Interviews at The Entrepreneur Center @NVTC
An Interview with Richard "Hollis" Helms, Founder and CEO, Abraxas Corp.
November 7, 2005
Not to be confused with the other Richard Helms (who headed the CIA under Nixon), “Hollis” Helms was with the CIA for nearly 30 years until October 1999, including 12 years overseas in several postings in the Mideast and South Asia. He was also one of the original assignees to its Counter Terrorism Center in the mid-1980s. He started Abraxas Corp. four years ago. Headquartered in McLean, it now has 225 employees. Helms has a BA and MA (in national security policy) from American University.
Bisnow on Business: This is some retirement – you left the government and became an entrepreneur. How did you get into this business?
After retirement I worked for a small company for a year before it was sold to a very large firm. Six of my coworkers at the time sat around my kitchen table discussing whether we should or could start something on our own. One of them brought a spreadsheet, something new to me at the time, which showed reasons for not going into business, the cost of doing business, and how cash flow needs were excessive. Everyone immediately pushed back from the table but me, and declined to go forward. I went forward with a $5,000 investment. Then after 9/11, my former colleagues were being called in by big defense contractors to help defend the country. Most contractors did not understand the uniqueness of the problems, nor the potential these people represented. So I seized the moment, because I could identify extraordinary people who were available and was able to offer them what the big companies could not: ownership. From that kernel we have developed a number of technology solutions for the security and defense problems of today.
So what does Abraxas do exactly?
We have the largest aggregate of analytical counter-terrorism capabilities, outside of the U.S. Government, and are foremost among competitors in intelligence experience. We offer data collection and analytical skills, fraud investigation and containment, domestic and international due diligence, competitive market intelligence, new market entry, with an emphasis on China, political, economic and security assessment, behavioral analysis and deception detection services. We give clients a competitive advantage by providing them with better information, enabling them to make stronger and more informed decisions. With offices in both the U.S. and China, we can serve clients effectively and efficiently across the globe.
Who would use you for what?
The vast majority of our clients are big or small companies dealing with different cultures where they don’t have skills in-house to understand overseas risks. They may have a lot at stake dealing with a foreign company, for example, that’s investing in them or manufacturing something for them, and they want to have a Plan B in case that company has labor or governmental difficulties. We advise them. At one point, we calculated that our employees have over 3,000 years of experience in foreign intelligence.
the deliverable? A thick black briefing book?
We have done that kind of advice and due diligence for clients, but sometimes it’s as simple as, “Can you participate in this meeting with us, could you bring in one of your experts for the Q & A?”
Choosing to put your own money
up first is a risk. How did you determine that was the right course
of action versus seeking outside
No one in his or her right mind would give you money without you already having something at risk. You need to determine - fairly accurately - what it takes to get started and reach profitability. I think the more money you have to start a business, the more money you will spend and the less efficient you will be, and having more money may delay profitability. I say start with using your own money and plan on using as little as possible. While there are people who will invest, if you do not have an investment yourself, you are taking on partners, which means time away from managing and developing your business. The more you spend getting it going, the longer it will take to be profitable.
So you don’t believe that early money is like yeast?
Not in my experience. The ability to execute the plan is the most important aspect of a successful startup. If you cannot execute the idea, it is useless. The Wrights could not execute much beyond their first flights - other aeronauts accomplished much more. Curtiss Aircraft, the company started by Glenn Curtiss, eventually purchased the Wrights’ company and the new company became known as the Curtiss-Wright Aircraft Company, not the Wright-Curtiss Aircraft Company. Even though the Wrights bitterly used patent lawsuits against Curtiss, he flew rings around them as an inventor and an entrepreneur. Curtiss was building motorcycles when the Wrights first flew. He, in my view, was one of the real entrepreneurs in American aviation.
You really draw from the early entrepreneurial
spirit of aviation.
There was an incredible amount of entrepreneurship involved among the early developers of powered, fixed winged aircraft. The Wright brothers were the first, but they ran out to file their patents to protect their work and reap their rewards. It is remarkable where they were not able to take their invention. While they used every piece of information they could lay their hands on to systematically solve the problem of the first flight, they gave little thought beyond the event and their patents. Meanwhile, an explosion of development work took place in Europe where U.S. patents were not feared and a free exchange of information was taking place. There were numerous inventions that resulted in flight safer than in a Wright airplane.
have a product with an intriguing name: TrapWire. What is it?
It’s a proprietary technology designed to protect critical national infrastructure from a terrorist attack by detecting the pre-attack activities of the terrorist and enabling law enforcement to investigate and engage the terrorist long before an attack is executed. The beauty of it is that we can protect an infinite number of facilities just as efficiently as we can one and we push information out to local law authorities automatically.
Is TrapWire a service
or a product, or what does it look like exactly?
It’s a software application we’ve developed over the last two years. It runs on a server and is used across whole industries. For example, the nuclear industry has 104 civilian owned and operated nuclear power plants, and yet they don’t collect or share pre-attack information. TrapWire can help do that without infringing anyone’s civil liberties. It can collect information about people and vehicles that is more accurate than facial recognition, draw patterns, and do threat assessments of areas that may be under observation from terrorists. The application can do things like “type” individuals so if people say “medium build,” you know exactly what that means from that observer.
You were the only employee at the beginning, and now you've grown
to over 200. How's that affected your role?
In the beginning, I did everything because it was just me. Doing proposals, accounting, business development, hiring, and human resource jobs are some of the things I did. I now focus on CEO functions of taking the company forward. I am challenged to learn a new, more focused role for the company and am involved in the planning and execution of all new initiatives. This includes the initiation of a summer intern program for analysts and operations personnel who are currently in, or are finishing, graduate school. I am also directing research into a new line of simulation business. I am one of several people in our company looking at opening new offices in southern Virginia and in Florida.
What do you think of advisory boards?
I think they are an invaluable way in which companies can access the talent and insight of revered professionals across a range of industry perspectives. We created an Advisory Board in 2004, and are delighted with the participation of retired Air Force Gen. John Gordon, former Virginia Governor Jim Gilmore, President Robert M. Bryant of the National Insurance Crime Bureau, and others.
currently partnering with any companies?
In general we partner with a wide range of large and small defense contractors. One particularly interesting small company is called Sentia Group, which has developed a software application that combines cutting-edge advances in agent based modeling with the accumulation of subject matter expert knowledge. It draws on algorithms from game theory and spatial modeling to simulate the interactions between different individuals and stakeholders and can be implemented in a number of different political and social situations. We’re excited about its technology because we believe we can make it dramatically improve analytic outcomes.
Your career seems to have
been fast paced. Do you seek any extracurricular thrills?
Some might say my flying around the country in an airplane I built myself is gambling. I believe I reduced the risks - and increased the performance - by building a better airplane than any I could afford from a U.S. manufacturer.
A Lancair 360, built in my garage.
What does Abraxas mean?
It’s an ancient Greek word believed to be the source of the phrase “Abra-Kadabra.” But I prefer to think of it as one of the four horses that pulls the chariot of Helios, the sun god, around the heavens.
How’d you think of it?
To tell you the truth, I was having to fill out a Virginia state incorporation form, and I went into the living room and said, “Quick, give me a name—I don’t want to be one of these companies named after myself.” And my daughter was reading a book of mythology. Only later did I realize Abraxas was also the name of a hard rock band, and a Santana album. :)