3 CEOs talk pros, cons of building world-class startups in Maryland

Building a startup 3,000 miles from Silicon Valley isn’t easy. But it can be every bit as rewarding, a panel of founders said at CyberMaryland on Thursday.
The panel, titled “Building a World Class Start-Up in Maryland,” was moderated by Bob Ackerman, founder and managing director of Allegis Capital and included Mike Janke of Silent Circle, Gregg Smith of KoolSpan and Guy Filippelli of Red Owl Analytics. All three helped found their respective firms and now helm them as CEO.
For Janke, a former U.S. Navy Seal, starting in Maryland in 2012 provided proximity for his mobile privacy venture.
“We said, let’s go right into the belly of the beast. Let’s do a private communications firm, start right out of D.C.,” Janke said. “We get it was absolutely critical to secure information in the privacy world … to actually come to D.C., get the conversation going.”

It was very much happenstance to move to Baltimore. I really consider it one of the luckiest, serendipitous experience of my life.

Silent Circle has employees in eight countries now and is technically headquartered in Switzerland (with offices in National Harbor, near the nation’s capital), but Janke said he has no regrets.

“It’s hard to start a company in the Beltway compared to other places, but you can start a better company,” he said.

In April, Red Owl cofounder Renny McPherson wrote in a Huffington Post op-ed that Baltimore was the best place to launch their firm. Filippelli echoed that Thursday, saying that Baltimore offered great access to a pool of potential employees via Interstate 95 and other arteries.

“It was very much happenstance to move to Baltimore. I really consider it one of the luckiest, serendipitous experience of my life,” Filippelli said. “We really like the … semi-grungy feel of Federal Hill.”

Smith, a serial founder, said the Baltimore area offers a unique pool of engineers and others from Maryland’s colleges and universities, whereas Silicon Valley would require him to lure those minds from elsewhere.

“You can get some really high-quality talent here,” he said.

But despite the easy temptation to become a government contractor, Filippelli and Janke both cautioned attendees from having all their eggs come from one basket.

“You’re only worth so much if you start off with your bones focusing on a very, very narrow niche. You can only grow so much,” Janke said. “You can be an Under Armour. Go ahead and take on Nike. You don’t have to supply military clothing to Lockheed.”

However, one area where Silicon Valley definitely has it easier is a roadmap. The titans of California aren’t necessarily to be found downtown, nor is their bountiful capital, Filippelli said. In his case, Red Owl opted to invest and expand.

“Some of the things we get here we don’t get there [in Silicon Valley]. We get loyalty,” he said. “My people don’t leave, unless it’s not a good fit.”