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D.C.’s start-up engine gaining momentum, but hurdles persist for entrepreneurs

By J.D. Harrison,August 19, 2012

Elbowing through a crowd of government and professional services industries that have long defined the region’s commercial identity, Washington’s technology community has expanded in both size and scope in recent years, and no one has a better vantage point on the changes taking place than its youngest members — the start-ups.
On a recent visit to The Fort, a center for start-ups in downtown Washington, we spoke with a number of entrepreneurs building new technologies in the heart of the city. Below are their thoughts on what they’ve learned as the region tries to establish itself as one of the nation’s dominant breeding grounds for new technology.

Dan Berger

Founder of Social Tables

His business: Helping event planners coordinate their seating arrangements.

Fort resident since January.

On building a start-up in D.C.: “D.C. is going through a second coming of technology. The city needs a sustainable economic foundation, and what better industry than technology, which is what we did so well back in the ’90s. So like many of these founders, I gambled on this being that place, and so far it’s paying off nicely. The valuations are still lower on this side of the country, but that’s okay, that’s part of the cost of doing business. I’ll tell you straight up, though, that the other problem is D.C. is a lazy town, a 9-to-5 town. Look at Congress, they take vacations like crazy, and they set the tone for this town. I have had guys that I’ve had to train, had to show that that’s not how we do it, and I’ve actually parted ways with people because they didn’t understand that, and that has to change if we’re going to swim.”

On tackling the challenges: “People go through the ringer when they apply for a job here. We do a five-hour super day, four rounds of interviews — I’m building a team of grinders and I’m looking for people who are ready for a start-up.”

Sam von Pollaro

CEO of Venga

His business: Helping restaurants use data to build better relationships with patrons.

Fort resident since January.

On building a start-up in D.C.: “The city’s start-up scene is definitely improving, and the community has probably doubled compared to where it was a year ago. Now, I could go to tech and start-up events three nights a week if I wanted, and that just wasn’t the case last year. The one thing that’s trailing that trend, but probably benefiting from it slowly, is the perception of people sleeping on a friend’s couch and building some really cool company. That’s obviously pervasive in places like Silicon Valley, but it’s not part of the culture here yet.”

On tackling the challenges: “In terms of finding talent, I have to make sure I’m explaining how start-ups operate, what terms like ‘equity’ and ‘stock options’ mean. Out West, people just kind of understand how that works and how people make money in this system. But here, I have to be sure the talented developers understand those concepts and see this as a viable path.”

Justin McLeod

CEO of Hinge

His business: Helping young people meet dates through friends of friends.

Fort resident since January.

On building a start-up in D.C.: “There’s probably no better time to start a company. Because of cloud computing and software as a service, you can get started for basically nothing. But that does create some problems, because now you have a flood in the market of people who don’t know anything about starting a company. For one, that sucks up development talent, because developers can’t always tell what’s a good business. It also creates a sentiment that money is hard to raise, but it’s really not — if you have a good product, a good team and a little bit of traction, the money is there.”

On tackling the challenges: “D.C. has become a perfectly legitimate place to launch a start-up and more and more people want to be in this city. They want to know they’re going to be working in the center of it all, so we’re using that as a selling point when we’re looking for talent.”

Manpreet Singh

President of Seva Call

His business: Helping service professionals connect quickly and easily with customers.

Fort resident since September 2011.

On building a start-up in D.C.: “I feel like there is a lot more capital available now than even just a year ago when we were raising money. The wealthy community in this area is learning what angel investing means, and more investors are willing to lead rounds of funding rather than just hop on board once a deal comes together. Before, I had to do a lot of explaining, but now it’s a very different conversation when it comes to getting money. At the same time, talent has actually become harder to find, or at least harder to keep, because more of the developers and graphics people we find are interested in pursuing their own ventures on the side, so it’s getting harder to keep our top talent.”