Washington has long been known as a ‘government town.’ But with a large pool of highly educated, tech-savvy workers, it’s also becoming a hub for tech-oriented entrepreneurs. We examine the challenges and opportunities facing small start-ups in the Washington region.

Guests

  • Philippe Chetrit CEO, The Affinity Lab
  • Daniel Yates CEO and Founder, OPOWER
  • Peter Corbett CEO, iStrategyLabs

Transcript

  • 13:20:14

    MR. KOJO NNAMDIIt takes a unique breed of person to build a successful tech business from the ground up. Someone with enough smarts to come up with a new idea but someone reckless enough to try it out. The kind of character traits we don't always associate with this government town but Washington is home to a growing number of tech savvy entrepreneurs. Building new businesses, testing out new ideas and hiring people even in the midst of the recession. We're exploring small businesses that might someday scale up and what our region can do to attract and help tech entrepreneurs.

  • 13:20:46

    MR. KOJO NNAMDIJoining us in studio is Philippe Chetrit, he is CEO of the Affinity Lab. That's a shared workspace along the U Street corridor in Northwest D.C. It's home to 50 small businesses and other organizations. Philippe, thank you for joining us.

  • 13:21:01

    MR. PHILIPPE CHETRITThank you, Kojo.

  • 13:21:02

    NNAMDIAlso with us is Daniel Yates, CEO and Founder of OPOWER, a smart grid and energy efficiency software company out of Arlington. OPOWER started three years ago. Today is has over two million customers. Daniel, thank you for joining us.

  • 13:21:18

    MR. DANIEL YATESThanks for having me.

  • 13:21:19

    NNAMDIAnd also with us is Peter Corbett, CEO of iStrategyLabs, that's a social media and marketing company. Peter was a co-creator of one of our favorites around here, the Apps for Democracy Contest that was sponsored by the Chief Technology Officer of the District of Columbia to design apps for city services in D.C. Peter, thank you for joining us.

  • 13:21:39

    MR. PETER CORBETTThank you so much, Kojo.

  • 13:21:40

    NNAMDIAnd, of course, we take your calls at 800-433-8850. What do you think our local governments should be doing for small tech start-ups or small start-ups, period, 800-433-8850? Dan, these are trying times for American businesses with a sluggish economy and unpredictable markets. But there are opportunities out there for small businesses especially in certain sectors, like, green power. OPOWER focuses on energy efficiency. Over the last three years, it's grown from a relatively small start-up to a company that, as I said earlier, serves two million customers and employs almost 200 people.

  • 13:22:18

    NNAMDITell us about what exactly it is that you do?

  • 13:22:19

    YATESYeah, so we are an energy efficiency consumer-facing software company. What we really do is help give consumers much better information about their energy use and we do it by partnering with utilities to take advantage of the vast, really treasure trove of energy data that utilities have about their customers and put it to good use, to really give people better information. So as an example, helping people understand how their usage compares to what's normal. How does your usage stack up to, you know, similar (word?) in your neighborhood?

  • 13:22:52

    YATESAnd then targeted tips and recommendations so that people can actually act on that. And so in working with the utilities and delivering this information, we in fact get customers to save energy. On the average between $20 and $40 a home. And when you have millions and millions of homes, that ends up being a lot of savings.

  • 13:23:09

    NNAMDIWell, electricity rates, as we all know, are not necessarily sexy. Most of the information we get from power companies seems to be pretty abstract. Most of trust either -- the figure on the bill and pay for it. OPOWER is trying to change that. And you're borrowing a page from, I guess, behavioral physiologists. You're basically tapping into something primal in all Americans, our sense of competition. When you said 40 percent less, my ears perked up and I said, oh, I got to get in touch with OPOWER.

  • 13:23:36

    NNAMDIThat's what happens, isn't it?

  • 13:23:37

    YATESThat's exactly right. It's the case that everybody, whether it's for environmental reasons or for saving money or if we have, you know, people are interested in oil and energy and independence, we all want to save energy. And when we find out -- the thing is, that we just -- you weren't born knowing what your utility bill should be, right? So you live in a nice home in the suburbs and you have a $250 bill. Is that high? I don’t know.

  • 13:24:03

    YATESBut you find out that the average, you know, neighbor in your area with the same sized home is spending $150 and all of a sudden, the light comes on, no pun intended.

  • 13:24:12

    NNAMDIAnd you can say, take that Pepco. Philippe, Affinity Lab is a unique...

  • 13:24:17

    YATESYou can say that.

  • 13:24:17

    NNAMDI...place. (word?) my power's out during the last snow storm. Affinity Lab is a unique place. It's a business that helps generate other businesses. Right now there are 50 separate organizations being operated out of your space along U Street Northwest. Could you please explain?

  • 13:24:33

    CHETRITYeah, first and foremost, we are a entrepreneur community and then secondly, I think we're a shared office space. So, to me, that means we provide collaborative culture, business tools and a managed infrastructure to anybody looking to launch their dream business in a creative, effective, affordable space. So, you know, how that manifests, you come and you get a membership with us. That gives you 24/7 access to this, you know, amazing space that has conference rooms and internet and all the kind of stuff entrepreneurs can chew up and bite up and use to get their business going.

  • 13:25:12

    CHETRITBut, you know, the really compelling part about working out of the lab is being part of this membership community, being surrounded by 50 other entrepreneurs, which means two things, you know, you're surrounded by peers, which means you can share on sort of an experiential level, you can bounce ideas around, you know. These are the people that kind of get your lifestyle. Then you're also surrounded by 50 other businesses, so, you know, you've got software developers, you've got graphic designers, you've got PR firms, you've got any sort of consultant pretty much sitting next you. So you've got a pre-vetted group of people to use and to empower, which creates a lot of efficiencies and makes you a more effective business.

  • 13:25:53

    NNAMDIInterestingly enough, nobody ever started a business because they wanted to haggle with the internet service provider or figure out how to get cleaners to service their offices. So on one level, Affinity Lab is a place where those kind of annoying logistics are taken away. Is there any way to characterize the type of businesses that we're talking about here. You mentioned a wide -- a pretty wide variety in just three or four businesses.

  • 13:26:14

    CHETRITAbsolutely. So typically the lab has been split up into a couple different groups. So 50 percent of the lab has been service providers. So in my mind those are graphic designers and the web developers and the P.R. consultants and accountants. And those are the kind of people who, probably in their ambition, don't have any, you know, they're not trying to scale. They are just really passionate about what they do. And they want to offer that as a service. Then a quarter of the lab is non-profits.

  • 13:26:43

    CHETRITAnd another quarter of the lab is, you know, pure place start-ups whether that's a consumer product or a tech company. What's amazing is these service providers, you know, their alternative is go home or go to Starbucks, which is not the most healthy alternative. So they stick around for a long time. You know, I've got members who have been there six, seven years. The other half of the lab, they kind of cycle in every two to three years and -- which is amazing because they show up, their mission is really to grow. And, you know, in their minds, in three weeks from now, they want to have 100 employees so...

  • 13:27:16

    NNAMDIThat's Washington.

  • 13:27:16

    CHETRIT...what's better than kind of, you know, getting a, you know, an agreement where, you know, there's -- it's month to month, you don't have to worry about calling Pepco and worry about what your Pepco bill's going to be like. And you have all these service providers at your fingertips. So we've actually created this really cool economy that kind of happens in our space.

  • 13:27:36

    NNAMDIHave you started your own business or worked for a start-up? Call us, tell us your experience 800-433-8850 or send us a tweet at kojoshow. Peter, you own a small business but you've also been thinking a lot about how the city can create an environment that supports small entrepreneurs. Tell us about iStrategyLabs?

  • 13:27:54

    CORBETTSure, iStrategyLabs is a digital and experiential marketing industry. So we build technology but also marketing campaigns that bridge the digital and physical worlds, right. So how do you engage whether it's a consumer population or a B to B population in some sort of creative, crazy idea or I'm get them engage in a project or a service. Much more than what we do is, I think, what we believe and what we're very passionate about, which is building a innovative and creative culture in Washington, D.C. specifically, but also nationally.

  • 13:28:22

    CORBETTSo a lot of the things that we've done, things like Apps for Democracy or Digital Capital Week or the creation of D.C. Tech Meetup is about nurturing that community of people who we want to see grow around us. And they're in places like Affinity Lab. And they're very well supported by people like OPOWER.

  • 13:28:36

    NNAMDIWhat's that D.C. Tech Meetup, you mentioned?

  • 13:28:39

    CORBETTSure, so the first one will be March 1st. We didn't even really promote it but there's over 250 people who are technologists that will come together to focus on start-up culture, right. All things that need to know, whether it's venture financing or rapid application development or how to find a co-founder or all those things. And what we aim to do with that over the course of, basically, the next year and from now on is create the big stage for innovation in the district.

  • 13:29:03

    CORBETTThere's no place here now that if you're going to launch a product, where do you do that? Who do you call? Do you call Kojo? Maybe you call Kojo. I mean, I'm -- maybe people do. We need to have a place for start-ups to share what they're working on. And this is a part of ecology.

  • 13:29:17

    NNAMDIDon't call me. Whether we use -- whether we deserve it or not, all cities develop certain reputations. Washington is known as a government town, the Silicon Valley is known as a place where technology businesses are born. If we really want to attract cutting edge entrepreneurs, and this question is really for all of you starting with you Peter, what do we have to do? We got a tweet from tehpennycook saying, "Why is D.C. so rough for start-ups?"

  • 13:29:43

    CORBETTIt's interesting, you know, I don't think D.C. is that rough for start-ups. There's a terrific project that launched a couple months ago by a couple friends of mine, (word?) and Michael, and it's called, Proudly Made in D.C. If you go to proudlymadeindc.com, you'll see over a 100 start-ups that are growing and thriving here in the district. The recipe for innovation anywhere, but specifically within the district is first talent, right? You need the people that have the skills to build the new kinds of businesses that we want to see go from one founder or two founders to 200 employees in three years like OPOWER.

  • 13:30:14

    CORBETTOr 2,000 employees like Living Social, right. Most of your listeners are probably well aware of Living Social. And they're a D.C. based start-up. Talent is that first piece, financing is certainly an issue. But I don't think there's any real scarcity of capital. If you're talented and you have a great idea and you have execution capability, money is going to be thrown at you. That's not the issue. What's missing in Washington, D.C. right now is really about physical place, right.

  • 13:30:37

    CORBETTThis region is so fractured. There's not enough density, that people aren't bumping into each other enough. And once you have that density, you have that friction and when you have that friction, those sparks fly where new companies get created and they grow and they thrive. So if we had something like a quote-unquote, digital district somewhere here in town, call it a two or three block radius that a lot of our start-ups starting to concentrate in, interesting things would happen.

  • 13:31:02

    CORBETTAnd the Office of Planning is well aware of this and is interested in that kind of idea. So maybe we'll see something like that come alive.

  • 13:31:07

    NNAMDIWe're going to have Harriet Tregoning, the Director of the Office of Planning on the broadcast on Thursday. We'll certainly raise that issue with her. But maybe, Dan, one of the issues we don't have that is because of Washington culture. I mentioned earlier and it's my understanding that you can talk a little bit more about this. That if you have someplace with eight employees in Washington, D.C., people think of it as maybe someplace on the verge of failure. If you have eight employees in Silicon Valley, people say, no, this might be a breakout company coming up here.

  • 13:31:37

    NNAMDIWhat is it about the Washington culture that likes big offices with lots of workers in it?

  • 13:31:41

    YATESWell, you know, I think this just like -- just as OPOWER builds on this for our products, it's about social norms. So, you know, if you look -- and I think what Peter is saying is exactly right. We need and we would all benefit the -- entrepreneurial community here would benefit tremendously from there being a bit more density in that community and awareness and in connectivity because the average person here doesn't know someone who joined an eight person company that turned later into a 8,000 person company.

  • 13:32:11

    YATESNow, that's quite the exception in San Francisco or in Palo Alto as well but most people know somebody who -- for whom that's happened. And so joining an eight person company doesn't seem crazy. I think, here it's just -- it's a higher bar for those reasons. So, you know, we definitely felt that as we started. You know, you bring in someone who you haven't met personally -- you don't know personally who's currently working at Lockheed Martin and they come into your offices and they see that you, you know, have very sparse supplies.

  • 13:32:40

    YATESThe desk they're about to sit at is in shambles. And they look back at their office at Lockheed and think, what am I doing? And they don't have anyone to pat them on the back and say, no, I did it, too. And so, you know, by creating a little, I think, any effort that we can do and I think that's why this -- the stuff that Philippe and Peter are both are doing, I really applaud.

  • 13:32:59

    YATESAnything that we can do to get more people just to see more people who are doing these things is self reinforcing. And that's what -- it took the Valley 50 years to get there. It wasn't, you know, it wasn't like this in the 40's. It was...

  • 13:33:11

    NNAMDIYes, because you're beyond the start-up phase now.

  • 13:33:13

    YATESYeah.

  • 13:33:14

    NNAMDIBut how, Philippe, can this region begin to re-brand itself?

  • 13:33:17

    CHETRITOh, that's a great, great question. You know, in my mind, there's two D.C.s. There's Washington, which everyone knows is big government, big buildings, big suits, and then there's D.C., which I think is what, you know, probably the four us in this room are part of. And unless your listeners are part of, which is actually this part really creative town. It's full of talent, full of really smart people doing great, you know, amazing things. And that's kind of what we need people to know. That's what needs to be outwardly facing in this nation, is D.C. rather than Washington.

  • 13:33:49

    CHETRITWhat I really love about this city is exactly what Peter and Dan are up to right now. Which is, it's a small community here of start-ups and we all know that to create -- that we need to create our own solutions. You know, no one here is waiting around for somebody else to grab the horns and make it happen. These guys are who's making it happen. And that's what's amazing about starting your business here.

  • 13:34:10

    NNAMDIHave you ever worked at a start-up? Call us 800-433-8850, do you think we really suffer from this bigger is better mentality here in Washington? Is that our culture? What are your suggestions about how we might be able to change that? Call 800-433-8850 or go to our website kojoshow.org and ask a question, make a comment there. Here is John Michael in Frederick, Md. Hi John Michael.

  • 13:34:36

    JOHN MICHAELHey, how you doing?

  • 13:34:36

    NNAMDIDoing well.

  • 13:34:38

    MICHAELYeah, I've actually been to Affinity Labs with my company. I have a web design development firm and it's a great space and I applaud what they're doing. I'm just curious if historically -- I know they've been around for a little bit, historically they've seen the companies that graduate, so to speak, and move on from there. If they see any of them merge or start to form sort of loose partnerships? If that relationship they built there carries on once they leave?

  • 13:35:03

    CHETRITThat's a...

  • 13:35:04

    NNAMDIPhilippe?

  • 13:35:05

    CHETRIT...that's a great question. And that is, almost like a proud parent of all of our members, one of my favorite things to see happen. And that happens all the time. You know, members -- in my mind, everyone's running around with these great half ideas and they're just waiting to collide with someone else who has the other half of their idea. And that's what's happening all the time at the lab. Members are always just bouncing ideas off each other, realizing that together they're much more powerful than they were singularly and creating something totally new.

  • 13:35:31

    CHETRITAnd that's happened many, many times. You know, in 10 years, we've helped launch about 130 different companies and 83 percent of them are still in business today, which is something like 10 times the national average. And that's totally because of that. Because people are bouncing ideas of each other, helping each other, supporting each other.

  • 13:35:52

    NNAMDIJohn Michael, thank you very much for your call. Peter, I wanted to underscore the point you made earlier or Philippe just made actually about the difference between Washington and D.C. We went to the usajobs.gov website, put in our zip code and typed in -- put in -- typed in our zip code and started searching under technology. Here's one of the ads we come -- we came up with. A typical job listing, "This is an occupational band three job in the Defense, Civilian, Intelligence, Personal System, DCIPS. Band three duties are at the full performance level and are equivalent to those of the GSGG 11, 12 and 13."

  • 13:36:31

    NNAMDI"The selectee's salary will be set within the band equivalent to a GSGG grade based on the selectees qualifications in relation to the job. If you're claiming five points veterans preference, you must submit a copy of your DD214, Certificate of Release or discharge from active duty or other documentation that supports...

  • 13:36:48

    CORBETTI want it.

  • 13:36:48

    NNAMDI...your claim."

  • 13:36:49

    CORBETTSign me up. I want it. I want that job right now.

  • 13:36:51

    NNAMDIWe were cruising on Peter Corbett's website and saw an interesting job listing. He is looking for a social experienced producer. Here, ladies and gentlemen, is the difference between Washington and D.C. We're quoting Peter's listing, "You must have a deep understanding of social media, seriously. If you're not a Facebook, Twitter blogging fanatic, please don't apply. We also don't care if there are pictures of you on Facebook doing keg stands, but please don't have a sparkly MySpace page, that's just gross." And you go on to list your ideal candidate as, "A geek and or hipster at heart. No pop collars allowed."

  • 13:37:29

    CORBETTYeah, we're really, very against pop collars.

  • 13:37:32

    NNAMDIOh, and therein, ladies and gentlemen, you have the difference. You can call us, 800-433-8850. Have you started your own business or worked for a start-up? Here is Glenn in Vienna, Va. Glenn, you're on the air, go ahead, please.

  • 13:37:45

    GLENNI'd like to hear a comment from your guests on -- I have a theory that part of the problem we have is there are too many regional authorities competing for the attention of start-ups. You know, D.C., Northern Virginia, Maryland, and by competing, we are not raising the tide. So I'd like to -- I'll get off and listen to your guests.

  • 13:38:09

    NNAMDIHere's Peter Corbett.

  • 13:38:10

    CORBETTGlenn, I think your inference is absolutely correct. And unfortunately I know a little bit too much about all this. D.C. specifically suffers from being in the center of this donut, right. We call it that in a number of different ways. And D.C. has been the weakest part of this region, right. So Northern Virginia is probably one of the most powerful, it's one of the largest technology councils in the country and I think Northern Virginia Technology Council does a great job at what they do. But they're not focused on D.C., right? And no one seems to really be focused on D.C. except for the community itself.

  • 13:38:40

    CORBETTSo we're very much a grass roots movement of people who are focused on innovation in the district. There's also a very subtle things that I've uncovered over the course of being an advisor to Mayor Gray's transition team which is, D.C. itself, has the highest capital gains tax out of any region, right, in the area. So it's...

  • 13:38:57

    NNAMDIJack Evans keeps saying that.

  • 13:38:58

    CORBETTRight, 8.5 percent. So if you're an investor or if you're going to start a company, an incorporator, you're going to do it in Maryland or Virginia where the tax rate is something like 5.5 percent. If D.C. were to lower its capital gains tax below 5.5 percent, would money fall into the donut hole, yes, absolutely. People love money. They're going to try and keep it, right? So those are some of the policy changes that we're recommending to the mayor and I think he's going to be looking at that very shortly.

  • 13:39:22

    NNAMDIDan, when your business was three months old, you moved it to Northern Virginia. What influenced your decision?

  • 13:39:28

    YATESA very simple answer, my wonderful, beautiful wife.

  • 13:39:34

    NNAMDII thought he would say capital gains tax.

  • 13:39:36

    YATESThat's right.

  • 13:39:36

    NNAMDIBecause I'm, like...

  • 13:39:38

    YATESNo, we relocated...

  • 13:39:38

    NNAMDIWhy Arlington?

  • 13:39:39

    YATES...we relocated from the Bay area. The reason we moved to Arlington actually, which speaks to what I was saying before, is we were squatting in offices of my cousin's software company and he was giving us free space so one start-up helping another start-up to get going. And we're not actually, our new -- our current offices are just a single block from that original office because we got, sort of, triangulated with where early employees were based.

  • 13:40:04

    YATESBut I'd also add one thing, going back to what Peter was just saying. I don't -- I think that what we're looking at here, you know, to answer -- to answer the question on whether or not how -- how startups are going in D.C., perhaps it's for tax reasons, perhaps it's different government groups. But I think looking broadly across the overall D.C. Metro area, I want to make sure that listeners know there are a -- like things are actually quite vibrant here.

  • 13:40:32

    YATESSo we're talking about how to amp it up even further. But there are a tremendous number of very successful, very fast growing technology companies. A lot of them are in the sort of Reston 66 corridor, but there are big booming businesses in technology and there are a lot of people already joining these fast growth companies.

  • 13:40:51

    CORBETTWhich I think is a real testament to the community here because it is hard to start a business in D.C. and there are tons of businesses being started in D.C. So there is a reason to do it here.

  • 13:41:01

    NNAMDIHere is Arlene in Potomac, Md. Arlene, you're on the air. Go ahead, please.

  • 13:41:06

    ARLENEHi, thanks, Kojo. Hopefully this is appropriate, but this is not for me. But I have a son who is a computer math major at the University of Maryland. And is the place where you are -- I mean, they're not really for -- can a college student, for instance, visit, hang out, you know, look around? I mean, is that something that's even, you know...

  • 13:41:33

    NNAMDIIndeed...

  • 13:41:33

    ARLENE...a part of what you do? Or...

  • 13:41:35

    NNAMDIIndeed, it's...

  • 13:41:35

    ARLENE...is that totally inappropriate?

  • 13:41:36

    NNAMDINo. It's appropriate because it's not just if you're trying to start a business, if you're trying to latch onto a new business. We got an e-mail from Julia -- well, this was posted on our website from Julia in Alexandria. "Is there a place where people who are interested in working for a start-up can look for jobs?" Can they kind of like just come and hang out at the Affinity Lab, Philippe?

  • 13:41:56

    CHETRITAbsolutely. And actually, we've been talking about doing kind of like an informal job fair at the lab. But the lab is a great place to come and hang out. You know, it's a -- come spend a day with us. Just come be around, you know, these great minds.

  • 13:42:09

    ARLENESo one -- so, like, just to find out what's going on and to see what ideas are bouncing around, you're saying college students, like, me and a bunch of buddies could come by or something?

  • 13:42:20

    CHETRITI have members that range in age from 18 to probably 75. Everyone has a different background and everyone comes from a different demographic. Everyone can be an entrepreneur. Send him our way.

  • 13:42:32

    NNAMDIAnd Arlene, after you have explained to your son over his objections why you're doing this, you will also find a link at our website to the...

  • 13:42:40

    ARLENEOkay.

  • 13:42:40

    NNAMDI...Affinity lab and to all of our guests here. But here's Peter Corbett with some more.

  • 13:42:43

    CORBETTYeah. There are a number...

  • 13:42:44

    ARLENEOkay. Thank you.

  • 13:42:45

    CORBETT...there are a number of resources I think everyone should be aware of. First and foremost, if you're interested in technology, entrepreneurship or just as a hobbyist in some way, shape or form, go to DCTechEvents.com. It's the aggregated list of all events in the region that are focused on technology. And there's probably a number of them that your son and his friends may be interested in and your listeners, in general, may be interested in visiting.

  • 13:43:07

    CORBETTD.C. Tech Meetup, certainly just Google that. It's meetup.com/dc-tech-meetup, and that's gonna be people coming together for all sorts of reasons, and certain open to any age attending. Digital capital week, which we had launched last year, 6,000 attendees. This coming year, we have about 10,000 in November. I think our average age was 34, but about 15 percent of the audience was younger than 21.

  • 13:43:31

    CORBETTCertainly they couldn't come to our super awesome opening and closing parties, but they could certainly come to the sessions and key notes which are all certainly focused on entrepreneurship. And then, lastly, if you're on Facebook, and if you're a younger audience, you're certainly in there, and even if you're an older audience, you're certainly in there, just search for D.C. Tech, and you'll find the D.C. Tech meetup group that was created by Justin Thorpe of Clear Spring.

  • 13:43:51

    CORBETTAnd within that group, there's about 600 people that would be really happy to talk to young people who are focused on technology, who were focused on entrepreneurship, could probably lead you to internships and could lead you to other events and other resources that might be of interest.

  • 13:44:02

    NNAMDIGotta take a short break. When we come back, we'll continue our conversation about business and tech entrepreneurship in Washington. Inviting your calls at 800-433-8850. Arlene, thank you for your call. But you can also go to our website, kojoshow.org, or send us a tweet @kojoshow or e-mail to kojo@wamu.org. I'm Kojo Nnamdi.

  • 13:46:13

    NNAMDIIt's a conversation about business and tech entrepreneurship with Peter Corbett, CEO of iStrategyLabs, a social media and marketing company, Daniel Yates, a CEO and founder of OPOWER, a smart grid and energy efficiency software company operating out of Arlington. Philippe Chetrit is CEO of the Affinity Lab, a shared workspace along the U Street corridor in Northwest D.C. It's home to 50 small businesses and other organizations.

  • 13:46:41

    NNAMDIDan, as we mentioned earlier, you started out out west, and then came out here, but this is your second successful start up. Your previous company was run out of the Bay area. OPOWER is run out of Arlington. What differences did you notice?

  • 13:46:55

    YATESYeah. I mean, quite a few. I was actually just reflecting earlier, while Philippe was describing his lab, that we actually started OPOWER out of something that was more informal, but almost identical in San Francisco. We were squatting in office space and only -- the landlord only realized in month three and we had to start paying the rent then. But we were squatting on a floor that ended up generating OPOWER, TripIt, which just sold for a couple hundred million dollars and flixster.com, which is a great movie site.

  • 13:47:30

    YATESAnd we were all -- and we were collaborating. I talked often -- I'm friends with the CEO of Flixster so in some ways, you know, lots of similarities. I think the biggest -- the only difference is just the scale of the community. So the Bay area is the biggest community in the U.S. and so you -- on the one hand, it's to your advantage because there's just -- for every kind of job, particular tech job, there's many, many people who can do the work. But on the other hand, you can get above the noise more easily here.

  • 13:48:00

    YATESAnd in every other sense, you know, the community here is big enough to build great companies and it is robust enough to support their really rapid growth. And so you have, you know, from Source Fire to OptNet to, you know, all these different companies that have gone public in this area that are tech companies that started here. I think many more similarities than differences.

  • 13:48:23

    NNAMDIOfficial Washington likes to talk about small business start-ups. President Obama says we need them to win the future. Congressional Republicans says Washington regulations are holding them back. President Obama has been talking about them all the time. He's visited OPOWER and the government working with private foundations has created a project called Start Up America. Philippe, it's a tough issue because some people would say you just can't throw money at the problem.

  • 13:48:50

    CHETRITI think that's true, you know. I think we know that all new jobs and a lot of economic development comes from not young businesses -- or I'm sorry, not small businesses, but young businesses and yet these young businesses have the highest rate of failure. So how do we look after these young businesses and make sure that they make it? You know, I think one of the -- well, first of all, Start Up America is a great program.

  • 13:49:15

    CHETRITI love that this is what the government is thinking about. I love that it's getting a lot of attention. You know, I think one of the only real conflicts is that at our core, entrepreneurs are very agile. They make spot decisions. They move quickly. They do what they have to do to succeed. And, you know, historically, the government is a -- is a little more of a slower entity and so I think there might be a misalignment there.

  • 13:49:41

    CHETRITBut, you know, as I think we've proven today, we are looking out for ourselves and each other, which is what's powerful.

  • 13:49:50

    NNAMDIPeter, we got a tweet from Wineburg81 who says, "Idea, get local government involved in releasing unused office space so more places like at Affinity Lab can grow."

  • 13:50:01

    CORBETTYeah. I think it's a terrific idea. Actually, the transition team offices on the corner of 14th and U are now empty, right? So we had our last transition team meeting for the tech advisoryship, I believe it was two weeks ago, and I said, well, guys, we're talking…

  • 13:50:13

    NNAMDII forgot to mention Peter was a technology advisor to the transition team of D.C. Mayor Vincent Gray.

  • 13:50:17

    CORBETTAnd I -- and I said, guys, what's gonna happen with this office space after the transition's done? They said, well, it's gonna probably be empty for a little while. And, like, we're talking about a problem with density and no space for start ups, and you're telling me this building is just empty, right? So however we have to do it, whether it's on the radio with you, Kojo, to get the mayor to understand that there's a real priority here with regard to supporting technology entrepreneurship in the district, this is crucial, because the market is incredibly hot right now.

  • 13:50:43

    CORBETTCompanies like OPOWER need to hire almost, I think, 50 engineer -- engineer openings right now.

  • 13:50:48

    YATESThat's right.

  • 13:50:48

    CORBETTLiving Social is gonna hire another 1,000 people in the next year. Clear Springs, what, hiring another 25? There aren't enough people. So right now, this sector specifically is catching fire and we need to make sure that we harness this opportunity right now. If we don’t, we may miss the boat to a certain extent. And we have cities like New York and San Francisco, who really understand what we're up against and they're recruiting people from across the country and the world to be there.

  • 13:51:14

    NNAMDIHere is Andy in Vienna, Va. Hi, Andy.

  • 13:51:18

    ANDYHey, Kojo, how you doing? I know today is Tech Tuesday, but my question has more to do with people tend to associate innovation with tech-oriented companies and there's lots of startups out there that are not tech oriented, yet are innovative. And I'm thinking that -- my question is, how do you break that paradigm and what are the -- what are the resources available to brick and mortar start-up companies that are not tech oriented?

  • 13:51:44

    NNAMDIPhilippe Chetrit?

  • 13:51:47

    CHETRITI'm really glad you raised this question. You know, I think tech does not mean start up. Start ups can be consumer products, they can be tech, they can be services and they're all equally important, you know. The more diverse an (word?) the greater its ability to thrive. So we've got to support all these different types of businesses and support them all. They're equally as important.

  • 13:52:11

    NNAMDIThank you very much for your call, Andy. We'll move to Steve in Odenton, Md. Steve, you're on the air. Go ahead, please.

  • 13:52:19

    STEVEYes. I have a comment and a question. I've worked for small companies that were acting like startups in the beginning, but turned out to be more like family businesses. And my comment is that the employees that went along for the ride got the distinct feeling that if the company succeeds, no one here is really gonna succeed but the family. And that's an important distinction as I look at startups going forward. The other -- a question is, how do you approach the issue of benefits in a startup, particularly health insurance?

  • 13:52:53

    STEVEThat guy from Lockheed might also be looking at the need for health insurance and not just the desk he's gonna sit at.

  • 13:53:01

    NNAMDIHere's Peter Corbett.

  • 13:53:02

    CORBETTYeah. I'd actually like to address that. We're about a dozen people now. We offer health insurance to all of our employees. And mind you, we're not really a startup. We've been around about three years. We've been profitable since the beginning. Excuse me. But we pay 100 percent of the health insurance premiums for our employees, which is not required by any law. It's just a benefit. Health insurance costs don't seem to really be an issue for us.

  • 13:53:22

    CORBETTThat's why I think it's always interesting when we see our politicians say, well, the cost of health care is crushing our small businesses. I'm like, it's really not. Not at all. Those are not the things that we're focused on. It's probably your overburdened tax law that's crushing us. I mean, my CPA and CFO bills alone are ridiculous, right? So let's reform that piece of the puzzle.

  • 13:53:41

    CORBETTHow can we have people focus on different benefits and joining in the startup culture? I think maybe D.C. needs to learn a lesson in how do we actually structure equity packages and options for people in young companies? I think the valley knows that fluently. I think the best and brightest companies here in D.C. understand that. I personally don't understand it well enough, right?

  • 13:54:00

    CORBETTSo I think -- and I think a lot of the potential entrepreneurs within the D.C. region don't understand it well enough. And I -- I would put that on myself. For someone who brings together a lot of people at events to teach them about entrepreneurship and things that -- you know, Philippe does the same thing. We probably need to focus on it a little bit more to make sure people understand the different benefit structures they can provide to new employees in new companies so they can share the benefits as they grow.

  • 13:54:22

    NNAMDIThat's part of administration's initiative Start Up America is trying to clean up some of the regulatory clouds that we have. But here is Daniel Yates.

  • 13:54:30

    YATESYeah. I would -- I think on the health care issue, Peter is exactly right. There is -- I think it's -- a lot of folks have a misconception that startups can't cover health care and almost every -- certainly every startup I've started, and every startup I'm familiar with has great health care benefits. People demand it and it's not -- it's not unaffordable for a company to provide them.

  • 13:54:53

    YATESI think the other point from the caller which is very interesting that I have seen here more so than I saw in the Bay area companies, where there is a founder who ends up running it kind of like a family business. And I think that -- I have very specific easy advice to take here, which is look to see if the company has been funded by venture capitalists. Because if it has, it is very, very unlikely to go down that path because venture capitalists don't like investing in businesses that have that profile.

  • 13:55:20

    YATESSo if a company's been venture funded, OPOWER has been venture funded, you're gonna see, you know, rational options being given out to people. I mean, stock options that they can participate in the upside and you're gonna see a company run in the way where there will be, you know, profit sharing with the rest of the -- with the rest of the company.

  • 13:55:40

    NNAMDIHere's Luke in Arlington, Va. Luke, your turn.

  • 13:55:44

    LUKEHi Kojo. Great show, thank you. I just wanted to mention another organization called HacDC, and its HADCD.org, which is in Columbia Heights, and it provides a work space for people to actually craft and fabricate and make a lot of startup technology that they might need an office space for at Affinity. And you even have a small monthly membership, and then have access to tools like (word?) machines and 3D printers, and all sorts of other interesting things. Not to mention the creative synthesis that happens when you meet and talk with people there. So I just wanted to mention that as an alternative...

  • 13:56:16

    NNAMDIThank you. Thank you for your call. Daniel, one area where there seems to be a big opportunity for tech entrepreneurs is the big problems we confront, energy issues, health care delivery, those are opportunities waiting to happen, aren't they?

  • 13:56:31

    YATESYeah, they absolutely are. And, you know, we -- OPOWER is at the center of that, you know. We hired 100 people last year. We're gonna hire another 100 people this year and that's -- and we're tracking very, you know, smoothly towards profitability and hopefully a -- an eventual IPO. And that's because we're in the center of this enormous boom that is Cleantech. I think you see the same kind of thing.

  • 13:56:53

    YATESIncidentally, I'll say those 100 jobs are all at OPOWERjobs.com, so every job you can think of.

  • 13:56:59

    NNAMDIOkay. So you won that bet.

  • 13:57:02

    YATESBut I think actually, to the point of the D.C. community, I think there's a real advantage. We've seen certainly a real advantage being located here in Cleantech because there's a big regulatory angle to this market. And you're gonna see the same thing with health care, and I think that from terms of a long term trend, there may be some -- we may see an ascendance of D.C., you know, technology companies as regulation becomes a more common place interaction in these businesses.

  • 13:57:32

    NNAMDIAlmost out of time, but Peter, this Tweet we got says, "More is needed than just space. You need the complete community, and honestly, it's never really gotten off the ground here."

  • 13:57:44

    CORBETTI would have to disagree with that entirely. First and foremost, the community got well off the ground in the late '90s. Everyone who was here understands that Mario Marino, over his coffee and donuts, really accelerated all the progress that was happening here. This community has been set on fire since probably 2006 or '07, and is on fire again.

  • 13:57:59

    NNAMDIAnd hopefully, after today's broadcast, you will have found the community. Peter Corbett is CEO of iStrategyLabs, a social media and marketing company. Daniel Yates is CEO and founder of OPOWER -- OPOWER.com, a smart grid and energy efficient software company out of Arlington. And Philippe Chetrit is CEO of the Affinity Lab, a shared workspace along the U Street corridor in Northwest D.C. It's home to 50 small businesses and other organizations. Gentlemen, thank you all for joining us, and thank you all for listening. I'm Kojo Nnamdi.

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