Our next guest is Aaron Gregg, Aaron is a reporter at the Washington Post and he covers a local business community, which makes him one of the region’s, well, basically “go-to-guys” to try to understand what’s going on and what’s new and what trends are emerging here in town in business. Aaron, thanks for taking some time with us today.
GREGG Thanks for having me on.
ABERMAN Let’s help our audience get to know you a little bit. How did you come to be a journalist here writing business articles for the Post?
GREGG When I started in journalism, I didn’t really know where it was going to lead, I was studying abroad at the time I was one of those weird kids who chooses to study abroad in Uganda, of all places and so I got this unpaid internship with the Observer. It’s the sort of Ugandan weekly publication, closely affiliated with the opposition party over there and just sorta, showed up covered parliament for them for a little while, no idea what was doing no local political knowledge, just sort of learned the ropes by following their political reporter around. Anyway after that I came home to the Atlanta area and covered my own backyard, felt like I did a much better job at that and eventually sort of matriculated up here for Grad School at Georgetown, and here I am.
ABERMAN So what you think makes somebody a good journalist, or a good reporter? Yet with your life experience, what do you think?
GREGG I don’t know, I mean I think our job is to sort of bring things out when we can and contextualize it when something unexpected happens like three sub-regions in the DC area making Amazon’s “HQ2 Shortlist”. There’s been a lot of speculation about that whether we were competitive with other hubs like Atlanta and Denver and other areas across the country. So it’s it’s pretty good to see that we had a couple of home runs in there.
ABERMAN Well, let’s talk about that. I also want to talk a bit about the local venture capital market, because I know you’ve been following that closely but let’s talk about Amazon first. What do you think, as you’ve talked with people, I know there was a big issue with respect to: “Could this region succeed if there were in fact three different bids?” And it looks like there may in fact be three different bids. What did you hear and what you think is going to be the next thing that’s going to happen as people respond to this HQ situation?
GREGG Northern Virginia, Montgomery County and DC all appear to be on the shortlist, and I guess the criticism around having multiple bids was that we appear to be in fighting once again, we’re sort of competing with each other within the region when we really should be highlighting our regional strengths on the whole.
The Council of Governments sort of initially voted to say: “Okay, maybe we should all band together on this and put in a joint regional bid, that will sort of present the region as a unit.” That didn’t work out, all the different regions sort of went through on separate ways and decided we don’t want to do that and so the Council of Governments went back and said: “Okay, we’re going to have an overlay which is basically just a forty page document about the DC region to sort of put in front of your actual applications to say well, we’re Montgomery, but we’re also part of the DC region or we’re PG, but we’re else part of the DC region and I’m not sure whether that even ended up happening, I’ve heard from some people in local tech community when they saw that overlay document it was just dozens and dozens of sort of pages that they didn’t really want even attached their application, because it was too long and not very interesting
You know, I don’t know whether the three winning bidders used that — they don’t really share the details of their own applications. But it’s clear that we, you do not have a regional, unified approach on this at all.
ABERMAN It would strike me knowing what I know about workforce, there’s no way that we’re going to find 50,000 people for the jobs Amazon wants filled without some sort of comprehensive workforce approach that cuts across the regions. It’s going to be very interesting to see how we stepped up to it. Speaking to step up to it, you covered the week or two ago you weren’t look deep for the venture capital community. I think it’s very interesting people. Adventure cap lean the indicator very important to our region, growth. What don’t you see when you looked at the numbers for 2017?
GREGG The top line looks great. We’ve got these big mega deals, we’re we’re seeing the total amount capital is reaching recent highs. I I think the last time it was his high was back in twenty, So we’re we’re on the upswing. It’s a sign that we might be closing the gap with other venture capital heavy tech ecosystems. But if you look sort down the chain at the number of companies that are actually winning these fields, there’s fewer and fewer companies getting I hear from a lot of local entrepreneurs that there’s a lot going on at the seed stage, so if you’ve got four guys in idea in your garage, you can pretty easily find 50 or 100 thousand dollars to get your idea out the door, but making that jump from seed to A round is nearly impossible, and then it’s really, you know, takes closer to B or C round where you’ve got maybe hundred employee he’s a pretty decent revenue stream before you find it easy again to bring in these mega deals.
ABERMAN So the funding gap that you’ve described, I see it every day. Hear people talk about constantly it’s the chronic discussion. When you published this article, it created some conversation. Does anybody come with an idea for how to solve this problem?
GREGG I think it’s just a factor of what venture capitalists are choosing to do do with money at the of the day. Most of the state sponsored programs that we have are not going to want to go for that A range. You’re not going to have the the government of Maryland to write a 10-million-dollar check.
ABERMAN Or even a two million dollar check…
GREGG Yeah, just not gonna happen, so I guess at the end of the day we are beholden to VCs to sort of pick closer. Look at these stage firms.
ABERMAN When you talk with the entrepreneurs, do get a sense that they different shape between entrepreneurship, working with the federal government or on entrepreneurship working with the product company?
GREGG Well around here, it’s all federal. We trying to build this product community, but as as you’ve written in your report from year ago, even our cyber community, which is the most vibrant product environment we do have at this point- is pretty much service oriented that mostly service. I don’t know — what you think is many progress since that report?
ABERMAN I think that the same way with amazon we’ve got the question framed now, I’m I’m looking for people to form some sort of comprehensive of regional approach, whether it’s a not-for-profit or a or for-profit that cuts across regions and starts to build product companies and the same way, I think Amazon’s going to force to look at workforce. My view is: I’m not hearing enough people talk about regional solutions, I’m hearing a lot of people talk about regionalism and why we’re not good at it!
GREGG True. I mean I don’t know that it’s necessarily. It’s always going to be the case that we don’t have original approach here. It’s just that, to the extent that we do regional approach- it is the federal government. Some people want to change that. It’s going be pretty difficult.
ABERMAN Just about an possible, I would think …use a third over our time. Guess we could engine and we could all not work thanks for joining an us and folks follow iron and greg the washington post rights regularly local issues thanks for joining us.
GREGG Thanks, Jonathan.