Value Added: This Herndon search company found its perfect retreat in Costa Rica


Search Technologies President & CEO Kamran Khan inside his office in Herndon, Va. on Wednesday, December 12, 2012. (Tracy A. Woodward/The Washington Post)
Reporter

I don’t get corporate retreats.

First of all, I have never been invited to one. The only “retreating” I do is when I am on the wrong end of an argument.

Thomas Heath is a local business reporter and columnist, writing about entrepreneurs and various companies big and small in the Washington Metropolitan area. Previously, he wrote about the business of sports for The Post’s sports section for most of a decade. View Archive

Anyway, I am not convinced that retreats, off-sites or whatever you want to call them (junkets?) are an efficient use of company resources. Do you really need to pack everyone into business class and fly them 1,000 miles to some beach so they can ride a zip line and team-build?

Kamran Khan, 49, co-founder and chief executive of Herndon-based Search Technologies, says corporate retreats are crucial to the success of his growing business, which employs about 100 people between here, Britain and Costa Rica — the latter of which is where everyone at his company gathered for several days in September.

“People ask if it’s a waste of money,” said Khan, who spent more than $100,000 of the company’s money to fly employees (economy class) and investors in from Europe and the United States. “I would say it’s one of the most valuable investments we make.”

“Oh, really?” I said to Khan, over a glass of Burgundy at London’s Connaught Hotel last month, where he was on business and I was on a “Tom Heath retreat” — which means I was vacationing with my wife.

Khan, who started Search Technologies in 2005, said it’s the only time when everyone in the company — including the management team — can be in one place. Khan uses the chance to address his 100-person staff, informing them of how the company is doing and outlining the goals for the next year.

“I prefer to get people together and . . . clarify our strategy, which is very simple: We are going to be experts in the search space.”

Besides, a little time away can be a draw for new recruits as the software services company battles for the best and brightest engineers coming out of college.

The retreats migrated to Costa Rica from their beginnings a few years ago in a D.C. hotel and then at the Hyatt hotel near Dulles Airport.

Why Costa Rica?

Amazon.com, IBM, Hewlett-Packard, Intel and Procter & Gamble all have a significant presence in Costa Rica, where the highly educated workforce is less expensive than in the United States.

Costa Rica has three state-run technical universities and a handful of private ones, all focused on technology.

The country is also conveniently located in the Central time zone, a few hours away by jet.

Search Technologies has about 35 people in Costa Rica, where they perform research and development on supercharged search systems built around Microsoft and Google software.

Khan grew up in Manchester, England, where he studied aeronautical engineering. He graduated from Manchester University in 1984 and got a job with a software company, which paid more than the aerospace industry.

For the next nine years, he helped market computer software to customers. His speciality was sales and marketing, showing auto manufacturers and aerospace companies how they could use computers to increase their profits.

Over the years he has bounced around Britain and France, and worked for a search software company called Excalibur Technologies. Excalibur was largely owned by Allen & Co., the boutique investment bank based on Fifth Avenue in New York City.

While at Excalibur, he noticed that the government and corporate clients he came across were dissatisfied with existing search products. He concluded that there was a business in helping customers amp up the ability to search massive amounts of documents.

He launched his company in 2005. Khan put up half of the $60,000 in seed money, and he still owns around 40 percent of Search Technologies. He has three co-investors, including two on his management team. Closely held Search Technologies has no debt and has not taken any venture capital money, although Khan does not rule that out at some point.

Khan and his co-founder worked out of their homes for a few months, then found some office space in Herndon. Of the firm’s 100 or so employees, 35 are in Costa Rica, 35 in Herndon, and the rest are spread around Britain and North America, and even one in Germany.

So what do the people at Search Technologies do?

They don’t write search-engine software, but they do write software that helps search engines work better. And they coach clients on how to use it efficiently.

Want to find out who has the patent on the latest cellphone technology? Search Technologies can plug you into 90 million patents from 95 agencies around the world.

“You want to find out basic details on the Affordable Health Care Act?” Khan said. “You want to find out how this particular congressman voted on this issue? We are giving you access not just to how your congressman voted, but what he voted on and the detailed documents beneath it.”

Other big clients include the Daily Mail newspaper’s Web site in Britain, where Search Technologies helps screen millions of resumes for jobhunters. It also helped Amazon.com launch its new cloud search product.

Search Technologies makes money. Revenue for the year ended in June was $15 million, and Khan said he is on track for $18 million this fiscal year. The company’s net profit margin is about 5 percent.

Khan said competition everywhere, including Costa Rica, is fierce for top software engineers.

“It’s tough to find people,” he said. “The 8.9 percent unemployment in the U.S. is not in software engineers.”

Khan’s recruiters scour LinkedIn, Monster.com and other online resources for candidates. Salaries in the United States and Britain start at about $80,000 a year. Employees receive health and life insurance, tuition reimbursement, and a 401(k) match.

“My philosophy is hire good people,” said Khan, who plans to hire 20 new employees by June.

And the pitch includes, of course, the beach party at next year’s corporate retreat in Costa Rica.

For previous Value Added columns, go to washingtonpost.com/
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