Inside Wolf Den's spinoff strategy

Wolf Den Associates is taking its technical solutions business and creating an independent company. Here is the strategy behind the spin.

Wolf Den Associates is best known as a consulting firm that helps companies navigate the federal market and to grow their business.

But five years ago, it launched a technical solutions business unit to work directly with government customers. They knew from the start it would grow into something more and that day has come.

So Wolf Den is spinning off its technical solutions business into an independent company to be called Dark Wolf Solutions. More on the name later.

From the start, that business was focused on defense and intelligence customers as well as some commercial customers looking for cybersecurity, systems integration and software development services. “Real hands on work,” Wolf Den co-founder Barry Landew told me.

Rick Tossavainen currently runs the technical solutions business and will become CEO of Dark Wolf. Steve Bailey will be chief operating officer.

Tossavainen was brought in five years ago to build the business. “From the get-go, we wanted to be a legitimate company in the federal space,” he said.

They built and certified a classified proposal facility. The accounting system was built to withstand a Defense Contract Audit Agency audit.

“We also invested in back office infrastructure and we have our own recruiter,” he said, adding that they have a college recruiting program that taps into students at George Mason University, Virginia Tech and Carnegie Mellon University.

When Wolf Den launches on Jan. 1, it will have 65 employees and annual revenue of $10 million. Under Wolf Den, the business unit has been growing at about 40 percent annually.

The company also will have a clean balance sheet, which will put it in a position to make acquisitions as it tries to break into the middle tier of the market.

Tossavainen said that they are looking at companies with good cybersecurity and software development skills. “Maybe they haven’t gotten past the 30 or 40 person range but they have great capabilities,” he said.

The timing for the split is right for a couple reasons, the executives said.

Wolf Den is best known for its strategy and management consulting work with companies. But as the technical solutions business grew, they saw the potential for conflicts of interest. This spinoff remedies those concerns, the said.

Wolf Den co-founders Landew and Kevin Robbins will have a minority stake in the company, but Tossavainen and the management team will be the majority owners.

“It is entirely possible that they will compete against a Wolf Den client in the future,” Landew said.

A second reason is that the market opportunities Dark Wolf is targeting are just starting to emerge.

“Dark Wolf has in demand capabilities that are in the early innings of the game,” said Robbins. “They can take these capabilities and really build the next full-service, mid-tier company.”

Those capabilities include cybersecurity work such as information operations and network defense as well as DevOps, ethical hacking and the application of artificial intelligence.

“The one thing that we hold near and dear is that we are practitioners. We are on the customer site,” Tossavainen said. “It really builds customer intimacy when you are there living and working with them.”

That closeness feeds into the Wolf Den culture that the best idea wins. While Dark Wolf will be free to develop its own culture, Tossavainen said that ethos will continue.

“That really resonates with our younger people,” Tossavainen said. “I’ll be up there white boarding a problem and I’m there with people half my age and people older than me. We are all just trying to work on the problem together and get the best idea.”

For Landew, that culture tracks back to his time as an executive at SRA International.

“We aren’t trying to replicate SRA,” he said. “But the best idea requires that people speak up and challenge each other. It’s unusual for people to see the CEO be challenged but that is how it was at SRA and that is how it is here.”

That culture also connects with the company names -- Wolf Den and Dark Wolf.

“Think of the characteristics of wolves,” Landew said. “They are collaborative and loyal and they help one another.”

While Dark Wolf will be Wolf Den’s first spinout, don’t expect it to be the last.

“If you have an idea that is innovative on how to grow something in the federal market, bring it to us,” Robbins said. “We have a very flexible business model.”