You are not the only person who has devoted time and support to the Austin community that is of color. You are also not the only man of color to raise funding in Austin and I commend you in raising $1.6 million for your product. That is amazing!!! Only 1% of startups get as far as you have!
I love Austin too and I see tremendous opportunity for what my skills, talent, knowledge, wisdom, team and creativity can bring. I looked forward to being one of the first breakout global startups that could create a boom in jobs and revenue growth for the 87% of residents that are being ignored as Tech is only small percentage of the industries in what people in Austin are trained & qualified for. I was also eager to build something that can stave off the financial blows that the residents and city will without a Doubt experience as it continues to grow. Austin has lost over 1,200 musicians in the span of 4 years. On New Year’s Day it was heart breaking to walk around my neighborhood & Downtown and not hear a sound. That is just a small heart break compared to the fact that business commercial spaces are empty in the cities most prized areas. The affordability of this town is not startup or consumer product friendly and since I’ve been here, I’ve paid more to exist than I would have in LA!
I’ve also been pushing this fast and hard in Austin because I have a second project to start under Stretch Recipes within Real Estate and find that industry is something people here understand. But alas, I have to move my company, so that project will be moved too (not to mention its 2–3 year delay!)
However, your reasons for leaving and mine are not the same. To be frank, if I had $1.6 million dollars in Austin seed working in Austin, I would have enough to get to at least $6-$7 million in revenue in 3 years time. I can do this because my teams expertise matches what is needed to attract outside of Austin money in. I’ve studied the Austin market well enough to know that any business that relies on Austin residents for continual income is doomed for failure. Austin itself will always only account for 1–3% of your revenue potential and if you rely on it any more, you’d better be a restaurant or bar. Have you hit $6-$7 million in revenue? If not, I assume you’ve learned enough to leverage additional investment in that direction. So is there a way you can raise an additional $100k in seed to prove this — > turn it into $300k in 9 months to a year? If the answer is yes, stay in Austin and do this. If the answer is no, time to figure out a new business model. You should be able to raise again by picking up the phone with your new ability to hit 3x in a short amount of time and your investors that back and clearly support you.
Overtime, in Austin, Realistically with the resources, I could grow organically with an initial $1.6 in Angel money to $30 million in revenues by year 7 with a 60% profit margin. With Austin VC funding probably only $70 million.
Additionally, my experience in Austin has only brought me people who say silly things like — it’s not scalable or you’re not already funded. *blank stare*. These same people think delivering organic meals to preschoolers of busy low income moms for $7 a meal is more scalable than a platform/app without food costs leveraged by Fin Tech, Media & Social. Again, *blank freaking stare* They are wanting to invest in Dolly’s cupcakes while I’m asking them to invest in Uber. We are bound to not see eye to eye and my suffering within finding investors in this marketplace has been for naught. However, I do not regret any positive impact dollars I have brought into the State to feed families, or the lessons learned. But when you yourself are struggling for the first time in 10 years, you do get a little peeved when you are results driven, so I have empathize with the many smart people who have left and hope to join them soon in the ranks of the funded.
Side note — -> I do not think all Investors or notables in the Austin startup community are racist and I have had to stick up for people I don’t do business with because some make this assumption about their track record because I don’t go to them for support and they don’t have a record for supporting minorities. The reason why I do not go to them has zero to do with color, but their ability to support & respect me is not as equal to my commitment to respect & support them. I am direct and verbally I don’t say as much as I write or always how I feel. 😊 that said, if you’re not trying to coach me to the Super Bowl, how the heck are we going to get you the ring? We’re not. I want to go to the super bowl. I’ve already proven I’ll put in my 50,000 hours to get us there we just need the ball AKA funding so we can all eat & win. In other instances, we don’t speak the same language. I am about empowerment, impact, long term revenues & tools. They are about repeating other people’s methods, copying already proven revenue models. I am about creating value through conversions & mobile economies and generating profits of 30% or more. I left them all behind while they sat around blank staring at profits. They aren’t bad people, we just don’t see eye to eye.
However with that said, I have experienced racism from Blacks and Whites in this town. Those people do not get any respect from me because they have told me what they think about me, my abilities, the world, & themselves by doing & saying what they have. I stay away from those who have jealous, entitled hearts and a divide & conquer mentality. They are not allowed to invest a dime into anything I harvest and I have promised myself not to speak anymore life into their inability to love & respect me, themselves, or others. With that said — > these type of people are everywhere. California, DC, NY… everywhere.
But just like in Austin, you will meet good people who are about the green & love as much as you — > everywhere too! 😊
Enough of that — - Energy should be focused on getting the seed, farming and harvesting. No pun intended.
Austin’s VC track record has shown they don’t exercise the ability nor desire to build billion dollar companies (or win the Super Bowl 😉). The funding market here hedges very safely and investors are happy with getting their money back at 2x. If they weren’t, they would invest differently than they do now. They are risk adverse to the degree of stifling innovation because they aren’t big picture people. There is nothing wrong with that for them. It is obviously working for them. So much so that other markets are following suit — haha. They don’t bet on the entrepreneur, they bet on the pudding that was already made with someone else’s milk. They don’t invest in the cow, they invest in only one product the cow has produced. They don’t have the ability to make cows or buy cows, only invest in the sale of the pudding made from the milk the cow produces. This is why they don’t have billion dollar startup players. 😉
For innovation… well, look at how much trouble Austin gives uber/lyft. Don’t get me started on how quickly they decided on STR’s. It was a no brainier for STR’s to be shut down to 30 day minimums because the city receives money from hotel bookings and has more hotels being built. They love tourism dollars and because they keep the citizens so poor, it’s all businesses can bank on. However shutting down the STR’s come with a double edged sword — less investors purchasing properties. Price of housing will have to go down until companies can afford to pay employees better. Hence, startups will be unable to contribute to this equation because it’s a bootstrap town that nickle and dimes startups and funds so late they can’t compete or even make it to market in time.
Now, with all of that said, I am leaving because my company needs exceed what Austin has the vision & capability to give — strong advisors ready to build a multi-billion dollar player, city where the market size & dollars can facilitate our plan to make our marketing & advertising self-funding & sustainable, and of course, funding to fuel and keep my team focused on growth!
You did right by getting investors. Bootstrapping here is impossible without working a job that barely covers your rent (I currently live in a crappy over priced house with a roommate and I pay more than what I paid living in the Hollywood Hills for the same sqft). The town is so out of touch with pay scale that they think working at Starbucks 30 hours a week will cover you and give you enough time to push your own business forward. I asked my Starbucks barista if he wanted to sign up for Stretch and he said he didn’t have a phone because he couldn’t afford one.
To add to this, the town has a B2B mindset for funding startups without realizing that without bringing the value of the C conversion, the dominoes will fall. They have to nurture the founders ready to go get the C.
Of the people I’ve met that were go-getters, they all got up and went to go get. I tried like hell to stay because I don’t want Austin to become crazy unaffordable like SF & smoggy like LA. I love the green, the good vibes, eats, and possibilities. But there comes a time when you realize Austin doesn’t understand its own worth and they’ve let Realtors & developers become king in a city of paupers. It has become just like every other city. Without the music, without the startups, it’s going to be just like every other American city that priced its own heart out. Downtown will become flooded with fast food and 4th & 5th offices for well funded companies based out of___. Sure, the only person that appeals to is the commercial realtor/developers. They would love that!
(Essentially, Austin has become that drunken hot mess you love and want to protect. When you tell him you can’t keep partying like this, your liver can’t afford it. A hot rich girl comes along with a big bottle of Tequila, and your love believes everything the rich girl tells him, and gives you an ultimatum. Come to this party with me or we’re done. If you opt to go to the party, it escalates and a year later your liver is outta there. If you opt to leave, you’re just heartbroken to see him ten years later lying in the gutter in his own puke.)
In other words, I didn’t move to Austin and fight to build here because I just wanted to make a lot of money. I came because I wanted a home and a life/culture for my growing company that would provide the things that major cities can’t offer. I wanted to create jobs and a financial boom for the people who truly are the heart of this city. Now that I find it is no longer possible because the VC’s and some of the institutions who live here & claim to help entrepreneurs don’t want to go to the super bowl, just snap selfies in the locker room. The rules of energy require me to move and build a home & my company elsewhere. I have a lot of training to do to get to the super bowl and I need a proper coach.
But for you Joah, you are extremely blessed to have $1.6 million to feed your team to earn $6-$7 million in 3 years time. If you fell short of that, it’s time to review your business model and understand why you fell short. Fix it, prove you can do it and pick up the phone to call your current investors in Austin. You don’t have any reason to leave. You have support and the team ready to get you to your End goal. Travel may do some good to spur innovation or new clients, but you have a home in Austin that you have enough resources to stand and protect. I really don’t want to come back in 10 years and see Austin in its own puke. Protect him!