Episode Transcript
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Speaker 1 (00:00):
At iHeartMedia presents national CEOs you should know. Let's meet
Matt Culkins, CEO and Chairman of the board of Appian.
Speaker 2 (00:10):
Yeah. I grew up in California. I went to school
in Dartmouth, and I came to the Washington area for work.
That's how I found my first job. It was a
micro strategy. I worked there for about five years before
starting Appian when I was twenty six.
Speaker 3 (00:24):
Little culture shock going from California to New Hampshire.
Speaker 2 (00:27):
Yeah, but I was born on the East Coast. Most
of my family was out there, so it wasn't so
shocking to me.
Speaker 3 (00:32):
Well, let's talk about Dartmouth and coming out of school,
because you had that job for five years and then
you started the company that we're going to talk a
lot about today, and that's been twenty five plus years
in the making, which is truly incredible and all the
amazing things that you, the founders and your team do.
But when you were coming out of school and you
had that job, what it exactly did you want to do?
Speaker 2 (00:49):
I love the idea of getting in the middle of
a cutting edge industry. I wanted to be a technologist.
My degree was in economics, but I wanted to apply
it in business, and I thought the most interesting business
I could be part of would be the software business.
And so I was looking for a software business that
was had a moment of creation and I found one.
I found an exciting startup called micro Strategy, and I
(01:12):
joined and stayed with it as it grew over five years.
Speaker 3 (01:15):
So nineteen ninety nine there was a lot of technology
booming going on. It was really an amazing time. And
this is the fun part of the job when I
get to talk to people like you about the origin,
the epiphany, the idea about starting your own company, and
there's we talked to so many CEOs and entrepreneurs on
this series and they have so many different reasons about
why they wanted to start their company. I'm just going
(01:36):
to guess that you saw a hole in the industry
and you needed to fill it with the idea that
you had that you wanted to do. Can you tell
us about the origin about Appian.
Speaker 2 (01:45):
Yeah, it's really not the case. A lot of businesses
are started because somebody's got an idea and they source
capital to back up the idea. We did not have
those things, but we started the business because we felt
that it was possible to create a business that would
be a vehicle for making people's lives better. But we
didn't know how. We didn't have a business plan, and
(02:05):
we didn't have funding. We just had creativity and the
intention to build an institution.
Speaker 3 (02:14):
Well, let's stay with that. So when you came up
with that idea, what did you think was missing that
you could bring customers?
Speaker 2 (02:20):
Well, I think, first of all, we did know a
few things. So I had some experience in databases, for example,
and business intelligence. And we also felt confident in our
ability to pioneer a new industry. And so our goal
was too as quickly as possible, get at the forefront
of an emerging industry. That's why we positioned ourselves as
analysts and thought leaders, and we sought our customers as
(02:42):
experts in an emerging field. In this case, it was personalization,
and under that cover we were able to establish the
first set of customers, and that evolved over time for us.
From personalization it became portals, and from portals it became
process and processes where we live.
Speaker 3 (03:00):
The name intrigued me, like Frobby does a lot of
other customers. Where's the what's the origin of the name?
Of the company.
Speaker 2 (03:06):
Yeah, well, the name is abstract, of course, refers to
the Appian Way, an early highway in the Roman Empire.
And I liked it for its abstraction. I like the
fact that it was vaguely metaphorical, like a road could
mean a lot of things. It could mean the way
you get to where you need to go, or a
way that you enhance commerce or something like that. It
was even itself a pretty high tech piece of work
(03:29):
at the time, you know, it was macadimized and it
lasted for a thousand years or more. It was. It
was technological in its day. But I like the name
mostly for its ambiguity, and it didn't help it was
It didn't hurt to be early in the alphabet because
we ended up at the top of a lot of
lists by choosing a name that began with a You.
Speaker 3 (03:49):
Know, I love that because I kind of compare that
to maybe a musician writing a song and it's up
to the people that are listening to it to interpret
what the song means.
Speaker 2 (03:58):
Right. Yeah, I think ambiguous was good for an organization
that did not come into being knowing what it meant,
what its business plan was going to be. We knew
our values, we knew what we wanted the organization to achieve,
but we didn't know how. And it's a good thing
we didn't make the name correspond to the way how
because we were going to change our business plan a
couple of times.
Speaker 3 (04:19):
All right, well, let's dive in with Appian. What's the
mission statement?
Speaker 2 (04:22):
Yeah? Well today, all right, I'm going to tell you
about what Appian is today. We do processes. Processes are
like any behavior that an organization executes at scale. Anything
your organization does a million times, that's a process. And
processes are typically unique to different organizations. And so a
process is like the signature of a business. It's the
(04:45):
behavior set. It's the way it touches its customers. It's
the way it onboards new customers, handles their problems. It's
the way it saves money. It's the way it creates
its product. Every of the critical DNA fiber behaviors that
a business does, it's probably done through a process, and
as such, a process shapes its reputation. So they're very important.
(05:08):
It's important to get it right, it's important to be
able to change it over time. And we are a
platform for automating an organization's processes. We started by allowing
them to just draw a flow chart, and that flow
chart would be automated like a like a piece of software.
But over time we also filled in the flow chart
with digital workers so that the work could get delegated
(05:30):
to a robot. In some cases that would be robotic
process automation or an RPA bot. In some cases, it
was just a business rule for a set of rules,
and of course in some cases, most famously, it's artificial intelligence.
So we've been in the artificial intelligence business for about
a decade as part of the way we execute those
processes that we plan for our clients.
Speaker 3 (05:51):
All Right, I'm going to want to talk to you
about AI and AI regulation because I know that is
a passion project of yours and it's a really big deal.
It's always in the news every day, so I'm dying
to here where you think about everything and where it's
going Before we do that, though, I know there's many
worldwide that know what Appian does. But if we were
to give a snapshot to some of our new listeners
that aren't familiar with the company, and you give a
thirty thousand foot view about what you exactly do, what
(06:12):
would you tell them?
Speaker 2 (06:14):
Yeah, Appian is the process company. Your organization is made
up of processes, and we're going to help you make
those processes efficient and better, and we're going to run
them with less time and less cost and a higher
success rate than you've been achieving in the past. Your
organization is defined by its processes and we can help
you optimize them.
Speaker 3 (06:33):
So, preparing for the interview, went on the website. Love it.
It's easy to navigate, but there are a lot of
programs and capabilities, and I know you're probably proud of
all of them and what you offer your customers. But
if you were in an airdew maybe a handful of
them that either you're most proud of or what clients
really want in today's climate, Can you tell everybody about
that and expound a little more on it.
Speaker 2 (06:52):
Yeah, Well, we're conducting this conversation in the Washington, DC area,
which is where Appian's home base is or a worldwide company,
but our base has always been in Northern Virginia in
the DC metro area, and some of the work I
am most proud of over the twenty five years we've
been in business has been right here. For our federal government.
We did the Army Knowledge Online System, which twenty years
(07:12):
ago was called by Wired magazine the largest intranet in
the world. We do wonderful work for the Department Defense
in terms of procurement. Right now, tens of billions of
dollars annually passed through our procurement systems. We were integral
to getting the Affordable Care Act processing to work. You
may remember that the website didn't work well. The other
part of it did work, the part where you could
(07:34):
register by a filled out form. We kept that running
even when the other side was lights out, and we
were able to build that system in just one month
on an emergency basis, and so I'm proud of how
quickly we responded to save that program. So a lot
of the greatest jobs we've done. I mean, at this
point we're around the world. We're about roughly half of
(07:54):
the world's biggest banks, biggest insurers, biggest pharmaceutical companies. We
are in five continents, we're everywhere. But a lot of
the work I'm most proud of happened right here at a.
Speaker 3 (08:06):
Hometown outstanding Matt. You know, there are so many different
challenges in the industry and as a Layman as I
read the news between AI and we will talk about
regulation just a second, But you know, I hear cybersecurity
a lot, and that's not only internationally announced domestically. With
that said, is it at the forefront? I know each
client is very specific for their needs and what you
(08:28):
do for them, but is that at the forefront usually
when it comes to cybersecurity and everybody trying to protect
themselves in the climate that we're living in today.
Speaker 2 (08:36):
Look, data has never been more valuable than it is today.
Our organizations will freely admit now data is their greatest asset,
and they're frequently correct. Protecting that information is top priority
for all of our clients. We're not just the process company.
We're specifically at the high end of this industry. We
focus on the big organizations making big bets and defining
(08:57):
themselves through process, and so for them, data is of
the utmost priority. We protect data. We're ahead of the
curve on industry standards and measures that we take to
secure information. That's always been a part of our calling card.
I mean, we started with big jobs like the army
(09:19):
and health and human services twenty odd years ago, and
so we had to care from the beginning about the
sanctity of confidential information. So yeah, that is a big,
big deal, and privacy is also a big deal. This
is a major issue these days. It's not whether your
data will be stolen, but whether it will be taken
(09:40):
with your own permission or with some semblance of permission
in order to train somebody's AI algorithm. This is a
big issue today. Organizations are afraid to use AI because
they don't trust that AI will be private enough with
their data, and so they don't want to train an
AI algorithm that they don't own and control. That's a
big issue and it's holding back the evolution of this industry.
Speaker 3 (10:02):
All right, Well, let's expound on that a little bit,
because I know that when it comes to AI and
AI regulation, this is really something that's very important to you,
your team, your clients, but also something that you're at
the forefront with. And once again, just as a layman,
I only know enough to be dangerous. It's on my
phone now, it's on my computer. I've used it from
time to times, but that for me when it comes
to somebody like you, the industry, and just overall, let's
(10:26):
just give it kind of a thirty thousand foot view
about where you are with AI and regulation, and then
we can start diving into that.
Speaker 2 (10:33):
Yeah, let me first of all say what a priority
I believe privacy is in the evolution and the usage
of AI. I think the industry's progress depends on privacy.
And I take this first of all on the authority
of my customers. I speak with the CIOs that I
work with, and they are all very concerned about protecting
(10:53):
their data. They don't want to share it around and
they don't want to train algorithms on it. And so
we need to reassure them that their data is safe
in AI. And that means creating an AI architecture that
protects their information. And so it's going to be important
just for us to connect with those business users to
reassure them in some better way than we've done so far.
(11:15):
And we've come up with such a way. A right
appian has a specific we call it private AI. We
have a specific angle on this business whereby we do
not train an algorithm. We instead take your question that
you want to ask of AI, and we source just
the right information from across your enterprise and send the
(11:36):
question with the data. And that's all that the AI
gets to look at is just that slice of your data.
But it's enough. We send the right data, and therefore
AI comes back with an answer that's comparable to what
it would have given if you had first given it
everything you knew. And so it's a low data and
(11:57):
a low trust way of using AI, which suits the
concerns of the modern customer. So that's one way that
we can make progress in AI. It's called request augmented generation,
and it depends on a really great virtual database and
we have that. We call it a data fabric. But
because we have that, we can offer this no training,
generative AI and it's successful. So that can work. However,
(12:21):
more broadly, if we were just set back and say
what does privacy mean for this entire industry? I think
privacy is the hinge on which this whole industry turns.
The future of AI is so much better than the present.
We're to look back on today and say, this is
when they didn't get it, this is when AI didn't
have any value. It's just a parlor trick. AI is amazing,
(12:41):
but it's not productive. It'll be productive when it understands us,
which is to say, when it understands the person or
the entity that's asking the question. AI can't tell me
where to go on a Friday night because it doesn't
know what I like. AI can't write an email my
voice because it doesn't know my voice. Until AI knows me,
(13:04):
it's not going to be as useful as it would
be if it did. The reason it doesn't know me, though,
is because I don't trust it. I don't want to
train an AI algorithm on all my emails that I've written,
and I don't want to explain everything that I like,
and therefore my lack of trust is holding back this industry.
It's true across the world. We need to get over
(13:25):
that by showing that AI can be trustworthy. And that's
why I encourage this industry to adopt guidelines that prove
it's trustworthy, to be more transparent, and to make a
conscious effort to stop blurring the lines between what it
owns and what it doesn't. I think the average person
understood how much they have personally trained AI, they would
(13:45):
be upset, Matt.
Speaker 3 (13:47):
I know that worldwide social media companies, companies in general
are using AI and moving forward it, but let's just
stay maybe in your industry, if we could domestically and
internationally when it comes to your peers and your contemporaries
and what you do. Is everybody on the same page
or are you fighting a battle on your own right now?
Where are you with everything in your contemporaries.
Speaker 2 (14:07):
We are very different from our competitors. We compete against
some of the largest tech firms in the world, like
Microsoft Salesforce Service Now and for the most part, our
competitors see AI as a way to get hold of data.
They want to use AI as a way to control
their customer's data. That could be by moving all the
data into their format, into their database into one consolidated
(14:30):
heap that then they have privileged access to. Or it
could be by literally sending the data over to our
competitor so our competitor can train on that information and
use it to whatever extent the fine print allows them
to in their agreement with their customer. We are not
doing that. We are not using AI as a trojan
horse to get our hooks into any data at all. Instead,
(14:53):
we respect the enterprise the way we found it. We
use a virtual database to connect things that are not
co located. We don't ask our customers to change their
data's format or location, or to train an AI algorithm,
whether we control it or not. Our point is to
empower our customers to get value out of AI without
compromising their data one whit. So we take a very
(15:17):
different approach to this industry than our competitors do.
Speaker 3 (15:20):
I don't want to assume with any advocation on your
part of somebody from your team, but is this something
that you're going to be discussing a Capitol hill or
somebody from your team and talking about this, because obviously
you're very passionate about it, you feel very strongly about it.
But there's a big world machine out there that does
exactly what you're saying that you don't want it to do,
which is grab everybody's information. So what about advocating, Yeah,
(15:41):
you're completely right about that.
Speaker 2 (15:43):
There's a lot of energy advocating for the lack of
data rights because the leading AI vendors are gaining tremendously
by ambiguous or missing data rights guidelines. We take the
opposite approach, and I, personally, as a privacy advocate, take
the opposite approach. And so I've written a set of
principles and published them, and I'm building support amongst the
(16:06):
press fellow CEOs and Congress for these principles which speak
up for the owners of data and the sanctity of data.
Speaker 3 (16:17):
All right, well, listen, I want to talk a little
bit about the future, because AI is also the future,
and that's part of the component of your company and
where we're all going. But with that said, I know
that you and your team are We're sinking down the
line too, and technology is moving very quickly. As you
see your company and the industry moving ahead the next
five ten years, where is the industry going?
Speaker 2 (16:35):
The AI industry is reaching a fork in the road.
If we can win people's trust and confidence, then AI
is going to become personalized, and when it does, it's
going to become far more valuable, far more valuable than
it is today. Personalized AI is going to be revolutionary.
(16:55):
Generic AI. What we have today is merely intriguing. So
we need to make is to turn and making that
turn depends on trust, and trust is the most important
commodity in the past. In the last year or two
in AI, it has appeared that the most important commodity
is raw data, and the leading vendors should just take
it wherever they can, no matter the cost, no matter
(17:17):
the dubious legality, just take it. But the paradigm is
shifting here to make to reach AI two point zero,
the personalized AI. That's the real future of this industry.
We need trust more than we need data. Trust is
the only way to get the data you truly need,
and so we're approaching a crossroads and the priorities will
have to shift.
Speaker 3 (17:38):
Are there other people in your camp that feel the
same way you do?
Speaker 2 (17:41):
Yeah, there are there are others. First of all, every
customer I mentioned to this mentioned this too. They agree
with me, and so definitely the consumer base for AI
agrees with me. But does big AI? Does big tech
agree with me? They don't. Their strategy is what I
would call run until tackled, and they're just going to
(18:03):
take as much data that they maybe have a right
to as long as they can and use it to
the fullest extent that they can until someone stops them.
And that strategy has been working for him so far
because data has been the most important input to AI.
It's about to not be, so they need to change
their game. But for now, until someone stops them, that's
(18:23):
their game.
Speaker 3 (18:24):
We talked about some challenges, but I also like to
talk about some of the positive, cool things that are
wrapping on there, and you really are doing so many
innovative things with your clients. I know that there's a
lot of reasons why you and your team get up
every day because you're servicing your clients. You're making them happy.
You're making America and the world safe for a lot
of people out there, especially when it comes to technology, privacy,
data and everything else out there. Is there something in
(18:45):
the industry right now that with your and you don't
have to name the client, Matt, but you're most proud
of that you're making a difference to you and your
team right now that you know is really special.
Speaker 2 (18:55):
Yeah. Absolutely. I love this technology and one of the
reasons I've been able to stay with it for twenty
five years is I believe that it serves a larger
purpose in the world than just moving money from one
account to another. I think that we're empowering people to
extend their capabilities through digital assistance, and we are allowing
(19:17):
organizations to have and reinforce the personality they want to have.
Organizations for the last couple decades have all felt that
they needed to trade their personality away in favor of
the most efficient, cost efficient set of behaviors. And so
every corporation seems alike, or almost all of them seem
(19:39):
alike to us right now. They all use generic phone
lines and generic emails, and they all appear to us
as robotic, impersonal and indistinguishable. Our processes allow an organization
to create its own personality and live up to that,
(20:02):
and that raises the standard of living for all of
us because none of us wanted to deal with robotic,
undifferentiable vendors. We wanted them to be able to live
up to their brand promise and their expected identity, and
with this technology they can. And then secondly, we're about
the interface between people and machines. When you draw a
(20:23):
flow chart and it turns into software right on our platform,
that's fundamentally what we do. You are extending your reach
and commanding a computer to follow your instructions. It's like
a simple form of programming, but a very powerful form.
It's very human, it's very intuitive, and it allows people
(20:47):
to interface, collaborate, and direct machines better. And so I'm
proud of the effect that we're having both on people
who become stronger and on organizations who can finally assume
their attended personality.
Speaker 3 (21:00):
Man if I could do this, indulge me just for
a moment. I always love to talk to leaders, especially
with your company. I mean, you are worldwide, so there's
a lot of people on your team. You obviously are passionate,
you have a vision, but you want a company you
run a certain way. But also we talk about the
work life balances for people. And some people have very
high security clearance and some don't, and some are living
(21:20):
all over the world and some right here in the DMV. Well,
that said, with so many people that are on your
team and handing down the message about how you would
like the company to be run, but making sure that
everybody's a happy employee, have that work life balance, but
also get the job done, how do you do that
leadership wise?
Speaker 2 (21:37):
All right, Well, that's a challenge, and it becomes a
greater challenge with scale. It becomes a greater challenge with distance,
and we have offices all around the world. We are
furthermore a values driven organization, which is to say, we're
more dependent than most companies on having a set of
values and having them broadly adopted. They shape the way
we work and the way we are different from their firms,
(22:01):
and so it's more essential for appy and to be
able to convey its values across oceans and across a
larger team than it is for other companies. We've never
tried to be like other firms, and I don't want
to be like them now. And so first, it's a
great deal of communication. I'm constantly writing things and saying
(22:21):
things about what we stand for and how we work,
and so it's a constant expression of values back to
the team. You have to enforce values when you hire
and when you promote, so consciousness about what your values
are and bringing them to bear on those moments of
truth is very important. I think it's important to have
(22:41):
as many people come together as possible. I believe that
when people are together, they exchange information about values, they
confirm values, and they understand the differences in the organization better.
So I'm a proponent of working in the same place
to the degree that we can, and I think appiing
(23:02):
is a magnet for people who feel that way and
are interested in the kind of personal development, career development,
and highly charged collaboration that are possible when we get
together in the same location. So we're always innovating. We're
always growing and we need to keep finding ways to
(23:22):
stabilize and enhance our values at scale in a distance.
Speaker 3 (23:25):
I appreciate all your thoughts on that. Thank you so much.
I've really enjoyed the conversation. I do want to wrap
up with some final thoughts from you, and we've talked
about a lot in the short time we've had a
chance to get to know each other, Matt, but just
maybe some recapping some final thoughts. The floor is here,
sir Ah.
Speaker 2 (23:41):
Well, like I never thought i'd be with the same
organization for a quarter century, We've grown over that time
and it feels different, and I think it's the difference
and the impactfulness of what we're doing that keeps me here.
I'm also very proud of the fact that all for
founds of this organization are still here in an executive
(24:03):
capacity twenty five years after we founded it. That says
something about loyalty and decency and mutual respect, and I
can't think of any companies that have achieved that. And
so while I'm surprised that we've been able to maintain
this growing organization for a quarter of a century, when
(24:24):
I look back on it every year, made sense, and
it makes more sense now than ever because the stakes
are higher than ever. I feel like we can have
a greater impact to help people than we've ever been
able to before. And if our culture is harder to
establish across a global organization, then at the same time,
it is more impactful because there's more people to influence,
(24:44):
and therefore they can have a greater impact and our
culture can go farther if I can establish it in
all those people. So, because the game keeps changing, because
the stakes keep going up, and because I get to
work with good people that I'm fortunate to have worked
with all this time, I'm still at it twenty five
years later.
Speaker 3 (25:02):
It's a truly amazing story. If you do me a
favorite because I'm a sports guy, I've been in my
industry for thirty years and when I was reading up
about you, you really used a very cool sports analogy
about pulling a goalie. And we have a lot of
future entrepreneurs that listen to the series, and it obviously
spoke to me, but I think it would speak to
a lot of people because sports crosses over to business
(25:23):
just about every day. As far as I'm concerned, Can
you share that analogy because I thought it was fantastic.
Speaker 2 (25:28):
Oh yeah, you're referring to some research I did, yeah
long ago when I was in school, about when a
hockey team should remove its goalie. The hockey team is
losing toward the end of the game, and it has
to make a decision about when to take its goalie
out of the game and add another player who could
conceivably score a goal, who could be part of a
powerplay style situation, knowing that when they do that, they
(25:52):
increase the chances that a goal will be scored against
them by more than they increase the chances that they
will score a goal. So a it is move you
would only make if you needed to change the game
dramatically and you were going to lose if you didn't
change it. But the question is when when do you
pull that goalie? Now. Back at the time that I
(26:12):
did the research, which was the early nineties, I felt
that the hockey statistics world was not very well developed
and that goalies were rarely pulled outside of the final
minute maybe two at the most of a game, and
I found that that was probably a mistake. That a
(26:33):
team should pull its goalie a bit earlier and in
a truly important game, a team should pull its goalie
even when it's losing by two goals, which is almost
never done. Even if it's losing by two goals and
relatively earlier, then it would pull the goalie if it
was losing by one goal. So if you're losing by one,
you should have your goalie out two minutes or before
(26:55):
the end of the game. But if you're losing by two,
you should pull your goalie by maybe four minutes from
the end of the game. If it's a truly important
game and you don't care about being embarrassed, you know,
losing by three or something, you should pull your goalie
an additional minute or two beyond that in order to
have a longer period of high variance. Even if the
mean next to me expected value goes against you, the
(27:17):
higher variance makes it more likely that you're going to
win a game you otherwise would have lost.
Speaker 3 (27:22):
So I know there's a lot of data in there,
but I also thought there was a life lesson in
there too about actually just getting ahead of things, And
because I'm a sports guy, made a lot of sense.
I'm a big hockey guy too, So I love your
analogy that you put together, Matt, and I think there's
always life lessons from sports that we can apply to business. Well,
let's do this. Let's wrap up by giving the website
to everybody. I know that you're always looking for the
best and the best. There is a careers toab there.
(27:43):
But there's so much information on this wonderful website of
Appy and if you could give the website to all
our listeners Matt appian dot com, that easy listen. It
is a treat to get to know you continue success.
It really is in the making twenty five years of you,
your founders and all the amazing things that you're doing
and mad the one thing that I took away beside
the amazing things that you offer, and also how you
(28:04):
feel about AI regulation when I talk in this series,
no matter what people do and what company they lead,
they have a passion for what they do. And I
can tell that you have that. And I'm always very
appreciative of people that are passionate about what they do
and that gives them an extra head start and everything.
So thank you for your time and thank you so
much for joining us on CEOs.
Speaker 2 (28:21):
You should know thanks so.
Speaker 1 (28:22):
Much, Dennis, You've been listening to iHeartMedia's national CEOs you
Should Know podcast. To hear more interviews from this series,
visit the iHeartRadio app and search for CEOs you Should
Know