David Hollenbach did his growing up east of the Mississippi River in states including Pennsylvania, New Jersey and Ohio, where he graduated from high school. He was then appointed to the Air Force Academy and introduced to Colorado Springs. The former cadet worked several assignments in the space acquisition and space operations fields and eventually landed back at Peterson Air Force Base. He joined the reserves at the eight-year point of his career, and like many who separate from the military, Hollenbach went on to work for a local defense contractor before setting off with a couple colleagues at the time to create DSoft Technology, Engineering & Analysis Inc. The company, which launched in 1998, was recently awarded a $95.9 million federal contract for modeling, simulation and analysis for space and cyberspace capabilities at Peterson Air Force Base. The work is expected to be completed in May 2023.
Hollenbach spoke with the Business Journal this week about creating a culture of excellence and overcoming challenges along the way.
Talk about starting DSoft.
The inspiration was: I used a lot of bad software while on active duty. My family was also tired of moving.
I knew the next station would most likely be the Pentagon. We figured staying here and joining a defense contractor would be a good second start for us.
Staying in the reserves was part of my blood — going to the Academy and loving being in uniform and serving was part of me. So it seemed like a good compromise. And after a few years working with the defense contractor, we figured we could do it better.
I had a few other partners at the time, and we started writing proposals at night to organizations the company was not actively marketing to.
We won a contract at the Air Force Academy. It was our first and it allowed us to leave and work on our own full-time.
The company quickly grew from there. We won a contract with Federal Express and did some IT work for them in Memphis. We won state and local work. We went from three to eight folks mostly working out of our basements. The other two partners left over time. Running a small business is stressful. Suddenly you go from your passion to trying to understand everyone else’s passion and keep the ship going in the right direction. I seemed to be the only one left that wanted to do that.
What services do you provide?
We do a lot of application development. It’s providing web-based-type applications for our clients, which are mostly federal, that allows them to do their jobs and integrate with systems they already have established or new systems.
For instance our Forest Service work being performed for the National Interagency Fire Center in Boise, Idaho, has a web portal that tracks all the active forest fires in the country. So if you look at Colorado, there are about 15 active fires. If you wanted to know who the incident commander was for that fire, what kind of aerial assets, how many gallons of retardant [are available], what the cost is, get a picture of the fire line and all the [Geographic Information System] — DSoft is building that or has built that. That’s one example.
We’ve been through some ups and downs, but for 20 years we’ve had a contract at Air Force Space Command at Peterson. There have been some short breaks and maybe a year where we didn’t have a contract with them. As a small business you tend to start out as a subcontractor, so a lot depends on what the prime contractor wants to do. They may decide to do things themselves or get a subcontractor to help with the work.
The downturn [in the 2008] time frame through 2014 was a tough time for DSoft. We continued some work at Peterson Air Force Base but really focused on diversification. Instead of just military technology support, we’ve now won contracts with the [Department of Veterans Affairs], with the U.S. Forest Service, the U.S. Department of Commerce, the [Federal Aviation Administration] in New Jersey and the [Transportation Security Administration]. It’s a wide variety of federal work. We’ve also been a mainstay with the Pikes Peak Library District and just finished a project for El Paso County — replacing their entire human services infrastructure. …
It’s been a real intentional strategy for us — risk diversification. When you have a downturn in one sector, hopefully other sectors are doing well. Right now, all sectors are doing pretty well.
What’s your most recent contract?
At the end of April, we were awarded this very large contract. For us, it’s like the NBA Finals. We went to the Finals, went to Game 7 and won. I don’t have a trophy — just a letter. … I think, when you win a large government contract, there’s a tendency to get complacent. … ‘Oh, we have five years.’ I never want staff to think like that. I always want us to think this is a 6-month contract. We have to stay on top of the game and we want to make the finals somewhere else — and the re-compete of this one. It’s a big one. But some of that same momentum and the same attention to detail and quality that went into winning this big proposal are things we’ve been doing the past four or five years: a real focus on high quality customer service, a team atmosphere. We’re one of the largest Microsoft gold partners in Colorado.
How did you deal with the last recession?
We’ve always been a very lean company, very focused on making sure — I don’t call them employees, I call them teammates at DSoft — making sure our teammates are taken care of.
This is the fanciest office we’ve ever had, but to me, it’s not about that kind of stuff. It’s about getting the job done. The company’s never had any debt. By not having debt, it allows you to get through lean times and not have default issues. We made it through by being lean and focused on the engine that drives the company — our teammates. …
Another thing is perseverance — just driving business development. A lot of technology companies will get a big contract and stop business development. … But having a longer-term perspective and knowing contracts can be terminated any day, part of that fear has driven us to continue our business development cycle. We’re constantly meeting with potential clients, writing proposals, reaching out, that sort of thing.
Things really ramped up for us starting in 2014. We won a number of longer-term contracts and built a backlog.
How has DSoft grown?
DSoft is close to 50 personnel. We have a number of subcontractor companies employing probably another 10 to 12 people. We did a small procurement in September 2016 — a company called TG O’Brien [& Associates], which does human factors engineering for the Federal Aviation Administration. They also have a really unique contract working for the Transportation Security Administration. … Our team goes to [airports] and inspects the baggage screening equipment to make sure it’s working properly.
What is your company culture?
That’s a bigger part of my job now, managing culture. CEOs are pretty busy. I do everything from empty the trash to worry about culture to write proposals. But I also know there are other good places to work. You could move to Denver and make more money. Culture is a big part of any company’s success. Firstly, you need to have a niche. Our niche includes things like our top-secret clearance. We’re a disabled veteran-owned company. We have a Microsoft partner and have other technology partnerships. Those are all part of the niche we’ve built.
But I still know that’s not enough. If you have a culture that’s caustic and that awards only the people who want to make themselves into stars — that erodes the team culture. I allude to sports. I love the way the San Antonio Spurs run their organization. They always make the extra pass. They’re always in the top five teams for assists because they’re not all about the glory.
We’ve implemented hiring criteria for bringing people onboard: They’re humble, they’re hungry, but they’re also people-smart. If I can get them and they have a solid technical capability, I know they’ll help enhance our culture.
It’s a culture built on mutual respect and helping each other out.
How can the city attract young talent?
I’ve been quoted a lot as being an encourager to past mayors, city councils and the county to make improvements to our city and region. I think Denver, if you go to the Tech Center and places like that; it’s just a lot cooler. You see how vibrant it is with the light rail, if you go to the Tech Center, its manicured. There’s more opportunity and a much better nightlife. For younger folks in our industry, that’s important. …
We’ve recently hired three new people and they’ve all been from out of state — Virginia and California. Some people don’t want to hear that and are saying the Springs is getting too crowded, but I can’t find the talent I need locally.
Any advice to readers?
Certainly no advice to my competitors! And Colorado Springs is a city of competitors. It’s that way because of the federal contracting rules. Everyone is constantly competing. Sometimes it feels like the TV show ‘Survivor.’ You form these teams, work together, you win, and there’s discord amongst the team because people want more work share. The next time [you bid], you’re competing against some of these teammates. It makes it tough. Every subcontract you have is a seam for litigation.
So my advice for business leaders is to get to know the senior staff at the companies you’re teaming with. By knowing them, first of all it creates the opportunity to work together more easily, and allows for more trust. One thing we did on the big contract we won is actively sought out companies we’ve worked with before and have trusted their leadership.
We intentionally have 10 companies on our team of 19 that are Colorado Springs- or Colorado-based companies. I think that’s key for our ecosystem. So many defense contractors in Colorado Springs are owned by an entity outside the region — typically Virginia, Maryland and California.
While they generate good salaries, the money gets filtered through corporate headquarters. The satellite office here gets money in the form of wages. The profits stay at the headquarters where they can afford big gleaming buildings and contribute to the arts and churches. Colorado Springs has suffered because there haven’t been many companies headquartered here. What we’ve seen in the last 15 to 20 years is small businesses starting to grow and win their share of prime contracts — and the money stays in the region. That’s something I’ve really been focused on. I wanted to put my money where my mouth is on this last procurement and I offered other companies here that we’ve had relationships with to join our team.
How would you describe your leadership style?
I’m very involved with every project, every client. Probably more than I need to be. Part of that is the small business roots, but I think I’ve gotten better at delegating. I tend to be a trusting person. Sometime that’s good, sometimes that’s bad. We are always trying to raise the bar and not everybody sees the bar in the same place that I see it. When I delegate, sometimes I’m happily surprised, other times not so much. I’m very detail oriented and integrity is very important. When talking with staff and I say I’m going to do something, I want to make sure to follow through. The worst thing you can do is request input, get the input and say, Hey, good idea!’ and not act on it. If you want to encourage good two-way communication, throw that model in the trash because people will stop giving you their ideas.