Justin Oberman, Ben Smith: America’s Biggest Startup And Its Lessons For Entrepreneurs

Can you name America’s largest startup? It’s not Facebook or Amazon or even Home Depot. It isn’t even a technology company.

This little known giant is the Transportation Security Administration and its massive scale up offers a roadmap for entrepreneurs eager to turn big ideas into sustainable businesses.

The secret isn’t just a clear mission or a risk-taking culture, though both are important. For us, building an organization at breakneck speed – and returning a jittery public to the skies – meant rapid business model experimentation and imposing a strict methodology for measuring progress each step of the way.

The TSA was created 10 years ago this month following 9/11 and in its first 13 months processed a million job applications, interviewed 125,000 candidates, hired 60,000 people, purchased $1 billion of 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.

Here are several things you should insist on if you want a similar pace at your company:

A clear mission. Our motivation was the 9/11 attacks. They provided unparalleled inspiration. Several team members had experienced personal loss. When Transportation Secretary Norman Mineta launched the agency, its goal was obvious: to secure the nation’s airports – and fast.

Venture-backed companies need to articulate powerful reasons for “being” in a similarly clear and unequivocal manner. If that means posting banners on the wall, 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.

Support from key outsiders. They 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.

We were lucky to have three people at the top with the ability to kick-start the build and never let up. Secretary Mineta never let us forget the moral imperative, and his deputy Michael P. Jackson worked harder than we did. Department of Transportation Chief of Staff John Flaherty ran not only the rest of the department, but also got us the help we needed.

Top Talent. Our first meeting was no bigger than those of many startups, just three of us: Justin (pictured top) and Ben (pictured below), co-authors of this story, and Kip Hawley, who eventually became TSA head. Our headquarters was Department of Transportation conference room 10246, with just several bulky desktop computers, paper, pens and a calendar with 37 deadlines we were legally mandated to hit in the first year. What benefited us was a diversity of experience that at first we largely overlooked.

Ben brought with him a wealth of Silicon Valley experience building organizations and integrating disparate but complementary teams. He helped recruit executives from Intel, Cisco Systems, Solectron and Disney.

Justin contributed his aviation industry experience, including a feel for how decisions at the TSA would impact the industry. Finally, Kip was a transformational leader. He attracted talent, including experienced security professionals from military and law enforcement, organized methodology and engineered the collaboration between the launch team and TSA’s permanent structure.

Young companies should not under estimate the value top talent brings and should be willing to write bigger checks than they might like for key hires. They also should consider hiring in unexpected places.

A willingness to experiment. Not just experiment, but measure, adjust and then make bets. From day one, we faced challenges for every one of the hundreds of tasks we planned. “Can they scale?” “Can we test them?” Even the newest, most junior members of the team knew every idea would face and had to overcome these challenges.

What we did to make sure airport checkpoints worked was both critical and creative. We sent 20 people to the Baltimore airport for six weeks shortly after kicking off our operations to get our arms around every aspect of running a checkpoint. We hired 20 retired law enforcement folks to help train our trainers and draw up the curriculum. We tested 15 different kinds of shoehorns to see if they would speed the flow of airport lines.

This went on and on and still drives TSA experimentation today. There should be no lack of system refinement and innovative experimentation at any startup. It is the fuel for growth and often the most difficult part of innovation. Give your project teams the opportunity to experiment with new approaches that you can compare alongside what you might consider a more proven method. Think of it as A/B testing.

Monitor key tasks against overall goals. The persistence to monitor and adjust as needed, while ignoring the noise that distracts you, can’t be over emphasized. Congress had estimated 3,000 screeners were needed for scanning checked bags. The real number was 10 times that amount. When we realized the mismatch, we formed a new team, put together a new budget request and recalibrated our weekly hiring plan.

No startup is a linear exercise. The quicker founders build regular operational goals-oriented reviews into their routines, the better off they will be.

In the end, the best endorsement of the TSA experience is that many of us have gone on to form and manage startups of our own. The alumni list is too long to print here, but a few are: Ben Smith, MerchantCircle; Justin Oberman, Short Hop; Michael P. Jackson, Firebreak Partners; Hans Miller, B4 You Board; Kent Olson, Memory Hive; Andrew Taylor, Freerain Systems; and Vikas Sood, Media6Degrees

Few people are willing to defend the TSA with its legacy of airport pat-downs and long lines. But most don’t realize it was just a massive startup innovating on the fly, like any seed venture with big dreams.

(Justin P. Oberman is a security consultant, a former TSA assistant administrator and an entrepreneur with the aviation startup Short Hop. Ben T. Smith IV is a serial entrepreneur, investor and the co-founder of MerchantCircle.com and Spoke.com. They are available on Twitter @bentsmithfour and @justinpoberman.)

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