Steve Case and AOL are the marquee names of Washington’s digital age. But Mario Morino helped launch the region’s tech industry and became the man to see.
Mario Morino’s 40 years in Washington could be scripted as a two-act play. The first act sees a young man, the son of a door-to-door vacuum-cleaner salesman in Cleveland, come to Washington, launch a start-up company, and become a tech tycoon. In the second act, the protagonist, having retired at 49, plunges into local civic life and spurs new-money moguls to become activist philanthropists.
The play would run off-Broadway because its star is not well known. Steve Case, Jim Kimsey, Ted Leonsis, and the others who led AOL are the marquee names of Washington’s 1990s rise as a tech center. But Morino is the original, the man known as the godfather of Washington’s tech industry.
Morino came to Washington in 1967 as part of a Navy technology program. He and others in the program began moonlighting to create a start-up business. Computers at the time were big and expensive; Morino’s outfit managed systems in which businesses or agencies shared time on a single mainframe, accessing it via phones and a typewriter console.
A recession in the early 1970s kneecapped Morino’s company and others, but he rebounded in 1973 to start a business that developed software for mainframes. That company—called Morino Associates though it was founded with Morino’s mentor, info-tech pioneer Bill Witzel—grew and then merged in the 1980s to become Legent, one of the area’s few equity tech companies. In 1995, Legent was sold for $1.7 billion—at the time the largest software deal in history.
Morino retired from Legent in 1992, three years before its sale, and became champion of the area’s tech sector. Declaring that Washington would become the world’s digital capital, he threw himself into efforts to make that a reality.
Worth more than $150 million, Morino also dove into the philanthropic world. Recruiting the AOL crowd and other tech moguls such as Mark Warner and Raul Fernandez (founder of Proxicom), he launched Venture Philanthropy Partners, which uses the principles of venture-capital funding to identify entrepreneurial nonprofits and back their growth.
Today Morino splits his time between Washington and his hometown of Cleveland, where his wife, Dana Sandberg Morino, and three teenage children live.
How did your first business start?
There were 187 of us in that Navy technology program, and it was a remarkable base of talent. Each of us had four years in the computer field.
Maybe 30 of us decided to create a company on the side. We were called “Morino’s marauders.” We’d put a case of beer on our shoulders, go in, and work all night.
What was taking place in Washington from 1967 through 1971 was the original tech bubble. DC was a hotbed for computer time sharing. Wisconsin Avenue was lined with time-sharing companies. Technology was just getting infused in the government, so the government became this huge spawning base.
The exact same thing happened then as in the 1990s but on a smaller scale. The valuations of companies went off the charts—ridiculous valuations. And then the recession hit, a big one that parallels what we’re seeing today. By 1971, the companies were selling for pennies on the dollar. We’d go down the hallways and joke about which door would be padlocked next.
At the start, I put $1,000 of my own money into the company. I went to my mother and brother and got money—maybe $5,000. We lost it all. It was probably the most valuable loss I ever had because it sensitized me to how stock markets function and how valuations are done. I got burned at a low cost, but a lot of people got burned for a lot.
What was the fallout for the area?
It sent a shudder up the spines of people in a region that was already conservative. You had this enormous talent base in technology, but it migrated to the government-contracting side. You didn’t see the growth in the product market that you saw in Silicon Valley. Product work sublimated itself to the government-contracting model for almost 20 years, through the 1970s and 1980s.
What government-contracting companies were key to this second wave of technology?
Earle Williams did phenomenal work with BDM. People like Dan Bannister at DynCorp, John Puente at Digital Communications, Jack London at CACI, Ed Bersoff at BTG—they don’t get credit for that wave. The media hung labels, often unjustly, on these firms and their leaders—“Beltway bandits” and other not-so-nice terms. In reality, these firms and many others—Lockheed Martin, SRA, and more—have played vital roles in designing, implementing, and running large technology systems for the federal government—from monitoring “dirty water” for the EPA to doing the student-loan program for Sallie Mae.
And these companies had a hand in driving innovation. The experience they gained in building these systems for the government gave them the understanding to create new intellectual property that in turn created the first commercial databases, search engines, network managers, and on and on. People didn’t realize that the government work was spinning off a lot of commercial activity.
Morino Associates, later Legent, was one of the first commercial tech companies in the 1970s and 1980s.
Software firms or product firms were really rare. If you go back to 1984 or 1985, there were only maybe six true software firms in the region. A meeting of the CEOs could have fit around the corner of the bar at Clyde’s. And we were ostracized. We were these mavericks—we weren’t doing “real” business, we weren’t part of the big government complexes, and we weren’t part of the business community. No one gave you the time of day.
Why did you retire?
I got remarried and I had my first family, and I knew that if I stayed in business, I would ruin that relationship. I’m too competitive and too driven, and I just had to break it. I made a cold-turkey break in 1992.
What was your next move?
I began to go to meetings and network with leaders in the region. When I was doing my business, I couldn’t have told you who my supervisor was in Fairfax County. I didn’t care; I was running a business that was all over the world.
Making the rounds, I learned about the complexity of the leadership of this region and the importance of getting involved. You have all those groups that you can see—the boards of trade, the tech communities, the business roundtables. Then you have informal groups. One executive told me, “Decisions in DC are made by four guys at Congressional Country Club at 7:30 on Friday mornings.”
That doesn’t even get into the community networks and the activists. And there’s an international monetary world and a presidential administration.
The DC region is a massive ecosystem. I went to a National Parks Foundation dinner once where there had to be 1,500 people. I didn’t see one face that I recognized. That’s Washington. If you step outside of your arena, you can be totally in another world.
Is that complexity bad?
It’s not bad, but if you don’t know how to navigate it, you’re toast.
Sally Quinn talked to me for a Washington Post story about how new money was changing the area. I told her you can get on a ladder of success here, climb the ladder, get to the top, and feel so proud. And then you look around and realize you’re on the wrong ladder. There are so many ladders taller than the one you’re on.
How did you become known as the godfather of the tech industry?
After I retired, I got involved with the Northern Virginia Business Roundtable. George Johnson ran it—he was then president of George Mason University—and that’s where I met Earle Williams, lawyer and developer Til Hazel, and others in the Northern Virginia business community. I was again the new guy on the block and the odd guy at the table. Everybody else was either a builder or a computer-systems integrator. That was it.
I gave a speech to the group on September 28, 1994, about the future of Washington as a digital capital. I remember the date because that morning Disney announced that it was pulling out of its plan to build a theme park near Manassas. I walked in to give the speech, and it was like death had hit this place. All the Northern Virginia builders—they just saw massive fortunes go down the drain.
But the negative atmosphere helped my speech. By the time I finished, people were really excited; they were sort of on the rebound. At the end of the meeting, George Johnson, whom I hardly knew, said to me, “I don’t know if I understand anything you said, but I watched this room, and there’s a chariot moving out, and I’m getting on it.”
What did you say in the speech?
I showed them that this region was going to be a portal of commerce in the 21st century. It wouldn’t be just technology, but technology would enable it. We were moving to a network society, a world connected by the Internet. Remember, this was 1994, when Al Gore was still talking about the information superhighway.
I told them that the MAE-East, the key Internet exchange point for the eastern part of the country, was located here—in Northern Virginia. The closer you are to that pipe, the faster your Internet times are going to be. That’s why you saw the emergence of Internet-service providers here and why so many hosting centers located here. This was as close to the pipe as you could get on the East Coast.
At the time, Legent was an anchor company spinning off lots of smaller companies. MCI was also an anchor, and AOL was clearly emerging as one.
You had NASA’s Goddard Space Flight Center in Greenbelt and all the advanced wireless and satellite stuff that was in its embryonic stage back then. And you had a heavy concentration of telecommunications. Even though it wasn’t all research—it was a lot of sales and government relations—there was a lot of practical application that would lead to product development. You had all of this, and you had 120 government labs between Richmond and Baltimore.
Another part of the equation: Washington to this day is one of the largest newsletter-production and media centers in the world. The remarkable abundance of production talent here would go on to become a primary asset in a network society.
We had no idea when all this would happen, but the idea that this area would become a digital hub was a slam-dunk. The question was when.
How have you focused your philanthropy?
When I retired, I wrote that my life would be focused around three things: youth, learning, and community. The key to leveling the field in our society is how one learns. And a lot of our communities have imploded, affecting that learning.
You grew up in a blue-collar family. How does that affect your philanthropy?
You can’t engineer the lives of others, and too many people want to impose their ideology, their beliefs, their mores—though with noble intentions—on the lives of others. That’s why, growing up, we could see the do-gooders coming a mile away and were cynical. I’ve gained great respect for some of the families of affluence who have come to learn, come to listen, come to respect those they seek to help. Only then will they really make a difference.
Venture Philanthropy Partners includes many of the area’s biggest tech entrepreneurs.
We have a different breed of entrepreneur in this region. We aren’t dot-com flash-in-the-pans, as the media made so many out to be. Sure, Raul Fernandez was a rising star born of the 1990s Internet boom, but he had already paid his dues working for years on Capitol Hill with Jack Kemp. Jim Kimsey had a life as a successful businessman and, more important, as a soldier for his nation before starting AOL.
This gives the nonprofits we work with access to key resources. Take someone like Raul Fernandez. He knows Capitol Hill and can pick up the phone to reach many of the players there. He can call Mark Cuban, the billionaire tech entrepreneur in Dallas.
What does that mean to someone like Lori Kaplan, head of the Latin American Youth Center? Lori was trying to work with the Catholic diocese, where Raul had made a million-dollar commitment. So a dinner was set up with Lori and me and Raul and Cardinal McCarrick, then head of the diocese. Access changes things.
What do great nonprofit leaders have in common with entrepreneurs?
The greatest entrepreneurs have been on a mission. I would argue that when Steve Jobs started Apple, he was going to make a lot of money but wanted to change the world. Half of the great businesses never had a business plan. But they had a dream, a vision. That’s the trait you’re looking for in a great nonprofit leader.
You once predicted that Washington would become the world’s digital capital. Did the dot-com bust in 2000 change your view?
We’re far from that vision, but we’re also a lot farther along than anybody realizes. Are we Silicon Valley? No. Are we in Seattle’s range? Hell, yeah.
You have such an educated workforce here. There’s an enormous amount of intelligence, and intelligence over time wins out.