Tech Start-Up Envy - Why Does the Capital Region Come Up Short?

Driptech, Scribd, SolarCity, Zynga, Fitbit…they are all interesting technology start-ups recently included on BusinessWeek’s list of the “Most Intriguing New Businesses.” There’s a problem with the list though: not a single company based in the Washington, DC region made the cut. Why?

By Marc Hausman, Strategic Communications Group | December 3, 2009

Driptech, Scribd, SolarCity, Zynga, Fitbit…they are all interesting technology start-ups recently included on BusinessWeek’s list of the "Most Intriguing New Businesses."

There’s a problem with the list though: not a single company based in the Washington, DC region made the cut.

How can that be? Where I call home has all of the ingredients to nurture a world class community of entrepreneurial technology companies.

For starters, the largest buyer of information technology products and services has centered most of its decision-making here. That’s right, the US federal government spends billions of dollars each year on a broad set of products, services and capabilities.

In fact, the federal Chief Technology Officer (CTO) recently unveiled a Web-based IT dashboard that tracks a fair amount of this annual spend.

This strong government footprint has attracted a myriad of systems integrators that cater to the technical and innovation requirements of government agencies worldwide. Lockheed Martin is based in Bethesda, Maryland. SAIC recently relocated to McLean, Virginia. CSC moved last year to Falls Church, Virginia.

These government contractors – often referred to as "Beltway Bandits" – serve as a training ground for technical and management talent.

Moreover, they often develop interesting products and applications with potential to be spun out as distinct companies. Systems integrator Mantech did just that two years ago with the successful creation of information security vendor Netwitness.

The potential for robust technology transfer also resides in the Washington, DC region’s research institutions, including George Mason University, George Washington University and the University of Maryland, College Park. All have outstanding engineering and business programs.

And finally, there is a mile-high stack of smart, experienced money in this town. Venture capital firms like NEA, Novak Biddle and Valhalla Partners, as well as private equity shops like Carlyle Partners are all well versed in helping start-ups successfully grow and mature.

So, again…I ask…why is the Washington, DC region a tier two player when it comes to technology start-ups?

You can’t put us in the same sentence as Silicon Valley without snickering. And we fail to measure up to technology hot spots in Boston, Austin and New York City.

Perhaps it’s about ego and attitude.

Are we in the DC business community content with modest success rather than aspiring to create the next Apple or Google? Are we too comfortable and conservative because of the government presence?

Marc Hausman is president/CEO of Strategic Communications Group, a public relations consultancy based in Silver Spring, Maryland. Read more at: http://www.strategicguy.blogspot.com.

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