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What’s the Future of D.C. Technology?

Posted by Nick O'Neill on February 22nd, 2008 10:51 AM

On Monday, a Washington Post article was published discussing the AOL exodus effect and the impact on the local D.C. technology community. Since that article was published I’ve had a number of conversations with individuals active in the community. There are a few points that I think are critical to this conversation as I’ll outline below but ultimately it’s the participants that decide what will really happen.

Is there a lack of community?
According to the census bureau, D.C. has the second highest technology population outside of silicon valley. If there was anywhere else that would have a vibrant tech community outside of Silicon Valley, I would imagine D.C. would be it given our “tech density.” There are a number of people that have been criticized for not being highly active in the community and I still think that’s the case but it’s changing rapidly.

In Silicon Valley, company executives of larger companies attend events and brush shoulders with aspiring entrepreneurs. This exposure helps both the entrepreneurs as well as the companies that these executives work for. In D.C., many of the technology companies are multi-billion dollar companies and having the executives of these companies hanging out with aspiring entrepreneurs may not paint the right picture nor may it be necessary.

If you attended the Refresh DC event last night you would have seen that this community has grown rapidly over the past 12 months and I would imagine that this continues for at least the next 12 months as well. While we may not have the same mixture of entrepreneurs, venture capitalists, angel investors, developers, designers and tech bloggers as Silicon Valley, we definitely have a great mix.

What is missing?
Currently I believe that there are only a few things missing from the community that would help contribute to the growth but I also think that we are well on the way. One of the primary things is positive press about the D.C. technology community. The Washington Post is consistently critical of the D.C. technology community. In their most recent article, Kendra Marr and Zach Goldfarb describe the AOL exodus as throwing this community into turmoil.

Perhaps their article may not have been as critical as I have portrayed it but time and time again, there is negative press about this community coming from the Washington Post. I have personally spoken with writers at the company and each time I do, they speak with a tone that implies there is no chance this community will materialize into anything significant. With our without the post this community will succeed and I think that it’s going to happen through a highly active blogging community which has already begun. It simply needs to continue to grow.

The second thing missing is a culture of risk that exists out west. I don’t think we’ll ever have the same culture of risk but we can sure embrace it and encourage others to take risks. Rewarding failure is critical. Part of this risk taking includes the need for venture funding. There are already a few venture companies locally but without local universities that consistently produce entrepreneurs, this community will always have less entrepreneurs than Silicon Valley and we won’t see the influx of continuous web focused venture funding.

There is plenty of room for discussion surrounding the culture of risk in D.C. and the supposed “lack of funding” so feel free to post about it in the comments.

Where do we go from here?
As long as the local people including Jason Garber, M. Jackson Wilkinson, myself and others continue to host events, we’ll see this community continue to grow. I think involvement with the local universities would be a great thing and we have already seen a little of that with the University of Maryland but there is plenty of room for growth.

We need to keep the buzz going so if you aren’t blogging regularly, start blogging more! Seriously, this may be one of the most important things to the success of any community. Right now the tech blogs are mostly a silicon valley echo chamber. That needs to end now and D.C. needs to be one of the top participants in furthing this effort. Any other ideas about what should be done?

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This entry was posted on Friday, February 22nd, 2008 at 10:51 am and is filed under D.C.. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Viewing 19 Comments

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    Nick,

    I agree that we've taken some heat in the press of-late, but I also don't think that they've been overty critical in the past. The Post has very little local business news (one day/week) and small tech is rarely mentioned. Maybe that's the real issue...but to Kendra and Zach's credit, they did provide a lot of coverage of startup weekend and the tech community a few months back...and nothing really negative up until this recent article.

    But I didn't much appreciate that article, and wrote my own response here.

    We're in an interesting community, because we have an international newspaper that we expect to care about a sector that's not big on people's minds here, in comparison to big business and government contracting. Most cities don't even have a paper that gets read outside of their 30 mile radius. So I guess any coverage is either damning or inspiring...but it doesn't necessarily surprise me how little we get.

    As for blogging, it would be great if more people would cover the scene. It begs the question of whether we need more of the west coast interested in our writing, or whether we ought to be commenting on each others' writing more. But either way, any publicity that talks about our events and companies growing is a good thing.
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    I think they're missing the change in mindset too...

    In the past, the economic success of an industry/area/etc was based on having a couple major players/employers in the area. While those are still strong indicators and aren't irrelevant, they're only part of the picture. In the last couple years, the number, variety, and types of tech companies in the area has not only exploded, but they're becoming better connected.

    I think this is where DC is excelling and growing in ways that the WaPo doesn't detect and probably can't get their minds around... yet.
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    Nick, thanks for posting this, it rather concisely sums up a couple of the rants (as Martin would say) I've had floating around my head.

    As you mention, having 100+ folks brave the cold and impending bad weather (two months in a row now!) to attend a gathering like Refresh blows my mind and should silence any criticism regarding a "lack of community" in the DC area.
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    As a service provider to the DC region's technology community, this is obviously an important issue for my firm. I have two thoughts about the ingredients necessary for a vibrant community:

    1. It's ultimately about the quality of management who run our region's emerging growth companies. I recently wrote about this in follow-up to a meeting I had with the new CEO at Reston-based CorasWorks:

    http://strategicguy.blogspot.com/2008/02/commun...

    2. A strong desire to take risks. In a meeting with a client this week who is very much a serial entrepreneur we talked about this issue. He said that VCs in this region swing for doubles, while in the Valley it's about the big score. Even if that means a majority of a VC firm's investments eventually don't work out.
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    Nick is right on the second reason, that of our culture of risk.....what do you expect when 80% of all business in our town originates from the US government....US gov rightfully buys products and services that are "proven" and have been operational for years....discourages risk....you get penalized here for doing risky things.

    Also, that stat about the high density of technology specialists and researchers in DC is misleading....we do have the highest concentration in the country of advanced and post graduate degrees....please think about what that says about our tolerance for risk....go count how many advanced degrees there are among the entrepreneurs in Silicon Valley.....look up the number of bachelor vs advanced degrees held by groundbreaking entrepreneurs in the US overall and that should tell you something....think about why a person who has invested many years of her life in an advanced education should want to throw that all away to go start a new company as compared with a person who barely or did not get a bachelor's education....look at the mindset and personality of an entrepreneur and realize that here in DC many of us who like careful analysis, thorough planning and time for extensive documentation tend to frown on that.

    ...there are many other reasons why we do not have the culture and resulting business community in DC that they have in Silicon Valley but they are too numerous for me to commit here. Rather than try to imitate Silicon Valley's model we should try a different one that suits our culture and demographic more easily.

    K. Tjong
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    Nick...you know this is a topic near and dear to me and I've been continuously brewing on it. I will do a post to share my full thoughts but you hit on all the major points. I think everyone still needs to be more active. We're not there yet because we haven't cracked the nut on what role everyone is playing to grow our community. It involves different involvement for the various people in the community.
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    @Ann, I agree aside from the roles position. A community naturally exists. You have naturally occurring leaders and as such I think we are starting to see that take place. In regards to people being "assigned" a role I think everyone will naturally figure out what role they want to play and it will happen.

    We just need to continue providing venues for the discussion to take place and then eventually we will see this community grow. I think it's happening we just need to continue the discussion and build the buzz.
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    @Kiem, totally agree. Don't need to imitate ... just need to (as I said on the last comment) build the buzz. As I said in the post "While we may not have the same mixture of entrepreneurs, venture capitalists, angel investors, developers, designers and tech bloggers as Silicon Valley, we definitely have a great mix."
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    As a side, there was some good positive coverage of the area by Zachary today:

    Wash Post Blog

    I'm not at all playing down this issue--negative articles may piss us off, but the good news is that we have an awesome community here.
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    Nick: Re the line in your article: "we won’t see the influx of continuous web focused venture funding."

    Is that referring to funding of web technology or web 2.0 startups? Because i do think our local culture is not in sync with the web category....we should do better with more traditional techs like biomed or IT hardware.

    The formula the guys out west are using for Web2.0 is "think it up, build it, run it, monitor it and if it does not get traction real fast (like a month) move on to the next thing". That mindset will not do well here, but with low barriers of entry you really do need speed for web 2.0 I think we are thorough but not speedy.
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    Hi Nick,

    As usual great post. I often have a lot of these questions kicking around in my head. Dont know if you saw this or not, but I wrote this a couple of weeks ago about this very, almost very, topic.

    http://eastcoastblogging.com/2008/02/10/does-th...

    While I do not want it to be true, I think it may be a factor

    take care

    jimmy
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    Thanks for keeping this discussion going, Nick.

    First, on AOL: I personally think that AOL's move will be a boost to the local web community, at least in the short-term. At Viget, we have a couple of new start-up clients founded by former AOLers, and we've talked with a number of potential hires who have left or are leaving. So, from my point of view, it's a bunch of experienced, talented people getting mixed into the community in new ventures, which is exciting.

    Second, on funding: I met with a small group of angels and VCs a couple of weeks ago where the topic of discussion was: where are the good emerging companies around here to fund? It was the exact flip of the conversation I normally have with entrepreneurs looking for smaller investments. I think there's interest out there on both sides, but the start-ups need to be really solid ideas, and the funding sources need to be sincerely interested in early-stage. That connection will happen for the right ventures.

    I agree that we need more of a "culture of risk" and I agree with Kiem's comment about failing fast. What will boost the community ultimately is wins. When a Clearsping or a Mixx sees a big exit, for example, those kinds of deals will be exciting, and will usher in a whole new group of start-ups and funders.

    I don't think what's "missing" is big media coverage. That will come if we earn it as a community. What's missing is a more open, active business culture where individuals and companies share whatever they can -- knowledge, connections, office space -- and where the results are tangible (more start-ups, more exits, etc.), even if they aren't direct.

    There's a core of us doing our part, and I think it's spreading. I'm optimistic about the future for this area, regardless of the current buzz in major media. They'll catch on.
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    We discussed the same thing on last Tuesday's District of Corruption. AOL has been dead for some time, so this is a good thing. What may be more harmful is Sprint's exodus.

    And Thursday's SMC event was also a big hit. Just goes to show you, the Washington Post is out of touch with its community. Ironic, isn't it?
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    There are a few points that I think are critical to this conversation as I’ll outline below but ultimately it’s the participants that decide what will really happen.
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    Since that article was published I’ve had a number of conversations with individuals active in the community.
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    There are a number of people that have been criticized for not being highly active in the community and I still think that’s the case but it’s changing rapidly.
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    In Silicon Valley, company executives of larger companies attend events and brush shoulders with aspiring entrepreneurs.
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    The second thing missing is a culture of risk that exists out west. I don’t think we’ll ever have the same culture of risk but we can sure embrace it and encourage others to take risks.
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    I agree with Marc Housmen comments and i'll support him..It's ultimately about the quality of management who run our region's emerging growth companies.

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