But, last year, Bryan Sivak, the CTO and entrepreneur-in-residence at the Department of Health and Human Services, was tapped to bring more Silicon Valley spirit to the massive department. (Prior to working in government, he founded a company that was acquired by Oracle). And it looks like his touch is starting to move the agency further along a startup-inspired track.

At the SXSW Interactive conference in Austin on Saturday, Sivak said he’s tried to promote a definition of innovation that gives people the “freedom to experiment.”

“I can teach you how to experiment. I can teach you how to develop a hypothesis. I can teach you how to define some tests that generate some metrics. I can teach you how to analyze those metrics to determine whether or not your test was successful and I can give you the freedom to execute some of these things,” he said. “This is something that’s critical for an entity like the federal government, which is very bureaucratic and structured and all the things we wish it wasn’t in a lot of cases.”

Sivak isn’t the first to bring lean startup theory to HHS. Sivak’s predecessor Todd Park, co-founder of health tech giants Athenahealth and Castlight and current CTO of the United States, drew on his tech chops to start opening up health data and transforming health care. But here a few of the more recent Silicon Valley-style programs at HHS.

Yammer-powered social networking

Getting 90,000 government employees to collaborate is obviously no easy task. But using Yammer, HHS employees across the department now have the opportunity to share ideas and reach out to people up and down the bureaucratic hierarchy through HHSConnect.  Since launching a few months ago, 10,000 of the department’s employees have used the platform with many using it actively, said Sivak.

Open coworking spaces

Like many startup CEOs, Sivak said he believes in the “serendipitous collisions” that happen between coworkers who work in open spaces. But in government cubicles, he said, “the only thing you’re going to collide with is air.”  To up the chances of serendipitous in-person collaboration, the department is creating “HHSLabs” – an open, modular, technologically-tricked out work space open to anyone in the agency.  It’s also opening its doors to health startup CEOs and other private sector visitors to DC who want a temporary place to work.

Internal crowdfunding for resources

To support entrepreneurial-minded people at HHS who come up with interesting ideas but need people with other skills or resources to get their projects off the ground, Sivak said they’ve created an internal crowdfunding-like site where people can solicit support. Called “HHSFairtrade,” people can post descriptions of their ideas and others across the department can commit needed resources or support. Like Kickstarter, the project only activates once it receives all of the commitments it needs to launch.

Seed funding for internal innovators

If it’s a little bit of cash that internal innovators need to test their ideas, Sivak said they can turn to “HHSIgnite.” The program gives department employees small amounts of money to try out new approaches. If the project can show returns in three to six months, he said, it can become a stronger candidate for allocated funds.

Opening the door to outside entrepreneurs

More technologists like Park and Sivak are bringing a startup mindset to the public sector, but Sivak knows that many of the country’s most innovative thinkers don’t live inside the Beltway. To tap into their ideas, he said, the department created “HHS Entrepreneurs,”a new program based on the HHS Innovation Fellows program launched last year. One track invites HHS employees to apply to be “internal entrepreneurs” who will work on special team and get extra networking, mentoring and professional development opportunities. But the other track is open to entrepreneurs around the country who would come to HHS to work with internal entrepreneurs for 6 to 12 months on “high risk, high reward” problems, Sivak said.

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In the internal memo published by All Things Digital, Yahoo’s head of human resources said that the company wanted to improve the working environment at the company, and in order to do so, it needed people to work in the same physical location. According to the memo, “speed and quality are often sacrificed when we work from home,” and therefore working at home was no longer going to be supported — in other words, find a way to work at the office or quit:

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings… We need to be one Yahoo!, and that starts with physically being together.”

Yahoo says it needs to re-build its culture

Although most of the responses from tech-industry insiders have been resoundingly negative, the Yahoo plan does have its supporters: some say the company has fallen so far behind its competitors after years of inaction and bad strategy that Mayer needs to bring the scattered remnants of its corporate culture together, and one of the best ways to do that is through physical proximity. In other words, the company’s “insights from hallway discussions” argument has some truth to it.

People, I know it sucks for 500 who can't WFH but @marissamayer trying to ensure other 12k Yahoo employees still have an office to come to

—
Hunter Walk (@hunterwalk) February 23, 2013

According to some ex-Yahoo staffers, many of those who currently have work-at-home arrangements are disgruntled employees who provide little value, and so forcing them to work in an office is either a) a way of getting them to drop this attitude, or b) an easy way to get them to quit and save the company some money. Either way, the argument goes, Yahoo as a whole winds up benefiting financially. But at what cost to the company’s reputation?

Yahoo has also taken fire from critics who see the move as an attack on employees who can’t afford to work in an office, including single mothers and others who require more flexible work arrangements. This is an argument that the company should theoretically be more open to, they say, because Mayer herself is a new mother — although she also happens to be one with a built-in nursery in her office according to some reports.

Many argue that remote workers are more efficient

The debate over whether employees are more productive in the office or at home has been going on for at least a decade, if not longer, and there is still plenty of disagreement on both sides. In addition to the impromptu hallway conversations and other social benefits of working alongside other people — which are clearly very real, as I and many other remote workers will admit — some managers believe employees who work at home invariably goof off and get less done (although as our GigaOM Pro analyst Stowe Boyd argues, this often says more about those managers than their staff).

The new Yahoo policy for remote workers is incredibly myopic. And unfair.

—
  (@danprimack) February 22, 2013

Companies like Automattic, however — the for-profit arm of the WordPress community (see disclosure below) — say they are more efficient and friendlier as a workplace without any real corporate office to speak of, and distributed teams like those behind Wikipedia and Linux have been able to accomplish incredible things without a traditional office environment. Surveys repeatedly show that companies with more flexible working arrangements are more efficient than those without.

Most technology companies (including GigaOM) support remote working because it provides a lot more freedom for employees, and because giving staff the opportunity to live virtually anywhere and work wherever they wish broadens the available talent pool enormously. And isn’t that what Yahoo theoretically wants to do, or should want to do? Maybe people are already pushing down the doors demanding to be hired at the company, but if so then it’s a well-kept secret.

What message does this send about Yahoo?

I think David Heinemeier-Hansson of 37signals puts his finger on the problem in a recent post about Mayer’s decision, in which he says that Yahoo’s move is “an admission that Yahoo management doesn’t have a clue as to who’s actually productive and who’s not.” He goes on to argue that, for a company that is so desperately in need of talented employees who are willing to go the extra mile to rescue the former web giant, the decree abolishing remote working isn’t going to help, but will rather do the opposite:

“Are you going to be filled with go-getter spirit and leap to the opportunity to make Yahoo more than just “your day-to-day job”? Of course not. Yahoo already isn’t at the top of any “most desirable places to work” list. A decade of neglect and mounting bureaucracy has ensured that. Further limiting the talent pool Yahoo has to draw from… is the last thing the company needs.”

The danger for Yahoo here is that a decision driven by what are theoretically positive motives — to get employees to feel more like a team, to encourage innovation through serendipitous encounters, and to drive low-performing staff away — could wind up sending exactly the wrong message: namely, that it is a bureaucratic and centrally-controlled organization with no interest in being flexible when it comes to the living arrangements of its employees.

Disclosure: Automattic, the maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Post and thumbnail images courtesy of Getty Images / Chris Jackson Shutterstock / ER 09 and Flickr user Pew Center

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The broadcaster’s former partnership with Microsoft acquired EveryBlock in 2009 for what sources said at the time was “several million dollars” — two years after it was founded by developer/journalist Adrian Holovaty with a $1-million grant from the Knight Foundation, one of the first winners of the now-annual Knight News Challenge (the original code for the project remains open source, as required by the terms of the grant).

Everyblock closed down. That's nuts. They may not have found exactly the right product, but it's clearly the future: everyblock.com

—
Tom Coates (@tomcoates) February 07, 2013

NBC chief digital officer Vivian Schiller told the Poynter Institute that the project was a “wonderful scrappy business,” but didn’t make sense as part of the company’s growth strategy. In a memo to staff, she said EveryBlock provided an engaging user experience, but wasn’t a good fit with NBC’s core strengths (she also pointed out that the media company still owns and operates a former news startup called Breaking News, which it acquired in 2010). Said Schiller:

“As we continue to grow and evolve the NBC News Digital portfolio, we are focused on investing in content, products and platforms that play to our core strengths. The decision to shut down the site was difficult, but in the end, we didn’t see a strategic fit for EveryBlock within the portfolio.”

In a blog post, Holovaty — who wrote a seminal essay on the use of data in journalism in 2006, and created some of the earliest data-driven projects at the Washington Post — said that he was saddened by the news, and added on Twitter that looking through some of the comments about its demise was like “attending my own funeral.” Holovaty left EveryBlock last year, and said at the time that he expected the company to be around for “a long, long time.”

@digiphile @NBCNews @everyblock @adrianholovaty i'm a big believer in Adrian's original vision and the EB team. It was a tough call.

—
Vivian Schiller (@VivianSchiller) February 07, 2013

EveryBlock started as an automated news aggregator that pulled in data from local feeds and databases, similar to what Holovaty’s ChicagoCrime.org project did, but the site pivoted somewhat in 2011 to focus more on human contributions and community. Other hyperlocal efforts, including the New York Times’ local experiment, have either been shut down or downsized significantly, and AOL’s Patch is also rumored to be undergoing cuts.

Post and thumbnail images courtesy of Shutterstock / Karen Gentry

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Led by a group of entrepreneurs and venture capitalists, including SurePayroll founder Troy Henikoff, OkCupid founder Sam Yagan, Sandbox Industries’ Nick Rosa and New World Ventures’ Adam Koopersmith, Excelerator Labs launched three years ago and has established itself as a prominent part of Chicago’s growing startup community. In the past three years, the program said its 30 companies have raised a total of $30 million. But by becoming part of the national TechStars program, it could help elevate the local community and give founders access to TechStars’ larger network of mentors and entrepreneurs.

In a blog post, Cohen said he and TechStars cofounder Brad Feld had advised Henikoff and Yagan and had mentored companies in Excelerate Labs’ classes. He also said that he had personally invested in three Excelerate startups.

“As TechStars has expanded into new cities, we’ve always started our programs from scratch. But Excelerate made us think differently,” Cohen wrote. “We were so impressed with what they’ve built that we asked them to join forces with us and turn Excelerate Labs into TechStars Chicago. TechStars and Excelerate have always been kindred spirits: we both put entrepreneurs first and believe in the power of mentorship.”

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In the coming years, access to spectrum will be an increasingly important foundation of America’s leadership as mobile broadband becomes a major driver of our nation’s future economic growth, and faster and more capable mobile connections become essential in improving every facet of society. Expanding the amount of spectrum available for mobile broadband use is an important part of a broader strategy to improve the speed and accessibility of wireless service in America.

Capacity hindered by inefficiency

Recently there has been considerable discussion about a looming spectrum shortage. Yet the reality is that most of our spectrum is unused most of the time. This is because spectrum is managed by often assigning exclusive rights to a particular “licensee” to use a specific frequency in a specific location, and often only for a very specific purpose or service. This approach, which is analogous to building a private road for every different type of vehicle, leads to inefficient utilization of our nation’s spectrum resources, and impedes the introduction of new technologies.

A large percentage of these frequencies service the thousands of government systems that provide the essential functions for our national security. And, in most cases, even if it were possible to reallocate their spectrum for new commercial uses and technologies, the process of doing so is extremely expensive and incredibly slow, taking on the order of a decade or more – far too slow to keep up with our fast-paced digital economy.

For these reasons, the President’s Council of Advisors on Science and Technology (PCAST) recently recommended a new approach to federal spectrum management. With a new approach, we can transform the availability of a precious national resource – spectrum – from scarcity to abundance, and do so rapidly. It is time to start building the first shared-use spectrum superhighways.

Automation of spectrum analysis

PCAST’s report calls for a new spectrum architecture that uses an automated “spectrum access system” that will enable new and inexpensive technologies to coexist with legacy federal systems. The combination of smaller radio cells and a spectrum access system could make underutilized spectrum, much of which is currently assigned to the federal government, available to commercial users in just a few years, rather than a decade or more.

As dynamic sharing evolves and spectrum is reused in smaller and smaller cells, capacity can be improved thousands of times. Likewise, capacity effectiveness can be improved thousands of times, thereby enabling less expensive mobile broadband access using technologies like LTE.  Just as we have seen with Wi-Fi and Bluetooth, innovation in wide area mobile communications, sensor networks – even whole new industries and products that we cannot yet foresee – will emerge.

A pioneering first step

Last month the Federal Communications Commission voted unanimously to approve an important proposal to begin building the nation’s spectrum superhighways. These new rules would unlock 100 megahertz of spectrum in the 3.5 GHz band for commercial use. In response to a directive from President Obama, this spectrum was identified by the Commerce Department as ripe for sharing because it is only sporadically used by shipborne military radars, mostly located along the East and West Coasts.

This new spectrum management model builds upon the FCC’s pioneering experience allowing database-driven access to vacant channels (so-called “white spaces”) in the TV bands. Over time, this new model should be extended into other frequency bands as well. Building on the farsighted and ongoing work of the National Telecommunications and Information Administration, the Department of Defense, and other federal agencies, the PCAST report calls for the eventual sharing of up to 1,000 megahertz of federal spectrum with the commercial sector.

A key to our future competitiveness

It is great progress that the FCC’s proposal is moving forward, and both the FCC and NTIA deserve our praise. However, it is important to note that any real value to the economy and consumers will start to accrue only when the review process has concluded, new rules put in place, and infrastructure is deployed. Reaching that goal quickly should remain our focus.

The European Commission recently introduced the outline for a proposal for spectrum sharing in the European Union, reminding us that we are in a world-wide innovation race. By adopting a new approach to spectrum management first, the U.S. can lead in both the amount of spectrum available and in continuing to advance the technologies required for the future.

We applaud the FCC for proposing this crucial first step. Much like the creation of interstate highways, it will catalyze innovation, fuel our competitiveness and demonstrate global leadership.

Mark Gorenberg, PCAST and Managing Director, Hummer Winblad Venture Partners

Eric Lander, PCAST and President, Broad Institute of MIT and Harvard

Craig Mundie, PCAST and Chief Research and Strategy Officer, Microsoft

William Press, PCAST and the University of Texas at Austin

Eric Schmidt, PCAST and Chairman, Google 

Photo courtesy of Andrey Titarenko/Shutterstock.com.

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Historically, the public and private sectors have had different priorities. The private sector’s profit-centric focus favors businesses that play it safe and shy away from spending on costly infrastructure or risky R&D. The public sector, on the other hand, serves the interests of taxpayers, eschewing commercial interests and taking on public works projects, building infrastructure, and, most relevant to this discussion, funding research and development.

Occasionally the federal government invests in the private sector, with unpredictable results, such as the recent case with Solyndra. However, when the federal government and business approach one another as complementary forces – rather than as producer and consumer – there’s the opportunity for real innovation to flourish and for history to be made.

A history of public-private cooperation

Let’s rewind to the early 20th century: The National Advisory Committee for Aeronautics (NACA), NASA’s predecessor, operated a handful of wind tunnels at the Ames Research Center and Langley Aeronautical Laboratory primarily for use in testing aircraft developed during the World Wars. But if NACA had not also allowed The Boeing Company to make use of its research and test facilities, it would have almost certainly delayed the introduction of the first commercial airliner, the Boeing 247, by over a decade.

To a certain degree that same need for public support of private enterprise still exists today. For instance, were it not for NASA’s financial commitment to SpaceX, we would not be on the verge of an historic new commercial space industry. Similarly, after Sebastian Thrun’s team nabbed the $2 million bounty the U.S. Department of Defense put up for the 2005 DARPA Grand Challenge – a race across the desert driven by robotic cars – Thrun ended up leading the Google Driverless Car initiative.

The tradition has moved to the cloud

One of the strongest showcases for how the public and private sectors can work together and create brilliant innovations can be seen in the computer industry, specifically in the realm of cloud computing.

OpenStack has its roots in NASA’s Nebula project, which aimed to create an efficient, self-service cloud platform. As an undertaking of the federal government, NASA Nebula’s budget was drawn from public funds. Executives at Rackspace noticed that Nova, the open-source compute engine at the core of NASA Nebula, complemented their planned open-source storage system. After contacting NASA to explore opportunities for collaboration, the OpenStack project was born in July 2010. Today, OpenStack is the fastest-growing open-source project in history (eclipsing even contributions to the Linux kernel), and has garnered support from industry leaders such as AT&T, Cisco, HP, IBM, Intel and Microsoft, as well more than 500 developers from 850 organizations in more than 80 countries.

What we’re seeing then is the early indication of a new computing ecosystem forming, driven by the foremost innovators in enterprise IT. This isn’t limited to OpenStack, either. Eucalyptus (which started as a publicly funded research project at UC Santa Barbara, by Professor Rich Wolski) is also seeing significant adoption. The ability to customize your cloud to your specification adds value that can’t be overstated. This is especially true in a market where financial services companies, healthcare companies, government agencies, and other organizations need to know exactly where all their information is at all times.

Open source instead of patents

The fact that the open-source model can enable organizations to gain new use from their data and greatly increase the efficiency of their IT operations is proof-positive of the return on the government’s initial investment. Given this success, a similar approach should be considered for other areas of public investment, such as with the patent arena where NASA is once again a model.

Traditionally, NASA attempts to commercialize and otherwise transfer the good work done in its research labs to the public by two means: directly auctioning its patents to the private sector, or maintaining the patents but  actively choosing not to enforce them if doing so would impede innovation. NASA claims over 1,200 success stories in this regard, and there’s plenty to show for it. But arguably no single NASA patent has had the same kind of market-disrupting effect that OpenStack has had merely by opening the doors to the community and letting the market drive development and adoption. That’s food for thought.

Consider the more common alternative: Merely licensing federally funded research keeps the resulting technology proprietary, which restricts the possibilities for innovation. And more importantly, the probability of any of the select companies that license the technology succeeding is quite small. Thus the resulting license revenues returned to the government would likely hardly cover the overhead of maintaining the infrastructure to create, manage, and license the patents, and many technologies are not commercialized simply because of the overhead of the process.

A better alternative to patenting technology would be to require that any technology developed by taxpayers – be it hardware or software – would be open sourced. Using a license such as the Apache License or the General Public License, any business or individual could take publicly supported work and  download, share, modify, and remix it. The result would be a new wave of innovation, as private companies build better companies based on public sector research.

The patent system, patent reform, and the government’s approach to technology transfer are all large, intricate and nuanced topics – too intricate and nuanced to go into here. That being said, let’s not allow success stories like OpenStack to become exceptions. When “open” goes from being a buzzword to the default way our government fuels innovation, the sky will be the limit.

Chris C. Kemp, CEO of Nebula, is a former CTO of NASA and co-founder of OpenStack. Follow him  @kemp

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But Silicon Valley works because it is stupid. The intelligence is distributed, and the ultimate arbiter of correctness is the market.

Let’s start with the startups. You might think that most successful startups begin with some genius’s brilliant idea. The genius shares this idea with a trusted investor who provides money to hire a team. They work really hard, have a big launch and become a success. But this is not how big companies begin. Companies that start this way tend to be good at spending a lot of money and producing useless products.

Successful startups often begin with no idea at all. They start with some friends who simply enjoy building things together, without any specific idea of what they are going to build or how they are going to make money at it. It sounds silly, but that’s exactly how Hewlett-Packard began. Two nerds in a garage. It took them a few years to find their first really good idea, which was to make cheap, high-quality oscilloscopes. Flickr began by working on something else altogether. Twitter came out of the train wreck of a podcasting startup. If a good team goes through enough ideas, they will eventually figure out how to make something that people want to use. Then, they raise money to bring that product to more people and scale it up.

Okay, so startups are dumb, but what about governments? It’s not that hard to believe that governments are dumb. What’s surprising is when that’s a good thing. The U.S. government is not smart enough to pick winners, so startups are treated like regular companies. When I first traveled to Mexico, I was asked whether the U.S. government paid for all or only part of our office space. The entrepreneurs were astonished to find out that my startup got no help whatsoever from the government. We were on our own. Terrifying. In theory, the Small Business Administration is there to help, but it is irrelevant to startups. It’s structured to help a dry cleaning shop purchase another piece of equipment, not help you hire another iOS developer so you can create Angrier Birds.

But what the U.S. government does do is get the heck out of our way. If you want to start a business, you can just go ahead and do it with no forms at all required. This is called a “sole proprietorship.” At the end of the year when you fill out your personal income taxes, you just attach an appendix that says, “Oh yeah, and I run a business and here’s how much money I made or lost.” If you want to incorporate your business, you can do it in about an hour. The form to create a tax ID takes a minute or two to fill out. Dozens of companies compete to offer cheap and easy payroll tax processing that electronically file everything you need with the state and federal governments for a few bucks a month. The government’s role is infrastructure and facilitation.

If government gave special aid to startups, it would need to ensure those startups were performing well, which would require startups to account for their progress or face punishment for wasting taxpayer money. This regular accounting smells like added paperwork. And overhead. Worst of all, it means bureaucrats are making the call about which startups stay and which go. And when bureaucrats have no incentive to pick longterm winners, they might be persuaded to be more lenient to startups that have friends in high places.

Startups funded by a government cannot, politically, afford to fail. But the real way to create new markets is to do the opposite — reduce the cost of failure by eliminating debtors’ prisons, make bankruptcy straightforward, and allow easy incorporation to shield founders’ personal finances somewhat from the failure of their companies. Even success takes too long for governments. Government programs are managed for the next election cycle, while startups usually take much longer than that to be proven out as a success.

So it’s actually much better if government is “stupid” and delegates the intelligence about which startups should thrive and which should die to others. The government should ensure clear and consistent corporate law and taxation, minimal red tape and overhead, fast and effective infrastructure, easy hiring and firing, and should expose itself as a customer of startup products.

The final dumb contingent of Silicon Valley is our awesome, dumb investors.

In many developing ecosystems, I see angels who describe themselves as “smart money.” They want to take 40 percent or more of the company in a seed round to ensure that the entrepreneur does the right thing, and that if the company is successful, the investor benefits richly. They think they will guide the company to success. They want to have a voice in the day-to-day operations of the company, and when they speak, they expect their entrepreneurs to listen.

But investors who take 40 percent of the company in seed rounds are setting themselves up for failure. If the company does well, it’ll need to raise more financing, and new investors will need substantial percentages of the company. With IPOs taking longer than ever, there may be many of these growth rounds. And if 40 percent of the company is in the hands of a seed investor, there’s not enough room for other investors. A Series A venture capitalist will realize this and simply not invest in a company with this kind of structure, meaning the company will not be able to find financing, even if it is very successful. The “smart” seed investor has effectively doomed the company.

Peter Thiel was the first investor in Facebook. He wrote a check for $500,000 and got a board seat and about 10 percent of the company (not 40 percent), but mostly he just told Zuckerberg to not f**k it up. When the company IPOed years later, poor Peter was left with a mere 2.5 percent stake of the company. But I don’t think he was too upset, because that stake was worth a billion dollars, which makes it the most successful seed investment in history. All for just believing in a smart kid and letting him do his thing. Peter was, brilliantly, not “smart money.”

So the best government defers smarts about which startups to invest in to the investors, the investors defer smarts about how to build the company to the startups, and startups defer the wisdom of what would be a good idea to build to the market. The intelligence is distributed, and it works.

David Weekly is the CEO of Oha.na, which helps users create visual newsletters. He is also a startup mentor and has helped found Hacker Dojo, PBworks, Mexican.VC and SuperHappyDevHouse.

Image courtesy of Flickr user Michiel020.  

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But what if the opposite is true? UBS analyst Steven Milunovich put forth a thoughtful note to clients Tuesday arguing that it’s ultimately in Apple’s best interest if it loses this case against Samsung. How could that possibly be? Here’s the argument:

In the short- to intermediate-term, an Apple win forcing competitors to come up with different designs should be positive because Apple is a better designer and could have a monopoly on key features. In the long run, however, it could hurt Apple because the real threat is not a competitor beating Apple at its own game but instead changing the game. The likelihood of Apple being leapfrogged or a rival creating a new category is greater if they have to think out of the box. If they just copy Apple, like Coke, Apple can claim to be ‘the real thing.’

“The real threat is not a competitor beating Apple at its own game but instead changing the game” — that’s a really interesting observation. Especially since that’s basically Apple’s corporate M.O. The company has been able to climb to the very top of the technology and business worlds because it’s changed “the game” on so many of its competitors — RIM, Nokia, Microsoft, Dell and HP among them.

Apple winning could force other companies to pursue real innovation in terms of phone and tablet form factors, how content is delivered, and more. But following either a win or a loss, it doesn’t mean Apple will sit still either.

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The TSA was created in December 2001, just months after 9/11. In its first year of service, the TSA processed one million job applications, interviewed 125,000 candidates, hired 60,000 people, spent $1 billion on new security equipment and set up security at 450 airports.

All this was done under intense congressional scrutiny — and not without a few hiccups. You can imagine what a shoe bomber does to your business plan three weeks after opening the doors.

Startup versus enterprise

The secret to why startups innovate faster and better than enterprise companies isn’t just a clear mission or a risk-taking culture, though both are important. The startup environment is different on a fundamental economic level, not solely because founders are more motivated and focused than their enterprise counterparts. They are different because any time a startup does something big, the upside is uncapped and the downside is pretty small. If a company fails, an investor loses a few million dollars and the team goes on to get new jobs. You can only lose as much as you have.

Big companies, however, have a high cost of failure — very different than the startup model’s limited downside. When Netflix risked moving its brand from DVD sales to streaming video, not only did millions of users feel the effects, the change impacted the company as its market cap dropped dramatically. Netflix did the right thing by making this tough business decision and betting on the future, but the repercussions are still being felt and have led to its business value losing hundred of millions of dollars and an initial loss of thousands of users. This is a prime example of the risk paradigm being reversed with an enterprise company — for any significant innovation a big company has an uncapped downside and a finite upside.

Startup secret sauce

Entrepreneurs can build their organization quickly (maybe not at the TSA’s breakneck speed) by following these key directions:

Have a clear mission

When Transportation Secretary Norman Mineta launched the agency in the wake of the 9/11 attacks, its goal was obvious: to secure the nation’s airports — and fast.

Early in the development of the TSA, there were several hundred new hires that ended up taking on much of the responsibility of building the organization, effectively serving as the foundation for what the TSA has become. This collective ownership of the organization was formed by a common understanding and belief in the overall mission.

Startups need to articulate powerful reasons for being in a similarly clear and unequivocal manner. If that means posting banners on the wall, or having a credo such as Facebook’s “the hacker way,” so be it. Just make sure the message is as obvious and inspiring to your most junior employee as it is to the CEO. It is your rallying cry, and it should inspire innovation.

Gather support from key outsiders and top talent

The TSA quickly brought in experts from everywhere. For logistics they pulled from Disney, for technology from Intel and for service from Marriott. Additionally, they recruited information technology experts and security professionals from the Federal Marshals and Secret Service. For startups, the talent might be venture capitalists or angels. They might be advisors. What they do is encourage risk-taking and help set the direction for the core team.

Young companies should not underestimate the value top talent brings, and founders should be willing to write bigger checks than they might like for key hires. Startups also should consider hiring in unexpected places. Recruit hackers from the local junior college, or better yet from failed startups.

Monitor crucial tasks against overall goals

The importance of monitoring and adjusting can’t be overemphasized. Congress had estimated 3,000 screeners would be needed for scanning checked bags. The real number of screeners needed ended up being 10 times that amount. The TSA was forced to quickly reevaluate its hiring goals. Metrics for measuring success must be must be aligned with longterm goals, not rigid, non-negotiable commitments to areas that may require change with time. For instance, stay away from being too financially committed to infrastructure, technology or processes that will change as institutional knowledge of the business problem grows and technology evolves.

Conclusion

Of course, the TSA example is not perfect. The TSA had unprecedented funding, and organizational failure would have looked more like the enterprise examples I mentioned earlier. What the TSA has is a startup mentality and similar ground-floor principles. If an organization with such a critical mission and so much to lose can encourage people to take on risk, startup founders may want to follow suit by embracing risk and encouraging it 10 times as much on their teams. With proper motivation, a startup can be extremely versatile, quickly establish itself, scale and deliver a solution to an existing problem.

Ben T. Smith IV is CEO of ShopCo, a startup focused on reinventing circular shopping with a social experience. He is also a venture partner at Accelerator Ventures and co-founder of MerchantCircle.com and Spoke.com. Smith blogs at btsiv.com and is on Twitter at @bentsmithfour. 

Victor Belfor and Justin P. Oberman contributed to this article. You can find them on Twitter @vbelfor and @justinpoberman. 

Image courtesy of Flickr user Roger Schultz.

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