Choosing Austin, The TapSavvy Story

I recently was introduced to Brandon Ramirez, co-founder of TapSavvy. I read his very first blog post, and asked him for permission to post it here on AustinStartup. I’m always interested in the perspectives of people who are choosing to start their companies in Austin.

The TapSavvy team has moved to Austin! 

We’re here.

And our fires are lit in anticipation of realizing our vision to make restaurants smarter.

These are the main three points I’d like to make with this first blog post, and if you’re interested in nothing more than that you can stop reading here.

However, before we arrived physically, we collectively arrived at the decision to pick up our lives and throw our lot in with this budding startup town.  Up until a couple months ago our core team had been located across three U.S. cities in two time zones, with the larger team (contractors, etc.) working across three countries.

As a data driven company I’d like to pretend that we looked at the hard numbers alone to make the right choice.  To be sure we did look at metrics to gauge the cost of doing business, access to talent and whether a thriving restaurant scene existed, but decisions like these can’t be made by the numbers alone.  We also tapped into our network to gather a qualitative assessment of the startup cities on our shortlist.  What we found was quite interesting and the subject of what I’d like to share in the remainder of this article.  Keep in mind that these are perceptions only and may not reflect your own reality in these places.

Silicon Valley

The mecca of technology startups.  It contains the highest concentration of visionary investors & companies passionate about supporting local innovators.  If the high caliber of talent being pumped into the valley by Stanford and Berkeley were not enough – there are also the hordes of engineers and entrepreneurs literally flocking to the city to pursue their startup dreams.  For those reasons and others the conventional wisdom says go here.

But they say success is the catalyst for failure.  If there is a bubble in early stage capital (which is the subject of another article entirely), it is most certainly centered in the valley.  This makes for a fragmented startup scene, disincentivizes consolidation (‘why join a company when you can start your own?’) and drives up the cost of talent.  Then there are the masses of starry-eyed entrepreneurs who view the Instagram exit as anything other than the Black Swan event that it was.  Those entrepreneurs contribute to the overabundance of what Steve Blank calls AFSMS’s – look it up!  As a serious B2B startup looking to add real and measurable value to our customers (and charge them for it!), we decided the culture was not the best fit for us right now.

New York & Los Angeles

Other cities have taken note of the positive effects yielded by a thriving startup scene, and have made impressive strides towards building their own entrepreneurial hubs.  Los Angeles and New York are two such cities and because the profile we built of them is so similar I will deal with them in the same stroke.

The impression we got from these rising tech hubs is that the investor culture plays a huge factor in determining the culture of the rest of the scene – and while both these cities have their share of visionary investors (Fred Wilson, Mark Suster, et al), the prevailing ‘smart money’ sentiment apparently is to invest in more traditional industries, or rather, the “e-version” of those industries.  Some we spoke to lamented that LA and New York seem to value a slick presentation with a well formatted business plan rather than a visionary idea or well-formed team.  This would be a shame, if true, since – as those of us who read Steve Blank’s book know – “no business plan survives first contact with customers.”

Seattle

The Pacific Northwest is also building its own startup hub, fueled largely by Microsoft and Amazon talent, University of Washington graduates and local incubators and VCs.  Like Mayor Bloomberg in New York, Seattle’s Mike McGinn has also taken an active role in creating a better environment for innovative companies to succeed.  I can say from my own experiences living in the Emerald City that there is certainly a thriving and growing community of entrepreneurs.  The other side of that coin, however, is you should be prepared to have SAD employees and a tough sell job recruiting outside talent away from their sunny California dreams.

So we know how this story ends… but what led the TapSavvy team to choose Austin? 

Until we started our investigation the city basically wasn’t on our radar.  I mean sure, we had heard of SXSW, but who would dream of starting a tech startup in the middle of Texas instead of Silicon Valley?  Well when we really dug deeper the word on the street was that while the valley is the consumer startup capital, Austin is quickly becoming the B2B startup capital.

So we did an exploratory visit back in August, and what we found far exceeded our expectations.  In every bar or coffee shop we found driven tech entrepreneurs working on something interesting and eager to share their knowledge or make an introduction.  We met with a local CEO who depicted a city with a thriving community of small businesses that support one another to succeed.  This could be seen in the numerous coffee shops and food trucks using some new piece of restaurant technology, whether it be a loyalty program or tablet-based reservation system, from some local startup.

Has the city lived up to the hype?  Ultimately what we hope for from the startup city we choose is serendipity.  In the last couple months we’ve added a fantastic fourth member to our founding team, we’ve had chance encounters with investors, we’ve talked to customers, we’ve made pivots and we’re just getting started.  It’s still too early to tell where this journey will lead but for us at least it is clear that Austin has been the right place to take the first step.

Choosing Austin, The TapSavvy Story