Pentagon Reboots Silicon Valley Startup as Analysts Cite Flaws

  • Secretary Carter names new director, organization for DIUx
  • Analysts praise move to surmount project's early failings

Like many a Silicon Valley start-up, the Pentagon’s initiative to cultivate better contacts with technology executives and innovators is being rebooted as analysts lay out its early shortcomings.

Defense Secretary Ash Carter has replaced the initial director of the Defense Innovation Unit (Experimental), or DIUx, and brought the year-old effort under his direct control, he announced Wednesday in a visit to the operation’s headquarters in Palo Alto, California.

“We’re taking yet another page from the Silicon Valley playbook, making leadership structure at DIUx as flat as any company here,” Carter said of his effort to revamp an initiative to tap into Silicon Valley’s technological expertise and entrepreneurial spirit.

Carter made a pilgrimage to the technology industry’s heart last August, saying the Pentagon lacked a “coolness factor” as he ramped up programs aimed at cyberspace and cybersecurity. Though he is a physicist by training, Carter has had to overcome Silicon Valley’s suspicions about the government, particularly after disclosures about U.S. government surveillance by former National Security Agency contractor Edward Snowden.

‘Doubling Down’

While two defense analysts praised Carter’s reorganization as “doubling down on this commitment in an unprecedented way,” they also sketched out the troubles that they said led to the move.

“With its small size and steep learning curve, the DIUx could not overcome the weight of expectations from a high-profile launch or easily cut through Pentagon red tape,” analysts Ben Fitzgerald and Loren DeJonge Schulman of the Center for a New American Security in Washington wrote after the announcement.

“As with many startups, the DIUx suffered from an overly broad purpose and associated high demands; unlike other startups, it missed the opportunity to operate in ‘stealth mode’ to address these issues early” without excessive publicity.

F-16 Pilot

Carter said the previous director was being replaced by team of four officials who are technologists, investors and business executives. Among them, he said, are Raj Shah, a former F-16 pilot and combat veteran who headed a technology startup, and Isaac Taylor, who had worked at Google on research projects including Google Glass and self-driving cars.

Fitzgerald and DeJonge Schulman said the office “had multiple missions, depending on who one spoke to,” leading to “overlap with functions the Pentagon already provided, leadership scrutiny counterproductive to an experimental culture, and demands outstripping the resources of a young, small organization.”

Carter said in his remarks that the unit “has made connections with more than 500 entrepreneurs and firms. They’ve hosted many highly attended forums, connecting innovators here with senior DOD leaders and a full range of Pentagon funding sources, fellowships, rotations programs. And they’ve created a funding pipeline for nearly two dozen technology projects.”

He said the office’s new leaders will be joined by “an equally impressive team” of military reservists, many of them technology leaders in their civilian lives. He said an additional office will be added in Boston to tap into that area’s technology expertise.

The defense chief also gave a progress report on his “Hack the Pentagon” initiative, which invited carefully vetted and supervised hackers to test the Defense Department’s non-classified networks.

“It’s already exceeded all of our expectations,” he said. “Over 1,400 hackers registered and so far have discovered more than 80 bugs that qualify for a bounty.”

While Carter’s agenda in the last months of the Obama administration has continued to be dominated by the fight against Islamic State terrorism, the Silicon Valley initiative is among his top priorities, along with a“Force of the Future” initiative on personnel recruiting and retention and his decision to disclose some details of the previously secret Strategic Capabilities Office.

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