Пълният препис на Episode 54 - Inside GovCon & Federal Technology Sales with Carl Wright

are on the steep trajectory that are looking for an exit. But in public sector, we're running a marathon here. I I try to look at the whole fiscal year, right? And there's an ebb and flow of contracting. And there's times when the fish are biting, there's times when we're sharpening our axes and just getting really comfortable with the team, but most of all educating folks that aren't from this world. on the realities of doing business. And if you can hang on long enough, maybe one or two years to reach that two year mark and they start seeing the revenue and the expansion. And then only then they're kind of like, hey, I think these people actually know what they're talking about. So I thought you'd appreciate that. Yeah. Well it's funny you brought on so many different things. I I'm probably gonna try to start back almost in the very beginning. So I was thinking about at towards the end as you were talking about metrics and KPIs, laughing thinking about how the government doesn't care about C RPOs. Or like I remember when I was with the government, people would come in and try to sell me on, can you get this thing closed by August thirty first? I'm like, no, I can't. I didn't even understand why it mattered, but it was certainly wasn't my problem. Anyway, so we're gonna get back to that. But I want to start in the very beginning because you mentioned about the impact on families as it relates to CRs and shutdowns. And as somebody who my dad was ⁓ with the Secret Service and my wife was with the FBI, my brother was in federal law enforcement. How do you explain to somebody that's outside of the beltway the impact? Of a government shutdown on families, basically that have any connection to the federal government. Well, I mean, I think the economy, I guess, is starting to wake up a little bit more at a macro scale. Like when we saw the longest government shutdown history after Doge and all of that. And by the way, we can get into Doge, because man, everything that we thought we knew about federal government like kind of went out the window. So we were all flying in the blind. So that impacts credibility from, you know. Like, well, what's really going on here? You guys are the experts. And I'm like, no one's ever seen anything like this. So, like, hang tight, we'll fight through it. But, you know, I during that shutdown, I saw a lot of outreach in the area from like mortgage companies for like forgiveness or delayments of payment if you're associated with the DMV and the GovCon industry. So I think it's cool to see that the industry is waking up that like the federal government supports a a large network and ecosystem of People that help move the ball forward for the US government. And it's not just people in government, it's the supporting apparatus of folks like us on the outside who are fighting the same battles with them and working with them on their processes. So I've seen that. That was a big change. But ultimately, when you have a pipeline and you're going into end of Fed fiscal and everything's going great and you're closing deals, and then they're like, all right, we got momentum. Like next Q4 is going to be huge. And it's like, whoa, whoa, whoa, whoa. We're in continuing resolution. It's like, well, what does that mean? No new starts, contract ceilings, all of this stuff. Well, how do we get around that? Because now as a sales leader, they're looking at you like, okay, what's the feather in your hat? What's the ace up your sleeve? How are you gonna get around this? And I'm like, write your congressman? Like I don't like there's not a whole lot we can do. And then when it goes into actual shutdown, then it's just like, you know, we focus on sharpening the axes and waiting for the storm to pass. But the reality is the people that we need to talk to are they can't even go to work. You know what it is? Well, and the business impact. So if you have personnel that have to go to work and you're a small business and you're paying them, but you're not getting any revenue back on billing from the government, I've seen small businesses go under because right? Yeah, because the government expects their people to show up, but they're not paying for And I I also feel like on the government side, the people that are most disproportionately affected are the ones that can least afford to take a break. It's not the senior executives. It's not the 20 year veterans. It's the administrative support person that's making fifty grand a year that is living worse than paycheck to paycheck. And then they'll do things like, ⁓ are you a exempt an employee or whatever the terminology was, I can't remember, but basically like are you critical or are you not? Or whatever that terminology was. And there's nothing worse than when they were doing things like, we're going to pay half the workforce, we're going to pay the agents during a shutdown. But we're not going to pay the people that are actually processing the payroll. And just for somebody who's lived most of my life in Northern Virginia, you can see those impacts. I never realized or appreciated the impacts of business until I started working with businesses. But I I work with a lot of startups, as you know. And a lot of times they they have a thriving commercial business and they say, I want to get in the federal business. I'm like, you might want to think about that. Cause to your point, it's not quarter to quarter. It's fiscal year to fiscal year, twelve to eighteen month sales cycles. And it's not what you think. Nothing is quick. You mentioned FedRamp and you mentioned, you know, basically in your trajectory. One thing that was interesting to me is you get hired and you're not a tech guy. So in the beginning, were you a translator, basically? You know, you have the tech guys and you have the government. How important is that role? Well, especially I was coming in as a kind of like a middle manager, like an engagement manager. So I was leading the

program and I had been a deputy program manager on access control for NGA and stuff like that. So I knew how government contracts operated, butts and seats contracts worked, right? So billing hours, making sure everybody's there, making accountability of all of that, and making sure that those time cards are getting over to the government, getting approved. And this is like what's typical every day. But yeah, it it's just really Seeing how being a translator is just kind of really explaining to folks back in California and Silicon Valley, like we're in CR now, so it's gonna be a little bit late, but you know, we're not critical or we can't put people on site because we can't because the government shut down. So it's translator. But if you're lucky enough, we're at least seeing now more VPs who are in the area. And because a lot of VPs that I've seen were covering commercial mid-Atlantic in these software companies. So they automatically get federal and GovCon thrown into their bag without any expertise. We're seeing more specialization because historically, you know, we were talking about that going into the federal market was seen as a risk, right? So for smart boards and smart executives who understand their product alignment fit in the market and going to find people that have been to the top of the mountain, not just led a sales team in federal because you might be one of those mid Atlantic guys that just inherited it and maybe saw some success. But really I use the analogy, like there's a lot of people that claim to know the Fed space, but it's the equivalent of taking high school Spanish, right? There's ways, means, and culture here. Like this is like going into Costa Rica and living in country and having to speak their language, their customs and understand it's a lot more than just like, ⁓ yeah. I know it's CR is or I know like task order IDIQs or alphabet soup, right? But more companies are seeing that if you can get that right team in place, it's not a risk as much anymore as it is like an accelerator to getting that exit, like to really turning on a revenue stream. But you know, there's always the joke in federal, like you never want to be the first VP, you never want to be the second VP, you want to be the third VP, because by then The board and everybody have kind of normalized and nothing shocking to them. And then you're seeing the efforts yield from folks of the past. And it's just fascinating how that works. But at least I think private equity is kind of wisening up to the fact that there's a great opportunity here to accelerate on their metrics and goals. But you can't have it both ways. You have to come from a place of understanding that the gravity in your world doesn't doesn't work the same. Over here. So thankfully I have a great CRO right now. My leader, you know, he sold to GovCon probably 20 years ago. So notionally knows what's going on. ⁓ my CEO has been really like leaning in and understanding. And I do think actually

in the age of generative AI, Claude and GPTs and all of that have been really helpful in educating outsiders from a leadership perspective on that is actually kind of normal. And you shouldn't be shocked by that. So it's fascinating to see how AI is playing into that, but it's been boding well. How difficult is if you're somebody that is, say, getting into the federal space or is retiring and coming out, how different is it working for a PE firm or PE backed company versus a bootstrapped founder-led company? Is that something that until you've done it, you don't realize sort of like the different pressures and sales that you have? Absolutely. That's a great call out. And so, you know, depending on where you're at and your revenue growth tr trajectory, the hardest chasmed across for any SaaS company or tech company is like 30 to 50 million. And if you can get the escape velocity to get across 50, like you're showing promise in your going places, right? I personally like working, I have worked with founders, founder led organizations, product led founders. They're very passionate about their product. They're very passionate of applying it to the mission and to the warfighter. And I see a lot of companies opening up, not just doing work in the government, but You know, creating nonprofits to kind of reinvest back into veterans and stuff like that. And they're really taking an active role. But when you get into the PE world, this is a numbers game. So it's like you you can talk all day long, but you gotta deliver at some point. You know what I mean? You gotta deliver quickly and you continue to try to educate. But luckily, you know, you called out twelve to eighteen month cycles. With my team, we've kind of cracked the code of Penetrating the Fed quicker than average. So I would say it's 12 to 18 months if you really know what you're doing, right? I still see a lot of companies like partners reaching out to us, like, hey, we're gonna bid on this RFP. And it's like, okay, but you don't really understand our technology. And I understand you're an SDBOB or an 8A, and I understand all that stuff. I understand the triple word score magic that you guys bring to the table, but you know nothing about our product. And what kind of past performance do you have? So you see to this day, a lot of just RFI, RFP. Chasers, and that's their whole strategy. And that's deeply concerning from anybody that really knows how the sausage is made, right? You need to be influencing that. You have to have a vision and a point of view and help the government make that leap. And where we find success is not using generative AI for our outreach. It's always highly personalized, very targeted. I always have an agreement with like the marketing team on like your role in helping me is really boots on the ground, funding events. We need to show up. And this is the way it's gonna go. We do FCOS, they're gonna see us, they're gonna talk to us. They're gonna be like, this is great. Next

year we come out there, they're gonna be like, hey, we remember talking to you guys last year. You show up that third year, it's like, hey, Bob, why are we not doing anything with these guys? They're obviously here, they're still here, the product's good, let's do a pilot, right? But conventionally speaking, marketing and outreach was massive numbers, large numbers, like reach out to everybody. And what most software companies don't understand is they're cannibalizing their whole go-to-market because. If one person in the FBI opts out to a marketing led spammed message, that puts us on some sort of naughty list somewhere. And I've actually had clients that weren't getting our emails because of a one off marketing campaign that someone in their organization just hit, like opt out, and that opted us all out. So we weren't even getting our comms through to people on contract. And we're like, what's going on? It's like, ⁓ someone opted out and you got on a naughty list. We got to get you back on the whitelist and all of that stuff. And please don't spam. So I make an extra effort and it's kind of clunky and it's old school, but highly personalized, targeted outreach, and we're not talking about ourselves, we're not talking about our technology, we're talking about the problems that they have, how our technology aligns to that, how others in the government are using it and experiencing ROI and value out of that. And we respectfully and humbly just request thirty minutes for an industry briefing. When you take that approach, you know what I mean, it's a world of it. You know? Do you think ⁓ organizations struggle with not having good KPIs for marketing led sales. So they're just sending stuff out in the ether and they put on conferences. That's what I've found quite often, but I don't know if it's just because it's anecdotal for the people that I'm working with. But the organizations that have, to your point, cracked the code on how you can leverage marketing to be a forcing function for sales really seem to have a competitive advantage. Yeah. So when I was first getting into that, you know, and I got my master's degree in government contracting from GMU here. It was a program that they had. So like it was cool to see the specialization of that. But one of the things coming out of that is I think they were working with the government on actually understanding if marketing dollars matter in this space. You know what I mean? Like can you just do mass outbounding campaigns and you gotta find the watering holes, your bed scoops and guts and all of that. So you want to go to the watering hole and educate. I think that's where most companies get it wrong. They get really excited about their product and all the great things that their product does, but no one really cares on the other side of the ball. Like so when you send an email like, we're great, we're hyperscience, we're the industry leader, like we're really awesome at what we do. And by the way, did I

tell you like our tech is really awesome? It loses all the context of how and that's how like a lot of marketers see what I've seen has been impactful is leveraging marketing dollars to go to the conferences. Why? Because let's face it, people are getting drowned in LinkedIn and outbound email. Like email is borderline becoming useless. LinkedIn is becoming less helpful. Getting email addresses is a little bit more helpful, but you better be salient and on point. Anything that we put out to anybody in the federal government, I always go back and say, What would my dad say if I sent him this email? Would he just go nuclear or would he be like, All right, that sounds like that's helpful and pass me off. You know what mean? But You know, between boots on the ground conferences and investing in the conferences, that's the opportunity where folks come out of the ivory towers. And it's still you have to be cautious about it and play the long game because I've even heard army colonels and stuff like that be like, Great, I gotta go to this conference. And it's like wearing a pork chop around my neck, walking around to all these vendors in a kennel. And then, you know, come Monday you get seventy-two emails from your scanned badge and you opt out of all of that because you don't want to be spammed. And it's this this constant, constant repetitive cycle. But between conferences and working with consultants, folks that just got out of mission, or even some lobbyists, you know what I mean? I'm very careful about how we select consultants and lobbyists. But it really helps when you can take a technology from someone who just punched out that still is really close to the mission or have sat in seat like for twenty years, thirty years, you know where the problems are. And if you can find the right people that understand How this technology, and we've seen this a lot more since the Doge early retirements. There's a lot more folks, career folks, who are out there helping technology companies kind of bridge that gap and coaching them on aligning to the very strategic problems that you were trying to solve for the last five years, right? So that's really where I see like marketing attribution. And the last thing I'll say on it is attribution is a funny word in technology because it's like, well, did it come from marketing? Was it sales led, SDR led? You know what I mean? Was it an inbound? So there's a lot of infighting on attribution. And I'm like, guys, you're thinking about this wrong. What you want is, you know, an SDR that got a warm call and a warm intro. So they've talked to us. We see them at a conference. Now they get on a webinar. Now they're kind of engaged. So it's not like who gets attribution, but a higher quality lead and opportunity in this space should check all of those boxes, in my opinion. What about the tension between product and sales as well? 'Cause that's something that I see often and again, I don't know if it's because I'm now picking up

on it, but I'll be out with sales guys and they're saying, ⁓ yeah, we could do that. We could do that and it gets the customer all happy and then they go back and they're like, We can't do any of that or it's in the roadmap or it's all that other stuff. Is that a common tension point in organizations that you've worked at? I think that's more of a legacy challenge 'cause you have sellers don't really understand how the government works and You know, if it's big enough of an opportunity, product will get in line. I think because of my roots having come up in service delivery and solution architecture, how we structure my team is like in terms of ⁓ feasibility and level of effort, those are the two levers you can pull on from a product. Is it feasible? And how much is it gonna cost to build? Right. Yeah. ⁓ if you can do the business case and the use case, like if it's an expansion and it makes a lot of sense, but coming through the door, I find the smartest guy on my tech team. I pull him over onto my team, the guy that really understands the product, and he is the first cut of we should walk away from this. So, like I don't even want to get in the realm of overpromising, under delivering. We really focus on underpromise and knock it out of the park. And that kind of goes back to the theme of category creating, category leading solution. How my team goes to market, which I would argue is, you know, not patting myself on the back, is probably one of the most successful in a short amount of time of driving revenue and creating great lasting relationships, both in the partner ecosystem and directly with clients. It's all about a very measured cadence, adding value and always providing success, but being aligned with the mission, being aligned with the warfighter and the goals of the United States government. If you can kind of like get into the ether of that, you'll get a lot further, a lot quicker. How we go to market is massively successful, but I will tell any founder who is courting me and my team and bringing us on board. If we get this thing out of the box and we do our job and it tanks, if it craps the bed, we're done. We pop smoke and roll, bro. So there can't be any like fugazy technology here. There can't be any smoke and mirrors. Your technology has to get kicked in the teeth by security because this is the beauty of doing business in the federal government, is if you do have the best mousetrap. And you have the right team that knows how to navigate that ecosystem and prove it and you're gonna do the POC and you're gonna bake off and you're gonna earn and show the government that you have the best mousetrap, then you're in the best position for success because as dysfunctional as the government is or appears to be at times, if you have the best mousetrap and it's secure, like inevitably twelve months, eighteen months, they're gonna turn it over, right? So In the ethos of what I do, I'm really good with my team of getting and accelerating revenue, but the product has to be bulletproof and it can't be moderately better. The government isn't interested in, ⁓ well, it's kind of it's a little bit better, right? It has to be monumentally earth-shattering, game changing from the way things were done in the past and the value your product adds into that workflow or that pipeline or that mission. And that's really if if I could find that, that's the sweet spot. Yeah. What about some companies that I know that I've worked with that are really excited about a new product and they're really excited to get it in front of the customer and you have to slow them down to say, We're not selling promises. To your point, you get one chance. And if it fails that one chance, you're done. How do you as a sales leader navigate those waters by understanding the tension and pressure, an organization that invested a lot of money in this new tech and to say, look, you're 80% there, you're not a hundred percent there, we can't risk Alienating our closest contacts with something that's not ready for prime time. Never sell on futures. Never ever sell futures. The government is actually a little bit culpable in this problem because they're always asked, what does the future look like? Yes. And we always meet that with like, Hey, look, we're gonna show you some vaporware. Like this is our product roadmap, right? But we are very nuanced and keeping a very clear line of communication is this is what we have off the shelf today. This is what we can do for you today. And if we're successful in doing this, and this one key feature is really important to you, like deduplication of records. That was not part of the hyperscience platform that was developed and built for a major agency, because what we found, and we haven't really dove into hyperscience, but what you see across the government is when like you apply for a benefit and it goes into a black hole, especially if you're like in an older generation. Your natural instinct is like, well, I never got an email back. Maybe my submission didn't go through. So I'll just do it again and I'll do it again. ⁓ so you're applying for a social security benefit and you've applied five times. It turns out that that is a lot of noise on these old back end systems. A major agency came to us and was like, Hey, this is our problem. Can you solve it? And we took it back to the product team and we were able to schedule it on a roadmap release on the following year. So that's kind of how I would say the give and take is like, let's focus on what we can do and help. for you today. And then once we're inside the door, let's talk about what your big challenges are and how we can possibly align to that. And then we'll take that to our product team and then we'll get it on a release and update it. But that was a great successful example of how to do that safely, effectively. How important is it also in this world, even more so in your career to this point of the ability to integrate into

other tools? 'Cause it has to, right? Has to. So I kind have a formula that I look at when I'm examining a new technology that maybe there's going to be synergies here and we go and we bring the team over and do it. Security is paramount. And I don't even want to go into FedRamp and the mess that is. It's table stakes conversation, but that's all it is is really marketing to me, because the first objection you're gonna get in any conversation is is it Fed ramped? Right. That's gonna be the question number one. So if you say, Well, we're going to, your conversation is tanked. So you have to have FedRamp. Just to say yes to that question and continue the conversation. The challenge with that that I have found in my experience is you'll go through the FedRAMP process, you'll go with your 3PO, you'll get it all accredited, and you'll get like basically, yeah, you're good to go. You're approved, but approved isn't an ATO. And so when you're out there and it's like, yes, we have FedRAMP, they're like, great. And then when they want to move forward, they get involved and like, well, you don't have an ATO. So you're gonna give us an ATO, right? You want our product. We've done all the work. And then the question swiftly changes to like, well, can we just self-host it? Can we go on-prem? We don't want to tie up our security resources. You know, they're doing other things. So, like, in my experience, it's challenging because, you know, companies make big investments in FedRAMP and getting it all secure, only to have like an on-premise version wanting to continue forward if you want revenue quicker, which also has cascading implications. You're behind a couple versions, you're not getting the latest and greatest, you know. releases and upgrades and all of that stuff. So it's not ideal, but it's kind of like the give you gotta take if you want fast revenue. But it's amazing for me to see how challenging it is. And this is not just here, this is at a lot of companies that I've worked at where they've made the investment and I'm constantly like haunted by like, well, we've spent all this money trying to do it and we're not even using that environment. It's like, well yeah, because it's kind of like if we don't have it, we don't even get out of conversation number one. Yes. Some of my partners, also former senior executives, ⁓ describe it by saying, if you're not Fed ramped, you might get onto the second floor, but you're not getting to the fourth floor. It's just not going to happen. We might not wind up needing, to your point, the Fed ramp because we're going to do it on prem. But the fact that you're not that is an indicator that you're not really a player in the federal space. And I get into conversations with clients a lot that say we don't need to be Fed ramped. And I would say it's not your decision to make. There are plenty of things that have been FedRamp that historically probably didn't need to be, but because they were, it helped them get to the point where they're at basically with having actual active contracts. And I have seen, you know, the most recent sort of updates to FedRamp and guidance and it's more clear now. And it's another thing to your point, maybe Claw Chat GPT is good because I'll say don't take my word for it. Look it up yourself. Just do a quick search. This is what we're doing. Do we need FedRAMP? And it's getting a lot more clear. But I would imagine again making that investment, especially for historically commercial companies, that it's tough. So you mentioned hyperscience and I'm a big giant fan and it's one of these tools that when I first got a briefing from Chris and the team, I said, Boy, I wish I had that for a million use cases. And that's basically as our ethos at my consulting company is do we wish we had that? And if the answer is yes, then we help support them. Give the listeners a feel of what hyperscience solves for. Cause we just mentioned integration, but you guys are very specific into what you can solve for. Yeah. Well, so just rounding out on the last one and going into hyperscience. So yeah, it has to integrate. You gotta integrate to what they got. That's gonna be the fastest way in is like it's not disruptive. There's no vendor lock in. And if you can containerize it and deploy it in any cloud, like you got those two things, like we're not gonna impact the live environment while we build this, and then we plug it in and turn it on and voila, you have magic. That's great. And then if you can containerize this and put it on prem or put it in Amazon or put it in Google or whatever the client wants, that's the best way forward. So hyperscience, when I was first approached by them, it was like on the surface, you know, I'm like leading companies. Like my last one was a category creating solution. It was called Walk Me. It was digital adoption. It was a great one. They didn't have a single logo. It was a tough, you know, I swore I'd never do it again. Like, no FedRAMP, no logo. We're gonna go make the ascent. But that was making the government think differently. Like, hey, there was a way it was always done, and then you could do it this way. And this is the transformation that occurs. Coming here ⁓ to hyperscience, it was like paper. It's like documents. And I'm like, that's not lightsaber. That's not super sexy, you know what I mean? But then you understand how the government operates all on DS forms and SS forms and everything in state and local government that feeds back up to the Fed, like whether we're talking about SNAP and HR one or Medicaid or any other of these eligibility benefits. In the key theme of fraud today, right? So all of this is starting to like weave together. But if you trace it back to where a vast majority of the challenges are for any mission with eligibility of benefits like SSA or VA benefits or anything like that, and I have some great stories I can share, it all goes back to the paper. And technology, so the status quo

today in the government, everybody has a version of a technology of OCR, which is really legacy. It's kind of moved into like what is called IDP, which is the category hyperscience is in, which is intelligent document processing. But we're really a next gen iteration of that. So historical technology is moderately good at looking at applications, structured forms, typed characters, all neat and tidy. But in reality, government documents are messy. They're copies of copies of faxes and their SKUs and there's coffee stains on bills of Leiden and like documents are messy. That's been a challenge for any government and no technology today has been able to really and then handwriting. If there's handwriting on it and you need that handwriting, forget about it. There's no technology that's gonna do it. So what happens is everything differs to butts and seats, compare and stare on the screen. And now you have in the age of AI, a legion of people literally looking at documents and hand jamming it into databases, like transferring it, right? Yeah. And That's kind of what we solve for today, especially with handwriting. When we talk about the mission at DOJ, when we talk about in the Department of War, you know, we call it the bin Laden box. If you're gonna go and get you're crashing a site, you get a bunch of documents, bots of docs, you have all this evidence and material, you gotta get that scanned. And what the government has been doing for the last 10 years in digitization is basically taking pictures of documents that are PDFs. In the age of AI, PDFs choke on generative AI. You might be able to get one or two answers out of it. But when you're talking about looking at billions of pages like we're doing at the BA and you need that kind of scale and it's mission critical data accuracy, that's really what hyperscience brings to the table. When the data can't be wrong, that's when you come to us. And at DOJ, we're expediting time to warrant. I can't get too into the use cases, but like it's really fascinating to see you can take a box of documents, take it back to the ship, take it back to the depot, start scanning them, running them against your LLMs, handwriting, looking for bad guys. locations and all of that rag models that the agency already has, but get a high fidelity of extracting all of those key data points into your downstream telemetry, whether you're using BI analytics and all of that good sauce that already exists, we're actually empowering AI and analytics in ways that folks wished, you know, five, 10 years ago, because you know you're getting mission critical, actionable data and intelligence based on the data coming out of these documents. So in short, Hyperscience turns documents into data, like really high fidelity data. So when I first got a briefing on hyperscience, I thought about a case that I worked back in two thousand fifteen to seventeen, where it was a joint case with Secret Service where I was FBI and Postal Inspection Service. And we seized documents from a publicly traded company. And we literally got a U Haul and they were in ⁓ Delray Beach, Florida. And we were up in north of Boston and Concord, New Hampshire, and we got it all back. And we opened up that U-Haul and we're like, what do we do now? This is way too much. This was a giant mistake, but here we are. So the only solution that we had was we're gonna take bankers box by bankers box, and we probably had 400 of them one by one down to Columbia, South Carolina, for DOJ to OCR them into relativity. And then the problem was to your point, handwriting. But so this was a company that was basically doing fraudulent insurance. And so there was a lot of handwriting. There's a lot of doctor's notes. There was a lot of stuff. It took us 18 months to get even the data back. And when the data came back to us to an analyze, the case was already too far right, but also it wasn't actionable. And so I go back to thinking, and when I'm talking to my friends in government to say when you have that use case, you need to have a solution. And that's where hyperscience would come in. Also, when I ran the asset forfeit branch for the Secret Service, we had legacy folks that I thought were gonna die under paper because you would have stacks and stacks of paper. I'm like, we gotta go paperless. We're taking this important data. You take it very seriously when you seize and forfeit people's stuff. Like, that's communist kind of stuff. Like when you think about it, like the government's taking my stuff. You have to be very precise. And the fact that we were still using paper everywhere. And then you have a water problem and all of a sudden all of your documents are ruined and you couldn't analyze them. You couldn't do anything. And that's where it's like, man, you guys have created. Is it sexy? No, it's not. But like there's a lot of companies that have created solutions without a problem. They look awesome, but they don't solve a problem. Where you guys can solve a problem and you can also integrate. You're not the only solution. You do something else with that data once you've used it, you've turned it into something actionable. And that is a really powerful thing that a lot of times it's hard to translate to the person that hasn't ever sat in that seat to know those use cases. But you have no shortage of use cases, which must be exciting in that regard. But how hard is it to get on the government side to get people to invest in something where, hey, I'm used to just doing it this way. We're just gonna OCR it and like how tough is that from that perspective? So you have to hit it from multiple angles. And, you know, this kind of leans into a couple of themes that I think we'd be happy to cover. Like, you know, the FSIs, the major integrators, they play a great role in advising and making the world turn for the federal government. They're patriots just like everybody else. But like in the age of AI, what I'm finding when I'm

representing really innovating cutting edge solutions, it's hard to kind of like when you're talking about like, well, we don't need three hundred bodies on contract anymore. We can actually take those three hundred bodies on contract. And move them to the other end of the bottleneck, which is like adjudication, right? But we gotta let the machines do the work. If it's passing the sniff test and it has the accuracy and it has the automation and it's performing as advertised, we find ourselves rubbing up against like, you know, it's replacing jobs. And it's really not. It's just are we really looking at jobs as like how much are we paying someone to look at a piece of paper and like type it into a system? Right. That's a very low value job. And a lot of people in the case of like staying local with HR one, when we're talking about getting benefits, snap benefits, adjudicated Medicaid benefits, which is also has a slew of fraud into it right now. It's it's it's an epidemic in the country right now. A lot of that hides in paper, number one. Number two, the folks that we see across the states, like in caseworkers, whether they're doing DOJ stuff or they're administering benefits at the state and local level, these folks, to your point, did not sign up to swim through paper. They came to chase bad guys. They came to get help to the people that need it in the worst times of their life. So you're seeing a lot of burnout and turnover just because of the stare and compare aspect of and that's the way it's always been. So we gotta work with the SIs. You have to make them see the value of it, right? Because when you're a two hundred person company, I say I spend a lot of my time educating the board and executives on the realities of doing business. Man, we have to cross the moat of gators and snakes. You know what I mean? To get Through to show this technology because if you get trapped at that FSI layer, you're dealing with personalities, you're dealing with egos, you're dealing with a lot of different stuff. And they've been doing it a certain way and delivering value to the government, they'll patronize you in a lot of cases. They'll burn cycles with you, educating them on it, but they won't bring you in. And that could be for a myriad of reasons, one of which includes is these partnerships with like the big hyperscalers, right? Hyperscalers are eating the earth and they just buy technology left and right and they'll throw it in for free. It's not a competitive technology compared to what we do, but it's hard to compete with they're going to give it to us for free. So why are we talking to you? And it's like, well, it's not going to work the way you need it to work, and it's not going to change the mission in any capacity to the tune of helping you get bad guys faster. So that's a challenge. How much do you worry too when you're dealing with certain SIs that say, I think we can build that ourselves? And of course they can't. But there's always that challenge because to your point, it's about how much revenue can we bring in and how much margin am I gonna lose when I'm bringing in somebody else. That is a tempting thing. And especially if you're saying I can solve for this 300 person problem, and they're like, Well, we make a lot of money off of 300 people that are coming in forty hours a week, and they're not appreciative of the fact that I can get you downstream, I can get you higher wages and it's more impactful for the government. That has to be tough, especially when you have a technology that People don't really understand the complexity that goes into it and probably think for a little while, like, I can do that. I can build that. We get it all the time. We can build that. We can build that in Amazon. We can build that. So being a good partner to the mission, this is a twofold attack. And I tell this to all of my reps who are out my account managers and stuff like that. Our job is to get two federal leaders to educate them, not on hyperscience, but to educate them on the landscape of the technology and the problems that we solve and why we're differentiated in that and helping them solve that. When you're successful, and this is my call to Fed leaders, I know that there is a million technologies that want to waste people's time. So like that's why I'm very upfront when I write someone and say, like, hey, listen, you know, we're FedRamp High, we're Gardner leading, forester leading, IDC leading. That's my first sense. Like we have our bona fides and our credentials to sit down and not waste your time to show you something that you're gonna like. And then it's two years before you can get it. This is on the shelf, this is available to you now. And it's providing massive ROI on some of the largest contracts in federal government right now. So if you are capable of getting to the gov leaders and they're open to learn and think differently about how we've always done it versus what could be, and then partnering and being like a good partner in the sense of like, hey, look, you know, we saw this, like we can just build this. Like with HR1 and state and local, we got that a lot. Like, hey, we're just gonna build this with Amazon. And what we've actually seen, and it's kind of really cool about our technology, is When we first got here, we were the expensive solution. That's because they saw, you know, hyperscaler competitive solutions that are legacy that are good enough for government on pennies on the dollars, right? So they're like, Well, we're paying for this and you're that. And we're like, No, we're not that. We're so much more than that. But at the same time, like we're fighting through that. We get in front of ⁓ we tell them, like, hey, we can help you here. The FSI says that they're gonna build it. We've paid them to consult for us. So, you know, we hired experts and we're gonna listen to our experts and we'll say, We hear you. Other states are doing the same thing. I just want to

let you know in six months, you're gonna call us back and we're gonna be here for you to help. So patience, it's a very obtuse word in sales. Yeah. Right? Like you never wait and you don't like patience. But patience, if you have the right technology, patience is your best friend because you gotta let them fail. So, like early off when we were being compared to hyperscaler low cost leading solutions, we were more expensive. But then they started to understand that our capability provided it wasn't a point solution. We do foyer and redaction. We do FOIA and redaction on the largest federal FOIA program in the United States government. That was a huge bake-off for years to have to go earn that. We can also enable your future generative AI, meaning we can take off-the-shelf models and make all of your legacy historical documents that choke your generative AI, that you don't get the hallucinations, you burn through tokens trying to get the answer that you want. Turns out with one of our simple models. The new standard is no longer PDF. It is, you know, doing full page transcription. You vectorize that data. You create markdown files. And now all of your historical data, which is to me, I've always been told that is the treasure trove for the federal government. They don't want open source models. They want generative AI trained on their historical data, right? The gap to that was that's billions of pages locked in boxes. And it would take an army of people to do that. To enable the promise and vision of what AI should do for the federal government. So we are the springboard for that as well. But to do that, when we're compared to these legacy solutions, to compete with us in the age of HR one and try to get into handwriting and stuff like that, they have to start coupling in GPUs. So the hyperscalers are smart. They'll go give this away for free for a trial. It'll perform moderately well. We're still beating them at accuracy and automation at scale, but it's kind of like, well, on the surface it looks Less expensive. But when you talk about infrastructure and you start talking about GPUs, which are in limited demand, my CTO likes to say, you know, it looks cool and it performs really good, but would you take a helicopter to cross the street? You know what I mean? Like that becomes very impractical very quick. And when you scale that out across a mission, it becomes not affordable. It's not forecastable in the budget. So we do ninety-nine percent of what we do on CPU, which is also why we lead Gartner, Forrester, IDC, and the rest of them. And we're like less than a 200 person company. And that's what I get a lot. It's like, how do you guys go and beat the big hyperscalers and these people who've been doing this for 20 years? How are you beating them? And it's because people a lot smarter than me who were like Einstein level IQ of machine learning back in the day made a big bet on, you know, everybody here is in the age of AI, the right model for the

right job at the right time. It's not like a one-time thing. So that was their vision. They were small. you know, clustered models working together to solve different problems on the documents. For example, our first three processing models are is it skewed? Does the paper come in wonky? Well, we have a model that will re skew that and get it clean. So even if it's a dirty, nasty image, right? We're already getting that cleaned up. So that's one model for a job and et cetera and et cetera. So we run it through like a conveyor of processing different models to get you that final output. And we do this the vast majority on CPUs. So we went from like the super expensive solution to like the hyperscalers trying to compete against us. And now they're becoming far more expensive when you're looking at scale. Yeah. Yeah. The total cost of ownership or at least the inability to predict what your budget's going to be using a tool is a terrifying thing when you have a limited budget in a smaller organization. So having that price certainty is critically important. ⁓ cause I know I've been burned and I know others have been burned, especially in this move to the cloud where sometimes it's eight times more expensive. And you don't realize it because you were sold, I was sold on this promise of, ⁓ well, this is going to be easy and you know, all that other kind of stuff that we thought and so it's interesting to see now the dynamic changing a little bit where now the same people that were spending a lot of time saying we're gonna migrate entirely to the cloud are going, well, maybe we can pull stuff back and you know, we'll see how that plays out in the next couple of years. For the last couple of minutes, I wanted to ask you, because I have a lot of listeners that are in federal government that are looking to retire. And they'll ask me a lot, like, hey, what do you think about coming out and going into federal consulting or GovCon or whatnot? When you're looking and talking to somebody that is coming out of government, what are the characteristics or experiences that you are particularly most interested in to find out if they would be a good fit for an organization? Or is it more individualistic? It's the network. Right. Like you gotta know somebody who knows, but like there's enough of us I call us federalis around here that are just kind of in the software space. You know, you work with folks, we've done deals in the past, you're getting ready to punch out and retire. You know who's who in the zoo, you know what the priorities are, you know how the budgeting streams work. So any kind of like helping demystify the contracting process. And like we're to the point now, like after a lot of the big retirement after Doge, what we've been finding working with federal governments, which To a board or two executives seems appalling, which is all right, so we want to buy this on the government side, but we got to go figure out how we're gonna buy this. We haven't bought, you know, five million dollars worth of software before. My boss did all that, and my boss retired early last year. And we're kind of learning that. So it's redeveloping this new class of folks that are still sticking around, punching the clock, getting there. But there's a lot of like, you know, challenges with that. So the folks coming out, there's a lot of value. And knowing who's who in the zoo, knowing who the decision makers are, because you know, junior sales reps in this space will spend a lot of time working and you got a thread at multiple levels. You want to be multi-threaded, you want to build a sphere of influence and all of that good stuff that we learn in sales books and our careers. But also like it's so critical getting someone who just popped out of the mission knows exactly how the money flows, exactly who's gonna be the decision maker, who can tell you who's gonna be the objector and help coach you around how to like soften that person up and win them over what matters to them. So all of that discrete knowledge that no one or chat GPT or no AI can give you that fidelity of how the terrain, the landscape is, right? And then understanding also that everybody's on the clock. When you hop over on this side, the clock is burning. And we, I understand, Matt, you understand the way the world turns and funding cycles, but we basically have about a year to show proof of life that this is working. So for folks like me. What we're doing more is like, hey, let's just do a six month contract, low dollar value amount. We're gonna pay you something, right? Because your time's valuable. And you can ratchet that back into ours for you. Because a lot of these conversations are more just access, right? Like, hey, Bob, you know, I'm working with this company. I think it solves this problem that we were working on for the last five years. We need to kick it in its teeth a little bit more and harden it to make sure it's really good. But based on my knowledge of us working together for the last 20 years. I think this could be massively helpful. And I wish that we had it when we were in seat, right? Yeah. So already we're going through a door in such a different I can't tell you what the value of that is. I can't quantify the value of that, but it's massively value. The challenge is let's do six months. Let's get the quality. You got to measure the quality of the meetings, who those people are you're meeting with. Are they buyers and decision makers? So as long as you can get to those things and then you know, help shape the team to align and and you've actually done a really good job with us on helping shape the vision of how we align in the vernacular, in the way that folks on the side of the mission understand it, because I wasn't in the secret service for 20. You know what I mean? I don't know the language that you speak in the problems that we solve for you guys. So that's immensely valuable understand you're always on the clock. You

gotta produce something, even if it's like, hey, let's just do a little POC. You know what I mean? Key card, we have to show proof of life. And then once you do that and you're successful and that leads to a larger kind of contract, then it's time to discuss renegotiation with your sales peers who you're supporting. And you need to set that expectation up front. What I've seen is people sometimes come out unrealistically jumping into the consulting game. Like, I need $20,000 a month. I'm like, well, that's great. You've never consulted and I don't know if this is going to work. And I'm on the hook for showing all five of that. So kind of meet me halfway. Let's test the waters. Let's see if there's a there there. Let's get a plant the flag and win. And then let's see if we can get an expansion on that. And now I can talk to you about that twenty thousand dollars or whatever the number is. You know what mean? That's more in line of what consultants I think are expecting when they jump in because their buddy who jumped out of the army, he's you know, colonel and he's getting you know what I mean? It's just meeting people where they're at and doing a good job sussing out the technology in terms of how it applied to the mission that you just came out of. Yeah, I try to tell folks to be successful in helping companies. You have to have run a budget. You had to have sat through a million pitches. You have to understand where your money comes from, not only running the budget, but how do I get more of it? Are there any alternative budgets, whether it's a forfeiture fund or something like that? I have to know contracting lingo. That's important. Because if I can't even talk to talk, then what am I doing here? And people have to like you inside your organization. Like if you're missing any of those, then you're not going to be particularly successful. So you might be but the hard part on the government side is Most of those roles, people don't want to do them. Like they want to be operational. They want to be mission like, you know, tip of the spear, I'm in the right front seat with the president. That's not going to help me sell anything. I need to be able to talk somebody through and understand, to your point, the cultural dynamics of an organization and how can I shortcut it as quickly as possible. And then also the last point is the phone gets awfully heavy. Are you willing to pick up the phone and call? People are paying you for your network. But if you're not willing to actually activate your network, then you're not that effective. And I didn't know that. So in 2017, when I started the Global Operations Center, I was getting calls from retired guys. Hey, can you go meet with this? And I was getting frustrated. And I didn't understand. And my boss's boss, a good friend of mine, said, Any form of calls, you take a meeting. And I said, Great. But at first I didn't really even understand that dynamic. And some of the best tech I ever bought was because

I then became open minded. And if those guys didn't have the courage to pick up the phone and call, I wouldn't have known. And so being a value back to the government and knowing what they want and not selling them, you said vaporware, shelfware, whatever, is also critically important because then you're relied upon. People will come to you and go, Hey, Carl, what do you think I'm trying to fill this gap and I get this a lot from my friends still in government. Hey, have you heard of this company? And I'll do my own due diligence. Yeah, it's a good company. Here's two other alternatives. But Anyway, I say that to say to the listeners that are still in government, those are the kind of things that you need to look out for if this is the world you want to get into. Because if I'm putting up my resume and I can retire in six months and I haven't checked any of those boxes, you're probably not getting a twenty thousand dollar a month contract, first of all, but you're probably not gonna be able to get wins and the wins is where you make the money. Last question. When in your mind did the protest thing start to become so destructive. Cause it's a real problem. I saw it on the government side. I deal with it now with folks and it's become weaponized. Do I have that right? Because you've been in the game a lot longer. I just got out of the government a couple years ago. Twenty years ago, was this going on to this level and I just didn't know it? No. Okay. No. And it has been weaponized. So putting yourself in my shoes, right, as a leader, a big component of my job is what is called sales forecasting. So when is it going to rain? Right. So we go through a full sales cycle. We educate. RFI pops. This looks like it was written for us. Looks like we did our job. They're saying the right things. It sounds like hyperscience. RFP comes out. We do our due diligence. We write our response. We as a technology company always respond directly. Just educate, even if it's a modernization program and they would never award to just us because they need an FSI to turn the wrenches. We do our due diligence in educating the government on. where we fit into what they're trying to do. Then we take that and we go to partners, right? And if you're good, all the partners, all the bigs are bidding on the same stuff. So you want to be betting multiple horses respectfully. We partition resources. There's no talking across the fence. So, you know, we work and build prototypes. At least the government is building prototypes now because they were just awarding major contracts on RFPs. Right. Mm-hmm. So now now they're in the mentality of build it and show me and we'll talk and you can progress Phase two, phase three. Good on them. But ultimately, you know, my job is to predict, all right, so this is all lining up. We've confirmed that this is FY twenty six money. It's August now. We're expecting this to pop out at September thirteenth or September thirtieth, and everything is aligned. Everything looks good in a normal year. But how do I forecast back to an organization that it was awarded? Our partner that we bid with won it. And a partner that we bid with also protested it. What's the delay in that? Is that another quarter? And then you get the badness of pre-protesting. Like we haven't even got into it and people are throwing into the fields. So I show all these different scenarios of like what a protest period looks like. And I'm like, how do I forecast any of this? So I think it has become weaponized. And I just kind of like now when it's a competitive opportunity as a sales leader, and what I tell other people to do is just cautiously add two quarters on it just in case of CR, just in case of protest. And if we've done our job, it'll pop out the other end. But I've seen a lot of people get chewed up. From like, hey, look, it was supposed to come in on September thirtieth. That's the only real what we call in sales compelling date. Yeah. What's the compelling date? There's only one in the federal government. There will only ever be one. And that's September thirtieth, right? And that's like hearkening back to like you gotta look at it through the year, not through the quarter, right? So that's kind of what I would say to that. It hasn't been helpful. I've seen a lot more respect or honor among thieves, if you will, where it's like, we gave it our best effort. We're not gonna protest this. Even though we could protest this. But hey, Bob, don't protest me if we win on the next one, kind of deal. Right. Because what we're doing is through we call it corporate greed, right? Or just people's livelihoods and winning these contracts, we're delaying progress in the government. We're delaying innovation in the government. And I think, you know, when private equity gets involved, a lot of those ratchets go out and individuals are fearful for their jobs and all of that stuff. So the natural thing to do is protest. But again If you're leading a good team and your heart's in the right place and helping mission owners and the warfighter move forward and respect that there's going to be other contracts for us to go after and hey, maybe they fail or hey, maybe we can even go over there and talk to them about maybe fitting in somewhere, you know, working together on Workshare. I think that's a lot more agreeable because it's just gotten so nasty that what we're really doing is same with continuing resolution. How many months are we losing behind our adversaries and our bad guys who don't have continuing resolution? So At some point it you can almost tie it back to national security on some of this stuff. Just for throwing the flag on the field and protesting because that's your only option left. You got beat, yeah. we're gonna protest it. And those things hardly ever swing back in the other direction. So you're only delaying innovation in the federal government. And from the perspective of somebody who was in the government that had awards protested, although I could never say this while I was there, there is no way. I was ever going to want to work with a company that just was angry that they didn't get it. So they protested. I'm like, you're on my list, dude. Like, I've never like and you try to tell them that. No, it doesn't work that way. I'm like, it 100% works that way. Imagine that. You just blocked me. Now I have a work stoppage. Now you've created a whole bunch of problem. If I wanted you, if I picked you with the first pick, you would have gotten it. But anyway. So, Carl, thank you so much for your time. I really appreciate it. My daughters always ask what what do you do for a living? Talking like this. Like this is I find this to be so interesting. It's how the government operates, right? And it we're hopefully demystifying it for folks on how you can interact with the government in a productive way. You've mentioned staying mission focused, providing value to the government. What I didn't hear is margins. Like that's not what is successful and the government knows it. Do you agree? Yeah. If you're not here for the mission, and that goes all the way up to like from a founder to a private equity. If you hire the right people and the folks that I hire are mission focused and mission first, and we understand some things take time, like you're gonna get a lot further, a lot faster in being patient and understanding that there's a lot of disruptions in the government. There's things that you can control and things that you can't control. But yeah, I mean, I'm so glad that you have this outlet and educating. I hope board members across the globe see this and hear this. Because I think if we could fundamentally change and stop grouping public sector just as another commercial business unit and driving success, I think we're gonna see a lot more innovation, a lot more patience, less turnover in the market because, you know, there's a lot of institutional knowledge lost. If if a board loses faith inside of a year because I couldn't put any points on the board and my team rolls out, the new guys coming in got to start all over and there's very limited context and it's a diminishing return on accelerating into the market. And it's not good for the government, not good for the company. So Matt, thank you so much for this outlet and Me on to talk about some of the pains and challenges of the life that we live every day, right? Absolutely. ⁓ Carl Wright, and it's hyperscience.ai, correct? Okay, perfect. Yeah. Listeners go check them out. And thank you for listening for this week's episode of Detonation Point present Elastio. We'll see you next week. Thank you.