There was a flood of congratulations and applause after 1776 acquired Disruption Corporation and Crystal Tech Fund on Thursday, but questions about its impact on the area's startup and incubator scene remain. What kind of incubator space does the D.C. area need? Is there the capital to support it? Who gets left out when there's one less option for growing a startup?
If Disruption is now just a facet of 1776, that means there's one less option for startups looking for an incubator or co-working space to grow. That will have a real impact on current and prospective Disruption members.
"I don't even think I'm eligible to work at 1776. I couldn't afford it anyway," said Lisa Kaneff, a marketing and strategy consultant who recently founded The Next Chapter Consulting and was looking at joining Disruption before the announcement.
Partly it's just a straightforward question of resources. Pooling together the money and opportunities available to members of 1776 and Disruption doesn't mean there are suddenly more choices overall, it just means they will be distributed differently. It could also point to 1776 and Crystal Tech Fund having trouble funding their $25 million and $50 million goals respectively. And as Kaneff pointed out, the two aimed at different, if overlapping, markets. Now, some of those at Disruption may not fit the mold anymore.
Niche incubators and accelerators like Mach37 for cybersecurity, Eastern Foundry for government-focused startups and Halcyon for social good startups all appear to be thriving.
D.C. has seen a mushrooming of incubators and co-working spaces in the last couple of years, with Cove and WeWork locations popping up everywhere. Niche incubators and accelerators like Mach37 for cybersecurity, Eastern Foundry for government-focused startups and Halcyon for social good startups all appear to be thriving.
At the same time, long-standing incubators like Affinity Labs and the The Fort have shut down. Whether it's different strategies that are succeeding or failing, a limit on how many such places D.C. can support or some combination is harder to measure.
That's not to say 1776 acquiring Disruption isn't without its good points. Plenty of those involved with 1776 have reason to be pleased.
"I think it will be great to have an added location," said Neel Patel, founder of Magnify It, a startup that helps non-profits with email fundraising, and a 1776 member for over a year and a half. "There will be more people to work with and it will help the area scale up with startups. Having an outpost adds fuel to the fire."
Patel said the new campus is essentially a list of new benefits for being part of 1776, which hadn't been open long before he joined. Patel himself lives not far from Crystal City, which makes the convenience of being able to work closer to home when he doesn't have clients to meet an extra bonus.
"D.C. can feel so homogeneous, and Disruption felt different from 1776."
Patel's take was echoed by several other founders of 1776 member companies, but again, the change may not be welcome on the other side.
"Disruption Corp. was appealing to me because of the really nice, inspiring vibe, without the frat house feel. It is accessible and affordable, and welcoming to freelancers like me," Kaneff said, adding that price in particular was a hot topic of conversation on Thursday at Disruption.
The startup scene in the greater D.C. area has grown undeniably stronger and larger in the last few years. A major consolidation like this could be a great chance for even bigger things, but if it's also a sign of limits on resources and choices for new startups, it's more than a little foreboding.
"D.C. can feel so homogeneous, and Disruption felt different from 1776," Kaneff said. "It was refreshing. I hope it stays that way."
