Potomac Council Comes Back From the Dead
By Bob Starzynski
One year after emerging from dormancy, the American Electronics Association's Potomac Council is garnering a lot of attention in the Washington region.
In the past year, the local arm of the national association has increased its membership to 90 companies from 30. In November, 25 of those companies will go to the AEA Classic in San Diego, one of the largest technology investor conferences in the United States. In comparison, only six public companies from the Washington area went to the conference last year.
That companies are flocking to the Potomac Council now is a sign of the times, according to the group's organizers.
"The local public companies are gung-ho for investor conferences," said Kevin Carroll, executive director of the council. "The classic is the biggest draw for us with new member companies."
The American Electronics Association, which has joint headquarters in Santa Clara, Calif., and Washington, D.C., is one of the largest organizations in the country representing various technology industries.
Contrary to what the name connotes, the American Electronics Association, with 3,000 member companies, does not just promote electronics companies. In fact, software companies make up the largest portion of the association's membership - 24 percent.
America Online Inc. founder Jim Kimsey and former Lockheed Martin Corp. front man Norman Augustine originally started the Potomac Council in 1987 as a way for AEA members in this region to share a common thread.
For the next five years, the council offered networking events and Capitol Hill policy muscle to local AEA members, most of whom were government contractors.
But, unlike other regional councils that worked well for AEA, the Potomac Council failed in the early 1990s for several reasons.
"Ten years ago, the AEA's big issues were the fight with Japan and export regulations," said Ed Bersoff, chief executive of BTG Inc. in Fairfax, Va., and chairman of the rejuvenated Potomac Council. "But those weren't the big issues for government contractors."
Plus, Bersoff added, there weren't many public technology companies in the Washington area 10 years ago that were interested in AEA offerings, such as the classic.
"By the early '90s, the Potomac Council was nothing more than a shell in dormancy," Carroll said.
But, because of the changing culture and landscape in Washington's technology market, AEA services have bounced back into favor in the region.
The organization's big issues of the day include immigration of workers, Internet taxes and computer security.
And most of the technology companies in the Washington area are in the information, software and Internet businesses - right in line with AEA's issues.
"Now, the association's issues are of more direct relevance to the companies here," Bersoff said.
Also, many of the companies in the Washington area have gone public in the last five years, giving them interest in events like the classic.
So, last summer, Carroll decided to launch the Potomac Council again, making it one of 17 regional groups headed by the AEA.
Unlike the last go around, the council does not focus any effort on networking. Carroll believes that the Northern Virginia Technology Council and the High Technology Council of Maryland already fill the networking niche well and that competing against those organizations would be a waste.
Instead, the council is pushing AEA services as its big selling point.
"I always encourage tech companies to participate in [the classic] because of the great cross-section of investors there," said Gene Riechers, managing director of FBR Technology Venture Partners, the venture capital division of Friedman, Billings, Ramsey & Co. in Arlington, Va.
Riechers also is on the steering committee for the Potomac Council.
Some companies, like Landmark Systems Corp., a Vienna, Va., software firm, joined AEA simply because membership is a qualifier for participating in the classic. All of the more than 400 companies that present at the conference are AEA members.
The classic is so important in investment banking circles that Landmark suspended its initial public offering roadshow for two days last year because most analysts and investment fund managers in the company's market were attending the event, according to Kathy Clark, chief executive officer of Landmark.
In addition to the classic and policy issues that the AEA supports, the organization's data and studies are worthwhile to members.
The group does an annual compensation survey, which is strongly supported and widely read by technology company executives.
Carroll said he would like the Potomac Council to continue its rapid growth and is setting his goal at signing up more than 200 companies.
Currently, the two largest AEA councils are the Bay Area Council, with 947 members, and the Boston Council, with 220 members.