Lean (Government) Startups
George Patton had already gone above and beyond for his country by the breakout of the Second World War. In World War I, he had commanded the United States tank school in France and earned full colonel status, the Distinguished Service Medal for excellence in performing duties of high responsibility, and the Distinguished Service Cross for exceptional bravery in combat—bravery that included taking a bullet through the thigh while advancing on the enemy.
In the two decades following America’s victory, Patton continued rising through the U.S. Army ranks, even as the nation resumed a peacetime posture. In the summer of 1939, with Adolf Hitler’s Germany already acting as an aggressor in Europe, and Asia falling into turmoil, Patton was called to serve as a tank brigade commander in the Second Armored Division, based in Fort Benning, Georgia. There had been advancements in technology in the intermittent years, but those were not reflected in the fleet Patton found at Fort Benning. Due to military underinvestment after World War I, 85 percent of the machinery in the Army’s arsenals was over 10 years old, this at a time of rapid technological change. And some parts were just plain missing. A Life magazine article reported in 1942 that “once, on his own responsibility, Patton bought some quickly-needed equipment direct from Sears, Roebuck.” Yes, on his own time, and dime.1
Obviously, ordering from Sears, Roebuck wasn’t an ideal approach to preparing for the full-scale war that appeared well on its way. In his fireside chat on May 26, 1940, titled “On National Defense,” President Franklin D. Roosevelt assured the nation that its military was steeling and reshaping itself for conflict, leaning “on the latest that the brains on science can conceive” when it came to weaponry and tactics.2 Unlike other nations, America would not manage nationalized industries and centrally plan production; rather, the government would search for the best ways to work with its private domestic partners.
While he acknowledged in the speech that private industry, not government, would need to manufacture the majority of “the implements of war,” he emphasized that government stood ready to provide investment capital for new plants and plant expansions, employee hiring, and any other capacity-building activities to meet the wildly ambitious production goals the military had set. But the government would also need the private sector’s assistance, especially in a coordination capacity, since few government employees had the requisite experience and expertise, whether in product and service creation or in mass production techniques. So he enlisted private sector experts to align with the government, and entrusted them to take the coordination lead, for a common cause.
“Patriotic Americans of proven merit and of unquestioned ability in their special fields are coming to Washington to help the Government with their training, their experience and their capability,” Roosevelt said. “It is our purpose not only to speed up production but to increase the total facilities of the nation in such a way that they can be further enlarged to meet emergencies of the future.”
President Roosevelt’s call for outside assistance had a precedent—in World War I, President Woodrow Wilson recruited industry leaders as “dollar-a-year men,” named as such because, by U.S. law, government employees need some compensation to bind their contract.3 And, as in World War I, many of the nation’s most accomplished and prominent people, from a variety of fields, reported for government duty, undeterred by the pittance paid. By the end of World War II, there would be more than 300 business leaders in the program, under the supervision of Sears Chairman Donald M. Nelson, who had succeeded GM President William S. Knudsen. Seventy percent of those participants were experienced manufacturers, many of them with a research and development background, and their ability to apply newer mass production techniques and supply chain management manifested itself in a dramatic increase in manufacturing output. For the government, they served a translation function, a communication bridge between the public and private sectors, between military planners and industrial producers.
Take aluminum, one of the staples of modern warfare, used extensively in aviation. In 1939, the country produced no more than 350 million pounds, only one-quarter of Defense Department projections for the necessary amount in the coming years, and almost entirely from Alcoa Corporation. Nelson’s team of dollar-a-year men, including Alcoa’s Arthur Bunker, worked with the Defense Plant Corporation, under considerable scrutiny from the press and public due to the monopolistic nature of his company. Still, it was hard for anyone to argue with the results. In the spring of 1944, the Truman committee investigating the war program revealed that, in 1943, the supply of aluminum had grown to 2.79 billion pounds, such a significant surplus (620 million pounds) that it recommended releasing some to manufacturers of civilian articles. The committee commended Alcoa for “the prompt and effective manner in which it expanded at its own expense its annual production from 350 million pounds to more than 850 million pounds, as well as the expedition with which it constructed the Government-owned aluminum and alumina facilities.”4 The committee also concluded that “plants built by Alcoa for the Defense Plant Corp. are equally or more efficient than those owned by Alcoa itself.” Also, for all the concern about Alcoa acting as a monopoly, the war program actually created competition. Other suppliers, including Reynolds Metals—which had urged increases in aluminum production capacity—gained strength as a result of the effort.
World War II was a victory for America and the allies well beyond its borders. But, while we recall many of the heroes and battles fought in faraway lands, the domestic lessons are often lost, such as the good that came from civility and collaboration between those from the private and public sectors and those from different political parties. Here was Roosevelt, considered the classic liberal and a proponent of expansive government, ceding coordination responsibilities to largely conservative business leaders. And here were those business leaders, many skeptical of government, serving it in its time of greatest need. At a press conference on April 15, 1941, Roosevelt joked about the preponderance of Republicans on the dollar-a-year list.5 He said he asked Knudsen why there weren’t more Democrats and was told: “There’s no Democrat rich enough to take a job at a dollar a year.”
Presidential administrations since Roosevelt may not have confronted world wars, but all have faced varied and vexing challenges, domestic and abroad, that forced them to recognize the need to venture outside their comfortable circles of party loyalists, campaign volunteers, and policy advisers to tap into the expertise of those not already working in government. They have gone to great lengths to frame government work as honorable and appealing, with rewards beyond the financial, in order to attract the interest of premier talent among the general populace.
This came into play in the 1960s, when President John F. Kennedy instructed his brother-in-law Sargent Shriver to head a Talent Hunt Committee for filling Cabinet spots and other key positions in his administration.6 Shriver started by securing a list of first-team academics from a Harvard professor, but he didn’t want to rely on one person’s recommendations. He sought a diversity of opinions and candidates. He told a staffer, Harris Wofford (a future U.S. Senator from Pennsylvania), “We’re going to comb the universities and professions, the civil rights movement, business, labor, foundations, and everywhere, to find the brightest and best possible.”
Once he identified those people, he needed to sell government to them. That may have been a bit easier in those days, as even Shriver acknowledged at a JFK legacy seminar a quarter-century later.7 At the dawn of the Kennedy administration, government was not, as he put it, widely perceived as the “capital of an evil empire of bureaucrats and dunces and incompetents.” Plus, Shriver could sell the opportunity to associate with a charismatic President. That allowed for selectivity, and they filled more than 200 positions, many with people who shared the administration’s optimistic, almost idealistic vision. As Shriver later recalled, “If you believed in America’s destiny, the efficiency of democracy, this was truly a glorious time to be alive.” In his inaugural address, President Kennedy famously bellowed, “Ask not what your country can do for you—ask what you can do for your country.” The underlying corollary, when it came to his administration’s evaluation of potential employees, was that a person needed to be good enough for government, not the other way around.
Times and attitudes changed over the course of the next four decades, with scandals, incompetence, and media-amplified polarization dragging down government’s prestige and popularity, but the election of President Obama—on a platform of Hope and Change—signaled a fresh opportunity for government to polish its reputation. As candidate Obama said at the ServiceNation Presidential Forum at Columbia University during the 2008 campaign, “Part of my job, I think, as president, is to make government cool again.”8 That had to start somewhere, and Valerie Jarrett, the cochairperson of the transition team, started here: “I think we’re open to innovative ideas for new ways of government doing business.”9 That was appealing enough to convince entrepreneurs to invoke the spirit of the dollar-a-year men, and leave more lucrative private sector opportunities behind for a role in Washington. In turn, the administration could be selective, populating government with those who had demonstrated an ability to use the latest technology to strengthen or further an enterprise, whether a startup, a new product, or a social cause.
President Obama started with his own White House, recruiting Internet-savvy entrepreneurs to serve as Chief Technology Officer (me), Chief Performance Officer (Jeff Zients), Chief Information Officer (Vivek Kundra), and Director for Social Innovation (Sonal Shah), among other senior positions. And he directed his Cabinet to do the same, including the previously mentioned CTOs at HHS (Todd Park) and the VA (Peter Levin). More than 50 other entrepreneurs would fill senior roles, reporting directly to department and agency heads, and tasked with applying technology and innovation to advance that agency’s mission. The White House supported these policy entrepreneurs in two ways: one, by providing them “air cover,” or a Presidential license to innovate; and two, by convening them on a monthly basis via an Innovation Cohort, to exchange their best practices so they could scale across the government.
The participants brought a wide range of experience. Jim Shelton, the cofounder of the school management company LearnNow and the educational manager for the Bill & Melinda Gates Foundation, joined the Department of Education to design the Investing in Innovation competitive grant program. That vehicle would provide seed capital for promising ideas and provide scaling capital for those, like Diplomas Now (DN), already proven viable.10 DN developed a predictive model to flag children at a high risk of dropping out as early as sixth grade—based on the ABCs of Attendance records, Behavior, and Course failure in math—and pair them with nonprofit social service groups to monitor and improve their situations. DN received a $15 million validation grant to scale the program across the 2,000 schools that account for a majority of high school dropouts, partnering with those schools to develop and execute customized strategic plans for students. Those interventions have already significantly cut the number of students failing math.
Maura O’Neill, who had started companies in electricity efficiency, customer information systems, e-commerce, and digital education, joined the U.S. Agency for International Development.11 There, she founded Development Innovation Ventures with a similar, staggered model to Shelton’s program for education, allocating more funding to the best defined, developed, and tested projects. One was Mere Gao Power, a startup that uses microgrid technologies to replace kerosene with cleaner, renewable energy; early results, across 1,000 rural village homes in India, showed more than a 50 percent weekly reduction in costs, and earned the company the White House spotlight in a June 2013 We the Geeks Google Hangout.12
Alec Ross, who had cofounded the global nonprofit One Economy to close the digital divide for the poor, joined the State Department under Secretary Hillary Clinton, to lead her 21st Century Statecraft initiative, designed to take advantage of this “Internet Moment” in foreign policy.13 His team intervened to delay Twitter’s planned network maintenance in June 2009, to keep the social media platform open to Iranians during their uprising, allowing them to communicate with each other and the rest of the world. He also championed the administration’s text messaging initiatives during international disasters, with the effort following the Haiti earthquake contributing to more than $32 million in donations.
The entrepreneurs who joined the government brought more than their respective skill sets. Many also brought a different way of working, one with its roots in Silicon Valley, and its fertile field of technology startup companies. Eric Ries, an entrepreneur, adviser, and author who had moved to that area in 2001, called that philosophy and methodology “lean startup.”
When I first met Ries on my first official trip to Silicon Valley as the nation’s CTO in the summer of 2009, he had little experience with established organizations, and had given little thought to applying his lean startup principles to government. In defining a startup as “a human institution designed to create something new, under conditions of extreme uncertainty,” he had always left the identity of that institution open-ended, whether for-profit or nonprofit, private or public sector. Still, over time, even he was surprised by the proliferation of the principles and how they were applied by many “in situations that I considered to be quite strange.” Those tinkerers included division managers at major companies, foundation directors, policy makers—and, well, me. Eventually, Ries would come to understand this hunger for a new approach, especially in areas in which the traditional ways of working were proving insufficient or even obsolete.
“People talk about the twentieth century being the management century, and I really think that’s true,” Ries said. “We’ve become so good at general management, you think about the global supply chain to keep us all alive, you think about the government programs that have lasted decades and really provided for the welfare of a large number of people, that’s a real accomplishment to be celebrated. But those tools are really based in planning and forecasting, which makes it work well under conditions of nice, stable environments. Nothing changes too fast. So those tools are not really the best for situations of disruptive innovation, technological turmoil and change—the new paradigms.”
He believes his lean startup strategies are better suited to handle uncertainty by leaders in all walks of life: “What we want to do is grow a management discipline that can be just as good as general management has been in the twentieth century, but with some tools that are more appropriate for the twenty-first.”
What we wanted, in the wake of Wall Street reform and the 2010 passage of the Dodd-Frank Act, was a new agency that stood up for the American consumer in the increasingly cloudy and confusing financial marketplace, protecting citizens from predatory lending by financial service companies. President Obama tapped Elizabeth Warren to help establish and organize the agency, which would be called the Consumer Financial Protection Bureau (CFPB). She requested the assistance of my deputy, Eugene Huang, himself a successful tech entrepreneur, in modeling the agency more after nimble Internet startups than plodding government bureaucracies—leveraging technology, data, and innovation to maximize efficiency and impact. In August 2010, Huang and I attended a small dinner in Silicon Valley, where technology leaders offered suggestions about how the CFPB should operate. Ries later recalled his advice in The Lean Startup, his 2011 book: “Treat the CFPB as an experiment, identify the elements of the plan that are assumptions rather than facts, and figure out ways to test them.” For instance, one of the elements of the CFPB was a call center to field consumer complaints about credit card companies, mortgage brokers, and other financial services. To establish staffing levels and budget authority, Congress needed to assume a certain level of call volume, but those assumptions were really just guesses, with no way to accurately account not only for how many citizens were victims of fraud, but how many would actually pick up the phone to inform the government. Instead, Ries suggested a more targeted approach that might avoid understaffing and the risk of caller frustration, while also avoiding overstaffing and the corresponding waste of man hours and tax dollars. His impromptu suggestion of a minimum viable product would consist of creating a simple mobile app, saturating one neighborhood with flyers, asking anyone with financial issues to call a simple hotline number on the Twilio.com cloud-based communications platform, and then extrapolating the number of actual callers to what might occur with expansion to the larger population.
“That microexperiment would be cheap, and it’s better than market research, because you’re not asking what you would do or putting out a survey,” Ries said. “It’s actually an experiment where people reveal their behavior through their actions. And if they don’t agree with you about what topics they want to talk to you about, they’re right, not you.”
With Huang acting as an advocate, CFPB adapted Ries’ experimental, incremental approach in a slightly different way, by initially rolling out the call center (and web) complaint service for credit card issues only, so that it could be used as a test bed and training ground for other financial services issues, such as those related to student loans, vehicle loans, mortgages, and debt collection. But it played an even greater role in an initiative mandated by the Dodd-Frank Act, one aimed at removing complexity and confusion from the mortgage process. As Warren said: “With a clear simple form, consumers can better answer two basic questions. Can I afford this mortgage, and can I get a better deal someplace else?”14
The agency engaged those who would use the new forms—consumers, lenders, mortgage brokers, and settlement agents—through a website called Know Before You Owe, posting two prototype loan estimates for review and input.15 Then it took the testing on a nationwide tour, meeting with small businesses, adding elements, and posting the revised products for further feedback. In sifting through more than 25,000 comments over 10 months, the agency was able to hear, and then heed, requests for clearer language and cleaner design, to make cost comparisons easier. In February 2012, President Obama held up the latest incarnation of the redesigned mortgage application form at a Falls Church, Virginia, community center, hailing it as a key component of the “Homeowners Bill of Rights.”16 He recalled how he and Michelle, two trained lawyers, had struggled with the complexity of the documents required for buying their first home, and the President argued that a new form where “terms are clear” and “fees are transparent” would keep consumers from getting “cheated.”17 In later months, he would speak on the campaign trail of the ways that Know Before You Owe was expanding to college financial aid letters—the Student Loan Fact Sheet—and credit card agreements, all aimed at allowing borrowers to make the most informed choices.
The CFPB officially got the lean startup seal of approval during one of Ries’ trips to Washington as an informal adviser. As he sat in the bureau’s offices, the environment reminded him of Silicon Valley, in the manner that people worked and spoke, obsessed with experimentation and rapid iteration. He was amazed by the integration of his philosophy in other agencies as well, even by those employees who didn’t know his name—people who had come from entrepreneurial backgrounds or longtime government employees whose entrepreneurial instincts had been awoken. He saw these seeds growing up healthy in what many assumed to be impossibly hostile soil.
“I was really skeptical,” Ries said. “I didn’t believe it when people would tell me that government is innovative. But there are honest-to-god real-life entrepreneurs working in the federal government.”
We had seen the Ries philosophy, experimental and incremental, planting itself in what he would call “a green field opportunity,” an agency starting from scratch. But what about more established agencies and departments, those defined by entrenched bureaucracy? In those legacy institutions, there’s often a way to do things, because it’s the way they have always been done, even if that way isn’t particularly efficient and hasn’t always worked out well. It was easier to turn something on, than to turn it around.
Two agencies would represent this truer test of the latter around, because they had a reputation for constraining the innovation economy: the Food and Drug Administration (FDA) and the United States Citizenship and Immigration Services (USCIS). That’s why we targeted those two agencies with our Entrepreneurs in Residence (EIR) program, which married external and internal talent, and asked them to apply lean startup principles to a clearly-defined mission over a six to nine month period.
The administration did not discriminate based on attitudes toward government. Otherwise, Dean Kamen never would have become one of the 20 people chosen for the EIR program in the FDA. The inventor of the Segway and numerous medical device products had been among the most vocal critics of the painstaking approval process for new medical devices, claiming that the continuation of business as usual would result in more innovation occurring outside the country.
“When you actually diagnose the process—and this is classic general management—the thing that made it slow didn’t make it more safe, it’s just because everyone is risk averse and afraid of failure,” said Ries, who addressed the team early in its efforts. “It goes slow because no one is taking responsibility for a process that is really bad and creates silos between people that are really dumb. These are supply chain and manufacturing ideas that have been [incorporated] into general management that worked really well in olden times.”
It wasn’t working for Kamen. At the TEDMED 2011 conference, he mocked the FDA’s intransigence in green-lighting an advanced prosthetic arm he had designed for veterans who had lost limbs in combat.18 His acerbic commentary illustrated the serious rift between the regulatory agency and the innovators under its watch and, in reality, thumb.
Fully aware of this division, and determined to engage rather than enrage experts in the field, Dr. Peggy Hamburg set out to redefine the relationship. The agency sent out a signal for Kamen and 19 other leaders of industry, academia, venture capital, and research—including embolectomy catheter inventor Dr. Thomas Fogarty and retired Medtronic CEO William Hawkins—to work with the best and brightest in the FDA’s Center for Devices and Radiological Health.19 They were tasked with designing a better process for regulators to evaluate the risks and benefits of approving medical devices, a process that was more mindful of the innovator’s perspective and could get patients faster access to safe, state-of-the-art products. The team targeted one ailment, end-stage renal disease (ESRD), which afflicts more than half a million Americans, and for which patients have few options other than dialysis or kidney transplant.20 The team then zeroed in on specific parts of the process that were counterproductive.
“What if we had the same examiner who reviewed the initial application also review the follow-up application?” Ries asked. “That examiner wouldn’t have to get up to speed—brand new—every time the new application came in. That’s pretty common sense, an obvious thing to do. But just having a commonsense idea is not enough. You’ve got to have a team that can pilot it, test it, and see if it will work. So the key parts are a cross functional team with a limited mandate, six months not just to write a report or come up with new ideas but to implement the new solution, iterate it, prove that it works.”
In April 2012, the FDA announced that three ESRD technologies had emerged from a competitive pool of 32 and would get the opportunity to earn regulatory approval through the new pathway. In announcing the selections, the Center for Devices and Radiological Health’s director, Dr. Jeff Shuren, highlighted the overwhelming response, arguing that it “demonstrates that there is a desire from developers of innovative technologies for earlier and more collaborative agency interaction.”21
To initiate its EIR program, USCIS would also turn to an agitator. Brad Feld, an early-stage investor and prolific blogger, had become exasperated when officers of two promising startups under his watch were forced to return to their home countries because they couldn’t secure visas. He shared their story on a blog, attracting the attention of other entrepreneurs, including Ries, who couldn’t understand why there was no visa category for an entrepreneur with American investors and employees. In lieu of that category, many entrepreneurs were at the mercy of visa examiners who didn’t understand how they operated. At the point of visa application, many startups had not hired many employees or generated much revenue. This confused traditional visa examiners, who would then ask odd and irrelevant questions, often before a denial. To give just one example, it’s been years since AOL required a compact disc to use its service. And yet, visa examiners were demanding proof of a warehouse, where software startups would store their CD inventory for shipping to customers.
As Feld’s idea of a “startup visa” became intertwined with, and paralyzed by, the broader debate on comprehensive immigration reform, the USCIS, with White House support, sought to accomplish something administratively within the existing law. It instituted an EIR program, to organize and educate a specialty unit of immigration officers to handle entrepreneur and startup nonimmigrant visa cases.22 The project also called for educating entrepreneurs about the available options, one of which they may have overlooked. For instance, the O-1 visa, which was reserved “for those with extraordinary ability,” had proven a successful channel for actors, athletes, musicians, directors, scientists, artists, businessmen, engineers, and others who could provide ample evidence of their unique and impressive abilities, attributes, awards, and accolades. It had even created some controversy, when visa evaluators took the term “model” to an extreme, awarding a visa to one of Hugh Hefner’s ex-girlfriends, a Playboy centerfold from Canada named Shera Berchard.23 If she was confident enough to assert and explain her “extraordinary ability,” why weren’t entrepreneurs?
Like the team at the FDA, the EIR team enlisted entrepreneurs familiar with the obstacles, including SoftLayer senior executive Paul Ford, to work alongside the USCIS personnel committed to removing or clearing them. “You get fresh thinking, you get a very low-cost way of trying to impact the situation because the people doing this are committed to try to find what’s not working and propose solutions, rather than take a partisan or political or hierarchical or structural view to the environment,” Feld said. “They’re short-timers, so they’re committed for a period of time to come do something, but they’re not here for career advancement, so they are going to speak their mind.”
Feld also believed that the presence of Ford and other outside entrepreneurs made the participants feel more comfortable to speak freely than if they had been working with government officials alone. In the spring of 2012, the team began building a prototype of an alternative application process for entrepreneurs and by fall had achieved a significant breakthrough: the launch of the Entrepreneurship Pathways web portal, designed to close the information gap between USCIS and those in the entrepreneurial community, by letting them know which visa may be most appropriate—including the O-1—for their situation.24 While the results of this exercise were not empirically conclusive at the time of an interview for this book, Feld did offer his anecdotal assessment “that there’s an increased number of people who I know have been able to get into the country and get valid visas who are entrepreneurs. I’ve definitely heard a decrease in the negative.”
One case study was unquestionably positive. Fabien Beckers was born in France, where he, as a physicist, tried unsuccessfully to build a company for seven years.25 Convinced of grander opportunity in America, he enrolled at Stanford University, graduated with a master’s in business and, with a partner, started Morpheus Medical Inc. to build cloud-based software for noninvasive diagnosis of cardiac defects in babies. His work visa, however, was set to expire on December 13, 2012, and, in attempting to extend his stay, he was denied an H1-B visa because he did not have an employer.
“It was hell,” he said.
With other options exhausted, he applied for the O-1 visa that the Entrepreneurship Pathways portal had included as one of the viable possibilities for someone with his “extraordinary ability.” One week prior to his deportation date, and likely aided by the education that visa examiners had received, he was approved. With Beckers’ status assured for at least the next three years, investors felt comfortable contributing to his cause, and he quickly secured nearly $2 million and hired four employees.
“It’s really, really amazing,” Beckers said. “We’re so happy now.”
Yet he was not satisfied. He became a visible proponent of the passage of the aforementioned startup visa, hoping to make it easier for others than it had been for him to contribute something meaningful in, and for, America.
Todd Park wasn’t satisfied either, even after inroads that the Entrepreneurs in Residence had made at the FDA and USCIS.
He had been the pioneer of the open data movement from his post as CTO of Health and Human Services, prior to becoming my successor as the nation’s Chief Technology Officer on March 9, 2012.26 That promotion positioned him to expand upon our attempts to alter the culture of the entire federal government. He would build toward the future by drawing from the past: the White House Fellows program that had endured since President Lyndon B. Johnson established it in 1964 to give promising Americans a chance to work inside government for a year. Park would give that time-honored program a more modern spin, integrating Eric Ries’ lean startup principles of lightning speed and limited scope.
In May 2012, Park proposed a Presidential Innovation Fellows program to bring together external and internal innovators to work for six months on what he deemed “game-changing projects.”27 With President Obama’s support, and leadership from John Berry at the Office of Personnel Management, Park selected 18 fellows from more than 700 applicants, to work on five projects. I have covered two (scaling Open Data and increasing the awareness of Blue Button personal health records) extensively in this book. The others were MyGov, to streamline communication between government and citizens by organizing the more than 1,200 government websites around people’s needs rather than around the bureaucracy; RFP-EZ, to create an easy online marketplace to better connect government and private sector technology firms during the request for proposal (RFP) process, allowing government to buy better technology at less expense; and the 20% Initiative, which aimed to transition international development assistance from cash to electronic payments to reduce fraud and theft and lower administrative costs.
Park didn’t force the projects, or the fellows, on the agencies. He wanted willing, eager partners who saw a need for outside assistance.28 He required that those agencies compete for the right to house—and pay for—the fellows, by submitting proposals and explaining how they would enable and empower the new personnel. He got the fellows going quickly, so quickly that it stunned even Ries; by the swearing-in ceremony, after only a few days together, some had already hit their first milestones. “The speed of it is so refreshing,” Ries said. “It’s refreshing for those of us who are frustrated with government, but it’s even more refreshing for the people in government. A lot of those people want to go faster; they want to be innovative, they want to do a good job. There’s this caricature of them that they’re lifetime bureaucrats who don’t care. That’s not true. I’m sure there are some of those people, but the ones I’ve met get excited about trying to serve their country.”
Ries credited Park for showing respect to those people, by not giving the newcomers too much license at their expense, and creating resistance or resentment.
“That would be a catastrophic failure, if we go get a bunch of people from the outside and we drop them like aliens on the lawn of the government, and they sort of tell the government what to do,” Park said. “That has been tried before, and that project would be flaming wreckage.”
Instead, Park used a Ries-inspired technique to assist the entrepreneurs in government who may have felt stifled by a general management environment: he gave them more like-minded help and, through a supportive structure, gave everyone permission to experiment and fail.
“What we said instead was ‘What are you trying to do? What kinds of capabilities and skills do you want to bring in from the outside to help you? OK, let’s form a team that has your best people on it, and bring in people from the outside that have the skills you want, and then have that new team execute in a lean startup mode to change the game, do more than either could do separately, and deliver successfully against that mission,’” Park said. “That recipe is working incredibly well.”
At times, it required adding a pinch of spice to the mix: entrepreneurs who, like Dean Kamen, may be somewhat skeptical of government. Clay Johnson hadn’t even voted prior to the 2004 Presidential election, when his mother’s breast cancer, and the corresponding hike in health care costs, led him to become the lead programmer of Democratic candidate Howard Dean’s website. After his subsequent technology firm, Blue State Digital, designed websites for the Democratic National Committee and then-Senator Barack Obama, he became the director of the nonprofit Sunlight Labs. In that capacity, he collaborated with the government on Data.gov, including the Apps for America contest that produced the aforementioned upgrades to the Federal Register website. Over the years, he came to conclude that government reform required more than just the noble goal of transparency.
“When you are dealing with government, there is always this question in the back of your head, Is this corruption or is this incompetence or is this inertia?” Johnson said. “And it could be one of those three things that is frustrating you inside of government. More than likely, most of the time, it’s not corruption, it’s not incompetence; it’s usually inertia, and inertia is just as much of a corrosive influence on the business of government as money or malfeasance.”
After leaving Sunlight Labs, he captured his frustration with the current political discourse in a book called The Information Diet, arguing that the public, taking a cue from its leaders, was arguing about the wrong things. “What the Republicans say is ‘We need to cut programs’ and the Democrats say, ‘Well, we need to raise revenues,’” Johnson said. “And it doesn’t make any sense. It’s as though America is a fat guy on the couch. And the Republicans are saying, ‘We’ve got to get him off the couch, the best way for him to get off the couch is for him to lose weight, the best way for him to lose weight is to cut off his legs.’ The Democrats are saying, ‘No, no, to get him off the couch, he needs more energy, and the best way for him to get more energy is for him to eat more,’ which is also not going to get him off the couch. We need to have conversations about how to get government to run better and work better.”
After completing the book, Johnson would receive another opportunity to actively participate in that conversation—to, as acquaintances challenged him, “do something about all of those things you’ve been complaining about.” One of those things had been the government’s procurement process, which had frustrated him again during a failed bid to provide website development services for Recovery.gov. He concluded that the government’s arcane restrictions and overreaching requirements caused it unnecessary expense, as it consistently paid more than the private sector for similar technology services. The White House agreed, which is why it made RFP-EZ one of the five initial Presidential Innovation Fellow projects, assigning Johnson, GovHub cofounder Adam Becker, and innovation designer Ed Wood to the Small Business Administration.
The team approached the project in lean startup fashion, with the intention of speeding up the interminable RFP process so that the product, service, or technology requested wasn’t out of date by the time it was received. It also sought to make the process less overwhelming to small-business bidders, who sometimes gave up because they didn’t speak the language of government, and less intimidating to program officers and contracting officers, who are sometimes scared to even post work for bidding because they don’t have time to do the necessary diligence on bulky proposals.
The RFP-EZ team identified one of the root causes of the problem: agencies had been asked to outline their needs in overly complex and clunky statements of work (SOWs), often from scratch or with little guidance, and in a language that neither they nor many vendors really understood. The result was fewer bidders, many incurring costs to interpret the statement and passing on those costs in higher prices. So, as its first deliverable, the team launched the SOW Composer, a way of creating simpler forms patterned after what the Internal Revenue Service has done with the 1040EZ for a subset of its filers.29 The SOW Composer is a template repository of simplified stock content for statements of work, all ready to be repurposed. The tool not only allows authorized government contracting officers to choose exactly what they want in the statements of work, by checking boxes and filling in blanks, it also offers tips on how to make sure the content developed is easily located and understood by small businesses. The tool eliminates repetition and leaves space for users to add their own requirements.
Then the team, in an open source manner, developed other tools, such as BidMaker, which helps small businesses create their bids; the Marketplace, where small businesses sort through opportunities and make their bids; and BidMonitor, which helps contracting officers swiftly sort through those bids, search databases with background about the bidding company, match the bid up to the statement of work, and use a drop-down menu (“price too high” or “irrelevant proposal”) to explain why they dismissed or awarded the bid.
In its initial pilot, RFP-EZ posted five website development and database contract requests on its new platform, four of them simultaneously posted on the traditional portal, FedBizOpps.gov.30 The bids received on the new RFP-EZ platform attracted 270 businesses that had never competed for government work. Not surprisingly, the bids were 30 percent lower on average.
Following his fellowship, Johnson returned to the private sector, but didn’t turn his back on the open government movement; with a seed grant from the Knight Foundation, he and Becker started a company called the Department of Better Technology to create a number of products, including Screendoor, based on the RFP-EZ software and designed “to make the process of procurement less painful—both for government and for business.”31
Johnson emerged from his government experience believing that the culture must change more, to reward innovation over compliance. He strongly advocates educating all government employees—especially newcomers—about the importance of innovation through open government and open data. He actually found some senior staffers to be more open to such alternative policies, perhaps because junior staffers are concerned about doing anything that might undermine their ascents.
“But we’ll get there,” Johnson said.
The White House turned to a civic pioneer, Jen Pahlka, to lead the Presidential Innovation Fellows program to the next level in 2013, its second year.32 Pahlka had made her name through Code for America, an endeavor that demands considerable exploration here, because it embodies so many of the concepts in this book: people pulling together to solve problems; working with government rather than against it; using nontraditional lean startup methods; and getting out of the traditional boxes and arguments to enrich the lives of others, as well as their own—often in unexpected ways.
I first met Pahlka when she was working for TechWeb. We were at a 2009 conference meant to foster greater collaboration between government professionals and their traditional contractors—which had been on one side—and a new breed of social media entrepreneurs in the Beltway area that potentially could offer added functionality and lesser cost. At the time, she viewed these relationships optimistically, expressing her belief that if these parties simply became more aware of each other, they would share information in a way that would benefit everyone. (There were others who took a more jaundiced view of these relationships. Vivek Kundra would represent that perspective in a New York Times op-ed he wrote after leaving his position as the nation’s CIO.33 In making a case for companies that operate with newer technologies like cloud computing, he called out an “I.T. cartel” of powerful private contractors that make government dependent on “inefficient software and hardware that is expensive to acquire and to maintain.”)
By our next meeting, at the Gov 2.0 Expo in May 2010, Pahlka had decided to blend her optimism with activism, still believing the government was capable of smarter acquisition and usage of technology, but no longer willing to wait for that to occur on its own. She invited me to join private sector technology leaders—including Tim O’Reilly, Facebook founder Mark Zuckerberg, and Twitter founder Biz Stone—in a public service video to recruit for her inaugural class of Code for America fellows.34 She aimed to attract the most promising people in the technology field; to fan them out to cities (initially eight); and pair them with able, underutilized public servants to address localized issues. The video was called “What If,” and its participants posed questions like this: “What if some of the most talented designers and technologists in the country applied those talents to building web apps that work for cities and for citizens?”
After 362 people applied for the 2011 fellowship, she chose 20 with a mix of skill sets, but all with track records of results. The passion to serve was assumed—after all, the annual stipend was a modest $35,000, plus health care benefits and some travel expenses. Pahlka viewed the program as a Peace Corps for technologists, one requiring a finite commitment of 11 months. The time constraint applied healthy pressure to accomplish something significant before the music stopped and a new crop of fellows, with their own perspectives and projects, came along to replace them. As an Eric Ries disciple, Pahlka adhered to the lean startup philosophy by emphasizing speed at every stage. “Let’s put something up that will teach us something about the problem, instead of spending two years defining it, then three years prototyping, and by the time you’re ready to address the problem, it’s just out of date,” she said.
The specific problems differed depending on the city, yet Pahlka came to view many in a common context: as persisting or worsening due to a disconnect between government and its people and, in turn, serving to deepen that disconnect. Pahlka analogized government to a smart phone: government costs far more than such a device, through the collection of taxes, and yet if it doesn’t provide the features and services promised, there’s no remedy. There’s no receipt or warranty to use to get it fixed or replaced. There’s no satisfaction, at least until the next election. And even then, there’s little confidence among the consumers—the citizens—much will be different. Above all, Pahlka saw a desperate need to repair that relationship, and restore some of that confidence, so citizens feel compelled to contribute rather than just complain, lending a hand as well as a voice.
“What I realized is it’s not about transparency to hold government accountable, it’s about transparency to sell the value of government to citizens, and to sell citizens that they are able to be involved in this process,” Pahlka said. “In the absence of the access to that information, citizens are going to assume that the government isn’t going to do anything. That’s the basic building block of this enormous distrust between citizens and government that is killing our country. If we are able to create interfaces that are simple, beautiful, and easy to use and open the door, you start to have people caring about government and wanting to support it, instead of hating it and wanting to take it down.”
Pahlka ran into some resistance, because cities aren’t monolithic institutions, and some officials are invested in the status quo, concerned about any change that might somehow decrease their value or simply scared of new technology they assume to be overly complex. Still, she said that pushback was “much less than you would think,” and credits that to a model that calls for cities to self-identify some need for change, and to making the technology as understandable as possible to city officials.
“Let them own it as their agenda, let them find their own way that they can express it in their community, and then tell that story,” Pahlka said. “Then you’re sort of creating all these allies. Does that always work? No. You’ve still got people who want to see the current system persist—the current way of doing things—because they’re waiting for retirement. But I would say in general, public servants in the United States are far and away one of biggest undervalued resources in our country. Treat them as such. ‘You’re the key to this. You went into public service to serve the public. This is a way you can do that better.’ Tap into what got them into the field in the first place. And I think it actually goes pretty well.”
Pahlka observed that, after working with Code for America, some government officials take different approaches to problems, more “consistent with government as a platform—different skill sets that they’re hiring for, different positions they may create, very often different policies, especially around data. It can mean a whole host of things that can signal true institutional change. We’re really building a network of local government leaders and community agents to care about this agenda and can support each other and work with each other. We want to tell those stories and spread those kind of outcomes as well, not just the applications but the organizational and institutional changes.”
During the first two years of Code for America, the encouraging stories occurred all over the map, with one even off the U.S. mainland. The team sent to Honolulu, Hawaii, in 2012 encountered a common deficiency in city government, unacceptable at this stage of the Internet era: an unwieldly, exasperating website, one that sent residents down rabbit holes of useless text, outdated information, and broken links. This also stressed city staffers, forced to field flurries of angry calls from those who couldn’t find content buried deep on that site. Recognizing the folly in attempting to rewrite an entire website in a few months, a former Yahoo employee named Sheba Najmi and the other fellows borrowed an interface from gov.UK, checked the search logs of honolulu.gov to find the 10 most common questions (“how do I get a new driver’s license?”), and provided a search box that linked to the appropriate answers and forms. The team also recognized that 10 answers would not suffice so, in partnership with the city, it called a civic Write-a-Thon. That meant inviting officials and citizens to rise early on a Saturday to spend three hours in a government office to, in Najmi’s words, “rewrite government.” Nearly 60 people participated, posing questions and writing more than 120 total response “articles” in simple jargonless language, as if explaining to a neighbor. Many of those made it to the Honolulu Answers site, such as a page providing the prescription for a local dilemma: “What do I do about wild roosters?”35
Pahlka saw more value in this inclusive, collaborative, incremental solution than in the fellows rewriting the website on their own. “They’ve got the community now involved in it, and wanting to make it better all the time,” she said. “You start to create social norms, to say, yes, government is something we do together. I don’t just pay taxes and vote, I am an active participant helping to make our community work. That’s really, in the end, what we’re going for. That’s the real outcome of government as a platform beyond first-class notions of transparency and efficiency and participation.”
What does this engagement look like? Sometimes, it looks low tech, such as a Santa Cruz man painting photos of bicycles on lockers so riders would know the lockers were meant for them. Sometimes, it means citizens looking for hydrants or tsunami sirens or storm drains to “adopt”—entering their information on an application, clicking on a map, and then checking to make sure the key service is working properly in an era of strapped city budgets. “Money’s tight, and no one is checking these sirens anymore,” Pahlka said. “The city’s not going to do it. Who does it? You do.”
The engagement also looks like what started happening in Philadelphia, when citizens were given new ways to influence the city’s plans for the future. The city had invited in-person feedback one evening per month to influence elements of its 2035 plan. Predictably, that once-a-month schedule generated negligible and unbalanced interest, not representative of the populace: many single mothers, for instance, couldn’t regularly spare two hours at some meeting. Code for America’s fellows leveraged technology to bring the questions to the people, posing them on posters in strategic locations such as transit stops: asking riders, for instance, to text to a “yes” or “no” number, indicating whether they would like to see a line extended. For city planners with a simple log-in, this is a means of cheaply, quickly, accurately soliciting and compiling citizens’ opinions. “You can get hundreds and hundreds of people answering one question, instead of 20 people answering all of their questions,” Pahlka said. That application, like many in the Code for America portfolio, is being scaled, or studied for scaling, in several other cities.
Finally, the engagement looks like what’s happening in New Orleans, and a story—BlightStatus—that is especially emblematic of Pahlka’s vision, and the tenets of this book.
Seven years after Hurricane Katrina, one of America’s most unique and culturally vibrant cities was still holding on to a much more dubious distinction: ranking among America’s three most blighted, fraught with foreclosures, and abandoned, crumbling edifices.36 City officials were acutely aware of the problem, and many, including the new mayor, Mitch Landrieu, were intent on addressing it. He had made post-Katrina demolition and restoration a priority of his administration, even establishing monthly BlightSTAT meetings, through which the city could give its citizens a macro sense of how many houses were being repaired or demolished, with a goal of reducing the city’s blight count by 10,000 by 2014. But, on the whole, the city still wasn’t capably communicating to its citizens what it was attempting to accomplish.
“So to the people of New Orleans, it’s just a mess,” Pahlka said. “You come home one day, and something’s been demolished, and you had no idea that was going to happen, you had no input into it, you weren’t able to signal that, in fact, a different property on your block was really a problem. And you cannot really find out what’s going on through that process.”
As 2012 Code for America fellows, Eddie Tejeda, Amir Reavis-Bey, Alex Pandel, and Serena Wales would be responsible for abating those frustrations. They had attended different colleges, before pursuing different careers in different corners of the country: Tejeda, a software engineer in the civic technology space; Pandel, a graphic designer with a degree in studio art and work featured in magazines; Reavis-Bey, a technologist for Wall Street investment banking firms; and Wales, a web developer working with museums, nonprofits, and corporations.37 They shared only a strong interest in service, beating out roughly 550 others to earn four of the 26 spots in Code for America’s 2012 class. They spent four weeks working together in San Francisco, receiving crash courses in municipal government, civic technology, and design. Then the quartet shipped off to New Orleans, a city two had never previously visited, to bond in close quarters. There, they took the pulse of the people, outside and inside government, hearing how blight was affecting neighborhoods, interactions, and lives and learning what citizens were doing and what they wanted done. They encountered frustration in every corner and on all sides, whether from overwhelmed government staffers, underappreciated community leaders, or beaten-down citizens, frustration that had virtually paralyzed conversation and progress. And they began to understand how much this issue mattered, and the desperate need to close the information divide.
There was the woman from the Bunny Friend Neighborhood Association Inc., who spent several hours every night monitoring and chronicling the conditions of properties. She was so appreciative of the fellows listening, understanding, and attempting to assist that she hugged them. “You’ve got people who have lived there for their whole lives; they are fighting to make their communities work, they are fighting to be able to create the kind of communities they want to live in,” Pahlka said. “And they cannot be partners to the city government in that fight if they don’t have the access to some basic information and in a way that they can understand that information. They had just felt shut out. After years of being shut out, the door is now open. To someone who cares very deeply about fixing their neighborhood, that’s an emotional moment for them. To be told, we’re now going to collaborate with you on what happens to these blighted houses on your block, instead of just doing it to you, they feel validated, they feel hopeful, and they feel like they are now in a dialogue with the set of services that people are providing them.”
There was the woman from Mid-City who kept photographs, printouts, letters, and complaints and consequences, largely unsatisfactory. Tejeda recalled her being “really tense” and even “angry at times,” as she frantically flipped through a gargantuan, archaic, offline contraption. “It made me realize, ‘Wow, this is how she stores information, in this binder, and here she is, stressed out, trying to find some piece of information,’” Tejeda said. “And a lot of this information, when we talked to people at City Hall, existed already, and it was in digital form.”
The Code for America team sought to free these activists from unnecessarily pounding the pavement, pens in hand, to uncover what officials already knew, to allow them to invest their energy in helping to push properties through the blight process. The team also wanted to create conditions for a more constructive conversation, giving citizens and city staff the means to access the most specific and accurate information, and allowing them to recast their relationship as collaborators rather than adversaries—more common ground and common sense, less wasted time. They wanted to empower citizens to click on a specific property, point it out at one of those BlightSTAT meetings, and ask why a scheduled inspection hadn’t occurred, instead of making some generalized accusation. “These questions are actually a lot easier for the city officials to answer,” Tejeda said. “They can say, ‘Oh, that guy was sick that day so he couldn’t make it.’ In terms of the relationship, it’s much easier for citizens to communicate with city officials. Instead of frustration, yelling at each other, demanding things.”
This is where technology came in.
“The main point is all of this information already existed in city hall,” Pandel said. “We thought that clearly the format the information is in, in the city, is not working for citizens.”
The team presented several basic concepts to the stakeholders at city hall, learning what was legal, feasible, and most critical. Then, back in the Bay Area, it reunited with fellow fellows, brainstorming with them about their projects while getting feedback on the blight work. The team returned to New Orleans to start testing a minimum viable product, one that would leverage open government, pulling from more than a dozen data sets to give citizens greater knowledge of the city’s activities related to properties already reported. Less than five months later, the team officially launched the BlightStatus site at the monthly BlightSTAT meeting. It took five minutes to demonstrate how the application worked: how citizens could enter an address and receive a current status report of “Inspection” or “Notification” or “Hearing” or “Judgment” or “Foreclosure” or “Demolition,” how they could sort by case status, and how they could scroll through the map. The team knew its application could be useful to citizens (clean format), staffers (less reliant on other departments, better able to answer questions), and planners (conceiving strategies to reduce citywide blight). Still, the response surprised them. “I remember when we got to the map page—that sort of showed all of the properties that currently had in ‘open case’—people literally gasped and started to applaud, because I think they realized, ‘Oh, so now I can basically have a BlightSTAT meeting in my home anytime,’” Pandel said. “They get the statistics now in real time, at their fingertips, instead of having to wait for the city to manually compile a report and hold this public meeting. So it was really very cool. It felt very rewarding.”
The meetings continued in the city and still served a purpose, especially for those without Internet access. But the fellows had used technology to give the citizens more options, not through big government, but through making a big problem seem a bit smaller, more personal, more manageable.
“People cared overall about the overarching climate of how blight was being tackled in the city, but they want to know what’s happening on their block, they want to know what’s happening on the street around the corner, the properties that affect them directly,” Reavis-Bey said. “So people were superexcited all over the place. People were interrupting the meeting, saying, ‘Oh wow, I am looking right now, and I can see that this property was inspected, this property is in a hearing.’ People were just really, really thrilled; it was as if the lights had been turned on.”
That experience lit a flame for Tejeda, Reavis-Bey, and Pandel that they weren’t prepared to blow out when their fellowships ended. They sought to make the progress sustainable. “It shouldn’t happen that a project goes well, and people like it, and then it just dies because there’s no one there to support it,” Tejeda said. “This felt too important. It was New Orleans only, but hopefully we can expand it out to different cities that have similar needs. This is not an area where there are a lot of people who want to build tools for communities, and this is an important space, where you can have a real impact in fixing cities and helping people be involved in their government. If we can continue to work in this space, and people see the potential in this product—I wanted to make sure that we could.”
So they passed over opportunities with established technology companies, staying in New Orleans and signing up for Pahlka’s incubator program, which allowed some teams to continue their work while benefiting from the access to advisers and structure already in place. They came into this phase with contacts, confidence, and ambition, perfecting their pitch that, as Pandel put it, “there’s space for innovative software with a user-centered approach, using the lean startup method, that can actually better meet the needs of cities and cost them less,” and that it made more sense for a city to hire them to improve its communication with citizens than pay a major corporation to attempt to replicate their work.
During an interview in late 2012, Pandel related that “when we’ve been expressing the (relatively low) cost of this, people have been kind of surprised; they don’t know what to make of us. ‘Wait a second, this is a software system that provides value to me, and I don’t have to go through procurement for it. I don’t understand.’ So we really think there’s room in the civic space for projects like this.”
Tejeda spoke of the potential to be “trailblazers.”
“We get to be the first to try and disrupt this space at a fraction of the cost. We can possibly build a relatively big, successful company, and what we’re doing is displacing these big, gigantic dinosaurs that are just not providing the kind of value that they should to cities at the cost that they charge,” he said. “So I think we are all relatively optimistic as far as the space. There are legal challenges, as far as procurement, but this is what we are going to be working on now. But that’s the gamble of this opportunity, not whether the market is big enough.”
The gamble would continue paying off in 2013, when the team began incorporating permitting and licensing data to its application, moved back to Northern California, changed its name from Blight-Status to Civic Insight, began working closely with the city of Palo Alto, entered the $3.2 million Knight News Challenge on Open Gov along with 800 others, and was named one of eight winners.38 That came with a $220,000 Knight Foundation investment grant.
“So we have legs for a little while longer,” Tejeda said during the summer of 2013. “We can talk to other cities.”
Code for America, in concert with Civic Insight, is smoothing the path for adoption by other cities, with the former creating a Code Enforcement Housing Data standard and the latter working to create an API that would connect to it.
“There’s a lot of momentum,” Pandel added.
“They get to go from cogs in the wheel to creating something long term that they are a founder of,” Pahlka said. “It’s not just doing good, it’s a narrative of success.”
It’s an open innovation bonanza, featuring elements of open data, standards, and challenge competitions, all put to great use by entrepreneurial talent that government encouraged to assist.
Meanwhile, Pahlka continued writing her own narrative of success. Upon taking the one-year leave from Code for America to work as Todd Park’s deputy, she oversaw the expansion of the Presidential Innovation Fellows program in its second year, from 18 to 43 fellows, and from five to 10 projects, some of them second phases of first-year projects (such as Open Data; Blue Button; RFP-EZ; and MyUSA, the next iteration of MyGov) and some (in the areas of disaster response, VA modernization, and federal agency accounting) representing new technological spins on long-standing issues.39 She also brought in the U.S. General Services Administration (GSA) to assist in scaling prototype solutions to multiple agencies. Her intention, after institutionalizing lean startup and collaborative principles inside the federal government? To bring the lessons back to Code for America as new fuel for the virtuous cycle.
So the narrative of open innovation will continue. It is a hopeful story of people coming together—through handoffs and handshakes —to create the “wiser, frugal government” that Thomas Jefferson envisioned: one that is more transparent, participatory, and collaborative; one that is defined not by its size but by its smarts.40 One that, believe it or not, can work.