Welcome to the first episode of Crossing the Valley!
I’m excited to bring you Accrete AI’s story of transition. It’s a story about a commercial-first bootstrapped company finding its way in the defense market. The interview was super interesting, as our two guests have such different backgrounds: Prashant was a financial trader, while Brian had a 20+ year career inside the government. But they play off each other incredibly well, and have some absolute truth bombs for our listeners. This case study includes key takeaways, timestamps, company contracts (thanks to our friends at Procure FYI), and much more.
If you like the audio version, check us out on YouTube, and read on for the Case Study highlights!
And please let me know what you like and what you want more of! noah@frontdoordefense.com.
⏲️TIMESTAMPS⏲️
00:00 - Intro
01:43 - Prashant's Background and Accrete's Founding
08:47 - Brian's Background and Transition from Government
13:37 - Accrete's Commercial-first Strategy
17:47 - The DIU Application Process
24:24 - DIU's Acquisition and Transition Process
29:53 - How Accrete Built with the Customer to Pass Technical Milestones
32:44 - The First Transition
35:42 - Expectations vs. Reality of Transition
43:02 - Advice to Small Companies
50:17 - What Does the Future Hold?
Case Study: Bootstrapping from Prototype to Production in DoD
Overview
Prashant Bhuyan founded Accrete AI in 2017 after a career in high-frequency trading showed him how next generation algorithms could displace traditional traders by creating an unfair advantage exploiting small price inefficiencies across exchanges. Accrete’s technology isn’t designed to replace human workers, but to make them more powerful by giving them better predictive abilities to improve decision-making.
Prashant began Accrete with the hypothesis that if you could use machines to read, understand, and learn from large quantities of unstructured data, you could beat others in forming conclusions. With the proliferation of data, machines are the difference-maker.
The company’s initial focus was analyzing complex, unstructured, dynamically changing data - particularly on social media. But they had a breakthrough in creating models that could - for example - extract rumors of mergers & acquisitions. They built a diverse portfolio of customers across industries; even music labels reached out to use Accrete’s software to predict what songs would go viral. Prashant and team imagined that the Securities and Exchange Commission (SEC) or other federal regulatory agencies would eventually have a need for these sorts of predictive tools, so they acquired a Bloomberg Government terminal to start tracking potential government requirements. It was the Defense Innovation Unit (DIU), however, that would offer the first relevant opportunity.
Company Snapshot
Size: 153 employees, 57 (37%) of which are engineers.
Estimated 2023 Revenue: $23M, $3.2M (14%) from federal contracts.
Note: Thanks to our friends at Procure.FYI for sharing their data!
Products
Accrete builds artificial intelligence (AI) products that learn what is most important to an enterprise and then track that behavior. Their primary government focus has been on tracking social media narratives and how they emerge and evolve, to help customers predict their impact on behavior.
Argus: AI Agent for anomaly detection on open-source unstructured data
Nebula: Viral narrative prediction and automated content generation
Path to the Federal Market
Accrete had a robust commercial business before they entered the defense market. The team got a Bloomberg Government account and spotted a government requirement for supply chain security analysis. Accrete applied via the DIU, and won the award over 60+ other companies.
According to DIU’s website, the organization partnered with Accrete to “to develop a custom threat detection platform that automates the collection and processing of more than 30 million pieces of open-source information to identify attempts by U.S. adversaries to infiltrate critical national security supply chains.” DIU’s 2021 report stated that the partnership allowed the Defense Department “to identify, track, and map illicit activities at a speed and scale that is three times faster than what human analysts could perform.”
At the time Accrete won its first government contract, its federal sales subsidiary, Accrete AI Government, was led by a former U.S. Special Forces Lieutenant Colonel, and a retired Air Force special agent.
When the prototype was accepted, Accrete showcased it at US Special Operations Command’s annual conference, Global SOF Week 2023.
Key Lessons
1. There is no deal without a champion.
It may sound obvious, but it’s amazing how many companies think that a product alone is enough to make it across the valley. To quote Prashant: “Ultimately, there was no playbook, there was no visibility, and it was a traumatic experience!” There is no one-size-fits-all process for selling to the Department of Defense. So without a true champion - a leader with significant influence, experiencing pain they are no longer willing to tolerate, motivated to fight to pull you through the process, it’s an uphill battle. Which brings us to #2…
2. “You need to have a product that they really, really need.”
No one you engage with inside the Pentagon (or any government building, for that matter) has a job description of “buy X product.” Acquiring your solution may sit anywhere from their top priority to the bottom of a thousands-long to-do list. Given the amount of work it takes to get a capability rolled out, government customers aren’t going to sign up for that task unless it really makes a difference. Which leads us to #3…
3. Do the work to understand the customer’s mission.
Brian told a story of being pitched a wearable device while at the Defense Intelligence Agency. While the technology was interesting, Brian explained to the sales rep why he wasn’t a buyer (DIA doesn’t operate clandestine services). Instead of accepting this answer, the company representative berated him amd claiming that Brian “didn’t understand the mission.” This behavior obviously did not get the company closer to a sale, and did nothing to get a decent capability in the hands of a group that could have used it! The government is opaque - no one should expect to hit the perfect customer on the first shot. But the approach, humility, and ability to do customer discovery matters - there’s a huge difference between showing up to sell a widget and showing up to solve a problem.
4. “There is no one big step. It was a series of little steps and really just perseverance.”
This is the quote that I have not stopped thinking about since this interview. The Accrete team mapped out the 150+ steps and actions it took from the time they learned about the DIU commercial solutions offering to when they finally received the production OTA. They never knew if the hurdle they crossed was a big one or just another brick in the road. Like an ultramarathon runner, people working with the government cannot allow themselves to get lost in the enormity of it all. One foot in front of the other. Celebrate the small wins. Just. Keep. Going.
Key Contracts and Vehicles
Tradewind Solutions Marketplace: The Chief Digital and Artificial Intelligence Office maintains a digital repository of “post-competition, readily-awardable” technologies, to assist government customers in quickly researching and acquiring Artificial Intelligence/Machine Learning (AI/ML), digital, and data analytics capabilities. Accrete AI was added to the marketplace as “Awardable” in November 2023 for its Argus Supply Chain and Argus Social solutions.
Multiple Award Schedule (MAS) contract by the General Services Administration (GSA): Accrete was awarded a five-year contract vehicle (07/14/2023 - 07/13/2028) in August 2023.
DIU Prototype Other Transaction Agreement (OTA): In November 2020, Accrete was awarded a prototype OTA for their Argus solution. The project was sponsored by the Defense Intelligence Agency (DIA) and competed by 65 companies. The prototype was accepted after 15 months.
Production OTA: Operational Technology Software Licensing Contract: In November 2022, Accrete received a five-year for Argus, as part of their DIU transition.
Small Business Innovation Research - since winning their DIU contract, Accrete has received a variety of Small Business Innovation Research (SBIR) awards to introduce new products into the Department of Defense, with different customers. Some of these include:
SBIR Phase I Open Topic for Artificial Intelligence / Machine Learning from the Army
SBIR Phase I for Supply Chain Logistics Resilience from the Air Force
SBIR Phase I for Reverse Engineering Obsolete Parts
SBIR Phase II for Media Exploitation Research from the Air Force
Additional Notable Quotes
“There are a lot of companies that claim to do Artificial Intelligence, but most of them don’t.” - Brian Drake
“One of the unique things about the DIU process is, if a company is not performing, you can cut the money. The government is not locked in.” - Brian Drake
For more, follow us on social media:
Front Door Defense: https://www.linkedin.com/company/front-door-defense
Host: Noah Sheinbaum
https://www.linkedin.com/in/noahsheinbaum/
Guest: Prashant Bhuyan, CEO / Founder of Accrete AI
Twitter: Prashant_Bhuyan
LinkedIn: https://www.linkedin.com/in/prashantbhuyan/
Guest: Brian Drake, Federal CTO of Accrete AI
Twitter: thedrake
LinkedIn: https://www.linkedin.com/in/briandrakedeloitte/
Ep. 1: Bootstrapping from Prototype to Production, with Accrete AI