“When it recognizes bad things—viruses, Trojan horses, botnet attacks—it either alerts your security administrators or automatically deals with the problem. In one of our pilot deployments, we were able to reduce their security department from over 100 engineers to 10 engineers. So you can see that the cost savings are massive.”
Lin grinned. “Impressive. How does it differ from Gamification Systems’ software that I saw last Friday?”
“I’ve never seen a Gamification demo, and I don’t know their exact architecture, but my understanding is that they don’t specialize in AI like we do.” Josh’s bravado masked the fact that the same question plagued him.
The General added, “It’s the best AI I’ve seen for cybersecurity. Now, wait until you see his demo.”
Josh stammered. “General, we’ve hit a roadblock with improvements in the NLP. I can’t show you anything new. Our level of detection of cyber-threats is nearly the same as it was last time. The AI is recognizing 83% of the security events we’re testing it against.”
Josh believed the company would only be successful if the AI discovered upwards of 95% of nefarious cyber-events. He thought that performing above the 95% threshold would constitute his 10X improvement.
The General’s granite jaw tightened. Clasping both hands to cover his mouth, he fixed his searing stare on the Founder. Time stopped for Josh. The bricks in his stress backpack fell, one-by-one, into the pit of his stomach.
CyberAI was his life. Josh couldn’t even entertain the thought of failure.
“Son, I’m a five-star General, the first five-star since the Korean War.” Josh’s heart quivered. “I run the most powerful spy organization in the history of man. And right now, you have my undivided attention. I could be at the Fort, receiving analysis to the latest SIGINT on terrorists that want to destroy our country. Or, I could be briefing the President of the United States. Instead, I’ve chosen to invest my time—and NSA capital—in you. Do you know how many AI and cybersecurity companies want to be a part of this Accelerator? And you have nothing to show me?”
If the General’s voice were a machine gun, Josh’s body would’ve been riddled with holes. Josh cleared his throat to speak, but the General interrupted—mid-gulp.
“Charl—I mean Josh, CyberAI was the first company we down-selected for the Accelerator. You were picked first, because I believe in you most. This nation depends on its entrepreneurs to care for the protection and prosperity of its next generation. It’s your job to provide cutting-edge cybersecurity software to the US taxpayer. Every minute, hackers launch an exponentially growing number of sophisticated cyber-attacks against DoD networks. I can’t hire enough people to deal with it all. I need you to make your shit work!” The General slammed his right palm on the conference table.
“General Shields, I want you to know, I appreciate everything you’ve done for me. We’re going to get orders of magnitude improvement for the next demo. I promise you that.”
The General continued to glower at Josh. Then the intensity in his face began to wane. “Ok, I believe you. You’ve never let me down before. Every demo before this has shown spectacular improvement. And that’s the right answer. 99 times out of 100, I would never get such a succinct briefing and honest assessment from either a govie or a contractor. They would have given me a 90-minute presentation on why, despite the apparent lack of success, they were indeed succeeding.
“It’s why I believe the Accelerator is so important. You are essentially betting your life trying to hit a grand slam. If you don’t hit a grand slam, you’re going to fail. Most people are trying not to fail. They’re bunting for singles. When they reach base on the bunt, they give themselves high-fives and re-name it a home run. It’s not true of everyone, but it’s true of the vast majority of people I’ve come across in government.
“I’ve implemented monthly demos for every member of the Accelerator. I know that the four-week sprints are challenging, but they allow me to consistently monitor progress. I intend to purchase technology from all the Accelerator’s companies. I know you’ll move heaven and earth to make the improvements.”
Nobody ever went to a US government job fearing that the government would run out of money. Every day, employees of small startups were cognizant that today, could be their last day. This meant that successful startups had to focus on things that mattered. Quickly.
Slowly, the General’s demeanor had returned to normal. “Maybe by looking at the problem from a different angle, you’ll get a new perspective. Why don’t you meet with Gamification and see if you can apply your AI to their software use cases? I think there are a couple of scenarios where you could help them.”
“Alright,” said Josh. His heart was now beating more like a marathon runner than a sprinter.
“You guys are not head-to-head competitors. You go about cybersecurity from complimentary angles. Talk to Samantha Powers and set something up. They have great stuff, but Gamification doesn’t specialize in AI. However, I do think they’re close to revenue. And, I believe I can push some your way…if everything goes well.”
“Yes sir,” said Josh, finally able to take in a deep breath. “I’ll schedule it as soon as possible. I love revenue.”
Josh left the room.
Josh felt as though he’d just been in the lion’s den He’d survived. Not only had he survived, but he actually felt re-energized, in spite of the one hour of sleep last night. He couldn’t explain it, but the General was inspiring. If only his father were like that.
When Josh made the decision to drop out of MIT, Jared Adler was filled with rage.
The elder Adler was the billionaire founder of the hedge fund, Adler Capital, located in Greenwich, Connecticut. He warned Josh that he was no Mark Zuckerberg. Why couldn’t he get his undergraduate degree from one of the most prestigious universities in the country—especially for computer science majors? Once Josh graduated with his CS degree, he could do all the startups he wanted.
Josh was relieved to have a break from dealing with his dad. But, even though Jared Adler had always been a non-supportive, workaholic parent, Josh hated to disappoint him. He surely didn’t want to let the General down.
Chapter 8 – No Pain
5:35 p.m. (EDT), Monday, July 27, 2020 - Columbia, MD
Suite 601, General Shields’ Office, Defense Innovations Accelerator
Lin Liu trailed Shields into his office. “That took a lot less time than I scheduled. You don’t have your board meeting with Samantha until 6:30. Do you want me to attend?”
The General didn’t respond.
“Sir, are you ok?”
“Yes, thanks for your concern. I’m just exhausted. You don’t need to stay for the meeting. Go home and enjoy your night.” After Lin had departed, General Shields locked the door to his office. He entered his personal bathroom and again locked the door. Shields looked at himself in the mirror and wept.
The main reason that the General chose CyberAI was that he completely believed in Josh. He was also impressed by the experience of Josh’s CTO, Vish Kumar. Kumar’s previous cybersecurity startup had sold for north of $300M.
But, there had also been an intensely personal reason for his selection. Josh Adler reminded him of his son. Though Charlie’s murder occurred over five years ago, Shield’s had to admit that he was not over it. He splashed water on his face, walked to his bar, and poured a drink. Then another. His pain slipped quietly into the shadows.
Josh and Charlie’s personalities were so much alike. Can do. Confident. Bold ideas. The General missed Charlie in a way metaphors couldn’t even articulate.
It was my fault he died, thought the General. Why did I glorify the military? Charlie could’ve done anything in life. Why did I force him to follow in my footsteps?
Shields was only internalizing what his wife said aloud when they fought. Thursday evening’s argument with Lisa echoed
through his mind.
“Wasn’t it enough that I’ve given my life to be a General’s wife—decades and decades of moving all over the country and never feeling at home? Then, I had to sacrifice my son? For what?” she demanded.
Charlie’s public beheading live over the Internet ran on a loop inside Shield’s head. It enraged the General. After five years, the US had yet to bring the killers to justice. He had watched the video 1000’s of times, searching for clues. If POTUS and CIA weren’t going to do their jobs—he would.
The General poured another shot.
Chapter 9 – Samantha Powers
6:15 p.m. (EDT), Monday, July 27, 2020 - Columbia, MD
Suite 201, Gamification Systems’ Offices, Defense Innovations Accelerator
Samantha printed the most up-to-date financials for her 6:30 board meeting with General Shields. She swiveled in her desk chair and grabbed the statements from the laser printer on her silver-mirrored credenza.
The most important report in a small startup was the statement of cash flows. This financial summary detailed money coming in, and money going out. There was not good news in the report. All the money at Gamification Systems was going out.
Gamification Systems had yet to make a sale. After nine months, there was no revenue. Samantha took no salary. She lived off savings. Even so—with nine employees—Gamification was burning $115,000 a month. There was about $275,000 cash in the bank. With that burn rate, the company could operate for less than two and one-half months. While the lack of revenue was not uncommon, especially for an enterprise software company like Gamification Systems, it was nonetheless very nerve-wracking for Samantha.
Additionally, like Josh, Samantha was coming to the end of the first year period with the Accelerator. Worst case, this gave the CEO three months. Then, not only would Samantha be out of money, but she would also need to lease new office space—and pay rent. Additionally, she would lose the ability to use the Accelerator’s two SCIFs. Access to SCIFs came in handy for certain DoD contracts that required clearances.
SCIFs came in all types of configurations, ranging from multi-story office complexes to portions of planes, ships, and buildings. One of the SCIFs was across the hallway from Samantha, on the second-floor. A much larger SCIF occupied the sixth-floor, down the hall from General Shields’ office.
There were a number DoD regulations regarding doors, walls, windows, and the like, that went into certifying a SCIF. SCIFs were also required to meet sophisticated specifications from a classified project code named, TEMPEST. Complying with TEMPEST ensured that no electromagnetic radiation could escape and be gathered by spies. Personal cell phones and other electronic gadgets, including laptops, were generally not allowed inside a SCIF.
Samantha also printed another financial statement—the balance sheet. Gamification’s balance sheet recorded the VC deal. Nine months ago, General Shields and the Accelerator’s investment committee voted to contribute $1M.
In return, Defense Innovations Accelerator received equity totaling 18%. Other terms of the deal included Samantha assigning 20% of the stock to an employee option pool. From this pool, Samantha offered Becca three percent. Becca’s options vested, one percent per year. It was options like these that made multi-millionaires of former Microsoft secretaries. Samantha collated and stapled two copies of the financial statements.
All of Gamification Systems’ employees worked in glass offices. From her desk, Samantha could see Becca sitting in the office next to her. She watched Ali and Saul banging out code on their laptops. At least, she hoped they were banging out code.
Samantha always mentioned the transparent workspaces in her new employee orientation: “Our offices are representative of the type of company culture we want to create at Gamification Systems; honest, open, and elegant. Walls don’t exist in this company. Communication is the key to our success. My door is always open. If it’s not open, at least you can look in and see why.”
Today, however, she regretted her glass office. She picked up a mirror and reapplied her lipstick. Looking at her face she thought, I’ve aged five years in nine months. That’s worse than dog years. Samantha worked 18 hour days.
Even though she was incredibly tired, in the last few months, she did more tossing and turning than sleeping. If she wasn’t worried about making payroll or finding investors, she was thinking about the upcoming demo with Gecko Insurance. This was the gritty nature of startups that the media typically glossed over when they cherry-picked their favorite entrepreneurial success stories.
Becca wrapped her knuckle on the open glass door. She stuck her torso into Samantha’s office. “Sam, you look beautiful.”
“Ugh. You’re just being sweet. I look haggard. But thanks. Are you trying to win employee of the month or something?”
Becca smiled. “Hey, we’re all going to get a bite to eat at 7:30. We can nosh on some wings and catch a little of the Nats’ game. Do you want to join us?” ‘Nats’ was the area nickname for the Washington Nationals baseball team.
“Oh, thanks for asking. But I’ve got my board meeting tonight. Maybe Friday?”
“I forget. Yeah, that sounds excellent. Good luck tonight, you’ll do great.”
Becca was Samantha’s favorite employee. She spotted Becca’s talent when they worked together at a government systems integrator. Becca was hardworking and bright. She reminded Samantha of a younger version of herself.
The CEO looked over the financial statements one last time.
Another term of the deal gave Defense Innovations the right to elect one board member. When the financing closed, General Shields was appointed to serve as that member. Boards were designed to provide strategic leadership and governance to their companies. CEOs usually worked at the behest of the board. This meant that the board could fire CEOs. Three to five members was the most typical configuration of the board for a startup of 100 employees or less.
The two person, Gamification Systems’ board was a bit non-standard. However, there had only been a Series A round of investment. The board would grow in subsequent funding rounds, as investors typically requested a board seat.
Samantha had pitched Gamification to numerous other VCs. There was a high level of interest, but investors had yet to offer a term sheet. Samantha was not comfortable relying entirely on the Accelerator for the Series B round.
Defense Innovations was not committed to providing any further funding to Gamification. Locating investment capital would be much easier if Gamification just had one referenceable client. Samantha hoped that a successful demo to Gecko Insurance would lead to this outcome. But that was a long shot. Samantha perceived that Gecko was just kicking the tires. She didn’t feel there was any urgency on their part. They weren’t in a hurry to close a deal. She needed money quickly.
Samantha ran her fingers through her hair and smoothed her skirt.
Chapter 10 – The Board Meeting
6:30 p.m. (EDT), Monday, July 27, 2020 - Columbia, MD
Suite 601, General Shields’ Office, Defense Innovations Accelerator
Samantha Powers and General Shields sat close to each other at a cozy side table. In the middle of the table was a new, Universal Secure Phone. A bottle of Macallan 1928 single malt scotch rested next to the phone.
Samantha raised her glass to toast the General and declared: “I officially commence this board meeting.” The two snickered.
“Oh, this is good,” said Samantha, elatedly.
The General cackled. “It should be. That’s a $50,000 bottle of scotch. I get all sorts of gifts in this job.” A devious smile swept across his face.
“Josh Adler emailed me today and said that you told us to meet?” asked Samantha, nonchalantly. “I forwarded the email on to Becca. I knew you wanted us to talk. I just didn’t realize it was so urgent.”
“After his demo, it jumped up in prior
ity. I know you’re still a little apprehensive. Don’t be. You want Gamification to be about gamifying and monetizing standard enterprise functions—cybersecurity is just one of them, right? I remember from your earliest presentations the idea that you wanted to expand to other business opportunities; like, human resources, call centers, and physical security?”
“Yes, General.”
“CyberAI is better than you at recognizing sophisticated attacks. I think if you replace your current AI with CyberAI, you can quit devoting resources to developing software to identify cyber-threats. So if the conversation goes well with Becca, I’d like you to consider licensing his technology.”
Samantha took a sip of her scotch to mask her frown. “I see. We’re going to review the financials later, but you know that with nine people on the payroll, we’re burning through our cash quickly. Unless I lay people off, there won’t be any money for licensing.”
“I know. I’m going to help you land Gecko Insurance as your first source of revenue. I think that deal can provide close to $1.2M. From that money, you can take about $250,000 to pay CyberAI for licensing.”
Samantha’s frown transformed quickly. “Landing our first paying customer would be so exciting! We’re scheduled to conduct a demo and presentation to Gecko in two weeks. I just don’t think they’re ready to buy that fast.”
“I believe I can get them to move quickly, if everything goes well on your end. Especially, if you can recognize spear phishing. Tim and I go way back. And, I have some inside information. Recently, hackers viciously attacked Gecko. The cyber-thieves sent spear phishing emails, with bogus .pdf insurance attachments, to Gecko customer service agents.
“When the Gecko agents clicked on the .pdf files, malware was downloaded to their system and spread everywhere. Then, the thieves snuck into Gecko databases and stole personal financial information, including credit card data and lists of insured assets. This hasn’t been announced to the public yet. The FBI called us. It appears the hackers have some ties to the Caliphate. The whole situation gives me some leverage with Tim.”