In this episode, Mike Vichich, CEO of Pursuit, joins Jamie Grant to talk about fixing the broken incentives in public sector procurement. From his roots in public service to building two tech companies, Mike shares how data and precision targeting can drive real transformation. If you're tired of the status quo and ready to rethink government innovation, this episode is for you.
The public sector isn’t short on talent. It’s short on alignment. And Mike Vichich is on a mission to fix it.
In this episode, Jamie sits down with Mike Vichich, CEO of Pursuit, to break down why legacy procurement processes are actively working against innovation and how data-driven models can realign the ecosystem.
From growing up in a family steeped in public service to building and exiting a successful tech company in the private sector, Mike brings a rare dual perspective. Now at the helm of Pursuit, he’s applying those lessons to one of the most complex and inefficient markets in America: public sector procurement.
They dive into:
This episode pulls back the curtain on incentive structures, misaligned risk, and why the most significant barrier to transformation isn't bureaucracy. It’s trust. If you're in the trenches trying to change the game, this one’s for you.
About Mike
Mike Vichich is the Cofounder & CEO of Pursuit (pursuit.us), an AI company simplifying how businesses find and win public-sector contracts. An accomplished entrepreneur, Mike previously founded and ran a company through acquisition by a public company for $187M in 2021. He is also an active angel investor, backing early-stage startups and mentoring founders who tackle challenging problems with creativity and grit. Outside the office, Mike lives in Ann Arbor, MI with his family, where they enjoy playing sports, exploring new destinations, and continuously learning something new together.
Guest Quote
“ In SLED, you might pick California, Texas, Florida, and New York. Those are the biggest budget states, and you got limited resources. So you hire people who have relationships, whether it's a sales rep or a consultant or an advisor, or a lobbyist, and they give you access to data. That was the old game, right? Relationships gave you data. The new game, we think, is that if you're actually able to listen to the transcripts, the plans, the budgets, the contracts, all the stuff that's happening in the public sector, that's being put out every day. If you could listen to that and then find where your opportunities are and prioritize based on who's got the pain, that data tells you what relationships to go build from a seller's perspective. So that's the fundamental frame that we're teeing up. We're not saying the relationships are gone, we're saying that you should use data to figure out what relationships you should be investing in.”
Time Stamps
00:00 - Episode Start
02:36 Mike's Journey
09:56 Balancing family values and career ambitions
18:24 Breaking into the public sector
22:48 Understanding incentives in the public sector
44:33 Breaking down RFP dynamics
49:08 Role of relationships in the public sector
53:25 The Three Farmer Syndrome
58:27 CAC vs COGS & How Venture Funds Really Work
01:08:06 Why government buyers get screwed on pricing
01:18:38 Fixing public sector tech: From SI boondoggles to smart SaaS
01:27:50 Rethinking regulation in public sector tech
01:32:48 Pursuit's approach to public sector solutions
01:45:44 The Roundup
Sponsor
Ever To Conquer is brought to you by RedLeif, a digital agency focused on accelerating the modernization and security of public sector data. Visit RedLeif.io to learn more.
Connect with Mike
Get in touch with Mike at mike@pursuit.us
Connect with Jamie
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[00:00:00] Jamie Grant: The cost of a single lead in SLED is 3.1 times the cost of a lead in the, in the commercial market. Cost of a lead in FED is 2.4 times and the sales cycle's twice as long. And CFOs at government facing firms are over forecasting their pipeline 10 to 15%.
[00:00:17] Mike Vichich: The most mission critical pieces of technology actually are the, the most archaic because they're the highest risk to fix or to like upgrade.
And if they're, if they're working fine, they're efficient, like don't, don't fix what's not broken is kind of like the, the prevailing wisdom. But then of course maintaining it, integrating in it into some other system, adding a feature, that stuff becomes. More difficult.
[00:00:51] Jamie Grant: Hey y'all, welcome to the Ever To Conquer podcast, where we're having a lot of fun looking at the public sector ecosystem, um, an ecosystem that's in like desperate need of, of transformation and disruption. Super excited for the conversation we're gonna have today with, with somebody that's become a good friend in just a, a short period of time.
Uh, Mike Vichich is the CEO of Pursuit.us. A company doing some really cool stuff to try and expand marketplace access, uh, for solutions that'll help modernize and, and secure public sector data and just doing some really cool stuff. So Mike, I really appreciate you taking the time today. Uh, we can empathize with being a co-founder and a CEO, uh, and everything you have on your plate.
So looking forward to a great conversation.
[00:01:32] Mike Vichich: I'm looking forward to it. Matt. The only thing I'm not looking forward to is seeing that Auburn helmet there for about 45 minutes. Listen, when the Elite eight happens, go green, baby.
[00:01:39] Jamie Grant: I, I would love to see, you know, I think we can unite around this. Uh, in the state of Michigan, there is a university that, uh, tends to be a little highbrow and entitled and loves to call the, the premier institution in the state of Michigan.
A little brother. Uh, we call that the scandal Plague, university of Alabama at Tuscaloosa. You call it the University of Michigan. So even if we spend a, a day battling it out in the elite aid, at least it's kind of the, the, the righteous universities from our respective home states.
[00:02:09] Mike Vichich: Yeah, it's ironic though, 'cause I live in Ann Arbor.
Yeah. But Spartan in, in Ann Arbor. It's all good.
[00:02:15] Jamie Grant: Listen, I could not live in Tuscaloosa, so the fortitude it takes for you to do that. Um, man, it's, it's fun time with March Madness going on and hopefully we, we, we could have some fun, uh, in the Elite Eight. Let's kick off, man. I'd love for the audience to get to know you a little bit because you know, a lot of the work we do is kind of in the ecosystem of people who have been around public sector technology for a long time.
It's a very small group that has seen the need for disruption that's been begging for things like Doge to break down kind of the oligarchy that exists of these, these institutions and moats that make it difficult for a guy like you and, and the work y'all are doing to, to come on board. But I'd love for you to just kind of touch on your, your, your family's story.
I think we share that from different perspectives. My mom was a teacher. I, I know I, I don't wanna steal your thunder, but just kind of talk about how as a software entrepreneur you found yourself on this mission and how your family played a role in that.
[00:03:10] Mike Vichich: Yeah, for sure. Both of my parents were public school teachers.
My dad taught high school science. My mom taught fourth grade. And just the conversations around the dinner table growing up were always about education and trying to. You know, leave the world a better place. And you know, my grandfather, uh, was a B 24 pilot. My uncle was a fighter pilot, and then the FBI.
So there was always like a strong public service and a love for our country that was embedded in, in me from when I was really little growing up, going to air shows with my dad. And, and when I sold my first company, I had the privilege of taking a step back and thinking about what I wanted to be when I grow up.
And, you know, that led me to Pursuit.
[00:03:49] Jamie Grant: So let's, let's real quick, talk about Wisely and what that was doing because Yeah. You know, having almost nothing to do with public sector, right. But, but yeah. A, a, a value delivery, leveraging technology. So give the audience who doesn't know Mike doesn't know wisely, doesn't know kind of where you're coming from as somebody that's new to the public sector saying, Hey, we can play a major role in disrupting this thing, what that looked like at Wisely.
[00:04:13] Mike Vichich: Yeah. So Wisely was a, a restaurant technology company. Our customers were enterprise restaurant brands. You know, pf Chang's first watch, Denny's, five guys, brands like that. And our whole mission was to try to make every customer feel like a regular at the end of the day. So we did a lot of different things, and actually from a data perspective, there's some similarities to Pursuit.
But, uh, we tried to stitch together all the disparate parts of data that a restaurant brand might have, so that no matter whether the, the guest was interacting with the, the restaurant online or in the restaurant or through some digital communication, they had the same experience. And it felt like the, the brand knew them, knew what they liked.
So that was, that was what we did, was take all that customer data together and, and if you apply that to Pursuit, we're taking a lot of data that is available on what the public sector's needs and budgets and problems are, and trying to stitch it together in a way that can be useful for people who sell into the public sector.
So this, some parallels there.
[00:05:12] Jamie Grant: And, and I think, and I know we're gonna touch on it a little bit in, in kinda what we've, we've outlined, um, that only works if you understand who the end customer is. Right? Right. And, and I love where you're going because so many times in the B2B world, it's like we sell the back office software to the service provider.
Mm-hmm. But if we don't understand the user story of the family of four that's sitting down at first watch, we're not really doing anything other than kind of back office admin. So, um, I, I know we'll touch on that, but I, I love kind of the, just imagine if government around the country at every level actually believed in constituent experience.
Yeah. Right. Hospitality,
[00:05:49] Mike Vichich: right. Like ha the way, the way people feel. You know, one of the, one of the seminal books, uh, in hospitality, and it's something that I think every restaurant entrepreneur reads, is there's a book by Danny Meyer called Setting the Table, setting the Table, and he talks about 51% hospitality, 49% service.
And the difference between the two service is what you do. It's the steps, right? Um, it's all the stuff you train, you know, and then hospitality is how you make people feel. Do they walk out feeling like they mattered and are they happy? Yeah. And I think I'm super grateful for that experience in the hospitality industry.
'cause I, I hope to bring it, you know, to what we're doing at Pursuit.
[00:06:25] Jamie Grant: In one of our all hands when I was, um, still in the inside is the, the CIO of Florida. One of the things I, I challenged the team early on and it just kind of stuck, was would they do business with us if they had a choice? And there's like this systemic culture in government that has guns and badges and penalties and regulations that can basically do the service offer no hospitality.
And we're forced to consume at the DMVA miserable experience in some places. And then you have some folks that, that come in and say, Hey look, they lead a, a Department of Transportation, or they lead the Department of Motor Vehicles and they go, Hey, what if our customer actually would choose us if there was a marketplace?
Um, so that's, it's cool. Talk to me a little bit. Um, you have this huge exit, and I know everything's relative, but you know, you, you build a company from, from ground up and you sell for a couple hundred million dollars. I call that huge. Uh, everything's a matter of scale, but, but, but give a little bit of light, um, especially for a largely public sector audience that isn't used to kind of the venture world, the PE world.
They know it's out there. They we're gonna touch on that a little bit, but what was it like for Mike, the man, the husband, the dad? When you go from kind of just warp speed building what you're building to, all of a sudden this transaction happens, a liquidity event happens, everything that comes along with that.
What was that like as a dude to just go now? What? Yeah.
[00:07:45] Mike Vichich: Well, I mean, I, I, I talked to some founders who'd been through that process before, and I think it's pretty common for people to have like a, an identity crisis, right? Because this thing that they worked on for however long, uh, you know, isn't it, it's not their identity anymore.
I, I felt fortunate that I, that I personally didn't have that experience. I think partially because I was at peace with, you know, the team and the company and the leader that bought wisely. And I knew it would be, you know, was in good hands. And then, you know, I think the other part of it was I, I was looking to the future and trying to figure out what I wanted to do next.
Um, and so went through a, uh, probably about a six month process where I was just reading and thinking and writing and talking to people, uh, second time founders, how did they pick what they're doing next? And, um, was able to, you know, find something that I'm super passionate about with Pursuit and fortunate in the sense, 'cause I think it is a life's work for me.
Like I'm, I'm about 14 months into it, but, you know, I hope I spend the next two decades on it.
[00:08:48] Jamie Grant: It's, it's interesting you say that. I saw, and I'm a big fan of this person's work, so before I sound critical, but I finally found like the one thing Cody Sanchez put out that I was just like, Hmm, I don't love that.
And it sounds dumb, but she said, uh, she, she posted on X the other day. She said, does anybody walk 10,000 steps a day regularly? And go, gosh, how does anybody have time for this? And I thought like, man, how does anybody not have time for that kind of clarity? Reset, collaborative, creative. And that six month sabbatical is right on steroids to go, man, I'm out of the grind that I was in.
And now I get to kinda hit the reset and go, it's, it's, I've always been even in some of our conversations, but other friends of mine that have gone through those kind of exits, we had kind of the opposite where we went through hypergrowth and then lost a company with a, a failed hostile takeover like on a Thursday.
So there was no reset. It was like, man, get right back to it. And, and I often wonder like what would've happened if Amy and Travis and our team, we could have stepped back and said like, okay, what do we want to do next? But um, you really kind of find out where your identity is in those moments, whether you know it or not.
For sure. What was that like as a husband? Right? Um, 'cause you've, you've shared with me a little bit, but, but what was that process for somebody that's going through that? And I think, Mike, one of the things that this comes up with, like the public sector, we say CXO, but like the, the person that's inside government today, that's like, okay, what do I want to do next?
Mm-hmm. It's a little different. There's not a liquidity event, but they start thinking, okay, what do I wanna do next? What, what kind of process or framework or advice would you give them that that's kind of paralleled to say, like, this is how I thought about it as a husband and a father, or, this is how I thought about it with my family.
[00:10:24] Mike Vichich: Yeah, yeah, yeah. Uh, well, I think there's kind of, uh, as a recovering consultant, I, I started my career at Accenture. I, I think in issue trees, right? So like, on the one hand there was the structured stuff on the other, there was the unstructured side of it on the, on the structured side of it. Broke that up into three things.
I, I basically wrote down, uh, some advice from Charlie Munger, which was, write your eulogy, you know, what you hope people would say about you. After you died. That was difficult, but also, you know, thought provoking and I, I, it clarified a couple of things. Second thing was writing down our va my wife and I did this.
We wrote down our values and, uh, we also talked about things that we wanted to do every day, every month, every year with our kids that kind of lived the values, right? And not to say that our values are the right ones, but just, you know, we, we thought it was important to teach that intentionality, um, and, and, you know, do that with our family.
And then the third thing was, uh, you know, I, I call it the three column thing. The first column was stuff that I did it wisely that I want to do again. Uh, the second column was stuff that I, that I did it wisely that I do not want to do again. And the third column was stuff that I did not do it wisely, that I wanna try and just like literally wrote bullets in each of those three columns.
And that was like. You know, the, the fodder for, for what do I want to do next? And then I also just went on a bunch on the unstructured side, just had a bunch of conversations with people that I thought might lead to an interesting place. Second time founders, public officials, you know, people who had started companies in Govtech just to try to soak on the problem.
Yeah. Or the area right. To, and, and, and not necessarily, you know, pun intended, pursuing any given hypothesis. It was like literally just to learn.
[00:12:13] Jamie Grant: Yeah. So, so man, I, and I know we've talked about doing these regularly, which I would, I would love to do. 'cause I think if people had some insights into our, our jam sessions, there's probably some, some cool stuff there.
I, I love the eulogy idea. 'cause it really is like, what's your identity, right? Yeah. When you're done, what do you want to, what, what do you want to be said about you? Is that, you know, I accomplished all these things or is that, you know, and, and I think there. I notice in a lot of conversations around the country, whether it's in small groups or business or whatever, just like this crisis of identity and depth where it's so easy for us to get in the rat race.
So I I love that. Yeah. And then I think, well,
[00:12:50] Mike Vichich: I think the other, the other thing I would say too on that man, yeah. Uh, 'cause you, you mentioned about folks in the public sector who, who may be interested in starting a company. You know, there some folks will say, starting a company seems super risky. Right. Um, and, and I just don't personally don't see it that way.
It, you know, I think that, that someone is more employable if they've started a company and failed actually. Uh, I think that experience shapes you in a way that, like, you can't read that anywhere. You can't teach that anywhere. You have to go through it. And, and I, I think you empathize with that, but like the, what's the worst case scenario?
Like, you, you learn a lot and you get a better job. You get a higher paying job. That's less stressful than starting a company. Like pretty good. Worst case scenario. You know, you gotta be able to pay the bills and whatever, but, um, but I, people find ways to make that work. When we first started wisely, I had two jobs.
I had a part-time consulting job for three days a week, and then I had a four day a week figure out what we're doing at Wisely job, you know? Yeah. Um, you just find ways to make it happen.
[00:13:55] Jamie Grant: I, I love where you're going. Scary and risk are different things. Starting a company. Scary. Right, right. It, it, it's scary.
And there's days, um, we used to joke with Amy Gleason was our CO at Cares Sink, and there were days like a DP submit was going. It's like say a prayer, guys, like, you know, you're, you're, you're in full, you know, product velocity mode. You're going through hypergrowth, you're trying to manage that stuff, and, you know, it's like, boy, I really hope this payroll goes through.
Right. Yeah. Um, so it's scary, but it's not actually risky. Um, and then two, I think we're in this really amazing place, and I, and I don't wanna sound like I'm, I'm dunking on 'em, but when 25% of Harvard MBAs can't get jobs. Like the American ecosystem better wake up because the credential isn't actually the thing.
My dad gave me some great advice when I was going to law school and looking at different schools, and he goes, look, your diploma will get you your first job. You get every job after that. And the experience of being a co-founder and having to problem solve. When, when people say like, what's it like to be an entrepreneur?
It's like, it's really just waking up a day and, and identifying and solving problems. Yeah. That's it. It's, it's just doing that, solving a lower
[00:14:58] Mike Vichich: level problem knowing that you're going to create a higher Yeah. You know, uh, uh, solving like a, a lower level problem to create a higher level one and being cool with that, and then you do it again and again, and again and again.
[00:15:09] Jamie Grant: I, I love that. The, the other shout out I want to give you, and this we could go on, 'cause I think there are so many parallels between our family lives, our, our personal lives, and our business. Like when you talk about the values of the principles, I love to say that principles never change. Facts and circumstances do change, but those principles or values become kind of the north star.
I thought it was really cool that you said, my wife and I sat down and did our values. Mm-hmm. I, I, I think like that's just a family legacy thing, dude, that, um, is really fricking cool because I think in a lot of situations you have a husband or a wife that don't have values. You have one that want like, I mean, uh, there was, there was a lot of meat to my wife and I sat down and did our values and then started to implement 'em in the family.
[00:15:52] Mike Vichich: It's funny, the prompt for that, um, was, you know, I was talking with a, uh, a good friend of mine and he was saying how, you know, he had kids in high school and, you know, his son was taller than him now, so like the scariness of like, dad is bigger than me wasn't a thing, and, and he's this, my friend said like, he wished that he focused more on teaching values because that could be something that.
As a kid, and this is his thesis, or I guess, you know, in retrospect, but you know, to be able to, to say that, you know, the values are the reason why we're gonna try hard and, and we'd rather try hard and lose than not try, you know, stuff like that. Um, to be able to have it anchored in a value that you've been talking about for a decade is useful.
Uh, when, when kids go through the teen years, I don't know. I'll talk to me in 10 years. I'll let you know how that, how that plays out.
[00:16:45] Jamie Grant: Dude, two, two things are true, right? You can't be a perfect dad, right? There's nothing we can do for our, uh, spouses, kids, whatever that spares them, the landmines that we hit, that there'll be different landmines, right?
So like the freedom of that. But two, what I, I what, and certainly no relationship or parenting expert, never having been married, no kids. So I, I might be outta my depth here, but from a coaching perspective or a leadership perspective. Where we can instill values that are the framework for decisions to be made.
Um, Megan Fate, Marshman, somebody I think does some really great teaching stuff, and, and she was telling a story one time that she had this job earlier in her career, and it was this big event. She was responsible for the event. She's like, how do I arrange the tables in the room? And she goes and ask the CEO O like, Hey, how do I arrange the tables?
Uh, you know, what, what it should look like? And the, and the CEO looked at her and said, um, what are our values? And the value answered how it should be laid out, right? So like the empowerment for our team and our kids and our spouses I think is, is there. So, um, I think that's really cool. And then, you know, to kind of transition to the business, we call it start, stop, keep change, but that three column example you were describing of like, what are we not doing that we need to start, what are we doing that we need to stop?
What are we doing that we need to change? And then what are we doing really well? Like what, what are the things that that we need to do more of? Talk a little bit, you know, I, I know, uh, a, a Spartan living in Ann Arbor, uh, we, we touched on that kind of at the top, but. I know kind of a conversation with the, the mayor of Ann Arbor.
When you started to look at this problem and go, look, I don't have any govtech experience. I, I know how to build companies. I know how to deliver value. I know how to leverage technology. Yeah, yeah. But there's this foreign ecosystem over there that's keeping guys and and gals like me out.
[00:18:21] Mike Vichich: Yeah.
[00:18:22] Jamie Grant: Walk through kind of where you went from, you know, different ideas, right?
You have all the liquidity you want. You can raise again, you can build again, and, and you're going through this kind of sabbatical of Yeah. What does that look like for, for me as a, a husband and a father, and then as an entrepreneur. Get us rolling on that start and then let's dive into kind of what you're finding as you keep pursuing kind of how broken it is and, and how I think straightforward some of the solutions are
[00:18:47] Mike Vichich: coming out of the conversation with the mayor of Ann Arbor, I had, uh, like one key question, which was, why are costs accelerating so quickly in the public sector, like at a, at a rate that is like meaningfully higher than kind of like your typical inflation.
Uh, consumer or, or a purchaser, um, or producer rather. I think that like, that, that central question was something that we spent months trying to wrap our minds around, right? And, and the way that we've come to define it, and, uh, you tell me what you think, but like, it's, it's that the rules that were intended to save taxpayer money actually caused it to be wasted.
And that's like the great irony of the whole thing, right? Um, and you can understand why the rules are created. I don't mean to put anyone on blast. They have immense respect for folks who work in the public sector. I think they wake up every day and try to, you know, serve the citizens or serve the kids.
Um, but you know, like you can understand, right? Like if, if a, if a mayor is giving a contract to his brother, you're kind of like, wait, what? Like, maybe we should put that in a, you know, it should be publicly solicited for 60 days, right? And we should get three quotes. And, uh, and then if money is spent, you know, in, in a particular city.
That, and there was a project that spent millions of dollars that wasn't approved by council. People would be like, what? Like, shouldn't our, shouldn't our elected representatives who are accountable to the voters be the ones that are approving projects, you know, insurance requirements, liability, you know, rules.
Like all that stuff is well intended, I think. Um, and that's the irony is like if you stack it up over time, it, it actually becomes onerous. And so someone who's not serving the public sector, just focused on the private sector, or it's a new startup, they look at those rules and they're like, wait, what? I have to invest, there's like probably years worth of investment.
I gotta hire a lobbyist. I don't know how this stuff works. Um, there's years of investment before I maybe see a dollar and, you know, and this kind of gets to the investor stuff, but like, it's, that's a, that's a tough bargain, I think, for a lot of people.
[00:20:52] Jamie Grant: So you touched on two things that, uh, you know, just kind of those little one-liners that, that I love, but, but bad facts make bad law.
Mm. Right. And I saw it all the time in the legislature, right. Where all of a sudden you get a horror story and now we have to go put into Florida statute a way to make sure that thing doesn't happen again. Right. And to your point, I think on the public sector side, like one, one of the things we're really trying to do with everything that we're doing at, at Red, at Redleaf specifically, but also the podcast, the newsletter, is to try and sit in that intersection or the translation layer between the buy side and the sell side.
The public sector needs to understand every time that they create those laws or those regulations, they increase cost of compliance. And so fundamentally, with those regulations, you can have the best intentions you want. If the framework creates a perverse level of incentives, then costs are gonna go up.
And at the end of the day, your p and l and my p and l have to account for that.
[00:21:45] Mike Vichich: Right.
[00:21:46] Jamie Grant: And so one, one of the things I did as a chairman of the legislature to measure our office and our committee was how many. Um, and, and one of the beauties for me is that like everybody knows or could do the research, I'm a borderline libertarian hate government conservative.
I don't know where that puts you in today's political environment, but as a chairman, I, I would measure every year how many Democrat bills we agenda and how that stacked up to our other Republican chairman in a super majority or, or close to super majority Republican state. And the way we were able to do so much of that was I could have the most progressive liberal Democrat come to me and say, I'm trying to solve this problem.
Will you agenda this bill?
[00:22:23] Mike Vichich: Yeah.
[00:22:23] Jamie Grant: And I could say to them, I'll never agenda that bill, but if you wanna solve that problem, I'm happy to put my staff and your office together and solve that inside the parameters of principles that we think will accomplish that problem without all the net losses around it.
[00:22:39] Mike Vichich: Hmm.
[00:22:39] Jamie Grant: And I think there is kind of that balance sheet approach to, you know, the, the more the regulation, the more we keep guys like you out. Right. If, if we sit there and ask ourselves why the Accentures of the world are dominating technology projects, billing on time and materials, the starting point is policy and regulation that prevents the innovator from actually showing up and saying, I can deliver you the good without all these bad facts that are there.
And, and I think that's missing a lot.
[00:23:04] Mike Vichich: Totally. But I, I also think that the, uh, the, the part of it that, that you and I have talked about before is the incentives, right? So like in the private sector, there's massive asymmetric upside for taking a risk, right? Starting a company, there's asymmetric upside. Um, my perception, I, and I'd love your take on this, I've never worked as a CIO of a state, but it seems like there, the perception is that there's massive asymmetric downside.
Like if you don't pick IBM or Accenture and you pick new co consulting firm and they do a bad job. That's a bad look. Right? So like the talk, talk about that, like the incentives I think are different in the public sector for sure. Would you agree?
[00:23:48] Jamie Grant: They're, they're not just different, they're mutually inverted, right?
Like they're like some, some they're like, yeah, a hundred percent, right? Yeah. In, in the private sector, and I used to say it as a legislator, uh, I didn't really get it until I became the CIO to really get it. Um, I used to say that when I was trying to work on data governance and API catalogs and I was really frustrated as a chairman that every technology project that showed up was an absolute boondoggle and a disaster, and I could get nothing, uh, in the way of meaningful metrics if I was a board member for Pursuit, rudimentary questions I wouldn't even have to ask.
You would be presenting as part of the deck to go like, Hey guys, here's where we are. Here's where we were, here's the trend. Here's what we think is happening. Um, all we got was like death by deck. That was just a bunch of BS that that left me going like, I don't even understand what this project is. And so I used to say, um, in the private sector, the rule is innovat or die.
In the public sector, you show up in the capitol, the rule is innovate and they will all try and kill you. And then when I became the CIO, what I, what I, kind of drilling down on that and, and one of my big things, like at some point I want to get some, I wanna get it done in, in some cool, something I'd actually wanna put on the wall, but incentive structures are undefeated and you and I spent a lot of time on that, right?
Like, show us the incentive structure. We can predict the performance, not because we're Nostradamus, it's just that the incentive structure will always win and condition the human behavior. Yeah. And so I saw this, yeah. Charlie
[00:25:12] Mike Vichich: Munger's got like the, the most fabulous quote ever on, on the topic of incentive.
And it says, show, show me the incentive, I'll show you the outcome. Like yes, the same hundred percent,
[00:25:22] Jamie Grant: hundred percent. And, and by the way, it's, it's empirically undefeated. Like it, it will always win. And so. Um, I think where that bears out in the public sector, you're right. Nope. You know, we've all heard, nobody gets fired for hiring IBM nobody gets fired for hiring Accenture.
I think that's changing quickly. Um, and, and rapidly, which is long overdue. But like at the same time, the incentive structure for the person at the company, and, and I think this is an important thing to touch on, your sales team would behave the exact same way as a public sector employee without a comp plan.
There's nothing about like going into the public sector or private sector that makes you mission driven, hungry driven. Like there's the, we used to say in the coaching world, can't coach want to, um, and, and you can't coach Hustle. You have people that are mission driven both ways. What gets the person in the private sector is the incentive structure is to get to, yes, I get my commission, I get my bonus I President's Club.
I get rewarded, I get promoted, whatever that looks like, I had no idea. And, and one of these days I'll, I'll tell the story. I don't wanna take us too far on this one, but maybe it's a, a double click for us when we, we do the next one. I had the grossest example of there has to be a fall guy that there's ever been.
And I called the governor's office and said, if you think there's a fall guy here and you want it to be that guy, I will resign now and I will be very loud. And, and what was the situation?
[00:26:43] Mike Vichich: Can you say The situation
[00:26:44] Jamie Grant: was hardware failure that we inherited? A storage array goes down that, that our team inherits has nothing to do with anybody personally doing anything wrong.
But then the co the co-pilot that I was leaning on to manage the entire response with me happened to live remote. And so when the secretary of an agency has to offer a hide to fire somebody, they go, oh, this guy was remote. Yeah. They pretend they don't know, even though there's like six months of notes where that guy on a tiger team is checking in remote and, and that secretary is documenting their remote.
Yeah. Right. But, but like the institution of the public sector says, oh gosh, there's gonna be a bad headline. And so talk about perverse incentives. When you are incentivized to take to a governor a hide, so the in so that the governor can go, we think we're gonna be serious about this. Yeah. And we're gonna show accountability and reforms, and you publicly execute a guy who worked around the clock to get you through this, just so you can have the headline that says we took it seriously.
Uh, and, and that is pervasive everywhere. So, so it's not just Yeah. Could can I ask you a
[00:27:47] Mike Vichich: follow
[00:27:47] Jamie Grant: up on that though? You can ask what you
[00:27:48] Mike Vichich: want. I, I think the one, one thing I'm trying to wrap my mind around is like, there, there are phenomenal examples of the government creating fence, right? Like, talk about the, the, the space program was like the customer for the early semiconductor companies, right?
Yeah. And without that demand, like, would they have taken off? Probably not. Maybe like much more slowly. Um, so that is is one example. I think there's others like the, the internet, you know, was a, was a DARPA project, right? Yep. Um, so how do you like, is. Uh, has the, have the incentives changed? I, I guess one thing I'm wondering is like, how much of the, the rules, uh, following, like are the rules that are, that are part of the way government works?
How much of it is actually statute versus culture?
[00:28:38] Jamie Grant: That's a great question. You know, you've, you've talked before about like the service versus hospitality 51, 49. Like, here's the service our restaurant was providing, and then here's how we make people feel.
[00:28:47] Mike Vichich: Yeah.
[00:28:50] Jamie Grant: I'm gonna reserve the right to come back with you and tell you I was wrong and change it.
Um, I, I, I found it interesting that, that the traditional notion of the bureaucrat is like, that's a bad word. Like Yeah. It's like a
[00:29:04] Mike Vichich: pejorative. It's a pejorative.
[00:29:05] Jamie Grant: Yep. Um, I actually found a lot of my team that I inherited initially, about 300 people. Um, look, there were people that were hiding that needed the email to say, tell me what you did this week.
Right? Um, there, there were absolutely people checked out, but they were the vast minority. I was blown away at both the technical talent I inherited and the mission. Mm-hmm. To the point that I had to spend a little bit of time. Um, she'll know who she is, uh, if she hears this, but I, I had somebody who, uh, she really kinda wanted her role to be this, I needed it to be this.
She didn't like that. And then we built like a lot of trust in kind of a, a painful process. A little bit like, I think she wanted to quit for a while. She was somebody that I describe as a turret, and if it was pointed on mission, she was lethal in a good way for our organization. But I needed to build the trust with her to say, listen, I need you to be a turret, but not the way you're, you're thinking now.
Mm-hmm. I found there were people that I had to do a lot of time developing the structure, the principles, the framework to go, don't lose the drive, like this dog is pulling on the leash and I need that to build this, but I need you to be focused a little bit. So I think it's like any organizational leadership, you gotta define success.
You gotta share the principles and values. You gotta reward the good, punish the bad. And if I was to say the other side of where it goes wrong in the public sector is you can get fired if it goes wrong and and that's one thing. The second thing though is if you take risk or put out a fire, your reward is effectively more work.
Same pay.
[00:30:38] Mike Vichich: Mm-hmm. Right. Yeah. The winner's curse.
[00:30:41] Jamie Grant: Yeah. So like you quit raising your hand when we're going into a war room because you're like, every time I go into the war room and Jamie gets to go to committee or Jamie's on TV or whatever it is, it's like, okay, great. Now I'm just reinforcing that when there's a fire, he grabs me and we go into the war room and he'd like to give me pay.
He'd like to have the inverse of a whistleblower statute where if you deliver value for government, like Mike, step back for a second. We reward whistleblowers for identifying that there was something bad as gross as sexual harassment and fraud and all these things. That's great incentive structure work.
[00:31:16] Mike Vichich: Mm-hmm.
[00:31:17] Jamie Grant: I could not, I spent years in the legislature trying to get through the bureaucracy of legislative staff that are unelected and unaccountable, and there are some great ones that were, mm-hmm. My, my, my staff directors are, are still some of my closest friends. We couldn't get through the sludge of the legislative process.
An incentive structure that would say if a team brought us something that reduced cost on a baseline quantifiable level, that we could share with them the same proceeds like we would with a whistleblower.
[00:31:47] Mike Vichich: Which is weird because I would imagine the argument against that would be, well, aren't they supposed to do that anyways?
Like, isn't that what their job is? Right. Worse,
[00:31:57] Jamie Grant: worse their job. That's not how the budget works. The mainframe in Florida still drive, I mean, like, I could go down the, the financial manage.
[00:32:05] Mike Vichich: Yeah. Well, let's talk about that. 'cause the mainframe, the proverbial mainframe example is interesting, right? Like I, I, I've heard, and I'm curious your take, I've heard that like a lot of the most mission critical.
Pieces of technology actually are the, the most archaic because they're the highest risk to fix or to like upgrade. And if they're, if they're working fine, they're efficient, like don't, don't fix what's not broken is kind of like the, the prevailing wisdom. But then of course maintaining it, integrating in into some other system, adding a feature, that stuff becomes more difficult if it's, you know, shipped in 1962 and written in assembly language.
Which is a real, real examples
[00:32:43] Jamie Grant: dude. I've said, if Redleaf doesn't work, I'm just gonna go learn cobolt. 'cause it is an evergreen and, and like everybody who knows it is dying. And so like the next gen of, of cobolt, uh, developers, um, well
[00:32:54] Mike Vichich: with AI you don't even need to anymore. Right. I was say
[00:32:57] Jamie Grant: now guys like us are lethal.
Right? Yeah. Um, I think there's two things on the mainframe, and I think you're right, but fundamentally, government does not know how to scorecard. And so I spend a lot of time working with CIOs. Um, I'd love governor's offices to get there. What does it look like to scorecard a board deck? And I think if we ask that fundamental, if you and I put a a, a retreat together and brought executives from around the country to go, talk to me about your scorecard.
You've reported to boards. I've reported to boards. I've been on boards. You've been on boards. Um, I was blown away. I I, I got put on a board statutorily for a, like a data center. And when they onboarded me, they said, uh, we've been in existence 25 years and every single vote at the board level has been unanimous.
We've never had a no vote on our board. And I was like, oh my gosh. When did the fed show up?
[00:33:42] Mike Vichich: Yeah. Red flag. Yeah. Right.
[00:33:43] Jamie Grant: Like that is the most terrifying thing as a board member. And I'm not allowed to get off the board 'cause the statute says I'm on the board. Yeah,
[00:33:48] Mike Vichich: you, you're there. Yeah.
[00:33:50] Jamie Grant: Man. Like that is not a board.
Um, and so you have those kind of things where like there is no, I would ask for financial data there and it was like, it was a, a fool's errand. Um, so one
[00:33:59] Mike Vichich: assumption we're making in Pursuit, and tell me if you think it's a smart or a dumb one. We are assuming that the incentives. Of public sector leaders and of public sector employees are not going to change.
And we're trying to build a system that acknowledges those incentives and is sensitive and empathetic to 'em and still allows for innovation to happen. Um, I'm curious, do you think that's dumb? Like, should we expect you think that's No, I don't. It, I don't think it's dumb
[00:34:28] Jamie Grant: at all. I, I think it, I, so I think you have to, you know, uh, one of the things we say is like, tell me the game we're playing.
What, what game? What are the rules? Who's the umpire of the referee? What are penalties? How are score points scored? And we'll win if that stays, if it's constantly shifting and rugs are getting pulled, and that's a lot of pubic, right? Like you, you're chasing an RFP and then all of a sudden some lobbyist goes and lies to the governor's office and says, Hey, they're violating this, this happened to me.
Like super sketchy lobbyist goes into the governor's office on behalf of one of the big sis and goes, Jamie's violating procurement law.
[00:35:00] Mike Vichich: Hmm.
[00:35:01] Jamie Grant: Because I wasn't gonna put out an RFP that would just outsource all of cybersecurity to one of these big sis.
[00:35:06] Mike Vichich: Hmm.
[00:35:07] Jamie Grant: So they can go in and tell a lie, and now I'm having to lo I'm losing the war of the one sentence to say, yeah, I'm not violating law.
Let me teach you what your law says and how the state's chief procurement officer has blessed our entire strategy for how to purchase. Um, but you know, you have these ghosts in the public sector, um, and eventually they get caught. Like it's been fascinating to watch over the last year some of these people that were absolutely trying to sabotage what we were doing at the digital service.
Um, and some of these lobbyists will be like, Hey, man, no, no. Like, no offense, it was just business. I'm like, you're a liar and a fraud. That is always an offense. If you want to get on the field and have a debate and you win, and I lose, we can be friends. If you're a liar and a fraud, there's a fence taken and I'm letting you nowhere near my brand, my customers, my partners, anything.
And that's real in the pub sec, like this ghost that exists out there. So, so that's real. Two, I think you're spot on in the incentive structures. I think. I, I'm optimistic having kind of been playing the follow the data, follow the dollar game for, for the last 15 years and, and running into a lot of landmines and I'm biased, right.
Former co-founder that's leading Doge, um, trust her with my life. I'm, I'm hopeful that the American public is starting to understand all these corporate grifts that exist and how corrupt it is and how much we can reduce the cost of government and increase the outcome of those programs.
[00:36:29] Mike Vichich: Yeah. Well, yeah, let's talk about that.
'cause I think one that we are trying to address is, uh, you know, you talk about the procurement rules, right? And they're, they're effectively like a castle wall that is trying to keep out new entrants. I mean, maybe not trying to keep out, I don't think that's like the express reason why rules are created.
I think the rules are created to solve a problem, but the byproduct is that people on the outside who haven't contracted with government before. They look at it and they're like, ah, it's too complicated. I'm not even gonna try. And then what happens is, you know, there's natural consolidation of the suppliers on the inside of the castle, right?
People retire and they sell their companies. There's private equity roll-ups that happen on the inside, and folks on the inside can raise price 10, 15%. You know, when, when they have a contract renewal and there's not a lot of, you know, suppliers that, that can say, Hey, like, by the way, we're, we're new. We have an innovative, better way of approaching this problem, and we can solve, we can solve it more cost effectively.
The rules keep a lot of those folks out. I think so. Do you, do you think that's true? Like on the inside percent inside of the castle, what, like, you're a hundred percent are year over year, you're seeing prices of contracts go up.
[00:37:48] Jamie Grant: Our problem statement as a company, right? The, the cost of a single lead in SLED is 3.1 times the cost of a lead in the, in the commercial market.
The cost of a lead in fed is 2.4 times and the sales cycle's twice as long. And CFOs at government facing firms are over forecasting their pipeline 10 to 15%. Now you take your role as a CFO con each quarter, by the way, compounding.
[00:38:12] Mike Vichich: Yeah.
[00:38:13] Jamie Grant: So, so you take your role as a CEO, your CFO's reporting to you going, Hey, we're gonna have, you know, a hundred million dollars or a hundred dollars or $10, whatever the magnitude is.
And every quarter, the one person that's responsible for the forecast is wrong and overestimating every quarter they could get away with underestimating and say, surprise, we had a great quarter.
[00:38:33] Mike Vichich: Yeah.
[00:38:33] Jamie Grant: Now follow those incentive structures down. And that's why I think on the sell side, we find all the time working with companies and, and account executives and, and leaders that one of those symptoms is the, the, the, the self-fulfilling prophecy of one meeting.
These people think, I finally got the meeting I want. Yeah, yeah, yeah. I'm not gonna get a second meeting, so let me skip discovery. Let me give them diarrhea of a deck and a demo and click through all of it and say, do you want my thing? As if there's not like an actual discovery process that's necessary to build trust with the audience, to have, right, like great sales and great marketing.
We, we, we live this. Yeah. Give, give, give, give, give, give. Eventually you'll get, and, and that takes setting some boundaries for the team. You know, uh, my, my brain has been scraped for free by so many people. Um, and, and the, the boundary looks like find your tribe, right? Like, when you and I are jamming out, you're making me better.
You're not, you're not brain scraping. You're, you're asking me questions. I'm learning from you. You've helped me on just things that aren't even pub sec related, right? To go, Hey man, I need another set of eyes on this thing I'm struggling with for our company, so much of the sales motion in the public sector is abusive and transactional, and it's why it doesn't sustain.
And then on the other side, the buy side, they're like, how come I keep having such a tragic experience with people who I want to do business with? To go back to your question though, 'cause I don't wanna lose this, the American people can change the incentive structure. You asked a really important question.
Like, I have to play the incentive structures, the field as it lies, which is true. The elected and the appointed wanna not get fired or wanna get reelected. The American voter is the customer in that regard. So we either as a, as, as a tribe of folks trying to disrupt this industry, start shining transparency.
I, I've started saying, and, and look, I know that I'm picking some wars with people that can squash us if I die on the battlefield proverbially. Like that's kind of my, I, I'm, I'm here for that, you know? Yeah.
[00:40:39] Mike Vichich: You're all good. Yeah.
[00:40:40] Jamie Grant: But, but like we, we shorthand sis for systems integrators and it's like, when are we gonna start telling the truth?
They're really software inhibitors. They are not interested in anything software unless they can put young kids billing at a blended rate doing manual work. Mm. And then they tell the OEMs, the manufacturers, the actual software companies, Hey man, if you want to be involved in our bid, we're gonna need you to align to our business model.
You don't really, you automate everything. So we can't really put managed services on that. It doesn't fit my business. Huh. And then the regulations that you're talking about that are kind of these RFPs I've said, and I'll say it to, I'm blue in my face. The CCP and the Kremlin could not design a better system to sabotage American technology than the RFP.
[00:41:26] Mike Vichich: Say more.
[00:41:27] Jamie Grant: Okay. So it excludes innovators, it outsources everything to the, it
[00:41:32] Mike Vichich: excludes. Wait. I'm gonna, I wanna inspect you don't, please don't forget the points, but like, it excludes interview innovators. Y because it says you have to have been in business for three years, or could be, you could be that X amount of contracts.
[00:41:43] Jamie Grant: So, so there's that right one. Um. It, the, the oligarchy's driving it. So whatever's in statute, the oligarchy is lobbied up in a way that you and I'll never be lobbied up
[00:41:53] Mike Vichich: a hundred percent.
[00:41:54] Jamie Grant: Yeah. So the oligarchy can go in there and say like, Hey guys, if you wanna protect and you wanna make sure we need you to do this, you have to make sure
[00:42:01] Mike Vichich: you have this one requirement that Yep.
You know, is basically out of some patent of a company.
[00:42:06] Jamie Grant: Dude, there's a very, very public known food fight between the sis. And you could, you'll know the answer to this over whether or not respondents have to provide public financials. If you're publicly traded, you check that easily. If you're not publicly traded, you don't wanna show your financials.
So the sis are fighting there where somebody's trying to win business or lose. Right? Like, so, so people all, uh, I call it capitalism. Um. Capitalism is free. Enterprise capitalism says, let market caveat enter Baat. Milton Freedman like that has been the most undefeated, uh, eradication of poverty. It is the greatest tool that's ever existed to lift generations.
The problem with capitalism, with the A is that it gets abused and turns into capitalism where somebody says, I don't have to be an innovator. An entrepreneur and solve problems. I'm gonna leverage government to write that requirement in there. And it, it touches, that's just not technology that is pervasive through the capital, where a group of us would look through the, you know, all of a sudden amendment shows up and you're like, that's an interesting way to classify a requirement.
Yeah. Whose name is actually going into statute that happens across America every day?
[00:43:21] Mike Vichich: Do do you think that's, um, you know, 'cause like, I, I guess if I put myself in the shoes of, you know. Uh, I, I pick a pick a, a persona like a police chief, right? Yeah. And, and I'm not buying x, y, Z technology every year. Yep.
Um, I might buy it once a decade. Right. Um, so, and, and in order to buy it, like the last time I bought it, the market has changed a ton. And I've gotta educate myself on what the market is now and what, what features matter. Like what, how, you know, what should I be concerned about? Yep. So, you know, I think there's, there's like a natural, uh, hey, who are the top brands in this area?
And you talk to 'em and just try to understand the requirements. And, and, you know, those folks of course, trying to put their best foot forward and position themselves, they'll, they'll say like, oh, this thing matters. And of course, that one thing is what they do best. Right? And they try to get that written into the spec.
Like, you understand why, why both parties do that. But like, I guess I'd be curious, do you feel like when, when an RFP is shaped. I think we could probably both agree that it's intentional by the supplier side for sure. But is it, is it known by the buyer side? Like do they, do they know that they're putting a requirement in there that, uh, that is limiting the possible, um, you know, suppliers?
[00:44:41] Jamie Grant: No, no. Yeah, so I, so, so one of my rules is I hate labels, right? Just like if we go back to the pejorative of like the, there, the, the government worker that's on a tour of service, that sounds like a compliment. The bureaucrat sounds like a pejorative, they're in the same org, right?
[00:44:54] Mike Vichich: Yeah, yeah, yeah. Right.
[00:44:55] Jamie Grant: I absolutely believe that the sell side abuses the buy side.
Okay.
[00:45:02] Mike Vichich: And I think the buy side knows that there's, like, there's a lot of, there's,
[00:45:04] Jamie Grant: it depends, right? Yeah. So like, if you break it down, so, so for example, in the public sector, if you're a CIO right now and you want to go get educational content to do discovery on, I have X problem, whatever function.
[00:45:19] Mike Vichich: Sure.
Right? Sure.
[00:45:21] Jamie Grant: The number of companies that would come to me and kick off a meeting, they're like, hi, my name is Mike. I'm from the, you know, metaphorical Pursuit. We're in the Gartner Magic Quadrant.
[00:45:31] Mike Vichich: Yep.
[00:45:31] Jamie Grant: I would just stop the meeting and I'm like, guys, I know how that happens. Yeah. Right. If you think I'm gonna make a buying decision off the Gartner Magic Quadrant, you have severely underestimated why I'm here and what I'm trying to do.
[00:45:43] Mike Vichich: Yeah.
[00:45:44] Jamie Grant: But without access to something that is actually kind of intellectually honest and substantive, your only choice is to like go out to the vendor community and say, Hey, I'm trying to explore this.
[00:45:55] Mike Vichich: Yeah.
[00:45:55] Jamie Grant: Now, let's go back for a second to the CFO over forecasting. Those pressures are build pipe. Build pipe.
Build pipe. Mm-hmm. So if the former CIO reaches out to company, company now puts that in, CRM company has an AE that's getting hammered, why isn't that moving faster? And I'm like, guys, I didn't have budget. I don't have budget. I'm just kicking off discovery. And if you're gonna try and just hammer my team with meetings, you're done coming in the office.
[00:46:20] Mike Vichich: Yeah.
[00:46:21] Jamie Grant: So just the holistic waterfall of, that's why we say 3.1 or 2.4, twice as long, 10 to 15%. The taxpayers getting screwed by this whole thing. And yes. I'll give you an a specific anecdote. One of our roles at the digital service was to, to hypothetically, like in statute we had project oversight, all the accountability, none of the empowerment or resources or enforcement, but there was a major program at an agency kicking off multi-agency, big thing.
And they put their project, program and technical team together and we show up and, and, uh, it was me, uh, state's chief data officer, uh, that, that worked, worked on our team. Um, a couple other C-suite, uh, my team, right? And we come in there and they just keep hammering on data warehouse, data warehouse, data warehouse, data warehouse.
And I'm like, we just weren't following the questions.
[00:47:11] Mike Vichich: Yeah. And
[00:47:11] Jamie Grant: I was like, guys, can we step back for a second? So room, room of 20 people or so. I said, can we just step back for a second? What is like, what do you mean by that? And where is that coming from? And they go, oh, well the SI wrote that into the feasibility study.
They said, we need to do a data warehouse and we need to do it this way. And I said, have they expressed interest in responding to the RFP when it goes out? And they're like, well, of course.
[00:47:34] Mike Vichich: Yeah.
[00:47:34] Jamie Grant: So, so when we say that the r fp is this tool,
[00:47:37] Mike Vichich: yeah,
[00:47:38] Jamie Grant: follow me for a second. In an RFPI almost, in almost every jurisdiction, but starting point, I cannot do a proof of concept because that's gonna result in a bid protest.
That's gonna mean that the people who did the POCs, so like if you and I were running it, we'd say, let's go get three companies. Let's do a demo day. Let's give 'em live data to, to de-identify. Let's put it in a sandbox. Let's see it working, see which one
[00:48:01] Mike Vichich: works the best.
[00:48:01] Jamie Grant: Bingo. And RFP prevents that.
[00:48:04] Mike Vichich: Yeah.
[00:48:05] Jamie Grant: So you cannot, you know, drive before you buy number one.
Number two, it's written by the people that are trying to win it. So they spend a couple years on feasibility, say they got paid to do the feasibility study. Right. Of course, they literally made money to do a feasibility study that then recommended what they want to sell later. That is in no way an automated or efficient solution.
It's the time and materials boondoggle.
[00:48:27] Mike Vichich: Yeah.
[00:48:27] Jamie Grant: And that is happening all across the country. And that's why I say the RFP, like when you waterfall down an rrp, what's the incentive?
[00:48:35] Mike Vichich: So I, I, I buy that. Um, what's the incentive you think that allows that to persist on the buy side? Fear.
[00:48:45] Jamie Grant: Fear. Like the, the, the fear, and I don't wanna do more work.
The we don't do, the expert is
[00:48:49] Mike Vichich: saying it should be done. This, the, the expert is saying it should be done this way, and I've never done it before. And I think they,
[00:48:56] Jamie Grant: I think they even know it's not an expert. Right? Like, uh, if we, most of these pub SEC practices are like, let's go hire somebody that was on the inside, may have no experience running a p and l has no experience with product.
In fact, I want, I want you to tell the world right now the tagline for Pursuit because this is so timeless.
[00:49:14] Mike Vichich: Yeah, well, the tagline is, uh, the working tagline is Goodbye relationships. Hello. Opportunities. And that's the, the frame, right? Like the, the old game, the way we talk about it, the old game was one, if you had the best relationships, they gave you data.
And I'm talking about, about SLED. I, I, I, I don't, we don't do anything in federal. And so I don't know that as much. Uh, but in SLED, you know, you had, you might pick California, Texas, Florida, New York. Those are the, you know, the biggest budget states. And, uh, you got limited resources. So you, you hire people who have relationships, whether it's a sales rep or a consultant or an advisor or a lobbyist, and they give you access to data.
That was the old game, right? Relationships gave you data. The new game, we think, is that if you're actually able to listen to the transcripts, the plans, the budgets, the contracts, you know. All, all the stuff that's happening in the public sector that's being like put out every day. If you could listen to that and then find where your opportunities are and prioritize based on who's got the pain, that, that, that data tells you what relationships to go build, right.
From a seller's perspective. So that's, that's like kind of the fundamental frame that we're teeing up. We we're not saying the relationships are gone, we're saying that you should use data to figure out what relationships you should be investing in.
[00:50:40] Jamie Grant: So the reason I jumped all over it when you shared that with me, um, like I think anybody that knows me, like I don't value much more in life than relationship, but that's capital R.
I'm one of those guys that I came outta coaching trees that I'll kill for and I have a coaching tree that I'll kill for. Um, it's tough to have too many people in that tribe. Yeah. Um, and I value capital R relationships. Um, I treasure 'em. Um, and I don't do a good enough job investing sometimes to go like, Hey, I haven't.
Checked in on Mike. I know he was struggling with this and that kind of thing. Um, what you're describing is so acutely targeted and I love it. The top of the funnel across pubs, sec, and I think it's everywhere. It this applies everywhere. It has a filter on it that is the relationship. It's, it's really like the access point, right?
Yeah. So you have to go through the oligarchy to even get into the funnel. They are trying to keep everybody that could disrupt and move their cheese, right? Like you move the cheese and the mice get mad. We might create more cheese for the taxpayer, which is a great win, but in order to do that, we had to take it from some of these other people.
Uh, so I love what you're doing because like the, the commodity of the gross lobbyist and we work, like, there's a lot, just like every, I don't care if it's insurance versus the trial lawyers, doctors versus trial lawyers, sis. There are good and bad actors in every single bucket. The gross ones. Are trying to say, pay me and I'll introduce you.
Hmm. Right. Like they are brokering the relationship such that you can't really go through and, and access and here's what's so broken about the go to market in the public sector. You said something that I have encountered for the last year and a half as we've been trying to disrupt with, with a, with our little cohort of friends.
Kevin Gilbertsons, one of my favorite people I got to meet as a state CIO. He truly a friend, CIO of Montana, everybody building their go-to market business goes Florida, Texas, California, New York. Four biggest budget. Yep.
[00:52:44] Mike Vichich: Yep.
[00:52:45] Jamie Grant: Kevin Gilbertsons budget is the CIO of Montana that he controlled and could deploy is bigger than the CIO's budget in Florida.
[00:52:52] Mike Vichich: Yeah. Because of centralization versus bing decentralization.
[00:52:56] Jamie Grant: Bingo. So, so like even the way these teams are looking at pubs sec, when, when you go back up at the board level and some of the stuff we're talking about, they're like in a hurry to like. Get something.
[00:53:05] Mike Vichich: Well, they don't know that. Right? They don't know.
So then they, they
[00:53:07] Jamie Grant: don't do the research. They don't understand what the centralization score looks like. They read a top 10 list and they think, okay, well everybody's interested in cyber, let me go meet with them. There's no actual strategy happening at a, at a level that could drive a sustainable business unit.
[00:53:22] Mike Vichich: Well, uh, the other thing I've, I've noticed, um, is that if, if speaking about companies who have a private sector business and a public sector, one that, that they sell into public sector, I, I have noticed a pattern where like they sometimes will invest in public sector and then, and then it'll come up, and then they'll de they won't invest, right?
And they might reset their team and it, it goes in waves like this. Um, first of all, have you, have you seen that?
[00:53:50] Jamie Grant: We call it the three farmer syndrome.
[00:53:52] Mike Vichich: Okay. So it's a thing.
[00:53:54] Jamie Grant: It, well, I, we're trying to make it a thing, uh, but it's real, it resonates with people from the public sector. You're a landowner, right?
Like you exit wisely. You're sitting on cash, you're like, all, what am I gonna do? And you're like, man, I, I could, I could go buy that land and I could farm and enjoy it and sell it, right? So we, we like to think of it as a three farmer syndrome. You go recruit the first farmer.
[00:54:14] Mike Vichich: Yeah.
[00:54:14] Jamie Grant: Now this is a important distinction.
Sometimes people try and hire like a barber or a mechanic and turn 'em into a farmer. Terrible idea. Um, but let's say you go hire a great farmer and you say, listen, all I need you to do is farm this field. I'll buy the seed, I'll buy the equipment. I don't know anything about, like, you just have to farm this field and you'll have a career.
[00:54:38] Mike Vichich: Yep.
[00:54:38] Jamie Grant: And so that first farmer, let's say you actually hire a farmer that knows the process. Um, we find a lot of legacy talent in pubs sec, where they carried the bag in kind of the ca CapEx world. They were just carrying one of those big bags that every CIO had to buy. There wasn't a lot of talent. The legislatures weren't spending, the premier lobbying firms weren't playing, and so they, they just kind of were able to carry their bag and win their business.
[00:55:07] Mike Vichich: Sure. Yep.
[00:55:07] Jamie Grant: That's changing fast, right? The number of software companies that want to come into the space, guys like you that say Gov tech's broken, let's go. But let's say we get the right AE account executive.
[00:55:18] Mike Vichich: Yep.
[00:55:19] Jamie Grant: And, and for folks who aren't familiar account executives kind of like, uh, demand gen business development on the ground in some sort of territory.
[00:55:26] Mike Vichich: Yeah.
[00:55:28] Jamie Grant: They come in as the first farm and they're like, man, I got the seeds, I got the equipment they're doing. But they don't get meetings fast enough.
[00:55:34] Mike Vichich: Yeah. So they
[00:55:34] Jamie Grant: get fired, they did everything right, but they don't get meetings fast enough. 'cause the top of the funnel's being owned by the oligarchy. So they get fired.
Now you go back out to the market and you go, Hey, great news farmer number two, you can come do this thing. Um, all you have to do is take what was planted and get it to harvest. You know, like that's easy. The hard work's been done. They hop on the tractor, they're doing the thing, they're plowing the, but they can't convert opportunities fast enough in a sales cycle that's twice as long.
So they get fired. And the gross irony is that the third farmer shows up and you're like, Hey, all you have to do is kind of finish it off. And it's even better. They just show up in the harvest is ready, they pick it, they sell it, they win.
[00:56:12] Mike Vichich: And that's, that is fundamentally a point about the sales cycle. Is that what you think
[00:56:16] Jamie Grant: that is?
Well, I think it's, I think it's the over forecast. It's bad pipeline data. It's not being able to qualify opportunities. It's perverse incentives from the corporate level at the company.
[00:56:26] Mike Vichich: Mm-hmm.
[00:56:27] Jamie Grant: So like to show
[00:56:27] Mike Vichich: pipeline. Right.
[00:56:29] Jamie Grant: To show pipeline. Well, and And then also, also also books. So like these companies that are going into the public sector that don't have somebody like you that can talk about what they're seeing in the public sector presenting to the board or on an advisory board.
It is, there's so much historical group. Think of the status quo that's like, well this is just how pubs SEC works.
[00:56:49] Mike Vichich: Mm-hmm.
[00:56:49] Jamie Grant: And I think that's crazy. But it's understandable. It's been the status quo for so long that why should we expect people that grew up in it to not think like, well this is how it works, rather than this is how we can change it.
Going back to your question of aligned to the incentive structures, but let's start changing the implications and the application of those incentive structures. Yeah, yeah, yeah. Um, because you get this, so, so let's flip it, right? You with what you are doing. Customer acquisition costs plummets. 'cause the other stat I didn't say, if it, so doja is going into federal agencies saying, Hey guys, uh, we need you to reduce it.
Spend 70%.
[00:57:31] Mike Vichich: Yeah.
[00:57:32] Jamie Grant: So the software companies are like, oh gosh, the sis have barbed wire bricks in their intestines forming. Right? Like, they're just like, we're screwed.
[00:57:40] Mike Vichich: Yeah.
[00:57:41] Jamie Grant: Software companies that get it understand that even that reduction is 70% means growth for their business. 'cause the 70% that's getting ripped out is the software inhibitor labor that wasn't necessary.
[00:57:51] Mike Vichich: Yeah. Yeah.
[00:57:52] Jamie Grant: Now the average markup of software in the public sector is 25 to 30% because the software manufacturer has to make up for the twice as long in the 3.1. So I want you to, to talk a, a second about why customer acquisition ca. CAC and COGS are two things that the public sector does not understand at all.
So why don't you introduce what CAC and cogs are first, and then talk about why you are focused on CAC and how that ultimately benefits the taxpayer.
[00:58:25] Mike Vichich: Yeah. Well, I think so, and there's a whole bunch of implications of that. I think going back to even how companies get formed and how they get invested in, um, you know, 'cause I like a great growth rate for a, a govtech company is probably what, 50 to 70% would be screaming.
Right. In terms of, you know, you had a hundred dollars of revenue this year, now you had 150 next year in Govtech. That'd be like phenomenal. Yeah. And you do that every year? Yep. Um, when you compare that though to the, the market of software companies, like you go look at like the fastest growing companies out there, and you have companies like wi uh, you have companies like Cursor, um,
[00:59:10] Jamie Grant: cursor, Wiz Island.
They, you have, you have five the fastest, like open ai. Yes. Fastest
[00:59:14] Mike Vichich: glean, right? Like they, they Well, I'm
[00:59:16] Jamie Grant: in the ca I'm not throwing open AI in there. I I gotta throw the asterisk on that 'cause that looks fair enough.
[00:59:21] Mike Vichich: They started in 2016. Yeah, yeah, they
[00:59:22] Jamie Grant: started in 2016. They're playing some games.
[00:59:24] Mike Vichich: Fair enough.
Okay. That's half joking.
[00:59:27] Jamie Grant: But we've had like five of the fact somebody said about Cursor and I loved it. They're like, forget the hockey stick. They obtained the evergreen unicorn stripper pole. Like it was a straight line.
[00:59:35] Mike Vichich: Yeah, yeah, yeah, yeah. Right. And, and they had like, not, they were endorsing to no, very little to no sales team.
Right. But, and they went. Roughly a 1 million in, in annual recurring revenue to a hundred in, you know, maybe a year, a little more than that. Um, so, so lemme stop you for, lemme stop, compare that to 50% growth.
[00:59:57] Jamie Grant: So, so, alright. If you're on a board, true or false, you agree. Um, CAC to LTV is one of the metrics I really care about.
[01:00:07] Mike Vichich: Yeah.
[01:00:09] Jamie Grant: Customer, like cost of goods sold separate. You, you care about it as a CEO. But when we're talking about go to market Dale, customer acquisition cost, right? Like, how much does it cost me to get a customer? And then what's the lifetime value? The game that needs to change is that, um, nobody's speaking to these boards and C-suite about the fact that the public sector, LTV is the inverse.
Uh, right. So the growth rate you're describing from the customer acquisition cost side and just the enterprise value side, government's never gonna keep up with that. It can't, yeah. But. The commercial sector can never keep up with the LTV or the lifetime value. But here's the challenge
[01:00:47] Mike Vichich: with that though, right?
Because like, uh, a venture fund their incentives, like, could they invest, they invest a dollar, right? Yeah. Or they invest a hundred million dollars. Um, they, you know, they wanna see a company grow, right? So time, so by the time, time
[01:01:01] Jamie Grant: out, I, I want to, I wanna strip this down 'cause we got, like you and I speak this language, we're gonna have people listening to this that don't even know how a venture fund gets money.
Can you give me 30 seconds on GPS and LPs? Yeah. And then deployment, and then make your point. 'cause this, this should not be lost on our audience.
[01:01:19] Mike Vichich: Yeah. And, and I can do, you know, similar for a private equity fund too, but for a venture pr, venture capital funds are generally speaking further out on the risk curve, right?
They invest in brand new companies, private equity funds. They'll typically invest later. Once a company has like a proven revenue profitability, um, still growing, but, you know, they're, they're less risky, more mature companies. In the venture. And, and they both, both of those comp like types of funds, they have like general partners, AKA, gps, these are the people who started or run the fund.
Uh, and they go raise money from LPs limited partners. Um, sometimes gps put their own money into, but the general partners go raise money from LPs. And let's say you raise a hundred million dollars for the sake of easy meth, um, you wanna return, you know, a, a good return for a venture fund would be three.
Three x, right? Like that would put you in the top quartile probably, I think, I don't remember my exact stat. Depends on what's what, uh, you know, time verticals history. You're doing it. Yeah, yeah, yeah. What year? 'cause 21, 22 is, yeah. But, but anyways, like, so the way the GPS make money is outta that a hundred million dollars fund.
It's called two and 20, right? 2% of the fund every year goes to management fees, running the fund, paying the gps. Bringing, having an office, attending conferences, finding companies like taking them out for dinner, winning the deals, all that stuff is part of the 2% management fee. Right. And it's every year.
So if you have a hundred million dollars fund, it's actually 80 million that is going to be invested roughly. And there's a little bit of nuance to it, but 80 million will be invested in companies and you're gonna try to return 300 million, right. Um, fast. Fast, right. Well, within like seven to 10 years typically.
Right. But now I think it's even longer 'cause you're seeing companies stay private. Yep. Um, so it might even be 15 years now. Um, but speed's up factor
[01:03:18] Jamie Grant: is my point, right? Like it's, it's absolutely, it's, it's the growth against the speed where you're going keep going. Well, 'cause if
[01:03:22] Mike Vichich: you raise a hundred million dollar fund, you know, you invest that money over, you know, a, a period of years, 2, 3, 4 years and no el If you invest that, let's imagine two scenarios.
Scenario one, we invested that money in a bunch of companies that, that died, that went bankrupt. How many LPs are gonna be pumped about giving us money the next time? Probably not. I can't raise, raise again.
[01:03:44] Jamie Grant: I, I think the industry is gonna get washed out with the crazy covid valuations and, and the ERP stuff that showed up.
It was easy to be in the PE or the venture community for a stretch there when interest rates were at zero and cash was everywhere. I think it, I think we're gonna see a lot of cleansing of people. A lot of and stuff. Yeah. Yeah. So,
[01:04:03] Mike Vichich: so the, the scenario where we invested the money in, in, into companies that didn't do well and they all went out business, like, no LPs are gonna be excited about giving us money to invest in, in the next fund.
Right. Um, can I add
[01:04:15] Jamie Grant: one thing? Yeah. I want, I wanna make sure people understand the LP is giving. If I'm the limited partner and, and you're the general partner, I'm giving you that cash and I'm not using that ca, the opportunity of that cash is commercial real estate. The s and p 500. Yep. A t bill. Right.
Like my money is not working for me when it's with you.
[01:04:37] Mike Vichich: Yeah.
[01:04:38] Jamie Grant: If you're not gonna have the exit,
[01:04:40] Mike Vichich: right? Yeah. So you're, you know, you, you're baking in like a eight or 9% return is the, is the alternative, right? Right. In the s and p. Right. So, um, so now what, what is the, what is the incentive of a gp? Their incentive is, I know I'm, I'm probably gonna raise another fund in a few years, so I want to invest in companies that are gonna grow materially so that when I go out to raise my next fund, I can say, look at how awesome these companies are.
Right? Like, if you put your money into my fund over someone else's fund, we're gonna invest in great companies and here's, you know, proof, you know, of how we've done that before. So the incentive is to deploy the money and have the company grow. Now you're faced with, as an investor, you're like, should I put money into a govtech company that grows at 50% or should I put money into cursor that goes zero to a hundred in like 15 months?
A hundred million in revenue? Right. Um. Uh, tough choice, right? Do you know Wi Wiz?
[01:05:34] Jamie Grant: I, I saw so wi like people ask us about the buffalo all the time and, and like, why the, like, it, it, I'll tell that we, we tell that story, but I want us to play on the frontier. Uh, I want us to be playing with emergent stuff. I think it's where we, we, I think the only way you can disrupt this oligarchy is to go find unicorns.
Um, and so I, I've said it publicly before, but Wiz was our first customer at Redleaf and, and kind of fit that profile. Do you know they created $16 million of enterprise value a
[01:06:00] Mike Vichich: day per Yeah, I saw that a
[01:06:02] Jamie Grant: day. I mean like,
[01:06:04] Mike Vichich: yeah. Yeah.
[01:06:05] Jamie Grant: Totally. And yet the public sector has no idea who they are and I got CIOs going like, we're good.
We're on prem, or Hey, we're good. Our hyperscaler secures our workloads. And it's like, guys, maybe not the freight train's coming.
[01:06:15] Mike Vichich: Yeah, yeah, yeah. Totally. So the incentives I think are, are two of like not invest in the gov tech company.
[01:06:22] Jamie Grant: Right.
[01:06:22] Mike Vichich: Agreed. Um, and,
[01:06:23] Jamie Grant: and by the way, if we summed up the PE world to, to transition, 'cause I wanna take you where the work you're doing and why it's critical.
The PE world, it's kind of the same thing. It's just later and it's three to five multiple in a couple of years. It's an acquisition strategy. Put these legos together or what, like Yeah. It's a little bit less holistic from a, it's less code and it's more Excel spreadsheets, I guess, maybe. Yeah, yeah, exactly.
Yeah. Right. But, but to your, your takeaway is I think the lifetime value isn't perceived as a big value when compared to the enterprise growth in the commercial sector.
[01:07:00] Mike Vichich: Yeah.
[01:07:00] Jamie Grant: And now the pub SEC side, what, what drives me nuts is I have, um, well if you're gonna
[01:07:05] Mike Vichich: hold a company for eternity, then you care about LTV
[01:07:08] Jamie Grant: Bingo.
But, but, but now my limited partner's not getting paid. Right. So the reason I wanted to make that point is that a lot of people, not to go back to it, but like when Google offered whiz 23 billion, um, and they turned it down, everybody's like, oh my gosh. Like, who turns that down? It's like, well, you could go public, you could, um, obviously now, you know, news, news is broken.
That, that, that there's an, at least. Pending approval. Yeah. Uh, and acquisition happening there. But like my limited partner doesn't win in the venture com. In the venture model, if we don't have a liquidity event, a cash cow does not make sense. That's spinning off growth and retained value. But what's lost on the public sector, CIO is the way to buy down the rate is speed.
Like speed doesn't cost you anything If you're a CIO, like once you start or you're an agency head or a governor. So like the, the, the, the in, say more about that.
[01:08:01] Mike Vichich: What, when you, what do you mean buying down with speed?
[01:08:03] Jamie Grant: Elaborate on that. Okay. So if the markup from the, if the markup at software company in as compared private sector commercial deal per, let's just take per license to, to keep it easy per license.
30% more to a public sector customer. Why? Because the p and l and math doesn't care about your feelings and they have to recoup for twice as long, 300% on like. So what the, what the CIO actually has as a tool is speed to purchase.
[01:08:34] Mike Vichich: Yeah. Creating clarity. Clarity. But you got, so the problem with that is if you're the only CCIO who's cool with speed, right?
Like you, you, you still, because the, the rest of the industry is what it is, you can't, you're not gonna get that speed discount. Right. Basically what you're saying, I think is that, um, there's a, there's a lot of overhead that folks need to have. They need to have lawyers and consultants and advisors and lobbyists and capture people, proposal people.
There's infrastructure team, humans salary that goes into winning government work. Right. And, and doing that in a way that is compliant with, uh, the, the procurement rules and such. And that is what you're referring to as getting priced in. And you're, what you're saying is if that, uh, burden was less, then the overhead is less and the price is lower, I think.
Is that right?
[01:09:23] Jamie Grant: It is. But I think the, the one thing No, you're totally right at the macro. Yeah. Like if we play the macro economics, I got a coconut. I'm on an island. What is the utility of the coconut? You're absolutely right.
[01:09:34] Mike Vichich: Yeah.
[01:09:35] Jamie Grant: My, my, my macro, I went to the Harvard of the south, we call it Auburn. Uh, I had the best macro economics professor.
You're so good. Um, I forget his name, but he should get a shout out 'cause I've never forgot the coconut and utility. I think if you go to the micro, you have the ability, if you are the buyer, to leverage the desperation of the broken seller.
[01:09:56] Mike Vichich: Okay.
[01:09:56] Jamie Grant: And to put enterprise pricing together that accounts for real scale and kind of pre-negotiate that waterfall pricing.
[01:10:05] Mike Vichich: Mm-hmm.
[01:10:06] Jamie Grant: So that you actually get enterprise pricing. One thing that blew my mind is like these state term contracts, the oligarchy loves the state term contracts. 'cause they keep a new innovator off of it. They didn't know about it, they didn't know how to get on it. And now you don't have the right license to h that territory.
Yep. It's why we're very bullish on the distribution model and what the distributor actually does to create a marketplace, I think is fundamental to the reforms. Yeah. Um, but two, if I looked at it and said, I have money, I have need. This is how I wanna structure the deal. You either do this or I'm going somewhere else.
I'm buying it off of a cooperative purchasing agreement. I can get it done in 60 days at the micro level, I could win. They're so desperate. They're trying, like they're, they're trying to figure that piece out. I think what I would say, and we're making this bet as a business the buyer has never had. Is that true though?
[01:10:55] Mike Vichich: Yes. Because I guess what to walk that through, the thing that I would, that I would wonder about is like, that contract is now public record, right? Mm-hmm.
[01:11:04] Jamie Grant: No. Well, but the skew's not, so there's not that, like you're, keep going. I cut you off. Keep going. I want you
[01:11:10] Mike Vichich: to click on this. Yeah. Well, tell me, tell me if, if I'm not following or tracking entirely, but like that, that agreement is public record.
Mm-hmm. So, um. Now if I'm giving you that price and, and now there's a, you know, GSA schedule that has an MFN in it, the most favored nation, does that not like, put you at odds with that schedule or no?
[01:11:32] Jamie Grant: If that was true, it would. Here's here's what a lot of people like. So, so, so here's the distinction. The, the contracts of public record.
Um, we had this happen with a reseller and a manufacturer where we put out an RFQ. We needed both the software and services and we wanted, let's call it like a small and a large, uh, t-shirt sizing. Okay? The large included a different module and different services, and it was actually a critical module and critical services 'cause it was gonna get the agency CIOs to buy into what we were doing.
The resellers submits, uh, the resellers all submit and the one that we end up selecting gave us a proposal for a small and a proposal for a large. It was like a 30 page response. It had their logo all over it, the reseller logo all over it, and it said, here's the large and here's what the large includes.
And then the very last page was the actual purchase order. And it had SKUs. Just like if you were at a gas station and you're like taking the barcode scanner around, like you don't have an ability to translate that barcode to what system it's in. We buy, go to the OEM. Hey guys, time to implement the module that we need.
And they're like, you didn't buy that. I'm like, what do you mean I didn't buy it?
[01:12:50] Mike Vichich: And they're like, yeah. So it was in the large, but it wasn't in the skew list or you use It was in the
[01:12:54] Jamie Grant: large, the reseller screwed up. They put their name all over it. We buy that one. And then when we go to the reseller and we're like, Hey guys, we bought off this.
Here's your document. And the reseller looks at me and goes, yeah, sorry. We screwed up. It was in the sku. Uh, and I go, well. Can you point me to where I would be able to translate that skew to compare it against what was in here? And can you let me know when your logo's on something, if I should just understand that you're gonna come back to me after I send a lot of taxpayer money to you and go, we screwed up.
You have to give us more money. 'cause where I come from and I don't think wisely exits, imagine a rest. I mean, just it. This one infuriates me man. 'cause it was like a two year fight with the OEM and the reseller and the Florida Digital Service and CI citizens and constituents in Florida got screwed and it got so bad that the, the AE for the reseller in front of our, our, I won't, I gotta be careful in front of an executive on our team, presents a deck for the onboarding and one of my direct reports goes, see, we did get it.
The AE opens the PowerPoint, deletes it, and says that was a mistake.
That crap's happening everywhere. So, so, so to your point, so if
[01:14:07] Mike Vichich: you were able to map all the things, bingo.
[01:14:09] Jamie Grant: Bingo. Keep going. Yeah. But it's, but it's
[01:14:11] Mike Vichich: not traceable, basically. So it's not
[01:14:13] Jamie Grant: traceable. And if you're a CIO you have no access to, like, one of the bets we're making is that a, a buyer has never had a fiduciary agent.
Kind of like, you know, if we were selling a house, we use this example right now instead of like, if we think about selling houses, everybody's used to a seller's realtor and a buyer'ss realtor splitting a commission and it works. 'cause they kind of work together. We close the deal and it goes
[01:14:38] Mike Vichich: mm-hmm.
[01:14:39] Jamie Grant: Right now the, the buyer has an army of agents for the sellers VARs. Yep. A lot of 'em are jars, right? Like the difference between value add and just another reseller. Um, but like, they show up and they're trying to sell you that thing. They're like, buy this house, buy this house, buy this house. Yeah, the buyer doesn't have somebody to actually go look at all the houses to understand how to negotiate, to understand what's out there.
And so if you strip down the GSA or the NASPA pricing, these cooperative purchasing agreements, and I think this is good to be clear, but those are not to exceed prices.
[01:15:16] Mike Vichich: Yeah.
[01:15:16] Jamie Grant: That's not, that's not MSRP.
[01:15:18] Mike Vichich: Yeah.
[01:15:19] Jamie Grant: That's just literally saying somebody goes to jail if they charge more than this. So if you're a CIO and you're buying at GSA rates, pump the brakes, call a friend anyway.
Yeah. But like that's malpractice.
[01:15:31] Mike Vichich: Yeah.
[01:15:31] Jamie Grant: That's my, not toce. Now, I didn't necessarily have access to translate, but I think coming from, you know, you're a recovering and repentant consultant. I'm a recovering and repenting lawyer. We've negotiated a few deals. Yeah. Let them walk into their own landmines.
Right. Yeah. Um, and then understand where the deal points are on there so that you could empirically know what you negotiated.
[01:15:56] Mike Vichich: Yeah. Right.
[01:15:57] Jamie Grant: Um, so we were able to do some really crazy impressive stuff really quickly. Also, we had our both hands tied behind our back a lot of time trying to figure that out.
[01:16:07] Mike Vichich: Hmm.
[01:16:08] Jamie Grant: But there is no actual transparent pricing to know, did I go to, it would be like going to car dealers. Mm-hmm. And having no idea what MSRP on that car is in every jurisdiction.
[01:16:20] Mike Vichich: Yeah. Right.
[01:16:21] Jamie Grant: We've gotta give these folks transparency so that they can understand and go, oh, this is what MSRP is. How can I get a better deal for my constituents, my taxpayer?
[01:16:30] Mike Vichich: Right. Yeah. And the question is like, of course. Who has that incentive? Um, so that's a, that's a good one to think about, but I, that, that, my takeaway there is, um, if it was transparent and you could trace skews a hundred percent to product items and prices. Then, then a lot of this would, would like self resolve?
[01:16:54] Jamie Grant: A hundred percent. I think the grift would be, so when you talk about, like, if you go back to earlier in the conversation, the, the notion of like regulation with the best of incentives. Like I would tell, I would tell my colleagues in the legislature when like the kind of the woke big tech narrative was out there, like big tech is trying to take over the world.
And I was like, guys, they're not, it's actually way worse. They're trying to save the world. Like I'm way more scared of that. Right. And, and so when you talk about kind of like the per um, the, the, the flawed incentive structure around regulation, the fact that right now we don't have stuff that requires market based competition and transparent, like the, the definition of value, not mine, economics, price against benefit.
The buyers across the country right now have no ability to understand value because they're dealing with like kabuki math and then a broken go to market. So once we can disrupt with transparency and start exposing a lot of the oligarchy and the shady stuff they do to keep the top of the funnel restricted from innovators.
If we can show up and say, Hey, look guys, we can deliver that for a zero less than what you're being quoted, whatever that that is. Um, and I'd maybe wrap here 'cause I do want to kind of transition into, I, I want folks to understand a little bit more about what Pursuit's doing, what we're running into, is that the status quo?
All of these things that you're describing is effectively summed up by the buyer. The, the government side is thinking about everything in ways of the program or the function, the name of the initiative. Rather than thinking about the tools to automate or the tools to eliminate unnecessary things that are program and product agnostic.
So rather than funding, you know, software inhibitor boondoggle called what if we were going and getting some funding for workflow automation, what if we actually deployed data governance on the, on the public sector side where it is almost non-existent. So, so like this waterfall of AI that's a couple years out, it's all well and good to have all these conversations about that.
But like, dude, imagine running wisely with no data governance and supporting restaurants and brands all over the country. You're screwed. You can't scale. So, uh, I think we've gotta get folks to start understanding. And the reason I say that is like when we, when we get asked to come do like just, you know, friends call me their agency heads or governor's offices around the, whatever that is, and we come in, they're like, Hey, can you just do this?
Like buy side, look at our what we got and, and give us some ideas. I. The, the number one thing that happens, Mike, is they walk out of, they may have seen a proof of concept in action, something. They go, my whole team wants it. The problem is they know we can't afford it. And I go, okay, tell me what you think That costs, they're used to Accenture prices.
Yeah, yeah, yeah. They're used to the software inhibitor prices that add the zero for the unnecessary labor. And I think we've gotta condition the marketplace to understand you're either playing SaaS or you're playing software inhibitor.
[01:20:00] Mike Vichich: Hmm. Well, is it not the, um, take a step back and go to the private sector for a second.
Like, when, when a private sector company is buying software, there is implementation work, right? Yep. There is, there's often integration work. Agreed. And sometimes they'll contract that out. Yeah. And sometimes they'll have people internally who are engineers, you know, our developers and can Yeah. You know, stitch things together and make them talk.
Um, what's like fundamentally, what's different about, in your view, like what's different about the public sector? Why, why is it totally the same deal? Like they could buy SaaS and they got the teams to be able to stitch the things together, or
[01:20:40] Jamie Grant: No, I, that's a great, that's a great, I love where you're going.
There's a, I was actually on a call this morning, uh, with a, a state agency and we finally put some things together where they're like, and this is somebody like a, he's like a brother and then his chief of staff, and they're trying to translate some stuff and go like, why are we getting hit here? And what does that look like?
Number one, a lot of these use cases like cots became a thing, right? Where everybody was like, you should just buy a commercial off the shelf. And to your point, I don't know that cots exist for the public sector. Again, going back to the vc, like if we started at the top of how a software company is traditionally funded in America, um, or globally, right?
Like, um, not, not just American, like the vc. Infrastructure. Uh, it doesn't make a lot of sense to invest in a commercial off the shelf solution for government that goes slow and only can be sold once per jurisdiction. Also, custom dev from the inside. True CapEx on building technology by government is a disaster.
Also, government doesn't have the talent and the longevity and the retention to truly manage SaaS and implement SaaS. So that's another thing we gotta solve for. And so I think with those things, what you, what, what that, I think those are the things that gave rise to the SI boondoggle.
[01:22:01] Mike Vichich: Yeah.
[01:22:02] Jamie Grant: Because the SI could show up and they could go, Hey, we could build on this platform or that platform.
You tell us, you know which one you want. And you and I, if we were co-founders of the same company, would go, Hey, you know, if we're gonna do ITSM or CRM or any of these other alphabet soup to go like, Hey, we need this function. Do we wanna hire our own dev team or do we want to go OPEX and, and make it work?
You and I, I think from our mindset, I've never asked you this, I think we're more opex guys than CapEx guys, uh, when it comes to this kind of thing. But if I don't have the talent and the transparency and I, and the Oligarchy's running it, then the only way that gets structured is time and materials.
[01:22:39] Mike Vichich: Yeah.
[01:22:40] Jamie Grant: Which means if the American interstate, like if we go back to seventies, I think sixties, seventies predates us. It was Eisenhower, wasn't it? Yeah. Something. I don't know. I should, my, my American history teacher wasn't as good as my macroeconomics professor. Um, shout out to Mark Sharp though, who actually is in this community was the best seventh and eighth grade history teacher ever.
That dude never gave up on me. But, uh, the interstate gets built, incentive structure's undefeated. If we paid by pound of asphalt or mile of road and we let the sis build it, the interstate map would look like spaghetti.
[01:23:13] Mike Vichich: Yeah.
[01:23:14] Jamie Grant: They'd have a change order for everything. There's no way 'cause the road wouldn't have been straight.
Yeah. And if we looked at technology, um, which is, you know,
[01:23:22] Mike Vichich: back to the incentives point, right? Bingo.
[01:23:24] Jamie Grant: And, and by the way, and I know we're getting long on this one, so I wanna respect your time. I want us to come back, 'cause I'll give you what these projects look like as a parallel to road builders and the legislative staff dynamic I had to deal with and the legislators I had to deal with.
It's why that job was the most hellacious three years of my life and, and, and pretty much freaking killed me. I allowed it to almost kill me. But, but if we look at it, the software project should be fixed price. We want it to be a road. We need cars to travel on it that hit trucks like vehicles, and it needs to go from Tampa to Atlanta.
That incentive structure tells the road builder be as efficient as you can be. The problem with the way every one of these large SI projects in America is built is that they only make money. By the line of code or the hour that was there. And so there's no incentive. Um, I don't think he'd mind sharing it, but Kevin Gilberts and I were talking about it when I was in the chair.
I was like, what would a code compact look like where multiple states could share the lines of code that were the configurations, the modules between Montana and Florida? Why would Florida build ground up the exact same program that Montana needs? What if we put a collaborative, uh, kind of compact together and we went out to market and we said, you're not just getting Florida.
We'll bring our friends in Texas, Utah, Wyoming, go down the list and go out to the market and say, Hey, if you can give us a solution that does this, you're gonna have real enterprise pricing across five states. The mechanics of that are not hard to draft up that agreement, that contract, but in the current incentive structure, it's not rewarded.
And the big sis hate it 'cause they don't get to build like absolutely redundant. Sorry. Lemme say this, 'cause this is important, I think for you and, and some of our audience, a lot of state programs are a 90 10. We, we kind of say like the traditional 90 10 Fed funding state money. Medicaid's a great example.
Child welfare, there's all these things. Federal government sends 90% of the money down to the state, state contributes 10 boondoggle starts. What would it look like? And, and this is some of the conversations we're having with some friends at Doge. Like once they get through kind of the initial battlefield medic piece, why is the federal government allocating 90% of the same program to 50 different states pro rata?
Instead of saying, let's build the kind of initial product we can ship, even if that's built on a ServiceNow, a Salesforce, go down the list of any of these utility platforms, why isn't the federal government saying, Hey look, we're gonna take that 90% of waste and we're just gonna build you something that gets you started.
And allows you to do the last mile configuration at the state level.
[01:26:11] Mike Vichich: Yeah.
[01:26:12] Jamie Grant: There's, there's trillions of dollars to be saved if that's how the, well, the, the
[01:26:19] Mike Vichich: I, yeah, we should talk more about that. 'cause I'm thinking through the other side of the, Charlie Munger's got another quote, right? Like, don't allow yourself to have an opinion on, on something that you can't articulate the other side's argument better than they can.
And so as I was listening to you, I was thinking like, okay, cool. Move from time and materials to fixed fee. Yep. I get it. That makes sense. I think like the, the, that is the, the argument against that would be, well, you're gonna have, uh, too big, too great a focus on cost and not quality. Right. Because they'll use cheaper equipment or cheaper, you know, uh, materials in the road, for instance.
Okay. Um. There's lack of flexibility, right? We didn't know that there was a swamp here. And like we door found the go for tortoise, found the go for tortoise,
[01:27:08] Jamie Grant: and we gotta move the road. Yep.
[01:27:09] Mike Vichich: Yeah, yeah, exactly. So there's stuff, there's stuff like that, right? That is a reality. Um, and then so, so, but I, but I hear you, right?
I think same. And from stuff I've read on DOD very much the same. Like don't, don't reuse something from a prior generation that's totally good. Like build it from the ground up because it's, you know, time and materials is so, there's, there's issues with both of them. Um, okay,
[01:27:32] Jamie Grant: but, but me, me in the middle, right?
So like, so, so like if A and Z are the parameters of the alphabet, and you're right. If we don't account for, I think this is the, this is like the laser focus on regulation. I was, I mean, I, I picked some wars in the legislature. I didn't, I wasn't there for boring stuff, but deregulation was one of my big things.
Like I went to war on all these, um, protectionist, grotesque things that were keeping people outta the market. Now, I think if I looked at the, well, I'll just say it. If you look at the traditional American political party alignment mm-hmm. And I don't want to take us too far 'cause we could, we could spend all day on this, but, but this is where they meet, uh, the traditional Democrat loves regulation and loves the civil justice system run wild.
Right. They, they raise a lot of money from the trial lawyers and then they do the regulation thing. The traditional Republican stereotypical loves deregulation and hates the civil justice system. The real fix is aligning deregulation with a healthily measured civil justice system that says we're gonna let lots of good actor, we're gonna let the the market be the market.
If the bad actor comes in, they're gonna get hammered. Yeah. I mean, and I would submit to anybody everywhere that both of those structures are fraud, punishing bad
[01:28:46] Mike Vichich: actors rather than making rules
[01:28:48] Jamie Grant: bingo. Because now we're punishing on, on, on like the regulatory framework. If we're heavy on regulation, we're actually punishing the good actors.
[01:28:55] Mike Vichich: Yeah.
[01:28:56] Jamie Grant: We're, we're increasing costs.
[01:28:57] Mike Vichich: Yeah.
[01:28:58] Jamie Grant: So, so to to, to Ken Crystal and
[01:29:00] Mike Vichich: punishing every student, every citizen.
[01:29:03] Jamie Grant: Everybody. Everybody. Yeah. Now, if we, if we applied that and we said, Hey, what if the stereotypical Republican could get their baat loving, caveat, eter, robust, free marketplace. Also, we're done riding protectionist policies to prevent civil liability.
Like a bad actor shouldn't have immunity, and there should be clear accountability. And so hammer them financially where it hurts. And now you're telling the marketplace, like, if you come in, you better be careful. So if we came to your road example, you're right. If we just said Fixed flat price road from Tampa to Atlanta, we're screwed.
If we wrote that RFQ with clear standards, requirements and baselines broke that project into modules and de-risked from a five year, $250 million boondoggle to a series of proof of concepts and milestones that didn't release funding until both the outcome and the quality had been assured, I think we could solve for both.
[01:29:56] Mike Vichich: Sure. I mean, I, I think that you're, we're making progress toward it. I think I, you know, I still think that there's like the, the reality is when you start, when, and I don't know, I like when you, when I, when we start building a product in Pursuit, you have a hypothesis, you have a vision. Yep. Um, and then you get in, you figure out what the customers actually need.
And it evolves, right? Like, yep. You, you, you talk with customers and figure out what the problems are. Um, I think it's hard to like spell that out for five years. Right?
[01:30:27] Jamie Grant: Um, it's impossible. Especially in this place. So, so for example, we, we've touched on 'em before, but this is actually a true example. Uh, Wiz did not exist when the state term contract had been created for state agencies in Florida to be able to buy cybersecurity stuff.
Right now, the fastest growing company in the history of the world at the time before Cursor mm-hmm. Can't come in and secure multi-cloud workloads. Um. Because they don't have the right license. Yeah. They're not on the
[01:30:56] Mike Vichich: contract
[01:30:56] Jamie Grant: and the contract's not gonna be renewed for five years. Right. What do you think is gonna happen in cloud security between year two and year five?
[01:31:03] Mike Vichich: Yeah. Right. So a whole bunch of different stuff. Yeah. I want take this. And meanwhile, you're, you're unsecured.
[01:31:10] Jamie Grant: Correct. Bingo, right?
[01:31:12] Mike Vichich: Vulnerable.
[01:31:12] Jamie Grant: Yeah. That's right. So, um, I wanna take us for a second. Uh, you know what I just thought about, I was about to give the disclaimer, like, Wiz isn't funding us today, but like, I want to take us to, uh, and, and we're, we're really careful to give disclaimers.
We're not doing ads on this thing, we're not doing sponsorships. We want this to be like an authentic conversation, but it just dawned on me and I, I knew better 'cause I have it in my notes. Uh, I want you to take a couple minutes and talk to us about Pursuit. So we've talked high level. Um, I want, I want you to give me, if I'm, treat me like a dummy, how are you trying to change the game?
For the companies that are trying to access the entire total addressable market in the, in SLED.
[01:31:56] Mike Vichich: Mm-hmm.
[01:31:57] Jamie Grant: I'm fascinated by it because I think it actually helps the buy side too. Yeah. Get access and exposure to stuff to start doing like true partnership work. Like so many of my former CIOs would say, we want partners, not vendors, but in order for us to get there, we, we need both sides to act like partners.
Yeah. And, and that's different things. You're coming at it from the sell side to create better access, meaningful content. Walk me through how you're trying to disrupt that game to try and eliminate that funnel. The, the, the, the, the restrictor on the top of the funnel that the Yeah. The oligarchy loves.
[01:32:30] Mike Vichich: Well, yeah. I think we saw, we saw the same things that, that you see that, that made us, you know, get to be fast friends, right. Like the, the 3.1, uh, x on the, on CAC being a big issue. So practically speaking, what Pursuit does is. We are, there's 109,000 public sector entities in the country by our count. And you could argue there's more, actually, depending on if you, you know, break out some sub special districts, special district.
Well, we count, we count special districts in that. Okay, but I'm just saying like, you know, you have a county and then you have a sheriff's office, right? Oh, yeah, yeah, yeah. They buy differently. There's a fight, you know, uh, and, and so they're related, but, so 109,000, that's state agencies, boards and commissions, municipalities, counties, K 12 districts, higher ed and special districts.
That's 109,000. And, and the vast majority of them all have a website, right? So very simply what our system does is it's listening to all those sites and reading their websites, reading their PDFs, reading their budgets, proposed budgets, approved budgets, act first, strategic plans, climate plans, fire, uh, plans, right?
Police and, and public safety plans, climate, all the stuff, right? Um, contracts, pos. Those, all these things are transcripts of meetings. Those are all documents that are being published, you know, by 90,000 entities every day. So in our database, we've got tens of millions of documents. And by the way, this wouldn't have been possible even 12 months ago.
Um, you know, AI didn't, wasn't ready for it yet, but our system is reading all that stuff continuously. And, you know, if there is, uh, a, you know, a school district that's talking about literacy issues or math achievement issues, folks who help solve those problems can find out about it. And they don't have to have hired a lobbyist in every place to figure it out.
Right? We can tell 'em, here's, here's the entities that, that have the pain that you solve. And before that was really from a cost perspective, uh, prohibitive, right? Same thing, if you have a police department that's trying to deal with, you know, reducing drag racing or violent crime clearance, we can hook you up with.
The people who solved that problem, your school had a budget issue. Same. Right. So, um, that's, that's what Pursuit is trying to do, is trying to make sure that the people who are out there trying to help the public sector solve problems, are able to listen and get dialed in as quickly as possible. So that, 'cause there's this saying, if you wait until the RFP is dropped, you're way too late.
Right. And so it's about not, not listening for, Hey, I, I necessarily, I, I put, you know, a million dollars into the budget to, for X 'cause that might even be too late. Correct. It's like, who's got the paint? Right. It, who's got, by the way, the issues,
[01:35:19] Jamie Grant: here's, here's one of the things, make clear that it would be, it would be malpractice on my part.
Not to mention this part. 'cause you just touched on something really important. You're, you are too late by the time it goes in the budget. Like, not that, uh, every rule has exceptions. Um, sure. How that number got put in the budget. Right. Was the vendor telling the buyer how much it costs?
[01:35:40] Mike Vichich: Yeah.
[01:35:41] Jamie Grant: Right. I mean, like that conversation already happened to go, okay, I want your thing.
How much money do I need to go to the board to advocate for? Mm-hmm. Which is why the RFP process is so fricking broken when compared to a demo day that says, okay, how much does that thing cost? Yeah. And you've got multiple so that you, well, and further
[01:35:59] Mike Vichich: to that point, someone who, who doesn't know that they show up and they see an RFP and they're like, oh, cool, we got 60 days to respond.
Correct. I'm gonna put together this response. I'm gonna try really hard. I'm, you know, put it, they write up a great response, boom, rejected bingo. And they're like, what? Like mm-hmm. I, I, I'm not gonna do that again. Yep. Navigating the process is really difficult. So that's what we're trying to do is just like reduce the, the time and the investment required to actually have a pulse on the market, and so that you know who, which entities have the problems that you solve.
And that's, that's fundamentally what we're up to is like, you know, I, the way I describe it is like simply we're trying to sell revenue. You know, we're selling into the pub. We're helping you drive your public sector business
[01:36:42] Jamie Grant: Well, and I think, so this is one of the things I love about some of the stuff we've talked about partnering on and ways we could play like where you are ex, like, I don't wanna say exclusively, where you are primarily focused on the outbound, I don't wanna put words in your mouth.
You are, you are disrupting the outbound, right? Yes. You're saying like outbound is broken. We say it all the time to teams. Like when I got elected, um, I was 27 when I won my primary, I probably looked like I was 14 in Tampa. And we knew that if we knocked on 10,000 doors we would win the election. But that was fundamentally a truth because we knew out of like the 350,000 doors, which 10,000 to hit,
[01:37:23] Mike Vichich: right?
[01:37:23] Jamie Grant: Public sector, go to market outbound. Well first of all, public sector go to market right now is almost exclusively outbound, which is why I love what you're doing because you are disrupting the piece that is actually exclusively how it's done.
[01:37:36] Mike Vichich: Yeah,
[01:37:37] Jamie Grant: we're a little crazier where we're like, how come there's no inbound?
And so at Redleaf we've said we're exclusively inbound from, from now on, right? Yeah. Um, I, I mean,
[01:37:44] Mike Vichich: I hope it works, man. I, I think that would be a huge, uh, revelation for the market.
[01:37:49] Jamie Grant: I, I think, right? It's worked in every other industry. Um, I, I think we're the only team, like I we're making the bet that, that the 15 tortured years I had to learn all of the different stuff.
Like we can actually build those inbound lean machines. But what I love about both our conversations, kind of CEO to CEO sometimes about like, what are you seeing? How can we, it's that right now, the, the go to market in the public sector is exclusively outbound and it is not targeted much at all. Like it's knocking on every door
[01:38:19] Mike Vichich: population budget, but not much more than that often.
[01:38:22] Jamie Grant: And not even accurate budget.
Go back to the example of Kevin Gilbertson in Montana versus me.
[01:38:26] Mike Vichich: Yeah, exactly right.
[01:38:27] Jamie Grant: I was like, I show up at nascio. Everybody's trying to like. I mean, the number of times I got pitched at a urinal, like take the over. Right? Like it's a, it's a bunch of piranhas.
[01:38:36] Mike Vichich: Yeah.
[01:38:37] Jamie Grant: And yet I'm sitting there going, y'all don't even pay attention to maybe a more talented CIO that's got more money than me.
Um, yeah. Sorry if I'm blowing Kevin up by, by uh, everybody's gonna be chasing Kevin now. Uh, but he's, but he is like one of the few private sector guys has money, has backing of his governor working with the agencies. And so I love what you're doing to go, like, I, if I, if I went back to the election scenario, if we had to knock on 300,000 doors to discover the voter, we lose.
We didn't have the money and the time.
[01:39:03] Mike Vichich: Totally. Well, and then to be, be specific, right? Like you're, you're not gonna, as a new contractor, you have to build your credibility, right? Yep. And you have to know, you have to know the ladder that you have to climb. Yep. So which entities in what order should you close and, and what, one thing that we've seen is that, like, if you're able, public sector entities do trust their neighbors.
So if, if you win. Ann Arbor, you're more likely to win Ypsilanti or vice versa, right?
[01:39:30] Jamie Grant: Yeah.
[01:39:31] Mike Vichich: And, and that is the, the name of the game. So you gotta know who's likely to go first. You gotta then, you know, use that, you gotta do a good job with that particular entity. And then the radius around them gets more likely to close.
And then you gotta repeat that. But if you don't have a guide, it's super hard. Like the amount of research you'd have to do to figure that out is prohibitive. So people go the blunt route, you know, they hire the experienced reps, quote unquote-
[01:40:00] Jamie Grant: Big air quotes. Um, I don't even think it's a level. Uh, so I think you, it is time and effort, right?
Like the, the amount of research time it would take, but I actually think it's worse in that even if I had the unlimited time to read all the budgets and the strategic plans and all those things.
[01:40:19] Mike Vichich: Yeah. It's
[01:40:19] Jamie Grant: like in Farsi and I speak Alabama.
[01:40:22] Mike Vichich: Mm-hmm.
[01:40:22] Jamie Grant: I mean, it, it's not even understandable. Um, and we run into that all the time.
So I, I, I love what y'all are doing. Um, obviously excited about some of the stuff we can, we can play together. But, but really just kind of go on this journey of like, let's build a tribe of people who want to disrupt, uh, the public sector before we get to, uh, the roundup, uh, where we're gonna have a little fun.
Um, is there anything you want to ask didn't cover or you want to double click on? Um, and I am gonna commit you to coming back 'cause I think we can have so much fun on these things regularly along the journey. So, evergreen, uh, invitation?
[01:40:58] Mike Vichich: No, I think we covered, I think we covered, you know, the, the main things and uh, you know, if I would just say like, if anyone out there disagrees.
With something that we said, uh, email me, you know? Yeah. And I would, I, I, one thing that I learned in Spades at Wisely is that it does not behoove me to believe anything that is wrong or false. Right? So, I'm sure I said some stuff that is wrong or false today and I'd just love to know what it is. So email me at mike at Pursuit.us.
[01:41:23] Jamie Grant: Perfect. We're gonna put your contact information in the show notes so people can get to you. Uh, you saved me that on the closeout, so thank you. I'll tell you one of the things that immediately attracted me to a friendship with you is that the scariest people in the world world are all answer and no question.
And I think if people heard some of our jam sessions, it's persistent. What can I ask Mike that I don't know, right? Like, yeah. Yeah. And you show up trying to disrupt govtech. You've had successful exits. You have all the credibility in the world to say, listen, little boy, listen little girl. This is how software works.
Um, and one thing I would stress to our audience, uh, and why I am bullish on what y'all are doing is from a leadership perspective, I, I would even say it's the pursuit. It's like the curious pursuit. What do we not know? What what, yeah, what do we know is true? The incentive structures are undefeated. What do we know a lot that we don't know?
And then how do we go down that path to find it? And that's why I just think like it's gonna be, well,
[01:42:25] Mike Vichich: I appreciate you, man. Thanks.
[01:42:26] Jamie Grant: It's not gonna be a straight line for y'all 'cause it never is.
[01:42:29] Mike Vichich: Mm-hmm.
[01:42:30] Jamie Grant: Uh, but that is that journey deal. Alright. So yeah, we're gonna land here and, and we really care. Like I, you
[01:42:35] Mike Vichich: know, like I, we talked about this, I have three little kids.
I want them to grow up in a country where these problems are solved. Yes. And, and I, I heard a phenomenal line from me Klein the other day where, you know, he, I think he said something along the lines of like, the stereotypically on the left, you have a lot of people who will defend government even when it's ineffective.
And on the right you'll have people who wanna throw away government even when it's effective. And our hope is that we can parse that. Like we want to, we want to judge by the results, not by the intentions. Um, 'cause I think most everybody's got good intentions. It's, it's, you know, what creates the results that we all want.
We all want our kids to get a great education. We want our streets to be safe. You know, we want our cities to be solvent. Those are not, uh, I think everybody's aligned on those things.
[01:43:23] Jamie Grant: Dude, I love where you're going with that. One of my good friends and kind of, he, he really kind of like was so good to me was Barack Obama's Chief Technology Officer, first CTO in American history and Anish Chopra.
Um, Anish and I probably don't agree on a lot philosophically when it comes to policy decisions, if, if he had been in the legislature, that kinda thing. Um, but we would talk about, and I talk about with a lot of folks, like, um, this space of follow, the data, follow the dollar is really the white in between the red and blue, such that if we can disrupt this space.
We can give the members of the legislature the ability to go to war in the arena on how to spend the new money. Yeah. Right. Right. So, so like my camp says like I'm in like slash government, uh, send this money back, reduce taxes. Somebody else is in the big entitlement programs and let's go provide free benefits.
The beauty of what we're doing here is that we sit in between that and go, look, let's just go free up 20% of the budget and let the people who were elected to represent their people Yeah. Fight over how they distribute this new money, either back to the taxpayer, the entitle, that's their job, not ours.
[01:44:31] Mike Vichich: Yeah.
[01:44:31] Jamie Grant: And I think like that's the reason killing this, just oligarchy preventing they, they are just driving up price instead of returning money back to the budget to let the red team and the blue team fight over it. And look, I'm, I have my, I have a long history of, of where I come from. I'm a voter, I have opinions, but.
I would actually live in a, I would rather live in a world where the legislative process is fighting over that money. Even if they determine something I don't like, I can vote with my feet and go somewhere else. But we kind of accomplished what we think should be done to say like, how do we make schools safer?
Here's some money to be able to do it.
[01:45:09] Mike Vichich: Yeah.
[01:45:10] Jamie Grant: Yeah. All right. Totally.
[01:45:11] Mike Vichich: Well set.
[01:45:11] Jamie Grant: Let's have some fun for a second. These are kind of quick. You haven't seen 'em. People will get used to 'em as we do 'em, but we like to do a little roundup at the end, kind of a lightning round concept. Uh, we want folks to get to know Mike A.
Little better. Alright, that's good.
[01:45:24] Mike Vichich: What do you got
[01:45:24] Jamie Grant: first one? This one's kind of boring, but it's a good one. One piece of advice and where'd you learn it? That you take with everywhere you go from wisely today? A husband, a dad. Best piece of advice. And who do you wanna give some credit for?
[01:45:37] Mike Vichich: You know, it's funny.
Uh, I, I just give you the first one that came to mind. My parents growing up, we had, they had 10 acres in, in Michigan and I had the privilege of cutting the lawn. Uh, so. You know, here's, I don't know, I don't even know how old it was when I started, but I, you know, I had a riding lawnmower and I'm cutting the lawn and, you know, I would start cutting one area of the lawn and then I would get distracted and I would go cut another part of the lawn.
And my dad would always say, make sure you finish cutting one part of the lawn before you go on to the next. And that is like such a fundamental thing that I take with me. Uh, I approach it, you know, in, in work every day. Like, you know, whole ass one thing, don't half-ass two things. Love that shout, shout out to Jim Vick.
[01:46:22] Jamie Grant: Look, number one, love the fact that it was your dad. We're starting this thing off, right? And number two, uh, as somebody who had to cut the lawn, and I don't know if I was actually a DHD or just in the Ritalin generation, but I would like draw circles and resonate. I was like, how can I replicate that baseball field and cut it just right and, yeah.
[01:46:41] Mike Vichich: Exactly.
[01:46:41] Jamie Grant: Um, alright, another one that's kind of productivity or, or kind of business. What's a secret? Uh, a secret weapon, a hack. When you think of productivity, um, like what's one practice that when you're using it, you are at peak. And when you're not using that system, that process, that hack, you're really struggling
[01:47:02] Mike Vichich: trying to be clear about what matters.
You know, like what, what are the, the things that actually matter? 'cause there's always the, you know, the Eisenhower box of like urgent and important. And a lot of times you get dragged into like, stuff that's urgent, but, but not super important. And I'm not saying you ignore that stuff, but I think it's important like that, you know, what's important.
Um, and then, and then do a calendar audit, right? Like, uh, they say values are not what you write on the wall, it's what you do. Like. Same thing with how you spend your time. So at the end of every week, what I try to do is go back and say like, okay, how did I spend my time this week? Did it align with what I thought was the most important?
And then if not, like, why not? And a lot of times those, those barriers are, you know, that's the actual work. So I, I just think like. It's a good, uh, periodic check. I do it every week.
[01:47:53] Jamie Grant: I, you're touching on some pain points for us right now in our, in our kind of PM framework, we love to do the urgent, important game of like, what's urgent, what's important, what's urgent and important, right?
Yeah. To, to try and do that. We don't do a good enough job of it. Alright. Yeah.
[01:48:07] Mike Vichich: Well, I don't think anyone ever nails it. Right. It's just a, it's an aspiration.
[01:48:10] Jamie Grant: It's a relentless pursuit, some might say. There you go. Uh, so something you do to totally unplug, right? Like, for me, there's a few things in my life I could be having the best or worst day my brain shuts off.
Where, where do you go? Where do you do when a, a really brilliant mind that's constantly thinking about things. How do you turn that thing off?
[01:48:30] Mike Vichich: Uh, well, I don't know. I first of all wouldn't classify as a, as a brilliant mind. I think, uh, that's why I like you. But it is, I'm smart enough. But like, you know, there are definitely people way smarter.
I think, you know, there's, there's a couple of things come to mind. I, I like to work out. I have a, you know, a few days a week I have a trainer that I work out with in the morning. Uh, that certainly is great time. 'cause I'm just like focused and, and in the zone. Um, I coach my kids, uh, my two older boys. I coach their flag football teams, um, which is fun.
Fourth grade and, and kindergarten, uh, that you're just totally dialed in. And then, um, you know, like we, my family and I, we were fortunate to be able to travel a lot and we try to make a point of like, you know, back to the values thing, we want our kids to be, you know, good global citizens. And one of the ways you do that is you have them experience how others live and yeah.
Get out traveling. Uh, that's, you know, that's, that's something we like to do too.
[01:49:27] Jamie Grant: I, I wanna come next time we're together. I want to touch on the value of diversity with teams. 'cause I think in that like pol like big believer teams are both a meritocracy and diverse, like great teams, our first a meritocracy and second diverse.
I think when we don't give exposure to the diversity side. Uh, that's a problem I think when we eradicate the meritocracy. So I, I, I love that. And, and it's, I
[01:49:50] Mike Vichich: think too, like, um, if you, if you travel, you know, it's, it's easier to learn about World War II history, for instance, if you've been to Normandy, right?
Um, so for sure. Stuff like that I think is really helpful.
[01:50:04] Jamie Grant: All right. This is an and, or one book and or one band that you're convinced the world needs to know about. Like, give me something that's not on our radar or that not enough people know about from a book or a band perspective.
[01:50:16] Mike Vichich: Um, I'll give you a book.
It's one that I read when I was in college, actually, I'd say it's like the book that, that changed my life the most. Um, and it's wooden on leadership. You know, the book
[01:50:28] Jamie Grant: Lace him up,
[01:50:29] Mike Vichich: uh, John Wooden, not learn how to lace
[01:50:31] Jamie Grant: him
[01:50:31] Mike Vichich: up. I, I, exactly. I think John Wooden is like such a legend for sure. And his, his, the way he thinks about teams, uh, and like the, the wooden pyramid, that, that really sticks with me.
Uh, but yeah, like what you're referring to was one of the things that, uh, that they did every, so at, at UCLA when Wooden was the, the head coach, I think they won 10 straight national titles. And at one point during that, they won a hundred consecutive games.
[01:50:56] Jamie Grant: It was 10 or 11 and like Yeah. Un untouched not gonna be touched.
[01:51:01] Mike Vichich: Yeah. Uh, I think the game that they lost was actually against Notre Dame and my, back to my dad, he was like, there's like a famous photo of, and you can see him like in the stands celebrating. He went empty anyways. That's awesome. Um, there's a, there's a thing where they talk about, uh, at the beginning of every year, wooden would teach the players how to put their socks on.
Mm-hmm. Right? And, and pull, pull 'em up so that they wouldn't get blisters. And like that attention to the details. I, I, it's one example that I really love, but wood not leadership. And then there's another one too that, that is, uh, I'll throw out at you is, um, you guy mentioned Charlie Munger a couple of times.
Yeah. But there's a, there's a blog, um, Farham Street, and if you look at their mental models. Uh, they have like different mental models related to like biology or physics or economics or psychology. And like what Munger says is if you learn the top 100 mental models, that gives you like 90% of the freight that you'll ever need to do thinking wise.
So that one, uh, I like that, that blog too.
[01:52:02] Jamie Grant: I, I'm gonna take one. Detour. No thought fast answer. What percentage percentage of Berkshire's success is Buffet and what percentage is Munger?
[01:52:11] Mike Vichich: Oof. Geez, man, I don't know. 51. 51 Munger. 49
[01:52:15] Jamie Grant: Buffett, Munger's. Like, don't sleep on Munger, right? Like, I mean, I think Buffett
[01:52:19] Mike Vichich: might even say more than, more than that was Munger.
Yeah,
[01:52:22] Jamie Grant: I think that which goes to the leadership, right? Like, I, I, it just not enough people know Munger stuff. Alright.
[01:52:26] Mike Vichich: Yeah.
[01:52:27] Jamie Grant: Last one. That's kind of, you gotta pick 'em here. We give, we give our folks a pick em 'cause we can see where people wanna go. Either way. Either the wildest thing you've done to impress somebody and did it work?
Or what's your hottest, most controversial take?
[01:52:42] Mike Vichich: Oof man. Uh, wildest thing I've done to impress somebody. Yeah. Or the, my hottest take either one. Um, geez, man, I, uh, nothing comes to mind on the first one. Okay. Um,
[01:52:58] Jamie Grant: I love that one for, for co-founders from like, how I picked up that contract, right. Like if, if only the other people, you know, like that kind of thing.
But like, and if neither fine, but we just like, well, to impress
[01:53:08] Mike Vichich: someone, I don't know, like, uh, I would say like, and not to, I don't mean to sound this like righteous or anything, but I, I've, I've tried, like one of the things that I, that I personally tried to work on very hard, like when wisely was in the, in the toilet, like there was a period of time where we missed payroll for six months.
A very humbling experience. Right. Uh, after we had raised money from angel investors and we had pissed it away, you know, we missed payroll for six months and uh, and we kept going. Um. But one of the things that, that, uh, I'll never forget was I was giving a presentation, uh, at, at the, there was a Ann Arbor New Tech meetup, and I was giving a presentation.
I had my cell phone out, plugged the phone into the projector, was about to demo this like cool app and my, my screen like moron. I didn't turn off messages, right. Uh, the, the screen is up, you know, my screen's up being projected behind me, and I get a text from my wife that says, are you coming with me to therapy tonight?
And, uh, and like the audience, like, you know, they were, people started laughing and I'm like, what, what's funny? I didn't even say anything, you know? And, uh, half of the people are gasping and the others are laughing. And I turn around to look at it like right before the message thing goes away. And, uh, and like that moment was a very liberating one for me because, you know, it did, leading up to that point I was trying to like be this like.
You know, proverbial successful founder, and then it was just like revealed in front of 300 people that I'm a schmuck and struggling in a lot of different areas. And, and that was a super liberating feel, uh, feeling for me. I felt like it was, uh, you know, my, my, what I said was, I think it's important that you're able to talk about issues and address them with people.
And, and I think, you know, my relationship with my wife would be better for it. And like, you know, some people were clapping and stuff, but walking off that stage, uh, I felt totally free and, and it caused a whole bunch of other stuff, um, you know, related to my identity, which I think actually was holding me back.
So my reason why I bring that up is when it comes to impressing other people, one of the things I've, uh, tried to work on is like doing things for the right reason.
[01:55:19] Jamie Grant: Dude, I, I, so it's funny when Paige and, and Jay and I were kinda like going through like, Hey, we, we want to end this stuff with, like, get to know folks.
Like the, the, the I word was kind of there, right? Because some people are gonna have like. How they got the first date, how they won the contract, whatever it is, uh, teaser for episode two, dude, we have, you have set up so much like, just great follow up stuff, authenticity and vulnerability. I think especially as men in America, especially as executive leaders, uh, it's stuff that was discouraged for so long.
Yeah. And so the irony of not trying to impress people, creating like that credibility to actually get the outcome you want, but not at the surface level. Uh, totally. And,
[01:55:59] Mike Vichich: and, and, you know, growing up the story that, the story that I told myself, like I wasn't around startups or, and stuff as a kid. Uh, and when I started wisely, like I had this mental model of like, you know, a great startup founder was Steve Jobs or Larry Page or Larry Ellison.
Right. And, and, and I, I, in hindsight, I spent way too much time trying to be right for the first few years rather than just try to get it right. And there's like a few people specifically that. That I credit my co-founders, uh, you know, or a couple of them. But, um, but yeah,
[01:56:31] Jamie Grant: it's all right. So we're gonna next, next time we come back, we're gonna take one segment to talk about my obsession with depth, my proposed formula of ingredients to get it.
And I want you to, I want you to like thrash away at it. Um, 'cause there's so much good stuff that you're going with there. Alright, last two are fun. Let's do
[01:56:51] Mike Vichich: it.
[01:56:52] Jamie Grant: You get a walkup song, you're playing college baseball at Michigan State. You're playing for the Tigers, uh, and you get a walkup song when you walk into the office every day.
Your team, like your team plays walkup music to get all your employees fired up. You get to tell us what the walkup song is.
[01:57:10] Mike Vichich: First one that came to mind is Gimme Shelter by the Rolling Stones.
[01:57:13] Jamie Grant: All right, perfect. Good, good. What's yours now? This one?
[01:57:17] Mike Vichich: What's that? What's yours?
[01:57:18] Jamie Grant: What's yours? What So I, I'd like to rotate it.
Um. At Lis is my go-to when I have to be up and early in the morning. I'm a, I'm a, I'm a, I grew up on Outkast and, and saw like actual, like the best hip hop, uh, Atan, like just gets me going. It gets my brain moving. Uh, J saw we were on the road the other day and we kind of sleep deprived. We're like, whirlwind of dcs, we're this Airbnb.
And he just hears Atan going on repeat. And I'm like, I don't know what it is, but like wrapping that gets my brain going. Uh, so it surprises people. That's uh, I love that. So, so Atan is up there. Well hopefully we,
[01:57:56] Mike Vichich: I see you in a TL
[01:57:58] Jamie Grant: soon. Yeah. Bingo. Teaser. Teaser. I like it. All right. Now you get to leave a landmine.
Since you're first on this one, you don't get the present. You get to leave the question you want the next guest to answer. So anything Pub sec. You don't know who they are. You get to leave. Uh, what is the one question in the roundup that we have to ask the next guest?
[01:58:21] Mike Vichich: What's the biggest thing you've changed your, the most consequential thing you've changed your mind on in the last 12, 18 months?
[01:58:29] Jamie Grant: By the way, I love that so much because I lost the debate with our team about including that question in the roundup. It's on the best. Really? Yeah. No, we were literally like, that wasn't
[01:58:37] Mike Vichich: a plant for everyone out there.
[01:58:39] Jamie Grant: Yeah. We literally were trying to go, we had like, you know, 10, 15 we're like, let's have some fun with 'em.
Like, we want it to humanize folks. We want it to create some, some community, uh, and we wondered how people would like, it's gonna, it, it is now back in the roundup and it is the Mike v question. Love. So
[01:58:56] Mike Vichich: dude, appreciate you, Matt.
[01:58:57] Jamie Grant: Dude, this has been awesome. We wanna do it regularly. Uh, so anytime you got time to give, I want to keep pursuing this thing with you, pun intended, of like how we blow up and, uh, just some of the, the bad incentive structures and show the proof of what a, a really efficient disruption looks like that aligns the buyers and the sellers around innovative solutions that truly make a difference for you and me as taxpayers.
Um, couldn't thank you enough for spending the time in.
[01:59:23] Mike Vichich: Thanks for having me, Jamie. Hopefully the country is better for it and, uh, we'll see you out there, brother.
[01:59:28] Jamie Grant: Perfect guys. We'll have some show notes for folks that want to get with Mike. We'll give you some information on that. Appreciate you taking a little time to come visit the Ever To Conquer.
We look forward to more.
[01:59:36] Mike Vichich: Happy to do it.
[01:59:37] Jamie Grant: Thanks buddy.
[01:59:38] Mike Vichich: See you man.