Startups and the Military

This past weekend I had the opportunity to attend DEFx Annapolis. It was exciting to see an interesting mix of current and former military personnel and the midshipmen who organized the event come together to talk about two subjects that interest me: entrepreneurship and the military. Despite my interest in both of these areas I would not have thought about bringing entrepreneurship into the military until a group of military officers took the initiative and created the Defense Entrepreneurs Forum last year.

But trying to translate startup methods and organization from the private sector into the military is a huge challenge with no guarantee of success. It’s entirely possible that after all the meetings and hard work the effort devolves into nothing more than the widespread use of startup buzzwords with no accompanying organizational change and with entrepreneurial-minded military personnel getting burned out battling the inertia of the military bureaucracy and giving up.

But if this effort is going to have any chance of success, entrepreneurship will need to be institutionalized in the military in such a way that it becomes a normal part of the organization and contributes productively to the overall purpose of the military services.

The key to doing this is understanding what a startup is and how it differs from and relates to an existing business. Steve Blank (AF vet, serial entrepreneur, investor, teacher, writer) has developed a concept about startups that could offer a starting point for bringing startup methods into the military. In his book “The Startup Owner’s Manual,” Blank says that traditionally people thought of entrepreneurial ventures as just smaller versions of bigger, existing businesses and many would-be entrepreneurs have been stymied by trying to run their startup according the the existing business template. But, he says, startups and existing businesses are actually two distinct types of business entities that require different methods of organization, personnel, and management.

An existing business is “an organization that’s executing a known business model” whose “customers are known, the product features can be spec’ed upfront, the market is well-defined, and the basis of competition is understood.”

But a startup is something different:

“A startup is a temporary organization designed to search for a repeatable and scalable business model.”

Startups, according to Blank, “are all about unknowns.”

The key distinction between the two:

“Search versus execution is what differentiates a new venture from an existing business unit.”

Most of what the military does falls into the “executing a known business model” category. It would be a mistake to try to apply the startup methods to this part of the military. Overall the U.S. military is really good at executing the known model and startups are just not built for that purpose. They are built to search rather than execute. So where can an organization designed for searching do the most good for the military?

While executing the known model units will of course be adapting to changing circumstances, but there will come times when the circumstances are so different from what they were trained to do that adapting the known model isn’t enough. It’s at that point where an organization optimized for searching for an, as yet, unknown model needs to be created or brought onto the scene. Once a repeatable and scalable model is discovered it is disseminated throughout the force and units transition to execution mode.

The idea is that the startup has a specific role to play for the executing organization. It doesn’t challenge it or replace it, rather it complements it. This concept of the two types of organizations enables people to recognize when it is necessary to switch from execution mode to search mode and then how to transfer the new model from the startup to the existing organization for execution. It helps us to know that in this circumstance we are executing, but in another circumstance we are searching.

For example, in 2003 the military executed the known model in the war against Saddam’s regime, but after the regime collapsed the military faced a lot of unknowns: how to deal with looting, crime, negotiating with tribal leaders, providing basic services, counterinsurgency, etc. There weren’t always known models to execute. If we apply our startup concept to that situation then troops would have been trained ahead of time to transition to search mode: organization, leadership, procedures and methods would have been developed in advance to manage and run startups searching for new models.

Would that have made a difference? I don’t know, but I do think it’s worth thinking about. In the future the military will inevitably face circumstances in which executing the known model just won’t work. Since we know that, we might as well develop procedures and methods, leadership techniques, organizational structures, etc. designed to search for new models. If it is possible to bring entrepreneurship into the military it will have to be institutionalized and be a normal part of how the military operates and I think this startup concept offers a useful starting point for doing that.