McDonnell Talks Entrepreneurship, Innovation at Arlington's Opower

Virginia Gov. Bob McDonnell toured the Arlington-based tech startup Opower on Wednesday and asked what he could do to help attract and retain similar businesses — and got a fairly simple answer.

"Just… more."

The company's brain trust talked about how they compete with giants like Google and Facebook, about battling the perception that Northern Virginia tech jobs are exclusively with government contractors, about the need to create a culture of innovation and idea sharing.

Located in the Courthouse neighborhood, Opower has about 200 employees at its Arlington headquarters. It has about another 70 in San Francisco and a small office in London.

The tech startup's business model is based on the idea that the cheapest energy is the energy you don't use. It partners with utility companies to provide information to consumers about their energy use and how they can save money. The average customer shaves between 2 percent and 3 percent off of their electric bill.

So far, . By the end of 2012, Opower will have saved enough energy to do that for two years.

"That's cool," McDonnell said after he and his daughter, Rachel, got a crash course in what Opower does. The governor later added, "For Virginia to continue to grow, we've got to have more companies like yours."

To do that involves having a conversation about more than just financial incentives — although other places are "falling all over themselves" trying to lure businesses like Opower, said the company's chief financial officer,  Thomas Kramer.

And so Wednesday's roundtable discussion on entrepreneurship was as much about branding and reputation-building as it was about Virginia's business-friendliness.

People want to be around other people in their industry — and making that happen can spur innovation, like what North Carolina achieved with its Research Triangle Park, said Jim Kapsis, Opower senior director of market development and strategy.

"We root for software companies in this area," said Michael Sachse, vice president of regulatory affairs. "They may take one employee from us. We may take one employee from them. But we want to get to that critical mass. Because the talent will want to stay here."

Return to the 'Silicon Dominion'

McDonnell said he was a bit surprised. Virginia has the second-highest concentration of technology workers outside of Silicon Valley, he said, citing a laundry list of companies that call the Dulles corridor home and dusting off the decade-old phrase "Silicon Dominion."

Ben Foster, Opower vice president of product, said he grew up in Fairfax and thought he'd have to move to Austin or San Francisco to land a cool software development job — because those places have the reputation for that. And that's the kind of reputation Virginia needs to build, he said.

The state should work harder at showing off the innovative companies located here, showing young people that this is an exciting area to work, Sachse said.

"Silicon Valley is always going to be Silicon Valley," he said. "But this is going to be the center of software innovation on the East Coast."

He added, smiling: "Of course, we'd like financial incentives, too."

Opower has hired 133 new employees this year, about half of them from Virginia, said Jennifer Crystal, the company's director of recruiting.

"There's never enough, right? And it's very competitive," she said. "Most kids have three to five offers. All the San Francisco companies fly in to recruit out of Virginia's schools. Google has a three-hour line (at job fairs). I've actually stood in the Google line and handed out information."

McDonnell talked about his push over the last two years to incentivize universities to expand their science, technology, engineering and math — commonly called STEM — offerings to increase the number and quality of students coming out of Virginia schools.

But cities like San Francisco, Seattle and Boston, for instance, enjoy a culture where college friends have an idea and start a company there. McDonnell said his administration has been leaning on George Mason to expand its STEM offerings, including through board appointments, in hopes of achieving something similar here.

Opower has utility providers as active clients in 30 states. Virginia is not yet one of them.

"Somebody ought to fix that," McDonnell said, smiling, before telling the Opower team to feel free to submit white papers to his office regarding branding, workforce retention and incentives.

"What I'm trying to do is showcasing companies like yours, increasing our branding as a hotbed for entrepreneurship," McDonnell said.

"Keep up the good work. And do not go to California."