Guest post by Joshua Baer who helps people quit their jobs and become entrepreneurs. He founded his first startup in 1996 in his college dormitory and now teaches a class at the University of Texas for student entrepreneurs. He’s currently the CEO of OtherInbox and Director of Capital Factory. Joshua has helped start a dozen companies, sold four of them, invested in more than fifty of them, and is a mentor to many others. You can follow him on Twitter @joshuabaer
This week I attended a panel at the Austin Technology Council’s CEO Summit titled, “Why I moved my company to California” featuring execs from 3 startups that moved from Austin to Silicon Valley and one that kept an office in Austin but moved the management team to Silicon Valley.
- James Beshara from Crowdtilt
- Frank Coppersmith from GameSalad
- Matt Pfeil from DataStax
- Tom Serres from Rally
- Moderated by Laura Beck
Nobody was bashing Austin, but everyone on the panel seemed to agree that for tech startups Silicon Valley was almost always a better choice than Austin. Everyone also seemed to agree that Austin shouldn’t try to be a “better Silicon Valley” because that is hopeless. Tom encouraged Austin to figure out what we are good at and focus on that, but he didn’t have any suggestions as to what that might be.
Austin doesn’t want to be Silicon Valley any more than Texas wants to be California.
In particular, the reasons I heard supporting Silicon Valley were:
- surround yourself with the thought leaders in your field
- more investors
- more top talent
- things “move faster”
- investors are willing to fund big ideas with no revenue model
- business development easier with local companies
They are all really good reasons. It’s hard to argue with them. It’s hard not to walk away thinking that you’d be crazy not to move your tech startup to Silicon Valley.
What did I learn from this? If you ask a bunch of people why they moved to Austin they will tell you how great Austin is and if you ask a bunch of people why they moved to Silicon Valley they will tell you how great Silicon Valley is. Of course everyone thinks they made the right decision. Otherwise they would have moved back!
There is no right answer. For some people Austin is the right answer and for others its Silicon Valley. For most we’ll never know for sure.
For me, the right answer in Austin.
There are a number of trends that make it easier to do a startup in Austin than ever before:
- it’s easy to get people to move here
- there are more and more direct flights
- recent success stories like BazaarVoice, HomeAway and SolarWinds
- investment in the city by Apple, Facebook and others
- new entrepreneurial focus at the University of Texas
- technology makes it easier to collaborate remotely
- social media makes it easier to keep up with fast moving trends
- social media makes it easier to do business development remotely
- Angel List makes it easier to raise funding
- less funding needed because of open source and cloud computing
- SXSW attracting national tech to Austin
I think the most important question is this: Do you want to fight your way to the top of an established hierarchy or do you want to be part of building something new?
It’s well documented that the flow of population is into Texas and Austin. We’re growing and our economy is strong. Anecdotally, I’m seeing it too. Every week I’m introduced to an entrepreneur who is moving his or her company to Austin – and the pace is increasing. I hear from engineers in Silicon Valley who tell me they don’t know where they want to work yet but they know they want to move to Austin. Top tier investors like Benchmark, Battery, First Round, Peter Thiel, and Mike Maples, Jr are actively making investments here. Things are getting better and better for entrepreneurs and for tech startups.
In Austin there is a different kind of opportunity. Opportunity to help shape the community that is growing and developing. Opportunity to be a leader and fill a void created by that growth.
That’s why I choose Austin.