Since the fine tech summit that was BarCampDC, there has been quite a bit of rumbling about the lack of investors (Angels & VC's specifically) lurking in and around DC. In the past couple weeks, some people have laid out a grand vision of "Bringing the Valley to DC" (Nick O'Neill), while others are focusing on building it from the ground up by motivating groups and connections (Will Kern), and others are just ticked because – despite pitching the idea a month earlier (Ann Bernard) – everyone is acting like its a new idea.
DC is a funny and unique place. In the 6+ years I've lived here, here are the key aspects I've identified:
First, there is a huge amount of tech. I've discussed this recently, on any given week you could easily attend 2-3 meetings in the area between downtown DC and Reston, VA. There are groups on everything from general web design to PHP to Ruby to Drupal to startups and probably more that I haven't heard of. And those are just the communities, when you consider the companies, the number quickly grows. The sheer amount of technology people and projects is staggering.
Second, the amount of tech is misleading. Yes, we have lots of it, but if you delve into many of the groups, you'll quickly find a handful of key people that are in many of them. In fact – I've been attempting to confirm this with others – I estimate that there are really about 100-200 tech people in the region who are active in these groups. That sounds like a lot until you consider how big and diverse the tech community is.
Third, the DC region is wealthy – incredibly so – but that doesn't translate to "investment wealthy". The vast majority of the wealth in the area comes from stable jobs with the government or one of their major contractors. There's nothing wrong with that per se, but it creates a different mindset. That $250k for Angel investment is likely what they paid for their home (if they timed it well).
Fourth, the mindset is different. DC tends to be risk adverse. As noted above, since much of the wealth has come from long term jobs with a single organization – normally the Feds – the idea of investing in a tiny organization just starting seems ridiculous. And quite often, the ones who have tried it before were burned in the dotcom bust.
Finally, we have a press cycle – and let's face it, DC is the center of their world – often focused on bad news. Every time the stock market takes a drop, a subprime lender takes a hit, or the presidential candidate of the week sees fit to ridicule "Big Anything", huge swathes of the Press see it as their opportunity to describe how we're all one paycheck from financial and societal collapse.
So how do we fix this one?
First, we have to realize that it can't be fixed quickly. Silicon Valley wasn't created in a day, it was created by 50+ years of investments, time, effort, and innovation. That said, the time it takes wealth to accumulate and investment to move is a fraction of what it was.
Second, I think our tech communities need to communicate better. As Ann Bernard noted recently, we don't share information as much as we should. Everyone is working on their little project but not sharing notes, doing demonstrations, or even talking about it as much as they should. On this route, I'd recommend another group along the lines of a Demo Day. If we got together on a regular basis and gave 20 minute demos of our latest projects – yes, similar to what YCombinator does and Paul Graham talked about – we'd have a better idea of what people were doing and it'd also create some accountability/motivation for each other.
Next, we need to be willing to share introductions and make them meaningful. Don't introduce me to someone who just wants to sell me something. Introduce me to people who have common interests and goals… and make the introduction useful. No, I don't care about their dogs or their family, but I might care that they're kicking around the same ideas on their blog or that we have a common interest in theatre. Guy Kawasaki has quite a bit on this point.
Finally, I think we need to have a few DC-local companies make it big. AOL was the first of the 90's and probably set what we have in motion. If we had just a couple more, we'd have the type of people who a) have the investment capital required to start other companies and b) are familiar with and willing to consider investing in a smaller company.
Are these ideas particularly new? No, not really.
Have they proven successful elsewhere? Yes, I believe so.
Can we take steps immediately to make them happen? On most yes.
So why are you still sitting there?