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Students vs Startups Ep 36: How a Startup on Steroids Can Lead With Innovation

Students vs Startups Ep 36: How a Startup on Steroids Can Lead With Innovation


Featuring The Ratio Group

Read Time: 15 minutes

Welcome to Episode 36 of Students vs. Startups. This week, moderator John Gilroy chats with a Partner at The Ratio Group, Jim Benson. Jim's career has spanned every facet of the business world, and he's used that experience to help create what John came to call a "boutique innovation hub."  Listen below to find out what he means!

[audio src="https://easternfoundry.files.wordpress.com/2017/08/students_vs_startups_podcast_episode_36-final.mp3"][/audio]

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John Gilroy: Welcome to Students Versus Startups, showdown of Potomac. My name is John Gilroy, I'll be your moderator today. Let's have a big round of applause for show number 36. We survived. Haven't gotten arrested, you know, or maybe not until today.

We are sitting at the offices of the Eastern Foundry, this is a community of startups here in Rosslyn, Virginia, and what we do is we grab a room, we have a table, we have a startup on one side of the table, we have three students on the other and we have a little 26 minute conversation, everyone walks out of here friends. Sounds like fun?

Christen Hill: Sounds great.

John Gilroy: What I'm going to do is introduce the students and then our startup today. Our first student is Christen Hill and she just finished her master’s degree in Journalism from Georgetown University. Christen, tell us about your background please.

Christen Hill: So, I am a journalist, I've worked in television, I've worked in radio and now I do a lot of writing. A lot of what I do, generally, reports in Southeast Washington DC, I spend a lot of time talking to the people out there, learning more about it, which is very interesting because the mayor said that she wanted Southeast DC to be the new tech capital of the East coast.

IMG_1970 Christen Hill

John Gilroy: Wow.

Christen Hill: So, it may be a good idea for me to be meeting these entrepreneurs so I can report.

John Gilroy: Our next student is Wil Patterson. He's finished his degree in Systems Engineering from Georgetown University.

Wil Patterson: That's correct.

John Gilroy: Tell us about your background and where you work, Wil.

Wil Patterson: Finished up in May with that Systems Engineering background, so I'm employing that in the federal government, also a military reservist, and my hardest job that I have is that I'm a father of four.

John Gilroy: Yeah, that's grueling. That's the toughest one. And Jennifer Lee is our third student. She is in the middle of a Technology Management Master’s degree and no four children for you, huh?

Jennifer Lee: No. Luckily. So my name is Jennifer Lee, I work for Price Waterhouse Coopers as specifically in their public sector digital practice. My specialties are in agile service delivery and customer experience.

John Gilroy: Great, great, great, and our startup today is Jim Benson. He's a partner at a Screen Shot 2017-08-21 at 7.09.14 PM.pngcompany called The Ratio Group, and Jim Benson's got this everywhere in the world background and we tried to put together, we can't figure it out. He's got a military background, he's worked for big companies, he's worked for small companies, he's worked for small companies that have bought other companies, he's had big fish eat little fish, and now I guess he's a little fish now, he's working for a startup now, so he's just a little fish but tell us about your background please, Jim.

Jim Benson: Yeah, thanks John and thanks for having me on the show again. I appreciate it. Yeah, so, very long history as everybody would imagine, just given my age. Been around a while. Spent many years, major systems integrators, commercial markets, federal markets, grew up system engineering and probably about a year ago, myself and a number of other partners got a little bit frustrated with the existing system and decided to go out and create Ratio, and so what Ratio is kind of a unique blend of people, companies, investors and resources that we kind of come together around, around core customer problems and opportunities in the market, so, for instance, we may have customers that come to us that really need to innovate and solve a hard problem within their organization, some just can't do it so they need help with it. At the same time, we may work with entrepreneurs and innovators to be able to look at those products, technologies, whether they're new or existing, and be able to invest in them to help take them to market faster.


IMG_1963 Jim Benson, Partner- Ratio Group


John Gilroy: So, Jim, your LinkedIn profile says your three strengths are IT strategy, enterprise architecture, and cloud computing

Jim Benson: Yep.

John Gilroy: Enterprise architecture and cloud computing, so that's a pretty good background for that. So what business problem does your company solve?

Jim Benson: The business problem that we solve is really helping other companies solve their problems. Essentially that's what it is, and what I mean by that is companies are competing very diligently and very hard in the market, yet there are sometimes some constraints around within their companies, or they don't understand what new technologies can be sourced, can be discovered, outside of their ecosystem, so they come to us with a problem. We then help them think through how to potentially solve that, what technologies that are out there, do you need investment, do you need funding and do you need a team to be able to kind of crank this up and take it through? Some you do it internally, other companies actually ask us to go create a new company that does that specifically for them.

John Gilroy: Wil, you want to jump in here?

Wil Patterson: So it sounds like you guys are a really people orientated company. Can you tell me a little bit about what kind of people work for your company, what size company you are and what type of people you're looking for to help with these company innovation problems?


IMG_1969 Wil Patterson


Jim Benson: Yeah, so just ... Good question, but just the name Ratio itself, which is one of the reasons why we picked that, is a blend, right? You know, you've got gin and tonic, you've got rock'n'roll, you've got all these different ingredients, right?

John Gilroy: Maybe you have gin and tonic.

Jim Benson: That come together into something really incredible, so the type of people that we have, we have an office out in Palo Alto, out of an office we have three partners. Two of those partners are Stanford PhDs, who run Stanford's Entrepreneur and Innovation Program. Another partner we have that's down in Southern California, right outside Newport Beach, recently retired and ran the Booz Allen's venture business.

We have other partners, for instance, and I can't go into the companies that they were in but big name companies that you know, that ran, for instance, their CRM, that ran their marketing, that ran their talent development. We have partners across the west coast, some foundry partners, so that we can actually take startups and put them into an environment where they can succeed, and we have other ones where we have companies that really need to source executive talent because they have no idea how to grow and the types of people and resources that we can move.

Christen Hill: So it sounds like you staged a coup. No, honestly, I wanted to know why people who are already successful would want to start a company from the ground up?

John Gilroy: Yeah, great question.

Jim Benson: I think it's ... When you get to, and everybody here, probably, with the exception of John, is younger than me, no offense, John, but I think you get to a point in your career where there are bigger rewards than simply just making a lot of money. Those rewards are being able to help people. Help people and being able to help them see the potential of what those technologies and what those products can actually do. The market is somewhat broken these days, especially from a venture perspective. The majority of the venture models are simply just let's take a portfolio, let's invest in a hundred technologies or a hundred different companies, let's hope that one hits it big, and that's the way, typically, certainly on the Palo Alto Silicon Valley side, work. We're kind of rethinking that model.

"You talked about venture earlier, we're rethinking that model to a point that it isn't as important to make a lot of money on one, it's more important to be able to have a really balanced portfolio of investments and when you do that, you meet great people and they have great passions." - Jim Benson


John Gilroy: You know, Jennifer, a lot of things he's saying is reminiscent of what your company does, too. I mean, is he competing with you?

Jennifer Lee: And I was actually going to ask, you know, it sounds like you guys have a wide variety of talent, so when you guys first started out, did you have a specific segment that you were going after, from a customer's perspective?


IMG_1974 Jennifer Lee


Jim Benson: We do. We've got kind of three ... Well, really two major verticals that we're focused on. One is energy and the other's infrastructure, and when I say infrastructure, I mean big infrastructure. That's kind of from a vertical perspective. From a horizontal, we're very focused in sensors, in mobility and, obviously, the cloud, so it's those kind of intersections where we go after customers, where customers come to us, we're able to kind of capitalize upon all of those and really create kind of a niche area for Ratio. We can come back to the competition, though, but sometimes we are compared to venture businesses within the Booz Allen, the venture businesses, within Deloitte, PwC and other.

We've got a different perspective. Look, there's enough innovation and entrepreneurship out there. It's not that anybody, any one person's going to capitalize and control the market. It's like in your town, there's not just one Italian restaurant. You go to many different restaurants, and there's ... And the big companies do things very well. They also do things, sometimes, slow, and it takes a long time and when you think about some of these technologies and how fast they need to get to the market, sometimes you have to take more risk.

John Gilroy: So, Will, is this applying Silicon Valley to Washington DC?

Wil Patterson: I don't know. Could be. So, I think you talked about meeting passionate people and tell me a really good day at the Ratio Group, where, you know, you're really moving Silicon Valley into the DC area.

Jim Benson: So, part of my role is, on the east coast, is very federal focused. That's where I grew up, that's my career. I haven't spent years and years out working with venture capitalists out in Silicon Valley, however we have partners for that side of the business that do that. What I do best is to be able to help government clients solve problems and part of that, on a good day, is a government customer will come to me and say, "Look, we have ..." And we have a few of these. "We have a challenge and we can't find any technologies that are out there and we need them pretty quick, so can you look within your network of new technologies, new companies and emerging companies to see what's available, to see if we can get this problem solved fast." Another way that folks are using is, in a good day, is as opposed to going through the traditional procurement cycle that starts with an RFI, that goes to an RFP, where you're looking, you're risking protests, and we're going through a couple of these now, it's a 12 to 18 month process before you can go from, "I've got a problem and I've got a challenge." To a point of I actually have fielded something that demonstrates and is working for the mission.


IMG_1967 Jim Benson, Patner- The Ratio Group


We're looking to shorten that completely. What we want to be able to do is get ahead of the RFI cycle to be able to bring innovation to the federal customers, so that we can start to ... They can start to think through what their options and what their opportunities are. Many of these folks have existing contractors already, and they're just not bringing ... No offense to them, because some just don't do that, they're just not bringing the innovations fast enough.

John Gilroy: Christen, yeah?

Christen Hill: I love the way that it's kind of like a give and take.

Jim Benson: Yeah.

Christen Hill: It sounds like Ratio's very give and take. It sounds like, also, that your intent is very altruistic, you know, you're really in it for the success of a person, a company, whoever you're working for, in that, what if you come across a company that might not be able to pay you what you're worth, but you really see the value in their company? Would you invest in a company like that?

Jim Benson: Sure. So we have lots of models. We're actually investing in a sensor company right now in return for equity, a small piece of equity, for like kind services. We will work with them because we saw so much value in what they have. We recognize and we're helping them kind of source series A funding but that doesn't stop us from seeing the market opportunity for what they have and then being able to start to help them go to market, and the discussion I had earlier around the sensors is a good example of that. They're located in San Francisco. They don't understand the federal market and how to get their new technologies into that.

"We do, so there's a value there to be able to help them create excitement, momentum, go to market through other federal channels, like contractors, system integrators and such, whereas they would never have had that before. That's worth an investment of our time."- Jim Benson

John Gilroy: Jennifer, please.

Jim Benson: Yeah.

Jennifer Lee: Yeah, that's very interesting and I'm just curious, you know, when you guys first started out, how did you get your name out there? I mean, it sounds like you have a pool of very successful partners. Did you start with your existing network?

Jim Benson: Yeah. So, you're right. All of us have 500 to a thousand different relationships. We've all spent 20/30 years in the government, helping them and then just think about the network that two of our partners have at Stanford, and so getting our name out there to folks, we had to be careful because the challenge we had, and you can still see it on our website, is there's so much we want to do but how do you narrow that down into a 10 second elevator pitch, so that you don't lose focus? And so spending time and really thinking about what and testing it with customers is really, really important. After that, and especially for new startups, there are so many different tools that are out there today, whether you have a product or a platform, there's marketing automation, there's lead generation, there are so many services that can enable that these days, as compared to 10 years ago. And I can work with you guys, I can give you my recommendations and examples we had to go. The prior company that I led was a products company, a SaaS company, so we had to do that. We had to figure out how to get the name and everything else out there.

John Gilroy: Christen has a follow up question but I just want to jump in here and say that Stanford, this is a Georgetown wannabe. You know, they're not very smart out there.

Christen Hill: Okay, so you said that your company was about a year old, is that right?

Jim Benson: Yep. Yep.

Christen Hill: Okay, great, but within your company, you have lots of experience.

Jim Benson: We do. We do.

Christen Hill: There's sort of this dichotomy of so much experience in a young company, what kind of challenges have you faced working with this kind of ... I don't want to say ... This conglomerate of people you've put together and then you, yourself, are learning how to, you know, so you can do the same things that you're teaching the people that you're ...

Jim Benson: So, I can't wait for my partners to hear this.

John Gilroy: We'll make sure they listen to this podcast.

Jim Benson: I think a big challenge that we have is one, being able to bring diverse backgrounds into a common agenda. That's kind of one. Second is given the seniority of these folks, everybody's type A, and then trying to reach consensus in a partner model is very challenging with type A folks, because everybody loves to create, so those were some of those. Cashflow was a, and is a, challenge. You know, starting a new company without going after and getting angels and VCs and being able to ruin your cap table. I'm sure you guys have learned about that, so making sure you have a sustainable cashflow. Invoicing, you know, all of those kind of things that you can source these days but when you start up, you've got to have them and you've got to have your processes in place so that you can run your business effectively.


IMG_1971 Christen Hill, Wil Patterson, Jennifer Lee


John Gilroy: Now, Wil, this doesn't sound like you're running a startup, it sounds like a startup on steroids or something, doesn't it? I mean, it's ...

Wil Patterson: Yeah. They've got some big talent and some big people around the table to tackle a really big government problem, so with the new CEO/President, how do you see your company being shaped in the future and kind of the way that government says that they're going to change and embrace the technologies and different things like that? Is that a market opportunity?

Jim Benson: It's a good question and I think part of it is still playing out a little bit around, you know, the new CEO, so to speak. I think, though, what is interesting and what aligns to Ratio very well is the urgency to be able to create and grow, and we spend a lot of time helping the Department of Energy accelerate commercialization of their new technologies and the new things that they're investing in. I think that aligns very well to that political agenda around driving new companies, new growth, as opposed to navigating and waiting in the bureaucracy. So we're looking at government R&D organizations, and we're trying to then say, "All right, given that and the networks we have, how can we help you accelerate these new ideas and technology to the market?" Because that's what their role is. Their role isn't to be able to create a brand new startup, you know, the Department of Energy. Their role is to stimulate economic growth and how you can do that is driving new technologies into new people's hands that create new companies and you help them succeed.

John Gilroy: Now, Jennifer, looks like he's got trust already established, he's walking in the door with a boat load of trust, doesn't it sound like that to you?

Jennifer Lee: Yeah, and I was going to ask, I mean, it sounds like you guys are very, clearly very passionate about what you do, there's a clear vision in terms of the business challenge that the company's trying to solve, kind of ... To its existence to date, how do you feel the company has performed and also where do you guys see yourself in five years?

Jim Benson: Yeah, the challenge we have right now is scale, because you've got ... We have four partners in the business and then we have six associate partners that kind of work around us, and there's only so much time in the day to be able to do things and when we go to talk to big name customers, they typically want big name talent to be able to deliver on top of that, but there's only so much you can do, so then it becomes a model of how do you create these frameworks and repetitive programs that you can then mentor and grow junior people underneath you, so that is one of the major goals that we have for this year.

I think where we see ourselves in five years, I think we want to rethink the venture market. We want to have a portfolio of probably a dozen different companies that we are focusing specifically on, as opposed ... You know, we want quality, we don't want quantity. We're not going to be a thousand person system integrator company. We want to maintain the brand of what Ratio is and the uniqueness of those people coming together.

John Gilroy: So, Chris, that sounds like a boutique innovation hub or something?

Christen Hill: It sounds great. Oh my goodness. I think that I love what you just said, growing junior people underneath you. I think that's really valuable in the tech world. Do you feel that that's necessary at this point?

Jim Benson: Yes. We feel that ... So, I think everybody knows, and they learn, starting a new company isn't easy and it takes a lot of time and you can't just go to bed and then hopefully that somebody else does it. It's got to get done, so there are things that we have committed to, there are relationships that we have cemented with customers and innovators, that we have to deliver on, so it is a priority for us to be able to source talent. I think we're ... What we're learning is that given the 30/40 years of experience, we can't expect people to have the same level of talent that our partners do, so what we're doing is trying to structure and segment areas where people can really own and then they can come together on behalf of us to be able to deliver for customers. I mean, PwC and others, we know how to do this, having grown up in Booz Allen, we know how to do it, but it's easier said than done.

John Gilroy: So, Wil, you work for a large federal agency. Does this resonate with you at all or does this sound crazy?

Wil Patterson: No, I mean, I definitely think that being able to actualize the technology that's available is the dream. That's the gold standard, but do you think you can accomplish it and if so, how do you think you're going to get there?

Jim Benson: So, yeah, we think we can accomplish it. I don't think we're going to be everything to everybody. I think there are going to be, like we talked about, core areas, such as energy and infrastructure, that we're going to really double down in, but what we are doing now is building a marketplace for Ratio, because there are serial entrepreneurs, innovators, that want to be part of this system. Then you have, and that's kind of the supply side, where they have the technologies, the ideas, and their building stuff out of their garage. So that's kind of one side of it, then the demand side is all the customers, system integrators, others, that want to use that technology and so that's a core key piece for us, is to be able to build that and when that happens, then I think we'll start to get what we're talking about.

John Gilroy: Good job, students, and good job, Jim. If someone wants more information on your company, where should they go?

Jim Benson: Go to ratioim.com. R-A-T-I-O-I-M.com.

John Gilroy: We're running out of time here. If you would like to see show notes, links and a transcript, you can visit theoakmontgroupllc.com.

I'd like to thank our sponsor, the Radiant Group. If you are interested in getting involved in geospatial projects, contact The Radiant Group.

We are hosted by Eastern Foundry, it's a community of government contractors who are bringing innovative solutions to the government marketplace. For more information, go to eastern-foundry.com.

If you would like to participate as a student or a startup, contact me, johngilroy@theoakmontgroupllc.com and thanks for listening