Welcome to Students vs. Startups Episode 12! This week we talk with Dan Tangherlini, the former GSA Administrator turned President of startup, SeamlessDocs Federal. His new mission, prove that government is beautiful.
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John Gilroy: Welcome to Students versus Startups: Showdown on the Potomac. My name is John Gilroy and I'll be your moderator today. The structure for this podcast is quite simple. You put a leader of a tech startup in the hot seat, students ask questions, we find another innovator, and we do it again.
Little variation on the theme today like Mozart would do, we're going to have one startup and we're just going to grill him for a full half hour. It's going to be really painful for our startup today.
The founding sponsor for Students versus Startups is the Radiant Group. If you enjoy solving problems and like to work with bright people, the Radiant Group is the place for you. Contact Al Di Leonardo or Abe Usher at Radiant Group dot com.
Here we go: round one.
Well, all three of today's students have an affiliation with Georgetown University. One successfully graduated and two are wannabes. All kinds of degrees this side of the table Dan, so you've got to be careful. Let's start off with Peter Pilawa. Tell us about your background and where you work now Peter.
Peter Pilawa: Yeah hi, I'm Peter Pilawa. I'm the director for strategic planning at Audi of America. I have a few master's degrees, so I collect degrees like Dan.
John Gilroy: Master's of Economics, MBA, you collect them.
Peter Pilawa: Yep, and I'm currently enrolled in the Georgetown Tech Management program because I think that's important when you develop a business strategy. You also need to understand the tech side, so I look forward to having some very tough questions for Dan here.
John Gilroy: Good, good, good we're going after him. Maura, please your background.
Maura Imparato: I graduated from the tech management program at Georgetown a few years ago and I've been joining as faculty, panelist, guest speaker for a while now. I'm an IT director at a public health association, and I'm also studying neuro technology on the doctoral level.
John Gilroy: Asad is no stranger to the MBA either. Asad, tell us about your background please.
Asad Jabbar: Sure, my background is in mes and banking and in venture capital. My education: I got my MBA from the Smth school in University of Maryland and right now I lead CSRA's small business growth and strategic initiatives.
John Gilroy: And you're an MBA student in Georgetown as well? Or technology management?
Asad Jabbar: Technology management.
John Gilroy: Well Dan, you've got a table full of smart people that you're facing. Dan Tangherlini is the president of SeamlessDocs Federal. Dan tell us a little about your background please.
Dan: Let me start by thanking you for including me on the program today, and looking forward to mixing it up here with the panel. My name's Dan Tangherlini. I just completed about two years ago a twenty plus year track record of public service. I came to DC in 1991 as a presidential management fellow, worked at the OMD, went over to the US Department of Transportation, then was loaned to the city Tony Williams had asked to be the CFO of the police department.
John Gilroy: Loaned?
Dan: I was loaned. And that was a long loan. I took about ten years to get back to the federal government. I started up the DC Department of Transportation and went over to run Metro for a year, and then came back to the city as the deputy mayor and city administrator, then went to the US Treasury Department as the assistant secretary management CFO. And then was asked by the president to go over to GSA after a small problem they had there in 2012.
John Gilroy: Very humble. You have some education, don't you?
Dan: Yes, I went the University of Chicago, both the college and the Harris School of Public Policy Studies. Then I went back for my MBA at the University of Pennsylvania.
John Gilroy: We have a lot of serial MBA-ers in this room, I tell you. A room full of MBAs. Now look at your background and I see strong federal experience, yet you're wanting up with a startup here. Would that prepare you for the startup or did your federal career impede it in anyway?
Dan: I'm not sure anything prepares you for a startup other than being in a startup. But that having been said, what really drew me to the startup and I think the startup to me is this product that we have that dramatically transforms the way people interact with processing government. And having spent twenty years trying to make government processes more efficient, I actually came across what looks like a completely new and better mousetrap. I get so excited about it that I joined the company, and I've launched our efforts to get into the state and federal marketplace with SeamlessDocs Federal.
John Gilroy: So that's the business problem that you solved, is that right?
Dan: Absolutely. So, SeamlessDocs actually early on focused on being a government exclusive, recognizing that the majority of forms processes either are developed by government directly. Too many transactions still happen by forms processing government or are mandated by government. By working directly with governments to help them dramatically improve the way they interact with the customer, we can reduce the cost of actually providing that service and dramatically improve the experience.
"We hope that by making government beautiful that people will begin to feel better about their government."- Dan Tangherlini, President SeamlessDocs Federal
Asad Jabbar: So, first as a public service announcement, thank you on behalf of all the government contractors out there who have to interact with all those forms. That's first off.
Dan: I'm one of them now.
John Gilroy: You're helping yourself.
Asad Jabbar: So Dan, this is an immense problem right, just the amount of paperwork and the government. There's no question about it. I would imagine that part of your firm's job is really kind of internal buying within agencies, between all the disparate component units and all the disparate business areas. So, walk me through a little about how you would engage with one agency and just centralize the business side without ever touching the technology.
Dan: I think the mistake a lot of people make is thinking that the government is a thing. And you hit on it. The government is this incredibly atomized marketplace. And so, there really is no single play you run in trying to sell to the government. And what we found over the years is selling and now my experience in the last eight or nine months, is that it's really about individuals, about champions. Find the people who are really committed to fixing a problem or really suffering the effects of working a problem. And finding those people and bringing them a solution that actually the little light bulb goes off and they say "wow, I need that, I want that." The best way to do it though is to show people other people who have had success with the product.
Peter Pilawa: So, I studied your website and I'm very impressed with your offerings. What I'd like to understand a little bit more is what makes your product unique? I know you mentioned you used PDF, but what would prohibit other competitors to potentially enter your market base?
Dan: I think what prevents them is the tremendous investment we've made intellectual property and developing the algorithms that convert PDFs or electronic based forms into these web based forms. Figuring out, going through the processes that we've gone through to learn government business processes, build those relationships. So, I really think what we've done is taken a number of parts that are available in the marketplace, put them together in a unique and special way, protected it with some IP, and then brought it back to the marketplace with a real deep understanding of how government actually does its work. So, yeah someone could start SeamlessDocs two tomorrow, but they are going to be three years, several million dollars, and a big reputational gap behind us.
Maura Imparato: So, you've been doing this for three years then? How long?
Dan: SeamlessDocs has been around in existence for roughly three years in really focusing on the government market. I've only been at now since last May.
Maura Imparato: Well it sounds like you're still excited about it, which is excellent. I'm sure it translates when you market to your clients. I'm wondering based on my experience with government contracting, after you've sold then is it easy to keep your client interested, excited, and motivated and engaged during all the implementation? So, who works on that? How do you get that done?
Dan: Right. We actually have as many people involved in what we call success as we do in sales. And that really is about making sure people not only just buy the product; we want people to buy the product; but what we really want people to use product. Because that's when the magic and the experience of understanding how you can dramatically change that relationship with the client. Client couldn't be a more important one. It's the citizens of your city, your town, the United States. We want them to be excited about using the product so they can gain the efficiencies and the benefit of it. That's our best promotion. That's our best sales.
Asad Jabbar: So, jumping on the theme of service delivery and execution, how do you interact with all of the compliance and things that are outside of your control. Just the federal laws and compliance that every agency has to do and how do you kind of work through that on an engagement with a political agency to minimize the paperwork?
Dan: I think that that's one of the things we offer our clients more than any other product that's available out in the marketplace. And that is the singular focus on the government client. So if there's a requirement, if there's some change in law, policy or regulation, we want to keep up with it. We need to keep up with it. That's our marketplace. So, there is no sense that the client has that we are going to get tired of the market, abandon them halfway, or get annoyed by some of new regulation. We're just going to internalize it within the product because that is our marketplace.
Peter Pilawa: Speaking a little more about your product, can you tell us if possible a little about your pricing structure? I mean, you have a big client base, so I'm curious to learn a little bit more about that.
"Right, and I think that's the important thing. Recognize that this is cloud-based software as a service, so what we're really focused on is delivering a price point that governments can build into a budget."- Dan Tangherlini, President SeamlessDocs Federal
So, we have unlimited submissions through our process, so you don't have to go and figure out how many forms you're going to have and create a little forms budget. We price it generally on population in the city or town or the number of FTE (full time employees) in the agency. Then, we have licenses for the people who make the forms or build the forms or who have the admin rights. But it's a very, very cost effective product because what we're really doing is leveraging the scale of the marketplace to deliver that product through the cloud to our customers.
Asad Jabbar: One thing I noticed, you talked about state and local. Tell us a little bit about your customer mix between federal, state and local and all of things that are entangled between the state and local market, and how fundamentally different it can be with the federal agencies.
Dan: Actually, we are primarily in the city, town, and county level right now. We're in 300 cities, towns, counties. We're just moving into the state market and I'm pushing us into the federal market. As you point out, it's a very different set of markets. Cities, towns and counties, particularly cities and towns, they have this immediate interaction with citizens that actually has electoral consequences if they get it wrong. So if they see a product that can make the service better, easier, faster, more effective and efficient; they buy it tomorrow. Counties, it's a little more attenuated. States even more so, and the federal government they're more nervous about taking any risk, so we don't yet have a federal client, but we've had lots of conversations with federal agencies. We're waiting for that client number one for the whole effort to tip.
John Gilroy: Great job Dan. We're going to hold you over for the second half here, but if people are listening and they want find out more information on your company, where should they go?
Dan: Seamlessdocs dot com. That's s-e-a-m-l-e-s-s-d-o-c-s dot com.
John Gilroy: I'm loving it, that's great. Now we are hosted by Eastern Foundry. It's a community of government contractors who are bringing innovative solutions to the government marketplace. For more information go to eastern-foundry dot com.
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Welcome back to Students versus Startups: Showdown on the Potomac. Round two.
Well, we know our students. We have Peter Pilawa. We have Maura Imparato and Asad Jabbar. And we kind of know our person in the hot seat, Dan Tangherlini.
He's the president of SeamlessDocs Federal. We've been going back and forth talking about the federal government and a seamless way to exchange a document. I'd like to ask one of our students to have the first question, Maura you want jump in here and ask Dan a question please?
Maura Imparato: Yes, when we were chatting earlier, you mentioned that you had an important mission that a lot of new employees get very excited about. Can you tell us about that?
Dan: Just the idea of making that interaction between people and government as seamless and as beautiful and as simple as possible. That is something that everyone has had an experience with and everyone wants to try an improve. So, we're able to recruit just the best and the brightest with the argument being that hey, here's a way you can combine being in a startup with doing something mission-oriented that can have a very positive effect on many, many people. And people get excited about it.
Peter Pilawa: So, where do you see yourself in five years? Where do you see SeamlessDocs to evolve from more strategic perspective?
Dan: I actually think that our real focus is getting the message out to people the fact that the way the government transacts business with the citizenry needs the kind of transformation and revolution we've seen in almost every other interaction we've had in our lives. And what's interesting is if you think about the medium of exchange and the commercial marketplace, you trade financial instruments for goods and services. Financial instruments have gone through at least two or three generations. We're on the third generation with PayPal, Vemma, and Square; we're on the fourth generation with bitcoin and the block chain.
Government transactions happen through the exchange of information and we're still squarely in generation one, which is the paper based form. Too many of our processes, too many of that exchange happens with a pen, a piece of paper, an envelope, and a fax machine. And where else in your personal life are you using a fax machine then when you're interacting with government? So what we're hoping to see is the fact that we can transform these processes. The existing processes that people are comfortable with, quickly, easily, and cost effectively transform them into something that's beautiful, simple, digital, and structured we're hoping that gets double-digit adoption across all levels of government.
Asad Jabbar: Dan, I think it's interesting you use the word 'beautiful' a lot when referring to the transformation that your firm wants to do. Talk a little bit about something like digital design strategy, how some of your folks come in and look at the business process needs of a local government entity or state entity, and how you transform that. You don't have to walk me through the whole A, B, C's of operation, just at the basic level what are some of first things you do at from a design perspective to figure out what's wrong and what's working and then offer your solution?
Dan: It's really very simple. You have to ask yourself what is the process trying to accomplish and what is the connection you're trying to make, and too often we're constrained by say the eight-and-a-half by eleven piece of paper that the data collection originally- you know a hundred and fifty years ago someone decided that was the format for paper, and so all of our processes now have to fit on the geography of that. Even our digital processes are really digital pictures of that geography, and what we do is we allow people to unchain themselves from that geography and simply do what they're trying to do, which is ask people questions. The appropriate set of questions necessary to create that ability for a transaction to happen. I encourage people to look at the Newark website.
We work very closely with Newark and help them restructure their entire website so that they could more easily, cleanly, and beautifully interact with their citizens and connect them with the systems and processes that they want.
We helped the city of Boston do the same with some of their permitting efforts, and that's what we're really excited about is helping spark a revolution and transformation in the way people relate with their government.
Maura Imparato: So, marketing strategy, you said you had 300 cities, towns and counties as clients and you built that up as your personal background. A lot of federal government experience and in your future you're looking for federal clients. So I'm wondering what's your strategy and what has worked in the past to get new clients?
Dan: What's really worked on the city, town, and county level is just going out there and connecting with them everywhere you can. I joke that I'll go to the opening of an envelope so, you've got to go there. You've got to be there. You've got to be present. You've got be engaged. You've got to talk to people. We're doing a lot of work on thought leadership and also get our name out and let people know who we are and connect us with the idea of transformational government.
And I think really that's the same on the federal government side. It's really building a relationship and trust because at the end of the day, if you mess up a government program you're leaving the poor civil servant to clean up the mess, and they want to know they have a partner who can actually handle the volume, handle that trust relationship in the security. That takes a little time. That takes extra time then you would have in a normal commercial relationship.
Peter Pilawa: Good point, commercial relationships. I'm thinking of big corporations like mine and they couldn't eat the same kind of processes you're willing to leave to convert really paper forms into digital processes. Do you ever see yourself eventually expanding at least the service offering for bigger companies that are almost the size of some small government entities?
Dan: Well, you know as really thoughtful students and startups, that the successful startup is one that focuses. We've picked a marketplace that's only 40% of GDP to focus on. I can see absolutely going after the other 60%, but we've still got some adoption that we've got to get through on the government side.
That having been said, I actually bought a car recently. A used car for thirteen thousand dollars, and I said I'm going to buy that car. I thought I could just write a check and drive the car off the lot. You're shaking your head in horror and sadness, exactly how many forms did I have to sign?
I sat there for an hour and a half filling out forms, only one of them related to the car dealer. All the others we're government forms. My favorite one was the financial crime enforcement networks structured financial payment structured finance form for a transaction for over ten thousand dollars.
So, I made sure I wasn't money laundering through buying this car, and I think that's really the interesting point. I agree that there's a lot of forms of corporate America that we could take on, but a lot of the forms you're dealing with in corporate America are really government forms.
"And if we could dramatically improve the efficiency of that process, I think we could dramatically improve commerce as well."- Dan Tangherlini, President SeamlessDocs Federal
Asad Jabbar: So Dan, tell me a little bit about-you mentioned scalability a couple times, tell me a little bit about your partner and alliance strategy. Whether it be systems integrators, whether it be even software providers, walk us a little bit through your partner strategy.
Dan: Yeah, we've said that our real focus of our company is adoption and any path to adoption we're open to. We believe that there is a way well developed ecosystem of systems integrators, consultants, management consultants, business improvement specialists. We want all of them and whatever toolkit they bring to have our particular tool in it.
We think actually SeamlessDocs is one of the fastest ways for a system integrator or consultant to demonstrate clear, obvious, immediate value to their clients. The great thing about it is you put in there and people will say "wow, something dramatic has happened here". Then, they can sit back and take the data, it's now coming in digitally and in a structured way they can begin to understand the way people are actually interacting with process through the focus on the data and the metadata that can actually see how many forms are being submitted. What questions do people abandon on, where do people have problems and stumble in the process, so they can build a better processor as a result of it. We think that's a key part of our strategy going forward.
Maura Imparato: I'm very interested in funding. How did it go at the beginning? How did you get these, what I heard were fabulous New York headquarters in Soho, right near Google?
Dan: Right, fabulous. It's in the Soho Valley I like to call it. It's a second floor classic startup environment with a dog walking around, the whole picture. But actually we've completed a series B a round of funding right before I joined. Motorola Ventures let it but we have the Gov Tech Fund as one of our investors. We just have a really great suite of investors who are really thinking that now is the breakout time for government technology and really transforming the way government interacts with their customers in the same way just about every other customer transaction has transformed over the last ten years.
Peter Pilawa: Tell me a little bit about the culture of your company and what talent are you looking for?
Dan: The culture of the company I really think that it was summed up best at our holiday party this year. What you saw was people who had genuine affection for each other, who really felt that they were working on something important, working on something special, and really wanted to bring this gift to government and to the people. That there is this real sense of-I've seen that sense of mission and focus before and I've seen it in places like the Metropolitan Police Department (Washington, DC) where I had the good fortune to work or places like the department of transportation or GSA when people are really focused on doing something important.
Maura Imparato: I'm very impressed by that description and I want to join your company now. Got any jobs?
Dan: We'll talk later. I think that that's actually one of the exciting things about the company is that we offer something that is actually going to make the people who are working with both directly as clients and the governments, and indirectly ultimately as people the governments serve going to make their lives better.
Asad Jabbar: Last question Dan is since we're talking growth and growth trajectory, tell a little about your BD (business development) efforts. Do you guys really respond to procurements in the traditional sense, do you really do organic growth, what's kind of your BD efforts and where do you see yourself kind of growing?
Dan: I actually see it as a combination of organic growth at the city, town, and county level. And then, really probably partner-based growth at the state and federal level. So, working with integrators at the state and federal level in part because what we found was at the state and federal agencies really need a bigger, trusted partner. They need some kind of endorsement. So, we think that more and more in this year, that's going to be our focus. Still working on the organic growth strategy too, that's still going and I was the former GSA administrator, I love working in federal buildings so I'll go into any one of them and talk to any inhabitant.
John Gilroy: Dan, if people are listening and want to get more information on your company, where should they go?
Dan: I implore them to go the seamlessdocs dot com. That's s-e-a-m-l-e-s-s-d-o-c-s dot com.
If you would like to see a transcript of this episode, please visit the blog at Eastern Foundry dot com.
Signing off, from high atop a nondescript building in lovely downtown Rosslyn, Virginia. I'm John Gilroy and thanks for listening to Students versus Startups: Showdown on the Potomac.