Update 2: A Tale of Two Pilots

Once Again – thank you for all of the incredible time, support, and dedication to our cause to better connect the Department of Defense to our incredible entrepreneurs!

People Interviewed since last update: 63

Rebranded: One of the greatest pieces of feedback we’ve received is that we should be including the entirety of the DoD from the start—we are working on rebranding to a "Defense" focused name, and will be transitioning to a new site with our next post! More to come here...

MVP Update:

We’ve played with multiple MVP’s and what we’ve found, more than anything, is that this is not a one size fits all model. We’ve begun to map out the landscape with the help of our myriad of interviews.  Thus far, we’ve gotten fairly positive feedback on the following depiction of how and why a technology accelerator fits. 

This first image show the various options available for innovation, to include contract vehicles and incubation space!

This first image show the various options available for innovation, to include contract vehicles and incubation space!

This image shows where a technology accelerator might fit into the defense innovation ecosystem. There are numerous paths that a small business might take, and any of the steps show here might be skipped pending the state of that organization. 

This image shows where a technology accelerator might fit into the defense innovation ecosystem. There are numerous paths that a small business might take, and any of the steps show here might be skipped pending the state of that organization. 

Pain Points: 

We have really hammered down our pain points, and are confident in the feedback we’ve received. We think we’ve truly boiled it down to the concept that our technology transition processes and contracting processes traditionally designed for big industry are not well suited for nontraditional partnerships - especially those with start-up companies. 

We do just fine purchasing new tech that has been embedded in our prime contractor purchases, but the contracts for those are generally years to decades long, and the technology is no longer new by the time it hits our shelves. 

The ability to transition technology, even that which we recognize as being value added ASAP, is incredibly hard. This is a statement we’ve heard over and over again from groups to include the Air Force Research Laboratory (AFRL), the Defense Advanced Research Projects Agency (DARPA), Joint-Improvised Threat Defeat Agency (JIDA), the Army’s Rapid Equipping Force (REP), and even the United States Special Operations Command (USSOCOM). While many of these organizations find luck in developing or discovering innovative and effective technologies, it is incredibly difficult to transition that technology into a program of record, or get it on purchase order and out to the warfighter quickly.

While we are looking at working with start-up companies, this transition challenge plays a huge role.  If we can’t turn a contract over and make it stick, we can't get new technologies.  For young companies, they see us reaching out and making promises we don't often keep, and we become somewhat of a “boy who cried wolf.” This is an issue on both sides of the fence. Program managers are afraid to invest their money on something they don’t think they can hold on to, and small businesses don’t want to rely on government investment to get them where they need to be.

For those on the commercial side – this is probably a “duh” to hear for you. Though the exact numbers vary in data, the average time it takes for a business to get on contract with the government is 18-24 months.  When looking at start-ups and entrepreneurs, that timeline just won’t do. For a start-up, runways are generally on the order of a few months, and rarely expand past a year prior to some serious Series A funding, and that won’t do.

We also have a pesky habit of creating restrictive requirements on small companies, so that when they do create something for a government contract, they are unable to truly commercialize it without dramatic changes. 

This and the contracting issue have led to a huge stigmatization problem for the government within the venture capital community.  Venture Capitalists seem to agree that when a small business is working for the government, that constitutes as a risk. When the value of that company is projected out, the government investment is often valued at a small percentage of the actual intended investment.  As a small business, this is a great deterrent from looking into dual use tech or reaching out for government contracts. 

Boiling it down, we are focused in on the following: 

  1. An need to find new ways to adopt new technology either into use or into programs of record --either through new contracting and acquisition habits or a more risk accelpting culture.
  2. A need to improve the stigma surrounding government investment within the Venture Capital and entrepreneurial communities.

Pilot Programs:  We've got money! 

As the title suggests, we are going down the path of two pilots.  Both are being manned and funded to run in the 2017 Calendar Year!

Pilot 1: This pilot will focus on space technologies and is honing in on numerous hypothesis looking into bettering our ability to transition technology from start-ups and entrepreneurs into programs or into the hands of the warfighter. 

Objective: Improve nontraditional partnerships with small businesses through the development of transition and bridging platform, and by focusing on connecting the correct program managers with appropriate businesses.

Pilot 2: This Pilot will focus on counter-autonomy (to include the counter unmanned aerial vehicles initiative the government has been undertaking for the last year) and will primarily test the hypothesis that branding and strong partnerships will improve the stigma associated to working with the government as a small business.

Objective: Begin branding the Defense Technology Accelerator and rely on strong partnerships and advertisement of new initiatives, such as the Commercial Solutions Opening (CSO) contracting vehicle, to overcome the negative stigma for venture capitalists to invest in start-ups looking at government contracts early in their development.

More details regarding our pilot programs will come in December!

Keep the feedback coming--we look forward to hearing from you!

 

Personal Update: All tiny new members of our Air Force family are happy, healthy, and (we'll just say it) pretty much perfect! 

Update 1: Wow, That Moved Fast!

Thanks so much to everyone who talked to us over the last week and a half! We were simply blown away by your knowledge and willingness to help us through this process!  We couldn’t do this without your support or mentorship, so thank you!

People Interviewed Since Last Update: 13

What We Did Well

Form and build relationships with key members in the ecosystem

What We Did Poorly

Our Mission Model Canvas still looks like a 3rd grader did it  

MVP "Happy Path" Update:

The biggest feedback we got from individuals we talked to was that our MVP spoke more to startups than to people in the government.  We tried to fix that to include both.  We may split the “DoD” happy path and the “startup” happy path into to separate MVPs in the future.  But for this update, have tried to include more information about possible contract vehicles and timing. Thoughts?

MVP "AF Accelerator Structure"

We also made an MVP around the structure of an AF Accelerator team. What that would look like, what the key players would be, what the manning and budget would require to operate.  What are your thoughts on this?

Hypothesis Testing

We were also able to test a number of our hypothesis throughout the last week and a half.  A few of our assumptions were even validated! 

Update Summary

We have a long way to go before we can be confident that we have created a structure that will work, but we trying to follow the right process that can get us there.  There was progress made in validating and advancing a few of our assumptions, and we made huge progress in expanding our network. For next update, our focus will be an update on our Mission Model Canvas (MMC). We are going to focus on a specific vertical (SSA) in order to be able to talk specifics as opposed to generalities. 

On a personal note:  One of our members Steven Lauver just had a beautiful baby girl enter his life! And another member, Robert Slaughter, is about to have a son. So the next update may take two weeks! We’ll make it up by including some baby pics in next update!!

Week 0: An Introduction to the Air Force Accelerator

Fellow visionaries,

Welcome to the first of many Air Force Accelerator blog posts – this blog will serve to chronicle our journey through Stanford University’s Hacking for Defense program and to share our insights with the world, so that others may execute their own visions even more skillfully than we have done.

For this first post, we will begin with a poignant and relevant excerpt from the TedX Talk, “Let Us Dare”, by Africa Redefined founder, and dear friend, Obura Tongoi:

“Years from now, when we look back at our youth, let’s wonder at how greatly we dared.  How naïve we were in our sincerity and in our yearning to make a difference; let’s be amazed by the great odds we took on, by the great feats we accomplished, and if our fate is such, let’s at least look back at how bravely we fell, and how foolishly we went back out in search of another dose of failure.  May our story be one of triumph or failure… but not anything in between.”

The problem that we are daring to solve – that we need to solve if we are to maintain our technological dominance – is how to embrace, attract, and enable agile innovation in the military.  The world simply moves too fast for the 20th century military-industrial complex to keep up.  Success is fundamentally rooted in our ability to innovate faster than our adversaries – we (the military) do not do a good job of this.  Complicated, incumbent-favoring contract regulations, budget stalemates and sequesters, and a notoriously risk-averse culture drive innovative organizations away from working with/for us and prevent us from imbuing our own people with the mindset and tools to rapidly innovate.  

Leaders at the highest levels of government recognize the need to change our approach to innovation, and, in recent years, a number of new programs and policies have been created to do just that.  Rapid innovation, rapid capabilities, and rapid acquisition authorities have helped sectors of the government find success, but it’s not enough, and we’re still falling behind.

Capturing Entrepreneurial Spirit

There’s a sector of the economy that does business differently.  They’re predicated on the very concept we’re practicing here - the lean startup.  This group believes in doing the research, in understanding the pain points, and pivoting rapidly to get the real problems solved quickly. They’re radically innovative, move fast, and function under disruptive models of business because they MUST do so to find success. As PayPals, Peter Theil tells us, it’s not enough for them to improve on past innovations, they need to create new ones to go from zero to one and thrive. This is the mindset of the entrepreneur, the startup business and the venture capital (VC) investor (representing some 20% of the economy). It’s also the mindset of now-major companies started by members of this ecosystem - companies like SpaceX and Amazon.

Very rarely does this group work with the government. In fact, they often actively avoid government contracts entirely because they don’t fit the business model, and our risk averse mentality creates risk for their businesses which often can’t afford it.  When we began this concept, our mind was set on one thing - we need to not only interface with, but create startup companies that are focused on government problems. We need to develop a segment of the ecosystem that we can look to and lean on when we need innovation to pivot rapidly and produce quickly.  

We learned very rapidly that we’re not the only one’s out there. There are many cells of innovation looking at this problem from various angles, but we think there’s still something missing– we intend to utilize, interface with, and enhance the missions of those organizations by fulfilling the key role described below.

The Barriers

As we dug our heels in, we learned that there are a few barriers that need to be broken down.  

·       Startups aren’t focused on government issues, nor do they have an easy way to learn about government problems

·       Venture Capitalists have an aversion to viewing the government as an investor

·       Lengthy contracting processes stifle our ability to procure from entrepreneurial business models

As stated in one of our interviews “Venture Capitalists have their own interests, and there are a limited number who care about national security issues.  Startups most likely would care, but they can’t afford to.”  As described in The Lean Startup and The Lean Enterprise, entrepreneurs are the type of people who aren’t usually motivated by money or benefits, they’re the type of people who are driven to change the world; Steve Blank and Pete Newell’s Hacking 4 Defense pilot has shown that they are willing to come to the fight.  We just need to make that possible.

We’re not the only ones thinking about this - DIUx, OnPoint Technologies and NSTXL are all working on solutions to better DoD-Startup relationships by utilizing more functional contracting vehicles and connecting product and solutions with government problems. The National Science Foundation's I-Corps Initiative looks to leverage the lean startup process to push government technology into commercial space. This program has expanded to various government entities to include the Department of Defense. Additionally, the Air Force Research Laboratory is working to use accelerator and incubator space as a means of technology transfer, to turn their in-house IP into usable solutions for the warfighter.

What’s left? We think those organizations are great, and our solution proposes strong relationships with each.  But something is still missing.  We think that to put all of these other programs to good use, we must develop a true startup ecosystem with a government focus.  We need to create and sustain an industrial base for agile innovation. We want to offer problems and let startups form around improving national security, not just tie those applications in after the fact. We want to create an environment in which a lasting positive relationship can be formed with the venture capital and startup community, becoming an attractive early adopter for small businesses with new technology.

The Air Force Accelerator

We are proposing that the Air Force establish a startup accelerator.  An accelerator is a fixed-term, cohort-based program that accelerates the development of a startup business through mentorship and education and culminates in a public pitch event.  Accelerators serve the dual-purpose of improving the odds of success for startups and de-risking potential investments for VC’s; as such, successful accelerators with strong track-records tend to attract high-performing startups and big-name VC’s.  

We are proposing that we partner with a leader in the industry to run the first accelerator cohort.  With the military having such a poor reputation at the start, working with a tier 1 accelerator will warm up the introduction between the government and the startup/VC ecosystem.

Working with a tier 1 accelerator is important, but alone will not be enough to overcome the impediments to innovation in the Air Force, as the startups that graduate the program will face the same difficulties that any other startup faces today.  As such, we will establish and optimize relationships with key players in the military-innovation ecosystem - such as H4D, DIUx, OnPoint, NSTXL, Bootup, and others – to eliminate barriers to entry for the startups that go through the program.  The Air Force Accelerator will serve as a lean test-bed for emerging acquisitions and funding mechanisms, will get brilliant, lean-thinking minds working on the Air Force’s problems, will improve the Air Force’s brand as an innovator and innovation-friendly institution, and will enable invaluable cross-pollination between military members, private-sector innovators, and Venture Capitalists.

The basics (our starting point) can be found here: https://www.youtube.com/watch?v=q3-p9jiKhTQ

Origins of the Air Force Accelerator

The Air Force Accelerator was born from a “Think Tank” at Air Force Squadron Officer School (SOS) in the Spring of 2016.  During the first week of SOS, the Commandant of the school, Brigadier General Goodfellow, presented the class with a challenge to “develop an X-Prize framework for the Air Force”.  A number of students submitted proposed solutions the next day, and, by the end of the week, 3 teams of ~8 were selected to participate in the challenge.  The incentive - if our pitch was good enough, we could get an audience with the Commandant and the Air University Commander, Lieutenant General Kwast, and potentially have the idea implemented.

Based on our collective knowledge, experience, and research, we decided that an accelerator model may be even more beneficial than an X-prize - so we pitched it as such.  Our plan garnered support from top military leaders at SOS and was distributed throughout key acquisitions players in the Air Force for further review and (hopefully) implementation. 

We ended our SOS journey there, but we didn't stop learning and iterating on that plan. The more we learned about the value of the Lean Startup process, the more we realized we were creating a startup ourselves and that we needed to take a brief pause and engage in our own customer discovery... so we did.

Minimum Viable Product (MVP):

Below is a visual representation of our current MVP.  We will update our MVP post to post, and will spend the time in between posts, testing our hypothesis and validating or invalidating our assumptions.  Our MVP is a work in progress, as it should be. 

-   Air Force Accelerator: Seed accelerators are fixed-term, cohort-based programs that accelerate the development of a startup business through mentorship and education, culminating in a public pitch event

--   Accelerator Partnerships: There are several highly successful accelerator organizations with precedence of partnering with organizations or industries to provide the expertise of how to run an accelerator effectively

--   Bridging Gaps:  generates and develops startups with a government focus to grow the ecosystem; establishes relationships by demonstrating an investment in startup success; generates an internal mindset of innovation by requiring mentorship and interaction with the startup cohorts from end users, program managers, subject matter experts and leadership

-  Company Maturity:  Any block along the way may be an entry or exit point. Depending on the problem being solved, different levels of companies will be targeted.  Our accelerator will impact the companies that come through - for instance, an accelerator that takes some equity of the company may drive away more seasoned entrepreneurs (an assumption we learned through several discussions with entrepreneurs and venture capitalists in the weeks following SOS).  In some cases, the accelerator may not be appropriate, and that company will be driven by the question, but may be better suited to go directly to an incubator or coworking space to grow in the industry community. 

--   A successful COA requires the collaboration and interaction of all innovation centers of excellence—in this depiction, a long path is shown, but startups may enter at any point in the process, and may skip steps on their individual journey

-   Technical Readiness Levels (TRLs): Most often, solutions begin at TRL 7 because they are the aggregation of existing tech that need only integration. Variation in levels accounts for different cases when tech development is needed. 

-   Acquisition Tools:  DIUx, NSTXL, & On Point Technologies—these will be leveraged in addition to traditional contracts where appropriate (OTA contracts & CSO—DIUx CSO White Paper). Our accelerator curriculum will need to include understanding the procurement tools that are available and relevant. 

-    Industry Leaders:  Past accelerator verticals focused on an industry have had many leaders of the industry be part of the formation of the thesis or problem statement, 

Next Steps

We will be engaging in the lean startup process (using Hacking 4 Defense as our guide), and logging our interviews, pivots and updated MVPs in this blog.  Our goal is to produce the best possible accelerator that will add value to the Air Force and the Department of Defense. To create an ecosystem of companies that are agile enough to pivot on world events and get the technology to the field quickly, when our traditional acquisition systems fall short.

Please respond to our posts or send us an email (info@afaccelerator.io) with any feedback or suggested connections -- the more we learn the better, and we can’t do that without “getting out of the building” and touching base with as many people as possible.

Cheers!

The Air Force Accelerator Startup Team

 

 

The views and opinions of the authors expressed herein do not state or reflect those of the United States Government, the United States Military, or the Air Force.  The mention of companies by name should not be implied as endorsement.