Forget Silicon Valley the Dulles Tech Corridor is cultivating companies that break the mold

When news broke late last year that Reston, Va.’s fast-growing software company Appian was thinking about leaving for North Carolina or Georgia, it looked as if the company would come to exemplify the Washington area’s failings as a technology hub. The area’s brightest stars — companies including Mandiant, Sourcefire and Opower — have tended to move elsewhere or be swallowed up by larger companies, preventing the local tech industry from developing much of an identity.

Instead, Appian became a symbol of how the local tech sector is maturing. Appian went public last year in lieu of selling to a competitor. And it recently announced plans to move just a few miles down the road to a corporate campus in Tysons Corner that once housed the Gannett publishing company’s headquarters. It will be Appian’s sixth subsequent headquarters in Northern Virginia since it was founded there in 1999.

Appian has doubled down on a stretch of land known locally as the Dulles tech corridor, a quiet, affluent business cluster that stretches from Tysons to Loudoun County in Northern Virginia.

“We’re really a representation of what can be done with the resources at hand in Washington, D.C., instead of a transplant from Silicon Valley,” Appian chief executive Matt Calkins says. “We’re about ‘here’ — we’re about this place, these resources. It’s not our goal in life to be bought by somebody else and become irrelevant.”

In a few decades, the corridor has grown from a sleepy residential area to a prosperous business district. It was connected to the Metrorail system in 2014 with the first phase of the Silver Line, which extended west to Reston and stimulated new developments along other new Metro stops in such places as Tysons and McLean.

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To be sure, the area has its drawbacks: Housing is expensive. Commutes can be punishing. Most of the area is inaccessible without a car, and the corridor has largely been left out of the bar and restaurant boom that helped turn downtown Washington into a destination for young professionals.

But Northern Virginia nonetheless managed to become one of three D.C.-area finalists — along with Montgomery County and the District — in Amazon.com’s search for a second headquarters. Officials in Fairfax and Loudoun counties teamed up to offer Virginia’s Center for Innovative Technology (CIT) campus, a frustum in the middle of the woods in Herndon, for the project. (Amazon founder Jeffrey P. Bezos owns The Washington Post.)

The corridor got outsize representation among 2018 Washington Post Top Workplaces awardees, a list that is compiled by the survey firm Energage based on how workers rate their employers.

Out of 150 companies that qualified in 2018, at least 40 maintain local operations in the corridor. And the top-ranked employers in all three categories are based within two miles of one another in Reston: Appian ranked No. 1 among large employers; a government contractor called Acclaim Technical Services (known as ATS) was top among midsize firms; and a small technology services firm called Macedon Technologies was first among small businesses.

Government contracts are still the primary source of business in the corridor, owing to the region’s proximity to the Defense Department and the Central Intelligence Agency. Midsize winner ATS, for example, helps the intelligence community translate communications in languages such as Arabic, Farsi and Pashto, recruiting a mix of U.S. military veterans and foreign-born U.S. citizens to handle the top-secret work. Government contracting giants CACI and Mitre also made the list.

“I don’t know that it’s fair to classify [the Dulles corridor] as a defense contracting mecca — I mean it is, but there’s so much more here than that,” ATS chief executive Dave Cerne says.

To his point, a few local firms, including Appian, have built things for the government before pivoting to business sales. Tysons-based Upskill, for example, started out selling augmented-reality technology to the U.S. military before realizing it could be used to overlay technical information onto what fac­tory workers see. It now sells augmented-reality technology to the likes of General Electric, Boeing and Coca-Cola.

Appian followed a similar path, building a workforce management platform for the Army before selling a similar product to hundreds of businesses.

Appian’s successful pivot to the commercial market — and the fact that it is spawning smaller firms like Macedon — gives regional economy-watchers hope that the Dulles corridor could one day grow to national prominence as a center for technology jobs and innovation, shaking its historic dependence on the business of government.

“To me this is a healthy sign of a fertile economy; it’s part of an incubation process,” says Stephen S. Fuller, a regional economist with George Mason University. “Now let’s see if we can hold on to it.”

Antithesis of Silicon Valley

At first glance, Appian appears to have a classic Silicon Valley origin story. Its first office was its 26-year-old chief executive’s basement. It got funding from a specialized technology venture fund.

In other ways Appian is not so typical: Early employees were self-described nerds who in the evening would play board games together, many of which were personally designed by the company’s skinny, bespectacled founder, Matt Calkins.

Calkins concedes that his company — and the broader business community in Northern Virginia — seems to have little in common with the innovation ecosystem that exists on the West Coast. He describes Appian as the “anti-Silicon Valley,” and he’s trying to craft a workplace culture that departs sharply from the ostentatious flare commonly associated with tech start-ups. Being based in Virginia has had distinct advantages, he says.

In a reflection of the company’s local orientation, Appian’s managers have generally discouraged remote work, choosing to recruit technology workers who might already be predisposed to living and working in Northern Virginia.

The more laid-back pace of the state’s technology industry — and the fact that Appian has fewer competitors for tech talent here than it would have on the West Coast — means that workers are more willing to stay in one place. Appian boasts annual attrition rates between 10 to 15 percent, even among those with sought-after technical abilities. That’s substantially lower than the 22.4 percent average turnover rate for software companies reported by HR consultancy Aon Hewitt last year. Most of Appian’s executives have been there longer than a decade.

“It would have been more difficult [to build Appian] in Silicon Valley, ironically because everyone there is hopping around looking for the next big thing, and it took a while for Appian to become any kind of a big thing,” Calkins says.

Calkins and his co-founders cut their teeth at MicroStrategy, a large software and analytics company also based in the Dulles corridor. None of them had studied computer science; instead, several were high school debate champions who became liberal arts majors in college. But MicroStrategy was so inundated with demand for talent, Calkins says, that the company let them learn on the fly.

“I don’t know that I have ever had the qualifications for the roles that I’ve attempted,” he says. “I experienced firsthand how it is possible to rise to that kind of a challenge with enough determination.”

They founded Appian in 1999. In its early days, the firm was at times indistinguishable from the other government-focused IT contractors in the corridor.

One of Appian’s earliest software products was created with funding from the Defense Department, forming the technological backbone for Army Knowledge Online, an information repository used by the U.S. military. That funding helped facilitate a broader pivot to “business process management” software, which businesses of all sorts use for workflow automation.

Austin Rosenfeld, who joined Appian in its early days as a product developer before later founding Macedon, recalls co-founder
Bob Kramer telling him and two others, “We’re going to build a new product, and you’re going to have a demo for me every day at 5 p.m.”

“We got it to market in six months from a blank sheet of paper, which in retrospect for a team of that size is pretty amazing,” Rosenfeld says.

In 2014, Harry Weller, a venture capitalist with Chevy Chase, Md.-based New Enterprise Associates, recognized Appian’s commercial potential and helped facilitate a $37.5 million investment that gave the fund a minority ownership stake in the company, eyeing the massive budgets that today’s corporations allocate for workforce management.

Today the company trades on the Nasdaq composite index under the APPN ticker and employs 898 people globally, including 568 in the D.C. area. More than a few Appian employees got rich from that IPO, something that doubtless played a central role in Appian’s top ranking: According to financial disclosures, more than 750 employees, consultants and directors had stock options at the time the company filed for its public offering.

As the company has grown, the founders have worked hard to retain the company’s early characteristics. Even today, almost every new hire at Appian is interviewed by one of the firm’s co-founders, many of them by Calkins himself, something that employees say sets a tone for where the company is headed.

“You get it from the horse’s mouth,” says Roland Alston, an inbound marketing manager and blogger at Appian. “You’re actually hearing it from someone who was there when it all started.”

Argumentativeness is central to the firm’s corporate culture, something that might stem from the founders’ background in competitive debate. Business meetings are conducted with an eye for creating a certain productive confrontation. Sometimes, when two people are conducting a business meeting, managers will order that a third, unrelated person be present, just to challenge each side from another direction.

“When we started the company, everything was an argument. At first that might sound annoying. And it was,” Calkins says. “But eventually I realized that as the group gets bigger, it’s actually an essential way to bring people in.”

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