AUSTIN, Texas — Decked out in a dark blazer, jeans and black cowboy boots, and foregoing his four stars for an understated U.S. Army lapel pin, Gen. Mike Murray, the head of Army Futures Command, asked a packed room of small business owners and entrepreneurs how many have seen a four-star general before.
About a third of the audience at the Austin Startup Week in September shot up their hands. Murray turned to a man in the front row and asked who he’d met. The man replied, “Dick Cody,” a general who retired as vice chief of staff in 2008.
“What about a serving four-star general,” Murray asked.
Just a few hands went up in the audience at the Capital Factory, an entrepreneurial hub in the heart of downtown Austin, Texas, which hosted the event.
For startups and companies categorized as small, doing business with the military has been daunting and seemingly impossible to navigate without a staff full of business development experts. And historically, getting access to and communicating with senior decision-makers at the Pentagon hasn’t been easy.
But as the Army tries to rapidly modernize its force following years of failures with major acquisition programs, it knows it can’t conduct business as usual with big defense firms and still get the disruptive technology or out-of-the box ideas it needs for its six modernization priorities: long-range precision fires, next-generation combat vehicle, future vertical lift, the network, air and missile defense, and soldier lethality.
The Army’s billions of dollars in science and technology development funding is a big draw for startups that consider readily available cash to be their oxygen.
The Army launched Army Futures Command, or AFC, roughly a year and a half ago to reform how the service develops requirements and transitions research and development efforts into programs of record. The command was also tasked to do a better job working with nontraditional companies, small businesses, startups and academia to advance modernization efforts.
To improve relations with those communities and breakdown some of the traditional barriers, the new four-star command wasn’t set up on base, but rather in the heart of a city. The Army chose Austin for its vibrant startup community, creativity and close connection to the military community.
AFC minted relationships with the University of Texas, which agreed to give it the 15th and part of the 19th floor in one of its buildings in downtown Austin as well as access to other campus space.
A year ago, when the service declared initial operational capability for the command, the 19th floor was just concrete and exposed pipes with a view of the state capitol building.
At the time, “the biggest challenge every day was which printer was going to work,” Murray told Defense News in an interview at AFC headquarters in September. The command had a staff of roughly 40 at the time. Now the headquarters is manned at about 75 percent strength and has just north of 26,000 people spread across 28 states in 15 countries developing concepts and working on modernization priorities.
Breaking down barriers
Establishing the command has been a heavy lift, but perhaps the heaviest has been figuring out how to reach out to the entrepreneurial community in a systematic and effective way.
“A year ago I had no idea what startups were or pitches,” Murray said to a packed crowd at Austin Startup Week. “I’ve learned a lot in the first year.”
Murray acknowledged there is still room for improvement when it comes to how the Army works with small businesses. “We’ve gotten better, but we’re nowhere near where we need to get in terms of working with small businesses and startups. And you’re dealing with a lot of culture and a lot of bureaucracy that kind of makes us move slow — a lot slower than we need to be.”
Even with 37 years under his belt as a soldier, Murray admitted: “I’m not an outside-of-the box thinker.” But taking the helm of AFC is forcing the general to change his thinking.
“Our Army has had a terrible habit: If it wasn’t invented inside the Army, it’s not worth pursuing,” he said, “I’m constantly trying to break those barriers that we’ve got to accept some ideas and really some solutions from outside of the Army if we are to take a very analog organization and move it into the digital age.”
A two-way street
Army leadership in Austin acknowledges that the startup community isn’t going to just come beating on its door, begging for a chance to work with the service, partly because government bureaucracy can act as a deterrent. Certainly there are hurdles when it comes to working with the military, but a major issue involves how funding flows during technology development efforts.
Area-I CEO Nick Alley told an audience at Austin Startup Week that one of his products — an unmanned system under evaluation by the Army’s Future Vertical Lift Cross-Functional Team for possible applications as an air-launched effect — has no commercial application. Therefore, he explained, the company must solely rely on obtaining government funding, which doesn’t come at the pace needed to continue operations.
At one point he had to borrow $10,000 from his parents to cover employee salaries.
The Army also doesn’t buy things very quickly, and that has to change, Murray said, joking that if he followed the traditional defense acquisition timeline to get his daughters cellphones in 2011, they’d receive them this coming Christmas, and they’d be flip phones.
The garage door is always open
If you stood outside of AFC headquarters, you wouldn’t see evidence of the Army’s presence, but a plan is in the works to set up a storefront welcoming visitors to come in and learn about the command on the first floor.
But the main gateway for startups to interface with the Army is the Army Applications Lab, or AAL, established over the past year.
The AAL has become the face of doing business with the Army in the startup community, and it has set up shop on a floor inside the Capital Factory, only blocks away from the University of Texas.
While the command headquarters looks like a typical government office, aside from an abundance of standing desks and a complete lack of ties, the AAL speaks more to the startup world.
There’s no security. Anyone can walk in through an open garage door and pitch ideas to the Army while sitting on comfortable, brown leather sofas. Nobody really has their own office, save the colonel in charge of the outfit, but even he shares his space. And jeans and T-shirts are the uniform of choice.
“We act as a translator and concierge service across the Army’s future force modernization enterprise and the broader commercial marketplace of ideas,” Col. Len Rosanoff, the director of the AAL, told Defense News in an interview at the factory. While he has a long career as a special operator, he could easily be confused for an enthusiastic entrepreneur.
The AAL concept wasn’t easy to establish, Murray said in his interview with Defense News. “I struggled with it for probably six, seven months. They didn’t get the best guidance from me because I was trying to figure out a niche, what I really wanted them to do, because it’s so different,” he said.
“If I’m finding technology, then searching for a problem, I’m doing it completely backwards,” he added. The AAL is meant to help with that by bringing the Army’s top issues to the startup community in search of solutions.
Speaking the same language
It’s no secret that the Army and entrepreneurs speak different languages, follow different rules and work at different paces. In fact, the Army is trying to fix that.
The issue was apparent to Capital Factory CEO Josh Baer when he printed the Army logo on T-shirts, only to have Army lawyers take away the shirts while they were being distributed at an event welcoming the AFC to the factory.
Baer ended up slapping company stickers over the logos on T-shirts people were already wearing, and then sent the shirts back to the printer so the factory’s logo could be printed over the Army’s.
“I didn’t even realize I had to get it approved,” Baer said. “There’s no hard feelings. It was really funny.”
The day Defense News spoke with Baer, he was preparing to kick off a first-ever course — a startup academy — for government officials and big companies on how to work with startups. Baer offers similar courses for startups looking to learn how to work with the government.
The AAL has taken pains to break down language and general cultural barriers with the startup world through its technology solicitation approach. AAL established an online portal in March 2018 — like a TurboTax for the Army’s broad agency announcements — where firms can submit solutions or concepts to address the service’s problems. (The Army has 15 ongoing focus areas.)
The companies AAL wants to hear from likely won’t understand how to navigate the process for answering broad agency announcements. So the organization has created a series of simple questions that legally cover the process so users can provide the necessary information. A submitted entry generates a whitepaper for the Army to analyze elements such as technical viability.
The Army averages about one submission a day through the portal.
If the portal is deemed a success for AAL, then AFC and the Army itself might adopt the approach so external entrepreneurs and problem-solvers can better navigate the gauntlet that is government red tape.
“We help expand the Army’s culture to embrace new approaches and opportunities, applying startup and innovation models to spur new capability development — faster, iterative, open,” Rosanoff said. “About 20 percent of what we’re doing at AAL is finding disruptive technology for the Army. That’s part of it, but fundamentally we’re helping the Army reimagine how it approaches problems.”
Jen Judson is the land warfare reporter for Defense News. She has covered defense in the Washington area for 10 years. She was previously a reporter at Politico and Inside Defense. She won the National Press Club's best analytical reporting award in 2014 and was named the Defense Media Awards' best young defense journalist in 2018.