There are two kinds of tech people in the world.
Tech people who should live in Austin, and tech people who should live in San Francisco. (Yes, LA and Seattle and New York, I’m leaving you out of this discussion. Bloggers don’t seem quite as hell-bent on making comparisons between you guys and SF.) (Also, people who make overly simplistic analogies, and people who don’t.)
The comparisons between the ATX and SF keep popping up as if the cities have some shared DNA and therefore *must* resemble one another. People say things like, “Austin is where San Francisco was in the 70s and 80s, with the obvious implications that in a few short years, Austin will have the density as well as the pedigree of the startups in Silicon Valley.
Posts like Hamish McKenzie’s, “Will the Austin startup ecosystem ever live up to its promise?” on PandoDaily are deep with the implication that Austin and San Francisco are so similar, except that Austin is somehow a weak, skinny younger sibling to San Francisco, with a weaker resume, and a lower bench. But not to worry: Austin will keep “growing up” and live up to San Francisco’s expectations of what Austin should be.
That’s just never going to happen. At least, not if you ask an Austinite.
The rise of Capital Factory as an incubator, and the amazing community that has bloomed in the last year is perhaps the most important signal that Austin is starting to “fill out.” But, to put it bluntly, Austin doesn’t want to be San Francisco. And frankly, Austin also wishes that San Franciscans would stop using their city as the yardstick to measure Austin’s “startup potential.”
The differences between the city aren’t necessarily because Austin hasn’t “lived up to its potential” yet (although I do think Austin is only just now beginning to step up as a startup city in many ways). No, for all their obvious similarities, Austin has a very different identity from San Francisco, and that will always be reflected in the Austin Startup Community.
Austinites are damn proud of the identity of the city, too.
Austin is just different
When I moved from Austin to San Francisco last year, my Austin friends aimed some good-natured mocking at me. They couldn’t fathom why on earth I would want to leave Heaven ON Earth (AKA, Austin, Texas) for any other city, much less San Francisco.
I heard all the things that they loved about Austin. Austin has a growing laundry list of characteristics and accomplishments that are drawing global attention for good reason (Hello Formula 1). But none of the things that make Austin Austin were motivating for me any more.
The more I thought about it, the more I realized they may never have motivated me the same way they motivate everyone else who lived in Austin. Things like the “balance” that everyone builds into their lives, while still having access to excellent and diverse restaurants and art. Austin’s slacker culture means that everyone can choose to modulate their work and home life to carve out a balance of everything that fits them.
There is a lack of intensity, or “cut throat-ness” that San Francisco definitely has. I moved to San Francisco to seek out the intensity and the cut-throat vibe. And I love myself for seizing the opportunity to move. I miss my friends and connections back in Austin a great deal, but on the whole, I do not miss Austin for the qualities that make Austin the great city that it is.
That doesn’t make everyone who raves about Austin wrong. And it doesn’t make me, the person who moved to San Francisco, right. I think it depends on what you want to get out of life. They both have exciting and growing tech scenes, and they both have great art scenes, and they both are surrounded by beautiful geography. There’s a ton of other things that allow both cities attract awesome, talented, creative people from all over.
But there is a key cultural difference that I think means that Austin will never be “exactly” like San Francisco.
A different yardstick
Lets create a different standard to measure our cities along a spectrum of intensity, because I think that’s where they key differences between Austin and SF are.
Start at one end with Portland, “the city where young people go to retire,” then place Austin somewhere right in the middle, and then have San Francisco be on the other end, the super intense end.
Portland is a city that I cannot spend more than a few days a time in. I can’t stay too long because I know if I stayed a day too long in Portland, I’d suddenly be happy to embrace the slow pace of the city and stop working my ass off. I’d end up getting sleeping real late every day, drink some coffee, maybe write some poetry on my porch (or not), and then find a part time job selling cigars like I had in college.
San Francisco, on the other end, is such an intensely driven city that you cannot help be swept up in what is going on all around you. That’s part of the point, and why I chose to move there. Practically everyone you meet in SF has something awesome that they’re creating, and without realizing it, they help you get better just by being around you. San Francisco’s culture involves hustling and kicking the most ass possible, and you feel like a chump if you aren’t working as hard as everyone else.
San Francisco makes you focus on shipping rather than talking, otherwise you literally won’t make it. It’s too damn expensive to not be awesome at what you do. Yes, there are always tire-kicking folks in any city, San Francisco included.
Austin is the city that will basically let you have it both ways: you can work a ton on your startup, but you’re expected to also have a bunch of other hobbies and projects that you’re into as well. It’s all about the tapestry of your lifestyle.
I tell people that Austin is the “be yourself” city. Where Portland seems to just slow down, Austin is still super active and driven. And where San Francisco is the distilled essence of hustle, Austin still wants you to be able to chill out every now and then. In Austin, one of the primary values is this idea of balance, and everyone strikes a clear balance between work and play. The city, as a result, feels more balanced and less intense than San Francisco. There are TONS of cool things to do, just like in San Francisco, they just happen at about a 7 intensity, not at a constant 11.
San Francisco is relentless. You find the *best* of everything in San Francisco.
San Francisco is not just about the best coffee in the city, it’s about the best espresso on the planet. And it’s not about the best startup, it’s about the “fuck off, we’re going to IPO, be billionaires, and start our own countries,” startup. SF isn’t about making a green vehicle, it’s about making Tesla, the all-electric vehicle that is going to turn the automotive industry on it’s head. SF isn’t about Venture Capital funding, it’s about, “holy shit, check out the ridiculous round that we just raised because there’s an entire street of VCs.”
SF is a pressure-cooker. If you’re an entrepreneur, you go to San Francisco in order to turn the volume up to 11, and see how much you can take, for how long, before you decide you’ve reached your version of escape velocity.
For many people, that literally means selling their company for so much money that they never have to work again, but then turning around and working 60-70 hours a week investing in other people’s companies. They just have something in their DNA.
As an individual, San Francisco offers more intense opportunities, but forces you to choose to focus on one or two of them. You invest your time in fewer things so you can do each thing as big as possible. San Francisco isn’t as balanced in the pursuit of outsized companies.
Austin offers you more options, but greater variety means that, on the whole, Austinite’s don’t focus as intensely as in San Francisco. Austin’s defining characteristic (part of it’s slacker culture) is a belief that intensity isn’t always the best thing. Austin believes in variety and moderation. This affects the startup community. Austin, the city, will let you pick and choose from its buffet line, and then admire the smorgasbord you put together. Your lifestyle is a work of art in Austin, and I think the culture rewards you for how you live as much as what you do, often moreso.
That’s why in Austin, there are thousands of “entrepreneurs” who have no employees. Everyone is starting something, but not as many people are finishing anything. There are exceptions*, of course, so Austinites don’t get upset at me for this before you look around at the next High Tech Happy Hour. Lots of people are doing cool stuff, but there ARE a lot of “social media consultants” who attend the tech events in the city.
Any time you dial down intensity and drive for the sake of balance, the result must be less output.
The exchange between intensity vs. output is a valid one that gets you a greater overall quality of life. In Austin, the job market is less intense, and there are also fewer opportunities for a community and content marketer, like me. There were times that I looked around in Austin, and realized that I had zero clue where I would fit into the startup ecosystem outside of WP Engine.
And the thing was, I wrote my job description and practically made Jason hire me. So really, there may not have actually been a natural place for me in Austin in the first place. I had to create my own job. In San Francisco, I see a number of people who do similar things as me. I hang out with them. We swap notes. I learn something new from them every time. We talk nothing but work sometimes. I like that.
With all that in mind, Hamish, and everyone else, probably needs to chill out a bit where he says that “Austin has never lived up to it’s potential as a startup hub.” First of all, Austin is becoming a more and more badass place to move your startup every year. I’m finishing this post from inside the Capital Factory, where during normal weekends the space would be full of entrepreneurs building and shipping startups, but this weekend has also been packed with more VIPs than I’ve ever seen in one place. SXSW has come to town, and Capital Factory has the amazing office space to serve the event.
Capital Factory is officially a destination, not just for startups native to the area, but also for the startups that have moved here from LA and San Francisco, and for the tech moguls and influencers who have spent the weekend interviewing, meeting, and may also invest in these companies by the end of SXSW. I introduced Robert Scoble to the folks at ZingCheckout and OwnLocal, and would have intro’d him to StormPulse if I’d been able to find them around the incubator.
WP Engine is also becoming a big name in Austin. We’re at the 50 employee mark (I joined as employee #12 last SXSW), and has grown out of Capital Factory (we are bursting at the seams, really). We have our own office space in downtown Austin that we’ll move into once the build-out wraps up. WP Engine loves Austin for our base of operations, but we also recognize the value of having an office in San Francisco for our marketing presence to connect with the ecosystem out there. But Jason and Ben probably wouldn’t open a company like WP Engine in San Francisco. Austin is a better fit for our support and engineering team.
No, Austin does not have the same density of San Francisco because Austin hasn’t hit critical mass quite yet. It’s happening, but that sort of thing can’t occur overnight. In the next few years, it will happen, but even when it does, Austin won’t look like San Francisco in a lot of ways. Austin will still retain the same sense of balance and won’t have the same San Francisco intensity. That will be by design. The Austin culture wants different things.
Austin also doesn’t care about social or consumer apps very much, preferring to focus on enterprise software, and products that have a great deal more utility. I don’t think the absence of lots of mobile companies is actually a black mark against Austin – I think it signals that the city builds companies that can clearly answer the question, “So how do you make money?”
Austin companies, by and large, focus on sustainable, long-term growth. This means fewer “moon shots” or IPO-focused founders. Austin has a bootstrap mentality baked into the entrepreneurial scene. The current crop of startups portends that Austin could have an increase in billion-dollar exits over the next few years. SpareFoot is going to blow people away by how far the founders take the company, for example. And MassRelevance continues to show steady, but rapid growth.
But Austin’s culture will support a different style of startup, and create a different startup ecosystem than San Francisco has. Austin isn’t going to be defined by “Tech Giants,” or major consumer apps. In fact, I want to go on record and predict that Social Entrepreneurship will take root in Austin, nurtured by the values and community spirit of the city, and become something Austin is known for.
Yes, Austin could use more investment. There are companies like Rally.org who left Austin for San Francisco because the funding they needed wasn’t available in Central Texas. San Francisco knows how to invest in startups, and in the last few months, I’ve already seen the results that investment can have on the growth and success of a new company. Austin doesn’t seem to realize how powerful funding can be for an entire ecosystem or it would be doggedly pursuing another 2-3 VCs to balance out the Austin Ventures dominated scene.
Some people will disagree with me about the need for more funding, and that’s fine. But to get real about creating a tech ecosystem, you have to forget the “bootstrap culture” arguments insofar as they prevent companies from having access to the capital they need to grow. More investment will equal more successful startups, which will only help the community to grow.
Come to Austin for the balance, and stay for the barbecue and the Southern feel. Come to Austin to “be yourself.”
But if you’re looking for intensity, and you want to live the next few years to the hilt, there’s no better place to live than in San Francisco. Your life may look imbalanced, but hopefully what you can accomplish will change the world.
*That’s why rent is cheaper in Austin. It’s also why salaries are lower. Rent and salaries go up with how many people are trying to live in a limited area, and they correspond directly with how skilled the population is, and how in-demand those skills are. I saw the ad on Hacker News last week for the first Python Engineer at a VC-Backed “startup with revenue” in San Francisco. Not only was the startup offering tons of salary and benefits and relocation, but also a housing stipend, maid service, and personal training sessions. That’s how badly they wanted the best available Python engineer on the planet. They wanted to pay that person an absurd amount of money, with incredible perks.
**Brett Hurt, founder of Bazaarvoice, and now with Austin Ventures, has written an incredible post about the state of Entrepreneurship in Austin. He outlines 3 stages of Entrepreneurship, and explains that Austin is largely stuck at the First Stage, where San Francisco and Silicon Valley are more prevalently at the Second and Third Stages. His experience as an entrepreneur gives him amazing insight into how different mindsets reflect different stages of businesses at each of the 3 Stages. I highly recommend reading his post if you’re entrepreneurial, and looking at or currently living in Austin.