At Fearless, a Baltimore-based digital services integrator, the power behind the tech they create comes from the people who build it. Fearless was founded in 2009, but the company hit a growth streak in 2022 after a strategic pivot towards digital services.
Joe Paiva, the company’s COO, came to Fearless in March 2024 alongside Jacob Hsu, who now serves as Fearless’ executive chair. Paiva came to the role with four decades of military, government and industry experience. Before joining Fearless, he served in the Pentagon, founded a private equity firm and served as a CIO, EVP and COO of multiple tech companies in the commercial and public sector worlds.
In this Executive Spotlight interview, Paiva, a GovCon Expert, talks about what drew him to Fearless, what he hopes to accomplish in the role, the growing digital divide fueled by the rise of AI and so much more. Read below for insights from Fearless COO Joe Paiva.
GovCon Wire: Joe, tell me about your background and why you came to Fearless.
Joe Paiva: I enlisted at 17 and earned my engineering degree while serving in the Navy. After nine years of active duty, I joined one of the Big 6 accounting firms thinking (rightly or wrongly) that I had developed decent engineering skills but needed to learn a lot more about business and finance. While I was at KPMG, I was lucky enough to get offered a job as CIO of a software company and get an equity stake in the company, which went public via a reverse merger.
From there, I lived in the world of software. I worked as EVP and COO of smaller, independent software vendors and served as CIO of larger companies. I was called back into service in 2003 and then served simultaneously as an Army reserve officer and senior civilian in the Pentagon during the second Bush administration. I continued serving as a senior executive in both Obama administrations at the Departments of Veterans Affairs and Commerce before returning to the commercial world.
Working for decades in the military, private industry and government taught me one big lesson: Solving many of our most critical national issues is not a matter of resources, technology or government competency.
The reality is, we have plenty of both technology and resources, and thousands of extremely competent and dedicated career civil servants and political appointees accomplishing incredibly great things on behalf of the American people everyday. However, the sad reality is that the real blocker, in many cases, is simply people’s perceived lack of alignment between personal economic interests and the common good.
So, I decided that when I returned to private industry, I was going to focus my time and energy on proving out business models and approaches that demonstrate how doing the right thing can be more profitable than other options. For me, it’s about creating an environment where good ideas can really take root and flourish. That’s been my driving focus ever since.
I spent time at HireVue and what made it such an awesome company was that we weren’t talking about diversity for diversity’s sake. Our software made hiring more efficient and less biased, and companies bought the software to save money and find the best talent. The quality and diversity of their workforce improved and, as a result, profits increased at companies that used our software.
That basic alignment of economics and the public good is the model we need more of.
The IT and software development industry has a terrible track record when it comes to diversity. So one of the things that drew me to Fearless is that the founder created this hugely diverse organization. It’s been recognized as one of the most diverse software developers in the region, and I’d argue it’s potentially one of the most diverse in the world. As of August 2024, our team of 250+ people is 47 percent Black, Indigenous and people of color, and over 45 percent of the team is female. Fearless is a proven instance of diversity delivering better results for both customers and shareholders in the IT space, and I want to make it a model for the rest of the industry.
With AI and the shift to a data-driven world, diversity matters even more. Companies like Fearless can be more profitable and deliver notably, objectively, measurably better products than monolithic software development teams. This is a great opportunity to get out in front of the world and show where we can align financial incentives. And to show there’s a good economic model for unleashing untapped potential, especially within the IT industry.
That’s what makes Fearless so exciting to me. We’re tapping into resources others haven’t, creating better products more profitably and efficiently. Who wouldn’t want to be a part of that?
GCW: What are your goals in your new role? How do these goals align with Fearless’ goal of improving 100 million lives, being in 10 countries and reaching $1 billion in revenue by 2030?
Paiva: I have very immediate goals to expand the company. I believe we’ll hit $1 billion and impact 100 million lives before our 2030 goal.
When I look at impact, I see three kinds:
- People we impact directly by providing job training, jobs and support to entrepreneurs,
- People we impact indirectly through our products, and
- Tertiary recipients of that impact.
At Fearless, we have our for-profit and our not-for-profit arms. The not-for-profit arm empowers individual job seekers and entrepreneurs from underserved communities, giving them the tools they need to join our nation’s IT workforce as either individual contributors or employers.
The IT industry is the greatest wealth generation engine of our lifetime. We are creating opportunities for the coal miner’s daughter from Appalachia, the farmer’s kid from Iowa and the inner city kid from Baltimore to join this IT revolution. By building this incredibly diverse company, we are giving them the opportunity to participate fully in this new technology based economy. The direct impact on our nation is that we will hire 1,000 people who otherwise might have been overlooked by the job market.
The secondary impact comes from giving people the opportunities, training and tools they need to build successful careers. This will allow them to create intergenerational wealth and then create opportunities for others. The employees’ children and grandchildren are the tertiary impact. We’re talking about livelihoods, intergenerational wealth and opportunities for good schools, healthcare and education.
There’s a cycle of goodness that enables economic empowerment, and it starts with getting people who have been left behind involved in this second digital revolution.
GCW: Can you talk about your partnership with Fearless’ new executive chair Jacob Hsu? What do you hope to accomplish together?
Paiva: Jake and I were both semi-retired. We had successful exits from other companies and we actually created a private equity firm together. The basis of our firm was to give support and resources to entrepreneurs from underrepresented backgrounds.
We found that 96 percent of 8(a) small businesses no longer existed within 24 months of graduation from the program. It is very hard for founders and their businesses to succeed when they come out of the 8a program. We set up the private equity firm as a social impact fund thinking that the reason these companies failed was because they lacked access to capital. And it turns out that’s true, but there’s more to it than that. We realized that what these companies needed was more than just money. They needed in-house expertise.
In Fearless, we found this very special business. They’d made it past that $40 million mark, graduating from the 8(a) program to become a $100 million company. When we met Fearless they were on the verge of something really big, but they needed more than just capital. They needed access to the types of people who could help them overcome the systemic problems I’ve seen within the small business set aside program.
To address the systemic issues we’ve seen, we’re implementing an innovative roll-up strategy at Fearless. We’re targeting promising diverse-owned businesses, particularly those graduating from the 8(a) program. Through our Hutch incubator, we’re cultivating relationships with these companies, gaining deep insights into their operations and potential.
What sets our approach apart is that we’re not just writing checks. We’re offering a comprehensive support system that addresses the real challenges these companies face. They get access to Fearless’ back-office operations, shared services and strategic guidance on navigating the post-small business landscape. This allows them to maintain their unique identity and small business status while benefiting from big-company infrastructure.
By integrating these businesses into Fearless, we’re not only expanding our own capabilities and market share, but we’re also creating a sustainable growth path for diverse-owned businesses in federal contracting.
GCW: Looking toward Fearless’ future, what can you tell me about the company’s M&A outlook? What can we expect to see from Fearless from an M&A perspective?
Paiva: We’re actively looking to grow through strategic acquisitions. Our focus is on companies that are not only successful in their field but also align with our culture and values. At Fearless, we’ve built something special.
When we consider potential acquisitions, we’re looking for partners who share our commitment to diversity and community impact. Jake and I have been in this business a long time, and while we certainly look at all the usual financial metrics, we’re also deeply interested in how these companies engage with underserved communities. We want to preserve and amplify that positive impact.
Our vision is to build a network of companies that taps into the incredible, often overlooked potential in underserved markets. We’re not just acquiring businesses; we’re investing in communities and expanding opportunities.
We were primarily a custom software application development company strong in agile, human-centered design and traditional data engineering. So, our first order of business was to expand our capabilities in both cybersecurity and artificial intelligence/machine learning. So in addition to investing in internal capacity building, we acquired part of a leading AI firm and are in talks to add to our cyber security capabilities.
We are now looking for additional acquisition targets with $30 million to $100 million in revenue that both share our values and diversify our tech stacks and customer base. I believe we are one of the best bespoke app development companies in the world, we currently do very little commercial-off-the-shelf implementation work. So, we’re constantly looking for companies that do Salesforce, Service Now or ERP implementation. And even though Fearless started in the intel community and does extensive work with the Air Force, we want to expand our footprint into the Department of the Army and Navy.
GCW: Let’s talk about AI. Do you think AI will ultimately close the digital divide or make it even wider? Why?
Paiva: The first digital divide happened in the 80s and 90s with the internet. Kids who grew up in working class neighborhoods like the one I grew up in 20 years earlier, frequently didn’t have access to computers and broadband internet. As a result, they entered the workforce at a greater disadvantage than some of their peers.
AI/ML has the potential to be much more insidious than the internet ever was. AI-enabled systems are already starting to determine how much your home is worth or whether or not your grocery store is going to carry fresh vegetables. They will determine who gets access to healthy foods and critical healthcare, and eventually will likely drive where the government spends money and how. Governments, nonprofits and private industry will use these correlation-based (not causal-based) predictive models to make decisions about where to focus resources to create the best benefit.
Every AI/ML model is taught based on data. If the people making those models and doing that work don’t come from a diverse background, the data is much more likely to be skewed. Monocultural groups lack the different perspectives and life experiences you need to ensure data is not driving bias into predictions.
Without the right people at the table, we’ll teach AI the wrong things.
What’s particularly concerning to me is that most of these AI and ML models are trained on historical datasets that reflect centuries of systemic bias and discrimination. All these inequities are baked into the data that AI applications use to ‘learn’ how to make predictions. Without intentional effort to identify and mitigate these biases, AI will continue to amplify past inequities and erect new barriers to opportunity for underrepresented groups. And because of the digital divide that began in the 90s, underserved communities and people of color have faced significant barriers to developing digital skills and participating in the tech economy. As a result, these groups are less likely to be developing and implementing the AI tools that are threatening to further divide us.
However, I don’t think this outcome is inevitable. AI also has the potential to be a powerful tool for identifying and addressing bias. We’re seeing promising examples in healthcare and criminal justice where AI is being used to surface disparities and inform more equitable decision-making. Fearless, via both our nonprofit Fearless Institute and digital services integrator, is publishing white papers and conducting free seminars for senior executives and policymakers. Fearless is already a leader in this space and we are going to do everything in our power to make AI a technology that empowers all Americans.
