Is The Technology Sector in D.C. Poised To Explode

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By Olandan Davenport

The Challenge Festival
The Challenge Festival

Last month, 1776, a platform in Washington, D.C. for startup companies, hosted The Challenge Festival, a weeklong technology investment competition, at various venues throughout the District. The festival showcased both the revolution of global technology innovation that is occurring and the alignment of forces that make Washington, DC a leading location for the development of a technology sector economy.

64 technology startup companies from around the world gathered to compete for prizes that included the grand champion prize of a $150,000 capital investment into their business. For some of the participants, just being invited to the competition was a prize in itself. “We don’t need the prize money. We are just here to let people know who we are as a new DC business,” said Richard Graves, 31, co-founder of Ethical Electric. Ethical Electric is the first all clean energy electricity company in the United States. While atypical in relation to the other contestants in its financial posture, Ethical Electric was very typical of the other contestants in its unique and cutting edge technology model.
Contestants of the Challenge Festival competed in four categories: Health, Energy, Smart Cities and Education. The technologies ranged from algorithms designed not only to expedite individualized cancer treatment, but help family members understand genetic markers that could affect their own health to a business model that generated profits by creating an online process to donate money as a solution to homelessness and poverty. CyberIQ, a health-based company, that focuses on cancer treatment, won in the health division. It was the only Black-owned business that participated in the competition.

HandUp, the company generating online profits to helping the homeless took home the grand champion prize. Steve Case, the founder of America On Line (AOL), was one of the keynote speakers, along with Mayor Gray, on opening night of the event. He spoke about the future of Washington, DC saying that it will play a pivotal role in global revolution of the technology industry. He said the first phase was the build out of the Internet. During his remarks, Case said, “30 years ago only 3% of the population was on the Internet. AOL’s meteoric rise resulted from the pace at which the Internet grew.”
He said the second phase entailed the development of programs that leverage and build on the Internet. He cited Google, Facebook and Amazon as examples of companies that provide services based on the Internet. The third phase of the evolution of the Internet is its integration into the core activity of society. Case stated that he believed the Internet is moving into its third and most profound phase of development.
He spoke about using the Internet to control energy usage at your home while away. Another example was use of electronic medical records to care for patients, wherever they are in the world, being critical going forward. “Healthcare technology evolution will be particularly important because nearly one sixth of the annual budget of the US is on healthcare related expenditure,” said Case.
Based on the migration of the Internet and related technology into more centralized and regulated aspects of daily life, Case reasoned that the third phase would require a different approach to that of the first two phases. He argued that coalition building and bi-patrician effort would be critical to successfully navigating critical legislation. He suggested that fundamental policy decisions relating to the technology industry like “net neutrality” and immigration would be addressed in Washington.
The Challenge Festival highlighted the importance that critical stakeholders have bought into the idea that Washington, DC is a solid location for a technology sector economy. Case himself started a technology investment firm based in the Washington, DC area. The D.C. Government, who was a sponsor of the festival, also hosted a VIP reception for participants. And last year, the District government awarded an $180,000 grant to 1776 to begin its operations.
The District has hired a Technology and Innovation Sector Manager, Erin Horne McKinney, to execute a 5-year plan to assist in the development of a robust technology sector here in Washington, DC. One aspect of the plan is the designation of a technology corridor on Georgia Avenue, NW between Kansas Ave and New York Ave. The District also has made it very clear that a technology incubator will be a core part of the multibillion-dollar ecosystem it is creating on the East campus at St. Elizabeth’s. Microsoft, one of the anchor tenants on the East campus was also a sponsor of the festival. Other Sponsors included Booz Allen Hamilton (BAH), The US Chamber of Commerce and Medstar Health.
1776 and BAH recently announced a strategic partnership, in part, to help startups grow more quickly by having access to BAH’s corporate expertise and global footprint. According to Donna Harris, co-founder of 1776, the startup ecosystem in DC has grown dramatically in the last two years. “To continue and fully capitalize on that momentum, we need to ensure the companies that get started here stay here. This will require a focus on making sure they have access to the capital they need in the District, and low-cost ways to get into independent office space when they begin to scale.” said Harris.
Viewing both the participants and the audience over the course of the week-long event, it is not clear whether a significant number of Washington, DC residents are engaged in, or even aware of, this bourgeoning industry. “The event was great, and very necessary. There are huge opportunities for Washington to be part of this global change in technology. The areas 1776 is focused on are critical to everyday life and will transcend global politics because they make every day people’s lives better,” said George Redmond, 52, a Program Director for National Institutes of Health (NIH) in the area of cancer research and a native Washingtonian.
Michael Catalano, 49, a volunteer for the festival said “that 1776 as an incubator is a great place to be for networking and job opportunities.” He was a member of the incubator until the business he was part of sold last year. He continued “to hang around” the 1776 incubator to mentor the up and coming entrepreneurs. Harris and Evan Burfield founded 1776 in January 2013. According to the website, 1776 is an incubator designed to connect technology startups with the resources they need, including but not limited to mentors, corporate connections, access to capital and media attention. Among the industries on which the incubator is focused are education, energy and health care.
According to Harris, “DC is so much more than the ‘government town’ the media portrays. The last 18 months have shown that you can mobilize the experts in our region to help promising startups grow. We’ve been thrilled at the reception our vision has gotten and look forward to continuing that momentum in the coming years.”
1776 appears not to have been required by the D.C. Government to enter into a CBE agreement, which is typically required, when a grant is awarded by the District. A definitive answer to this question could not be obtained by the filing of this article. However, based on the event, it is clear that 1776 is at the forefront of the development of the technology sector in the District.

For more information please contact Olandan at diagdeje@cs.com

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