Northern Virginia’s Tech Boom and the Upside for Realtors®

For commercial Realtors® trying to cover their own expenses and make some money in a tough market, working with entrepreneurs can be a daunting task that can add up to a lot of work and not much commission.

Entrepreneurs with early-stage startups often need little space, have less money and have a short-term goal that starts and finishes with survival.

And yet commercial Realtors® looking to build their businesses for the long term would be well advised not to ignore this sector. Despite a sluggish economy that still faces tough headwinds, entrepreneurs are agents of change. They are the ones most likely to disrupt the status quo with their innovations, create new jobs and reinvent what is possible. In the process, they may overturn the status of today’s dominant enterprises. 

George Gilder, who has spent much of his career observing, analyzing and reporting on entrepreneurs, recently added new insights into the formula of their success in his recently published “Knowledge and Power” (Regnery Press, $27.95). According to Gilder, it is the innovator’s “new knowledge” that ignites the “creative surprise” necessary for entrepreneurs to succeed and transform the economy. 

“Commercial Realtors® looking to build their businesses for the long term would be well advised not to ignore this sector.”

Northern Virginia is a hotbed of activity for startups and “creative surprise.”  Although the Fairfax County Economic Development Authority (FCEDA) does not keep separate records for entrepreneurs or startup business, they report that 97.5 percent of businesses in Fairfax County have fewer than 100 employees, while nearly 95,000 businesses have no employees at all. These businesses include many startups along with small businesses that have not gotten above the 100-employee level, even though they may have been in business for years.

The FCEDA, Arlington Economic Development, George Mason University, Marymount University, the Springfield-based Community Business Partnership and other institutions provide training and development resources, along with networking opportunities, to support business startups. The large presence of government contractors and research organizations has also made Northern Virginia a knowledge center for technology and innovation. From 2000 – 2011, Fairfax and Loudoun counties combined for an average of more than one-and-a-half patents a day….every single day!

Gerald Gordon, president and chief executive officer of the FCEDA, expects those trends to continue despite, and perhaps partially because of anticipated federal spending reductions.

“As sequestration results in declining activity in federal procurement, companies are looking to apply their skill sets to private activity,” he said, citing alternative fuel and medical technologies as two prime examples. “These nascent activities provide opportunities for small entrepreneurs to form their own businesses.”

Citing the diverse immigrant population residing in Fairfax County “who are driven to succeed and take on the American Dream,” Gordon advised Realtors® that many of the businesses will likely be started at home, before moving into leased commercial offices, affecting all kinds of residential/commercial crossovers.

Many Realtors® attended last fall’s NVAR Commercial Council presentations by Tina Leone, CEO of the Ballston Business Improvement District (BID), and JoAnne Fiebe, manager of Fairfax County’s Revitalization Programs. They described the transformations underway in Ballston and the Mosaic District of Northern Virginia, and efforts to attract new businesses to their communities.

Both speakers emphasized how these developments may have an immediate effect on real estate activity not only in their respective areas, but also within  the nearby incubator areas along Lee Highway, Route 50 or Columbia Pike. They agreed that it is essential for startups in these nearby locations to succeed and grow in order to ensure that the developing regional centers thrive.

The Ballston BID has taken support of entrepreneurs to the next level with their Ballston LaunchPad Challenge 2013. The project attracted 225 startups, each with a “big idea” to create a new business. The entrants met weekly and worked collaboratively with 100 participants from the Ballston business community to grow and develop their ideas and launch their businesses. They were led by noted entrepreneur Ted Leonsis, who inspired the project.

“We had several important things we wanted to accomplish,” Leone explained. “We wanted to encourage and support entrepreneurship, strengthen the connections within our community and attract more great minds to start up and grow their businesses here in Ballston.”

Commercial Realtors® looking to see what can result when an entrepreneur transforms an industry need look no further than the gleaming tower of the Capital One corporate headquarters along Chain Bridge Road in McLean, or listen to its founder and CEO Richard Fairbank.

Trained in working with playground kids, Fairbank told the story of his founding of Capital One at a recent symposium hosted in the bank’s auditorium. 

Fairbank had gone back to school for an MBA and was working as a consultant when he discovered how information and technology were transforming the financial services business and would hit the credit card business first.

“We had several important things we wanted to accomplish,” Leone explained. “We wanted to encourage and support entrepreneurship, strengthen the connections within our community and attract more great minds to start up and grow their businesses here in Ballston.”

“When the world is changing, the last ones to see it are those closest to it,” he observed. “They think they are in one business, but in fact they are in another business altogether.”

When he developed a business model and set out to find funding for his startup, he “wasn’t trying to build a bank the way it was, but the way it was going to be,” Fairbank explained.

Today, Capital One is the sixth largest bank in the country with assets of $300 billion, but “the best years are still ahead,” he predicted.

In a similar story reported in the Washington Post on December 2, reporter Annie Gowen profiled one of Northern Virginia’s latest high tech entrepreneurs, Alan J. Dabbiere. 

The article quotes Douglas Wolford, President and CEO of Convergent Wealth Advisors, who points out that over the past several years entrepreneurship in the Washington, D.C. area has exploded. “Back in the late ‘80s, this was a Podunk-y place when it came to wanting to start a business,” he is quoted as saying. “But not anymore.”

Dabbiere’s office can be found in a nondescript building on the quiet tree-lined Elm Street in downtown McLean, not far down the road from the Capital One headquarters. His company, AirWatch, was founded in 2006 to be a hot spot WiFi provider. 

Since then Dabbiere has refocused away from coffee shop patrons to securitized smart phones for large companies. According to the Post article, by 2011 AirWatch was managing devices for large companies like Home Depot and Macys, and is now managing them for nine of the 10 largest retailers in America. In the process, they grew from 30 employees to 1,500 employees, with headquarters in Atlanta.

The next market for AirWatch is the federal government, which Dabbiere estimated will have a budget of $757 million in 2014. The work will include the transition from the government’s current use of Blackberries to secured smartphones.

“I think employing people and building companies is an important thing to do for our country,” Dabbiere is quoted as saying. “I get a kick out of that.”

Commercial Realtors® may benefit from the advice given by Leonsis to the participants in the Ballston challenge. Recalling that he had been turned down 63 times before getting funding for his startup, which ultimately evolved into AOL, Leonsis said “just don’t quit."