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  • Part One:
    A Day in Washington's New Economy
  • Part Two: How the Region Embraced Innovation
  • Part Three: Washington's Investing Angels
  •  spacer
    From The Post
  • Monday's Wash. Biz: Local tech stocks go boom.
  • Study: The area's IT industry rivals the size of its federal work force.
  • Tech influx has forced a changing of the guard in Washington business.
  • Is Washington the only tech center without a silicon-related nickname?
  •   A Day in Washington's New Economy

    The Post's expanded Thursday Business section debuts.
    First of three articles

    By Mark Leibovich
    Washington Post Staff Writer
    Sunday, December 6, 1998; Page A1

    AOL Seeks to Acquire Netscape: Deal for Internet Pioneer May Reshape Tech Industry.

    It was still dark that morning when Daniel Strotman read the news at his Fairfax home. This, he knew, was big.

    He darted through the early rush-hour traffic on the Dulles Toll Road, and when he got to work, his fellow construction workers were talking about the deal.

    Vivian Wei Feng
    MCI WorldCom rep Vivian Wei Feng at your service – in Cantonese, no less. Post photographer Nancy Andrews trailed the reporters on yet another busy Monday in the local tech world. Photo gallery.

    "We were joking, 'Oh great, here comes another 200,000 square feet,' " says Strotman, sitting in a trailer next to America Online Inc.'s campus later that morning.

    Strotman, 41, a construction project manager, and his crew are sprinting to meet a Dec. 14 deadline on a four-story building for the giant online services company. Though he works a few hundred feet from Steve Case's suite, he has never met the AOL chief. But together, Case's deal-making and Strotman's jackhammers are creating an Internet empire 28 miles from the Capitol dome.

    Related Item
  • Map: concentration of tech companies in the Washington region
  • They are part of a high-tech boom that has transformed the Washington area economy in the past decade. While the region lacks a catchy Silicon Something nickname, it has become one of the nation's foremost centers of high-tech commerce and innovation, a dynamic mix of old-line government technology contractors and next-generation Internet companies, biotechnology labs and telecommunications firms.

    Close to a quarter-million people labor each day at 3,000 high-technology companies here and thousands more work in supporting sectors. Growth of the technology business is key to the Washington region's economic future.

    How This Story Was Reported
    The five Washington Post reporters and a photographer spent several hours with 11 people at Washington area technology companies or in jobs affected by the boom. The goal was not to interview, but to watch and listen as the people went about their work, so as to chronicle the tasks and concerns facing them that day. The reporters: Peter Behr, Justin Gillis, Shannon Henry, Mark Leibovich and Mike Mills. The photographer: Nancy Andrews.
    On Nov. 23, five Washington Post reporters set out to chronicle a typical day in the new economy: a venture capitalist in Rosslyn investing millions in a software start-up over lunch; an MCI WorldCom Inc. customer representative at Pentagon City helping a distraught caller; an engineer at a Reston government contractor chasing down a bug in a balky computer; a cell biologist in Rockville discussing "anion-exchange columns" and "gel-shift assays."

    Collectively, they have reinvented Washington's business landscape. They have created a slew of young millionaires (many under 35) and have introduced jeans and sandals to once-buttoned down offices. Their impact is also more subtle: Bartenders such as Ed Motley in Tysons Corner have doubled their tips as new companies sprout up, and construction workers such as Strotman have full dockets of technology-related projects.

    "Almost everything now is related in some shape or form to technology," Strotman says, his words nearly drowned out by a bulldozer behind his trailer. "That's who's doing the building now. You can see the effects everywhere."

    The Voice on the Phone

    "Cantonese." A computerized voice whispers the word into Vivian Wei Feng's headset at 11 a.m. That's her cue that a customer of MCI WorldCom who speaks that language is on the line with a billing problem.

    Feng, who emigrated from China with her husband in 1993 and began work at MCI a year later, is sitting high in a tower near Pentagon City Mall. The caller's long-distance service has been disconnected for nonpayment though he insists he mailed his check. "Just a moment," she tells him in Cantonese. "I'll speak with our financial services department and get right back to you."

    This is the heart of MCI WorldCom's global telemarketing and customer service operation. Feng represents a large and unheralded segment of local technology businesses: people without advanced degrees performing low-tech tasks. Feng will handle about 50 calls from customers between 9 a.m. and 5:30 p.m. In the process, she will gently convey that MCI WorldCom cares enough about the Chinese market to have a dozen Cantonese- and Mandarin-speaking reps on call 18 hours a day.

    She wears a smart red suit and keeps a cellular phone next to her desk so her nanny can reach her. Her computer flashes instant caller information – with Social Security number-and billing data.

    In cubicles around her, other telephone workers are handling multinational calls in 10 languages. Staff events feature revolving ethnic themes. A dragon once wended through the office on the Chinese new year.

    International calling is MCI WorldCom's fastest-growing phone market, with non-English speaking customers accounting for half of the company's revenue from residential calls to and from overseas. As more phones get into more hands around the world, more workers like Feng will be needed to smooth out the bumps for new customers like the man on the phone.

    Feng takes 45 seconds to scan the caller's payment history and consult with the financial services office. Then she's back on with the customer, telling him his payment has been found and service will be restored within the hour.

    The Scientist Salesman

    Ninety degrees around the Beltway in Rockville, in a conference room decorated with posters of modern Mexican artists, David Hilbert fixates on pages of charts. He is a cell biologist at one of Maryland's promising new companies, Human Genome Sciences Inc. Around him sit five lab workers who conduct many of the sensitive tests that help the company seek cures for disease.

    He and his crew pass the charts to one another around a conference table. Their minds are hot on the trail of a newly discovered protein that seems to regulate certain cells of the immune system. Everyone in the room is aware of the potential implications of the discovery – just conceivably, it could lead to important new treatments for certain cancers and for diseases of the immune system.

    Other researchers at the company found the protein a few months earlier as part of their work analyzing human genes. Hilbert's team members are now poring over reports on their own three experiments that tried to pinpoint the exact structure of the molecule – the "receptor" – on the surface of cells to which the protein attaches.

    In one experiment, researchers Amy Orr and Krystyna Pieri shredded up human tonsils freshly removed from children with tonsillitis, then used the still-living immune cells as guinea pigs.

    The charts reveal some good news: Hilbert's people are close. "It's three independent ways of measuring the same thing, and we all came up with the same answer," Hilbert tells his colleagues.

    But there are still pitfalls to get past. Hilbert jumps to his feet and starts diagramming an immune cell on a white board, reminding the team of some of the subtle problems that could trip them up.

    Still, it's clear he's psyched. After the meeting breaks up, Hilbert runs into a colleague in the hallway. "I think we've got it," Hilbert confides, although he knows to confirm the discovery, his team will have to do scores of more tests.

    This is complicated work, and in the best scenario, it will take years and millions of dollars to pay off. But the state of Maryland is betting that companies like Human Genome Sciences can create a vibrant new industry. Already, the state is helping the company build a pilot factory near Rockville to produce batches of proteins for large-scale human experiments. Several other local biotechnology companies are working on their own factories.

    Hilbert, 41, wears his erudition lightly. A thin, handsome man with strands of gray in his dark hair, he's dressed in khakis, a striped dress shirt open at the collar and penny loafers without pennies. He used to work at the National Cancer Institute, but wanted to switch to a private company where he'd be more directly involved in finding treatments.

    After a quick lunch at a conference table, Hilbert switches hats: He's now a promoter. He rushes to Dulles International Airport and boards a plane for Boston, along with three other managers at the company. There, they spend a couple of hours briefing a group of doctors on another drug that Human Genome Sciences is developing that ultimately may be an important advance in cancer treatment. Hilbert would like to recruit the doctors to test the drug in patients. The briefing goes well, and Hilbert and his colleagues rush to the airport, barely catching the last flight back to Washington.

    The Big System Puzzle

    At 11:15 a.m., Scott Leberknight zigzags between his office and a computing lab, scribbling in a composition book as he goes. The 25-year-old software engineer at Science Applications International Corp. in Reston is building a database that will help the U.S. government track research and media reports around the world – crop harvests in Africa, perhaps, or chemistry experiments in China.

    As part of this project, Leberknight is testing a powerful computer called a server. It is not going well. A flurry of "ERROR" messages flash on his screen. He shakes his head.

    "This is a big deal," Leberknight says. If it's not fixed, "we'll have to get a waiver on our contract to get a different server."

    Ten minutes later, he tells his boss, who is not pleased.

    Washington's technology tradition is steeped in companies like SAIC, which employs 9,700 people here. Known (sometimes derisively) as "Beltway Bandits," these companies subsist largely on contracts from the federal government, the biggest technology customer in the world. Their work is somewhat mysterious, often classified, and rarely sexy. It often involves patching together huge computer systems from many different makes of equipment – a data network for the Internal Revenue Service, a new air traffic control system for the Federal Aviation Administration.

    Washington owes much of its high-tech heritage – and prosperity – to these contractors and their employees like Leberknight. He loves his work. He loves solving problems and his bosses, who often say "check it out, Scott," think he's good at it.

    Leberknight has reddish hair and is dressed in khakis and a gray and black sweater. He is both techie and Trekkie: Each of the five computers he oversees is named for "Star Trek" ships. He brims with enthusiasm as he rushes past offices (no cubicles here) through white-walled corridors. In every office is the ubiquitous white board, decorated with scrawled boxes and lines, flow charts of ongoing projects.

    Later, Leberknight and his colleagues, in a last-ditch effort, open up the server to see if there's a hardware problem inside – again to no avail.

    The Money Man

    Lunchtime in Rosslyn, and Gene Riechers is quizzing two men over a plate of chicken fajitas and rice. Riechers is a special breed of investor. He controls a $50 million fund that invests in new technology ventures like the company his lunch guests are trying to start. Riechers, who works at the investment bank firm Friedman, Billings, Ramsey Group Inc. in Arlington, is almost sold. He has been studying the two men across the table over several months and multiple meetings.

    They are E. Wayne Jackson and David Rensin, founders of Riverbed Technologies, a Falls Church company that specializes software for handheld computing devices. The eager men have solid reputations,which Riechers knows because he has checked around.

    The group meets in a seventh-floor conference room (the Bull and Bear Room) at FBR's sleek but dressed-down offices. They dine on buffet selections catered daily by the brokerage firm. As one of the Washington technology sector's most visible venture capitalists, the 46-year-old Riechers does not lack supplicants. He receives 1,000 business plans from young technology companies each year. As of this day, he has invested in 13. Riverbed would be No. 14.

    "So tell us about Comdex," Riechers asks, referring to Jackson and Rensin's just-concluded trip to the huge technology trade show in Las Vegas. Riechers's affable style mingles boyish enthusiasm and paternal sobriety. Once a software executive, his investments transcend finance: He takes a hands-on role in the companies he sponsors – mentoring leadership teams, visiting offices, making introductions.

    "You have any partnership updates for us?" Riechers asks, and then records Rensin's answers on a white legal pad.

    "One other question," says Harry Weller, one of Riechers's young associates. "How did you get the name Riverbed?"

    Rensin, the firm's chief technology officer, swirls his hands in the air and gets cosmic. The name evokes a "river of information that flows," he says. Plus, the most fertile part of a river's soil is its bed.

    "Oh," says Riechers, frowning, but in a friendly way. He adjourns the meeting by saying, "Sounds real good."

    The following week, Riechers and his team agree to lead a $3.5 million investment in Riverbed Technologies.

    The Global Strategist

    Across the Potomac, lunch continues over a conference table at the downtown offices of Iridium LLC. A team of executives is updating company general counsel Thomas Tuttle on efforts to persuade recalcitrant countries to approve use of Iridium's satellite mobile phone network within their borders.

    "There's still negotiating going on between the Mexican and U.S. governments," reports one manager. In Syria, says a colleague, an influential sheik will be sent to persuade President Hafez Assad to approve Iridium's service application. Pakistan wants $1 million before it grants a temporary license – a stance Iridium deems unacceptable. Romania wants $15 million, which incites chuckles around the table.

    In all, 25 mostly smaller countries have yet to sign onto the Iridium satellite system, limiting use of its ubiquitous phone signals to 83 percent of the globe.

    Most corporate attorneys spend their days writing contracts and handling litigation. But Iridium's legal team doubles as global locksmiths, prying open markets that are crucial to the world's first handheld satellite phone.

    The Washington area is the epicenter of the global communications satellite industry. It is home to the global Intelsat consortium, the onetime monopoly provider of satellite communications between the nations of the world. Comsat Corp., its largest owner and U.S. member, is based in Bethesda.

    Regulations can make or break any of these companies. Which is why Tuttle's attorneys specialize in using the regulatory process to gain a competitive advantage.

    After Tuttle's meeting, he walks down the hall to another group of regulatory attorneys. They discuss ways of stopping rival company ICO Global Communications from getting regulatory clearance for its planned satellite system.

    Calling ICO an "unreformed monopolist" because of its roots as a private offshoot of the Inmarsat satellite consortium, Iridium Senior Vice President Leo Mondale tells Tuttle that Iridium should push the FCC to review ICO's holdings. Mondale looks over to an Intelsat veteran whom Tuttle hired to handle global negotiations. "I know you want a nicer, friendlier approach," Mondale says, only partly in jest.

    "We agree on the goal," the other man replies. "Where we may have a difference of opinion is how we're going to get there."

    That will be up to Tuttle to decide. He leaves the meeting grinning, pleased that his team is proficient in both regulatory hardball and gentle diplomacy.

    Article continues

    © Copyright 1998 The Washington Post Company

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