Quick Guide to the Austin Startup Scene

Austin’s Startup History

A lot of cities are laying claim to the title of “Next Great Tech Hub,” but what does it really take for a town to grow into a hot startup scene? Entrepreneur and investor Sam Decker, a partner at Austin-based startup incubator and accelerator Capital Factory, unveils the factors he thinks make up the DNA of a tech hotbed.
When hardware powerhouses IBM, Dell Computers, and AMD chose to set up shop in Austin in the late 1980s, the moves ignited the Texas capital’s aspirations of growing into a tech hub. It wasn’t until 30 years later, however, that Austin would begin to truly gain international attention as one of the hottest startup scenes east of Silicon Valley.
What was the tipping point?
While IBM, Dell, and AMD gave the city the kick-start it needed, Austin-based entrepreneur and investor Sam Decker says the founding of little-known Trilogy Software actually made the biggest impact on Austin’s emergence as one of the hottest startup software hubs in the world.
“There were some big companies in Austin, but the city really wasn’t known as a software startup scene in the 90s,” explains Decker, a former executive for Dell and the founding CMO of Austin-based SaaS business BazaarVoice. “When Trilogy came to Austin, it infused the city with a lot of top shelf talent.”
That talent ultimately paved the way for startups like HomeAway and BazaarVoice, which both set up shop in Austin 2005 and achieved successful IPOs in 2011 and 2012, respectively.
The wealth and entrepreneurial culture created by those exits has led to a trickle down effect that Decker says has given Austin the infrastructure, capital, and mentorship necessary to evolve into a full-blown tech hub. Throw in Austin’s emergence as an attractive cultural hub — thanks, in part, to events like SXSW and Austin City Limits — and you have the recipe for what VentureBeat called “tech’s new destination of choice.”

Getting Around: Map of the Austin Startup Scene

This handy interactive map at ATXup.com provides a comprehensive, easily searchable list of startups, accelerators, incubators, investors, and more. Click the screen shot below to check it out.
Austin startup map

Mind Map Breaking Down the Austin Entrepreneur Scene

Created by Bijoy Goswami, founder of Austin’s Bootstrap Network. Click the screen shot below to access.
Austin Mind Map

5 Factors Fueling Austin’s Startup Growth

According to Decker, there are some foundational building blocks that have contributing to the city’s thriving startup environment:

  1. Access to top talent: Without enough of the right talent, no startup tech scene will thrive. Austin benefited from the early successes of Trilogy, BazaarVoice, and HomeAway, which infused the city with the kind of entrepreneurial and technical talent that has since founded numerous other tech companies.
  1. Availability of capital: While outside investment isn’t a pre-requisite of startup success, capital is a key driver of scale. Typically, the more robust a startup scene’s investor pool is, the more likely it is that city will turn into a vibrant tech center.
  1. Willing mentors and advisors: Very few successful startups reach the top of their markets without the help and mentorship of some key advisors. As you’ll see in the lists below, Austin has developed a strong sense of community around a growing number of entrepreneur mentors, investors, incubators, accelerators, networking groups, and more.
  1. Affordable work spaces: While Silicon Valley is the unarguable king of the startup scene, one thing that isn’t in its favor is affordability. Because the cost of living is so much higher there, startups often deal with higher operational costs than software companies located in smaller (but growing) startup scenes like Austin. Access to co-working spaces certainly eases those concerns, which is one of the reasons Decker and his partners created Capital Factory.
  1. Supportive state and local government: While it’s not a major factor in startup growth, Decker says the fact that Texas has no state income tax and provides as much as $19 billion per year in incentives to emerging companies doesn’t hurt Austin’s ability to attract talented entrepreneurs and investors.

Ultimately, Decker says each of those ingredients work harmoniously to create an ecosystem that’s attractive to the types of people who build and invest in successful tech companies.

Quick Facts & Figures

150 people move to austin every day2
Source: Austin Business Journal
Graph With Stacks Of Coins
Source: Forbes list of The U.S. Regions to Watch in 2014
New York Construction Workers Lunching on a Crossbeam
Source: Forbes list of The U.S. Regions to Watch in 2014
austin office space cost2
Source: GoodApril infographic

Austin Companies with Big IPOs

Who to Know

Founders & Investors

Joshua Baer, Founder of Capital Factory, @JoshuaBaer

Joshua Baer helps people quit their jobs and become entrepreneurs. In 2008 he founded Capital Factory, the largest startup incubator and co-working space in Austin, TX. Josh now teaches a class at the University of Texas and is a Return Path Fellow. He is the most active email investor in the world. Josh was recently recognized as the 2013 Austin Community Leader of the Year and a 2013 Henry Crown Fellow at the Aspen Institute.

Jason Cohen, Founder of WP Engine & Smart Bear Software, @asmartbear

The founder of four companies including Smart Bear and currently WP Engine, Jason is also a mentor at Capital Factory and investor in a few companies.

Sam Decker, Board Member of Spredfast & Two-Time Author, @samdecker

Sam’s marketing, sales and product experience spans 21 years in B2C and B2B, for startups and Fortune 50 companies. Sam worked for Dell and grew its consumer online revenue to over $3.5 billion. He was founding CMO for Bazaarvoice Inc. and has helped grow the company to $50 million and 500 people in revenue globally. Sam is author of two books: 301 Do-it-Yourself Marketing Ideas and How to Market with Computer User Groups.

Rod Favaron, President and CEO of Spredfast, @rodfav

Rod is President and CEO of Spredfast. Prior to Spredfast, Rod guided Lombardi Software from an early start-up into a global leader in BPM solutions acquired by IBM in 2010. He serves on the board of Bypass Lane, Perception Software, the Austin Technology Council and is a mentor to many technology entrepreneurs.

Brett Hurt, Vice Chairman of the Board & Co-Founder of Bazaarvoice, @bazaarbrett

Brett led Bazaarvoice as its CEO from 2005-2012, through its IPO, follw-on offering, and two acquisitions. He’s also an owner of Hurt Family Investments.

Noah Kagan, Chief Sumo at AppSumo, @noahkagan
The founder of AppSumo, Noah writes on entrepreneurship, startup marketing, and growth hacking at OkDork.com.
Jan Ryan, Partner at Capital Factory and Founder of Women@Austin, @janryan
Jan is an entrepreneur, start-up advisor, and recognized leader in social technologies, having helped to pioneer customer service in social channels. Her latest company Social Dynamx attracted $3m in seed funding and was acquired by industry leader Lithium Technologies in the Fall of 2012. She has been focused on building early stage and expansion stage companies for over 25 years, resulting in four successful acquisitions and one IPO, primarily in web-based and emerging technologies. Jan is currently a partner at Capital Factory, and founder of Women@Austin, devoted to accelerating high-growth female entrepreneurship.
Steve Schoaff, CEO and co-founder at UnboundID

Steve is the CEO and founder at UnboundID, defining the company’s vision and overall business strategy. Internationally recognized as a trusted adviser on identity and security issues for Global 100 companies, Steve served as Technical Director and Chief of Staff for the Identity Management product division at Sun Microsystems, and as Senior Product Manager for Directory and Security at Netscape Communications prior to founding UnboundID. He has also been a key technical adviser to the US Department of Justice.

Growth Marketers

Get more info on these marketers — including their favorite growth hacks — in this post: Top 10 B2B Demand Gen Marketers in Austin

  • Amanda McGuckin Hager, Director of Product Marketing at PeopleAdmin, @Shoogie
  • Lara Hendrickson, Director of Marketing at Umbel, @larahendrickson
  • Doug Kern, Director of Marketing at nFusion, @dough_kern
  • Kirsten Knipp, Vice President of Marketing at Bigcommerce, @kirstenpetra
  • Sarah Moore, Director of Revenue Marketing at Spredfast, @sedmoore
  • Kate Morris, Director of Client Strategies at Outspoken Media, @katemorris
  • Megan Neely, Channel Marketing Manager at RetailMeNot, @meganneely
  • Parker Short, Business Development at Jaxzen Marketing Strategies, @Parker_Short
  • Russ Somers, Vice President of Marketing at Invodo, @rsomers
  • Amber Quist, Vice President of Brand Marketing at Spredfast, @amberquist

Universities to Recruit From

Learn more about each of the schools below in this post: The Best Austin Universities to Hire From

Organizations to Follow on Twitter

Events to Meet’n’Mingle

Best Spaces: Incubators, Accelerators, and Co-working

#ATX Twitter Feed



 
What have we missed? Let us know what we should add to this guide in the comments below.
 
Photo by: Peter Talke Photography

Head of Marketing

Rebecca Churt is Head of Marketing at TrueMotion. She was previously a Growth Strategist at OpenView and spent five years at HubSpot.
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