Tag: austin chamber of commerce

Building an Innovation Zone in Austin

Reporter with Silicon Hills News

Sen. Kirk Watson speaking at the Austin Chamber's Innovation Summit, photo by Susan Lahey

Sen. Kirk Watson speaking at the Austin Chamber’s Innovation Summit, photo by Susan Lahey

Austin is poised to become a global center of innovation, especially in the field of life sciences and medical research, but there are some big hurdles to overcome and potential threats that could knock the city off its trajectory, if it’s not careful.

That was the bottom line of the Austin Chamber of Commerce’s Austin Innovation Economy lunch Thursday at the Hyatt.

More than 350 people attended the event which looked at Austin’s plans for an Innovation Zone proposed to be from MLK Blvd. south to the river and from San Jacinto to I-35, according to Texas Sen. Kirk Watson. Watson has been named as incoming chair of the advisory committee for the project. The centerpiece of the project is the Dell Medical School at the University of Texas but Watson said the innovation zone will not only coordinate with Central Health (the county’s public healthcare district) and Seton but will also coalesce around art, software development, media and other elements of the community.

Dr. Clay Johnston, inaugural dean of the Dell Medical School at the Austin Chamber's Innovation Summit, photo by Susan Lahey

Dr. Clay Johnston, inaugural dean of the Dell Medical School at the Austin Chamber’s Innovation Summit, photo by Susan Lahey

At present, according to Dr. Clay Johnston, inaugural dean of the Dell Medical School, the medical field is leagues behind where it should be in terms of innovation.

“Doctors still use pagers,” he pointed out, “one of the least effective ways to communicate.”

The U.S. has one of the most expensive medical systems in the world, but life expectancy has only risen by less than a decade since the 1960s. In terms of actual care, he said, we’re comparable to Cuba.

The reason the medical field is so far behind is that the financial model for medical care depends on people being sick, on multiple procedures and doctor visits. Innovation creates efficiency, eliminating redundancy and therefore causing a loss of income.

There’s a built-in disincentive to innovate which means it’s time for a revolution in health care. One of the goals of the innovation zone is to make research through the University of Texas Dell Medical School and make it available for entrepreneurs to create that innovation revolution. The innovation center will create better access for collaboration, clinical trials and other advantages of critical mass in a medical practice, university and research setting.

Another speaker, Thomas G. Osha, managing director of innovation and economic development with Wexford Science and Technology which is a real estate investment company that helps develop research and innovation centers, said Austin has some distinct advantages as well as risks.

Much of the funding for medical research, Osha said, has come from the National Institutes of Health and NIH funding is being significantly reduced. At the same time, research and development costs are skyrocketing, making medical research more exclusive. In addition, he said, a lot of people believe we’re creeping up on a new tech bubble “We’ve drifted from the lean startup model and are chasing ever sillier return models.” Moreover, he said, Austin does not have the talent pool yet to support the opportunity in life sciences and medical research.

Each of those situations, he said, presents an opportunity for Austin to differentiate itself.

“You have phenomenal things happening in music, art, culture, the innovation zone should be the thing that stitches all of those things together.” Austin needs to approach the innovation zone in a way that’s exclusively Austin, he said, including “open, thoughtful, creative, inclusive.” Other medical research and life sciences organizations are replacing NIH money with Department of Defense and Homeland Security money, he said. Startups in this space often require an investment of at least $10 million, which generally means the company gets pulled to one of the coasts where there is not only funding but access to institutions and opportunities for clinical trials. The creation of the innovation center, combined with the attractive Austin lifestyle might be able to counter that. People talk a lot about Boulder The lifestyle in Austin, plus the power of proximity can create an advantage that Silicon Valley lacks and Cambridge, Massachusetts is “losing a little bit,” Osha said.

“People always talk about Boulder and how they have five strong clusters. But those clusters never talk to each other. Cross pollination is the way to move forward.”

Hatching Thunder Lizards from Radioactive Eggs in Austin

Founder of Silicon Hills News

Godzilla Movie Photo: Classic Media

Godzilla Movie Photo: Classic Media

Can Austin produce a thunder lizard, a $100 billion tech startup?

Mike Maples Jr., managing partner of Floodgate Ventures in Palo Alto, thinks so. He wants Austin to hatch what he calls a thunder lizard in the next 10 years.

Bob Metcalfe, professor of innovation at the University of Texas at Austin, creator of Ethernet and founder of 3Com, quizzed Maples about thunder lizards and Austin’s entrepreneurial ecosystem, during a fireside chat at the Austin Chamber of Commerce’s A-List awards event Wednesday night.

“The metaphor comes from Godzilla,” Maples said. “Godzilla was half radioactive from atomic eggs and swam across the ocean and emerged with an attitude and began destroying things breathing fire on things, swiping buildings, eating on cars and trains like they were sausage links and that always just struck me as the right metaphor for a startup.”

“A startup that is great should try to be a thunder lizard,” Maples said. “It should be an attacker, not a defender. It should be adaptive.’’

Google and Microsoft are thunder lizards and Twitter is a thunder lizard in the making, Maples said.

Metcalfe asked him if there are any thunder lizards in Austin.

Maples said at times Dell has encroached on that title, but he said there’s an opportunity for more here.

What does Austin have to do to get more? Metcalfe asked.

“I’ve surveyed the infrastructure pretty systematically and I think we’re doing really well – we’re firing on all cylinders as I’m fond of saying,” Metcalfe said. “So what do we have to do differently to get some thunder lizards?”

First, Austin needs to believe it can happen, Maples said. He first mentioned the idea of creating a thunder lizard a year ago at the Austin Technology Council’s CEO summit.

“My manifesto is Austin creates a $100 billion exit in the next 10 years,” Maples said. “Some people would say $100 billion you’re smoking weed, that’s crazy.”

But Google is worth more than $300 billion, Maples said. Facebook is worth more than $150 billion, he said. Cisco and Microsoft and Apple, were worth more than $500 billion each at one time, he said.

“A lot of people I talk to in Austin don’t really believe it can happen yet,” Maples said. “In order to have $100 billion outcome, you have to be willing to try to go after the exponential game-changing ideas. And we need to have a community that supports that. We need to have a community that doesn’t call those people crazy and whacky and stupid but sort of roots them on and cheers them on.”

Silicon Valley knows it can do it because it has Google, a thunder lizard, but Austin doesn’t have one, apparently, Metcalfe said.

“So how do we get to believe we can?” Metcalfe asked.

Maples said he doesn’t have the answer. But he looks for change events that are even bigger than the company, Maples said. For example, Microsoft was started in the era of the microprocessor and Bill Gates envisioned that hardware would be a commodity and software would be the rare, valuable resource, Maples said.

“Most of the startups I’ve seen that have that potential to be super huge they find some tectonic shift in the technology landscape that’s bigger than any one company,” Maples said.

Then the entrepreneur has some proprietary insight and then they go build a company around that, he said.

Maples invested early in Twitter and it’s evolving to become a thunder lizard. Some of the ideas sound kind of crazy early on, Maples said.

The founders of Twitter were either going to call it Voicemail 2.0 or Twitter, Maples said. The founders explained that Twitter didn’t have a roadmap or revenue model but that it was a micro-blogging service that let people say what they were doing in 140 characters or less. Yet Jack Dorsey and Evan Williams were able to explain the potential that blogging and self-expression is a big idea and that they expected millions of people to use the platform.

To create a thunder lizard, an entrepreneur has to have “a non-consensus but correct view of technology transformation,” Maples said.

IMG_3058Maples looks for an “entrepreneur who is such an authentic match to a technology change it’s almost like they couldn’t do any business but that business. Too many people when they start a company are just doing a startup. They are not doing the kind of startup that could be their life’s work.”

For example, Ethernet was Metcalfe’s life work so it made sense for him to found 3Com, Maples said. He was moved to start something because he had fundamental insight the rest of the world didn’t see, he said.

“I used to say the answer is Ethernet, what is the question?” Metcalfe said.

Metcalfe asked Maples if Austin’s thunder lizard might crop up out of the new Dell Medical School at UT.

The potential areas of “atomic eggs” or radioactive eggs to hatch the thunder lizards in Austin are from the new medical center or from Google’s super fast Internet broadband network, Maples said.

One area that could possibly create a thunder lizard is in the area of genetic engineering, Maples said.

The question is when will someone drop out of UT to create the next thunder lizard, he said.

Metcalfe said he didn’t encourage people to drop out of UT and that he finished his undergraduate degree at MIT and graduate degree at Harvard and was still able to create a game changing technology and company.

Going back to the topic of thunder lizards, again Metcalfe asked how does Austin encourage them.

“In Austin, we continue to up our game, we continue to add fuel to the fire, we keep adding cinders to the fire,” Maples said. “I would like to see the belief we can create a $100 billion outcome become more mainstream. I would like to see us do things as a community to encourage that outcome.”

Maples said he will come to Austin more often to work with Metcalfe on incubating “radio active eggs.”

The talk ended with Maples, who got choked up recalling being in high school and reading about Metcalfe and his Ethernet invention, told Metcalfe he just wanted to thank him.

“Well you’re welcome,” Metcalfe said. “And that’s sort of the difference between you and me because I can’t remember when I was in high school.”

Bob Metcalfe, professor of innovation at UT, Ethernet inventor and 3Com founder with Mike Maples Jr., managing partner of Floodgate Ventures. Photo courtesy of Bob Metcalfe.

Bob Metcalfe, professor of innovation at UT, Ethernet inventor and 3Com founder with Mike Maples Jr., managing partner of Floodgate Ventures. Photo courtesy of Bob Metcalfe.

Austin Chamber Names 12 Startups to its Austin A-List for 2014

Founder of Silicon Hills News

BnEfhvbCEAAFIPpThe Austin Chamber of Commerce Wednesday night named 12 companies to its A-List of Startups for 2014.

In the “Emerging” category, for companies that have raised less than $1 million, the winners were Datical, Compare Metrics, Embrace, TeVido, TrustRadius and Spot on Sciences.

“You look at the companies that won last year and this year, it’s a great honor to be part of that group, because they are next generation of startups that are pushing us forward,” said Bart Bohn, founder of Embrace, customer relationship management software.

“It’s such a strong entrepreneurial business environment in Austin and it’s such an honor to be part of it,” said Jeanette Hill, CEO of Spot On Sciences, the maker of HemaSpot, a medical device that allows for remote blood sampling.

“It really means that all your hard work paid off. People see that what you’re doing is exciting and innovative and game changing and Austin is the place to be game changing,” said Laura Bosworth, CEO and co-founder of TeVido BioDevices, which uses 3-D printing technology to reconstruct and print breast tissue.

In the “Growth” category, for startups that have raised more than $1 million, but less than $10 million, the winners included Umbel, Square Root, Set.fm and TurnKey Vacation Rentals.

And in the “Scale” category, for companies that have raised more than $10 million, the winners were Novati and Chaotic Moon.

More than 250 startups applied for the Austin A-List awards, a 65 percent increase in participation from last year’s list, said Michele Skelding, senior vice president of global technology and innovation for the Greater Austin Chamber of Commerce.

BnE3GWTIYAES3kqSkelding and Hugh Forrest, executive director of South by Southwest Interactive, announced the winners at the inaugural State of Innovation event at the ACL Live at the Moody Theatre. Several hundred people attended the event which featured fireside chats by Laura Kilcrease, managing director of Triton Ventures, and Gene Austin, CEO of Bazaarvoice and Bob Metcalfe, professor of innovation at the University of Texas, inventor of Ethernet and co-founder of 3Com, and Mike Maples Jr., partner at Floodgate Ventures.

In addition, Mayor Lee Leffingwell proclaimed May 7th as “Austin Innovation Day.” He also discussed the city forming an “Innovation District” around the Dell Medical School. And Thomas G. Osha, managing director of Innovation and Economic Development at the Wexford Science and Technology, gave a talk about the development of Innovation Zones.

Austin Entrepreneurs Advocate for Immigration Reform

Founder of Silicon Hills News


Immigration laws haven’t kept pace with the digital economy, said Burnie Burns, founder of Austin-based Rooster Teeth.

Burns spoke on a panel of entrepreneurs promoting immigration reform Tuesday night at Techstars’ offices in downtown Austin. Erika Sumner, co-founder of Social Good TV, moderated the event.

The other panelists included Anurag Kumar, CEO of iTexico, a web and mobile app development company and Kristel Viidek and Marko Kruustuk, co-founders of Testlio, a mobile app testing service.

FWD.us and Partnership for a New American Economy are hosting events in nine cities in two weeks with the goal of accelerating immigration reform.

The Austin event attracted more than 50 people for a two-hour discussion featuring two panels.

The entrepreneurs took to the stage first. In 2004, Burns founded Rooster Teeth, which has the fourth most watched YouTube channel in the world with 5 billion views. He discussed his problems getting visas for immigrants to work for his company.

Burns ran into a lot of trouble when he tried to bring, Gavin Free, 18, from the United Kingdom to work for him.

Free is an expert on slow motion video and he’s a viral Internet hit, Burns said. Free created a video of him jumping on a six-foot water balloon in his backyard in slow motion, which has more than 50 million views on YouTube.

icode-28percentBut the U.S. government issues only 85,000 H-1B high-skilled worker visas each year. And the annual quota is met every year within the first week of April; five business days after the filing period opens.

“We had to go through all these processes to get him to qualify for a visa,” Burns said. Free’s age and educational level proved to be big barriers to overcome to qualify for a visa for workers of extraordinary ability, Burns said. He also had to have several letters written to immigration officials on his behalf.

In 2010, Rooster Teeth had to educate the U.S. Department of Labor about what YouTube was and why it was an important platform, Burns said. And then they had to prove why Free was an important extraordinary talent in this new industry. Rooster Teeth can employ contractors overseas in the U.K. and pay them to upload videos to from there, Burns said. But the U.S. doesn’t benefit from Rooster Teeth sending money to them aboard.

“My channel can be global but my company really can’t,” Burns said.

Immigration reform needs to address emerging technologies and ways to get talent to the U.S. to fuel those industries, Burns said.

In the Austin-Round Rock-San Marcos metro area, companies filed requests for 3,087 H-1B visas in 2010-2011, according to FWD.us. They paid a minimum of $1,575 for each H-1B application.

The founders of Testlio, Viidik and Kruustuk from Estonia might have to leave the country to grow their startup. The two launched their company in London and moved to Austin to participate in the Techstars program. They would like to stay here but they are having trouble getting visas. They may have to move their company back to London.

Another panelist, Kumar, founder of iTexico, immigrated to the United States at the age of 21 with no money, no family and no friends. Thanks to the immigration policy of the 1980s, he was able to get his green card and stay and start his first company when he was 25.

“I wonder what if the green card processing took six years, seven years or ten years like it does now where would I be right now? I probably would have had to do something else,” Kumar said.

Last week, the government of Mexico honored his company, iTexico, an Austin-based mobile and Web development company, with the 2014 National Entrepreneurship Award in the small business category.

“Talent is everything,” Kumar said.

And U.S. companies are in a global competition to attract the best talent to fuel growth in their businesses and the economy.

BmWSEXBCEAAbD0e-1Yet a mismatch between job openings in the Science, Technology, Engineering and Math fields and the current workforce in Austin exists, said Michelle Skelding, vice president of technology for the Austin Chamber of Commerce.

Skelding spoke on a second panel of experts which included John Holmes, vice president of legal at Freescale Semiconductor, Peter French, president of Café Commerce in San Antonio and Ramey Ko, attorney with Jung Ko PLLC.

Currently Austin has 8,000 job openings, as of March 2014, for computer science and math jobs, Skelding said. And there are 29,000 net job openings beyond that, she said. Austin has an unemployment rate of 4.5 percent right now. So there’s a gap in available talent and jobs.

Austin universities graduate 3,000 people in the STEM fields every year, so there’s a huge need and gap in the talent pool, Skelding said.

“We need to look internationally to fill those jobs and we’re not going to displace anyone in the process,” Skelding said.

For every H1-B visa filled there’s a positive correlation with job creation with 7.5 jobs created, Skelding said.

Freescale Semiconductor has 4,500 employees in Austin and hired 115 people in Austin last year.

“Eighty percent of the folks we are hiring require immigration assistance,” Holmes said.

Freescale currently has 250 employees on H1-B visas, he said.

“The wait for those folks, I think for us is four to eight years,” Holmes said.

The worst day for the UPS man in Austin isn’t Christmas but the H1-B visa deadline day, Holmes said. In the “bizarre lottery system” for H1-B Visas this year, Freescale got 60 H1-B Visas out of the 120 applications, he said.

“Freescale would like to see the H1-B visa cap raised dramatically or eliminated,” Holmes said.

Freescale also supports the right to work initiative which allows a graduate of an accredited U.S. university with a master’s degree or higher in a STEM field to automatically get a visa.

Small businesses and startups aren’t participating in the H1-B Visa process, said Peter French, president of Café Commerce in San Antonio. The process needs to be fixed, he said.

Some of the programs to obtain visas for immigrants are underutilized, French said. To find a solution, businesses need to think more creatively about how to keep immigrants in the U.S. working, French said. Research universities have an exemption, under the American Competitiveness Act for the 21st Century, for the H1-B cap, he said.

“We can do it with some of the tools we already have,” French said.

“We’re going to find a way,” he said. “The entrepreneurs are going to figure it out.”

Immigration reform legislation has been stalled in Congress, but the issue should be addressed again this fall, said Ko. The tech community from July to November should send letters, make calls and email Congress members in favor of immigration reform, he said.

The Partnership for a New American Economy is asking people to visit pnae.us/eletter to pledge support.


A Collaborative Center for Tech Entrepreneurs Launches in Austin

Josh Baer introduces a new coworking and collaboration space downtown

A groovy new space in a downtown Austin high-rise offers tech entrepreneurs a place to develop startups.
It’s part of the Austin TechLive initiative by the Austin Chamber to create a tech-focused coworking site. Capital Factory will oversee the 22,000 square foot space on the 16th floor of Austin Centre at 701 Brazos Street. The wide-open floor offers spectacular panoramic city views. It’s furnished with Herman Miller desks and chairs and even has a full cafeteria. The workspace should appeal to creative people who like bright, expansive and beautiful office space. Smiley Media formerly occupied the offices.
“This is confirmation that coworking has moved beyond the emerging stage and is here to stay,” said Liz Elam who runs Link Coworking in Austin. She also organizes the Global Coworking Unconference Conference.
Coworking spaces provide workers with shared desks, conference rooms and other work areas. The number of co-working spaces has nearly doubled each year since 2006 to 1,300 worldwide in 2011 and projected to increase to 2,150 this year, according to Deskmag, which follows the industry.
The Capital Factory coworking site already has 60 desks filled and a waiting list from entrepreneurs wanting to rent a desk there, said Josh Baer, managing director of the Capital Factory, an Austin-based accelerator for tech startups. He referred to the coworking site as the “community entrepreneurial center of gravity.” A desk at the coworking center costs $750 a month and a community membership, which allows a person to work in the common areas, costs $150 a month. The site provides round the clock access everyday to members.
The Austin Chamber of Commerce selected the Capital Factory as its strategic partner for Austin TechLive. A few companies including Baer’s startup, OtherInBox, which Return Path acquired earlier this year, and WP Engine are already moving into the space. It will be fully launched within a few months.
In addition to the Capital Factory, the University of Texas at Austin and the General Assembly of New York are helping out with the new center. The General Assembly will offer certified educational programs at Austin TechLive.
During a press conference Thursday morning, Baer talked about the need to create “healthy vibrant strong companies” in Austin. And said there’s been a lot of talk lately about Austin versus Silicon Valley and other places. By creating a dense tech environment downtown, the new coworking center can foster interaction, connections and collaboration among the city’s high tech workforce, Baer said. That will lead to new companies and more high-tech jobs, he said. His goal is to have 250 companies occupy the space.
The other companies moving into the Capital Factory coworking space include Swoosh Traffic, Agent Pronto, Tweet.TV and Swimtopia.
The Capital Factory coworking space will also be the site of tech events, meetups and training, Baer said. The goal is to bring together tech events that happen all over the city into the central coworking site, he said. For example, Capital Factory used to host Austin on Rails but it got too big and moved to a bar. He plans to host that again in the new center.
The idea of the central coworking space focused on the tech sector is similar to an initiative launched last November in San Antonio called Geekdom. It’s a collaborative workspace with more than 300 community members and it recently expanded to another floor at the downtown Weston Centre. But while Geekdom is run as a nonprofit organization, the Capital Factory coworking space is a business, Baer said. A group of successful Austin entrepreneurs put up the money to launch the site. They include Baer, Bill Boebel, Andrew Busey, Ross Buhrdorf and Dan Graham.
“Nobody is trying to make a lot of money off this,” Baer said. “The people who did this really want to help entrepreneurs in Austin.”
“The mission is to create this great entrepreneurial center downtown,” said Bryan Jones, chair of the Austin Chamber’s Technology Partnership.
In addition to launching the coworking space, the Chamber’s Tech Partnership is focused on creating 5,000 new technology jobs, up 5 percent from last year and to attract 50 new technology startups to the Austin region, including 10 at the new Capital Factory space. It also wants to recruit 15 new entrepreneurial companies to the Austin region.
One of the biggest challenges startup companies face is hiring great talent, Baer said. The Capital Factory coworking space will attract that talent and help the new startups grow, he said.
Chuck Gordon, cofounder of Sparefoot, a Capital Factory company from 2009, has seen firsthand how being in a shared workspace with other tech companies can help a startup grow to a large company.
“It’s possible. We did it,” said Gordon.
Sparefoot recently moved out of the Omni building to 5,600 square feet in a neighboring building. The company now has 45 employees.
“Tons of companies in San Francisco and New York go to incubators,” Gordon said. Those spaces serve as entrepreneurial ecosystems that strengthens the entire technology industry in those cities, he said.
“This is going to make it happen here,” he said. “The networking opportunities of getting a bunch of smart people in one space are incredible.”
Boebel, managing director of Capital Factory, will manage the new coworking space in partnership with Cospace, an Austin coworking site.
Capital Factory will leverage Cospace’s expertise for IT services, furniture, assigning workstations and all the nuts and bolts that go into running a coworking center, Boebel said.
“I’m mostly excited about working with the startups,” he said. One of the benefits of working at the site will be access to successful entrepreneurs like Boebel, who sold his e-mail hosting company to Rackspace. And Baer, who has founded and sold several startups.
“I wish there was a space like this when I started my company,” Boebel said. He founded what eventually came to be known as Webmail.Us in the basement of a townhouse in Blacksburg, Va.
“It’s nice to be around other entrepreneurs who are going through the same things,” Boebel said. “Friends and family don’t understand what it’s like to bootstrap a company.”
The coworking environment allows the startups to learn from each other’s mistakes and that can accelerate their progress, Boebel said.
Also, the space allows them to share resources, he said. Three companies might be able to hire one User Interface Designer, he said.
Boebel is also working on setting up a fund to provide access to seed stage investment for startup companies at Capital Factory.
Jason Cohen started Capital Factory with Baer in 2009. In surveys of the program participants, the entrepreneurs always reported access to mentoring and the close working proximity of the other startups as the top benefits of the program, Cohen said. The Capital Factory coworking space provides both, he said.
“It’s an insane space,” Cohen said. “It has just the right kind of attitude and energy for creative people.”
That helps WP Engine, a hosting service for 40,000 WordPress blogs, which has 15 Austin employees and 20 overall, Cohen said. He founded WP Engine a few years ago. It’s adding two new employees every month, Cohen said. The space will help in recruiting, he said. “Who wouldn’t want to work here?”

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