Steve Blank, Avril Haines on Hacking for Defense and Diplomacy

well good evening everybody very pleased indeed to have the panelists here just a quick introduction for me before we get things going it's a it's always a pleasure to be supporting Columbia entrepreneurship my name is John Walker and with a company called temp CFO I'm a professor at the Columbia Business School I graduated from Columbia Business School so it's a blue is in my blood for definite and we've been around out so our company is we do accounting and CFO services for startups we've been running for about 20 years we take you from series seed all the way through to major exit Pintrest slack and stripe have been clients of ours in the West Coast and I manage the East Coast so if you ever have anybody here has any questions or or curious about what it means to be running finance and this startup come and come and ask and more than happy to talk about it I think tonight's topic obviously Steve is fantastic to have analysts here the topic of defense I see is personally interesting because I spent the first ten years of my career in the defense industry and so I think remembering back to those days which are god-forbid 20 years ago now gets longer and longer remembering those those situations where massive project times and all the obsolescence we're dealing with all the complexity of those systems are they talking now about some of the the ways that we can bring new techniques to is is particularly interesting exciting but any case I'm going to hand over and we're obviously bei very honored to have Justin Fox here tonight as our as our moderator who is a columnist for Bloomberg View has been an editor of Harvard Business Review before my wife is a Harvard grad so I have the displeasure of receiving Harvard Business Review at the at Department I try to make sure that from your business review sits on top of it on the coffee table you're also an award-winning author and journalist four-time fortune and many other many other publications so all of you thank you very much indeed and Justin I'll let you take it from here thank you so our topic today I think if I'm remembering the title correctly is hacking for defense and diplomacy and that happens to be the name of some classes that Steve Blank is going to tell us about in a bit but I also think the broader question and the reason we have a bunch of people here we have Abril here is to also just sort of more broadly discuss the issue of how entrepreneurial people entrepreneurial ideas new technologies different ways of thinking can fruitfully interact with the national security establishment and public service in general and and so I wanted one thing I want to start out with just as a question how many people out here and up here have worked in a government job before I know you have okay how many of you hope to do so in the future how many of you would like to contribute somehow or other beyond just paying your taxes to the security prosperity and decency of your nation that's a trick that's a trick question is it that's are you greeting this at the end no I just sort of puritans that beginning part I thought it would come out that way it's like not that many people are itching to join up I guess and and so you I assume everybody has full biographies of these people but this is a real hands that's Steve Blank over there and I'm gonna start with a couple of quick little biographical questions and I guess the first one is that of real most recently before coming to Columbia was the deputy national security advisor before that she was deputy director of the CIA but she actually was an entrepreneur at some point early in her career ran a coffee shop cafe bookstore what how do you describe it bookstore cafe yeah and this was right out of college it's kind of the most interesting thing that I've done by the way that is I mean that's partly it and you were like I'm sorry I did lots of reading and your banker was pushing you to started turn it into a chain was that true or well yeah when you think that when we started it it was basically me charging up all of my credit cards in order to get it started and then after the first year we sort of made the case to the bank that allowed them to give us a loan and then over the over the course of a few more years as the business grew essentially the bank did come back to us we had a loan officer that took a special interest in us and essentially said do you want to expand do you want to open up more stories and that's when I had a moment where I say it frankly took a weekend off and went away by myself and tried to figure out what on earth I wanted to do with my life and decided that as much as I loved bookstores and that was really a big part of the motivation of opening up a bookstore cafe it turns out that when you have a bookstore cafe you're still focused on the bottom line and you're still thinking about it as a business and it takes an enormous amount of work and I decided that what I was really enjoying at the time was the community work I've gotten involved in and so I decided to take a shift basically in terms of selling the business while it was still doing well which turned out to be a good thing because it paid for law school and going to law school and trying something totally different and then the fact that that then led you into the State Department and then the CIA and elsewhere was that and anywhere in the back here had or did that just kind of no I I am the poster child for the fact that anybody can have a career in government I don't know I really I started off in physics that was my major and that's why you know when I was a kid I said I thought I would do and what I would spend my life in and and I loved it I loved science and I got distracted with the bookstore thinking basically I could do the bookstore and do my PhD in physics at the same time and you know which was completely naive right so I ended up taking a leave of absence and then I ended up doing law school and when I was at law school I ended up spending a summer at the State Department and I loved it I love the people I love to work I found it fascinating and I decided this would be really fun and and so you know spent a year at an international organization did a clerkship and then went to government and and things really developed and one of the things at least in my career path that I share with a lot of the colleagues that I've had over the years is that being open to opportunities has been a big part of what has made us all successful I think which is to say that you know I certainly could not have predicted the path that I took and in fact with the agency job I resisted it thinking this was not the right move and pushed back for a while and then you know I ended up doing it and I ended up loving it and really learning a tremendous amount so it's it's just been one thing after another and there's so many different factors that come into it but I I've loved the work of love the people and I found those two things to be utterly critical to my job happiness so and actually I've probably put the people above the type of work in terms of my job happiness you know if you don't like the people that you're gonna go to work with essentially every day you really don't want to get up in the morning and do it so it's but it's been an incredible experience for me so Steve you're the entrepreneur guy but before you were an entrepreneur you were in the military right yes what did you do yeah so I ended up volunteering for the Air Force during Vietnam and spent a year and a half in Southeast Asia learning electronics is how I ended up in Silicon Valley electronic intelligence electronic warfare and when I got out a long story but ended up in the valley in the mid-1970s when we were still selling equipment to other businesses there was no consumer electronics business and also there was a very strong component of Defense in Silicon Valley at the time and still is Lockheed was the largest employer made their all our submarine launched ballistic missiles and built their first and second generation of intelligence gathering satellites and I worked for a start-up run by someone named Bill Perry who was a PhD mathematician but ended up eventually as a secretary of defense and so my introduction to the valley was through what I would call a halfway house between startups and and the military the one thing you said you volunteered during Vietnam not a lot of was this so you wouldn't get drafted to go do something worse or were you just masochistic so actually anybody's been in the military you know the number-one rule is never volunteer for anything and actually my entire career in life has been in violation of that rule I have volunteered for everything and I found as an entrepreneur that 80% of the game is showing up more than anybody else and so you know when in fact I got stationed in my first base just outside of Miami it was the cushiest base in the airforce and someone came into the shop literally the first week before I ever got to touch an airplane and anybody they said any I want to go to the war zone and I raised my hand and the rest of my career has been like that is I tended to pick for startups the you know the most toughest technical challenges that were also people thought were incredibly outnumbered by competitors are surrounded and whatever and I found those incredibly fascinating because number one people never thought you had any odds of succeeding and if you did it was considered a miracle win and be you've got incredible opportunity both in learning technology but in doing things that no one else would think you were capable of doing so I did eight startups to microprocessor start-up supercomputers enterprise software video games etc and the only common theme was attention deficit disorder so to bring things to our our title here you you then after you're eight startups started teaching your lean startup ideas at Berkeley originally or what first at Berkeley and the Business School then at Stanford in the engineering school and and and obviously after I was tired of second-tier schools I could invite it to teach her at Columbia and and the first applies won't happen always pander to the audience but the but the big idea for how many of you were entrepreneurs who want to be entrepreneurs or so in the 20th century I'm going to tell you some old man history and very quickly in the 20th century investors essentially treated startups as smaller versions of large companies it's a big idea there was no differentiation between what investors were telling startups to do than they would have told a large company to do that they were telling you the way you succeeded is you wrote a 40 page business plan you know with what the team here's the opportunity and more importantly you had a Appendix A which was the forecast with a five-year plan which every number pointed to a hundred million dollars of revenue in year five in fact I used to tell my students there was a secret Excel key code auto-generate that some of them are still looking for those keys the point is that people assumed that startups were not only smaller versions of companies that all you had to do is execute execute the plan you just wrote no one actually acknowledged that no business plan for a startup survived first contact with customers that is it as a document you wrote to get funded you threw it in a drawer and then you did something very different and the insight that started the entire Lean Startup methodology and revolution was pretty simple large companies were executing known business models they knew their customers they knew the competitors they knew pricing they were large because they discovered all this but startups startups didn't know very much actually startups were dealing with a series of unknowns startups were actually searching for business models and this distinction between search and execution had never been articulated before I mean people kind of knew it but but people didn't quite say wait a minute the emperor has no clothes you're making us do something that has no relevance here and the reason why no one wanted to say that is we didn't actually know what it was you were supposed to be doing and so my contribution was one having that insight and then two realizing that syrups needing needed their own management stack we had built a hundred years of management tools for execution but very little methodology for searching for business models and the Lean Startup was just the summary of my work and customer discovery Alexander Osterwalder is work in developing something called the business model canvas and Eric Reese's work and realizing that agile engineering was the was the way you could implement incrementally and iteratively and some things fill out things called Minimum Viable products and this notion of a pivot and and what it allowed us to do is have a kind of set of heuristics or set of rules for startups on how to think about building companies and to make a very long story short it kind of swept the startup the world in the beginning of the 21st century and then your old magazine the HBR put it on the cover of 2013 which gave permission to large companies because it said on the cover of HBR why the lean startup changes everything and that happened to be the time that large companies were now dealing with continuous disruption it's not like they weren't being disrupted and didn't know in the 20th century Clinton Christensen and others and Rita McGrath here had been writing about it but for the first time they were dealing with disruption that was occurring continuously and for the first time large companies were looking to start ups for methodologies and so in the last five years large corporations have been starting to adopt it and the segue to our conversation is she governments are waking up and thinking about crisis or now no we no longer have 18 months between crises we have about 18 minutes between crises and so the methodologies we we built in the 20th century to just deal with the Soviet Union and one main adversary you need a scorecard of the day to figure out who we're dealing with and so people are now starting to look to lean as the same potential set of methodologies for government that's the end of the syllable and so one question and this is for both of you really is that but these governmental organizations I mean aircraft carriers are still aircraft carriers there's there are still large organizations and large entities that need to execute how does that fit together and I'm yeah I'll start and then Steve should finish but I agree with everything that he's just said and one of those no that's right exactly we're done but but particularly in the national security world at least I would say we are consistently facing more threats they're happening more quickly like the generation cycle is faster in a sense and they're more complex in the sense that you typically need greater and diverse expertise to really understand them and deal with them on a pretty consistent basis and in a way that has led us to a situation where consistent innovation is actually critical to dealing with national security issues and fully agree that in you still need to execute in some respects but you also need an innovation culture in a way to deal with the things that are occurring on a day to day basis and I think the two can coexist in a sense and that it's a but I that would be my sort of framing for your finish no I completely agree and what's real interesting it's the same thing that's happening to large companies and what's what's interesting is that large companies have I mean think about retail today in the United States being being literally taken apart by Amazon you know how do you deal with continuous disruption and by transforming the core of an execution agency that or organization that was doing retail for a hundred years into something very different some form of retail will continue to exist but it won't look anything like today the the problem I observed and the reason why I'm kind of interested in government is we could afford to have Macy's go out of business we can't afford to have our intelligence community go out of business it's a big idea disruption happens equally to both but but one part of the country cannot survive where do we survive in the way it is if we are disrupted by a set of surprises that make us no longer the leader in a set of areas that we normally use delete and you know I think it's pretty public that people who used to be near pure competitors are no longer near peers and that requires innovation that may be a different cycle speed than we've been doing and this may be some way to contribute to doing that does that make sense sir I've been pretty oblique but well so then this these specific hacking classes where was the first one so so one of the things that happened then and I'll just give the audience the little background is so the Saleen methodology geez people are starting to do it it's now the beginning of the 21st century Silicon Valley entrepreneurs at least used the language everybody uses pivot Eric Ries is kind of the Johnny Appleseed of you know telling the story Alexander Osterwalder business model generation book sales millions of copies but there was still no class there was in fact the capstone class in any university up to 2011 even though we were kind of believing in this lean stuff was still how to write a business plan in any entrepreneurship in business school in engineering school and and I knew that was wrong I just didn't know what to do about it and and in 2011 I put together a radically new class called the lean launchpad which said let's take these components business model design customer development agile engineering set up the class as teams would come in with their ideas and every week we'll teach him some part of a business model but the customer was a channel what's pricing but we will force them to get out of the building and talk to ten to fifteen customers a week and every week build a new Minimum Viable Product every week by the time you're done with the class you've talked to over 100 customers and partners or regulators whatever and you've built multiple cycles and Minimum Viable products because it was such a radical class I decided to share it by blogging every week of the class here were my slides here the students the lines here's what worked here's what didn't what I didn't realize is back in Washington DC they had a commercialization of the National Science Foundation era our Kolok was reading every week as kind of a serial novel class ends he calls me up and says hi the US government needs your help we've been running the SBIR program for 30 years thank God Congress hasn't asked how well we're doing or else we'd all be in jail what does the SBIR program basically is about 30 years ago Congress said that since we're funding basic science in the United States we want every federal research agency to reserve today it's approximately 3% of their research budget for commercialization anybody who's gotten a basic science grant can go raise their hand and apply for free money half half a million to two million dollars depending whether it's NSF or NIH or anything else and they gave out these grants the problem is they didn't give any instructions with the grants so you're giving scientists and not teaching them anything about how to build a company and so what the NSF decided in fact they were lying to me on the phone is we think you invented the scientific method for entrepreneurship okay you've got my attention now and so make a long story short National Science Foundation adopted this lean launchpad methodology class as the basis of commercialization of science it got written into federal legislation it's now taught in 86 universities we've put 1500 teams of our best scientists and engineers through this class in the last six years now to answer your question about hacking for defense this class was about taking scientists and their ideas through this methodology worked pretty well NSF liked it i prototype the class four at UCSF for life sciences for therapeutics devices Diagnostics digital health and IH adopted it that DHS adopted it then the White House and OSTP said why don't we have all the federal research agencies have some version of it do we adopted it but it was still serving specific ideas of Engineers and the Morris that start thinking about the challenges our country had and also I had a personal view that we've run a 40 year science experiment of disconnecting our students from any skin in the game of national service I thought there might be some way this class can contribute to the safety and security of country and so I partnered with 2x kernels when Pete Newell who used to run the Army's rapid equipping force and Joe filter who was teaching at at Stanford ex-special forces and we decided to go out to the Guardian intelligence community and see if we could use this same class same methodology get out of the building talk to customers but instead of students working on their problems could we actually get problems from the US government real problems whether they were from SOCOM or CIA or NSA or different parts of the DoD and have them deliver real solutions at the end of 10 weeks and there were two hypotheses that we had no idea whether they would be true one is would any students want to get engaged in real government problems and two is could we get problems that were serious and real scrubbed down to an unclassified level that could be used not only by students but by foreign nationals because at Stanford you could not exclude people from the class and so we ran a prototype for what was called hacking for defense two and a half years ago and sitting in that class was a representative the State Department who by week three Suika Krieger realized the State Department needs a version of this and ninety days later we were not only teaching hacking for defense we were working with state and teaching hacker for diplomacy solving refugee problems and problems and embassies and the class actually became successful and scale that's now taught at ten or eleven universities it just got written into the National Defense Authorization Act as a standard part of the DoD and hopefully it'll scale to multiple universities and multiple agencies so that's the long-winded version of what's acting for defense yet please there are a lot of other programs and efforts to do kind of innovation within the US government you know that are similar to and you know intersect in different ways that Steve knows about and others but for example one thing that President Obama started with something called the u.s. digital service which I gather is going to continue in this administration or it has at least thus far and the number basically we had teams that went out to different agencies and these were folks that were brought in and under a particular program that had expertise in both innovation and in technology and and they worked on whatever it was that the agency needed work on and they were in the you know version that was allowed to be classified basically and they did just a really an extraordinary range of things they worked on things for example in the context of law enforcement where there were questions about whether or not you could identify what is likely to be for example child pornography on the internet where you're dealing with potential predators who are looking for it can you come up with a way to spot it so that then agents can focus in on the right place where they need to focus in order to spot as many they can you know there were things dealing with import and export efforts there was also with the refugee program they helped at the State Department in streamlining some of the processes that were dealt with also for just immigration more generally but just a slew of things that you wouldn't even necessarily think of it from all different parts of the government where people started to realize the advantage of having public you know folks come in with that kind of expertise in knowledge for a period of time and and really kind of do a sprint team almost in a sense on particular issues and then you sort of have different versions of this throughout but one of the things that Steve and I have talked about is that in many respects you know people find ways to solve problems to address the mission that they're addressing and they do it in different ways within agencies based on the particular culture or you know challenges that they're facing and so on and it's hard but clearly necessary on some level to have an opportunity to look across those ways and think about what's the most effective way to do this are there repeatable versions of this that can be done in other agencies and so on and I think one of the geniuses of you know the sort of model that's been set out by Steve is that it sort of identifies here is the process here's a sort of a process exactly a process and you can use this process and it's one that's been tested in a variety of different ways and you can adapt it to the particular scenario that you have but it's a way to really focus people on this is a process for doing this that's actually pretty effective and it's a you know a challenge that we've all got to mean but there are so many fascinating ways you can improve and and it's worth a you reminded me in our conversation earlier you know for those of you don't know the the government actually has kind of been a leader historically in innovation people thunder'd innovation at Stanford post-world war ii was ONR office of naval research actually was kind of the after world war ii basically the only government agency that was funding advanced technology on to the Korean War and then during Sputnik we stood up DARPA to actually accelerate long term innovation and actually got some interesting things out of that and then about 10 or 15 years ago Gilman and others stood up in cattell to try to take the venture capital world and and kind of try to integrate it it in first intelligence community and now the rest of the DoD and so if you really think about it this lean methodology is just one more thing that we're trying to apply from both the outside world and adapt it to innovation not on a u.s. digital service but people like sue Gordon and GA and Tek far and being able to do kind of agile contracting and the current Defense Authorization Act has other components of innovation you know people get the idea that the government doesn't innovate I just say the government is not the leader often in in in innovation process but over time certainly in the last administration it made some serious efforts to kind of adapt best practices from Silicon Valley and others and I think they did a pretty good job we're still buying aircraft carriers the same way by the way which is a different discussion we have by the way the question isn't you know are we still buying them the right way the question is why are we still buying aircraft carriers right that's a that's a different discussion and a much harder one to have because if you're a is my opinion if your whole career is to be a Admiral who's in charge of a kid you know Carrier Strike Group the last thing you're gonna say is perhaps we ought to think about some other place to spend that 13 billion dollars that's the last conversation you're gonna have because your career is focused on that well and I mean that is like in the military and I would have said you know the CIA I think most of us know less about it but it seems like it's mostly people who are spending their whole careers there right or not it so there's definitely a lot of people who do spend if not their whole careers most of their career in these institutions and one of the things that I think you know it has been one of the challenges particularly in the technology area right has been actually getting people to come in and mid-career finding an opportunity for them to do it in a way that makes sense for their career attracting them setting up the process for hiring them doing all those things and those have required exceptions and that's one of the things that we've done or that we did during the Obama administration was trying to to find ways to do that I I don't think that's necessarily bad and but here's one way of thinking about this problem you know and obviously folks to react to you and think about it I there's sort of tactical innovation in a way you know what you need to get the mission done can I do it better can I you know get more out of X can I adjust myself because the you know the adversary has adjusted and I need to respond or get better in a sense and then there's kind of strategic innovation in a way and that's much harder and I think that's much harder frankly you know regardless of where you are it's not easy to to really rethink the framework that you're currently operating under and and some of the problem I think with that is because you have folks who have lived and become institutionalized and you know are attached to what they're doing and one of the ways that we would try to deal with that in the context of the agency at least and then within the intelligence community is doing red cells people who really step out of the roles who are institutionally out of the sort of chain of command who are separated for years not somebody who's just stepping out for a short period but and who actually provides sort of like under different assumptions analysis that would go one way or the other but you also I think have a challenge even separate from that which is just really rethinking your policy and and the way in which you frame things and I don't you know when I it just as an example to give you a sense of what I'm thinking about you know I've been working recently on a project relating to access to energy right and most countries around the world privatized you know energy resource extraction because it was the to get substantial capital to do the extraction that was necessary to pull resources out of the earth in order to provide the energy right and that was sort of the most effective way to do it now with the low cost of renewables occurring and a variety of other ships and in the landscape you know one of the questions that is starting to burble up is are we should we be thinking about this in a whole different way should we be thinking about it the energy framework more along the lines of the way we think about highways and you know public infrastructure in a sense and is that a better model and it's just you know for you didn't make a shift like that in the government is very hard you've sort of worked everything is aligned to a particular incentive and structure and you're working within it and to really try to make that shift is very tough and that's something that I think we I can continually start with but I think it's you know just a constant issue that we face and I don't know that any of the things we've talked about really solve it but it is something to continually sort of at least be aware of and question and create that sort of nonconformist thinking for a little bit while you're you know that's true it's not Jessica it's any organization that's been doing something a certain way for a long time I would imagine Columbia University has certain things and and you know the probably the best example in the commercial world of a company that pulled that off was we kind of forget nowadays that Apple used to be a desktop computer company that's only about 10 percent of their business and today you know one guy said you know we're gonna die doing this and then did the iPhone and the iPad and got him into the music business and the application business and you know some of it I'm with a clear vision some of it kind of stumbling into the App Store and whatever but but he basically fired and shot his current business I mean that model is they burn the boats on the beach there was no going back and that's really hard and sometimes takes a visionary leader that kind of controls all the movement here I mean talking about privatizing electricity I mean there were whole set of incumbent who might have a different opinion even though there might be a leader who says go that way you know I think that is maybe worth discussing here for innovation we had a set of what we're called offset strategies right now yeah the first one was using tactical nuclear weapons under Eisenhower and their new look and then bill Perry and and the second offset strategy using stealth and semiconductors and software too so so the let's take the one in the middle of Cold War with the Soviet Union and stop me if I get this wrong is that the Soviets in Europe had built a almost a two to three to one advantage in tanks and artillery and manpower facing NATO and the only way you would just do the math going I guess we need to match them and but politically that was just unfeasible we didn't have the draft anymore and that would just would have you know started in an arms race and conventional weapons or else we would have had to say we'll do first use of tactical nukes and no one wanted to go there but bill Perry who was the back then the head of research and development for the Department of Defense said for the first time we have a technology advantage in semiconductors and software that the Soviet Union did not have and we could turn that into a set of weapons that they can't match to actually break their conventional weapon lead and it turned into stealth it turned into what was called ISR and it turned into precision guided weapons so now all of a sudden one missile or one shell took out one tank instead of you know having to do carpet bombing and all of a sudden the Soviets didn't have that kind of technology capability and they couldn't match this does that make sense it that was called an offset strategy by the way as an aside we decided to do the same for ICBMs called the Star Wars and we didn't even believe it but they believed it and and so kind of panicked them even though it was that one really wasn't off that strategy and now we're we've been searching for the third offset strategy of thinking about maybe it's AI or machine intelligence or robotics or something else too think about the offsets of all these other competitors don't get that right and so we've been looking for what's been called the third offset strategy for military I personally have a belief that the third offset strategy is not just technology but our speed of innovation and that we really haven't recognized that that is what our culture does well and that at least China has figured out how to innovate at speed as well as we do and unless we understand that we might be out innovated not just on technology but of speed of innovation and adaptation is you look at basically how quickly they've adapted technologies and into their certainly their Navy and and anti-access technologies are pretty spectacular I mean really spectacular one of the things somebody who actually knows something is gonna fall one of the things one of the paradigms that we continually seem to face was this concept of asymmetric threats between the United States and adversaries and and normally when people talk about asymmetric threats they talk about non-state actors which is its own concern but in this context just to to play off of what you said I think if you focus on state actor asymmetric threats here's a way to think about that particular paradigm it would be places where the United States has a high-value asset right that can be held at risk by an adversary at relatively low cost to that adversary right in a non conventionally escalatory way and in many ways this scenario paints itself out in a variety of different fields where you see how the adversary is using innovation basically to promote a threat towards us right so cyber is a perfect example of this it's asymmetric in the sense that so much of cyber infrastructure is owned and operated essentially of the United States right it is something that we rely on more than the vast majority of countries it is about 85% I believe is what the DHS figure was owned privately as opposed to publicly which is fine except that it makes it more complex for the government to set Uniform Standards for security and other things along those lines for the cyber space and you know it is one that we rely on for a private sector relies heavily obviously on cyber we also have digital assets all of these other things develop these are things that make our country strong in many respects is wealth producing and valuable high-value asset but we're uniquely vulnerable in many respects as well and when you look at utilities for example I think it's now over fifty percent of households are actually have a smart meter attached to their electricity piece which means that it's possible to attack it through cyber mechanisms so that the reality so this is a high-value asset it's relatively low cost for adversaries that are interested in attacking our cyber infrastructure to do so when you think about it right and they can do it in a non conventionally escalatory way which means that it's they can attack without necessarily sort of going beyond a line that internationally accepted as a basis for a response and so it's actually very hard for us to figure out how do we respond in a way that our allies our partners will agree is an appropriate response how do we deal with it in that scenario other examples of this there are in space our energy is another place where you see this migration even all of these different places but it's ways where you can see how basically an adversary looks for you know places where they can innovate and find ways to hold at risk a relatively low cost to them things that are valued to us and similarly we need to innovate in order to think through how we can respond without actually hurting the great values and all of these you know is bring to the United States and so if you really think about what you just said is people are now playing offset strategies against us so they the Cold War offset strategy was precision-guided weapons and stealth against an entire you know conventional West weapons systems it was a cheap hack now relatively cheap hack which negated their entire thousands of tanks here people are using potential asymmetric software threats to do the same thing kind of interesting and so this is why innovation in government for safety and security the country is kind of important is we need to continually innovate to not only match these threats but to come up with ours and it's a continual game and it requires you know my view a different type of thinking than we used to have we just need to be operating at continuous innovation speed much like startups do let me start them doing this 24/7 the conversation we had also is that you know people sometimes say is how come department defense can't innovate like startups but in the battlefield they innovate better than startups it's just that when they get back home they collapse down into bureaucracy and as you pointed out there are some things in the battlefield you don't want to do back home but it's not like the military doesn't know how to do this it's it's just that the infrastructure in the bureaucracy kind of like collapses it back into execution one question is we're talking about it clearly like during the Obama administration there was a great interest in Silicon Valley love for Silicon Valley I don't know what now part partly purely political there's a new administration a guy who was not supported by all but a handful of Silicon Valley people so there's this sort of turning against it there but there's this broader societal maybe less against the startups then against Google and Amazon and all but at some level there's this suspicion now among a lot of people of this whole world that Silicon Valley has created and I don't know what where to go with that exactly but it just seems like that that has been this if going on do you think it's going to shift back or is there something I have to change about the way the technology world relates with the rest of us and with government so you know I've been thinking about this for a while and this is completely an uneducated opinion other than as an observer I think we confuse large corporations whose names happen to be Google Facebook Apple etc with Silicon Valley startups these companies have nothing to do with startups anymore they are just as big as GM or you know name of large corporations what's worse is the ones that deal with social media are actually you know delivering a version of oxycontin you know I mean they're they're peddling dopamine you know modifiers in a way that is completely unregulated and it's fine for them but make me want to check my phone yeah all right that's the point and the you know if the point is now for adults the point is there a second for kids and and so that's different from how do we deal with startups and innovation they just happened to be tech companies but we you know AT&T and Verizon are not startups they're technology companies that happen to own you know network asset assets and we were arguing about net neutrality is you know which big organization do we want to win it's it wasn't about startups so I think this there needs to be some differentiation about you know large corporations who happen to be technology suppliers versus startups that have a technology ecosystem going on I don't know if that made any sense there is something else going on in Silicon Valley about technology innovation that should be kind of both scary and worth thinking about in the 20th century venture capital funded things that were in the national interest they funded computers they funded Life Sciences etc I'll contend that in the 21st century venture capital and Nash interests have literally diverged you could make an argument that life sciences is still being funded in our interest I'm not sure you could make the same argument that those tens of billions of dollars going into social media actually is the right place for investment if you had a national investment policy of where we wanted money to go but that conversation is a third rail in the United States you can't talk about a national technology policy without people starting to vibrate and should we be talking about what I mean or so we all vibrate I don't know I mean I don't disagree with these points I wonder though and I'm not sure I fully understand the public view and it's you know view of Silicon Valley per se but it does seem to me as if a piece of this is actually also inequality related I mean and I don't - my mind so separate from and not taking away from what Steve just said I we're seeing increasing gap of both income and wealth in the United States and in wealthier countries it's increasing at a pretty remarkable way and I think you know when it's been since the 1980s about in 10% increase in the gap along across all osed countries and the state of the United States has been at a higher rate than that than the average and then I saw a recent statistic that said eighty four point six percent of the world's wealth is in eight point one percent of the world's population which is a pretty remarkable figure when you think about it and I do think that's at least a piece of what's happening and it's so we're gonna do gilded age war yeah but it is I mean I think there's a real there's a whole property and I think that's a part of at least the perception of the Silicon Valley piece um it's an odd place well we're gonna do it okay we're not having a big Q&A session after here because there's basically a cocktail party afterwards but we're gonna do it we're gonna have time for a couple of questions now if anybody wants to there's a mic over here you're only gonna take the best question and if you could introduce yourself just because that makes it more fun hi my name is elseif so everal Steve Justin this is very entertaining entertaining conversation here really enjoyed it like you Steve I was in the Air Force for 10 years and you know more I served more I saw things like human trafficking in South Korea and you know separating an insurgent from his family by arresting in Afghanistan I really started thinking that you know pen is mightier than the sword I started believing in that so I'm in the transition of Korea right now as you said I really said you know keep an open mind for opportunities my questions to you is what are some of the steps it's a during that career that you about to leave to jump into something oh yeah what are some of the steps it's up to for the next career because like you definitely left a business that you actually built for yourself and enjoyed it but you took a big chance and I'm trying to do the same thing I hope this helps all the people as well in the future what does all the steps eats up to you know take that jump I would say yeah yeah it's a really good question and I when I shifted from science to the bookstore I'll touch it like my my father called my then boyfriend who's now my husband so it lasted you can't let her do this you can't let her leave physics guys she's only good at physics and math and this is gonna be a total disaster and you're gonna have to support her for the rest of your life like I mean this was the conversation right I still teased him about that but but the thing is one thing that I did was not listen to people around me who said you know this is the only thing you're good at this is the right the only thing that you can do and so on and and I wasn't sure frankly that I'd be any good either you know that trying to start up this bookstore or in law and I sure as hell didn't know if I was gonna be good at intelligence and I in each of these scenarios I took a leap of faith essentially that that I really would do my best learning about this next you know possibility and if I hated it I could change again and I think that helps honestly I the when going from science to the bookstore I loved science I loved math it wasn't that I didn't enjoy it but I decided that I wanted more and I found it was very hard to do anything else other than science and math frankly when I was working on that and so I thought this was an opportunity for me to see and I could take a leave of absence from graduate school and I could try it and I did it and I ended up enjoying it and I found something that I found even greater passion about and and I think if you have passion about what the next thing is for you and it excites you when you talk to people about it it's one of the most important things and then the the second one is just in every single one of these scenarios you know and the older you get the harder this becomes I find you just swallow your pride a lot right because you're suddenly you know you were an expert at something else and now you just don't know anything right and so you know you're relying on other people to help you learn and I just had a tremendous number of people in my life over each of these shifts who were willing to help me and you had mentioned before that when you went to going to the CIA though you were the one who was fighting against it and other people had to talk you into it yeah I thought that was a terrible idea I did not not even for me personally I mean I just thought I'm not qualified for this job I thought this really doesn't make sense and I had been nominated to be the legal adviser at the State Department at the time and the prison actually was drew my nomination and had to re you know had to appoint me then at the CIA and and the conversations were where just once where I don't I've never worked in the intelligence community before why on earth do you think it makes sense for you to do this and and then it's the deputy your role is basically your managing operations your managing the building you're managing the the enterprise and and then you also spend a lot of time at the White House doing deputies meetings and presenting essentially the agency's case in the interagency and it's you know and so I just I was very worried that it wasn't going to be the right shift for me and and then I wouldn't do a good job and I wanted to do a good job you know for president and and really what it came down to was that my predecessor actually was the one who convinced me he'd had 33 years in the UGC and and he when we had coffee and and he said look historically you know the director of the agency comes from outside of the CIA and we have an unusual situation John Brennan is a career CIA officer and I think as a career CIA officer it's really important to have somebody who's actually seen the outside and is coming in with fresh eyes to be there in the leadership position to kind of you know to push back against kind of conventional wisdom the way things operate doing things differently and so on and you can bring value by virtue of your relations in the interagency and your knowledge of how things work because you can make the agency more effective in that you know an agency world and the reality is more and more today we have to work together among agencies in order to be effective in our policy so it was very interesting but it's it's a leap of faith and I'm it some rely on other people you know don't be afraid to to get help is my view of what really rely on other people but don't believe your dad there you go one more question I guess I'll let them like let's go for the back row I mean you know Thanks my name is Greg I spent time in the government in the co u.s. u.s. Coast Guard as an aviator back in the 70s Steve you you mentioned that you thought the government had done a good job innovating in enclaves in the past I mean that's undoubtedly true you talk about DARPA Office of Naval Research NASA whatever who's the better innovator today is it the government because those enclaves still exist or is it private industry and how effectively are because I know the government has a huge appetite for innovation coming from the private sector how is that working so so one of the interesting things that actually was I guess it shouldn't have been a surprise to me but going back inside and and and looking around some of these agencies it used to be in the 20th century US Department of Defense an intelligence agency owns tools and technologies that were unique to us no one else had drones no one else had crypto no one else said you know nuclear weapons there I mean three other countries and whatever turns out that nowadays I'd say about 80% of what we used to own you could order on Amazon and get delivered in 24 hours it's a big idea it's truly a big idea it's that things that used to be available only to the DoD and Intel community are commercially available not only to nation-states but more importantly non nation-state actors if just read the news you know I have Isis was using phantom deified phantom drones to drop hand grenades with GF GPS location movement on Iraqi soldiers ordered them right off the net because it's sort of that there's this broader thing where like through the 90s you basically have better technology at the office than you did it yes so some point around 2000 that flipped so I want to go back to answer the question though so here's what's hard for government agencies particularly ones that have secure enclaves is now what they need to do is not only innovate internally which they obviously do they need to have our figure out how to partner externally but gee there's now this classification security wall is how do I set up you know gee do I shadow my secure system and an unclassified component and and they're all trying to figure out how to do this it's not that you know this is a new idea and so it's a different model than it was in the twentieth century is now how do you integrate external innovation inside this in people who are still innovating internally but you have these security barriers and process barriers and and g'd this does a start-up actually want to sell or work with the government and gee now you got to convince them that there's a value in having dual use technologies the government would be the first customer but no the government still has a 400-page or RFP you have to fill out and so the government needs to learn how to work with startups we're that's happening it's not happening fast enough and everybody will tell you it needs to happen faster and everybody kind of gets it I mean you're the domain expert here and so I'm trying to answer your question to say the world's kind of changed in a very different way is that it's not like we weren't being smart internally but but innovation it's happening externally even faster that would be Mike do you think yeah no I ain't good I need some credibility the intelligence community does this trends report that looks out over a couple of decades and in the last two of them there's been sort of three trends that go to this point I think and highlight it to some extent one is individual empowerment you know which is to say you know how easy it is basically to accumulate technology it allows you to do things that you couldn't do before in a sense the diffusion of power which again is sort of another way of saying that but that also replies to the fact that we're no longer in a kind of a Cold War struggle and there's a number of states that are becoming more powerful in a multipolar world in a sense and then the rise of the non-state actor or innocent and and when people talk about non-state actors typically you think of terrorist groups but in fact when the intelligence community is referring to it they're also thinking about just essentially cabal's of different actors that are not state so it's like WikiLeaks it's it can be a group of multinational companies right the pull together in brave ways and they're capable of doing things that frankly States could have done and they are among the spoilers the greatest spoilers of government action now then that make it harder to govern in effect I think the cocktail hour is upon us so you can if people have questions we'll be around and thank you very much you

Channel: Columbia Entrepreneurship, Innovation, and Design

Views: 1,673

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Id: fRkxoHQr3Vk

Length: 58min 50sec (3530 seconds)

Published: Thu Jan 18 2018