A Nest for Fledgling Tech Firms
Web Video Start-Up Among Tenants at Silver Spring Site
By Annys Shin
Washington Post Staff Writer
Thursday, July 22, 2004; Page GZ04
From their new office in the four-story Silver Spring Innovation Center, entrepreneurs Jim Welch and Kurtis Miller can see Metro and CSX trains rumbling by.
It's not a view of the Washington Monument, but it beats the one from their current offices, which are in the basements of their houses.
Welch and Miller aren't looking for a marble lobby with a concierge, anyway. They need to pour all their resources into getting distribution for their subscription-based service, which allows deployed soldiers to record and send video messages to their families over the Internet.
The partners stumbled upon the Innovation Center on the Internet early this year and put in an application.
Entrepreneurs compete to get into the county's business incubators. Following the success of an incubator in Rockville, the Silver Spring Innovation Center, at Georgia Avenue and Blair Mill Road, had leased 90 percent of its space before it was completed this month. The state, county and Chevy Chase developer JBG Cos. put up $3.3 million to develop the 19,000-square-foot office building.
In Rockville, the Maryland Technology Development Center would be an unlikely place for Web video producers. That incubator was made for biotech companies by virtue of its location in the Shady Grove Life Sciences Center and amenities such as wet lab space. As a result, for much of its five-year existence, the majority of the occupants have been biotechnology start-ups.
The Silver Spring incubator, by contrast, has no wet lab space. Most of its 14 tenants are information technology companies. Welch and Miller's neighbors include Cranium Softworks, a digital rights management company, and DVIP Multimedia, a digital imaging company that does homeland security work.
The Innovation Center's below-market lease rates keep costs for start-ups down, and it offers services that the county developed at its Rockville incubator. The Tech Council of Maryland, a trade organization, arranges access to venture capitalists as well as the University of Maryland law school's intellectual property clinic.
Welch and Miller plan to take advantage of the services. Their operation is small: six employees, including themselves. They have funded most of their business with their own money and with loans from banks, friends and family. "We talked to venture capitalists. But the last couple of years, there was no venture capital unless you were already showing a profit," Welch said.
Welch and Miller have tried the past few years to land a contract with a branch of the armed services. Their company, Military to Home, has a contract to provide its service to several thousand families at Fort Hood, Texas.
The Fort Hood account, however, is essentially a free trial. The company is giving away subscriptions for which the two entrepreneurs hope to charge from $7.95 to $12.95 a year. The Army gave them little choice. "There are so many regulations. You can't market [to the families]," Welch said.
Although they weren't charging for the service, Welch and Miller still had to have a contract to get on the base. Since starting the trial in November, they've received letters of appreciation from the spouses of deployed soldiers and hired a Fort Hood spouse to market the service.
This year, Welch and Miller came close to obtaining funding from the Army's office of morale, welfare and recreation. But their funds didn't make the final budget. "We lost out to medical supplies and bullets," Welch said.
Welch and Miller also face competition from the likes of America Online, which has donated a similar service to a small number of military families.
Welch says that his company's service is more user-friendly, requires less specialized hardware and works without a glitch no matter how slow the connection.
Welch and Miller mastered Web video production after several years of producing and editing videos for the Maryland Tourism Office's Web site.
Their service also has more commercial applications. The Navy is looking at it for training purposes, rather than strictly as a means of communications. Welch and Miller, who, separately, have owned a variety of businesses in Silver Spring, including a gas station, said they targeted soldiers and their families first because they wanted to help them.
"The military will do this," Welch said. "We just have to hang in there."
© 2004 The Washington Post Company
Kurtis Miller, showing a Web video application for deployed soldiers, and his partner, Jim Welch, have an office at the new Silver Spring Innovation Center.
(Juana Arias -- The Washington Post)
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