Nurturing Austin’s tech startups is a community affair
WILLY Ogorzaly had been in Austin for only a month before he knew it was the right place to reinvigorate his legal technology startup. The company had been “running on fumes” in Boulder, Colo., and desperately needed an injection of funding and advice.
Now, four months later, his company JustLegal has brought on investors, hired seven people and collected several mentors with the specific technical expertise the startup needed.
“Moving to Austin saved our company,” Ogorzaly said.
Ogorzaly’s experience is typical in the tech-friendly city of Austin, where the strongest part of the growing technology industry may be the intertwined network of young entrepreneurs.
Austin’s startup scene has kept pace with Seattle’s in terms of investor dollars pouring in. But the industry has grown without anything comparable to two of Seattle’s strongest assets - Microsoft and Amazon - instead flourishing on the strength of its community and the city’s history of creativity.
The impact of technology on this city of nearly 1 million people has become palpable. Austin’s heralded annual South by Southwest (SXSW) festival — which started Friday — has long been known primarily for its film and music showings, cementing the Texas city as a beacon of the arts community. But now, the festival’s technology track — known as “Interactive” — has surpassed the others after it began growing rapidly in the last decade.
More than 37,600 people participated in Interactive sessions last year, compared with more than 30,000 for music and nearly 20,000 for film.
“In a sense, that growth mimics or mirrors the role of technology in our society,” said Hugh Forrest, the director of SXSW’s Interactive festival. “The growth of Interactive also, in a sense, parallels the startup scene in Austin.”
Austinites will proudly tell you that 157 people move to the greater metro area every day. They are drawn by the fame that SXSW brings, the weather, University of Texas, the food and the relative affordability of the city compared to other tech centers.
While Seattle companies likewise tout great universities and beautiful landscapes to attract workers to the Pacific Northwest, one of their most valuable recruiting tools has been the tech powerhouses offering seemingly endless opportunity in the area.
“It’s super important to have had these success stories,” said Tim Porter, managing director at Madrona Venture Group in Seattle. “It shows the ability to create long-term, impactful, lasting companies here.”
Austin can’t compete with Seattle on that score. It is home to computing giant Dell, and a few of its large tech companies— including HomeAway, now owned by Expedia — have gone public in recent years. More Silicon Valley tech giants are also setting up offices in town. But Austin has yet to generate many homegrown megasuccesses.
Without the lure of tech giants to bring in talent, Austin’s burgeoning scene has had to rely on its people and the places where they congregate.
One co-working space and tech accelerator has become the unofficial hub of the Austin startup scene. Capital Factory, started in 2009, offers a flexible accelerator program, which helps young companies find mentors and investors while giving them a place to work and entertain customers.
Austin’s tech industry goes back decades to the days of semiconductors, but in recent years it has become a flurry of activity, said Gordon Daugherty, general partner at Capital Factory.
“Now all of a sudden you can see it, and touch it, and part of that did come from the evolution of co-working spaces and accelerators,” he said. “We pulled it out of the underground and gave everybody a place to work together.”
Inside a high-rise in downtown Austin, Capital Factory hosts more than 1,000 events each year, and its gathering spaces are packed on weekdays with startup founders and software engineers.
Capital Factory gave Blake Garrett’s company its start after the Boston transplant joined one of the accelerator’s first classes.
Garrett, who is founder and CEO of Aceable — which developed a mobile driver’s education class — found two early investors in a speed-dating type process through the accelerator’s network. They helped him shape, and ultimately change, the company’s focus.
Aceable now has 60 employees and raised $4.2 million last year.
Austin started out, as many tech hot spots do, not focusing on software but rather on the more basic technology of