Austin is the tech and entrepreneurial community of the future. Are we there yet? No, and frankly the exuberance for Austin as the hottest startup city in the world is a bit premature as we all know we lack the executive participation, nodes of engagement, and sophisticated venture capital at a scale needed to support what we are. But the idea is not without merit as indeed we probably have more startups per capita than anywhere else in the world and we have as many people, as a percentage of the population, working in tech as does the Valley. People are leaving the coasts in droves, and immigrating to Austin (well, Texas), while venture capital models are evolving and changing to support an ecosystem that works not like Silicon Valley but Texas. That’s critical for our economy to embrace and discuss — we don’t behave the same way as the economy of the Valley works; that’s neither good nor bad, it’s just different and we have to openly discuss those differences and what to do about them. How? Article’s such as yours Joah, this, and Richard Bagdonas’ thoughts on the Dark Ages of VC are bold enough to say, “hey, we can’t keep saying Austin is awesome and ignoring the challenges!” Is Austin awesome? Without question, but it’s not without warts. We’re going to experience growing pains; anyone suggesting we aren’t going through them has blinders on.
Consider, since you mentioned it joahspearman, location is a critical consideration. It is an advantage and a disadvantage. And too few consider that many of the characteristics of Austin that we believe to be advantageous, are actually disadvantageous. The low cost of living and doing business for example, an advantage? Yes, in some respects, but it also means entrepreneurs and executives can get by on less, ask for less, and expect less. I’m not referring to you per se, but macro-economically; consider, two startups of equal merit, experience, and vision, with one in Austin and the other in the Valley — the one in the Valley must raise more capital and investors there do tend to have higher risk tolerance (but not because they are more comfortable with risk rather that they have experienced a greater quantity of companies scale — they know what potential looks like beyond having customers). The company there will naturally and more efficiently draw more attention; to some extent simply because it’s less expensive here.
Of course, I’m oversimplifying that idea but the point is certainly that the grass is always greener as it depends on the point of view. Texas, with the most recent explosive growth of the Dallas Startup community thanks to folks like Gabriella Draney, Trey Bowles, and Michael Sitarzewski, and the impassioned Houston and San Antonio Startup communities at the seed of their own explosion, AND in between which we have Seed Sumo, Baylor, Waco, Rice, and San Marcos driving innovation, Austin is at the physical center of the future largest tech economy in the world. But it’s going to hurt to get there. People are even leaving Austin for Dallas, SA, and Houston let alone Silicon Valley. Why? Because at the end of the day, we can’t do everything well, we can’t serve everyone, and an economy is larger than a city. It’s going to take all of us, diversified in experiences, skillsets, and industry. David Altounian’s study last year helped validate what many of us have been saying, that we need more nodes of experience, influence, and industry. By my last count, there are 12 new venture funds trying to get traction in Austin! We have to break a few eggs. Eggs that may work well for one approach to tech, or Austin’s preferred approach to entrepreneurship, but things like Indeed, SpaceX, TabbedOut, SolarWinds, TrendKite, Dachis Group (now Sprinklr), and Localeur(?) are examples of companies/technologies outside our typical comfort zone; companies in which Texas’ traditional approach may not understand.
Unfortunately, is race an issue? Yes. I’m least qualified to say it is and why it’s so but many of my partners are from Mexico and I can say, having come from they Valley, that it did feel that the Valley was a little more color blind. Race was never as prominent a discussion and the region feels very ethnically diverse. Why? The culture there is one entirely focused only on execution (to an exhaustive fault) so one’s gender, ethnicity, creed, or color is irrelevant. Here in Texas, the fact that my partners are from Mexico is noted. It’s an observation if anything and in my mind, in the Valley, no one would even acknowledge it. Race is a prevalent discussion here and I’m curious why. Why is it even a discussion that needs to take place? Is the issue actual prejudice? Are we as color blind? Or are there other factors that create a passion for it being an issue? We’re certainly more Sales/Customer centric than the Valley so is it that Texas favors networks and people-you-know, to a fault, such that it’s easier to get some Sales but it also creates cultural and gender barriers to entry? Is it that we have a significant Social Impact/Mission based culture greater than that of the Valley’s? The question is, what can do to fix it as indeed, that blindness in the Valley, that focus on execution alone, is a bit greener. Only in knowing and openly discussing WHY our challenges are as they are can we figure out how to overcome them.
Interestingly, your challenges here, personally and professionally, are precisely why I’d like to celebrate more exposure of our failures. Look at what has taken place recently because of Richard’s article about Venture Capital and the wonderful responses from Mike Maples, Jr. and Venu Shamapant: critical, and in some respects inaccurate, but invaluable discussion of our warts and a spurning of the community to do something about it.
We need your thoughts here. We need your experience here. We need your voice here. Everyone’s.