How the DMV tech scene reacted to the 1776-Disruption Corp. merger - Technical.ly DC

Company Culture

Apr. 17, 2015 12:55 pm

How the DMV tech scene reacted to the 1776-Disruption Corp. merger

In a move that caught almost everyone by surprise, the downtown incubator acquired the Crystal City-based incubator. Here's how the tech community reacted.
Many were invited to celebrate the deal, including Va. Gov. Terry McAuliffe.

Many were invited to celebrate the deal, including Va. Gov. Terry McAuliffe.

(Photo by Therese Quiao)

The announcement was made on a Crystal City rooftop with a swimming pool, in the presence of the governor of Virginia.

The message? “1776 is expanding, and Crystal City is the next front,” said 1776 cofounder Evan Burfield Thursday, as he announced the acquisition of Paul Singh’s Disruption Corporation, which will become the downtown incubator’s first new campus.

While stressing the necessity for uniting the regional technology industry, Burfield also hinted at 1776’s growing influence here. Outside entrepreneurs, he said, “don’t differentiate between Crystal City, Bethesda and K Street. … They think about the D.C. region.”

He added, “We want to be something that is unique and different and special.”

Singh, who will stay on as managing director, said the deal emerged from discussions with cofounders Burfield and Donna Harris. “You’re doing a lot of that stuff, and I’m doing a lot of that stuff, let’s figure out how we can do it together,” said Singh. The 500 Startups cofounder came back to his home Northern Virginia region in 2013 to launch Disruption — and a new tech hub that could forge a “100-year legacy,” as he told Technical.ly DC a few months ago.

He followed up with the creation of the $50 million Crystal Tech Fund, which has invested in 12 companies, many of which are local startups. The fund will be now run by 1776, though the incubator said it will maintain the investments in local companies.

With weekly open houses on Thursdays and the February launch of an official coworking space, the artfully barren offices of Disruption brought together entrepreneurs on a regular basis — though, of course, not at the rate of 1776, an incubator with 270 members that hosts a major event about once a week.

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As part of the deal, 1776 will integrate Disruption’s products and platforms, including analytics programs called Dashboard and Hubble. Tools, data and insights are “critical” to identifying the right companies and “connect them to the network,” said Harris.

Vornado Realty Trust President Mitchell Schear, who leased the Disruption Corporation space and has a $10 million stake in the Crystal Tech Fund, heralded the arrival of Crystal City Tech 2.0. Schear has welcomed Singh’s vision to reanimate Crystal City from the slump of Defense Department cuts. He oversaw the opening of the contractor incubator Eastern Foundry, the region’s first TechShop makerspace and a new bar, the Highline RxR.

“Crystal City is the natural center of gravity for this kind of collaboration in the region,” he said. “We’re going to continue to add more layers to this 2.0 story.”

1776 has also set up partnerships with Montgomery County and now Arlington County, offering certain membership perks to companies in those areas in exchange for opportunities for other members to scale and grow here.

Gov. Terry McAuliffe gave the closing statement, proclaiming that “Crystal City will be the hub of innovators and startups in the United States.”

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Many in the tech community were excited by the announcement, like iStrategyLabs’ DJ Saulwho told Technical.ly DC in an email: “I feel it’s certainly a positive factor to have such a strong foundational pillar of the tech community extend its coverage/reach, and I know that Paul joining forces with Donna/Evan will create more value than if they continued to work in silos and only collaborate on occasion.”

“I’m always down for collaboration from anyone in the startup community,” said e2 founder Maxime Paul, who moved into the Disruption office space in February. “It usually brings out the best in original parts that came together.”

“Paul, Evan, and Donna are 3 of the smartest people that I know.  I’m incredibly excited to see what they’ll produce together,” said AddThis’ Justin Thorp.

“Honestly, I would’ve thought Disruption Corp would acquire 1776, not the other way around,” wrote Brandon T Luong. Adding, “One thing I wanted to see happen was a stronger unified DMV startup/tech community as things were starting to look like Romance of the Three Kingdom.”

Some thought it made a lot of sense for two organizations with similar interests to combine forces:

“The acquisition has the potential to eliminate redundancy in the entrepreneurial system, and hope it serves to further foster a region first mindset around the area,” said Fosterly founder Adam Zuckerman.

For Startup Grind DC Director Brian Park, “Even though they may do different things, their mission is still one and the same which is to help elevate the DC area into a world class region for startups.”

Digital District cofounder Elliot Volkman wrote: “Logically it makes sense. For some reason the DC and northern Virginia tech communities think that the Potomac separates the people along with land, and this is a solid step in combining the two.”

Jeff Alexander, a researcher at SRI International, posited that together, the organizations could solve the “Series A crunch,” by combining seed and post-seed investments. He said in a Facebook message, that with Disruption’s software and 1776’s network, “1776 and Disruption could get access to a larger set up start-ups, where they could develop a way to identify ‘disruptors’ more systematically.”

Others were a bit sad to see one pillar of the local technology community merge with another:

Christopher Breene, a digital strategist at Overachiever Media, said he viewed the announcement with “cautious optimism.” But, he added, “While it’s always sad to see healthy competition diminished like this, some of my best memories in DC tech have been in these two buildings.”

SocialRadar’s Shana Glenzer said on Twitter she was “conflicted” about the deal:

“Shouldn’t more spokes in the community wheel make a stronger hub?” she added in a later Tweet.

“There should be no doubt that hubs like 1776 and Disruption have been terrific for developing the DC entrepreneurs,” said Rennzer CEO Omid Jahanbin. “Part of Paul Singh’s appeal was bringing a different perspective and execution.”

But the first reaction, often, was:

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