AUSTIN, Texas — If you were to write a scene set in “a hip tech hub,” you might limn the Capital Factory, a co-working space and startup accelerator in downtown Austin. On a typical day, you can find kids barely old enough to drink who are pitching their startups to top venture-capital firms in a sunlit space, full of beanbag chairs, fun wall murals, green protein shakes, and loads of snacks. It’s not the sort of place you would expect to find Gen. Jim McConville, the vice chief of staff of the U.S. Army. But last Thursday, that’s where he was, piloting a simulated plane.

“I’m trying to get off the grass,” McConville says from behind a virtual-reality headset. “I’ve flown fixed-wing but this is not the same.” As the helicopter pilot works to get “airborne,” the simulator records his eye movements — the screen in front of him shows a pupil — to determine cognitive load and understand where he is looking and where he’s experiencing stress. The software is constructing a data-driven picture of how he’s absorbed training, data he could use to improve his performance.

It’s the product of a young entrepreneur named David Zakariaie, founder of a company called Senseye. Just 21 years old, Zakariaie represents some of the best of America’s tech startup scene in 2018: ambitious, restless, and able to move a product from idea to reality far faster than the Pentagon can buy one. Proximity to people like him is a big part of why the Army stood up its new four-star Futures Command here on Friday.

“We need an environment to help us change our culture... to get access to talent and innovation,” Army Undersecretary Ryan McCarthy said.

The new command will also centralize the Army’s efforts to grapple with the future. Army officials describe their service’s new organization this way: Forces Command is in charge of present-day readiness; Material Command handles parts and logistics; Training and Doctrine Command, or TRADOC, looks at recruiting, assessment, basic training, and operational doctrine. And the Futures Command will focus on how to win tomorrow’s wars.

The Army took “all the [future-focused] piece parts that were in all of those commands, in disparate ways, lacking unity of effort, and put them under [Gen.] Mike Murray,” the first commander of Futures Command, said Army Chief of Staff Gen. Mark Milley. “We had people spread out all over. It was an irrational system.”

Last year, the Army laid out several key tech priorities. They include a new ground combat vehicle that can accommodate human drivers or drive itself; new vertical-lift aircraft, including helicopters and drones; new missile defenses; longer-ranged and much smarter missiles and artillery; a communications network that can connect to every digital node on the battlefield despite Russian or Chinese electromagnetic warfare; and a variety of soldier-borne tech, everything from bug drones to exoskeletons to training technology to help U.S. soldiers become more lethal.

On its face, it’s the sort of tech wishlist that established defense contractors should have no problem making for the Army. But service leaders are seeking things that will be relevant to the world of a decade hence. How a military institution designs vehicles, helicopters, sensors, and communication networks in 2020 and beyond will be radically different from how it would have built those sorts of things in the past.

Rapid advancement in information technology doesn’t just change how news organizations reach readers and how Hollywood releases films, it also changes how you buy and build tanks, trucks, missiles, and helicopters. Machine vision and autonomy will be as important to future vehicles as any other mechanical part. But new technologies like computer-aided design, and 3-D printing will change all of those parts as well.

Startups like Senseye can navigate that space far faster than big, top-driven companies, even very innovative ones. It’s no wonder defense players like Lockheed Martin, Northrop Grumman, and Raytheon have all opened their own venture-capital outfits. And it's why the Army headquartered its future-weapons hub amid this city's thriving startup tech scene.

“When we look at where we are today, we feel the weapon systems that we have in place, the technology we have in place, is good enough for today. We don’t think it's good enough for tomorrow. As we take a look at the information age and how quickly things are changing, how fast the technology is moving in the civilian sector, we believe to stay competitive we can’t wait seven to 10 to 15 years to field systems,” said McConville. “The young innovators here are fielding systems in months. If we want to stay technologically ahead, we have to change our processes. We have to change the way we are organized to do these things.”

Referring to the Army’s modernization priorities, Army Secretary Mark Esper said, “I’m not confident we can get to those priorities and the capabilities we need by 2028 with the current acquisition system…If you’re trying to drive using an old car and you have to keep stopping to fuel and fix it, it’s going to take a long time [to reach your destination] and cost you more money than it needs to. We’re trying to assemble a new car that you can get you there much more quickly.”

At the same time that the military is looking to strengthen its ties to tech, Congress will be making it harder for competing nations like China and Russia to invest in the same sorts of startups that might have relevance to the Futures Command. That’s because of changes to the Committee on Foreign Investment in the United States, which became law as part of the 2019 National Defense Authorization Act. Sen. John Cornyn, R-Texas, who pushed the legislation and played a key role in Murray’s confirmation, connected the two.

“Whether it’s DARPA or Army Futures Command looking to invest in these startup companies that have potential dual-use applications, once they get it up and running, they go about their business and then the business looks to get commercial investment. China and other potential adversaries of the United States are more than happy to try and get access to technology we, ourselves, have been responsible for creating. We have to be aware of the fact that China has been aggressive in this space. That’s why it was important to update the rules by which the committee on foreign investment operates.”

The Next Stage of DoD Outreach to Startups

The last time the Army undertook such a massive reorganization was 1973. But no branch of the military has ever stood up a command headquarters like this. Unlike a typical military base, surrounded by guards armed with M4 machine guns and drab government architecture, the Futures Command’s main office will be in a slick downtown skyscraper with its own massive downtown “storefront.” The Command will also have a big physical presence at Capital Factory, among the beanbag chairs, as well as at the Engineering Education and Research Center at the University of Texas’ Cockrell School of Engineering, which has a strong focus on rapid manufacturing. Stroll the halls at the center and you’ll find lab space filled with a variety of 3D printers and engineering students building new robot prototypes with modular, off-the-shelf Raspberry Pi processors.

Over the years, the military has attempted various outreach attempts to the startup tech community, or what they sometimes call “non-traditional” companies. In 2015, then-Defense Secretary Ash Carter set up the Defense Innovation Unit (formerly the Defense Innovation Unit experimental) as a sort of liaison outfit between Silicon Valley and the services and combatant commands. In many ways, it represented a workaround to a traditional slow, bureaucratic, acquisition process that was highly geared toward a handful of large, established defense contractors at the expense of so-called non-traditional players.

“DIUx has enlightened everyone’s perspective,” said McCarthy, But the addition of a four-star command “puts in place a robust effort with a leader and with the authorities to make big institutional changes.”

The scale of the Futures Command is far larger. In 2017, DIU awarded about $84 million to startups and other companies, according to internal reporting. Army Futures Command will be overseeing a modernization budget of as much as $37 billion. Much of that goes to upgrading legacy equipment right now but more and more of it in the future will go toward developing entirely new equipment and capabilities.

Why Austin

After announcing its plans for Futures Command last year, the Army winnowed a list of more than 150 potential headquarter spots to five: Austin, Philadelphia, Boston, Raleigh and Minneapolis / St. Paul. (The digital map company ESRI has a great rundown on all of them.)

McCarthy said Austin emerged the winner after a rigorous appraisal. The city already had a small Defense Innovation Unit and an AFWERX presence. More importantly, it put the right mix of people, institutions, and resources in close proximity.

In the 1970s, MIT’s Thomas Allen observed that as you spread engineers farther apart geographically, the communication between them became sparser; while clustering them fostered interaction and value gain. His theory is called the Allen Curve and it helps explain why Silicon Valley works the way that it does. It also helps explain the Army’s selection of Austin. Much as Stanford University helped Silicon Valley become the world’s premier startup tech hub, so — the Army hopes — the University of Texas can help Austin become the military’s Silicon Valley.

If the Army’s experiment proves successful, it could be a model for the other services looking to overhaul how they buy tech. But first, a number of things have to happen.

Entrepreneurs who are interested in doing work with the Pentagon often complain about how long it takes to seal a deal — and how the bidding process exposes their intellectual property to competitors. The Army is starting to address that. And Defense Undersecretary for Research and Engineering Michael Griffin has made shredding department bureaucracy one of his key priorities.

But there’s a broad cultural shift that has to take place as well. Companies like Senseye are born of a Silicon Valley approach to building that rewards smart but perpetual experimentation and risk-taking, an approach embodied in that old Valley saw: Fail Often. Fail Fast. Fail Cheap. Startup success in the mold of the Valley requires all three elements. The Army, as an institution, is not built to accommodate failure, much less repeat and reward it.

When asked to grade how well the military was embracing the culture of failing fast and cheap, McConville said he had seen the culture change tremendously over the past year but there was much further to go. “I want to start with a ‘C’,” he said.

McCarthy added “C, C-plus.”