Featuring Eastern Foundry
Welcome to episode 10 of Students vs. Startups! This week, the co-founder of Eastern Foundry, Geoff Orazem makes an appearance on the podcast to talk with John Gilroy about his inspiration behind starting the company, as well as his plans to take the model online.
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John Gilroy: Welcome to Students Versus Startups, showdown at the Potomac. My name is John Gilroy and I'll be your moderator today. The structure for this podcast is quite simple. We put a leader of a tech startup in the hot seat, students ask questions, we find another innovator, and then do it again.
The founding sponsor for Students Versus Startups is the Radiant Group. If you enjoy solving problems, you like to work with bright people, the Radiant Group is the place for you. Contact Al Di Leonardo and Abe Usher at the RadiantGroup.com.
Here we go, round one.
A little curveball today, ladies and gentlemen. Instead of two separate companies, we're going to have one company. Furthermore, we're going to have the company called Eastern Foundry, the host of the podcast here. In the studio today, we have Geoff Orazem, who's the co-founder of Eastern Foundry. How are you, Geoff?
Geoff: I'm doing well. Thanks for having me.
John Gilroy: Now I was just reading the intro from the Radiant Group, and the Radiant Group is founded by two people who have military experience. In fact, they're both Rangers. It's a coincidence, I don't know if it's a coincidence or not, but you have a military background, you have a legal background, a fascinating background. Tell us about your background and how you got this idea for Eastern Foundry please.
Geoff: Sure. You've alluded to it. I think of myself as having started life in Quantico. Where I became on the path that I am today. Then from there, you got some great deployments and lots of opportunities to see the world, began to realize what leadership was, about the opportunities that existed in the government. Really opened my eyes to the world. From there went to law school. I actually decided that I didn't want to be a lawyer after three years in the law at school, and went back to the Middle East to do development work. I felt like if I was there for the invasion of Iraq, I really should be there for some of the rebuild. From there went into business consulting and got some more exposure to both the private and the public sector space. Really the differences between the two, how the two compared favorably and sometimes less favorably to one another. All these experiences came together to lead me down the path of starting my own government contracting shop.
Like so many other things where necessity's the mother of invention, I realized in the experience of trying to start my own government contracting shop that I was really dissatisfied with the resources available to a technically capable, proficient founder who could do the work, but didn't know how to navigate the government contracting process. Didn't have the resources, didn't have the education, didn't have the information. All of these things that I felt and still do feel should be secondary to your ability to execute, being able to win government contracts. I built the resource I wish I'd had.
John Gilroy: Now I keep thinking of office sharing, but it's not office sharing. It's intelligence sharing more than anything, isn't it?
Geoff: When I think of us, I don't think of a space provider. I think of a resource for a community of governments, technologists, government service providers. I think that we are helping the people that are helping veterans at VA hospitals, because keeping in mind, who's providing the services to our veterans, who's providing services to the elderly, to the disadvantaged? Who's building the tanks? Who's building the body armor that's protecting troops down range? It's all contractors. If you want to understand the nature of the quality of service that the average American experiences from their government, you have to understand the quality of the contractors coming into the system.
John Gilroy: I'll ask you the question I ask every other person in the room here. What business problem does Eastern Foundry solve?
Geoff: The analogy I always use here is just watching the government try to work with a startup is like watching an elephant try to cuddle a kitten. It's just not going to end well for the kitten. You're talking about agencies that have got hundreds of thousands budgets, and in the government, a small contract is a billion dollars. Now, how is that organization that's set up to distribute, to manage, to administer billion-dollar contracts going to handle the $150,000 contract that is almost overwhelming to a startup? We solve that problem. We encase, we support, we provide an ecosystem of other government contractors to team, to partner with a curious set of professional services providers that we've got preferential rates at to help that small business get the professional services they need.
We help them find the new opportunities by giving everything from direct access to information through knowledge sharing through everything we do, lunch and learns with government officers, program managers, small business advocates, all the way through some really more and more sophisticated training.
"To my knowledge, we're doing the most leading edge work, trying to teach how to do government contracting." -Geoff Orazem, Co-Founder Eastern Foundry
John Gilroy: That's great. I want to set you up for questions from my three students. Allow me to introduce the three students for this podcast. We have Bill Bailey, who is an MBA student at Georgetown University. How are you, Bill?
Bill: Doing well, thank you.
John Gilroy: We have two graduates of the master of professional studies and technology management at the School of Continuing Studies in Georgetown University. We have Madeline Tomchik and Max Sedghi. How are you two?
Max: Doing great, thanks for having us.
John Gilroy: Great, great. Madeline, I'll let you go after Geoff first. Ask him a question please.
Madeline: With all the experience you had and now that you built Eastern Foundry, when you were a startup, would you have come to Eastern Foundry?
Geoff: That's a great question. I don't think Eastern Foundry's right for everybody. I don't think Eastern Foundry's right for everybody at the same time in their professional development. If you're working a steady day job, don't quit it. Government contracting takes a while to get into. For that first year when you're finding your feet, when you're learning the ropes, when you're building your back offices for structure, learning how to write proposals, all those foundational skills that you should have in your back pocket before you're ready to go in your first piece of work, you should definitely not be here. You're making a paycheck, you're showing up from nine to five at your day job, and you have evenings for a one or two-person shop, go work on your kitchen table.
Come to Eastern Foundry for everything else. We do a lot of free classes. We do a tremendous amount of social access. We do a lot of happy hours and professional development opportunities. Almost all of them are free to the public. We encourage people to come to them. We have events like this, we have events with agencies. Show up to all of those. As you start to transition to a place where you need to be able to have a nice conference, you don't want to invite your clients to come meet you at a Starbucks again. You want to have that professional feel to your business. We have introductory plans that are designed for people who just really want some drop in space and a conference room a couple times a month. Easier way in with that. Continue to use the education. Continue to use all the peripheral services. Continue to access our professional services providers. Come to our workshops.
It's really we find this right around when people start hitting that three contracts in hand mark, when they start having maybe a ballpark of around 20 people in their company, 18 of whom are going to be on site, whatever government agency they're focused on, then now you've got two people in the overhead. That's generally around the part where we start seeing people come here. One of the nice things about our model is that the benefits that we provide to small business, because of the priority placed on teaming, partnering, the consortium model that really is almost a prerequisite in this industry, it means that we get really high end companies here. We've had teams from the largest system integrators in this market taking space here. We've got officers from agencies showing up to come scout the talent.
All the same benefits that we provide to a very, very small business are equally beneficial to that very large business who needs the “smalls” to work with.
Bill: Right now you have two locations, correct?
Geoff: That's right.
Bill: Crystal City and here in Rosslyn, but none in DC yet. Do you see expansion into DC or more so staying on the outskirts?
Geoff: Both, and. We're in pretty well developed conversations in Maryland and central Virginia to open up locations there, and I'm cautiously optimistic. Don't want to jinx, but cautiously optimistic that we'll have something open there by the summer. Then we've been in conversations with DC for a long time and I tell you what, I would be thrilled to get into DC. I think that the Foggy Bottom HubZone is just crying for an Eastern Foundry. We're having a couple conversations that I'm hoping will lead to something, but that particular conversation a little too early to set any predictions around.
Bill: I'm curious how you monetize all the wonderful services that you provide. I heard you say that there are a lot of free social events and free classes that people can take. Tell us a little bit about your models. I definitely understand the co-work space thing and I think there's a lot of competition out there for that, but clearly your value proposition is different. I'm wondering how you monetize that.
Geoff: Largely we don't. That's a conscientious decision. I think that the reason that people come here is in a lot of ways divorced from what the people are paying for. People are paying for space. They pay for a number of square feet. The difference that I think our resident member experience is from a non-resident member, from someone who's either because they live in, I'm making this up, they live in Richmond, so they can only make it up here once a month, or because they're not ready, they don't have the cash load to take all the space full time, is the experience of being here every day.
I think that as much as you get benefit from these contrived social hours, where everyone's got their name tag on and talking over a beer, the more organic ways that relationships form are by seeing somebody in the hall 10, 15 times, and then walking up to one of the screens in our kitchens and seeing, "I just realized that you're a woman-owned, you're a veteran-owned small business."
Then you bump into each other at the next happy hour, and it's the fifth, seventh, 10th interaction where you actually strike up a conversation that leads to a meaningful interaction, where you start realizing that shared dataset or that shared point of interest at an office, at an agency, or in a capability. By being here, it's like being at a happy hour every day, because just by walking the halls, you're being exposed to and you're interacting with dozens of other government contractors who between them have every set aside experience at every agency. The act of going to work becomes an active business development.
Madeline: In terms of business development for you, do you interact with the other incubators in the city or do you keep it to the side?
Geoff: A little bit of both. Sometimes we do get a company that'll come here and say, "Hey, we've got this wonderful idea for a bit of fin tech that gosh, if only we could break into treasury or FDIC," whatever agency they've got their heart set on, and we'll have a very good clear-eyed conversation about it. "You know, look, this is a long and difficult road that you're going to go down because of the nature of the product you envision selling. The much lower hanging fruit for you to get going is the financial industry, not the government directly. You should really look at some of these other resources out there." At the end of the day, if government isn't a core part of your business, there's probably a better place for you.
Max: I see that you have a very diversified client base here. However, the government's one piece of a very large pie. Do you see internal competition between individuals that come to Eastern Foundry to grow their business?
Geoff: It's a great question. I think this is one of the top things that concerns people when they are considering coming to Eastern Foundry because it seems natural. On the surface, I'm an IT services company, you're an IT services company. You're going after DHS, I'm going after DHS. Gosh, you're going to steal my client. Crazy talk. I understand why people feel that way, but I think it is ... It cannot live up to any scrutiny. A couple data points here.
"Federal government spend every year is $450 billion."- Geoff Orazem, Co-Founder Eastern Foundry
You've got a great 10-person IT services company that maybe brings in $1.5 million a year. You and somebody else are going after 1.5 million a piece out of $450 billion. It rivals the global software markets. It's so big there's no room for competition.
John Gilroy: Great job, students. Great job, Geoff. If someone wants more information about Eastern Foundry, where should they go?
Geoff: Eastern-Foundry.com is your best bet.
John Gilroy: Good. Earlier you mentioned events. Any events coming up in February we should note?
Geoff: Absolutely. Actually, we're recording here in the Rosslyn office and on February 2nd, we'll be doing our ribbon cutting for this office. We've got a great lineup of speakers, people from the government, people from the private sector, who are going to be sharing some observations they have about the future of the market. Obviously, it's top of mind for everybody with the election. We're really excited to have both as an event for us, but also as an event for the community.
John Gilroy: You get to meet the world famous Geoff Orazem. We are hosted by guess who? By Eastern Foundry. A community of government contractors who are bringing innovative solutions to the government marketplace. More information, go to Eastern-Foundry.com.
Our monthly sponsor, Acumen Solutions, been in business since 1999. Today, they help the public sector streamline operations and improve productivity. For more information, go to AcumenSolutions.com.
Welcome back to Students Versus Startups showdown in the Potomac, round two. You already know our students. Bill Bailey, an MBA student at Georgetown University. Madeline Tomchik, who is a graduate of the Technology Imagine Program at Georgetown School for Continuing Studies, and Max Sedghi, also a graduate of that same program.
On the other side of the table, we have the same gentleman with a different hat. On this side of the table, we have Geoff Orazem, and the hat he is wearing from the Eastern Foundry hat, he switched over to the Federal-Foundry hat. We're going to talk about a new company that he's launched called Federal-Foundry.com.
Before we begin, I want to find out more a little more about your background and what caused you to expand to a different ... Why isn't Federal-Foundry a subset of Eastern-Foundry?
Geoff: That's a great question. Federal Foundry fundamentally has the same mission of Eastern Foundry, which is to support government contractors through this holistic model of information, education, access, community. We saw that there was an inherent limitation to our physical model under the Eastern Foundry, which is that people need to actually show up here.
If you come here to Eastern Foundry, you have the physical experience, the information access is better, you have the education, you're in person, you have that in person experience, it's wonderful, you're meeting people at the coffee pot, you're meeting people at the happy hours. For a lot of people, you have companies out of Huntsville, Alabama, companies out of Tampa, companies out of Tel Aviv, which we've had a few requests come from. You're not going to show up.
It's just not viable for you to commute here, you're probably not going to open your company here, but we still want to reach those markets because we know that they're wonderful ideas that should be integrated into the federal procurement process that our seniors should be getting the medical care or the aid startup out of, wherever it is, out of Huntsville, out of California, out of Michigan. Wherever it is. Those things should be cultivated and being brought into this federal system so that American citizens get the best services and products possible. That's what we do with Federal Foundry. It's the web version of Eastern Foundry.
John Gilroy: That's great because now I don't have to ask what business problem you solved. You just told me. I'll have to toss them the questions. I'll have Max ask the first question. Tell us a little question for Geoff, please.
Max: Absolutely. You did not go into this venture by yourself, correct?
Geoff: That's right.
Max: Who is leading you in this charge right now?
Geoff: I wouldn't say ... We lead each other, I'll say. It's a very symbiotic relationship. Actually it's a little bit of a different partnership structure between the two. Eastern Foundry, my business partner is Andrew Chang. Andrew is a superb guy. We met socially at first. Similar backgrounds. His family ... He grew up running small businesses. He's got great stories about being kicked out of his dad's car to go sweep the floors in one of their family ... They ran gas stations in central Georgia. He learned how to run a small business from the HR side, from cash flow, managing people, managing resources inventory from the time that he could walk. This is just breathing for him to run a small business, which is wonderful because I didn't know any of that. My background was much more strategy, that's where that side of it.
Eastern Foundry is Andrew and we have a wonderful working relationship, but as we transition into Federal Foundry, we're looking at the skillsets that the co-founder needed, and Andrew and I ... I gave Andrew the first chance to be the other half of Federal Foundry.
He basically said, "You know what? That's not where my skillsets lie. My center of excellence is really around Eastern Foundry. What you need is somebody with deep product experience." I was lucky enough, I reached out to one of my best friends in the world, a woman, Heather Boesch, we worked together in the Middle East, we worked together in Boston. She's got a tremendous background in product design, product development, iteration, agile. She's got superb marketing knowledge. It's really all of the things that I needed to be able to create the product side of the house.
Madeline: With Federal Foundry, is that going to be something where medium-sized businesses, ones that are too big, but not small enough to be considered for Eastern Foundry, or for Federal Foundry, is this something where they can come in, maybe give the experience that they already have working on these big contracts, running big proposals, act like mentors to some of the small ones, yet still get some of the information that they may not know yet?
Geoff: Absolutely. That's a piece of what's happening in Federal Foundry is that we want to be able to reach geographies that we couldn't and also scales of business that we couldn't. I think in the previous segment, we talked a little bit about how super young companies are probably not great candidates for Eastern Foundry just because they don't need to bring that liability onto their books each month. They should be coming to the free education, to the social, to the networking, etc. the Federal Foundry democratizes that even further by saying, "You're not constrained so much by the cost because web-enabled platform, we can bring the cost down tremendously." It allows us to create a product that radiates out.
"The core piece, the first piece of Federal Foundry is Federal Forum, which is a question and answer platform that we've engineered for the government contracting space."- Geoff Orazem, Co-F0under Eastern Foundry
It's already out of beta, we've had people asking questions, everything from how does GCA (Government Contracting Activity) accounting work to where can I find a woman-owned small business with prior performance at a given agency?
The ways that people are using it has been interesting to see, and we've actually started to create tags and chat tranches that these questions about professional service how-to's of government contracting, these are around staffing, these are around teaming and partnering, just so that we can help people control the ... Find the information they're looking for. That's the Federal Forum, which is, again, this question and answer. I feel pretty confident, I'll say that by February 1st, we'll have the first tranche education on the market as well. Classes on how to get into government contracting.
Bill: The takeaway for me from the first segment was you guys have an amazing community here, a great sense of community, and that's a huge source of value for anyone. Are you considering integrating that with the Federal Forum and this new venture? If so, how are you going to tackle it, because I know in online education, creating a sense of community when people are scattered to the four winds, that that's really challenging.
Geoff: Absolutely. I really appreciate that question. I'd like to answer it from two directions. The first answer is that I'm just preposterously lucky. There's no secret in that. Anybody who's worked with me will tell you that I'm more lucky than good. One of the great things about that luck has been that by creating this ecosystem, this community of, I think we're at 95 government contractors who use our space, that gives us just tremendous access because of the relationships we've built to those 95 companies that I can walk down the hall and say, "Hey, we've got this new idea for a Q&A platform. What do you think?" We can do customer analysis, customer interviews, customer focus groups, and literally in a day. It's just a matter of we walk down the hall, we knock on a couple doors, someone's got a few minutes, "Hey does this product work for you?" "I don't know it's terrible, okay." Come back a week later. "Does this product work for you?"
We can iterate because we have access to the customer base far faster than most people can. You couldn't be better. That is the holy grail for so many small businesses is trying to achieve product market fit and where do you find those customers who are going to give you the feedback that allow you to iterate your product to a place where it really meets a need. We've already solved that problem by collocating ourselves with our customers, which is great. Then the second piece of that is that as you point out, so many of these things require a network, require a sense of scale. For example, a Q&A platform, it doesn't work if one person's there asking the questions and answering their own questions. It doesn't make sense. If you have 10 people on the platform, the chances that one of the other nine is going to be the subject matter expert to answer the question you have, pretty low. These sorts of community-driven, like a Facebook or any other network-based business model, needs scale.
Then one of the things about having 90 members is that every Eastern Foundry member's going to get a free membership to the academy. They're going to get a free membership to the forum. The forum's always going to be free, but they're going to get access, they're going to get curated access to the forum. All the bells and whistles for the people to be the paved side of it, they're going to get it for free. Immediately, we can start bringing in, just included into the Eastern Foundry service model, all of these extras to start building the user base quickly. If the forum provides the value that we think it will, they're going to share it with their friends. It'll radiate out into the community by word of mouth. As you guys have already seen in our beta, having government officers on there, looking at answers, being interested in what the community's saying, seeing capture managers, proposal managers for large primes, getting on there, looking for small businesses to work with, radiating their requirements, all of a sudden that becomes a self-fulfilling prophecy because everyone wants to be in the middle of the markets.
Max: How are you funding production costs right now for Federal Forum?
Geoff: That's one of the other nice things about starting off with Eastern Foundry is that that takes care of my walking around money as it were. I don’t need to pay myself a salary out of Federal Foundry, from that perspective. Eastern Foundry and Federal Foundry, different ownership and structures, the moneys do not co-mingle. There's a firewall there. Among other things, I also work a second job because ... I was working for McKinsey before coming here. I ended up keeping a full-timeish, sometimes more than full-time, consulting practice. Heather, my partner at Federal Foundry, and I, we had a long conversation about the merits of taking venture capital at this stage in our development. It was a pretty easy no. Not something that we're interested in. She's been shelling money from her day job, I've got my consulting practice, and we're self-funding.
Madeline: What are you trying to do to market Federal Forum? Considering you already have people coming to you saying they wanted the advice and the help, but how do you keep that going so it can keep for the next five years?
Geoff: Absolutely. This has been a huge learning curve for me, and this is one of the reasons why I was so excited to have Heather on this team is that I have almost no marketing background. This is not something I never had to do before. Having her in the mix with her deep knowledge in that space has been tremendous. To be able to radiate out information about how to structure Google ad campaigns, how do to the search engine optimization. We're talking a lot about this. One of the nice things about the missions of Eastern and Federal being so close to one another is that as we're going out to run a workshop for Eastern Foundry, by the way, there's this information resource. We're going out to ... We'll go to small business day. We'll go out to some event as Eastern Foundry, but there's the Federal Foundry, there's a form literature there as well. It's a nice way to push it out also.
Pretty soon, we've already gotten a pretty deep library of questions and answers that we generated from our community. We just literally went around to our members and said, "Hey, what questions do you have?" We entered those all as the seed content. We found subject matter experts to answer those questions. Now we're getting to a point where we feel pretty good that anybody who comes there will be able to find the answers to the most common questions. Then beyond that, we think there's a real ... We're hoping to be able to push this ... I want to push this out to anybody who will keep a search bar for us. If the big ... If the AFCEAs the world, if universities just want you to have a search bar on their website that says, "Hey, got a government contracting question? Type here to get an answer." I'm totally okay with that. We want this to be a public resource so that anybody from any trade organization from any radio station, anybody who's interested in government contracting, if the SBA wanted to put our search bar on their website, good.
"This is free. It's meant to be free. This is meant to be a way for this community to break this jam, this terrible friction point that it has."- Geoff Orazem, Co-Founder Eastern Foundry
That people in this industry believe that information is power and that it behooves them to hold on to that information as tightly as possible. Actually, they're doing everybody a disservice and this is the way we're trying to break that down.
John Gilroy: Great job. If people want more information about Federal Foundry, where should they go, Geoff?
Geoff: It's much like the Eastern Foundry URL. It's Federal-Foundry.com. The questions are there. They're asking to be read. If you don't see what you're looking for, please add one.
John Gilroy: Geoff, we're running out of time here. I'd like to thank you for appearing here today. I'd like to thank our founding sponsor, the Radiant Group. Our monthly sponsor's Acumen Solutions. If you'd like to see a transcript of this episode, please visit the blog at Eastern-Foundry.com. Signing off from high atop a nondescript building in lovely downtown Rosslyn, Virginia, I am John Gilroy, and thanks for listening to Students Versus Startups showdown at the Potomac.