Brandon Daniels: the Building of Exiger ($1 Billion+ Valuation)

Over the past 12 months, we've interviewed 30+ founders and executives who have built companies with a valuation that exceeds one billion dollars for our show,?Category Visionaries.?

From these conversations, we're excited to launch?Unicorn Builders, a new weekly newsletter that distills the top actionable lessons that B2B founders can learn from builders who’ve defied the odds and built billion-dollar+ technology companies.?(Subscribe on Substack here).

In our ninth edition, we explore our conversation with Brandon Daniels, CEO of Exiger. Exiger is a third-party and supply chain management software company with truly extraordinary revenue growth and a modest amount of capital raised compared to other companies who have achieved similar valuations. With roughly 50% of Exiger's revenue coming from the government, much of our conversation focuses on lessons founders can learn from partnering with and selling to the government. Here are the top lessons learned from my conversation with Brandon.?

#1: Capitalize on real-time events to showcase your technological capabilities.?

“In the COVID-19 response effort, we got to unleash the full capability that we had built that assessed operational risk, that assessed financial health, that assessed your technical capability to actually deliver the supplies that the customer was procuring. We got to use the full breadth of the platform that we had built in real time in a real sort of battle or mission focused scenario. And so the most interesting thing was how relevant the technology was to this mission and to the fight where you're trying to stop forced labor, where you're trying to avoid adversarial finance, where you're trying to stop fraudulent or fake companies from siphoning money away from critical initiatives like buying PPE, medical devices and pharma.”?

??Actionable takeaway: When you see an opportunity to demonstrate what your technology can do, capitalize on it.

#2: Gaining momentum is hard. Maintaining it can be even harder.?

“We went from $10 million of ARR in 2019 in the third party and supply chain space to a place where in the next twelve months we'll be at $100 million in ARR. And so if you think about it, that kind of explosive growth only happens when people see how your technology, how your capability can meet a need in real time, right? It's a bit of a black swan moment, but it's also then sustaining and continuing that kind of delivery that then leads to expanded or explosive growth.

We had to ensure that the momentum that we were seeing off the back of the COVID-19 response effort was being capitalized off of. As soon as we had that first bit of momentum. So we're talking late 2020, we had all this customer momentum from the industrial based councils and the COVID-19 response effort. We started to immediately implement an expanded salesforce, right? So went from no BDRs to ten BDRs, right? We doubled marketing spend.

The thing that we had to do is we had to make sure we didn't lose that momentum that we were able to cultivate. Because once you have momentum, you have to keep it and it is very easy to lose it by not betting on yourself."

??Actionable takeaway: Don't make the mistake of thinking that momentum will last forever. Once you have momentum, do everything in your power to make sure you don't lose it.

#3: Embrace customer-informed product development.?

“Two and a half years ago, actually, we had a customer say, hey, so I love the operational risk, financial, health, ownership, control and influence and reputational risk scoring that you do. But I really want to carve out for just ESG risks. So just environmental, social, and governance risks that we're encountering.

So what we did was we focused on a rapid Iterative customer informed development plan to carve out from our other risk scores the things that were specifically focused on environmental risk management or decarbonization or climate change. The things about forced labor or about health and safety or some of the other issues that are aligned with sort of the S piece of ESG. And then looking at cyber and corporate directors management for the governance side, we basically went on a six month sprint with that customer building and Iterating with them.?

And so one of the things that we did was as long as it was in the use case of third party and supply chain management, were pretty flexible on allowing our customers to bring us into new areas that allowed for additional share of wallet or allowed us to get new economic advantages."

??Actionable takeaway: Develop your products by working closely alongside your customers. Take their feedback, iterate, and build a product that others just like them need.

#4: Sell your product to the federal government.?

"The federal government is trying to make sure that it is cool to be a vendor. And so they have redesigned their procurement practices to be adaptive, faster, and smarter. They have made it so that you're able to prioritize your development of your product in a way that they're able to be a good customer and partner in terms of IP, in terms of funding. And so I think Silicon Valley is really interested in working with the federal government because there are lots of benefits to the way that the federal government has changed its manner of procurement or acquisition to be foot forward. And to inspire innovation in the United States, which hasn't always been the case, right, but it's certainly been the case in the last few years.

There are a number of really interesting programs that the government sponsors that help startups to get their first foot in the door that I would really advocate for. So one of them is Afwerx. It's an adaptive acquisition platform put together by the Air Force. I've had a number of friends that have worked in conjunction with the Afwerx team. In fact, Major General Holt from the Air Force is on the Exiger advisory board. And he was a big champion for Afwerx.

So Afwerx is a great opportunity to get funding to get into SBIR programs, to really sort of demonstrate cutting edge technology and how it can support the US federal government mission.?

??Actionable takeaway: The US government could be an amazing early customer. Educate yourself on all the different programs they offer to help bring you into their ecosystem.

#5: Choose your investors carefully.

“One of the things that most of us don't think about is that the government wants you to align with the US federal government, right? So when you're taking funding, when you're looking at potential funding sources, you have to assess your foreign ownership, control and influence, meaning focusing on Silicon Valley funds, focusing on US funds, focusing on VCs that are in your local incubators or are in your local angel groups that can give you that first bit of funding. It takes off a huge impediment that could exist as you start to scale right because the government is getting more and more serious on foreign ownership, control and influence and how it's going to dictate whether or not they're going to buy from you."

??Actionable takeaway: If you plan to sell to the US government, be mindful of who your investors are and ensure you aren't taking funding from organization's, countries, or individuals that do not align with the US.

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