Exiger CEO Brandon Daniels

Auren Hoffman (00:00.686) Hello, fellow data nerds. guest today is Brandon Daniels. Brandon is the CEO of Exager, which provides AI powered supply chain and third party risk management solutions to 4 500 companies and government agencies. Exager has annual revenues of over $150 million and was acquired by Carlyle and Inside Partners for $1.2 billion in 2023. Brandon, welcome to World of DaaS.

Brandon Daniels (00:23.225) Hey, it's good to see you, Auren. Thank you for having me.

Auren Hoffman (00:25.932) very excited. Now, let's start with the topic Dajour. What do tariffs mean for supply chain risk management?

Brandon Daniels (00:34.455) Yeah, I mean, for supply chains right now, tariffs mean chaos. You know, it's tough because no one knows what tariffs will actually embed themselves into the market right now. It's been a tariff roller coaster. So, you know, at the moment, it looks like there's going to be a broad, you know, lower but broad reciprocal tariff.

But at the same time, I know that the administration is right now working deals with Mexico and Canada and even Vietnam to bring down the potential reciprocal tariffs. And we don't know what that's going to mean for the market. For our customers, it means a lot of uncertainty. you know that corporations and the markets, they hate uncertainty. And so it means a good deal of conservatism

around spend decisions, around investments, around supply chain optimization opportunities. For us as a technology, it means an absolute boom though, because our customers are recognizing that multi-tier visibility is a necessity in today's very volatile market, in today's very volatile world as our earth and our climate has changed. And it is

It is requiring our customers to understand how products that they make can go through 30 trans-oceanic hops before they land on a store shelf, right? And how each of those can be subject to a disruption or a tariff or whatever it might be.

Auren Hoffman (02:12.771) Yeah.

Auren Hoffman (02:18.718) And I don't think anyone can predict the future, but we probably can predict that it will be increasingly unpredictable, right? Like, like, my guess is that these tariff rates are going to keep changing. There's not going to be stability at least in the next 12 months. Or do you disagree?

Brandon Daniels (02:37.793) No, I totally agree. think that what you're going to see are areas of stability. You're going to see some countries that are going to negotiate what I would call a standing truce on tariffs, right?

Auren Hoffman (02:53.038) But even then, do we, like, how much do you think the market will believe it and then therefore invest behind it? Or are they going to just presume it's going to be higher and invest behind a worst-case scenario or something?

Brandon Daniels (03:06.295) Yeah, I I think the markets will believe the deals that we strike. think the deals that we get done, when Donald Trump does a deal, he wants it to be the last and final deal. It wants it to be the deal to end all deals. It's in his vernacular, right? But I think that everything that stands in ambiguity,

Auren Hoffman (03:10.861) Yeah, okay.

Auren Hoffman (03:23.98) Yeah. Yep.

Brandon Daniels (03:30.167) the market will disbelief, right? Anything that is subject to a broad-based or just sort of standard reciprocal tariff, people will think is going to be subject to and have to adapt to change. But the core concern is how many iterative changes will you make to the benefit of United States or European or Asian corporations?

on a continuous basis. Like I imagine that our tariff changes or tariff rates might actually iteratively change on very nuanced topics. Like if you look at what China did to the micro electronics tariffs that they applied, Oren as response retaliation for the US tariffs on Chinese goods.

What they did is they actually said, okay, it's not a tariff on where you're buying the goods from. The stuff could come from the United States. The tariffs are actually going to be on where the manufacturing of the wafer happened, right? And that's such a nuance and precision sort of surgical attack on US wafer or US fab capabilities, right? That it's going to be hard to keep

Auren Hoffman (04:48.95) Yep. Yep.

Because they want to go, which makes sense. if you're trying to do, if you're trying to direct the tariff specifically at a country or specifically, you want to do it at the component level, right? Yeah.

Brandon Daniels (05:03.415) That's right. That's right. That's going to lead to a lot of very detailed regulatory tracking, which I don't think people are prepared for.

Auren Hoffman (05:09.368) Yeah.

And what are some of like the, assume we're just see tons and tons of changes in supply chain. Some of them are pretty obvious, but what are some of the non-obvious ones you think we should expect?

Brandon Daniels (05:23.993) Yeah, I mean, I think some of the non-obvious ones are that different markets have different levels of tolerance for different levels of cost change. If you go back, if you went back to 2008, you may remember, Oren, there was a brief period where gas prices spiked like crazy, right? 2007 to 2008, price...

oil prices had spiked by like three, four X. There was literally reshoring of entire supply chain lines like IKEA's major furniture building for the United States shifted to Danville, Virginia for almost a decade because of those price spikes and those intermediary logistics. And so the things that I think are going to be

really interesting over the next, let's say, five years is going to be the types of manufacturing that's going to come back to the United States because of the imposition of tariffs and whether or not those industries are going to be sustainable or whether or not those industries are going to be long-term in the United States because

the ability to reset a supply chain line on some commodity goods has become unbelievably fast because now you can build a plant or you can build a manufacturing site in years, right? Or maybe even under a year, you can.

Auren Hoffman (07:05.634) Not in the US though, but you could do that in other places potentially. Yep.

Brandon Daniels (07:08.215) in other places, that's right. And in the U.S., I mean, there are some places in North Texas that are basically deregulated. There's capacity to build, there's exist...

Auren Hoffman (07:19.852) And you think you could, you could create a factory and one or two years there. Okay. Cause so that would be, so that does change things if it doesn't take like three or four years to get something live. Yeah. Okay.

Brandon Daniels (07:24.087) You could, you could because as long as you have...

Brandon Daniels (07:30.425) That's right. That's right. So you have zones that are special economic zones where you could build quickly, you could drop in automation, and you could essentially offset the labor arbitrage advantage that a lot of emerging markets.

Auren Hoffman (07:46.51) And why doesn't like, if it like, like in some ways, one of the benefits that China has like in Shenzhen or some of these other places, it says like everyone manufactures right there. So just like to moving the goods between these places, it's like, it's like the factory next door is the one that's making it. Right. And then sometimes you'll even have people who move between those companies pretty, you know, cause they're, they're aggressively hiring from one another and they're taking like the best practices there.

Brandon Daniels (08:03.693) Yeah.

Auren Hoffman (08:14.414) Could you imagine like a special economic zone in the US to rival where they would all kind of, and then it would have some sort of access to a port and some sort of access to train networks and other types of things.

Brandon Daniels (08:27.065) Absolutely. They replicated that model in Mexico, Orrin, as you know, right? So I would imagine that the United States will build those similar economic zones. And I think those will be actually high-paying, pretty advanced engineering jobs.

Auren Hoffman (08:31.704) Yep.

Auren Hoffman (08:44.864) yeah.

Brandon Daniels (08:45.847) Because again, in order to compete with China or Vietnam or any of these other countries, you can't be manufacturing with manufacturing workers in the way that we used to, right? It's gonna be non-traditional manufacturing processes.

Auren Hoffman (08:58.318) Interesting. then, what do you think, like, ultimately, like, who are going to be the winners of these, like, new tariff and trade policies?

Brandon Daniels (09:11.169) Yeah, the winners are undetermined because what you need in order for US manufacturers to be the winners, you need us to nuance really quickly the tariffs so that you have component level or material level items, right, that are today subject to the broad-based tariffs.

you need those component or material level items to be excluded from the tariffs so that you can get the manufacturing of end use goods, keep the tariffs on end use goods, get the manufacturing of end use goods back into the states. And then you can essentially maintain commodity supply chains into emerging markets in the way that they are today because it's really hard to build those

know, heavy, rare earth element processing capabilities inside the United States within a five year

Auren Hoffman (10:10.082) Why is it so hard to refine lithium in the United States? Is it just because it's super dirty? Why can't we do that here? We refine oil.

Brandon Daniels (10:22.113) Yeah, I mean, so there are three reasons. One, regulation. Two, it's doing it up to standards that the United States can accept. And then three, it is the mining and then the processing capabilities being built. mean, it's a challenge from a overall

infrastructure spec perspective to support some of these, you know, large scale industrial practices. So you know, if we can make it so that you could actually produce a processing center in the United States for lithium, and you could you could get through approvals and you could get through regulatory paperwork in under three years or even under five years, then then you could expedite the you know, next piece. then after that,

getting to the high tech ways in which you can clean these facilities, you can clean the air, you can make it so that it's safe for employees, that's the next leg. And then the third place is when you've imposed all those regulations, when you've got all those advanced capabilities, making sure your cost comparative, right? Making sure you have.

You have cost symmetry, especially after some form of economic incentives, maybe tax-based or tariffs, creating blockades or exclusions for other cheaper markets.

Auren Hoffman (11:52.91) Because shipping that stuff isn't super cheap or easy. So if someone was making something with it nearby, you have some sort of like built in advantage. Like right now, problem is like, yeah, they're creating the warehouse in China, but also they're like using them in China in the process as well. Right. So if they had to use them in Mexico or something, like it would be harder for those guys to make money too.

Brandon Daniels (12:10.827) Yes. That's right. That's right.

Brandon Daniels (12:18.841) You're bringing up a great point, which is in the 80s, know, certain countries de-verticalized, certain companies de-verticalized. had hyper specialization. Then we also had globalization. The only place where that didn't happen was in communist countries. And why didn't that happen in communist countries? Because they own all of the industries.

Auren Hoffman (12:38.146) Yeah, they didn't have a choice. had to. Yeah. Yeah.

Brandon Daniels (12:41.035) So they perfectly verticalize, right? You're essentially all rolling back up to the Chinese government. So you're not a globalized business. You're a completely verticalized, closed supply chain. But what that also does is it makes it very hard to innovate. And that's where the United States still has the United States, Europe, lots of places around the globe still have a competitive advantage.

is you can get specialization that drives the profit motive to innovate. That's why I think the West still wins in the end.

Auren Hoffman (13:15.5) Are there countries you think are like the most likely losers?

or industries that are most likely losers.

Brandon Daniels (13:22.027) Yeah. Yeah, I mean, I think some of the I think some of the countries that are reliant on the infrastructure investment from China that we've seen over the last 20 years are losers like Zambia, right? Zambia is supposed to become the third largest copper producer in the world over the next decade.

And that has largely been due to...

Auren Hoffman (13:53.464) So it's like, assume Chili's like one of the top copper, who are the top copper producers?

Brandon Daniels (13:57.145) Peru, yeah, it's Chile, it's Peru, it's largely South American based. But those mines are starting to reduce in quality of ore, so it's harder to mine, of like the issue that you have with shale oil in Canada. So you're seeing reduction of quality of ore, and you're seeing these very rich, untapped mines in places like Zambia.

Auren Hoffman (14:00.686) Okay.

Brandon Daniels (14:23.929) China has invested over $5 billion into the infrastructure in Zambia. But like what just happened is because they don't have the regulatory oversight and because they cut costs on the mining infrastructure, you have these like major security issues, these major environmental problems, these major like hazardous risk issues. So what just happened in Zambia?

is they miss built the dam. They didn't invest enough into the dam bill that they had to do in order to start one of the major mines. The dam split opened up and leaked a bunch of mining chemicals into the water. They spoiled over 200 miles of river. Now Zambia has to clean it up, Now, what do you think they're gonna do? They're gonna actually have to borrow money from China to do it.

Auren Hoffman (15:03.526) my gosh, wow.

Brandon Daniels (15:17.466) They're going to end up in debt bondage. And so these countries...

Auren Hoffman (15:21.122) A lot of these countries are essentially, yeah, becoming essentially captive to China because of that debt,

Brandon Daniels (15:31.063) That's right. Well, they're captive to China because of the debt. They're captive to China because China then owns the market for buying those goods. And if the United States starts sourcing themselves, then those, you know, basically vassal states of China from an economic perspective are left in a lurch. They're left in a place where

They're not able to negotiate and to deal independently with the United States. Those are the real losers. think Brazil and Zambia and a lot of these countries are subject to some hard times ahead.

Auren Hoffman (16:03.758) Yeah.

Auren Hoffman (16:07.982) What about like countries like Germany? You you've heard, I've hear all these different for notifications about that. I'm like, where do you, where do you fall in that?

Brandon Daniels (16:16.151) Yeah, mean, I think that Europe is actually going to be able to navigate the next 20 years. I I don't know after that. And I don't even know, you the Monte Carlo scenario on that would go wild into completely unpredictable. But I think Europe is going to be able to navigate this, maybe not as a

Auren Hoffman (16:28.79) Yeah, I it.

Brandon Daniels (16:41.497) as a unified EU, especially with the differing opinions on the defense investment that they have to make in order to maintain their own security. But I do think countries like Germany, think countries like Italy, think countries like the UK, obviously not in the EU zone, but still in that European corridor.

still have really important global relationships and really important global supply lines that will keep them in a commanding position.

Auren Hoffman (17:24.354) Yeah. But even like part of like in Germany, like just the car industry is so dominant there. if you have, if you have electric cars, have fewer suppliers. So you have all these kinds of problems there. Of course you have, it seems like the best electric cars aren't being built in Germany. Whereas in the past, the best cars were being built in Germany. Maybe they'll catch up because obviously have good engineers there, but that does seem like it could have like a huge effect overall.

Brandon Daniels (17:36.472) Yeah.

Brandon Daniels (17:51.243) Yeah, I mean, I think, I think that's absolutely right. I think even some of the rebalancing with the United States in terms of car manufacturing could lead to a reduction in EU capacity to sell individually. mean, we talk about, you know, what are these tariffs trying to achieve? mean, American car manufacturers want to sell into Europe and they sell next to nothing into Europe in comparison to the three and a half million vehicles that are being purchased there, right? Like,

Auren Hoffman (18:14.989) Yeah, yeah.

Brandon Daniels (18:20.075) it's a really asymmetric trading pattern.

Auren Hoffman (18:23.234) We got to some bigger roads for our F-150s though there. It's hard to navigate those in Amsterdam. Now there are a lot of areas where like the trade restrictions are just like super leaky. We've seen that with like Russian oil. We've seen that with like Chinese goods, which are essentially just kind of quote unquote packaged in Vietnam. Like how does one fight these leaks better?

Brandon Daniels (18:26.081) That's right,

Brandon Daniels (18:49.667) think it's difficult to fight the leaks. And I think it's difficult to fight the leaks because companies don't want to know, right? There's a

Auren Hoffman (18:58.414) Yeah, yeah. The end buyer doesn't doesn't want to know. Yeah. Why would they? Yeah. In fact, it's in there. It's really it's not it's in their best interest to not know.

Brandon Daniels (19:02.625) Yeah, that's right.

Brandon Daniels (19:09.183) Exactly. so, you global regulation plus the actual governments investing in their own degree of transparency is the only road that I can see to closing some of these gaps because, you know, what happened after 9-11

was the United States started using all of its dollar processing capabilities to start identifying where people were missing, know, terrorism related trades, terrorism related transactions, where they were missing, you know, sanctions transactions. Like if you Google Exeter and Huawei, you'll see that it was reported that Exeter found the Huawei rerouting of

equipment from the US into Iran. It was reported by the New York Times and Wall Street Journal and a bunch of other companies or a bunch of other publishers. You know, the fact is that the kind of oversight necessary to drive industry action

it has to be invested in at the top level in those global policing organizations. And then that flows through to the corporations, just like it did the banks. I the banks scaled up their ability to manage money laundering and financial crime and sanctions issues, like to the tune of hundreds of billions of dollars between 2001 and 2025.

in order for you to see that same kind of modernized change of identifying sanctions and export control issues, identifying IP leakage or IP theft, or identifying the utilization of forced labor for the purposes of economic coercion, you're going to need a lot of enforcement. And I think

Brandon Daniels (21:01.593) know, the UFLPA enforcement that you've seen with seizures at the border, that's a first step. But criminal enforcement for not having the appropriate level of programs, that's when you're gonna start to see some of these gaps.

Auren Hoffman (21:15.114) It's one thing to figure out things that are coming in, which is hard enough. it's just, obviously, I mean, you can see that with illegal drugs and everything. It's just so hard to figure out. Another thing with like, figuring out like things going out, like that just seems super hard to, to figure out how that goes. Of course, like, you know, we can go out, you're allowed to send it to this place, but then, you know, it ends up going to, to play C or something. It just becomes very, very hard to know like where that will end up.

Brandon Daniels (21:40.75) Yeah.

Yeah, it's really tracking the money. our customers have used our technology to do that on the federal government side. As you mentioned, we have 65 federal agencies that use our technology. We're the most widely adopted supply chain risk technology in government agencies. But at the same time,

What they have to do is they have to use that visibility to then support policy and policy then takes a while to get into actual enforcement actions. Like we just released two reports, Orin, one on our reliance on Chinese-made pharmaceuticals, specifically like antibiotic APIs and things like that, that are widely necessary in order for us to support.

you know, cost effective medicine. We just released another report on our ability through our threat actor intelligence to identify all of the original funding sources for DeepSeek. And we were able to show that through grants and through research studies that were funded by the PLA, that China had actually poured, you know, tens to hundreds of millions of dollars.

into deep seek both investment and research and what we believe is intellectual property theft from US universities that were involved in generative AI collaboration. And, you know, the fact is in order to now take that information and do something with it, there are a bunch of policy and regulatory steps that could take weeks, months, years to actually put into action what they're, the things that they're learning from these reports.

Auren Hoffman (23:25.326) Yeah, it's hard. you see all these stats, like even with the Russian sanctions, like France's exports to Russia went down by X and then France's exports to Armenia and Kazakhstan went up by exactly X during the, you know, and so it was like, okay, like it doesn't take like a genius to figure out like these things are being right now. Yeah, but it still hurt the Russians because now they got to pay a big extra. They're paying 20 % more than they were paying before.

Brandon Daniels (23:39.321) Thank you.

Brandon Daniels (23:49.431) Yes.

Auren Hoffman (23:53.038) they were doing. it maybe does still have like a clinical cost to the Russians. And maybe that's reasonable since it doesn't have any cost really to the French economy. But at least you got to be upfront about that, I feel, you know, if that's your strategy.

Brandon Daniels (24:02.808) Yeah.

Brandon Daniels (24:06.423) That's right. think this issue of trans shipping and rerouting and how much it impacts the ability for us to sort of impose things like sanctions or even for companies to compete more. like there's a company, Blackendecker, right? And it's one of the major US manufacturers. It competes with Milwaukee Tool.

Auren Hoffman (24:29.292) Yeah, it's a great, love that company. Yeah.

Brandon Daniels (24:35.735) Now, no one takes into account that Milwaukee Tool is a Chinese owned company, using the Milwaukee brand. Yeah, it's a Chinese owned company. just as...

Auren Hoffman (24:45.046) I didn't know that. Yeah. Yeah.

Auren Hoffman (24:50.168) Stanley Black and Decker just to be sure is not right or cause I, great. I love Stanley Black. I've got a lot of Stanley Black and Decker tools. I'm a huge fan. Yeah. Okay. Okay. Cool. All right. Good. Okay. Good. I didn't want you to burst my bubble all of a sudden. Yeah. Okay. Okay. Good. Yeah.

Brandon Daniels (24:52.766) no no, Stanley Popped that Gertrude.

Well, keep buying SB &D, keep buying DeWalt, that's good stuff. No, no, no, no, no, no. But Milwaukee, you they were doing all of their manufacturing in China, sending it over to the United States, killing.

Auren Hoffman (25:11.542) Ooh, that's very, you know, it's very, very sneaky.

Brandon Daniels (25:16.653) Yeah, yeah. you know, their drills are inordinately cheap, right? And then as soon as the United States starts tacking on tariffs that can impact those products in China, what do they do? They move them to Vietnam. And literally in three years, Oren, like a light bulb switched on. They're not using any Chinese components. All of it speaks to Vietnam. You you think to yourself, huh,

Auren Hoffman (25:41.578) Yeah, yeah, yeah.

Brandon Daniels (25:45.643) Is that real? Right? You know, what's what's really happening there? Do you think that they haven't verticalized all those supply chains from China back into Vietnam? Come on now, right? Like, so so what it does is this kind of opacity, it leaves companies at an economic disadvantage because China is able to wield this extraterritorial power and put these sort of veneer centers all over the world, making it so that, you know, the

and the parts, those are still coming from cheap supply chain lines. And then, you know, they're assembling it maybe even at a veneer level somewhere else.

Auren Hoffman (26:23.532) Yep. Yep. And, the Chinese state is there, they're, they're, they're actually like helping companies like their intelligence services and stuff that help their companies like that. That doesn't happen in the U S it may happen in some countries like France or something, but it doesn't happen in the U S so they have a lot that, they're, those, those intelligence servers might be involved with bribery or they might be involved other types of things to help their companies along.

Brandon Daniels (26:35.417) That's right.

Brandon Daniels (26:48.205) That's right. That's right. It's it's I mean, there are literal laws. are blocking statutes, Oren, where it gives the companies in China not only the right, but the specific charge to obfuscate from the United States anything that could lead to any United States enforcement of their loss.

Auren Hoffman (27:10.7) Yep. Yep. Yep. Which is not surprising. mean, this is very smart. These are very smart people, very smart adversary. Now we have a lot of people listening to this are data folks. Like what are the big data sourcing challenges around all the supply chain data?

Brandon Daniels (27:14.284) Yeah.

Brandon Daniels (27:28.909) Yeah. So, so the first thing is, you know, the, the accuracy of the supply chain relationships, right? So at first, you know, most of what people were doing, like, let's go back five, 10 years, most of what people were doing to try to understand supply chains was doing analysis on, you know, things like commerce records, right? Like, import export records, stuff like that. That's right. Yeah. That's right.

Auren Hoffman (27:50.84) Yeah.

shipping things, those types of things. What's in the container.

Brandon Daniels (27:58.009) Now, you there are some countries that have exposed that stuff globally. Obviously China in 2018 decided to shut down their import-export data sharing, you know, with the rest of the globe. The EU has never been big on publishing their data on import-exports. What'd say? You know, I think they...

Auren Hoffman (28:17.548) And why not? Why isn't the EU?

Brandon Daniels (28:25.431) There are considerations of privacy, considerations of data ownership, right? Like they're much more exclusionary than they are inclusionary, right? So they want things to be rebut from being publicly available, right?

Auren Hoffman (28:43.916) Yeah. Yeah. Okay. Yup. Yeah. Sir. Kind of like anti-free speech in a way. Like, okay, you, you can erase your name from the internet type of stuff.

Brandon Daniels (28:50.112) Yeah.

Brandon Daniels (28:53.783) Yeah, not a lot of visibility to what they believe to be potentially owned information. So I think that the European ports have not gone to open digital platforms because of that, but also most of the ports still have a huge dependence on written records.

Auren Hoffman (29:16.238) Yeah, I've seen some of these records and it's like, it's like in handwriting, you can't even understand. And maybe it's like specifically done that way on purpose. Like I don't even like, it's just, I've seen like PDFs of these things and like, it's like, you can't even like OCR it like no, no AI would be smart enough to decipher this terrible handwriting.

Brandon Daniels (29:20.769) Exactly.

Brandon Daniels (29:28.597) It's crazy. Yes.

Brandon Daniels (29:34.233) That's right. That's right. And so, you know, the, the, the, the jump or the leap from saying, okay, we're going to use things that are, that are shipping records that have limited visibility into more nuanced, more granular, more product specific supply chain data has been a hard jump, but it's been a fantastic one because what

The other big data challenge that we try to solve is how do we get from unstructured content? How do we get from non-traditional sources, supplier reliance, and then how do we triangulate where that supplier is actually manufacturing that information? So I'm gonna let you in on a little secret, that we use product manuals for a part of this. So we get like replacement manuals for products.

Auren Hoffman (30:26.03) Brandon Daniels (30:29.825) And in replacement manuals, tells you where suppliers can be found to actually order replacement parts and where those replacement parts are.

Auren Hoffman (30:39.698) got it. So if this specific bolt breaks, you can call this guy and, you know, wherever Vietnam to get that for you.

Brandon Daniels (30:48.089) And they, yeah, and this is the, know, MPN to it, and this is manufacturing process and blah, blah. There's a lot of data in unstructured sources like that. And then what we do is we reverse engineer those unstructured sources into the locations where we know that those suppliers are manufacturing. Very often they have specific certifications.

Auren Hoffman (30:55.565) Yeah.

Auren Hoffman (31:03.415) I got it.

Brandon Daniels (31:17.087) or specific business units that are aligned with the type of manufacturing that one part is made of. And so what we can do is we can say, this part is a hexagonal self-locking nut that's made out of their nuts and bolts business that is based in, you know, this part of Vietnam. And then that part of Vietnam.

is the place or the facility that we're gonna start monitoring to understand whether or not you're gonna be able to continue to get that bolt when the next tsunami hits, for instance, right? So we've been using unstructured mining that we then validate.

Auren Hoffman (31:49.144) Yeah, yeah.

Auren Hoffman (31:55.79) Now the problem of course is I assume a lot of those like that, that a lot of the data that you might get out of a manual may be wrong or like it hasn't been updated in a while or something like that. So even though when you get this big manual from your drill or something there, I imagine like they're not so good about like updating it themselves, right? And things like.

Brandon Daniels (32:16.857) That's right. You do have data latency issues, but if you triangulate between the three major sources, so we have data that is commercial in nature, so import-export records, customs brokers, third-party resellers, like there are some great resellers that publish a lot of their catalog and then where that catalog is coming from, right? So we use a lot of that sort of reseller data.

So we take commercially available information, we take the unstructured data, and then finally, we also take proprietary data sets. So one of the things that we've done over the last couple of years is we've made five acquisitions, and four of those we made because they process proprietary data for some of the largest government agencies or some of the largest corporations in the world. And as a part of processing that data, they've been able to capture

data that is their own. like, for instance, we have every

Auren Hoffman (33:19.362) like a summary of it or some other type of like stats on that data or something like that. Yeah.

Brandon Daniels (33:23.401) Exactly. Stats on the data, the supplier purchase, the price, the inventory levels, all of that stuff. so that those three things allow us to then have a model and we have our own model that we use and that we've built to say, this is the part that is part of, you know, this stent. like, for instance, our, our, our AI can say, okay, in the stent, you have a night and all sheath.

Auren Hoffman (33:29.976) Yeah.

Brandon Daniels (33:51.885) You have a polymer layer that's used for insertion. Okay. So then it'll say in that stent, you then need the polymer. Well, the polymer is made of a natural rubber. Where do you get that natural rubber from? Right. And then the second part is it'll say, so then you have nitinol. Where do you get that nitinol from? Who forms the alloy? And then what you can say is, okay, where is the nickel and titanium sourced from for nitinol?

And so what we can do is we can say, okay, the Exager model says this, we can run it then, let's say in our GPT model, and then we can run that in our Mistral model against our data and have them confirm whether or not we find the same thing across each of those different AI tools. And then we can validate a final derivative answer. Okay. And so that gets us to the most recent information across those three major data types.

And then what we do is we continuously monitor that. So we feed data about these parts and products on a continuous basis into our system. And that allows us to identify when one of those signals might change and force us to adapt the graph data set that we've created.

Auren Hoffman (35:07.47) Now, when you're buying these companies, I assume because you're a strategic buyer, you could pay a lot more than a financially oriented buyer, like a PE firm or something like that.

Brandon Daniels (35:18.295) Yes, yeah, we not only are able to make that promise, but the more important promise that we make to them, Oren, is that we will actually deliver to them a better return on investment for any equity they roll in addition to the price we pay.

Auren Hoffman (35:36.622) So for the people who are already, they might want to roll some of their stock into the bigger company.

Brandon Daniels (35:48.441) That's right. So like when we bought Supply Dynamics in August of 22, those employees, those teams rolled money into Exager and I said, hey, I'm going to make it so that the equity that you roll in will deliver, let's say you roll 30 % or 20 % or 10%, it'll deliver more in total valuation than your first payout did, right?

Auren Hoffman (36:15.714) Yeah, yeah, I've got it. Yep.

Brandon Daniels (36:17.323) and I can show them the math on the equity to get there and we can reverse it.

Auren Hoffman (36:20.398) Yeah. And obviously if you're compounding at 20 plus percent and they're only going to be able to get, you know, 10 % in the stock market or something or less. So, yeah.

Brandon Daniels (36:28.631) That's right. That's right. We, you know, our CAGR over the last five years has been just under 80%. So, you know, when you when you're talking about growth, we're a very safe.

Auren Hoffman (36:43.81) Now when you, when you, mean, so obviously like you can pay more. So that's great. But these companies still just like trade whenever they trade, like they're not like, are you going in there to try to make the deal happen? Or are you just like waiting? Okay. Like they've, you've got this list of companies and then you're waiting for them to like get a process going and then, and then doing it.

Brandon Daniels (37:05.145) Well, we are proactively continuously surveying the market. Right now we're in an integration phase, right? So we're investing 32 % of our overall revenue back into R &D. We're investing a huge amount of CapEx back into integration and R &D. So we're in an integration and R &D phase.

But then as soon as we're out of that, have a list of 20, 30, 50 companies in a priority order that we want to go out and capitalize on, depending on where the market is and depending on where our own R &D has been able to open up and unlock opportunities.

Auren Hoffman (37:44.216) So let's, let's say like the number you've got these 50 companies on a list from one to 50 and the number eight, well, you're not ready to acquire something today, but like the number eight one's like running a process tomorrow. Like you're in that process, I presume anyway, like. Yeah.

Brandon Daniels (37:57.497) We're in that process. We're learning about the company. We're seeing if the juice is worth the squeeze, right? And all of these companies, we don't buy anything from market share, Like we're not yet at that size and scale where we're just looking to create a conglomerate, right? What we're looking for is enhancement of capability. exactly.

Auren Hoffman (38:20.652) Right, product, essentially, yep.

Brandon Daniels (38:22.745) product enhancement, product build out. We want to build everything back into the main platform and we want those capabilities to benefit our existing customers. Like this is true upsell, cross-sell kind of stuff, right? And so we're looking at the depth and quality of the technology and we're looking at the depth and quality of the proprietary data that those companies create. We think that there's something special about what they've done.

And so we're in that process because we don't want to lose visibility to something that could potentially augment our capability to dominate the market. And you'll see the result of that. I think the Gartner Magic Quadrant is being published this week or maybe next week at the latest. And so for the supply chain risk management market, you'll see the benefit of that when they publish soon.

Auren Hoffman (39:12.462) But do you like, do you put like, do you or your customers put any stock in anything with the word Gartner on it or, know, it's just like coming from the tech world. It's like, it's like anything Gartner says almost like usually you just should do the opposite. And that's usually the better strategy or Forrester. Like they're usually wrong, but like, don't know. How do you, is it still good marketing? Cause your customers are these huge behemoths and they still care about what some random entity like Gartner said. I mean, I'm showing my own bias here.

Brandon Daniels (39:20.185) Our customers.

Brandon Daniels (39:36.949) So, yeah.

Auren Hoffman (39:40.94) Gardner just seems like the worst, you know, out there.

Brandon Daniels (39:44.793) So analysts in general, think people take a healthy degree of skepticism, but Gartner in particular, because they've picked winners, and I'm not going to mention the others, but some others have said things like, oh yeah, right, Apple, you're going to get into the cell phone market, right? Like some analysts have just been so wrong at so many whiffs, but know, Gartner bet on CrowdStrike, right? And CrowdStrike then dominated, right?

Auren Hoffman (39:56.545) Yeah.

Auren Hoffman (40:04.652) Yeah.

Auren Hoffman (40:08.61) Yep. Yeah, yep, yeah, okay, that's fair. Yeah.

Brandon Daniels (40:11.673) Gartner bet on ServiceNow and then ServiceNow became something that we couldn't even believe. mean, think about the CRM play that they've built. It's unbelievable, right? And so Gartner, from our customer's perspective, seems to still hold that cache of like a kingmaker is picking the right horses. And so, you know, I think it's beneficial to us, but what they do that I think is pretty special or unique is they do

Auren Hoffman (40:19.438) Yeah, yeah, yeah, it's incredible. Both of those are incredible companies.

Brandon Daniels (40:41.497) they do take into account the testimonials and the customer feedback that they're getting and all of the customer day-to-day engagement that they have at Gartner. And so it is very ground up from the market, which I think gives it a little bit of credibility. But I know that analysts in general are universally hated, but yeah.

Auren Hoffman (41:06.984) Whenever I talk to them, just don't find them that bright, but that's just me.

Brandon Daniels (41:09.815) Yeah.

But just getting back to your question on data challenges, because I want to make sure I'm saying something to the data community here. One, the best way for us to validate and to create the best data for supply chains is to have a multi-model, both SLM and LLM structure.

And then to consume as much data as possible. Or like because of our scale, because we did that recap with Scott, with, with, um, JMI insight and Carlisle in 2023, we've been able to thrust forward our data purchasing, our data scaling, our data consumption, and just having access to that now and letting the LLMs and the SLMs make sense of it and give us heavily cited.

supply chain relationships, it has been transformative, been transformative.

Auren Hoffman (42:14.094) Cause data is usually around four nouns. like people, places, organizations, and products. And you're at least, I don't know how much you have on a people, but you're at least on, you have tons of stuff on the other three nouns. Right. And then you've got to do all the joints, that happen because like, you know, all these products that are like somewhat similar that have to be categorized. And it's like, can imagine, you if you just think of like a two liter Coke bottle and then a little Coke bottle and then diet Coke.

Brandon Daniels (42:27.736) Yes.

Yes.

Auren Hoffman (42:43.822) They're all like related to one another. Right. and I imagine in your case, it's even like more difficult to go, don't have like an ISBN number usually in some other type of thing. So was like, how do you think about like all this entity resolution?

Brandon Daniels (42:46.221) That's right.

Brandon Daniels (42:58.317) But so the first thing I would say is beware the company that says that they are going to implement a standard graph database for you in your supply chain visibility solution. Because the fact is that your products are unique. Your products are unique. Even if you are sourced, even if everyone is sourcing to, you know, J-Bull because they're, you know, a standard scaled.

top tier OEM, right? Your supply chains are unique. And so when I bring in, you know, let's say all of the supply chain data related to your vendor, Jable, your supply chain for your component, right? Like, let's say you're a motor scooter manufacturing company, right? And, Jable's doing your manufacturing, their manufacturing processes, their manufacturing suppliers, their manufacturing

Auren Hoffman (43:30.616) Yeah.

Brandon Daniels (43:56.057) capacity for that supply chain is completely different than what they're doing for Google or Azure or AWS, right? And it's going to be subject to different constraints, different limitations, different supplier base, even if they're using the exact same hexagonal nut with cadmium plating and passivated finishes, right? Like it's going to be different. And so when people say, yeah,

Auren Hoffman (44:03.298) Yep, yep.

Auren Hoffman (44:16.524) Yeah, yeah, yeah.

Brandon Daniels (44:23.277) like we're plug and play supply chain visibility, it is BS. The only way for you to truly map your supply chains is to take into account the product lines that you are purchasing or the product lines that you're purchasing for, then the parts that are associated with those individual product lines and the unique technical specifications that are associated with those parts.

and then to map the supply chain from there. Right? Now you might use the same data set. You might use the same data and information, but your graph set is going to be uniquely different from those other companies that are in the universe. And if you have somebody plug in their entire graph database, get ready for the hailstorm, the typhoon of false positives that you have in the supply chain.

Auren Hoffman (45:15.726) Yeah. Yeah. Yeah. Yeah. Yeah. That's, mean, the problem with like any entity resolution is just like, is both the false false positives and most of the entity resolution systems I've seen is just astronomical. And then of course, and of course, you know, and then you're always going to have tons of false negatives too, which maybe it's better than having a false positive, but it still can be a huge problem as well.

Brandon Daniels (45:28.289) Yes.

Brandon Daniels (45:36.057) Oh, it can be tough. But that's where what we've done is we've sort of been moving away from on the entity level and the product level and then the part level, moving away from sort of semantic relationship analysis into what I call entity identity. So on both sides of the coin, we force enrichment, right? So let's say I'm looking for, you know, JIT industries in

in Alabama, right? So I searched them. I might also get JIT Industries in South Carolina that comes back because they have the same name, same information, right? Like, you know, I have that that disjunct. The fact is that one company makes something very similar to the other companies. So you even have this like disjunct in terms of industrial classification, you can't just use a NAICS code to separate them.

What you actually have to do is you have to build the underlying profile. So who are the KMPs? Who are the, you know, what are the cage codes that they use? What are the facilities that they have? You know, where is their funding come from? And you actually have to build that in advance of trying to do the match. And then that match becomes much richer in terms of false positive and false negative improvement.

And so what we're doing right now is we're looking to actually move from semantic relationship and traditional entity resolution clustering, you know, which is just saying like, here's where I've got enough information where I know is weakly connected to this entity where when I get a new address in, I can actually connect it to the entity and have good, you know, good confidence in that. It's actually forcing both sides of that transaction to build out a full generative profile on the fly. And then

and then making the match, which actually, you know, it makes the matching take a little bit longer. But when you think about all of the things you build off of the match, Oren, like, so, you know, I'm gonna build your risk profile off of what you match against. Well, then if I've got that first match wrong, well, then I'm gonna build a risk profile that's gonna, you know, sort of compound this issue of a false positive. Now I got false positive risks. Now I've got false positive corruption.

Auren Hoffman (47:44.131) Yeah.

Auren Hoffman (47:56.686) Exactly.

Brandon Daniels (47:58.115) You know what I mean? Like it's an exponential equation. So we're just investing a lot more in the entity identity analysis as opposed to just traditional semantic analysis.

Auren Hoffman (48:10.328) Cool. You guys are in the DC area, right? What are some of the advantages of building a company in the DC area?

Brandon Daniels (48:18.775) Yeah, so obviously we have really, really close proximity and really tight integration with the regulators. So that's a huge benefit to us, right? Like we talk with the people on the Hill. We talk with the people in the administration.

Auren Hoffman (48:35.95) Right. And people, you know, people in your company, you know, their kids go to school with those people and so they'll see them at the soccer game too. Yeah. Yeah.

Brandon Daniels (48:40.377) Bye.

Brandon Daniels (48:44.023) Yeah, yeah, that's right. That's right. And so like we think about government affairs, we think about integration and writing policy and writing law as core parts of our go to market motion. I don't think most people or most companies until maybe the last couple of years really thought about how to invest in policymaking in regulatory rulemaking as a part of

Creating the market that they're in and defining the market so that they can meet those business needs, right? And so being in DC, we're just so drenched in it. We can't get away from it even if we wanted to and so that's a real advantage. The second thing about being based in DC is that there are lots of really nice hubs around DC where you can get great talent. So like we have an office in Tysons, right? And so we get a lot of the pull from the defense.

you know, technology companies that are out there like SAIC and all the other great companies that are in the Beltway. But then also we're a hop, skip and a jump away from Richmond and we can pull from all of the UVA talent, all of the Virginia Tech talent, all of the VCU talent. Like we've got these great hubs that are so close to Washington where, you know, it's a 45 minute or an hour and a half drive away and we're in a

completely different cost of living. in a completely different labor market. We're in a completely different group of people that we can pull talent from. you know, DC's just got this great central point to it. In addition to be obviously this like center for policy making and for world volatility right now.

Auren Hoffman (50:30.67) Now, back in the day, you know, the only CEO with a beard was Larry Ellison. Now it's like super common to see CEOs with a beard. that like, how do you like, is like, how do you think about that? Obviously for people who listening, they might not realize you have a beard, but like, I, like, I would say like a very high percentage of people I'm interviewing nowadays, like have a beer was like that never happened 20 years ago.

Brandon Daniels (50:46.797) Yeah.

Brandon Daniels (50:53.933) Yeah, yeah. So if you look back at my old pictures, I've always had the beard. So this isn't a copy. I'm an OG beard guy. Yeah, it's now almost completely gray, but it is still the beard is intact. So I think that people used to think that beards, you know, that they reflected either something that was much older, much more professorial,

Auren Hoffman (50:59.15) So you were an OG. You did it like, okay, pre-gray hair, yeah.

Auren Hoffman (51:22.368) Yeah, yeah, professorial.

Brandon Daniels (51:23.262) or people felt like a beard was uncouth. Like it was one or the other.

Auren Hoffman (51:28.086) Yeah, yeah. Obviously now we have like a vice president with a beard. Like these are just new things that we just didn't have before. Yeah.

Brandon Daniels (51:34.679) That's right. That's right. And so I, the way that I feel about the beard is, it's, it's, if you can keep it intact, if you can make sure that it doesn't go over well, yeah, it actually shows a level of discipline. You really got to invest to keep I mean, I can shave this beard off and shave tomorrow and shave tomorrow. And you know, it's a it's a quick touch up, right? It's no problem. But keeping this thing

Auren Hoffman (51:47.022) Too crazy, yeah, yeah.

Yeah, totally. Good point. Yeah.

Auren Hoffman (52:00.972) Yeah.

Brandon Daniels (52:03.897) so that it actually looks presentable, takes real commitment, shows that he's a discipline guy. Yeah, yeah.

Auren Hoffman (52:07.284) Okay, yeah, it's like gardening. Yeah. All right, two more questions we ask all of our guests. What's a conspiracy theory that you believe?

Brandon Daniels (52:16.387) So I actually, I don't have a lot of conspiracy theories that I believe because I'm actually one of these people that believes that the world is just not that organized. Like, you know, I've gotten the chance to meet a lot of, you know, our global leaders. Like I said, I spent a lot of time in Congress. I probably have 200 congressional members and Senator meetings a year. You know what I mean? Like I'm...

meeting the world leaders, we were part of the COVID-19 response. I got to meet like, you know, so many, you know, CEOs of major pharmaceutical companies and medical device companies and stuff like that. You know, I was a part of the monitorship for HSBC. I was leading, you know, the compliance overhaul for multiple banks after the financial crisis. When I meet people that are in the positions of power and control, they're just like us.

They're trying to get through the next challenge, the next hurdle, the next blocking and tackling motion. So I'm not a big conspiracy theorist.

Auren Hoffman (53:19.886) But we literally just went over like six of them, like all these different, like, you know, pricing conspiracies and evading sanctions. so, yeah.

Brandon Daniels (53:27.799) Yeah. And, and those are, that's just, you know, that's just habitual greed and whatever. Right. But I do have one where I have a anti conspiracy theory. So I don't believe that intelligent or like, you know, super intelligent life like a human exists on any other planet, on any other planet besides the United, besides the, besides earth. And I'll tell you why.

Auren Hoffman (53:33.205) Yeah, yeah.

Auren Hoffman (53:38.272) Okay, great.

Auren Hoffman (53:48.504) on any planet, period. Okay.

Brandon Daniels (53:57.089) you know, because most of us think about the sort of circumstellar habitable zone. But there's this guy, Dr. Hugh Ross, and I'm a big physics buff. I invented a theory called the probabilistic constrained collapse theorem. And like, I will probably publish it one day. I've tested it through every model. It's a model that basically marries classical mechanics and quantum mechanics and can help to do things like predict qubit positioning.

Auren Hoffman (54:15.416) Okay, cool.

Brandon Daniels (54:26.713) in quantum computing, but basically I'm a big theoretical physics buff. And there's this guy, Dr. Hugh Ross, who was a Caltech professor that wanted to prove the existence of God. But one of the things that he did was he looked at what are called the habitable zones. And there are actually 11 habitable zones. And I've done the research behind what Dr. Hugh Ross had done.

And there's the circumstellar habitable zone. There's the ultraviolet habitable zone. There's the tidal habitable zone. There's the obliquity, the eccentricity, but there are all these habitable zones. There's 11 of them. And the probability that all of these would exist at once is so near zero. And the universe would actually have to be as big.

Auren Hoffman (55:02.382) Alright.

Auren Hoffman (55:16.738) You have to have them all happening to have an intelligent life.

Brandon Daniels (55:19.625) All happening. That's right. All happening. And the universe would have to be as big and as old as it is to have all of these probabilities coexist. So I feel like

Auren Hoffman (55:35.234) And you don't think it's ever happened in the history of the universe or you think it just is not currently existing right the second.

Brandon Daniels (55:42.487) I don't think it currently exists right this second. I'd have to do a lot more math and a lot more thinking to think about did it ever exist. But, so I don't believe in the alien conspiracy theories and I think that there's good evidence that it doesn't exist at all. And so that leads to a bigger conspiracy, which is what the hell are all those UFOs?

Auren Hoffman (55:44.631) Okay.

Auren Hoffman (55:49.176) Alright.

Auren Hoffman (56:04.18) All right. Last question. ask all of our guests, what conventional wisdom or advice do you think is generally bad advice?

Brandon Daniels (56:12.749) Do what you love. It's it's it's again BS. You know, Andre Agassi never loved playing tennis. Incredible tennis player, right? Incredible tennis player loved love competition knew he was good at it. A lot of people that are doing the greatest things in the world today didn't start out thinking that that's what they wanted to do. Didn't get joy out of those things.

you know, they, they realized that they had the intellectual capacity to understand them, the unique capability to execute it against them and the will to bear the objections and the rejection that comes with trying to do something new. so for me, you know, I didn't imagine myself being in supply chains. didn't, I wasn't originally in love with data analytics and artificial intelligence. I became a programmer because I had to, I became a.

a risk management expert because I had to. I realized the market opportunity in supply chains and we built this business because we knew it was necessary. it, I love it now. it. I love it. Yeah, it's not that you never, it's, it's don't be over precious about what drives your passion because what you're good at

Auren Hoffman (57:24.27) But you love it now. Right. So under our advocacy, like never love tennis ever. Like he never ended up loving it. Right.

Brandon Daniels (57:39.777) and what you love at any one point in time can be in conflict and that's okay. But it's the grit, the determination and the willingness to push through that, to wake up every day and keep working until you've achieved your goal that eventually becomes the thing you love.

Auren Hoffman (57:58.798) So I've asked this question out of like maybe 200 people and I would say 50 % of them, like very high percentage, like 40, 50 % say you have the exact same answer as you have. it is just like, it is, it is now almost, I feel like we've now must be the conventional wisdom not to do what you love because like everyone now believes this thing. And now, now which makes me more skeptical. Like now maybe I'm like, maybe we should do what I like. I don't know. Like, I don't even know how I think about it anymore. Yeah.

Brandon Daniels (58:22.777) The thing is, the thing is, though, I mean, like, if you think about the Japanese principle on work, and there are a lot of people that, you know, that even in my own business say to me, this isn't my core skill set, or this isn't what I'm good at, or this isn't where, like I find, this isn't where I find like joy. And this isn't, yeah, fulfillment. And it's like,

Auren Hoffman (58:48.504) fulfillment. Yeah. Yeah.

Brandon Daniels (58:52.409) I still think it is very common for people to think, like, I'm going to do what I'm fulfilled by, right? It's of Ikigai Japanese principle and that kaizen sort of incremental growth principle where you have harmony between

you what you love doing and what you love working on. Work is hard, Oren. And I think, and I'm glad that 50 % of the people said what I said, because I think all of us need to realize that that's the reality.

Auren Hoffman (59:25.986) Yeah, yeah, yeah.

Auren Hoffman (59:35.48) Well, and there's, there's a certain generation where they almost have this expectation, like, I have to get this like massive fulfillment out of like the work stuff where like, maybe that just grows over time. And if you're a 23, like you're probably not going to get that much fulfillment that comes out of it. One question for you, say you like, do or tell me if you disagree or agree here, working with

Brandon Daniels (59:50.574) That's right.

Auren Hoffman (01:00:03.896) people you don't respect, you don't enjoy, like that seems really tough. And so like, is that a prerequisite? should you choose? I mean, obviously for some people, they don't have a choice. They have to do what they have to do. But if you have a choice, should you be choosing to work with people that you respect, that you enjoy working with, et cetera?

Brandon Daniels (01:00:23.577) I think you have to be willing to work with the people that fate puts in front of you and learn from it. The people that I have learned the most from, with one exception, I I've had some bosses where they taught me incredible lessons that I took with me, right? Incredible lessons in the way that they operated, incredible lessons in the way that they thought about

Auren Hoffman (01:00:32.941) Okay.

Brandon Daniels (01:00:53.069) you know, business, and I will take those with me, but I've learned just as much, if not more from the people that I thought couldn't offer me a lick of advice. and, and, and I learned how not to do things. learned how to deal with them. You know, so many people like, you know, by, by, by working with people that have those tough personalities,

Auren Hoffman (01:01:07.574) Interesting.

Auren Hoffman (01:01:11.618) Yeah, sometimes that's the best thing to learn. Yeah, yeah.

Brandon Daniels (01:01:22.189) I've learned so many people just want to be heard, right? And I wouldn't have learned that if I didn't work with people that, you I didn't enjoy, right? And so, you know, I think life's too short to stay with those people for very long orange. That's right. That's right. But, but having them in your career, it's like, it's like, you know, when you lose deals and you do the post-mortem and you learn it, you get better.

Auren Hoffman (01:01:24.984) Yeah.

Auren Hoffman (01:01:38.698) Yeah, yeah, yeah, yeah, you don't want to be married to those people. But yeah, yeah, yeah.

Auren Hoffman (01:01:50.189) Yeah.

Brandon Daniels (01:01:51.511) It's like Nelson Mandela said, know, like I don't, I never lose. win or I learn that same, same principle goes for people.

Auren Hoffman (01:02:00.712) I love it. All right. Thank you, Brandon Daniels for joining us at World of DaaS. I follow you on LinkedIn. I definitely encourage our listeners to engage you there. This has been really interesting and a ton of fun. Thank you.

Brandon Daniels (01:02:11.341) Yeah, thank you, Auren. It's been awesome.