January 20, 2017

“The Tech Scene Isn’t Going Anywhere.”

By Michael Martinez

1776 Co-Founder Donna Harris

1776 Co-Founder Donna Harris

Should D.C.’s tech start-up scene be excited about Donald Trump coming to the White House?

Donna Harris, the co-founder of the local tech incubator 1776, says small businesses around the region might find a lot to like about Trump – despite the fact that so many people in our area voted for his opponent in last year’s election.

Kojo spoke with Harris on the eve of Trump’s inauguration about how D.C. can maintain its appeal for many of those who set up shop here during the past 8 years – and what opportunities might be lurking for those leaving federal jobs as they enter the private sector.

Listen to our conversation: 

 

 

Read the transcript: 

Donna Harris:

There’s a lot of fear and uncertainty and hand-wringing, because it’s hard to separate how people feel about Donald Trump as a person and his campaign versus what his presidency will do. But if you think about his stance on regulation, if he can actually repeal some of the parts of Dodd-Frank and unlock some of the small business funding, that could have a huge impact positively on the ecosystem. Talent-wise, there’s an enormous outflow of talent from the Obama administration that has been exposed to start-ups quite heavily the last four years, so you can imagine many of them will stay in DC – we hope – and get involved in civic tech opportunities, which could be great for the community. It’s hard to say one way or the other, but all in, I would lean toward a positive impact on the community.

Kojo Nnamdi:

So you’re not one of the “oh they’re going to stampede out of town, crowd?”

Harris:

Certainly, I think there will be no shortage of people saying “I just can’t be here. I’m going to go pursue opportunities elsewhere.” But over the last four to eight years, people have come to call this home. They have kids. They’re enrolled in school. They’ve become embedded in the community. They know there’s a vibrant tech scene that has emerged over the last four years. There’s an opportunity for them to get involved either in existing startups – D.C. was one of the highest growth capital markets in the last quarter. There are a lot of great indicators that would say, “why not just stay here and get involved in the community?” I’m optimistic that some of that talent would stay.

Nnamdi:

It’s interesting that you say over the past four years, because President Obama has been in office for eight years and there are a lot of people who feel the Obama presidency had a significant role in shaping D.C.’s tech scene as it looks today, but you restrict that, it would appear, to over the past four years.  Please explain.

Harris:

If you think about his entire presidency, a lot of it pegs back to his focus on entrepreneurship through Startup America. Back in 2011, 2012, Kauffman produced the reports that showed start-ups create net new job growth, and he launched an initiative in partnership with Steve Case and a number of private sector organizations to catalyze startups across the country. Really that didn’t begin to take root at the local community level until about 2012, 2013. We began to see the effects of that in terms of the number of incubators and co-working spaces, funding going up, the culture being much more embracing of the tech scene … even though it began in the first term, you didn’t really seeing it taking root until the second term.

Nnamdi:

Outside of speculation, maybe in some cases uninformed speculation, do we have any idea of what tech policy will actually look like under Donald Trump and how those policies may be felt locally?

Harris:

The one thing I keep coming back to is his stance on regulation. If we think about the biggest challenge that startups face is lack of funding, Dodd-Frank had a pretty significant impact on community lenders and community banks, basically causing a stampede out of the risky capital markets that community banks were so important to in the small business category. If we can assume that he continues on the rhetoric of reducing regulation, that could end up being very positive for the community. The other area is really the focus on privatization – his sense that business can do it better than government. You could expect that many of the roles that government performs, you’d look at privatizing, initiatives that could be very strong for startups as well. Other than that, I don’t think anyone knows. We’re still getting to know his nominees and whether they’re going to toe the line that he’s put out or whether they’re going to go their own way. It’s very hard to tell, and I think that’s what’s really confusing and frustrating a lot of people right now.

Nnamdi:

You’ve already addressed this in general terms, but I’d like you to look at it more specifically — Donald Trump has stated that he wants to shrink the size of the federal work force. Could that promise and his presidency itself drive a rush of talented workers from the government into local tech?

Harris:

Definitely. One only has to look at the Facebook feeds to see the reaction over the election manifesting itself now in action – is that marching? Is that forming new organizations? Entrepreneurs tend to be pretty creative people. If you look at some of the things that have emerged in the last few days, there are startups that have emerged to predict market ups and downs based on Trump’s social media presence. Some of the best companies that we count on as pillars of our economy actually got started in times of uncertainly and challenge. I think those are all really interesting and positive pillars. The other thing is that if you look at small business optimism, the survey of the small business optimism index, December was the highest month of optimism since 2004 and the largest single month gain since Ronald Reagan was elected president. So small businesses are feeling a sense that whether you like him as a person or voted for him or agree with him, there’s something at the small business level saying “this might actually be good for us.”

Nnamdi:

Do you think the larger tech community may associate D.C. with Trump? And if it does, what is that association likely to produce in a city where most of the residents voted, apparently, for Hillary Clinton?

Harris:

That’s a challenge. People tend to say, “did I vote for him or not?” and if I didn’t, I don’t want any part of it. The reality is this is all of our country. The vote is over, and now it’s time to figure out how do we move forward as a country? We have to welcome him and his nominees into the city. We have to figure how do we make sure they have a balanced view of the economy in D.C. and the importance of tech and entrepreneurship. Twitter is a great example. The newly elected president had a tech summit in New York. He invited the Facebooks and the Googles and many of the tech companies. He did not invite Twitter and did not invite any small-to-midsized businesses, even though they represent 63 percent of all job growth in the country. We’ve got to get involved in helping his team understand the importance of small businesses and entrepreneurship – Tech doesn’t necessarily equal Facebook – so that they have a balanced view when they’re making decisions. It’s time to get on with the business of trying to be involved with government and being motivated. If you can’t get into the federal government and help  make change there, you can launch a start-up. The tech scene isn’t going anywhere. There’s a vibrant civic tech community right here that’s focused on how we bring private sector solutions to public sector challenges like education and health care.

Nnamdi:

I was about to ask – how intertwined are federal politics with local tech?

Harris:

Surprisingly, not as much as you think. If you think about many of the start-ups that we’ve seen in the last four years at 1776, thousands of them around country and around the world, they’re tackling things like how do we get education into the hands of everyone who needs it, improving the quality of the tools that we’re using, improving access to health care, energy, clean water, transportation. In many cases, they’re actually far more impacted by local government regulations than federal government. In an era where Trump may or may not be able to get things done, we may or no may not have gridlock in Congress, it really does come down much more to the local community level – getting engaged at the city level and really thinking about what does technology mean for the District and how do we become a place that embraces the digital era and ensures the digital era positively affects everyone. We don’t need the federal government to do that.

Nnamdi:

Yet there are many people who think of Washington and this region in general as the “Silicon Valley of the East.” One would assume that’s because of proximity to the federal government.

Harris:

Yeah. If you look at many of the tech companies that have gotten big funding rounds, or they’ve been acquired – we actually have a phenomenal track record of mergers and acquisitions across the region – there is usually a very high correlation of selling to the federal government, being a federal contractor. But there’s a new breed of startups that’s emerged in the past four to six years that is really [focused on] how do we consumerize much of what the government has done. If you look at the Uber example, the Airbnb example, they’re not selling anything to government. They’re simply creating a private function that makes obsolete a function that we used to rely on government for. And you’re going to see many, many more of those kinds of apps and companies evolve and emerge, as people really understand that in many cases you don’t have to ask for permission of the government. You can ask for forgiveness later.

Nnamdi:

In spite of that, do you think that D.C. tech companies will continue to take advantage of their proximity to the federal government in terms of connections, contracts and explores?

Harris:

Definitely. Regardless of who’s in office, this city is a city that operates on who you know. That will continue to be the case. We’re a global city, and people continue to fly in and out of here from all over the world in every industry. And that’s one of the biggest assets of the city, and that’s not going away.

Nnamdi:

Do you think those advantages, if you can call them that, might be compromised by the tension that this election has created?

Harris:

I think there is a challenge. People have dug in positions. The further we’ve gotten toward inauguration, the more that digging continues. A lot of us who are focused on the community level hope that that is a peak on inauguration day and that we sort of regain some semblance of ability to communicate and have civil conversation with one another. At the end of the day, I think we’re all saying a lot of the same things. We want jobs for ourselves. We want to ensure that communities and cities are strong for the future. I think that’s not a Republican or a Democratic issue. That’s a human issue. We have to remind ourselves of the things we have in common as opposed to who we voted for.

Nnamdi:

One of the things I find fascinating about Washington is that everybody has passionate feelings on one side or the other about issues and about politics. But in the final analysis, everybody gets up every morning and goes to work and does what it is they have to do – and that’s likely to continue after the inauguration.

Harris:

That’s right. We’re all humans at the end of the day, and we have to remember that regardless of who’s in office. It comes down to each and every one of us being able to impact our own communities. It doesn’t really matter who’s in the White House as to whether we can get up in the morning and do that.

 

 

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