Value Added: Building a business built on intelligence
By Thomas Heath,
I am sitting in a basement office in Rosslyn, staring at Google Earth satellite images on a giant flat-screen monitor as computer geeks show me how a SEAL team would take out a drug factory — which in this exercise happens to be my home in suburban Maryland.
So we pretend.
Several “Special Ops” teams surround the block, some gathering at staging areas around the corner to determine the best way to storm my center-hall Colonial and annihilate the no-goodniks inside.
“Don’t hurt my trees,” I tell the T-shirted geek next to me.
What’s going on here is a visit to Thermopylae Sciences and Technology, a 105-employee company that is the creation of A.J. Clark, 32, a burly, ponytailed motorcyclist who hardly fits my image of a guy who helped track bad guys for the Air Force.
The culture at Thermopylae’s Rosslyn offices, where 60 employees work, is as informal as its founder, who schedules his day in 10-to-30-minute increments so he doesn’t waste time in long meetings. It’s a world of T-shirts, long hair, feet up on the desk. The halls are decorated with plaques featuring people and their inspirational sayings, such as the one with Jody Williams, the Nobel Peace Prize-winning anti-land-mine crusader, that reads: “Success breeds success. People want to be involved with things that are successful.”
Thermopylae offers three big products to clients, which range from the federal government to the Cleveland Cavaliers.
The first helps clients such as the State Department track overseas employees on Google Earth, whether they’re at a cafe in Kabul or on a highway in Egypt.
The second is a mobile app that, for example, allows a spectator at the Las Vegas Motor Speedway to find directions to the nearest restroom.
The third product is a kind of search engine for the intelligence community.
Clark used his military experience and contacts to build a start-up that has $23.5 million in revenue. About $18 million comes from services for the government. Those operations have a relatively low profit margin, 7 percent. The rest of the revenue comes from software sales, which have a much higher profit margin.
The annual payroll is around $10.5 million, and after other expenses, ranging from rent and travel to new computers, the profit is around $2 million. Clark takes a low-six-figure salary.
Clark owns more than half the company, while a couple of unnamed investors own the rest.
Interesting back story
There’s a lot of start-ups like Thermopylae around Washington, but the interesting part of this story is Clark’s career path before going into business for himself, parts of which sound like something straight out of a Tom Clancy novel.
After joining the Air Force in 1998, Clark was assigned to a unit that reviewed satellite images. Intelligence gathered from the images was used to enforce a no-fly zone in southern Iraq. But the unit also helped direct forces to drug labs, terrorist safe houses and training camps in Afghanistan.
“That’s what I got to do for a living,” said the native of Dayton, Ohio. “If it was a training camp, we would say, okay, what building is bin Laden most probably going to be in? We analyzed images . . . people coming and going, trying to identify what targets to hit.”
After he left the Air Force in 2002, Clark went to Guantanamo Bay to work for a private contractor analyzing transcripts from detainee interrogations.
“My job was to take all of the intelligence out of the detainees in the camps and take advanced technology to process it and [find] where were the gaps in their stories.
“The interrogator walks out, gives me his report . . . and I enter it digitally and take different words and look for one detainee who says ‘I was with John at Kabul in January’ and another detainee who says ‘I was with John in Moscow in January.’ Well, John can’t be in both places.”
Clark can’t say much more about it, except that he thinks his analysis contributed to some successful anti-terrorist operations. But he was earning only $60,000 a year, and “I started to learn very quickly that I needed to change my career trajectory.”
He left Guantanamo in 2004 and moved to Miami, where he worked for a company that was acquired by professional services and technology giant Science Applications International, which is now based in McLean. He was running several highly classified programs for the military that included signal intelligence and overhead imagery that brought in around $100 million a year.
But Clark ached to start his own company, so he quit his $130,000-a-year job in June 2007 to launch Thermopylae.
He initially ran his company out of his Miami home using just a laptop computer. He quickly brought on his brother, who is a computer jock.
Clark invested hundreds of thousands of dollars of his own money into the company, much of which was saved from his years working overseas.
He incorporated the company in Delaware but located it in the Washington area to be near his military contacts, which soon paid off with a deal to build a prototype system for the State Department that allows analysts to track subjects’ movements.
The $30,000 contract was a hit, quickly growing to $1 million. Thermopylae took off from there.
Now, says Clark, “the objective of the company is to build ourselves to a point where we are around $50 [million] to $75 million in revenue and entrenched in our industry. At that point . . . I hope to start getting a return on my capital and sweat-equity investment without having to sell the company.”
I asked Clark about what he’s learned. Some answers:
●“One mistake was underestimating how hard it would be to start the company. If I had it to do over again, I would have spent a longer time planning the specifics.”
●“I would have brought on an advisory board earlier than I did. Having an advisory board is very effective, and some of the strategic guidance they provide could have added value earlier on in the company. We brought them on in our fourth year.”
●“I would have picked a banking partner that was more in tune with my business needs. I chose Citibank initially, and they didn’t have the desire to give a small business a line of credit like PNC did. We ended up moving everything to PNC when we went with them for our line of credit.”
By the way, my house is still standing.
For more Value Added columns, go to postbusiness.com.