Students vs. Startups Ep: 22 How to Transition from Legacy IT Systems

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Featuring Bluestone Logic

Read Time: 15 Minutes

Welcome to Episode 22 of Students vs. Startups. This week, moderator John Gilroy talks with the founder of  Bluestone Logic, Davey Ahearn. With 20 years of experience working with the DoD, Davey has been through many trials and tribulations within the Federal IT space. So what are some of those lessons? Listen below and find out!

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Transcript:

John Gilroy: Welcome to Students vs Startups, Showdown at the Potomac. My name is John Gilroy and I’ll be your moderator today. We have finished 21 episodes, looking at episode number 22, our previous one we talked about meditation. Now we’re going do the exact opposite topic, we’re going to talk about systems engineering and systems management, two very, very complex processes. People who have heard this podcast before, know that they have students on one side of the table and startups on the other side of the table.

We are sitting in a meeting room at the Eastern Foundry, a startup community in the Washington D.C. area. On one side of the table we have two students, they are both candidates for a Master of Professional Studies and Technology Management, from the School of Continuing Studies at Georgetown University. Our student number one is Obi Ukaegbu. Obi tell us a little bit about your background, please?

Obi Ukaegbu: Yeah, sure, no problem. I primarily come from a fintech background. I worked for 2 years in that industry in New York and previously I was a business analyst and strategist at an eCommerce company. So, that’s been my background for the past few years. I have a Bachelors in Science and Information Systems from New York University and it’s a pleasure to be back in my hometown for this podcast.

John Gilroy: Boy, you should match up here with Davey, with these skills just coming in. Great. Phil, your background please.

Phil Crawford: Yeah, Thanks Shawn. I am a first year student in the Technology Management program. I used to work for the Federal Government, basically helping CIOs, different Federal agencies make their technology accessible. Basically IT Accessibility, Section 508. Prior to that, I actually worked in the international development field for a consulting …. an international consulting firm, and my background is actually in the IR, International Relations field, and I’m happy to be here today.

John Gilroy: And Phil Crawford, you have some international experience too. In Cuba, is that right?

Phil Crawford: Yeah, I lived in Cuba for about six months, studying there while I was an undergraduate.

John Gilroy: My, my, my, good background. On the other side of the table, we have Davey Ahearn, and his company is Bluestone Logic. Davey, tell us about your background, please. BluetoneLogic logo details

Davey Ahearn: Yeah, just going on 20 years now, of working with the Department of Defense, in the US Government.

John Gilroy: You started in grade school or something? Impossible to believe you are that old

Davey Ahearn: No, no, I’m coming up on my 20th anniversary in May. Building command control systems and operations planning systems for the military. And then, I guess before that, I graduated my undergraduate degree in English, of all things, from James Madison University, and have a Masters of Engineering from the University of Virginia, from 2005.

John Gilroy: 20 years experience, strong education and background, and working with very complex systems over at the federal government. So what business problem does your company solve, Davey?

Davey Ahearn: We essentially try to help our customers figure out the best IT route to go in modernizing their legacy systems. Now, I mentioned I’ve been around for 20 years, so I’ve seen the evolution of these legacy systems, and amazingly enough, I see a lot of the same systems today I was working with 20 years ago. So we help our government clients kind of wade through the waters of all the different innovative technologies that are out there, and figure out what the best route for their program is, to find a path toward security and efficiency and all the things that drive the need for modernization these days.

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Davey Ahearn, Founding Partner at Bluestone Logic

John Gilroy: Obi, you want to jump in, please.

Obi Ukaegbu: Yeah, sure. I’m actually aware of a lot of the players within your industry, so I’m particularly excited to get a bit of a learning experience from this whole podcast here. So my first question is going to be, as someone in this space that is a bit crowded with competitors, are you looking towards some vertical integration perhaps? Or maybe acquisition down the line? Or are you looking to stay steady as a home company?

Davey Ahearn: Yeah, I think we’ve taken advantage of what the Federal market allows small companies to do that’s somewhat unique I think in technology space, in that we didn’t need to do heavy fundraising to get into the mix with our clients. We had existing relationships with our clients from previous jobs and things like that. And when we started Bluestone, it was an attempt to bring quantitative systems engineering to that space, and kind of get away from the boxes and arrows drawings that you see from other companies.

But what the government contract kind of market allows us to do, is have our customers fund our growth. And so we’ve been able to grow organically over the years. We just had our seventh anniversary a couple of weeks ago. So, we’re definitely not built for acquisition. Now that being said, no one would say they would never be a party to that, but it’s not in our overall business model.

“Our overall business model is to create a very high transparency, decision making environment that our customers can see what they get from us, minute by minute, so we can help them modernize their IT systems.” Davey Ahearn, Founding Partner Bluestone Logic

John Gilroy: So Davey, on your LinkedIn profile, it says that you do a little bit of everything. So I’m going to have Phil jump in, maybe ask a question about everything.

Phil Crawford: Yeah, so my question is Bluestone Logic, how does it relate to …. What’s the story behind the name, and how does it relate to your service offerings to your clients.

Davey Ahearn: Yeah, so naming a company is one of the hardest things I’ve ever had to do. I’m not lucky enough to have children yet, but it must be similar. Because you feel you’re making a pretty big decision that you’re going to have to stick with for a while.

I graduated from James Madison University, like I mentioned before, and all the buildings in the main campus are made from bluestone. And then the logic part was sort of a driver from what drove us away from larger defense contractors into a small engineering shop, that we wanted to be able to explain very technical concepts to our clients in a very logical way, so they felt like they were making a decision that they could stand behind, our clients could stand behind. Because usually our clients are actually making a decision that they have to pitch to their boss, and they have to then pitch to their boss, and then it gets into Congressional approvals and everything else. So logic is really important when it comes to that sort of thing.

I will say that, like early on, the real driver behind Bluestone Logic was that the dotcom domain was available in 2010.

John Gilroy: Now the real question is answered.

Davey Ahearn: I’ll be honest. I was very pro Bluestone Scientific, which was also available, but looking back now, I’m very glad that we didn’t go that way.

John Gilroy: Shorter the better. Obi, want to jump in?

Obi Ukagbu: Sure. Within Bluestone, when it comes to developing your systems in particular, what do you think it is that you do better than some of your competitors? Is it the process engineering behind it? You know, is it some of the system code itself, what allows you to be sustainable within the scientific method of how you go about your business?

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Obi Ukagbu

Davey Ahearn: Yeah, I was really worried when I heard previous discussions about what makes you …. What’s your competitive advantage and all that stuff, and I’m thinking about it, gosh there’s hundreds of thousands of companies in this space, and …. But really, I think what we bring to the table in our DNA that’s a little bit different is extreme transparency. We have built our own internal systems that allow our customers to see what we’re doing for them on a minute-by-minute basis. And that is something that most companies, especially in the defense space, who actually negotiate out of their contracts. They’ll negotiate down the number of reports they need to produce. They’ll negotiate down the access that government principals will have with their engineers. We actually create a very smooth interface through our own systems internally, so our customers can see what they’re getting for their dollar minute by minute.

It also allows us to do firm fixed price contracts. Because it actually reduces the risk of the end state where the customer comes back and says “Well that’s not what I wanted.” We know that what we deliver, our customer is going to want, because they’ve helped us make small corrections throughout the entire process.

John Gilroy: Sounds like agile process. Phil?

Phil Crawford: Yeah, so as someone who works for a federal agency, we’ve all been looking at the proposed budgets by this administration that recently came out …. I’m pretty sure DoD was one of the agencies that actually had an increase in their budget. So how does it look for you guys in the next four years? How does that change your strategy when you’re thinking about the next administration?

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Phil Crawford

Davey Ahearn: I always kind of chuckle when my friends ask me …. They’ll read an article in the Post and say “Well, that must be pretty good for you.” And I go, yeah, we’re a small business, one of tens of thousands of them. There’s an $800 billion dollar annual defense budget. We are really operating in the dust of the dust, you know, as far as macroeconomic drivers are concerned.

That being said, the language that we’re seeing in terms of modernizing existing IT systems is very good for us. It is our key market. We have run through programs with major, billion dollar defense programs, and reduced their costs by tens of millions of dollars, and our costs to them were in the single digit millions of dollars. So we think that that market of IT modernization will continue to grow. I think if you’re in the cyber space there’s a lot of interesting work there, but even with great cyber, it only is effective in modern technology. And so our ability to place modern technology and integrate it, and then present it in a way that the users actually find delight in using those systems. That combination of things I think is what we do somewhat differently than maybe our competitors.

John Gilroy: Delight the customers in the federal government? That’s hard. Obi, any questions for our guest here?

Obi Ukaegbu: Yeah, I see here that you’re located in downtown Washington D.C. Is it Vermont Avenue? There we go, there we go. How do you think the D.C. digital infrastructure shapes how you perform as a company? I’m aware that there’s a digital D.C. campaign that’s supposed to be built off of New Hampshire Avenue, and other things that are trying to build up the D.C. ecosystem to make it look like it’s what it is out west. So how are you keeping your ears to the streets, and sort of trying to take advantage of that?

Davey Ahearn: You know, that’s something we’ve gotten into a little bit more in the last year or so, is to try to become more actively involved with the D.C. tech community. In the past, because of the sensitivity of the projects we work on, we were a little nervous about getting out there too far, and then having to seem weird because we couldn’t talk a lot about what we were doing. I think we’ve learned a little bit about the best way to handle that, and we’re also finding that the best candidates in the D.C. market are interested in doing that sort of work. They differentiate between basic government contractor work …. John hasn’t stumbled over this yet to me, but I never liked it when people called us a government contractor. I always say that’s how we get paid, that’s not the business we’re in. We’re a tech firm, and we do business with the Federal government.

I think D.C. is making great strides in bringing their talent together. I also think the Universities associated with the city and around the city are getting better at producing people that can come in and immediately make a difference. We are a small company, but we generally bring in six interns per intern season, just to see what they can do, and see how they can help us build our internal R&D projects and help us with …. You know, we’ve had guys working on virtual reality, a number of different things that our existing 20 year veterans haven’t been able to really do.

John Gilroy: When the listeners hear the word intern, they always perk up. So tell us about your web site and how to get more information on your company before we take a break here, Davey.

Davey Ahearn: Yeah, we’re at BluestoneLogic.com, no funny spellings, that was the other requirement for the name.

John Gilroy: Pretty easy.

Davey Ahearn: And you can reach us through that, or at info@BluestoneLogic.com.

John Gilroy: Great, great, great. The founding sponsors for Students vs Startups is The Radiant Group. If you enjoy solving problems, and like to work with bright people, The Radiant Group is the place for you. Contact Al Di Leonardo or Abe Usher at RadiantGroup.com.

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

Welcome back to Students vs. Startups, Showdown at the Potomac. Yes, ladies and gentlemen, the entourage has finally arrived, the bodyguards and the paparazzi have brought Matt Pearson to the studio today. A round of applause for Matt Pearson.

Yeah. My, my, my. It’s tough when you’ve got to sign autographs, get pictures taken, you’re a celebrity, you’re a celebrity. So Matt, because you’re a celebrity here, I’ll let you ask a question to our guest real quickly.

Matt Pearson: Great. Well, it’s good to be here. Thank you. Davey, I apologize again for coming in late. I’m curious to hear something. Sounds like you work with a lot of different companies. What’s your expansion strategy? Are you looking to work with companies aside from defense contractors?

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Matt Pearson

Davey Ahearn: Yeah. We have a lot of good, established relationships with the defense community, the typical large players that you’re used to, we have established sub contract …. IDIQ subcontracts with them.

“We work mostly on prime contracts, and that’s been a strategy of ours from the beginning, to keep ourselves in our own driver’s seat and grow ourselves organically, like I mentioned before.” Davey Ahearn, Founding Parter, Bluestone Logic

That being said, we’re moving outside of that. We’ve recently teamed with a number of companies that are focused on human-centered design, and design thinking, if you’re familiar with that. We recently bid a couple of jobs with IDEO out of San Francisco, and we have friends at Huge Inc. we mentioned before here in town, who do some amazing work with the government. I mean these people are doing the birth of US Digital Service and 18F have brought some of this talent to the government public market, and I think they’re now becoming more comfortable with working with companies like ours, D.C. based companies. So that being said, they’re a little wary on the defense side. but we’re trying to make them more comfortable with that as time goes on.

John Gilroy: So Obi, human centered design, does that have any value to the people using computers these days? I don’t know. Why don’t you ask the question.

Obi Ukaegbu: Yeah, that’s a perfect segue. You know, expanding outside of this usual defense client scope, what exactly is the motivation to make that corporate decision? Do you usually attend events and you’re hearing word from potential clients saying they want to get involved in X, Y, and Z, or maybe it’s the way you engage your customer base online. Are you coming on to new discoveries, and if so, how?

Davey Ahearn: Yeah, what we’re finding, and what we found over the last couple of years is that the work being done in the Department of Defense is some amazing work. And to hide that, or keep that within the Department of Defense does a disservice to the rest of Civil Service. There’s massive amounts of legacy IT systems out there in need of modernization outside the Department of Defense. Even more so, the Department of Defense is dealing with the mission, missions at hand, that the Civil Service, public sector is dealing with real service to customers, tax-paying customers. And so the work we’ve done to try to make our internal military weapons systems very easy to use and responsive to human input; that could pay real dividends for the people who are served by our government. And so we’ve tried to get a little bit more outreach, to try to affect those things.

“We believe there’s kind of three parts to a successful technology project. The primary part is the human beings who have to use this technology.” Davey Ahearn, Founding Partner, Bluestone Logic

The technology itself, there’s tons of good stuff, and there’s new stuff every day. But how you apply that new technology to either have an effect on a mission, or have risks and rewards against a business model, that’s what really determines whether a project works.

And so I think, when you look at human-centered design as you mentioned before, it’s important. It’s human centered. We found in DoD that that was not really the pattern, and now that we’ve been able to implement that pattern on a couple of large projects, it’s finding a lot of good feedback.

John Gilroy: Phil, please.

Phil Crawford: Yeah, so the previous question about the DoD was kind of a sweetener. But then now, it is the 18th of April, we’ve got about seven business days until the Continuous Resolution for the Federal Government needs to be passed to go on. If it isn’t passed, they have basically a government shutdown. How does something like that affect some of your work?

Davey Ahearn: Well, it affects us because our customers are very concerned. Our customers are our friends, and we see the rising stress level that goes up whenever you flirt with a government shutdown. So for me, it’s really more about getting our customers into a position where their mission can continue in the face of that sort of risk. Now we do everything we can do in working with our friends on the hill, and here in D.C., you get a lot of person-to-person contact with people who make very real decisions in this space. And we try to communicate with those people who work on the Hill, and who work in the different budget offices, that this has a real impact on service members overseas, and readiness, and if we’re talking about defense, our overall national defense.

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Davey Ahearn, Founding Partner at Bluestone Logic

From a business perspective, it’s a concern, obviously. And we monitor that, but I think the bigger concern is for the folks in government themselves, and the uncertainty it puts them under.

John Gilroy: Matt, do you have a question for our guest, please?

Matt Pearson: Yes. Kind of going off that same idea, as you talked about growing outside of just the DoD clients, as you’re looking to break into the private sector, looking to touch on other clients, what’s your strategy for reaching those customers? Is it social media? How do you communicate victories that are secret?

John Gilroy: Yeah, that you can’t talk about.

Davey Ahearn: Yeah, that’s a good question ….

John Gilroy: The answer’s a secret!

Davey Ahearn: You got me there. Because you really summed up what the challenge has always been: how do you communicate victories that are secret, that you really can’t talk about? What we’re trying to do is use more social media. But also use media platforms. Like you’ll notice that our website is not a typical website, it’s just a Medium publication. Medium.com provides a baked-in distribution model, that if you create interesting content, will get distributed. So we are not social media experts, by any stretch. We’re good at building systems that create viral response within our customer markets, but I’m not the best Twitter person in the world. I don’t even want to say what my Twitter handle is, I’m so bad at it.

But the use of those sorts of things many times to me felt like screaming into a hole. Using something like Medium seemed to allow me to target my market a little bit better, and so you’ll see us using more sanitized content that reflects the good design work that we do without the dangerous stuff.

John Gilroy: Obi, kind of tricky business, isn’t it? All that systems engineering, the federal government, DoD?

Obi Ukagbu: Right, so let me talk about the other side of that. So today we heard a lot about sort of balancing productivity in the workplace. So my question to you, especially coming from a previous computer science background, I do understand that the intensity of the IT systems solution environment can be intense for the workers. How do you as a company help your employees sort of navigate that space?

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Obi Ukagbu, Phil Crawford

Davey Ahearn: Yeah, that’s a great question, and we do the best we can. One of the big things I think we do to that front, is we have an unlimited vacation policy.

John Gilroy: Oh, where do I sign up? I like that one!

Davey Ahearn: It’s not intended for guys like John, I’d say. It’s intended to take the stress of worrying about saving up, or this and that, away from becoming rejuvenated. We want our people to be fresh. And in the computer science world, it is very intense. I approve time …. Today was time card day for us, where I approve payroll. And you look at the hours. We just finished very large prime bid on a very large IDIQ in the Department of Defense, and I looked over the hours that we’ve been cranking out in April, and it was concerning. But it’s the way things are.

So our office location is one of those things. We chose it because we wanted to be kind of equidistant between the Pentagon and the defense installations in Maryland. But we also love that Macpherson Square is right there, and food trucks are right there, and you can kind of walk around, and make your professional life resemble your college life. Because if I could go back to JMU, I would do it tomorrow.

So that was the idea behind it. It’s much more than unlimited vacation, though. We have First Friday meetings every month, where the corporate strategy is communicated with everyone that works at Bluestone. Every person that works at Bluestone has to have a question ready, much like you guys. They will get called on at some point, and so those questions are always fun. People tried to say “pass” a couple of times, but that doesn’t work.

But we try to keep open lines of communication, I think is the best way to handle that.

John Gilroy: And Phil’s turn to ask a question. Don’t ask about food trucks. Ask about anything but food trucks, Phil

Phil Crawford: I’d just like to tie in this idea of some of your projects with IDO, and also kind of Obi’s previous question about the overall health of your different employees. Do you ever try to push more onto the commercial side, typically because it’s also just not the federal side? Typically the commercial side is a bit more interesting. Maybe that’s the wrong word, but different types of projects, different type of industries. Do you ever try to push that, also because you’re thinking about your employees and allowing them to be exposed to different types of work?

Davey Ahearn: Absolutely. We’ve worked with some trade associations here in town, we’ve worked with even a small custom jeweler who’s here, downtown D.C., shameless plug maybe for him. And the reason for that was exactly that. You hit it on the head, that people want to work on different projects. I’ve worked on variants of the same command and control system for 20 years in one of our projects. And we have people who work with us who’ve been there …. There’s a guy at Bluestone, one of our teammates who I worked for when I got out of college. And now he’s at Bluestone.

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Davey Ahearn, Founding Partner at Bluestone Logic

And so it reminds us that we can get caught up in kind of just doing the same thing. And it’s a very interesting thing, and it’s very mentally …. You know, multi-source correlation of sensor data is complex and fun, but it’s also fun to go visit a person who has a business, and figure out like, in the case of the jeweler, he was paying, let’s just say a ton of money per year for his IT infrastructure, and we got him down to zero. Because we walked in and went like “Wait, what? You have three people here. What are you doing with all these servers and stuff?”

And so we just got rid of all that, brought in free stuff, had it secured, and it was amazing to see that you could make a group of people so happy, that had nothing to do with the military. And it made our employees feel good, and even to this day, we still keep a very close contact with that business, and continue to help them modernize.

John Gilroy: Could be your corporate model, bring in free stuff. That would be popular, wouldn’t it?

Davey Ahearn: Right. I should have got more from the jeweler.

John Gilroy: We are running out of time here. Davey, if someone wants to learn more about your company, what web site should they visit, please?

Davey Ahearn: BluestoneLogic.com.

John Gilroy: Great web site, by the way. Simple, easy to read, there’s articles on there. One’s called Technical Debt in Plain English. It’s a great little article.

Davey Ahearn: Check it out. Technical, that’s a big deal for modernization.

John Gilroy: If you liked the podcast, please give us a review on iTunes. I’d like to thank our founding sponsor, the Radiant Group, and our host, Eastern Foundry.

Signing off from high atop a nondescript building in lovely downtown Rosslyn, Virginia, I am John Gilroy, and thanks for listening to Students VS Startups, Showdown at the Potomac.

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