Austin’s venture ecosystem ranks 10th nationally behind cities, such as San Francisco and San Jose, but it may have the potential of becoming something of a “third coast,” local tech leaders say.
At a South By Southwest Conference and Festivals Interactive panel Friday titled, “Third Coast: Can Austin Be the Next Big Tech City?” panelists discussed not only the likelihood of Austin becoming comparable to leading tech cities on the East and West coasts, but if it is something locals would want.
“Starting a company in Austin today, some of the pros to it are the community,” said Blake Garrett, Aceable founder and CEO. “Everyone works together.”
Garrett himself started in the Capital Factory community, a co-working space in downtown Austin focused on Texas entrepreneurs.
“The challenge to me though … is when you’re raising early stage angel funds, it’s $25,000 checks at a time,” Garrett said. That’s in comparison to companies in San Francisco that have access to larger investors.
BigCommerce CEO Brent Bellm identified three things that he said are holding Austin back from becoming a “third coast,” including the focus on company culture.
“This is a lifestyle city,” Bellm said of employees coming into work after 9 a.m., then leaving at 5 p.m. “[Residents] live their lives here. They don’t work that hard.”
“If the employees feel like they’re contributing to the success … then [company culture]solves itself,” said Tina Weyand, chief product officer at Austin-based HomeAway, in response.
“If your people are your most valuable asset, having them as involved as possible is your culture,” Garrett said.
Bellm also said the notion that a great company starts with great culture, instead of focusing on customers, is holding Austin back, as well as a lack of deal flow or business development.
The panelists said on average 159 people move to Austin every day. According to Community Impact Newspaper’s demographics report for the 2018 Annual Community Guide, the average median age for Austin residents is 32.4. In addition, 47.7 percent of residents have a bachelor’s degree or higher and $60,939 is the median household income.
But all of that could change if a “unicorn” technology company like Amazon chose Austin for a headquarters, Weyand said.
“Technology is going to significantly change the way we live and there are going to be jobs created as a result,” Weyand said. “If we can figure out how to have an affordable cost of living, decent transportation and an education system, then everyone can have a place.”
If a large technology company came to Austin, would Austin stay weird? Bellm does not think so. He suggested other cities in Central Texas, such as Round Rock or San Marcos, as better fits for a possible Amazon HQ2.
“I think it’s possible in Austin,” Weyand said, but local startups would have to ensure they are meeting market needs.
“If we want to be a legendary city, we have to create legendary startups,” Garrett said.