NASA Johnson Space Center Oral History Project
Commercial Crew & Cargo Program Office
Edited Oral History Transcript

Alan Marty
Interviewed by Rebecca Hackler
Palo Alto, California – 18 January 2013

[This oral history interview was conducted with Alan Marty on January 18, 2013, at the offices of Legacy Venture in Palo Alto, California for the Commercial Crew & Cargo Program Office History Project. Interviewer was Rebecca Hackler, assisted by Rebecca Wright. Marty began the session by sharing his view of the broader national significance of the Commercial Orbital Transportation Services (COTS) Program.]

Marty: We’re in a time right now when social need in our country is greater than ever, and yet government resources are more restricted than ever. In that kind of an environment, innovative ways to approach really significant social challenges are critical. COTS is one of those really interesting examples of how a very small team, germinated out of a nucleus of three or four people, used a very innovative approach in order to save the United States taxpayers $100 billion, $200 billion. Even in the federal scope of the budget, that’s a material amount of money for a small team.
But COTS is more than just success, it is also a wonderful story to tell. Plenty of challenges, with dead ends and surprising turns in the plot. Colorful characters who bonded in a common effort. And a mission to have the very first private rocket berth with the International Space Station in only six years. Yes, it is a rocket science story, and most experts at the time said it could not be done.

Hackler: We understand that you had previously worked with NASA at the Ames Research Center [Moffett Field, California]. Can you talk a little bit about your background working with NASA previously, and then how you became involved with the COTS team?

Marty: I will. Let me frame it a little bit bigger than that if I can. I was a scientist. I was a physics prof [professor], which always helps at NASA, because if you’re strictly a business person and you come into NASA, people sometimes look at you a little skeptically. It does help to have a science and engineering background.
I’d also been a White House Fellow. I don’t know if you’re familiar with the White House Fellow Program.

Hackler: It would be great if you could explain what you did.

Marty: The White House Fellows Program was started in the [President Lyndon B.] Johnson administration, and it still exists today. Its objective was to take people early in their career—for me I was in my early 30s—and allow them to see how the federal government works at the highest levels. They pick about 12 people every year, and they allow you to work directly for one of the cabinet members. At the time I was working for the Secretary of Defense. It was in the [Ronald W.] Reagan administration and then the first [George H. W.] Bush administration.
For a physics professor, business-type of person to get a chance to go in and see how the government works at the highest levels is very unusual. I spent a year in [Washington] DC as a White House Fellow, and I came away with some really strong feelings. The Defense Department at that time had 4.5 million people in it. How do you solve problems with a team that large? What kind of leadership challenges do you have, what kind of communication challenges do you have? When you’ve got 20, 25 levels of management, how do you communicate with people? How do you get stuff done?
My White House Fellow perspective was really useful to the COTS program, because interestingly, when you’re working with the President and with the Secretary of Defense, you don’t think very much about NASA. NASA is small. It was a big deal in the ’50s and the ’60s, but most people don’t think about NASA that often. But for a person who has spent their whole life working in NASA, and when your career is determined on how well you perform in the NASA structure, you have to buy in to the NASA culture to succeed.
At NASA, the way to do things well is to dot the I’s, cross the T’s. Don’t make a big mistake, communicate really well. Eventually you’ll get a bigger budget and eventually you’ll get a lot more people reporting to you. That’ll be your career. On a broader scale, that’s how the Defense Department works. You do things really well, you don’t make any mistakes, you work really hard, and eventually you get a bigger budget and you get a lot more people reporting to you. That’s exactly the opposite of how things work in Silicon Valley [high-technology region around San Francisco, California].
The steps to success in the NASA environment or in the Defense Department environment are turned upside down in Silicon Valley. Nobody thinks that way. You don’t think about getting a bigger budget, you never would think about getting more people. It’s not about that. It’s a completely different culture of risk and reward. Failure in Silicon Valley is just an opportunity to learn. But failure in NASA means the [Space] Shuttle blows up, and then the Shuttle is put on hold for two or three years, and the NASA brand gets tarnished, you have a whole bunch of hearings in front of Congress.
Just a completely different mentality. When you write a contract in the NASA or the DoD [Department of Defense] context, everything is risk averse. Usually we don’t even have contracts in the Silicon Valley environment. But when we do, they’re very simple, and they’re very fluid. They’re very asynchronous, which means you don’t plan ten years in advance. You plan a month or two months, and then you see what things look like and you adapt. People realize that if you don’t keep up, if you don’t adapt, it’s over. Again, very different culture.
The other thing I learned when I was a White House Fellow was that you can toil away working really hard and really smart 15 levels down in the organization and never make a difference. I was coming into this NASA project with a mentality that if I’m going to take a chapter of my life and work on this, I’m only going to do it if it can make a difference. This is not my whole career, this is simply a chapter.
The primary reason I got interested in working with COTS was to be able to tell the story to my grandkids. People at NASA have heard me say that so many times. My primary motivation for doing this was to be able to tell a good story to my grandkids. That’s a very different motivation than trying to dot the I’s, cross the T’s, and build a career and build a bigger budget. It’s just a different mentality.
The White House Fellows Program was very significant because it allowed me to say, “This is how the president thinks, this is how the vice president thinks. This is how the cabinet thinks, this is how budgets get done.”
The other thing to realize is that if you’re only working at high levels in an organization, a lot of times you can’t make the significant change that you want. Conversely, if you work only at low levels, a lot of times you can’t make the significant change. You can toil forever, and a lot of times it doesn’t even get seen up on high. The question was—and I’m getting a little bit ahead of myself here—if you’re really going to try and make a difference, what’s the right way to come into the government so that you can work at the highest levels and at the nitty-gritty levels in such a way that you can actually see it all the way through to making a multi-hundred-billion-dollar difference. That was my mentality going in.
So I brought the perspective of a scientist and the perspective of a White House Fellow and the perspective of an investor. But I also brought a memory of a meeting I attended somewhere between 2000 and 2002 with Sean O’Keefe, who was the NASA Administrator at that time. Sean made a trip to NASA Ames to meet with Henry “Harry” McDonald, the Ames Center Director, and Sean asked to meet with a couple of leaders in Silicon Valley to figure out how NASA could become more innovative. Which is really interesting, because most people think of the NASA brand as the innovation center. But Sean was coming out to Silicon Valley to say, “Actually the innovation center is really Silicon Valley. Ames is in the middle of Silicon Valley, what can we learn from Silicon Valley?”
Five people were at this meeting. [E.] Floyd Kvamme from Kleiner Perkins [Caufield & Byers]; an iconic venture capital investor, John [A.] Young, who was the former CEO [Chief Executive Officer] of Hewlett-Packard [Company]; and me, with McDonald and O’Keefe. We sat for half a day in the big conference room in the Ames center. We spent that time talking about innovation, and if there was a way Silicon Valley could have any useful influence on the way things were done at NASA so that NASA could be more innovative.
Then I filed that meeting experience away, didn’t really think about it all that much. But as I look back, I realize it was a pretty interesting and significant conversation, because even though NASA Ames is right here in the middle of Silicon Valley, at the time there really was very little interaction with the rest of Silicon Valley. And certainly very little interaction between Silicon Valley and Johnson Space Center or [NASA] Kennedy Space Center [Florida] or [NASA Headquarters, Washington] DC. Those just seemed so disparate.
Then I guess because of that meeting, the people at NASA would reach out to me occasionally. For example, while I was a venture capitalist at J. P. Morgan Partners [LLC], I helped NASA produce a DVD video on innovation. It wasn’t my job but it was interesting to me, because it seemed like an interesting challenge to see how Silicon Valley could work with NASA in order to do good in the world of some kind. I didn’t know exactly what that was going to look like, either do it better or do it cheaper or do it faster, but to make life better somehow.
Innovation is at the core of me. I’ve got seven patents, I care about innovation a lot. It resonated with me. In 2005 I gave a speech at NASA’s request. The transcript is online somewhere. I look back on it and go, “Well, a lot of what eventually played out at COTS was touched in this speech.” This is before COTS had really happened, although my guess is that it was bouncing around in [NASA Administrator] Mike [Michael D.] Griffin’s mind. As these things converge it’s very interesting, because he’d done In-Q-Tel [CIA (Central Intelligence Agency) venture capital firm]. He was the president of In-Q-Tel, so even though he hadn’t lived in Silicon Valley he knew something about venture capital.
I gave this speech in 2005, and I basically talked about the challenges of doing innovation at NASA. The challenges of getting the commercial world to care about doing anything with NASA or in space, and sometimes how NASA was its own biggest problem in terms of thinking they were helping but in fact oftentimes getting in the way. Not trying to, it’s just that the cultures were so different that in trying to help you can create your own set of problems.
That was in June of 2005, and interestingly, in October of 2005 I was at a reception in the White House, and Mike Griffin was there. I’d done enough with NASA to know who he was, and so I just went up and started talking. As you would expect, if you’re at a reception in the White House, you get certain credibility just because you’re there. We had this really interesting conversation.
I learned more from him about this idea that he had of maybe doing something venture capital-ish within NASA as a way to deal with what he considered, as he voiced it to me, his biggest challenge. It’d be interesting to know how he would reflect back on this conversation, but the way I recall it was in a highly simplified form.
He said, “I’ve got an International Space Station. I’m responsible because of international agreements for going up and down to support the International Space Station, I have a Shuttle that’s going to retire in 2010, and I’ve got an Orion [Crew Exploration Vehicle] project that’s going to cost hundreds of billions of dollars. It’s at best going to be available by 2013 or ’14, probably will be delayed, which means I’ve got this big gap where I’m going to be dependent on the Russians. Who knows if that’ll even be possible? Boy, wouldn’t it be nice if we could find an innovative way to come up with a commercial way to service the Space Station?”
Now that’s a project. That’s a really interesting project. I remember telling him at the time, “If you try to do that out of Johnson Space Center it will surely fail, because you’re trying to do the most innovative thing out of the deep core of the NASA culture.” Remember, I’m not saying anything bad about the NASA culture. The NASA culture is amazing and it’s great for what it does really well. But it’s very different than the Silicon Valley culture. My suggestion to him was if you really want this idea to go somewhere, you need to move it to NASA Ames.
He said, “Not going to do it. Too far along, not going to do it. But Alan, you should get involved. If you feel this strongly about it, you should get involved.” I was really intrigued, so I decide to respond to the COTS formal Request [for Proposals] for venture capital services, and I was selected.
But COTS was starting to move pretty quickly. My contract wasn’t supposed to be in place until January of ’06, and they were looking to put out the COTS procurement contract in December of ’05 or early January of ’06. I was well aware that if that procurement went out and I hadn’t looked at it, it was going to go out with a NASA approach to innovation and solving a problem. Which again is not a bad thing, but if you’re trying to do something really different in a Silicon Valley-style, it’s not going to lead to that kind of an outcome.
COTS ended up doing a short-term temporary contract for me so I could read this procurement in its late stages. What I recall is that I marked it up severely, with all the best intentions of my heart. You’ve got two people who I really came to appreciate. Dennis [A.] Stone [Commercial Crew & Cargo Program Office (C3PO) Assistant Program Integration Manager], who I’d gotten to know a little bit, was highly committed to the commercial space sector for a long time. Knew a lot of people, and his heart was really into trying to get this commercial space thing done—not just checking the boxes, not just worrying about his career, but actually trying to get commercial space off the ground. It was really at his core. Then Alan [J.] Lindenmoyer [C3PO Manager] was also so amazing to work with.
I hadn’t met Alan until December of ’05 when I first went down there [to JSC]. Both Dennis and Alan were just steeped in the NASA culture. They knew people, they knew how to get things done within NASA. Yet, they were also very good listeners and learners. You don’t usually find that openness in people who have a lot of experience and are really successful in their culture. It’s not common for somebody to be able to say, “Oh okay, well let me really listen carefully to a different perspective.” That’s hard for people to do, no matter where you are. It’d be like somebody in Silicon Valley saying, “Well, let me just listen really carefully to the way they do it in the government.”
That’s hard. That’s hard, because you’ve spent your whole life thinking that your way is the only way, the best way. I’ve got to give a whole lot of credit as this thing is kicking off to Mike Griffin, who had this concept, and his experience allowed him to generate it. And to Alan Lindenmoyer and to Dennis Stone, who had this experience that allowed them to be in this place at this time, but also had this personality that allowed them to be really genuine listeners. Without those three people, this would have gone nowhere. It just would have gone nowhere. They, in my mind, were just absolutely stars.
I did the markup of the COTS contract. There were four changes that were really significant. A lot of the logic behind my changes goes back to a particular book. You may or you may not have heard of this before, but it was a very significant book in the world of business innovation. It’s a book by Clayton [M.] Christensen called The Innovator’s Dilemma.

Hackler: I’ve read it.

Marty: You’ve read it. It’s a good one.

Hackler: It is good, a lot of good insights.

Marty: I actually handed it out to everybody within COTS, in DC and at the Johnson Space Center, and at Ames. Because the whole point is that—I’m trying to simplify the book, which is a tough thing to do—but if you try and innovate something dramatically new within an established organization, and within an established culture, you surely fail.
This was the genesis of my very first conversation with Mike Griffin. If you try to do this innovation in the bowels of Johnson you will surely fail. Even though COTS was based at Johnson now, and I was just skipping in and out of JSC, my point for the people who were closely tied to COTS was to say, “We’ve got to take this Innovator’s Dilemma book seriously, we’ve got to take it really seriously. Unless you separate yourself mentally from the way you’ve always done things at NASA and really try to embrace and adapt, you will never pull off the huge success required from COTS.”
The Innovator’s Dilemma is a big idea. In fact, I remember Alan Lindenmoyer didn’t have time to read the book. He was still trying to figure out who Alan Marty was. I actually wrote him a book report, a two pager. I said, “Here, read this. You’ve got to get this.” I think he eventually went back and read the book.
I just wanted to make sure people understood what we were trying to accomplish, that we had to do something with a different culture and a different mentality than NASA had done before if we wanted to do something truly great, and if we wanted to take it all the way to the end. Not just pretend we were doing a program and going through the motions, but actually really do something that would make a difference that would allow me to tell grandkid stories. That was my objective, my grandkids.

Hackler: Were there any specific principles from the book that you applied to your work in the COTS program?

Marty: Yes, I probably have the principles on the top of my head. Some of those basic principles were that you want to move the organization to a different place, you want to have a different team, and you want to have a different mentality towards risk. You want to do things that may look totally illogical to people who are in the space business or the steel business or the disk drive business, or whatever business you’re talking about, but if you do a lot of learning cycles and you move really fast, you can get on a steeper learning curve. And doing so with the expectation that within a matter of just a few