When the agency CIO heads to Silicon Valley

A little over a year ago, I took the helm of Resilient Network Systems, an early-stage software company that has its headquarters in San Francisco. Since then, I have been living a bicoastal life, spending about a third of my time out West and the remainder in the Washington, D.C., area or traveling as needed to visit potential clients.

I have been in a startup before, and not surprisingly, it does feel like déjà vu. Resilient has many of the same issues that most early-stage companies face as they attempt to bring new products to market: building credibility and references, working to raise one’s next round of funding, hearing lots of rejection from potential customers and investors, and getting jazzed when a new deal closes.

It’s quite difficult, but I, like so many other entrepreneurs, have a passion for what we are doing and the utmost belief that our technology can help change the world for the better. And like so many other entrepreneurs, I sometimes wonder why our value proposition is not immediately obvious to others.

Given my years of work in federal IT (both in and out of government), I understand this business and its culture. So I am finding it fascinating to face a new set of experiences and culture as I work in Silicon Valley and deal with venture capitalists, angel investors, other IT companies (small and large) and potential customers.

My observations reflect my personal experiences, and I appreciate that there are examples that one can cite that would not align with my observations. Still, I think it is instructive to reflect on some significant differences I have observed between West and East. There are important perspectives worth noting as all of us in government IT work to better capitalize on new, innovative technologies and solutions, and many of those innovations do indeed come from Silicon Valley.

The orientation in Silicon Valley is to quickly build a minimally viable capability, deploy it to get feedback and then incrementally improve from there. This is taking agile development beyond software to the business of building a company.

* Laid-back vs. buttoned-down. The most obvious difference between West and East is reflected in visible cues of dress codes, office space, etc. But if you work on both coasts, you quickly realize this is all just cosmetic. The laid-back label is not correct, and while there are certainly are some truly buttoned-down firms in the East, that typically has less to do with a company’s culture than with the persona they wish to project to their customers. That said, I do dress more casually on the West Coast.

* Consumer vs. enterprise focus. Perhaps most striking to me has been the more “consumer-oriented” approach to building business in the West than what I see in the East. Certainly there are Silicon Valley firms that do not sell directly to consumers, but even so, the approach is more about driving adoption at a grassroots level that in many cases has no immediate economic return.

Clearly, that strategy has been spurred on by the rise of companies that have changed the world of social media, and it is hard to argue given some of the successes we have witnessed in the past decade.

My sense is that the East struggles with this model. On the flip side, however, I also see a need for technologies and solutions that can drive needed change for large enterprises — and they are just not coming from large, established IT companies. And I have found that West Coast investors are more reluctant to invest in such opportunities. Given their ultimate bottom-line orientation, they must feel that the chance for outsized returns is less in the enterprise market. The one current exception is companies that make cybersecurity products.

* Speed vs. completeness. The orientation in Silicon Valley is to quickly build a minimally viable capability, deploy it to get feedback and then incrementally improve from there. This is taking agile development beyond software to the business of building a company.

As I have learned from having participated in a number of startups, testing and refining your capabilities with potential and actual clients is the foundation for success. Almost no one gets the killer app right at the start. It is the refinement through use and feedback from customers that is the key to creating a successful product or service.

Unfortunately, as those of us who have worked in federal IT know all too well, this is not how the government typically buys. That is the critical rub and why many early-stage companies (no matter where they reside) are averse to selling to the government.

On a final note, I was recently pitching to one of the major venture capital firms on Sand Hill Road. Overall, it was going well — until we started to discuss our market focus. One of our target markets is the federal government because I believe our capabilities are well suited to support it. The investors’ reaction was very negative, which is indicative of how government is viewed by many West Coast investors.

Even though we have certain organizations — for example, the Defense Advanced Research Projects Agency and the Department of Homeland Security’s Science and Technology Directorate — that are working to bring innovative technologies to government, the government as a whole continues to lag behind in technology adoption becomes it is not attracting young, innovative companies to try to sell to government.

This is by no means an easy problem to solve, but any meaningful procurement reform should seek to address how to enable the most innovative firms to access the government market.