In the past five years, Central Texas companies developed innovations to improve television and computer displays while cutting energy consumption, tripled the efficiency of thermoelectric conversion and developed nanomaterials so small they exist in only two dimensions.

The fact that those technologies were developed in San Marcos is lost on many people, said Laura Kilcrease, director of the Center for Entrepreneurial Action at Texas State University’s McCoy College of Business
Administration.

Kilcrease said when Texas State invited her to move from Austin, where she had spent the previous 30 years working as an investor and an early proponent of the city’s tech sector, to helm the CEA in San Marcos she had little awareness of what the city and university offered.

“I was surprised by what was here that no one seems to know about,” Kilcrease said. “To me this area has started to look like a slightly different version of Austin 25 years ago in that you have a fabulous, large, young, educated workforce, and you have some growing industry clusters. … I see the rudiments of a dynamic startup growth environment for businesses.”

The city’s startup scene appears to be gaining momentum as the city of San Marcos will welcome its first coworking space this fall, and the university’s Science Technology and Advanced Research, or STAR,  Park is preparing for a 16,000-square-foot expansion only three years after opening.

Texas State’s role

The Ingram School of Engineering at Texas State has been churning out students at a faster and faster clip since the program launched in 2007. According to the university, between 2010 and 2014 the number of bachelor’s degrees in engineering awarded to students more than doubled from 41 to 84.

Tom Zirkle, chief technology officer of MicroPower Global, a tenant at STAR Park, said his company moved to San Marcos because “the university offered a technical capability that we couldn’t find elsewhere in the United States.”

The company, which employs about 10 interns, has grown to appreciate the workforce Texas State is producing, Zirkle said.

That workforce will be on display at the 2015 Governor’s Small Business Forum on Aug. 26 in San Marcos.

The event highlights startups in the region and features panels on how to pitch ideas to investors and how to work with Texas State.

STAR Park hosts research in life science, material sciences, advanced manufacturing and renewable energy. According to the university, the expansion could open the door for research into computer engineering, water and the environment, and the Internet of Things—a phrase referring to a network of physical objects embedded with electronics, software or sensors.

The incubator aims to commercialize the technology created at STAR Park and spin out commercially viable companies into San Marcos.

Splash Coworking

In downtown San Marcos, Sean Garretson and Carina Boston plan to open Splash Coworking this fall. The facility, to be located in the former Hays County Records building, will provide coworking space for 300-400 entrepreneurs; with 10 private offices; open desks for rent on a monthly basis; a kitchen and coffee bar; and access to office services such as copying, faxing and scanning.

Boston, a San Marcos native, said Splash will be open to entrepreneurs in almost any field—tech or otherwise.

“We’re open to being what the community needs,” Boston said. “So if we’re going to attract freelancers and we’re going to provide the space that accommodates that, that’s who we want to be there for. If there is a tech startup we want to be there for them as well.”

The Records building was vacated along with two other buildings downtown in the late 2000s when Hays County moved most of its offices to the Government Center on Stagecoach Trail.

Garretson, who helped form the city’s downtown plan in 2008, said bringing workers downtown would mean more business for coffee shops, restaurants and service providers in that area.

“San Marcos’ reputation is not there. [Local startups are] going out trying to get funding, and [the venture capitalists] are like, ‘We really like your company. It’s a great idea. Move to Austin. Move to Silicon Valley. We’ll fund you over there. We don’t know anything about San Marcos, so we don’t want to invest in that.’”

— Victor Garza, director of business retention and expansion for the Greater San Marcos Partnership

“It’s going to make a statement on what San Marcos is doing in the downtown,” Garretson said. “It’s not just a place to go drink beer. It’s going to be a place to have serious commerce.”

Samantha Armbruster, San Marcos Main Street manager, said she believes Splash will address a growing demand for office space downtown.

“We see more and more people who are teleworkers,” she said. “Even if they aren’t starting a company here, if they can live here and be working for a company out of Austin and be doing that business out of our downtown, that is such a great way to keep our residents more engaged in our community.”

Building a reputation

Finding capital remains a challenge for San Marcos startups, said Adriana Cruz, president of the Greater San Marcos Partnership, an economic development group serving the Greater San Marcos area. The presence of Kilcrease, who helped found Texas’ first angel investing network more than 20 years ago, will certainly help address the shortage of venture capital in the area, she said.

Kilcrease said she hopes to work with the community and Texas State to address the area’s startup funding gap.

Victor Garza, director of business retention and expansion for the GSMP,  has spoken with young businesses that have had trouble securing financing because of their location.

“San Marcos’ reputation is not there,” Garza said. “They’re going out trying to get funding, and [the venture capitalists] are like, ‘We really like your company. It’s a great idea. Move to Austin. Move to Silicon Valley. We’ll fund you over there. We don’t know anything about San Marcos, so we don’t want to invest in that.’”

Kilcrease said it’s only a matter of time before San Marcos gains a higher level of name recognition within the tech sector.

“We’re at a moment where this entrepreneurial activity ... is starting to raise its head, and people are starting to notice,” she said. “But it’s very, very early.”