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Washington, D.C.

DC (as the locals call it) has an often overlooked but surprisingly strong startup ecosystem. Traditionally overshadowed by its largest local industry — the U.S. government — the region is home to a growing startup scene and a deep history in tech. The largest data ‘pipes’ in the world run through nearby northern Virginia offering ample bandwidth for big data companies, and the dotcom boom seeded the region with many successful technology exits. With one of the highest per-capita ratios of PhDs in the world, the city is filled with educated talent and has better-than-average resources for entrepreneurs. Yet many DC residents are risk-averse and tend to lack entrepreneurial mindsets, making it difficult to get engineers out of cushy government contracting jobs. The metro area is also very expensive, creating a challenge for early-stage entrepreneurs.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • A city with a truly global mindset. Washington has embassy representation from every country around the world, and entrepreneurs are more likely to have international perspectives and contacts from day one.
  • Large, well-educated pool of talent. 23% of residents have a graduate degree or higher -- the highest percentage of any U.S. city. The city also has a robust set of universities.
  • Tons of wealth. The DC region contains 4 of the top 5 wealthiest counties in the U.S. -- a high density of potential investors.
  • Industry strengths in the areas of defense, cybersecurity, hospitality, education, health and biotech, enterprise, geospatial, and nonprofits. Of course, DC is also home to the world’s largest customer: the U.S. Government.
  • Major IT infrastructure. Nearby Virginia is the birthplace of the internet and is home to the world’s largest data networks and hosting centers.
  • A recent string of successful IPOs and acquisitions and growth in the early-stage startup scene.

Risk Factors

  • Very expensive, making it costly for startups and hard to bootstrap. DC is the 3rd most expensive U.S. city to rent in, with a cost of living index that is 40% higher than the U.S. national average.
  • Limited startup-savvy developers compared to other major U.S. cities. Engineers tend to be accustomed to massive, slow-moving organizations and legacy coding languages and may struggle to adjust to startup environments.
  • A tri-state “identity crisis.” The metro area is saddled between D.C., Maryland, and Virginia. These states often compete against each other to convince startups to relocate, rather than outwardly promoting the overall region. This can be good as it creates competition but it also impedes the growth of a dense, united, startup ecosystem.
  • Risk aversion. Washington residents tend to be less risk-oriented and seek out stable jobs. This can make it difficult to hire as a startup.
  • Conservative investment mindset with limited access to venture capital.
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