Steve Blank

The U.S. government is discovering that Lean innovation can help them serve the country better and faster.

The Small Business Administration and the digital services agency 18F are trying to help entrepreneurs build successful companies and the 21st century digital government.

The guests on today’s Entrepreneurs are Everywhere radio show explained how they’re working to do that.

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

Javier Saade

Joining me on the latest show were

• Javier Saade, former associate administrator for the U.S. Small Business Administration
• Hillary Hartley, deputy executive director of 18F, a digital services agency inside the General Services Administration

Hillary Hartley

Listen to the full interviews with Javier and Hillary by downloading them from SoundCloud here and here.

(And download any of the past shows here.)

Clips from their interview are below.

Javier Saade was the U.S. Small Business Administration’s Associate Administrator and chief of its investment and innovation programs.

Prior to his public service, Javier spent 20+ years in investing, management, entrepreneurial and public policy, starting as a strategy consultant at McKinsey and Booz, Allen and at Abbott Laboratories. He also co-founded three companies: a broadcasting network, Air America Media, a solar energy company, Atenergy and a branding agency, Brand Maestro.

Javier explained how the SBA helps drive entrepreneurship in the U.S.:

Javier: … the entrepreneurial engine of the United States is bar none  the most efficient wealth creation and job creation tool that has ever existed. … 

I headed up the programs that focused on high-growth businesses in the United States.

The U.S. government is the biggest spender and the biggest investor in research and development in the world. $140 billion this year, about half of it goes into very basic science research. (For example) we’re trying to discover the 111th periodic element, which you may not have a current application for. And some of it could be in development. For example, the department of defense saying, “We need a very thin plastic that stops bullets and we want it to be this thin.” So essentially, the government invests in both (research), and (development).”

Two of the entrepreneurial programs, which I managed is called the Small Business Innovation Research (SBIR), and the Small Business Technology Transfer (STTR) programs. Essentially the SBIR and STTR programs took ~2% of that $140 billion research and development budget and invested it in small businesses who want to commercialize this government investment in research and development. We give out between $2 and $3 billion a year for these startups as 5,000 and 7,000 grants to small businesses doing everything from advance composite materials, space exploration, to IT, mobile security, you name it. The goal is help these companies take their tech

…It is money extremely well spent. The way the program is structured is not dissimilar to how companies travel the capital formation path in the commercial world.

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

Getting things done in Washington, he says, is a challenge:

Javier:  … For things to get done, the politics is something that was very difficult to get used to. …

Steve:  Was even the Small Business Administration politicized?

Javier:  Everything is politicized.

Steve:  I would have thought this was kind of neutral, good for the country.

Javier:  It’s neutral good for the country, but there’s always dissension, and that’s one of the things that, probably the only thing I did not like. … I loved the experience, I think it was an amazing experience to serve the country, to do things that are bigger than yourself.  However I had 535 bosses –  if you think about a company, the owners are represented by the board of directors. In the case of the company, it’s 320 million Americans that are represented by 535 (Congressmen). … so that was my board of directors.

Steve:  How about the organization itself? Did you encounter organizational inertia?

Javier:  Well … I was an appointee of the White House, and there’s always that rub … about … the professional managers of the government that at the end of the year you can’t incent them like in the private sector. … (and) you can’t fire them. You can’t … incent them with bonuses. You (are) very constrained as to what motivational tools you (have).

That said, again, just the experience I wouldn’t trade for anything in the world. There’s 28 million small businesses in the United States. While I was there … I touched tens of thousands of companies.

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

—

Hillary Hartley is co-founder and lead creative at 18F, a digital services agency inside the General Services Administration. She came to the GSA as a Presidential Innovation Fellow in 2013, where she worked on the development of MyUSA.gov. Hillary has been working to make government more accessible and available online for nearly two decades, starting as a web designer for Arkansas.gov in 1997.

Hillary pointed out that there’s plenty of innovation taking place within the government:

Hillary: We are here to help the folks in every government agency trying their hardest to get really awesome stuff done, and perhaps they’re blocked because of budget, perhaps they’re blocked because they don’t have the staff (or) any number of blockers.

They can come to us at 18F and we can help them try to get their awesome idea off the ground. That’s the attitude we take, that we are really just here to help get the amazing things that the agencies are already working that aren’t done.

Steve:  This notion of innovation and the U.S. government doesn’t typically come up in the same phrase.

Hillary: It has been referred to as an oxymoron (but) it’s not true at all. … Even if you think back to the first year of the presidential (innovation) fellowship, when this was just a hypothesis: could we get 15 to 20 folks from the private sector to come in and kick off some of these projects. Even then, the projects that agencies were pitching to that team were incredible. Folks across the federal government have incredible ideas and they’re trying to get some amazing things done. 

Like I said, they often just are blocked in some way, perhaps they don’t have the employees to get it done, they don’t have the resources to get it done, they aren’t sure where to start, so we are here to help them figure out how to start. 

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

Here’s how 18F works:

Hillary: 18F … is a consultancy. We are a team of digital services experts, about 160 currently to serve government agencies. … We’ve grown about 10x in a little over 18 months.

Essentially our work all starts about the same. Agencies approach us with an idea, with, perhaps, a product or a project that they’ve been kind of stewing on internally or maybe it’s just a big outside-of-the-box thing. …Our work takes primarily three directions: 1) Are we going to help them build the solution or 2) are we going to help them figure out how to buy it or 3) maybe get their current solution back on track?

… One of our most recent launches was with the FEC, the Federal Election Commission. It was a pretty exciting project because it encapsulates what we really want to do and what we like to do and what our goals are for this team.

The FEC came to us and said, “We’ve got all this data. We’ve got an enormous amount of open data, it’s really cool data but nobody comes to us for that data. Other groups like the Sunlight Foundation or Open Secrets, other groups are coming and downloading it, because it’s open data, it’s available for the public, and then they do cool stuff with it.” They wanted people to be coming to the mother ship for this data. We said, well, OK, you’ve got probably two problems, you’ve got a website that needs some help but also we want to lay the plumbing, we want to lay the foundation. We are a data-first and API-first team, application programming interface. You know, really wanted to lay the infrastructure for other people, including us, to use that data more effectively. The first thing we did was we built an API, an application programming interface.

Steve:  So other people can suck out data from their site?

Hillary: That’s exactly right. There are something like 65,000 different end points within that data so everything we really were focusing on. … the FEC deals with campaign finance information, regulating and disclosing all that information.

Steve:  You help people get access to all this government data … that the people who ran the website just hadn’t done before, either because of a lack of skills or a lack of time or a lack of expertise that you brought.

Hillary: That’s exactly right. We launched the API first and allowed a bunch of different researchers and organizations like the Sunlight Foundation and Open Secrets to grab that data and start doing interesting things with it. Then we went to work on building a search website for the FEC, completely redoing their interface to the data (so people can actually search) from FEC.gov.

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

Here’s how 18F fosters a culture of service:

Hillary: The culture has become so ingrained in me and it really is about service (and) community. The folks on the 18F  team are empowered. They feel like they are able to just get things done.

On our website you’ll see the phrase, “Delivery is the strategy.” The way we are making the cultural change inside all the industries we work with is by shipping — by shipping code, by delivering the things that we’re working on.

And by doing that, we’re also shipping culture, we’re giving the agencies an opportunity to do something in a brand-new way — (for example) to participate in a design studio. To get pencils out and sketch along with us. To go through a deep dive as some sort of daylong workshop that helps them break through a barrier.

It’s resetting their expectations for how all this can get done. It resets our team’s expectations, too.

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

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

Next on Entrepreneurs are Everywhere:  Brandon Bruce, co-founder of Cirrus Insight; and Jack Sundell, co-founder of The Root Café.

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

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

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