Experts Brainstorm on the Austin Tech Ecosystem

BY SUSAN LAHEY
Reporter with Silicon Hills News

One of the most compelling statements at the Morning TechTalk Leadership Series and Breakfast Wednesday was made by a newcomer to Austin.
Candice Hahn of R/GA Digital Advertising moved to town from the Bay area in July.

“What I observed in San Francisco is that the city has really changed, not necessarily in a good way,” Hahn said “Technology has become very polarizing…I want us to focus on how we make sure that what brings people to Austin in the first place—innovation and creativity for the sake of building something amazing—isn’t going away. The authenticity isn’t going away.”

The event, sponsored by the Chamber of Commerce and SXSW was hosted by Graves Dougherty Hearon and Moody. There were about 20 participants including Pike Powers, CEO of Pike Powers Group, Michelle Skelding, senior vice president of global technology and innovation for the Chamber, Hugh Forrest , Director of SXSW, and Jan Ryan, founder of Women@Austin as well as people from tech companies and representatives of the U.K. investment board and the Irish Consulate. The point of the breakfast is to discuss strengths and weaknesses in the Austin tech ecosystem that the community can address.

Making Business Easier

Hahn was responding to the comparison between Austin and Silicon Valley in terms of investment money. Some participants, including Jacqueline Hughes of Startup Week and Techstars, pointed out that one of the issues the city needs to tackle is the question of capital. Of the many Techstars companies in the current class that have received investment, Hughes said, only six percent of that money came from Austin.

Similarly, Max Hoberman of Certain Affinity—a game development studio that has worked on games including Halo and Call of Duty, said the city needs to focus more on growing its own businesses.

“Even though Austin has a huge number of game developers, it’s deficient when it comes to strong locally based companies,” Hoberman said. “Typically the gaming industry is binge and purge. A lot of people liken it to the movie industry. I actually believe that that’s a wrong business model. I’ve never laid a person off. I believe what Austin needs is to focus on strong, locally based companies. What I’ve found is that the environment is exceptionally focused on drawing in outside companies to create satellite offices. I’d like to see Austin become a true center for gaming sustainability and profitability and see more homegrown success stories.”

Many participants said they’d like to see the city and the state close the gap between the innovation that they encourage in the emerging tech world and arcane bureaucratic red tape that slows the granting of permits, filing for city tax incentives and following business regulations. Aimy Steadman of BeatBox Beverages, a boxed wine producer that just won a $1 million investment from Mark Cuban on Shark Tank, said the regulations required for companies that deal with alcohol haven’t changed since prohibition.

Steadman said that, when most companies want to iterate a product, they do so and can launch it. When BeatBox invents a new flavor or wants to change the wording on the box containing its beverages, the process takes months. As a result, BeatBox is going to become a marketing company and let another company manage the headache of production.

Growing the Focus

Several other members of the group talked about the need for Austin to think more internationally, not only in terms of bringing in companies from other countries and opening offices abroad, but in looking at who competitors are outside the 50 states.

“Most of the good brands are international. Most of the GDP growth is international. Startups who don’t see a path where someone conflicts with them domestically think they’re good to go. They don’t look to see if there are companies already doing that in China…,” said Harvey Frye of Tokyo Electron.

Bill Blackstone, Rackspace Austin site executive, quoted dire numbers from the Chamber of Commerce about the challenge of finding talent in Austin.

“This presents a great danger to the technical scene,” Blackstone said. One of the problems is that, with the University of Texas only taking the top seven percent of every graduating class, great students wind up leaving the state for their education, and staying gone.

Other suggestions brought up by the group included one that Austin become more design centric. John Fremont, executive vice president of sales and marketing for Chaotic Moon Studios said that design attracts investment.

Josh Rubin, executive producer and managing director of video for the Daily Dot, said he wants to build up the Austin media scene.

“We punch well below our weight in terms of media,” he said. The Daily Dot is talking about a media incubator and co-working space where “every graphic designer, shooter, editor” can have a place to work from. “There’s a lot of talent here,” he said, “but it’s siloed.”

Skelding concluded the meeting, the second in a series, by saying it was the organizers’ intent to take all the suggestions and perceived opportunities and begin crafting actions around them, rather than just conversation.