Eric Bovim is Managing Director at McBee Strategic
The acrobats were coming down on us from the ceiling, on ropes, through the blue strobe lights, landing on the banquet tables in the cellar of a cava producer near Barcelona. We were at an event for media, investors and dot-com dreamers put on by an investment bank that no longer exists, circa 2000.
I was a reporter then.
We are a mere 12 years removed from collapse of that era, when companies like Pets.com ran out of money, stock prices slipped from the heavens and the Henry Blodgetts fell from grace. Thanks to the flameouts and mismatched mergers, there is no easy money anymore. Start-ups rise and fall on merit, these days, more or less.
Were it to have existed before the bubble had burst, an incubator like 1776, by now, would have been valued at a billion dollars, an IPO around the corner. Evan Burfield and Donna Harris, its founders, would never have been guiding tech saplings in such a haplessly unhip a place as Washington, DC.
Toggle to the present: The headquarters of 1776 is just across the street from the Washington Post, now owned by the Phoenix from the dot-com era, Jeff Bezos. Step from the elevators onto concrete floors, into the quiet – entrepreneurs are working, silently, absent the trappings that you might find, say, at the Google campus. There is no free food. The furniture is made from reclaimed doors. This — the doors and the business model — seems sustainable.
The incubator stretches the traditional model of an incubator. It domiciles 170 companies on its “campus” in exchange for a fee, offering, in exchange, access to peers, mentors, corporate connections, talent, exposure, and capital. Just this April, the Queen of Jordan came to speak.
I sit down with its cofounder, Donna Harris, to discuss the future of 1776 and its plans for DC.
Bovim: So I guess the first question is kind of a warm up. What has stood out as an “a-ha” moment or a highlight?
Harris: You know, I think it’s not one single moment, but it’s a trend of moments.
We’re in the middle of our Challenge Cup competition, which for us is a first major global initiative to cast a net and look across the entire planet and find entrepreneurs that are really looking deeply at these industries. And it’s about finding the most promising companies in education and health and transportation and energy and smart cities.
For me, six months from now, we are seeing national press attention on the competition, on Washington, DC, on 1776, on the competitors — and we’re having a substantive conversation about the reality of social disruption coming to these antiquated industries and Washington, DC as the place where it is ground zero for that happening.
Bovim: What do you think of Evgeny Morozov’s critique of the tech industry – that every human problem and societal problem can be solved through tech. He says, “You’re a tech hedonist, blind idolatry to the notion that an app can save the world and solve obesity.” What do you say back to him about that?
Harris: My response is a couple of things. If you look at our lives as citizens, I have a three-year-old whose school requires piles of paperwork, I drive on horrible infrastructure every day. It takes me an hour to go seven miles to get into the District. I participate in the healthcare system as minimally as possible because it’s a horrendous experience, and I pay my electric bill having absolutely no idea why my electric bill is what it is — right?
That’s the reality of the world I live in.
Now, I as an entrepreneur, and more importantly the next generation behind me, the Millennials, look at that and say, ‘Okay we have two choices: We can wait for the system to fix the infrastructure or we can do an end around the infrastructure and look for ways to make this better for us.’
Bovim: So what would be an example of that?
Harris: Transportation. Let’s take a look at that. The road infrastructure in Washington, DC is not going to change in the foreseeable future. They’re not going to magically put up a new bridge overnight.
Bovim: It would be great if they did.
Harris: You have apps coming out — Ride Sharing, Ride Scout, Lift — I have access from in my car of who wants to ride with me, and I get paid for that. It’s no longer the slug line where I’m just picking up a random stranger.
Bovim: Uber for regular people.
Harris: Yeah, Uber for regular people.
I get paid and there’s a validation that I’m not picking up a stalker or, you know, a serial killer. So there are all kinds of apps that — and this is where the hypothesis comes in of “it’s not about building a huge solution that you’re trying to sell to the government.” This is literally bringing social disruption into these industries because you can do an end run around the broken infrastructure.
Bovim: So it’s technology intervening where public policy hasn’t caught up yet?
Harris: Right. And these industries are broken, they’re antiquated.
Look at education — the idea that you’re going to send somebody to a four year college that will take them five and a half years to finish, they come out well into the six figures in debt, and they are not employable. Employers are saying on the back end, “these kids graduating don’t have the skills we need, so we have to retrain them when they come in.”
So you have this, just in education alone — this disconnect between the needs of the employers, the wants of the students, which is why you go to college – other than to party and have a good time, you want to set yourself up for your career. But college isn’t doing that anymore. There are new options emerging that completely upend the system.
You want to have a tech career? You don’t need to have a college degree to have a tech career. Go through General Assembly, take a short-term program, come out the other end and you can get the six figure job.
Bovim: Are there alternatives?
Harris: Yes, but you’re also in that particular industry, disintermediating the industry because the whole point of the university was to act as the convening between the student and the employer.
Bovim: Do you think universities are anachronistic?
Harris: I think universities are struggling with what is their right role. I had a major university in here on Friday, had the chief operating officer in here — you can guess based on the local vicinity who that might be — asking really smart questions, which is if we really believe in digital education, what is the value of the university?
Is there value in place? Is there value in the resources? Is there value in the experience?
What they’re trying to really define: What is their role given the future landscape of the industry? Interestingly, they’re looking at it through the same lens startups do. They’re asking themselves: What’s our hypothesis? It’s a completely different world.
And we’re in a place where — if you look at the old economy, hierarchical, top-down, corporate-led, completely closed, and bureaucratic, and you look at the way startups operate, open, transparent, networked, hackerish –- there are two different mindsets. But yet the world is evolving to look much more like the hackerish mindset. And so the institutions are in a place where they have historically been the drivers of the company, but there’s this emerging force driven by technology, driven by the Millennials, driven by social-mobile cloud technology that allows people to think differently about the reason we had the institutions in the first place. So you think about, “what does that mean for the global landscape?”
Bovim: What are the markets or areas where you feel there is oversaturation?
Harris: Well I don’t want to see more student information learning management systems. I just think that, yes, the ones we have are not stellar, they’re not perfect, but there’s a lot of them. So, yes, yours is prettier, but there’s not enough distinct advantage to warrant another LMS or another health management record. I think those are oversaturated.
Bovim: So, is Morozov right or wrong?
Harris: I think, to some degree, he’s right. I think his premise, I think he sums it up really well here, “the geeks would say, given enough apps, all humanity’s bugs are shallow.”
He’s right in his view that Silicon Valley thinks that with enough technology and apps we truly can just eliminate all these problems. So I would say that I agree with him to some point that Silicon Valley believes we can sort of app’ify everything, and in reality that’s not necessarily true. Some people have a fit butt, but they’re still fat. You have to change your lifestyle and the app may not do that.
There’s only so much that the app can do. We are, still, at our core, human, which means there are human interactions and there is a layer to us that can never be solved with an app.
Bovim: What can you look at and say, “We germinated that, we incubated it?”
Harris: You know a company like ID.me is a fantastic example –- they’re here. They didn’t start here, but they’re a member now. They started with a single market, a single problem, and a single solution, and they have created a potential solution to the digital verification of who you are as your identity that did not come from inside the government.
It has the potential to become the de facto solution for digital identity.
You think about the government’s ability to say we’re going to create a single digital identity verification system, they would have led a contract to the Yahoo’s around town and they would have spent billions of dollars to do it … it would take 15-20 years and it would look just like what we’re hearing about Obamacare right now.
So this is how these industries’ true disruption will come about. It’s not going to come from government making an announcement and doing the same old procurement-style approach. It really is bottom up and has the potential to become the de facto standard, which, by the way, has an impact on everything from immigration reform to education to every part of our lives as citizens because how do you verify who you are in a digital world?
So it’s a mind-boggling possibility.
Eric Bovim is Managing Director at McBee Strategic, an advisory firm based in Washington, D.C. He cofounded Gibraltar Associates, propelling it from a two-man startup to an award-winning communications agency that joined the prestigious Inc. 500/5000 list of fastest-growing private companies in the U.S. in August 2012.