I'd like to share my viewpoint on the recent Statesman article, What would it take to make Austin 'the next Silicon Valley'?
While I don't think that Austin wants to become Silicon Valley any more than Texas wants to become California, I think that we can learn from Silicon Valley to continue attracting great innovators and entrepreneurs to Austin.
Steve Blank commented that one of the most important aspects of Silicon Valley that differentiates it from the rest of the world is that failure is a badge of experience, not a badge of shame. Austin needs to be a safe environment for entrepreneurs to try out new ideas, to experiment, and to fail.
Part of that is attitude and culture, but a big part is access to early stage capital and collaborative working spaces where entrepreneurs can meet each other, incubate ideas and inspire each other. We are very fortunate to have spaces such as Conjunctured, Cospace and Tech Ranch and communities like Bootstrap Austin. Still, we would benefit from a larger, central community meeting space and coworking facility. We need the Startup District that John Erik Metcalfe and Ceasar Torres started promoting a few years ago.
Capital Factory is one piece of the puzzle. We provide a small amount of capital and lots of mentorship to 5 select startups each year. More than half of the 15 companies in our portfolio are from outside of Austin and come here to participate in our summer program. Half of those stayed here after the program ended because they find the environment so friendly to entrepreneurs. We need to expand the number of companies so that we can have a bigger impact.
One obvious way reach more entrepreneurs is through the University of Texas. Inspired by the success of Capital Factory and the encouragement of Dr. Bruce Porter in the UT Computer Science department, I'll be joining with John Butler and Bob Metcalfe to teach and undergraduate entrepreneurship class at UT called 1 Semester Startup. I hope that through this class we can identify promising young entrepreneurs at UT, accelerate them down the path of success and keep them here in Austin.
Communities like Angel List are helping Austin by connecting our entrepreneurs with early stage investors from Silicon Valley and around the world. There are more than 100 Austin startups listed and more than 300 investors "watching" the Austin market (most of them NOT from Austin).
First time entrepreneurs need inspiration from successful entrepreneurs. They need role models to look up to and get advice from. Bazaarvoice, HomeAway, Spiceworks and Rackspace are all helping to fill this void. Let's not forget the massive Trilogy Alumni network that are driving many of the top companies in Austin right now. We need more visible leaders in the entrepreneurship community like Andrew Busey, Brett Hurt, Jack McDonald, Kip McClanahan, Bryan Menell, Bob Metcalfe and John Price.
I actually think most of the right things are happening. I've been here for more than 10 years and Austin has only become more attractive to startups and entrepreneurs. We are one of the top cities in the world attracting young smart entrepreneurs, college grads, and young professionals.
We are attracting startups like Gowalla and others that are moving to Austin from elsewhere in Texas and around the country. Austin is a great place to launch a startup because it is a market full of early adopters. I am contacted at least once a month by a startup who is looking for advice about moving here.
What do we need to do? We need to keep Austin attractive to young, smart people and innovative startups. We need to continue growing the early stage venture community and our connections to outside capital. We need to identify our Startup District (East side?) and achieve critical mass. We need to embrace failure. We need to keep being Austin.
What do you think we should be doing to promote entrepreneurship and startups in Austin? Leave a comment below.
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