of the 21st century.
  • The flood of risk capital into startups at a size and scale that was not only unimaginable at its start, but in the middle of the 20th century would have seemed laughable.

Up until the beginning of this century, the pattern for the Valley seemed to be clear. Each new wave of innovation – microwaves, defense, silicon, disk drives, PCs, Internet, therapeutics, – was like punctuated equilibrium – just when you thought the wave had run its course into stasis, there emerged a sudden shift and radical change into a new family of technology. 

But in the 20th Century there were barriers to Entrepreneurship
In the last century, while startups continued to innovate in each new wave of technology, the rate of innovation was constrained by limitations we only now can understand. Startups in the past were constrained by:

  1. customers were initially the government and large companies and they adopted technology slowly,
  2. long technology development cycles (how long it takes to get from idea to product),
  3. disposable founders,
  4. the high cost of getting to first customers (how many dollars to build the product),
  5. the structure of the Venture Capital industry (there were a limited number of VC firms each needing to invest millions per startups),
  6. the failure rate of new ventures (startups had no formal rules and acted like smaller versions of large companies),
  7. the information and expertise about how to build startups (information was clustered in specific regions like Silicon Valley, Boston, New York, etc.), and there were no books, blogs or YouTube videos about entrepreneurship.

What we’re now seeing is The Democratization of Entrepreneurship
What’s happening today is something more profound than a change in technology. What’s happening is that these seven limits to startups and innovation have been removed.

The first thing that’s changed is that Consumer Internet and Genomics are Driving Innovation at scale
In the 1950’s and ‘60’s U.S. Defense and Intelligence organizations drove the pace of innovation in Silicon Valley by providing research and development dollars to universities, and defense companies built weapons systems that used the Valley’s first microwave devices and semiconductor components.

In the 1970’s, 80’s and 90’s, momentum shifted to the enterprise as large businesses supported innovation in PCs, communications hardware and enterprise software. Government and the enterprise are now followers rather than leaders.

Today, for hardware and software it’s consumers – specifically consumer Internet companies – that are the drivers of innovation. When the product and channel are bits, adoption by 10’s and 100’s of millions and even billions of users can happen in years versus decades.

For life sciences it was the Genentech IPO in 1980 that proved to investors that life science startups could make them a ton of money.

The second thing that’s changed is that we’re now Compressing the Product Development Cycle
In the 20th century startups I was part of, the time to build a first product release was measured in years as we turned out the founder’s vision of what customers wanted. This meant building every possible feature the founding team envisioned into a monolithic “release” of the product.

Yet time after time, after the product shipped, startups would find that customers didn’t use or want most of the features. The founders were simply wrong about their assumptions about customer needs. It turns out the term “visionary founder” was usually a synonym for someone who was hallucinating. The effort that went into making all those unused features was wasted.

Today startups build products differently. Instead of building the maximum number of features, founders treat their vision as a series of untested hypotheses, then get out of the building and test a minimum feature set in the shortest period of time.  This lets them deliver a series of minimal viable products to customers in a fraction of the time.

For products that are simply “bits” delivered over the web, a first product can be shipped in weeks rather than years.

The third thing is that Founders Need to Run the Company Longer
Today, we take for granted new mobile apps and consumer devices appearing seemingly overnight, reaching tens of millions of users – and just as quickly falling out of favor. But in the 20th century, dominated by hardware, software, and life sciences, technology swings inside an existing market happened slowly — taking years, not months. And while new markets were created (i.e. the desktop PC market), they were relatively infrequent.

This meant that disposing of the founder, and the startup culture responsible for the initial innovation, didn’t hurt a company’s short-term or even mid-term prospects.  So, almost like clockwork 20th century startups fired the innovators/founders when they scaled. A company could go public on its initial wave of innovation, then coast on its current technology for years. In this business environment, hiring a new CEO who had experience growing a company around a single technical innovation was a rational decision for venture investors.

That’s no longer the case.

The pace of technology change in the second decade of the 21st century is relentless. It’s hard to think of a hardware/software or life science technology that dominates its space for years. That means new companies face continuous disruption before their investors can cash out.

To stay in business in the 21st century, startups must do three things their 20th century counterparts didn’t:

  • A company is no longer built on a single innovation. It needs to be continuously innovating – and who best to do that? The founders.
  • To continually innovate, companies need to operate at startup speed and cycle time much longer their 20th century counterparts did. This requires retaining a startup culture for years – and who best to do that? The founders.
  • Continuous innovation requires the imagination and courage to challenge the initial hypotheses of your current business model (channel, cost, customers, products, supply chain, etc.) This might mean competing with and if necessary killing your own products. (Think of the relentless cycle of iPod then iPhone innovation.) Professional CEOs who excel at growing existing businesses find this extremely hard.  Who best to do that? The founders.

The fourth thing that’s changed is that you can start a company on your laptop For Thousands Rather than Millions of Dollars
Startups traditionally required millions of dollars of funding just to get their first product to customers. A company developing software would have to buy computers and license software from other companies and hire the staff to run and maintain it. A hardware startup had to spend money building prototypes and equipping a factory to manufacture the product.

Today open source software has slashed the cost of software development from millions of dollars to thousands. My students think of computing power as a utility like I think of electricity. They can get to more computing power via their laptop through Amazon Web Services than existed in the entire world when I started in Silicon Valley.

And for consumer hardware, no startup has to build their own factory as the costs are absorbed by offshore manufacturers.  China has simply become the factory.

The cost of getting the first product out the door for an Internet commerce startup has dropped by a factor of a 100 or more in the last decade.  Ironically, while the cost of getting the first product out the door has plummeted, it now can take 10’s or 100’s of millions of dollars to scale.

The fifth change is the New Structure of how startups get funded
The plummeting cost of getting a first product to market (particularly for Internet startups) has shaken up the Venture Capital industry.

Venture Capital used to be a tight club clustered around formal firms located in Silicon Valley, Boston, and New York. While those firms are still there (and getting larger), the pool of money that invests risk capital in startups has expanded, and a new class of investors has emerged.

First, Venture Capital and angel investing is no longer a U.S. or Euro-centric phenomenon. Risk capital has emerged in China, India and other countries where risk taking, innovation and liquidity are encouraged, on a scale previously only seen in the U.S.

Second, new groups of VCs, super angels, smaller than the traditional multi-hundred-million-dollar VC fund, can make small investments necessary to get a consumer Internet startup launched. These angels make lots of early bets and double-down when early results appear. (And the results do appear years earlier than in a traditional startup.)

Third, venture capital has now become Founder-friendly.

A 20th century VC was likely to have an MBA or finance background. A few, like John Doerr at Kleiner Perkins and Don Valentine at Sequoia, had operating experience in a large tech company. But out of the dot-com rubble at the turn of the 21st century, new VCs entered the game – this time with startup experience. The watershed moment was in 2009 when the co-founder of Netscape, Marc Andreessen, formed a venture firm and started to invest in founders with the goal to teach them how to be CEOs for the long term. Andreessen realized that the game had changed. Continuous innovation was here to stay and only founders – not hired execs – could play and win.  Founder-friendly became a competitive advantage for his firm Andreessen Horowitz. In a seller’s market, other VCs adopted this “invest in the founder” strategy.

Fourth, in the last decade, corporate investors and hedge funds have jumped into later stage investing with a passion. Their need to get into high-profile deals has driven late-stage valuations into unicorn territory.  A unicorn is a startup with a market capitalization north of a billion dollars.

What this means is that the emergence of incubators and super angels have dramatically expanded the sources of seed capital. VCs have now ceded more control to founders. Corporate investors and hedge funds have dramatically expanded the amount of money available. And the globalization of entrepreneurship means the worldwide pool of potential startups has increased at least 100-fold since the turn of this century.  And today there are over 200 startups worth over a billion dollars.

Change Number 6 is that Starting a Company means you no longer Act Like A Big Company
Since the turn of the century, there’s been a radical shift in how startups thought of themselves.  Until then investors and entrepreneurs acted like startups were simply smaller versions of large companies. Everything a large company did, a startup should do – write a business plan; hire sales, marketing, engineering; spec all the product features on day one and build everything for a big first customer ship.

We now understand that’s wrong.  Not kind of wrong but going out of business wrong.

What used to happen is you’d build the product, have a great launch event, everyone high-five the VP of Marketing for great press and then at the first board meeting ask the VP of Sales how he was doing versus the sales plan.  The response was inevitably “great pipeline.”  (Great pipeline means no real sales.)

This would continue for months, as customers weren’t behaving as per the business plan.  Meanwhile every other department in the company would be making their plan – meaning the company was burning cash without bringing in revenue.  Finally the board would fire the VP of sales.  This cycle would continue then you’d fire the VP of Marketing, then the CEO.

What we’ve learned is that while companies execute business models, startups search for a business model. It means that unlike in big companies startups are guessing about who their customers are, what features they want, where and how they want to buy the product, how much they want to pay.  We now understand that startups are just temporary organizations designed to search for a scalable and repeatable business models.

We now have specific management tools to grow startups. Entrepreneurs first map their assumptions and then test these hypotheses with customers out in the field (customer development) and use an iterative and incremental development methodology (agile development) to build the product. When founders discover their assumptions are wrong, as they inevitably will, the result isn’t a crisis, it’s a learning event called a pivot — and an opportunity to change the business model.

The result, startups now have tools that speed up the search for customers, reduce time to market and slash the cost of development. I’m glad to have been part of the team inventing the Lean Startup methodology.

Change number 7 – the last one – is perhaps the most profound and one students graduating today don’t even recognize. And it’s that Information is everywhere

In the 20th century learning the best practices of a startup CEO was limited by your coffee bandwidth. That is, you learned best practices from your board and by having coffee with other, more experienced CEOs. Today, every founder can read all there is to know about running a startup online. Incubators and accelerators like Y-Combinator have institutionalized experiential training in best practices (product/market fit, pivots, agile development, etc.); provide experienced and hands-on mentorship; and offer a growing network of founding CEOs.

The result is that today’s CEOs have exponentially more information than their predecessors. This is ironically part of the problem. Reading about, hearing about and learning about how to build a successful company is not the same as having done it. As we’ll see, information does not mean experience, maturity or wisdom. 

The Entrepreneurial Singularity
The barriers to entrepreneurship are not just being removed. In each case, they’re being replaced by innovations that are speeding up each step, some by a factor of ten.

And while innovation is moving at Internet speed, it’s not limited to just Internet commerce startups. It has spread to the enterprise and ultimately every other business segment. We’re seeing the effect of Amazon on retailers.  Malls are shutting down. Most students graduating today have no idea what a Blockbuster record/video store was. Many have never gotten their news from a physical newspaper.

If we are at the cusp of a revolution as important as the scientific and industrial revolutions what does it mean? Revolutions are not obvious when they happen. When James Watt started the industrial revolution with the steam engine in 1775 no one said, “This is the day everything changes.”  When Karl Benz drove around Mannheim in 1885, no one said, “There will be 500 million of these driving around in a century.” And certainly in 1958 when Noyce and Kilby invented the integrated circuit, the idea of a quintillion (10 to the 18th) transistors being produced each year seemed ludicrous.

It’s possible that we’ll look back to this decade as the beginning of our own revolution. We may remember this as the time when scientific discoveries and technological breakthroughs were integrated into the fabric of society faster than they had ever been before. When the speed of how businesses operated changed forever.

As the time when we reinvented the American economy and our Gross Domestic Product began to take off and the U.S. and the world reached a level of wealth never seen before.  It may be the dawn of a new era for a new American economy built on entrepreneurship and innovation.

Everything You Ever Wanted to Know about Marketing Communications

I was having coffee with the CEO of a new startup, listening to her puzzle through how to communicate to potential customers. She was an academic on leave from Stanford now selling SAAS software to large companies, but was being inundated with marketing communications advice. “My engineers say our website is old school, and we need to be on Facebook, Twitter and Instagram, my VP of Sales says we’re wasting our marketing dollars not targeting the right people and my board keeps giving me their opinions of how we should describe our product and company. How do I sort out what to do?”

She winced as I reminded her that she had gone through the National Science Foundation Innovation Corps. “Painful and invaluable” was her reply. I reminded her that all the Lean tools she learned in class–Customer Discovery, business model and value proposition canvases– contained her answer.

Here’s how.
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Define the Mission of Marketing Communications
Companies often confuse communications tactics (“What should my webpage look like or should I be using Facebook/Instagram/Twitter?”) with a strategy. A communications strategy answers the question, “Why are we doing these activities?” For example, our goal could be:

  1. Create demand for our products and drive it into our sales channel
  2. Create awareness of our company and brand for potential customers
  3. Create awareness for fundraising (VC, angels, corporate partners)
  4. Create awareness for potential acquirers of our company

(Marketing communications is a subset of the Marketing department’s mission. Read the post about mission and intent here.)

Audience(s), Message, Media, Messenger
Once you figure out why you’re creating a communications strategy then you can figure out how to use it. The “how” requires just four steps:

  1. Understand your audience(s)
  2. Craft the message for that specific audience
  3. Select the media you want the message to be read/seen/heard on
  4. Select the messenger you want to carry your message

Step 1: Who’s the Audience(s)?
An audience means – who specifically you want your messages to reach. Is it all the people on earth? Everyone in San Francisco? Potential customers such as gamers who like to play specific types of games? Or people inside companies with a specific title, like product or program managers, CIOs, etc? Venture Capitalists who may want to invest? Other companies that may want to acquire you?

What’s confusing is that often there are multiple audiences you want to communicate with. So, refer to your strategy: Are you trying to reach potential customers or potential investors and acquirers? These are very different audiences, each requires its own messages, media and messengers.

If you’re selling a product to a company, for example, is the audience the user of the product? Her boss? The person who has the budget? The CEO?

How do you figure out who the audience is? It turns out that if you’ve been doing customer discovery and using the value proposition canvas, you know a lot about each customer/ beneficiary. The first step is to put all those value proposition canvases on the wall to remind you that these are the people you need to reach.

How do you figure out which of these customers/beneficiaries is most important? Who’s the least important? If you’ve been out talking to customers, you will have an idea of who’s involved in the buying process. Who’s the user of product? The recommender? The decision maker? The saboteur? As you map out what you learned about the role each of these customers plays in the buying process, marketing communications and sales can decide which one of the customers/beneficiaries is the primary audience of your messages. (And they can decide if there any secondary audiences you should reach.) Often there are multiple people in a sales process worth influencing.

If you’re trying to reach potential acquirers or investors, the customer discovery process is the same. Spend time building value proposition canvases for these audiences.

Step 2: What’s the Message?
Messages are what you delivering to the audience(s) you’ve selected. Messages answer three questions:

  1. Why should the audience care?
  2. What are you offering?
  3. What’s the call to action?

Your customers have already told you how to craft the first part of your message. The answer to “Why should your audience care?” comes directly from the pains and gains on the right side of the value proposition canvas.

And the answer to the second question “What are you offering?” comes from the left side of the value proposition canvas. It’s not just the product feature list, but the pain relievers and gain creators.

Once you get your audience to read your message, then what? What’s the call to action? Do you want them to download a demo, schedule a sales call, visit a physical store location or a website, download an app, click for more information, give you their email address, etc.? Your message needs to include a specific call to action.

Other things to keep in mind about messages:

Message context
A message that is brilliant today and gets the press writing about you and customers begging to buy your product could have been met with blank stares two years ago and may be obsolete next year. In crafting your messages, remember that all messages operate in a context that may have an expiration date. Netbooks, 3DTVs, online classes disrupting higher ed, all had their moment in time. Make sure your context is current and revisit your messages periodically to see if they still work.

Sticky Messages
Messages also need to be memorable – “sticky.” Why? Because the more memorable the message, the greater its ability to create change. Not only do we want people to change their buying behavior, we also want them to change how they think. (This is often a tough concept for engineering founders who believe that if we just tell customers about the features that make their product faster, cheaper, etc. they’ll win.)

Consider that if you were told you were going to pay for cold, dead fish wrapped in seaweed you might not be too hungry. But when we call it sushi people line up.

The same goes for a hamburger. You may eat a lot of them, but if McDonald’s message was “dead cow, slaughtered by the millions, butchered by minimum wage earners, then ground into patties, frozen into solid blocks, and reheated when you order them,” instead of “You deserve a break today,” sales might be a tad lower.

Product versus Company Messages
There is a difference between detailed product messages versus messages about your company. At times, you may have to communicate what the company stands for before a customer is ready to listen to you talk about product messages. For example, to outflank a competitor who had faster products, Intel moved the conversation about microprocessors away from speed and technology to create a valued brand. They created the “Intel Inside” campaign.

Apple was trying to resurrect a then-dying company by reminding people what Apple stood for with their “Think Different” ad campaign

Both Apple and Intel were selling complicated technology but did so by simplifying the message so it had broad emotional appeal. Both Intel Inside and Think Different became sticky corporate messages.

Step 3: Media
Media means the type of communications media each audience member reads/listens to/watches. Is could be print (newspapers/magazine), Internet (website, podcasts, etc.), broadcast (TV, radio, etc.) or social media (Facebook, Twitter, etc.). In customer discovery, you asked prospects how they get information about new companies and new products. (If not, get back out and do so!) The media your prospective customers told you they use ought to be on top of your target media.

The online media your company controls (your corporate website, company Facebook page, Twitter, Instagram, etc.) should be the first place you experiment finding your audience(s) and message.

Typically, you pick several media to reach each audience. It’s likely that each audience reads different media (potential customers read something very different than potential investors.) You’ll need a media strategy – a plan that describes the mix of media and how you will use it. This plan should include the category of media; print, internet, broadcast and then identify specific sites, blogs, magazine, etc.

Step 4: Messengers
Messengers are the well-placed and highly leveraged individuals who have influence over your audience(s). Messengers convey and amplify your message to your audience through the media you’ve chosen.

There are four types of messengers: reporters, experts, evangelists and connectors. (Each audience will have its own unique set of messengers.)

Reporters are paid by specific media to write about news. Which reporters you should talk to comes from discovering which media your audience has said they read. Your goal is to identify who are the reporters in the media your audience reads and what they write about, and to figure out why they should write about you. (Wrong answer – because we have a new product. Very wrong answer – because my CEO wants to be on the cover of publication X or Y.)

Experts know your industry or product in detail, and others rely on them for their opinions. Experts may be industry analysts in private research firms (Gartner, NPD, AMR), Wall Street research analysts (Morgan Stanley, Goldman Sachs), consultants who provide advice for your industry or bloggers with wide followings. Experts may even be potential customers who run user groups that other potential customers turn to for advice.

(Today some reporters are experts – product reviewers in the Tech Section of the Wall Street Journal, or the Technology section of the New York Times (or its product review site Wirecutter)).

Evangelists are unabashed cheerleaders and salespeople for your product and, if you are creating a new market, for your company vision. They tell everyone how great the product is and about the unlimited potential of your product and market. While nominally carrying less credibility than experts, evangelists have two advantages: typically, they are paying customers, and they are incredibly enthusiastic about what they say. (Evangelists are not customers who will give a reference. A customer reference is something you have to twist arms to get; an evangelist is someone you can’t get off the phone.)

Connectors are individuals who seem to know everyone. Each industry has a few. They may be bloggers who expound on the general state of your industry and write magazine or newspaper columns. They may be individuals who organize and hold conferences where the key industry thought leaders gather. Often, they themselves are the thought leaders.

Founders ask me all the time whether they should hire a PR agency. I tell them, “The question isn’t if.  The question is when?” Influencing the messengers is what great public relations firms know how to do. They may have their own language describing who the messengers are (e.g., “influencers”) and how they manage them (e.g. “information chain”), but once you’ve done a first pass of the audience > message > media > messenger, a competent PR firm can add tremendous value.

Customer Discovery Never Stops
Understanding your audience(s) is important for not just startups, but for companies already selling products. It helps you stay current with customers, get ideas for other needs to fill and to create new products. In addition, the audience > message > media > messenger cycle seamlessly moves this learning into getting, keeping and growing customers. Today, Marketing Automation tools (customer analytics, SEO, and Customer Relationship Management (CRM) platforms) generate customer behavior history about what messages worked on which media. These tools generate data that companies use to feed AdTech tools (demand-side platforms, ad exchanges and networks) to automate selling and buying of online ads.

Communications as a Force Multiplier

  • Smart CEOs treat communications as a force multiplier for sales, a tool to dramatically increase valuation and the vehicle to get acquirers lined up at the door. Not so successful CEOs treat it as tactic that can be handed to others.
  • Hiring a PR agency too early is a sign that the CEO is treating this as someone else’s problem. In a startup, the first pass of understanding Audience, Message, Media, Messenger can only be done with the founders/CEO engaged.
  • Getting publicity for a product that does not yet exist is how startups get noticed. But don’t fall victim to your own reality distortion field and hype a product that can never be made (think of Tesla versus Theranos.)
  • Figuring out who the possible audiences are, what messages to send, and what media to use, feels overwhelming at first. The temptation is to try to reach all the audiences with a single message and a single media. That’s a going out of business strategy. Use Customer Discovery, and your customers will teach you who they are, what to say to them and how to reach them.

Lessons Learned

  • Marketing Communications = Audience, Message, Media, Messenger
  • Use the Value Proposition Canvas to understand who your audience(s) are
  • Craft messages to match what your audience has already told you
  • Pick the media they said they read
  • Find the right messengers to amplify your message

Herding Cats – Using Lean to Work Together

When Colonel Peter Newell headed up the Army’s Rapid Equipping Force (REF) he used lean methods on the battlefields of Iraq and Afghanistan to provide immediate technology solutions to urgent problems.

Today, his company BMNT does for government and commercial customers what the Rapid Equipping Force did for the U.S. Army.

Pete and I created the Hacking for Defense class (with Joe Felter and Tom Byers.) One of the problems our students run into is that there are always multiple beneficiaries and stakeholders associated with a problem, often with conflicting value propositions and missions.  So how do you figure out whose needs to satisfy?

Here’s Pete’s view of how you do it.


Unlike businesses, government organizations don’t sell products, and they don’t earn revenue. Instead, they have missions to accomplish and very hard problems to solve.  They use a variant of the Business Model Canvas –  the Mission Model Canvas – to map their hypotheses, and they get of the building to do beneficiary discovery. (A beneficiary can be a soldier, program manager, commanding general, government contractor, stakeholder, customer, etc.)  And just like in a commercial business they are trying to determine whether the value proposition solves the problem and helps the beneficiary accomplish their mission.

Discovery for both business and government is similar in that the only way to do it is to turn assumptions into facts by generating hypotheses, developing Minimum Viable Products and getting out of the building to test those MVP’s in the trenches where the customers and beneficiaries work. Early in the discovery process, teams are faced with a cacophony of personalities and organizations. Often, they struggle with understanding which person or group represents a beneficiary, supporter, advocate or potential key partner. It’s only through repetitive hypothesis testing that they begin to sort them all out.

It’s in the trenches however, where things become different.

Multiple Beneficiaries, Multiple Conflicts
Unlike their commercial counterparts, government problem solvers are often faced with multiple beneficiaries associated with a problem, often with conflicting value propositions. As these differences become apparent, teams must make decisions about the value proposition trade-offs between conflicting beneficiaries – sometimes even pivoting completely in favor of one beneficiary to the detriment of another.

During last year’s Hacking for Defense class at Stanford Team Aqualink experienced the conflicting beneficiaries’ problem.  The result was a significant pivot of both beneficiary and value proposition.

Aqualink started with a problem given to them from the chief medical officer of the Navy SEALS – they had no way to understand chronic long-term health issues divers face. Divers work 60 to 200 feet underwater for 2-4 hours, but Navy doctors currently have no way to monitor divers’ core temperature, maximum dive pressure, blood pressure, pulse and the rebreather (air consumption), or the dive computer (dive profile) data.

Having all this new data would give a diver early warning of hypothermia or the bends. More importantly the data would allow the medical director to individually assess the short and long-term health of each diver. And medical researchers would have access to detailed physiological data. The medical director tasked the team with building a wearable sensor system and developing apps that would allow divers to monitor their own physiological conditions while underwater and to download it for later analysis.

In the first week of the class this team got out of the building, suited up in full Navy diving gear and did customer discovery by spending an hour in the life of the beneficiary.

But as the students on the Aqualink team spoke to the SEAL team divers, (another one of their beneficiaries), they experienced an existential crisis. Most of the divers were “ambivalent” (read hostile) about the introduction of a vitals monitoring platform, (“If you gave to us at 0900, it would end up on the bottom of the ocean by 0905.”) Having worked so hard to get into the SEALS, no diver wanted doctors telling them they could no longer dive.

After further questioning, the team discovered the reason the divers were spending so much time underwater – they often did not know where they were. To find out, they had to get a GPS fix. This meant their minisub (called the SEAL Delivery Vehicle) had to rise to within 6 feet of the ocean surface so the GPS antenna could broach the surface. And to do so they had to surface slowly to avoid giving the divers the bends.

The divers told our student team, “Screw the health sensors. Build us a GPS sensor that can be deployed from 100 feet underwater.”

Now the team had a dilemma. They would have to decide which beneficiary to focus on – the SEAL Team medical director, who was the sponsor of their problem, or the operators of the delivery vehicle and divers within SEAL Delivery Vehicle Team One, along with their immediate chains of command in SDVT-1 and Naval Special Warfare Group 3.

When they went back to the medical director with their findings, he was surprised as they were.  “Never knew that’s why they spent all that time down there.  Heck, yes, fix their problem first.”

Understanding the Problem Context and Problem Ecosystem
As Aqualink shows, getting out of the building – interviewing the beneficiaries, drawing their workflows and mapping a day-in -their-life – will give you a more complete picture of the context in which a proposed problem exists. Talking to multiple beneficiaries will lead to better understanding of the entire ecosystem of the problem. Often this will show that the problem you have been given is merely a symptom of a larger problem, or is the result of a different problem.

The solution is to:

  1. Cross check the results of your discovery between different beneficiaries. Often, you’ll find that they seldom have a complete understanding of one another’s workflows and pain points but instead are championing the solution to a mere symptom of a different problem.
  2. Share what you learned in discovery among the different beneficiaries. This will arm you with the tools needed to get them (or their leadership) to agree on the right problem that needs to be solved first. In many cases this will lead to your first pivot!

The goal is to sort out who has a value proposition that must be addressed first.

The power of beneficiaries helping one another
While discovery with multiple beneficiaries can be confusing and exhausting, there is immense power when all the beneficiaries work together. Therefore, the goal of customer discovery is not just to understand the pains and gains of individual beneficiaries, but to find a shared purpose between all of them.

Once they understand they share the same goal, they can solve pain points or create gains for each other using the resources they already control. A “shared” sense of purpose is a very powerful step in the pathway towards a deployable solution.

When the Department of Energy asked BMNT to build a training program for getting veterans into advanced manufacturing jobs, we saw the power of a shared purpose between multiple beneficiaries first hand.

The problem we were asked to solve is that of the 10,000 veterans who leave military service every month, many remain unemployed or underemployed, yet at the same time the number of unfilled advanced manufacturing jobs in the U.S. is expected to climb to over a million by 2020. From a business perspective, obtaining technically qualified talent is among the top constraints to growth in the US.

Seems like it would be a match made in heaven, right?  Not so fast…

While we initially thought the beneficiaries of the effort were the veterans, we quickly discovered there were other beneficiaries in advanced manufacturing. We found these additional beneficiaries had different pains and gains which in turn required different value propositions to solve their problems.

Our customer discovery taught us that there were three additional beneficiaries:

  • Universities needed to grow their enrollments. Our discovery showed us universities were willing to create programming for Advanced Manufacturing, but first needed to see a business case for how it would increase their enrollment to make it a worthwhile effort.
  • Industry needed to attract and hire qualified employees. We learned that technically qualified employees within industry were in such demand that the number one way to get qualified employees was to pilfer them from others.
  • Government Agencies needed to help their communities build skilled labor pools to attract new industries.

And we learned that our initial beneficiary, veterans leaving service, didn’t need internships or low-paying jobs, but needed jobs that paid enough to support their families.

We found each of these beneficiaries had a shared purpose. And each of them had a value proposition that would create a gain or relieve a pain point for another beneficiary. These were big ideas.

We found that as these overlapping value propositions emerged, we used the results to get the beneficiaries to come together in a workshop designed to jointly create a shared minimum viable product that they could then use to test within their own organizations.

Bringing the groups together in a workshop also served to align value propositions between beneficiaries by demonstrating that there was a way to create a single program that served all their needs. And we created an environment that allowed each beneficiary to discover that the other beneficiaries were partners they could work with in the future.

What was the impact of bringing the beneficiaries together in a workshop and creating this beneficiary ecosystem for advanced manufacturing?

Lawrence Livermore National Lab (LLNL) created a veterans’ jobs program. They teamed with a local college to create internships that allowed veterans to work during the summer.  In turn, the local college created additional advanced manufacturing classes to meet LLNL’s technical needs and the regional workforce investment board provided funding.

In Fort Riley, the Army base in Kansas, the military teamed with Kansas State University to create an advanced manufacturing program. Kansas State created a series of advanced manufacturing classes. Soldiers leaving the service can take these courses at a nearby campus beginning up to six months before they leave service.

An unexpected consequence is that today there are soldiers from Fort Riley using advanced manufacturing processes to create parts for vehicles and equipment at the Army base.

Lessons learned

  • Government problem solvers will often be faced with multiple beneficiaries with different value propositions. Share what you learn from different beneficiaries with each other to sort out which has a value proposition that must be addressed first.
  • The benefit of having multiple beneficiaries is that their strengths can be used to help one another create gains and relieve pains for one another. Creating a shared sense of empowerment from working together smooths the pathway towards scaling the right solution.

Why Some Startups Win

If you don’t know where you’re going, how will you know when you get there?

I was having a second coffee with an ex student, now the head of a marketing inside a rapidly growing startup.  His company had marched through customer discovery, learning about the customer problem, validated solutions and was now scaling sales and marketing.  All good news.

But he was getting uneasy that as his headcount was growing the productivity of his marketing department seemed to be rapidly declining.

I wasn’t surprised. When organizations are small (startups, small teams in companies and government agencies) early employees share a mission (why they come to work, what they need to do while they are at work, and how they will know they have succeeded). But as these organizations grow large, what was once a shared mission and intent gets buried under HR process and Key Performance Indicators.

I told him that I had learned long ago that to keep that from happening, you need to on-board/train your team about mission and intent.

—-

Why Do You Work Here?
I had taken the job of VP of Marketing in a company emerging from bankruptcy. We’d managed to secure another infusion of cash, but it wasn’t going to last long.

During my first week on the job, I asked each of my department heads what they did for marketing and the company. When I asked our trade show manager, she looked surprised and said, “Steve, don’t you know that my job is to take our booth to trade shows and set it up?” The other departments gave the same type of logistical answers; the product-marketing department, for example, said their job was to get the product specs from engineering and write data sheets. But my favorite was when the public relations manager told me, “We’re here to summarize the data sheets and put them in press releases and then answer the phone in case the press calls.”

If these sound like reasonable answers to you, and you are in a startup, update your resume.

Titles Are Not Your Job
When I pressed my staff to explain why marketing did trade shows or wrote press releases or penned data sheets, the best response I could get was, “Why that’s our job.” In their heads their titles were a link back to a Human Resources job spec that came from a 10,000-person company (ie. listing duties and responsibilities, skills and competencies, reporting relationships…)

It dawned on me that we had a department full of people with titles describing process-centric execution while we were in environment that required relentless agility and speed with urgency. While their titles might be what their business cards said, titles were not their job – and being a slave to process lost the sight of the forest for the trees.  This was the last thing we needed in a company where every day could be our last.

Titles in a startup are not the same as what your job is. This is a big idea.

Department Mission Statements – What am I Supposed to Do Today?
It wasn’t that I had somehow inherited dumb employees. What I was hearing was a failure of management.

No one had on-boarded these people. No one had differentiated a startup job description from a large company job. They were all doing what they thought they were supposed to.

But most importantly, no one had sat the marketing department down and defined our department Mission (with a capital “M”).

Most startups put together a corporate mission statement because the CEO remembered seeing one at his last job or the investors said they needed one. Most companies spend an inordinate amount of time crafting a finely honed corporate mission statement for external consumption and then do nothing internally to make it happen. What I’m about to describe here is quite different.

What our marketing department was missing was anything that gave the marketing staff daily guidance about what they should be doing. The first reaction from my CEO was, “That’s why you’re running the department.” And yes, we could have built a top-down, command-and-control hierarchy. But what I wanted was an agile marketing team capable of operating independently without day-to-day direction.

We needed to craft a Departmental Mission statement that told everyone why they came to work, what they needed to do while they were at work, and how they would know they had succeeded. And it was going to mention the two words that marketing needed to live and breathe: revenue and profit.

Five Easy Pieces – The Marketing Mission
After a few months of talking to customers and working with sales, we defined the marketing Mission (our job) as:

Help Sales deliver $25 million in sales with a 45% gross margin. To do that we will create end-user demand and drive it into the sales channel, educate the channel and customers about why our products are superior, and help Engineering understand customer needs and desires. We will accomplish this through demand-creation activities (advertising, PR, tradeshows, seminars, web sites, etc.), competitive analyses, channel and customer collateral (white papers, data sheets, product reviews), customer surveys, and customer discovery findings.

This year, marketing needs to provide sales with 40,000 active and accepted leads, company and product name recognition over 65% in our target market, and five positive product reviews per quarter. We will reach 35% market share in year one of sales with a headcount of twenty people, spending less than $4,000,000.

  • Generate end-user demand (to match our revenue goals)
  • Drive that demand into our sales channels
  • Value price our products to achieve our revenue and margin goals (create high-value)
  • Educate our sales channel(s)
  • Help Engineering understand customer needs

That was it. Two paragraphs, Five bullets. It didn’t take more.

Building a Mission-focused Team
Having the mission in place meant that our team could see that what mattered wasn’t what was on their business card, but how much closer their work moved our department to completing the mission. Period.
It wasn’t an easy concept for everyone to understand.

My new Director of Marketing Communications turned the Marcom departments into a mission-focused organization. Her new tradeshow manager quickly came to understand that his job was not to set up booths. We hired union laborers to do that. A trade show was where our company went to create awareness and/or leads. And if you ran the tradeshow department, you owned the responsibility for awareness and leads. The booth was incidental. I couldn’t care less if we had a booth or not if we could generate the same amount of leads and awareness by skydiving naked into a coffee cup.

The same was true for PR. My new head of Public Relations quickly learned that my admin could answer calls from the press. The job of Public Relations wasn’t a passive “write a press release and wait for something to happen” activity. It wasn’t measured by how busy you were, it was measured by results. And the results weren’t the traditional PR metrics of number of articles or inches of ink. I couldn’t care less about those. I wanted our PR department to map the sales process, figure out where getting awareness and interest could be done with PR, then get close and personal with the press and use it to generate end-user demand and then drive that demand into our sales channel. We were constantly doing internal and external audits and creating metrics to see the effects of different PR messages, channels and audiences on customer awareness, purchase intent and end-user sales.

The same was true for the Product Marketing group. I hired a Director of Product Marketing who in his last company had ran its marketing and then went out into the field and became its national sales director. He got the job when I asked him how much of his own marketing material his sales team actually used in the field. When he said, “about ten percent,” I knew by the embarrassed look on his face I had found the right guy. And our Director of Technical Marketing was superb at understanding customer needs and communicating them to Engineering.

Mission Intent – What’s Really Important
With a great team in place, the next step was recognizing that our Mission statement might change on the fly. “Hey, we just all bought into this Mission idea and now you’re telling us it can change?!”  (The mission might change if we pivot, competitors might announce new products, we might learn something new about our customers, etc.)

So we introduced the notion of Mission Intent. Intent answered the question, “What is the company thinking and goal behind the mission?” In our case, the mission of the company was to sell $25 million of product with 45% gross margin. The idea of teaching intention is that if employees understand what we intended  behind the mission, they can work collaboratively to achieve it.

We recognized that there would be a time marketing would screw up or something out of our control would happen, making the marketing mission obsolete (i.e. we might fail to deliver 40,000 leads.) Think of intention as the answer to the adage, “When you are up to your neck in alligators it’s hard to remember you were supposed to drain the swamp.” For example, our mission intent said that the reason why marketing needed to deliver 40,000 leads and 35% market share, etc., was so that Sales could sell $25 million of products at 45% gross margin.

What we taught everyone is that the intention is more enduring than the mission. (“Let’s see, the company is trying to sell $25 million in product with 45% gross margin. If marketing can’t deliver the 40,000 leads, what else can we do for sales to still achieve our revenue and profitability?”) The mission was our goal, but based on circumstances, it might change. However, the Intent was immovable.

When faced with the time pressures of a startup, too many demands and too few people, we began to teach our staff to refer back to the five Mission goals and the Intent of the department. When stuff started piling up on their desks, they learned to ask themselves, “Is what I’m working on furthering these goals? If so, which one? If not, why am I doing it?”

They understood the mission intent was our corporate revenue and profit goals.

Why Do It
By the end of the first year, our team had jelled. (Over time, we added the No Excuses culture to solve accountability.) It was a department willing to exercise initiative, with the judgment to act wisely and an eagerness to accept responsibility.

I remember at the end of a hard week my direct reports came into my office just to talk about the week’s little victories. And there was a moment as they shared their stories when they all began to realize that our company (one that had just come off of life support) was beginning to kick the rear of our better-funded and bigger competitors.  We all marveled in the moment.


Lessons Learned

  • Push independent execution of tasks down to the lowest possible level
  • Give everyone a shared Mission Statement: why they come to work, what they need to do, and how they will know they have succeeded.
  • Share Mission Intent for the big picture for the Mission Statement
  • Build a team comfortable with independent Mission execution
  • Add a No Excuses Culture
  • Agree on Core Values to define your culture
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