How to Make Better Pathways for Defense Innovators

Hi, this is Lindy Kyzer with ClearanceJobs.com and welcome. One of my favorite things to do over at ClearanceJobs is to scout out cool people doing cool things across the federal government and contracting space. Kristin Sargent is one of those people. She is the founder and CEO of Sargent Initiatives working at the intersection of defense, security and technology. I love that. I love where different things intersect and how we can gain advantage through those. So she spent 20 plus years working in defense technology, learning what works and what doesn’t, and now has built this really cool company helping other companies see advantage. So thank you so much, Kristin, for being here and taking the time to be on the show today. I really appreciate it.

Thanks so much. I’m so happy to be here.

The title of the show is Security Clearance and Security. It also may be National Security Career Stories. I love a good career story. You have an Army background, which is also my favorite. Can you talk a little bit about how you got into national security work and what led you to form your own company? Sure.

I ended up going to college on an Army ROTC scholarship. My senior year at Lehigh University happened to be 9/11. Just something clicked that what I was doing was going to be much bigger than what I had set out to do. I just don’t believe in coincidence. So it was just an interesting time and place to be sort of entering into the whole national security mission. And so with that, I became a commissioned Air Defense artillery officer. I was actually a Patriot battery officer, but my last additional duty in the military, this was in 2006, was as a battalion information management officer. And so I had no training. I really had no college background on what being in information management operations meant. What I learned was how to drive to an office, pick up a CD with firewall updates, and then manually insert them around all of the desktops at our battalion.

(02:17)
And I remember thinking, oh my gosh, this is how we’re going to lose the war. And so from there, I ended up transitioning out of the military and into the federal sector. I was at Booz Allen Hamilton and did incredible work and watched how putting the right contracts in place were really pivotal for the government to get the right blend of people with technology. And so I got more and more curious about how product companies do that. And so I then went over to Amazon Web Services and what was interesting is if Booz Allen had sold more like AWS and AWS had sold and delivered more like Booz Allen, both would’ve been more successful. And so I’ve kind of looked at those patterns over the course of my career and now looking at what is happening in defense sector, I said, oh my gosh, I need to start a company that helps every company who’s going to be unique and somewhere on that spectrum develop its way of selling and executing with excellence for the defense sector so that we can continually have the best of breed technologies and people and services companies delivering in the defense sector.

(03:18)
And so that’s why I started my own company and that’s what led me there. I

Love that. I love a good founder story, seeing how a company starts and seeing how you apply the different paths that you had, the different careers that you had and led them into one thing leads to another. So through your company, we have a common passion point around seeing more success stories for companies who have innovated solutions and can deliver them to the federal government and not just deliver them once, but keep on delivering them. Can you talk about some of the common mistakes that you’ve seen companies make as they try to enter into this space?

Sure. What we’re seeing right now and what I think a lot of companies experience is just a byproduct of the dual use nature of what government is trying to adopt. The government is genuinely trying to adopt best of breed solutions that we’re seeing in the commercial space way in advance of when they might make it into the government space. And so the challenge is a lot of companies are organically grown, are really built to deliver to the commercial sector, and some of the internal processes and mechanisms that they might develop don’t necessarily work within the defense sector and they don’t work because of how the realities of the defense sales cycle works. So one of the mistakes I often see are unattainable sales expectations and quotas that are set more on a commercial framework and less so on a defense framework. If there is someone with less defense experience or less federal experience actually developing those sales quotas and those sales incentives for their federal team, you might be creating a square peg in a round hole situation that is creating something that that team cannot achieve.

(05:00)
That’s often a dynamic I see. That’s really difficult to overcome if you don’t kind of really look at the incentives you’re trying to put in place against the reality of defense budgeting, how sales work, et cetera. The other thing I see a lot of is people see SAM.gov as the end all be all to where to really develop their business. And the challenge is if you’re responding to sam.gov request for proposals, someone has already been in there and in the mix and understanding what that customer wants and needs and has likely done some work in advance to shape that procurement in their favor, you’re already reacting to something that someone has a competitive advantage against you to pursue. And so I see a lot of companies spend too much time and energy being really reactive versus proactive, and there’s a way to use the data in sam.gov to get in far more of a proactive sales approach to put a more proactive approach in place.

(06:03)
But being reactive and responsive to those types of RFPs coming out candidly can be such a waste of time and energy and never result in the return on investment that a company might see. Put those aside. The number one mistake I actually am seeing is this lack of understanding by all of the key parties at the C-suite level and at the executive levels of their respective roles in pursuing the defense market, in pursuing defense opportunities. And so it’s not just enough, for example, A CEO to hire a VP of defense. They themselves, the CEO has to be engaged in managing the board’s expectations. If there’s a board or in helping build a culture that can handle the realities of pursuing a defense mission space, the chief product officer has to be engaged in understanding what security requirements might have to be considered for that product roadmap. And so it’s not just that sales leader for the defense sector that has to be engaged, it’s all parties. My goal is especially to help companies understand what their collective role is, bring them together and then get them aligned so that defense business can be executed in a very healthy manner.

Yeah, no, those are some great takeaways there. The issue with totally unreasonable sales expectations, reactive models, unengaged c-suite, who doesn’t understand the way the government does business. So we have that companies are trying to break into this space, but struggling on the flip side of it. Sometimes we have what I call the Google problem, but it’s a lot of the Silicon Valley problem. So companies that have a really cool value proposition maybe for the federal government, but don’t necessarily have the appetite to do federal business. So I kind of see this with this online, back and forth. You have some companies who maybe think they have a solution, maybe don’t or need to figure out to get their companies who it looks at least on the face value, who have a clear value proposition, but maybe don’t have the appetite. So the government, should we be working harder to attract those folks into supporting national security or do we just say, is this maybe not for everyone? I’m just curious on what your thoughts are on that spicy topic.

This is such a great, great question. I’m so glad you mentioned Google as an example, especially since they held the Google Defense Forum. So it’s a super relevant question based on their trajectory. But look at face value. The defense sector is not for everyone. It might not be for you because it takes a lot of time and resources to break in and for your company, you’ve got a different corporate strategy that you’re pursuing and the defense sector and how it works, it’s just not within the reality of that corporate strategy you’re pursuing. That’s okay. The defense sector might not be the right place for you to start as a company because something doesn’t feel right for you about the defense mission. That’s okay too, right? I personally am a strong believer that stronger defenses mean greater deterrence and a greater ability for us to promote world peace.

(08:59)
But I respect other people’s perspectives, and so I think the leaders of companies just have to stay true to themselves on where they sort of fit on that spectrum. But let’s look at what companies have to really understand, just using Google as an example. So if you look at Google and what happened in the defense sector, Google engineers essentially internally protested and walked off of Project Maven, the first really sizable defense foray in AI in 2018. Then in 2022, Google set up Google public sector and hired Karen Dahut, who I’ve been aware of from my Booz Allen. She’s a long tenured Booz Allen Hamilton partner. They hired her as their CEO. They then assembled a board of retired generals to really help shape and ensure that Google public sector and its culture and how it was approaching the market would be very thoughtful and very aligned with what the Department of Defense needed.

(10:03)
And then they won a prime spot on the big defense contract, the joint war fighting Cloud capability contract or what we all call the JWCC contract. So now Google’s back in the game, but think about that from 2018 to now 2024, that’s what it took. Look at the investment necessary for them to do that. Look at how much time it took, look at how much work had to go into setting up a totally different legal and organizational structure to do it within the culture that’s built for Google. Not many companies can afford that, right? How many companies can really afford that? And so that’s where I say you’ve got to think through how is this going to affect my culture? Will I have possible attrition of the key staff that are building my product or that are key to how my company operates? I mean, if you’re not kind of thinking thoughtfully and proactively through those, you could actually do a lot of damage to your company as it’s in its earlier stages of really gaining traction and trying to scale and grow. And so in my view, the defense industrial base as a whole, it has to be strong and resilient. And so for these dual use, these commercial and defense companies, they’ve got to see the whole totality of where the defense sector and where pursuing opportunities might push them and be okay with it and candidly draw lines and say, no, this isn’t for us where it’s not good or healthy for their company.

You gave a great example there and a great kind of use case for how if companies are struggling to go from the commercial sector to break into the federal government. That makes sense. And like you said, that perfect example, if it took Google these iterations and figuring out how to do it, then maybe you need to give your own company some grace or some resources or some time in a different execution strategy because you probably can’t just repeat what is giving you success in the commercial sector and then immediately jump in. So you work for heavy hitters in the government contracting space. I can’t keep up with company names these days. I’m glad for the Booz Allens, but I’m glad for companies that are actually still the same because the consolidation, the mergers and acquisitions, I feel like every day it’s kind of trying to figure out what’s going on. And we’ve certainly seen some news coverage and some information talking about the consolidation of the dib, how opportunities for small businesses are reduced because of that. Do you have any thoughts on how to operate in this space where it does seem like acquisitions and mergers are common? We do have a consolidating defense industrial base just based on the numbers.

Honestly, I don’t see mergers and acquisitions as a problem, but more of just a symptom of the market. At the end of the day, I think people always forget that any company that is being potentially acquired has the opportunity to say no. It’s not like these big guys are forcefully eating the little guys. The little guys always have the opportunity to say, no, let’s remember that to start. The challenge is look at the market right now. Interest rates are really high, so cash is expensive. And for the defense sector, I generally say you’ve got to have two. And it’s probably even better to have three years of runway to go after the US defense market and the opportunity that presents for you as a company. And so if you don’t have adequate cash on hand, a healthy revenue stream to support hiccups in defense that happen, then you could really quickly find yourself seeking m and a activity ahead of when you intended to based on your corporate strategy.

(13:38)
And so I was recently talking to a colleague of mine and he was telling me a story. He was working at a technology company looking, he had a deal in his pipeline. It was scheduled to close September 29th. Everything was green lit, and at the last second, he heard that his funding had been pulled to support our withdrawal from Afghanistan deal died on arrival. Now, if you are a small business company, the type of deal he’s describing that could be a real problem for you to have not closed that deal. If you’re counting on it in terms of getting revenue in the door, closing that deal, having the right story, you need to go after the next funding round within investors. So how do you compensate for those risks? How do you make sure you’re prepared no matter if those hiccups occur because they might. I think it’s those types of realities that are causing what we’re seeing as increased m and a activity, but it’s just a reality.

(14:39)
I think over time, as both the defense customers in particular acknowledge that these acquisition hiccups are really detrimental to the innovators that we’re trying to really give a chance to as they kind of even out some of those acquisition hiccups, we’re going to see companies have a better ability to kind of sustain some of these market realities. But for now, a lot of these companies, you’ve got to be responsible and you’ve got to be prepared for what could happen. And that just takes genuine discipline, having cash on hand and having runway with a healthy pipeline, it takes serious sales discipline.

I love that point. We’re not having hostile takeovers, so they want to be acquired. And there are advantages sometimes I see that there are business cases where folks clearly aligned too, but I think we can sometimes we’re looking for the big bad thing that Yeah. Well,

And these companies, at the end of the day, they have to be profitable. They have to make money, they have to do well by their investors. And so if something comes their way, they have to consider it with all of those factors in mind. So it’s much more complex, I think, than what the numbers might suggest to someone who’s outside of the market.

The last time we chatted, you shared a nugget that was very near and dear to my heart. You were talking about the defense counterintelligence security agency and how important that organization is to defense innovation. I’m normally the security clearance geek in every, like, why do you care about this? But I loved how you finally made me relevant to the broader community here, talking about DCSA has a huge role, and they always try to mention this too. They aren’t just security clearances and personnel vetting. They have a huge counterintelligence mission. They oversee the foci program. They are awarding facility security clearances. As you’re working with companies in that space, is super relevant to talk about. Why did you flag DCSA as something like, Hey, this is actually an agency that we should be following a little bit, even if we’re cool innovators and don’t want to pay attention to the old guard of these DOD personnel vetting people.

No, I mean, look, I am a massive proponent of DCSA because at the end of the day, I’m an operations officer. My favorite role in the army was as an S3 as an operations officer. And I was trained to think through that five paragraph mission, and we had to think through our five paragraph operations order situation, mission, execution, service support, command and signal. But one of the ways that we were taught to really ensure we could accomplish whatever the mission was, is to think through the specified tasks to being successful and the implied tasks to being successful. And so when you look at the aggregate of every company trying to get into the defense space and you understand the realities of having to do it, especially when it comes to supporting classified customer use cases, what do you need to support classified customer use cases?

(17:41)
You need a facilities clearance, you need cleared personnel. If you’re foreign owned, you need to follow proper protocols. You need to have foci mitigation. And so when you look at the aggregate and then connect the dots, all of those functions, which no one else can do, right? There are inherently government functions that only the government can perform. The DCSA, that defense counterintelligence and security agency is the only authorized government body to do those things. And so DCSA is critical to all of our success in this business in the market. And so when I look at the defense market, I look at this macro picture and I literally, whenever I’m talking to any of the companies I have the opportunity to meet, if they have a government affairs or public affairs arm, I am always asking them to advocate for DCSA, get DCSA, the resources they need.

(18:42)
It will help all of us because at the aggregate level, they need our help. They need to be fully functional in the way that makes sense from their inherently governmental function that is their jurisdiction, right? It’s no one else’s, but we as an industry need to help them and help Congress and the resources get to them so that they can help us all be successful. And so that’s what I look at is just what do we need to win at a macro level? And DCSA is just one of those key pivot points for all of us to succeed.

This is how I know I love you, Kristen, because you’re looking at all the integrators, right? I mean, I think that’s what you talk about, clearance jobs. I think people of long like your clearance jobs. Why do you care about security? I’m like, you can’t hire a cleared person without a security officer and a security clearance. So early on, we created a vested interest in saying, Hey, we care about security clearance reform as a business case for us as a company because we need clear talent. And you can’t get clear talent. I think sometimes companies can get, so, especially the new innovative companies, they have this cool thing that they’re doing, but you can’t compete in the federal space if you’re not integrating all of those pieces. And again, you need to know who DCSA is if you’re going to need a facility security clearance down the road and then getting all of those pieces together. So this is the synergy right here.

Yeah, you’ve got to think 1, 2, 3 steps ahead. Be really thoughtful. And so the more we can help companies know where those resources are and take advantage of them, the more success they’ll have. And I think the better our defense mission will be served.