What’s the Difference between Austin and San Francisco?

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

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.

Austin’s “Potential”

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.

 

NOTES:

*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.

Austin Gunter

I’m Austin. I live in San Francisco, practice Tai Chi, have rheumatoid arthritis, listen to a lot of loud music, and host a lot of dinner parties. Want more? Start here.

74 comments

  • Best article I’ve seen yet on San Francisco and Austin. As someone who’s lived in both places, and decided Austin’s balanced lifestyle was what I wanted, I agree with your point of view. Different but equally valuable is how I see the two cities. Austin certainly isn’t finished writing it’s own history and I am excited to see what the next decade brings.

    • Thanks for your response, Carolyn. I was hoping to give both perspectives equally. I clearly chose one over the other, as did you. Glad there were two choices 🙂

      Austin W. Gunter
      @austingunter

    • > Best article I’ve seen yet on San Francisco and Austin.

      Wow, really? The author just kept repeating the same thing over and over. This could have been a tweet.

  • Great article, Austin.

    One important distinction worth pointing out is that the SF you’re describing sounds a lot like the SOMA scene (and to some extent South Beach), because since mid-2011 SF has been, for better and for worse, importing a TON of DNA from down in Palo Alto / Silicon Valley (SV). As someone who’s lived in SF since before it was the startup hub (the valley was the far bigger player 6 years ago), I must point out that SV and SF have radically different cultures.

    SF tech people are actually extremely balanced compared to SV or NYC, especially if you ignore the recent influx of used-to-stay-down-south startups who’ve decided to move to SOMA.

    SF has a focus on ideas and change in the long term, where SV has a focus on money and success in the short term.

    A *lot* of the SF scene is Austin-like and Boulder-like, but it’s not the scene you see raising Sequoia money and guest-posting on TechCrunch and eating breakfast at the Creamery: it’s the lower haight kids, mission kids, oakland/berkeley-influenced kids, burning man crews, etc. And there are still a lot of us in SF that match that description and not yours.

    • Great point, Kyle. I think I’m still learning the distinction between SF and the Valley, which is definitely creeping into SOMA. I’ll have more nuanced opinions on this after another 12 months in SF, I’m sure.

      Thanks for the comment 🙂

  • As a SF to Austin transplant 6 years (almost 7) years ago, I couldn’t agree more. What I hated most about living there was that nobody would take any time to get to know you. My wife and I take walks every night, and in SF, nobody would say hi, let alone make eye contact. Now, our walks take 2-3 times longer because all our neighbors want to chat. I love that.
    Thanks for a great comparison.

  • That’s a great perspective Austin. I’m glad you took the time to share your thoughts and hope you do this again next year after more time in SF.

    One fundamental difference between Austin and Silicon Valley / San Francisco is that Austin is booming in growth mode while the other two are “peaked”. Sure they might get a little better or worse each year, but they already at the top of their game.

    Just last year, Austin took San Francisco’s place as the 13th largest city in the country. It’s growing and attracting talent… much of it entrepreneurs and engineers from Silicon Valley. California’s recent tax changes won’t help their case. Whole startups are picking up and moving here too.

    Things in life rarely stay the same. Either they are getting bigger or they are getting smaller. Either they are getting better or they are getting worse. I like Austin because it’s been getting bigger and better for the past 20 years and shows no sign of slowing down. I want to be in a place that’s booming and growing. That creates opportunity. Opportunity to be part of the growth and change – to help shape it.

    It would be hard to argue that Silicon Valley is NOT the overall best place for anyone to start a tech company. However, that doesn’t mean it’s the best place for ME. Fortunately, we each get to decide for ourselves!

    • (For the others reading this, I’m based in Austin but work for a downtown SF-based (SOMA) startup, so I get a lot of both worlds.)

      The thing that has struck me is not just the top but the bottom and averages. In both places, there is fantastic and growing wealth but at the same time, the poverty we have in Austin pales in comparison to SF.

      Also, I think there’s a different perception of *how* we live here. In SF, most seem to acknowledge they’ll be there for a while and move on, so there’s not a huge sense of responsibility for the area. Alternatively, people are here to build startups *and* lives, so we come together around efforts like wildfire relief and the annual Austin Web Bash when we raise money for the Capital Area Food Bank. People genuinely care.

      It’s hard *not* to fall in love with Austin.

    • As a fellow Austin to San Francisco transplant as well, many things in this article did strike a chord in me. I absolutely love San Francisco. But I miss Austin dearly—I really do. It was a hard decision: leaving the city, leaving relationships, leaving many years of building roots. Life was comfortable in ATX, the city pace was what I used to think was perfect for me. Speaking on the idea of “peaking” … personally I felt like I peaked in Austin, which looking back was probably one of the main reasons I left. Things got a little too easy, maybe a little too comfortable. I was yearning for something more. I didn’t exactly know what it was at the time, but it was something I couldn’t find in Austin. Here in San Francisco I feel like I’m constantly challenged, both in my professional and personal life…which, as my time in SF lengthens starts to feel more like one and the same. In a sense, the very idea of a work/life “balance” has become a moot point, and instead, turns into more of the notion of a single life’s work, rather than two mutually exclusive exclusive entities. I often fantasize about moving back to Austin. However, there’s that idea of life’s work that keeps me here in SF. It’s something that I haven’t been able to find personally in Austin yet. But that’s the keyword isn’t it? Yet.

      • Hey Dave, I think that your experience closely mirrors my own. I was getting to feel like the work that I do as a writer and a marketer might not have as much head room in Austin (for now) as it does in SF, which was a motivating factor in my move. I also have to give some credit (a lot, really) to WP Engine, and the company leadership for allowing me to link my career with my impact for the company.

        As for the balance part, I’ve never been much for that. I like to quote Richard Branson, because I think he said it best. Although each of us has to find our own version of the following, it rings true for how I live my live, “I don’t think that work is work and play is play – to me, it’s all living.”

        SF just gave me the opportunity to live the way I wanted to….at least, that’s the hypothesis I’m testing right now 😉

    • Hey Josh, thanks for sharing the post and commenting with your thoughts. After another year, I’m sure I’ll have more nuance from experience to add to the mix. I’m glad that what I wrote resonated with so many Austinites. I hadn’t ever seen a post from a Bay-Area writer that I felt gave the ATX a fair shake, mostly because Austin needs to be taken on its own terms, and appreciated as a unique creation. My hope is that I captured part of that here.

      And yes, thank you for all that you do for the Austin scene. Your work has created an epicenter that Austin needs, and the ripples / network effects / compounding interest / however you want to describe it of Capital Factory will be felt for decades. Including with me out here in SF.

  • Austin — really nice job articulating a much discussed and debated topic. Thank you.

    Still a bit unsure though why there has to be an “either/ or” debate when both ATX and SF are simply two of America’s greatest cities to live and work. One has to feel very fortunate to have the opportunity to be in either place. They have some well documented similarities, but also many stark differences. Ultimately it’s up to individuals to choose what’s best for their own lives (and their family’s).

    And really, until they’ve traveled the world and experienced at least 30+ years of multiple places, people, and things on the planet, it’s hard to have a real perspective on what’s best for ones own career and lifestyle. It’s all about perspectives and relativity in the end and one’s own philosophy of life.

    But you really nailed it with this statement: “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 really resonated with me as someone who just crossed the ten-year mark in town. When you look at lifestyle as a creative process in general, Austin might be the perfect canvas I’ve experienced in my 40+ years around the world.

    One of these days, I’d like to talk with you more on the subject and share a relevant project I’m working on that I think you’d have some amazing perspectives to share.

    Enjoy!

  • Knowing early on in law school that I wanted to work with tech entrepreneurs, I spent a fair amount of time contemplating this very question. Yeah, law schools and law firms are shrinking, blah blah. Some of us still had (and have) options. My assessment of Austin v. SF pretty much paralleled this post (along with the comment from Josh Baer).

    Sure, if I wanted to see my clients on the front page of the WSJ on a regular basis, SF/SV (and more specifically only a handful of law firms) was the only option. But there’s something tangibly different between living in an awesome city that others have built, and actually participating (albeit in my little role) in the building of one. Austin, as is, is unarguably an awesome city, but the sense of “possibility” here is what really draws you in.

    And the cultures among legal folks here v. California also seem to parallel the clients they work with. I’ve always been ambitious in my own way, but not in the Type A, balls to the wall, “I’m gonna change the motha $*)$in world” sense. There’s a “que sera, sera” way to be ambitious. That’s Austin’s style. That’s my style.

    It’s not that our dreams are any smaller, we’re just in love with many other aspects of our lives too, so we don’t obsess about achieving them all before we’re 30. The lives that we build here, like the careers and companies, are sustainable. They’re built to last, not to burn out in 7 years, and then hopefully have some cash to spend on a remote island recovering for the next 2.

    Different strokes for different folks. I made my choice, and have zero regrets. The 2300 sq ft house helps too.

    • Thanks for commenting, Jose. The “que sera, sera” bit ie exactly the thing that Austin has over most cities, and it’s the thing that SF likely won’t ever. Glad you found your fit!

  • There are fieners everywhere, dont let a city define your work ethic.

    • Hey Josh, thanks for the comment.

      For me, it’s the opposite. I was looking at my work style, not so much ethic, and realizing that one city fit better than another. I’d hate to say that anyone in Austin doesn’t have great “work ethic” because it would just be false. Rather, it’s about picking how you like to work, and then finding “your culture” and “your people.”

  • Austin, Thanks for writing such a “fair and balanced” piece. I see how you would want more action than Austin offers, at least right now. One other factor to consider is your age bracket and whether or not you have kids. When you have a family, Austin’s an ideal place. As someone who moved here from LA, I’m happy not to be living at “11” anymore. Yes, there are times I just want my coffee without a conversation, but I’m a convert. I raise you one Austin lifestyle article: http://www.huffingtonpost.com/love-letters/austin-texas-love-letter_b_2045500.html

    • Virginia, that’s exactly the thing: I’m at a point in my career where I want as much accelerant as possible. Happy to be out here in SF where I can pour rocket fuel on my dreams.

  • “San Francisco is relentless. You find the *best* of everything in San Francisco.”

    – except BBQ and TexMex. Otherwise no argument really 🙂 But my friends from SF and NYC who visit Austin are continually exclaiming over the food here. That wouldn’t have happened in 1995.

    “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.”

    – I think another way to look at it is, you go to SF if you want to see yourself as one of these people who “turns the volume up to 11” – whether or not you do, a lot of young men like the machismo of being able to say that they do 🙂 A lot of this is a Rorschach test of how you want to be perceived or perceive yourself, rather than an actual difference.

    Also, as for Austin *not* doing that – many people in the Austin scene simply missed out on the Trilogy era – which was as hardworking as any company culture in any city, anywhere. Many of us learned from that time – that balance is worth it. That we can get great return on investment without literally killing ourselves and our teams to get there.

    • Austin food is no where near other major/coastal cities. It has definitely improved in the last five years though. The only place I would consider travel worthy is maybe Franklin’s.

        • Benjis = sucks
          Searsucker = way over rated and “trying to hard”
          Uchiko = good, Uchi is way better

  • Great insight Austin, thanks for writing this. The more time I spend in Austin, the more I’m excited about the certainty that in 5-10 years, the tables are going to turn, as @joshuabaer:disqus points out, there is no sign of it slowing down here. Silicon Valley is going to be looking to how Austin works as the economic incentives, ambition, creativity, and diversity that makes Austin exceptional today will enable it to lead tomorrow.

    Why? Silicon Valley, for all it’s advantages, benefits from resources and experience. Experience is as fickle: skilled professionals have to keep up with the pace of innovation for experience to have any meaning to entrepreneurship AND it’s only a matter of time before the river changes course – in 5 years, those without experience, have it and the value of experience in one market is depressed by the value of it in other markets (in particular to Silicon Valley, it’s cheaper elsewhere). Resources (capital and human) are increasingly looking elsewhere. Make no mistake in appreciating that there is money and talent in N. California but with the economic climate there, government policies, and cost of doing business, most of the rest of the world is looking elsewhere. In the comparisons of Silicon Valley to Austin (which I certainly make too; obviously), it’s too easy to be blinded by the fact that there is far more money and talent emerging throughout the world and their investments in other parts of the world are accelerating far more quickly than in N. California. Evident in Austin’s explosive population growth is the fact that those with resources are all looking to Austin.

    Who in their right mind thinks this? “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.”

    At no point was it ever easy to be an entrepreneur in California. The early days were driven by the brightest minds in the world coming out of the military, science, and technology – most we’re not starting their own businesses. Out of that came an exorbitant cost consideration that the world too easily overlooks – Silicon Valley companies raise more capital not because they are worth more but because they must simply to exist there – most are not entrepreneurs. What makes Austin unique? Everyone can start their own, successful business. But that’s the criticism of that statement as it pertains to Silicon Valley; what’s preventing thousands of Austin businesses from leading innovative and developing global companies (not those that we know, what’s preventing Austin from enabling thousands of entrepreneurs to achieve that?)? “The pedigree of the startups in Silicon Valley” won’t emerge with time or population but only with comparable resources in place – not to BE Silicon Valley but to have the media/marketing engine, the focus on industries and not economies, the experienced scientists, the sufficient capital relative to developing global businesses from within the Austin economy, the embracing of risk and celebration of failure, and the diversity of investment sources that enable entrepreneurs to excel.

    The bottom line, as @facebook-519832686:disqus pointed out, is that it isn’t an either/or question and in the comparisons, it’s too easy to conclude that people are looking or hoping for one to be like the other. I don’t think that’s at all the case – Silicon Valley won’t collapse, don’t take my criticisms so literally, but Austin CAN grow, develop, and innovate at a far greater pace than Silicon Valley enables (or will continue to sustain) and there are subtleties to how that ecosystem works that we’re still lacking in Austin – not so that we can be like Silicon Valley but so that Austin entrepreneurs have the tools in places to accelerate more quickly and significantly. The EXACT same thing can be said of Silicon Valley – they desperately need to learn a few things from Austin’s culture – @twitter-8170372:disqus puts it well, it’s about HOW we live in Austin and it’s hard to argue that the HOW of San Francisco is sustainable when the HOW of Austin is exploding and the rest of the world is more intrigued by the how here.

  • After SXSW and making the rounds in Austin’s angel/investor community, it has become clear to my team over at firstcutpro.com that it’s time for us to move to SF/LA (hopefully temporarily, but definitely to raise there) We finished our product, people are loving it (big enterprise to small freelancers) and yet Austin still wants more “traction”. We’re in the creative video industry where it intersects tech and that’s very clearly best understood on the west coast and possibly in NY.

    We live the hustler culture everyday. We built our technology on scraps ($60k) and we transitioned it to a product that can tackle a huge pain-point of creatives. I appreciate what Austin has done for us in the quick realization that we had to make money but now it’s time to grow. I probably would’ve given up long ago, but “this one’s different”.

    Hope to meet you in SF, Austin. We’ll be there come May.

  • I enjoyed the post’s view on the start-up community in Austin but the perception of the start-up / entrepreneurship in SF / Bay Area can’t be more wrong. A lot of the start-ups here are bootstrapping and the seasoned successful entrepreneurs aren’t always going to VC’s. It’s not so much being the high-end of everything as you have put it, by beeing not just the green eco friendly vehicle vs. being the Tesla, it’s about being among very strong competitions and being able to stand among them and being the best among the best. If you have what it takes to bare the challenge, come to SF when you know you will be challenged with the smartest and the most innovative who have seen pretty much everything. Austin is cool, but unless you have been working in the SF tech scene, please don’t assume such things that are so untrue. I’m a long time SF Bay Area techie and have a lot of exposure within the startup community and I can say a lot of this review on SF is based merely on the stereotypes such as movies like The Social Networks and fan fiction.

    • Hey Hylan,

      Thanks for the comment. Naturally, my experience after 6 months of living in San Francisco is still from the perspective of spending the last 16 years in Austin. That colors my perspective and bias as it should. That’s part of why I wrote the post – nobody was talking loudly about Austin from the perspective of an Austinite – at least, not outside the Austin City Limits (so to speak).

      That said, I’m not sure your black and white dismissal of the post is accurate either. I’m not denying that the startups as you’ve described them exist in the Bay Area, they do. There’s a diversity of startups to examine. Austin, for example, has a few massively funded VC moon-shot companies that have gone public / will go public soon. That sort of company simply isn’t the “norm” according to Austin’s entrepreneurial culture, in the same way that a certain % of seasoned entrepreneurs in the Bay Area aren’t going to VC’s by choice. They’re choosing a different sort of company. But, I don’t think you’d argue that those founders aren’t the cultural majority – they’re taking a different path, either because they can afford to self-fund from previous successes, or because they don’t want a moonshot.

      There’s always a lot of nuance in every city, which I feel like you were trying to point out, but didn’t actually capture in your comment.

  • One thing San Francisco has that Austin doesn’t is Stanford University. Ken Auletta’s article, “Get Rich U” in The NewYorker (4/30/2012), highlights the tightly woven community and the flow of money that exists among the VC’s in the Bay Area, the Professors that teach at Stanford and the brightest students that come from there. Reading about this relationship – that started with William Hewlett/David Packard and most recently included the Instagram’s sale to Facebook- seals the argument that the institution is without peer. As prominent as UT’s Natural Sciences and Engineering departments are, their presence and impact in Austin’s startup community can’t even remotely be compared to what exists with Stanford and Silicon Valley. Granted, Stanford and Silicon Valley have been together for upwards of 80 years and Austin’s tech startup scene didn’t get traction until the mid 90’s.

    Further, it’s only natural that the scores of successful ventures in the Bay Area contribute to a gold rush mentality. If you’re 22 years old and one of your classmates sells his startup for close to a billion dollars, it’s going to impact how you view the landscape and play the game. That environment doesn’t currently exist in Austin and won’t be here anytime soon.

    • Thanks for the comment. Standford is essential to the Bay Area’s startup culture. Bob Metcalfe is working at the University of Texas to create an “City of Austin” version of that as well.

  • Wow, fantastic write-up with great perspective, thanks. I just forwarded to a friend moving to the Bay in a few months.

    Funny, I’ve been visiting Capital Factory for about a year now for various meetups and didn’t realize they’d made such an impact on the startup scene. Their space is awesome, glad to hear they’re breaking away.

    I love California, but alas, I could never make the move out west for one simple reason… I couldn’t leave the mecca of BBQ here in CenTex. Surely there is a significant segment of the tech community staying in Austin for this one simple reason, great BBQ.

    • Capital Factory is a game-changer for Austin, no question. And yes, sometimes you can’t leave behind your religion. Whether that’s barbecue or low taxes, Austin certainly is mecca for a lot of people 🙂

  • As someone who has lived in both locations, the reason for the “intensity difference” is based in part on simple economics – in Austin you can buy a very nice home and have multiple kids(day care costs 2X in the valley) on a decent tech salary. In the bay area, you have to “swing for the fences” and hit a home run to be able to afford a nice home and family with multiple kids. Beyond the cost of living differences, the tax differences increase this phenomena.

  • Great article.

    Here’s my two cents. Austin feels like a place on the cusp of its prime. It’s a teenager about to be an adult and the world is its oyster. However, Austinites have inherited the deep-seated pragmatism of Texans (whether they’ll admit it or not) so they keep one eye on the stars and one on the ground.

    San Francisco is a city in its prime. These are its best years and its on top of the world. This is reflected in its demographics. San Francisco is a city built to attract people from all over and it does that quite well, however, San Francisco has some problems. Look at its demographics. It has the lowest number of children of any city in North America (Mexico and Canada included). It’s going to age fast and become a retirement center faster than its seems to understand. It’s not a place for families.

    The problem with relying on bringing in fresh faces is that you have to eventually have the old faces leave, but that doesn’t seem to be happening by a great enough margin.

    Austin has young people and families. It’s a place where you invest in the community as much as the idea. Austinites have a strong identify. San Francisco feels like a very mixed identity.

    The two are in different places. San Francisco is on top of the world right now. Austin has not reached its prime, but when it does it’ll be something special.

    • Great point. Austin is definitely on the way up right now. San Francisco is definitely always reaching new heights. That does beg the question “when do things level out or even drop off?” Who knows, but SF is the epicenter that you can feed off of, and Austin is the place you can be part of the actual early building process. Depends on your style and immediate goals which one makes the most sense!

    • Megan, I think you’re absolutely right about Austin being on the way up right now. It’s mostly upside in that city, and the folks that are drawn to it are putting down deep roots in a way that most people find very difficult in San Francisco, which is in a period of growth right now, but the problems you describe definitely exist.

    • & when will that be?/ When we run out of water? Or when my 5 minute drive to work takes 1.5 hours instead of 40 minutes? You can’t beat SF weather, or view, they can’t bulldoze Austin fast enough, SF wins in the long run. & Austin’s prime was when nature & arts ruled not speculators & developers which unfortunately follows the tech industry around CUZ they got the $$

  • THIS IS TOO GOOD …
    I have NOT lived in Austin but your analysis on SFO is spot on. I love that city because of that …

  • Austin, small world…. my friend sent me a link to your article saying I might enjoy it (and I did) while reading it my wife (Kristy) walks up behind me and sees your profile picture and says she knows you and also know my business partner (Chris H). Crazy!!

    Also, I think you hit the Austin culture right on the head. I think I could use a bit of SF in me at times. But at the same time desire a good “balance” so I can do other things I love such as spend time with family.

  • You got me pick up SF over austin… What drove me for austin was the cost of living but business wise, SF all the way… by the way, what about SF vs NYC?

  • Excellent article and very good insights. I have lived in the Bay Ares visited SF once in a while like a tourist spot. The weather is best out there and its a melting pot of the world we have people from all over the world and hence you could find very good food especially in silicon valley SNV, Santa Clara area. There are several parks where you see people playing Vollyball and cricket yes I said it. I played cricket most of the year even in evenings and of course on weekend with Vollyball. I remained very active due to the weather and upbeat atmosphere. With lot of tech meetups there were several meetings going on at one place or the other with good food and goodies to offer. Every grad student’s dream even if it was only pizza and a t shirt.
    I really enjoyed my stay though taxes hurt including the rentals. Moving to Seattle,WA was a new experience. I was able to afford an apartment in downtown practically at the same rent as in Sunnyvale and had lot more options in Capital Hill and 1 st near the waterfront. Walking daily to work in cold drizzling weather was bit of a shocker initially and it took me almost an year to start liking Seattle. I liked the fact that bus system was very good never needed a car. With the hilly terrain and options of sea, mountains and immense vegetation kept me in great shape. I also foreyed into singing with so many bars that had kareoke. Yes singing live in public. Thank you Seattle for this talent I discovered in addition to dancing. Well it definitely was different than Bay area but due to AMZN and MSFT we used to see a lot of tech community. Most of the meetups you would find a person from the two companies based on if you were on east or west side of the bridge

  • Hey, I am livin’ in the pressure cooker (SF), and really loved this article. I feel like your perspective really gives each city it due, and does not unfairly try to judge one by the yardstick of the other. it is also a gold mine for someone trying to decide which fits them. thanks!! –dan

  • Hi Austin – what are your thoughts on Austin vs SF after having lived there for two years? Has your opinion changed or is SF still more badass!

    • Hey Nikunj,

      I was thinking about this the other day. I really understand why people choose to move away from SF now. It’s an incredibly beautiful place, but that secret is out, and everyone is moving here, which makes it an every-increasingly competitive place to live. Housing is competitive. Work is competitive. Moving elsewhere gives people a bit more balance 🙂

      I’m still really stoked to be here, however.

    • Chuck, you’re probably right. There is the underlying belief that you can work like hell for a few years to not work much the rest of your life. That can be pretty pernicious for us.

  • just saw this article….as someone who moved from Chicago to Austin three years ago, I miss some of the hustle and bustle that a big city offers. Pro sporting events, top notch museums, culture, etc. I also think that the restaurant scene in Austin is fair at best. I’m a sales vp in b2b solutions for point of reference and 38 yrs old.

    As for business – Austin is slow. People still seem to be set in their ways and resistant to change. In Austin there is a still an old boy network of doing things.

    San Fran is starting to look good to continue my career…..

    • Just be wary of the cost of living in San Francisco. It’s easily 2x that of Austin. There are tons of amazing creative cities across the US right now that you can also take a look at…

  • Hi Austin,
    I’m currently living in CA. My husband I been talking about moving to another state. We have 3 children. It just seems like it’s time for us to get out of CA to expensive to live here seems like we only exist, we want to live life. We feel like Texas has that slower pace to live and enjoy life. We hear it’s inexpensive overall cost of living out their. I’m just trying to decide in which city Austin or Houston? We are planning on a trip soon to visit Austin. Since we have already visited Houston. Thank you for your insight on this.

    • Hey Maritza, I think Houston is a profoundly underrated city compared to Austin. It lacks the “cool” factor and all the hype, but makes up for it with more amazing restaurants, museums, and culture than Austin has.

  • San Francisco is intense? It honestly seemed really laid back to me as a city and kind of slow pace. I haven’t been to Austin, but it must be downright sleepy. (I previously lived in Chicago and New York).

  • As an SF native who has also lived in Austin for a year (but Texas for 10) I couldn’t agree with this more. I have friends in SF who work for Google, Facebook, and LinkedIn and they are all trying to convince me to move out there. Everyone thinks I’m crazy for it, but I just can’t see myself going back to the Bay Area even with a crazy salary and benefits package. Im positive that the Bay is great for professional growth, but the way I see it there’s more to life. I also felt like I saw a lot more DIY / grassroots activism in the Austin tech scene (and in general) than in the Bay area ( the term ‘limousine liberals’) comes to mind which I find more pragmatic and inspiring.

    Anyways, interesting read, thanks for the share.

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