Randy Richter, Chairman and Price to Win Director at Richter & Company, was a recent guest on episode 19 of Scribble Talk, a podcast that invites well-known industry veterans to share effective strategies for bidding on and capturing federal contracts. Richter was asked to talk about factors that had shaped the development of his Maryland-based small business that has helped its clients win more than $30 billion in new business since 2006.
Born in a self-described “blue-collar” Baltimore neighborhood, Richter told hosts Ashley Kayes and Baskar Sundaram that he originally planned on going to work at a Sparrows Point steel mill or at the Dundalk Marine Terminal. Instead, thanks to the early influence of his uncle, aka “Unc”, and the guidance of Scoutmaster Dave Hagen, Randy set his sights on something beyond the streets of East Baltimore. At the age of 11, he was working with “Unc” at a mobile home park, learning the basics of the building trades, the soft skills of salesmanship and negotiation, and a solid work ethic. Scoutmaster Hagen introduced him to lacrosse, a sport he parlayed into a full ride to Cornell University. This education, along with the guidance of these two mentors, changed Randy’s life and put him on the path to success in life, and eventually in business.
According to Richter, the company he founded in 2006 was a sole proprietorship with very modest goals. How then, asked co-hosts Kayes and Sundaram, was he able to build this enterprise into one of the best-known consulting firms on bidding strategy in the federal market space? Was Randy Richter a natural savant at proposal-writing out of the gate?
Absolutely not, he confessed. “In fact, the first proposal I was ever asked to write was a total failure,” he laughed. “I did everything wrong. I did no planning. I had no process. And I had no clue how important it was to learn who our customer was or what they cared about. I spent no time at all studying our competition to try to figure out what they might bring to the table. When it came time to present our bid, my team and I walked blithely into a buzz saw, carrying my sub-par proposal— and got crushed by another company who knew all the things we didn’t about our potential customer.”
Despite the immediate outcome, Richter says that experience was important in the long term because it opened his eyes to the importance of competitive intelligence.
“Failing so dramatically at my first foray into proposal-writing taught me one of the most important things a person can know about capturing a contract: it’s not about you and your company. It’s about them: your prospective client and your competition for their business. Collecting and analyzing information about those two entities, and then using that information to produce actionable intelligence, is the foundation for success in this business.”
Asked if Competitive Intelligence (CI) and Price to Win (PTW) work are the same, Richter said, “They are separate but integrally linked functions. You can’t do one without the other, but they are different. CI is the process of gathering and analyzing data on your competitors. PTW is using that data to build out the costing that your competitors are in a position to offer, and then designing a solution that beats that number while staying in line with your own business objectives and fulfilling your prospective customer’s goals.”
When asked about role models and influencers in his life, Richter again returned to “Unc” and Mr. Hagen, the two men who had given him the tools he needed to get the education that redirected this life. But when asked about “words of wisdom” that had guided his business philosophy, Richter called upon the chorus of the late, great Kenny Rogers’ The Gambler.
You’ve got to know when to hold ‘em
Know when to fold ‘em
Know when to walk away
And know when to run.
(The Gambler lyrics©Sony/ATV Music Publishing LLC)
According to Richter, it’s important to know when to walk away from a bid. In other words, he said, know when to “cut your losses so you can live to fight another day.”
“When I think about a Price to Win position, I always think about these lyrics,” said Richter. “A good Price to Win process is designed to respond to the government’s needs, and applies factors like gaming strategy, aggressiveness, fees, and corporate interest to identify the ‘price to win’ position. Never forget, however, that the Price to Win process also identifies the position your company needs to achieve to meet your business goals and objectives. It doesn’t always mean winning. You may want to position your company with your customers without actually winning the program. If the price you come up with doesn’t fit your corporate objectives and it allows you to capture the contract, it’s not a true win.”
To wrap up the hour-long interview, Richter answered the “What do you wish you had known in 2006 when you started your company” question with some final words of advice for all types of entrepreneurs.
“If you’re going to start a business, you need to embrace the concept of failure. You can’t take the safe route—which means you’re going to stumble and fall…often…but you have to keep risking it. Keep doing the right thing regardless of the consequences.”
“As entrepreneurs,” he concluded. “We’re like the old saying: the turtle never goes anywhere without sticking his neck out.”
“Keep sticking your neck out.”