News & Politics

After the Big Boom

A decade after the dot-com explosion, an entrepreneur talks about how high tech changed Washington and how money changed his life

It was a modern-day gold rush: In the late 1990s, if you were under age 40 and had a promising high-tech product, investors gave you money to start a company. Within a few years, the thinking went, you’d go public or sell, making a fast profit for yourself and investors.

In the spring of 2000, the stock market began a freefall. Many start-ups went under. Dot-coms were rechristened dot-bombs.

Roger Mody, at the time CEO of Signal Corporation, a Fairfax firm that designed, installed, and maintained computer networks for the federal government, was part of the region’s high-tech growth—to a point. A federal contractor, he saw entrepreneurs on the commercial side get rich on paper while the firm he’d cofounded with his first wife grew gradually over 15 years.

“There never has been anything sexy about being a federal contractor,” Mody says. “In federal contracting, it’s a slow-and-steady-growth model.”

Not that he didn’t do very well. And Mody’s fortunes didn’t plummet when the market did. In 2002, he sold Signal for $227 million; his share was $125 million.

All that money, he says, was beyond his wildest dreams. Mody and his mother had struggled when he was young. He was born and raised in DC to parents who’d immigrated from India, but his father, a freelance photographer, died when Roger was 12, leaving behind large medical bills.

Mody loved the Redskins—he put his name in for season tickets when he was 11—and the team became an “emotional crutch” and a source of joy. Another way life has changed: These days, Mody—who got his season tickets after a 22-year wait—often golfs with quarterback Jason Campbell and hangs with former players such as Art Monk and Charles Mann.

He shares his passion for sports with his children—Alex, 18; Erika, 15; Zack, 13; and Max, 4. He lives in McLean with his second wife, Kyle, who is executive director of the Mody Foundation.

Mody, 45, is founder and chairman of the foundation, which supports nonprofits that help underprivileged children. Over the past two years, it has given away $1 million. He also is involved with many charitable organizations, including the Make-a-Wish Foundation, Fight for Children, and Joe Gibbs’s Youth for Tomorrow.

Mody still has a hand in the high-tech world, sitting on boards and acting as an angel investor. A decade after the dot-com boom, he talks about how high tech has changed Washington—and what he’s learned about business and life. →

Talk about the high-tech boom in the ’90s. What was created, and what was the impact on this region?

At the time, it felt like the equivalent of the industrial revolution, but a modern-day revolution. A technology revolution. It was a very exciting time.

Ten years later, it’s a travesty that we didn’t maintain the momentum we had in the late ’90s. We’ve seen a loss of jobs. This country is predicated on creating jobs; that’s what stimulates our economy.

It’s disappointing that so many companies were so overstated in their values. As much as entrepreneurs and management were benefiting from the boom in stock prices, the financial companies did pretty well. They were churning out IPOs. Everything was a slam dunk at that time.

Instead of such a quick escalation, in retrospect it would have been so much better to have slow and steady growth.

One of the best things that came out of the dot-com growth era was putting this region on the world’s technology map. We were deemed the Silicon Valley of the East. We’re seen as experts in software development, and I think that this region still benefits from that perception. As a result, you’ve seen people migrate to this region.

Why was Signal so successful?

I subscribe to the pyramid management theory; it’s a three-point theory where you have to make sure you serve equally your customers’ objectives, your employees’ objectives, and your bottom-line objectives. If you manage those three, you will have a successful company.

We came up with the perfect management team. We created an environment where people wanted to do well and grow.

One of our keys to success was our organic growth. We were one of the area’s fastest-growing companies, but we did it all organically, not through acquisitions.

My mom had stressed very early on not to take on debts. My dad died when I was young, and he left us with a $23,000 hospital bill. He was in Fairfax Hospital for 30 days, in intensive care with no insurance. We paid it the old-fashioned way. My mom took three jobs. I’d deliver newspapers, then go to school, then go wash dishes at the local Pizza Hut. That’s where it all began. It created a drive.

The perception in the late ’90s was that everyone was striking it rich.

On paper, everyone had enormous wealth. Many of them were being told what they wanted to hear because the people who were telling them stood to benefit from the idea.

When I was trying to keep my employees, I was competing with companies that were giving away stock options to junior employees. They were giving away paper. My retort was that I could generally pay more salary and I could incentivize in the form of cash. I didn’t always get the people I wanted because a lot of times people were willing to take less salary and more stock options in the hope that they’d have a life-altering moment down the road. It worked for many, and it failed for many.

We were trying to compete with these overvalued dot-coms. I thought it was insane how they were valued. I’d see companies doing revenues of $10 million to $12 million, losing $8 million to $10 million or more, but having multibillion-dollar valuations.

I would be dishonest if I said it didn’t bother me. I was profitable, but my valuation was, at best, one-time annual revenue.

What made it interesting is that I was socializing with dot-com guys who on paper were worth many millions and in some cases billions of dollars. I figured if it was my fate to be the slow-and-steady-growth model, then that was my destiny. I became resolved with it. But not until after a lot of internal questioning.

So, sure, a lot of people got caught up in it. Now if you look, not many of those companies survived the dot-bomb era. Those who have survived had great management teams. They had core disciplines when it came to financials. And of course they had a great product.

What you’re seeing is that dot-com companies are now valued less than government contractors. So there’s been a reversal in valuations. 

And you play golf. Is this recent?

Golf was a four-letter word to me. I never golfed when I built my company. I thought it was a waste of time. And I frowned upon my senior executives golfing. Most of them were wise enough to not tell me, but I could always figure out who was missing on those beautiful Fridays.

They finally corrupted me and are teaching me golf, and I’ve become passionate about it. I’m not good at it, but every day it’s a new challenge.

You also do some angel investing. What do you look for in companies?

My angel investing is based on management and on the product and its applications. And strong financial backing, whether it’s other venture capitalists or other angel investors. I’ve had a lot of fun with it, but I took some lumps.

How do high-tech CEOs today differ from CEOs in the 1990s?

The young CEO hype that existed ten years ago was in vogue. If you were a twentysomething CEO with a product, you could easily find venture capital and get your company kick-started.

Now venture capitalists and banks are looking for more mature individuals with years of experience in the industry. They’re still looking for a great product with application, they’re looking for a management team, and they’re looking for a company with fiscal accountability. In the ’90s, there wasn’t that criterion of having CEOs be financially literate to get those dollars.

It’s far more challenging to start a company because of what happened. The amount of money venture capitalists have put into this region has declined in the past ten years. We all want to see it ramp back up.

What have you learned about life?

For many years, I’d strived for a life without issues. What I realize now is you’re always going to have issues in life. Whether the basement is flooded or you have a problem with your car or you have a problem with your teenager, learning how to resolve those issues is the key.

I’m also a big believer that you should stick to your core competencies. Lightning doesn’t strike twice for many people. A lot of people will succeed in federal contracting and then open a restaurant. I don’t envision having another full-time job.

The Washingtonian first wrote about Roger Mody in a 1998 cover story, “Young Millionaires”—it was a look at high-tech entrepreneurs poised to strike it rich. You can read the article—which also predicted the success of Raul Fernandez, Michael Saylor, and others—at

Executive Editor

Sherri Dalphonse joined Washingtonian in 1986. She is the editor in charge of such consumer topics as travel, fitness, health, finance, and beauty, as well as the editor who handles such cover stories as Great Places to Work, Best of Washington, Day Trips, Hidden Gems, Top Doctors, and Great Small Towns. She lives in DC.