BETHESDA – While working at a startup company in San Diego, Ben Hatten was tasked to find a patent attorney to help with a flashlight they were developing.
He thought it would be relatively easy. It wasn’t.
“It took me a couple of months to find one guy with the experience we needed,” Hatten said.
In fall 2008, he returned to graduate business school at the University of Maryland seeing a need to link businesses and qualified attorneys via the Web the way Monster.com matches businesses with job seekers.
With classmate Zach Girod, Hatten founded Legal River, adding another company (and two more entrepreneurs) to Maryland’s burgeoning technology startup community, which is centered mostly around Baltimore and Washington.
Much like the larger information technology sector, the startup scene is growing during this recession, thanks in part to technology incubators throughout the state and a growing community of tech-savvy entrepreneurs. While those within the community believe the area will never rival Silicon Valley due to the presence of the federal government, they see bright things ahead.
“While there may be a recession on funding, there’s no recession on new ideas and technology,” said John Wasilisin, acting president and executive director of the Maryland Technology Development Corporation (TEDCO). Established in 1998 by the General Assembly and partially funded by the state, the group invests in startup companies to help take their products to the next level.
Critical components to the success of startup companies, Wasilisin and others say, include the relatively large amount of venture capital funding available, as well as the technology “incubators” located throughout the state. Much like their counterparts on the farm, incubators give budding companies the means to grow, including office space at reduced prices, networking opportunities with larger companies and early guidance.
Just as important as these offerings, many say, is the community and collaboration created when a gaggle of tech-savvy entrepreneurs are placed in the same location. The Emerging Technology Center (ETC) incubators in Baltimore, for one, host “open lunches” where entrepreneurs share ideas with each other.
Jared Goralnick, a veteran of the startup community in Maryland and the founder of Bootstrap Maryland, a meeting series which helps tech entrepreneurs network and grow, says this sharing of lessons learned is one of the most valuable services the incubators offer.
“When you have a space where you can put a bunch of people who are like-minded in close quarters, magic happens,” Goralnick said. “That’s why all these people talk about being on the West Coast, because that’s this giant incubator in some ways. The culture supports it.”
Goralnick and others see incubators, though, as just one piece of the puzzle. A larger, and perhaps more important, piece is the emergence of a tech startup “scene” in Washington, Baltimore and the space in between.
Nurtured by a flurry of events like Bootstrap Maryland and Innovate Baltimore, this growing community of established and would-be tech entrepreneurs celebrates cool ideas and helps nascent businesses grow.
For Baltimore in particular, much of the community’s growth has Dave Troy’s fingerprints all over it. A self-described “serial entrepreneur” and startup investor based in Baltimore, Troy says the community started becoming “self-aware” in 2008 when several events (including Social DevCamp East, which Troy helped organized) brought tech-minded people together.
“I wanted to connect with other people that wanted to work on the same kind of stuff that I did,” Troy said of creating Social DevCamp East. “I’m still reaping the rewards from having done that.”
Baltimore’s tech community has grown so quickly, Troy says, because of the emergence of social networking tools like Facebook and Twitter.
He points to the relative ease with which he and other organizers recruited more than 100 volunteers for the recent TEDx MidAtlantic event, a one-day series of lectures. To recruit this many people 10 years ago, they would have needed to send postcards or use other slow and expensive means.
“Now, literally, I can send out two or three Tweets and reach most of the right people organically through friends of friends within an hour or two,” Troy said. “That’s just a totally different world.”
But those thinking this area will become the next Silicon Valley shouldn’t get their hopes up — at least as long as the federal government is in town.
“(The federal government) sucks out a lot of the oxygen for entrepreneurship from the region,” Troy said.
Goralnick agrees, saying the government is just too big for startups to become the dominant culture in the region. He says the easiest way for someone with a technology degree to make money is to start at roughly $100,000 a year for a government contractor or established company.
“If all of your friends are joining IBM or CACI,” Goralnick said “how are you going to be the guy who decides to suffer on three bagels a day while putting the next big idea out there while your friends are buying a house? It’s a challenging value proposition.”
Despite the tractor-beam-like pull that the federal government possesses, some people are just driven to become entrepreneurs. Around the industry, most predict continued growth, both in the number of startups as well as the ability of the startup community to convert the young and digital to the gospel of entrepreneurship.
In their small corner of this world, Girod and Hatten at Legal River hope that profit and growth lie in their future. If nothing else, Girod appreciates seeing how the effort he puts into his business — staying up until 4 a.m. some nights working on the site — can translate into success.
“In this downturn economy, it’s nice to know that your fortune … is in your own hands,” Girod said.