Tag: Graham Weston

Rackspace’s Chairman Invests Millions in its Stock

Graham-Weston-2Rackspace Chairman Graham Weston has been bullish on his company since he made his initial investment to found the hosting company in 1999.

And now, he’s investing even more in the San Antonio-based managed cloud company.

This week, Weston announced he has purchased $2.5 million or 58,400 shares of the company’s stock on the open market on Nov. 18th, according to documents filed with the U.S. Securities and Exchange Commission.

And Weston plans to buy $2.5 million more in the company’s stock during the next year.

“My willingness to invest in Rackspace expresses my belief in the company’s future. I believe we can be the trusted partner to the rising wave of businesses who need help managing their cloud,” Weston said in a news statement. “One reason for my belief is the strong traction that Rackspace has demonstrated. I’m also confident in the leadership of our new CEO, Taylor Rhodes, and in his commitment to delivering Fanatical Support to our customers.”

Rackspace’s shares, traded under the symbol RAX on the New York Stock Exchange, closed Friday at $44.92, up more than 1 percent. Its stock hit a new 52 week high, according to Tickerreport.com. Its 52 week low was $26.18.

Before the recent purchase, Weston held 13.2 percent of the company’s outstanding common stock.

TEDxSanAntonio Sparks a City of Ideas

Founder of Silicon Hills News

Graham Weston, chairman of Rackspace and Susan Price, founder of TEDxSanAntonio

Graham Weston, chairman of Rackspace and Susan Price, founder of TEDxSanAntonio

San Antonio has evolved into the City of Ideas, said Graham Weston, chairman of Rackspace.

“The whole genesis of TED is about sparking ideas and spreading ideas and that happens every year at TEDxSanAntonio,” Weston said

This is a culture Rackspace wants to be a part of, Weston said. Rackspace served as the main sponsor of the daylong TEDxSanAntonio event at its headquarters’ event center on Saturday.

“The speakers for TEDxSanAntonio share new ideas with us and also give us a glimpse of some of the cool stuff people are doing across the city that often is unknown,” Weston said. “Every year that I come to TEDxSanAntonio it makes me very proud of our city and our region about all of the interesting things that are happening here.”

This is the biggest TEDxSanAntonio ever, said Susan Price, the event’s organizer. The event, now in its fifth year, has a core organizing committee of seven people and 40 volunteers, Price said. While the first event held at Trinity University had just a few hundred people, this one attracted more than 650 people. TEDx is based on the TED conference, an annual event focused on spreading ideas about technology, entertainment and design, but TEDxSanAntonio is organized locally under a license from TED.

“We try to feature ideas that are springing up, and around and about San Antonio,” Price said. “We fly a few speakers in every year with ideas that are relevant to San Antonio.”

One of those speakers was Trevor Muir, a teacher at Kent Innovation High School in Grand Rapids, Michigan. He received a standing ovation following his talk on changing schools to an environment of engagement in which students tackle projects and solve problems in the real world.

His students learned about World War II by interviewing veterans in the community and creating film documentaries, which they later showed to the entire community. His students also created websites and projects for immigrants new to their area so they would know how to do simple things, most people take for granted, like take a public bus or turn on the lights.

Susan Price, founder of TEDxSanAntonio

Susan Price, founder of TEDxSanAntonio

This year’s TEDxSanAntonio theme, “Ideas in Action” means the community doesn’t just want to discuss ideas, but they want to put them into motion, Price said.
“We’re giving them a call to action,” she said.

Jorge Amodio, an engineer, attends TEDxSanAntonio every year.

“It’s always inspiring,” Amodio said. “It’s a great community to share what you know and to learn from others.”

The speakers evoke emotions from the audience ranging from laughter to tears. Molly Cox and Victor Landa served as the emcees for the event and provided light-hearted transitions between some difficult subjects.

Sarah-Jane Murray, a professor at Baylor University, opened TEDxSanAntonio with a talk on how people are hardwired for stories through neural coupling. She recalled a story from her childhood in Ireland about her Poodle, who yearned to be a sheepdog.

“If you tell a story well, and you’re not just talking about language, you’re causing your brain to fire on all of its cylinders,” Murray said.

The brain of someone listening to a great story mirrors the brain of the person telling the story, Murray said. Stories affect people because they alter their chemistry, she said. When a story is well told, two major chemicals are released into the brain like cortisol for stress and duress and oxytocin for empathy, Murray said.

“Stories are the great levelers of this world not because they eradicate our differences but because they transcend them,” Murray said.

People are 22 times more likely to remember a story than fact alone, she said.

That’s why people have to be careful about the stories they tell, Murray said.

“We need stories that inspire us to greatness,” she said.

Throughout the day, the TEDxSanAntonio speakers did just that.

John Lambert discussed lessons from improv and how the theater taught him how to deal with life’s unscripted twists, turns and tragedies like the death of his wife, Maria Ivania from cancer.

Leezia Dhalla told a story of her life as an undocumented American. She learned just before her 21st birthday that she didn’t have legal papers to stay in the U.S., where she had lived since the age of six. Her family moved from Canada.

Dhalla received a degree from Northwestern University and got a work permit in 2012 that allows her to stay in the U.S. for two more years.

“We try to stay positive but it’s hard to keep your head down and your chin up at the same time,” Dhalla said.

Today, 11 million people are living in the shadows with papers, Dhalla said. Half came here without authorization; the other half came here legally including Dhalla’s family. They waited for their applications for citizenship to process but a series of mistakes happened and the documents never got approved.

She’s hoping immigration reform will give her and her family an opportunity to legally stay in the U.S. permanently. She asked the audience to help make that a reality.

Kori Ashton, founder of WebTegrity, created a painting with the big, bold letters “Inspire,” on stage while she told stories about her family and her mother’s struggle and triumph over Polio. She encouraged the audience to live a great story and inspire someone.

Steve Vrooman, a professor of Communications Students at Texas Lutheran University, encouraged the audience to share more information about themselves with others. That creates a connection that is more than just transactional, he said.

Studies show on social media, followers of a person, brand or company, share just 3 percent to 15 percent of all the content posted. Vrooman contends if the content was about people and not information, they would share more.

“Share more,” he said.

Joshua Singer and Abhinav Suri, cofounders of Apps for Aptitude and School's Out Hackathon.

Joshua Singer and Abhinav Suri, cofounders of Apps for Aptitude and School’s Out Hackathon.

And Joshua Singer and Abhinav Suri, two high school seniors, encouraged the audience to hack or create something new. They want to create a hacker culture in San Antonio. They’ve launched a company, Apps for Aptitude to encourage others and they host an annual School’s Out Hackathon for high school students.

Luz Cristal Glangchai, an engineer, wants to encourage more girls to become engineers. She founded VentureLab in San Antonio. The nonprofit organization runs a series of programs geared at kids as young as five to high school age to get them interested in entrepreneurship and experiment in the science, technology, engineering and math fields. Three student-run companies from VentureLab have raised more than $240,000, according to Glangchai.


The Techstars Cloud Program Returns to San Antonio in 2015

Blake Yaeger

Blake Yaeger

The Techstars Cloud program launched in San Antonio in 2012 with 11 companies and the next year another 11 startups participated in the 2013 program.

But the program, launched by Graham Weston, CEO and Co-Founder of Rackspace at Geekdom, went on hiatus in 2013 when Jason Seats moved to Austin and launched the Techstars Austin program.

Now it’s back.

The Techstars Cloud program will return to San Antonio in 2015 and will be led by Blake Yeager, who served as a mentor to the first class when he worked for HP Cloud Services. He later quit to join ZeroVM, a 2013 Techstars Cloud company acquired by Rackspace.

“I am extremely excited to be taking over as the Managing Director for the Cloud program,” Yeager wrote in a blog post on the Techstars website.

“The roster of alumni from the first two Techstars Cloud programs includes some great companies and even better founders,” Yeager wrote. “I don’t want to name names, because I know I will leave someone out, but these companies have raised serious money and are doing amazing things. I am excited by the opportunity to continue to build on the legacy that Jason and these first two classes have pioneered.”

“The next Techstars Cloud program will be kicking off in San Antonio in early 2015 with applications opening up this Fall, according to Yeager.

Rackspace Entertains Buyout Offers

imgres-21-300x84Rackspace Hosting may be sold.
The San Antonio-based company hired Morgan Stanley to evaluate potential partnerships and acquisitions.
“In recent months, Rackspace has been approached by multiple parties who have expressed interest in exploring a strategic relationship with Rackspace, ranging from partnership to acquisition,” according to a statement filed with the Securities and Exchange Commission last week.
“Our board decided to hire Morgan Stanley to evaluate the inbound strategic proposals and to explore other alternatives which could advance Rackspace’s long-term strategy,” Rackspace wrote. “No decision has been made and there can be no assurance that the Board’s review process will result in any partnership or transaction being entered into or consummated.”
Rackspace, which provides web hosting and open cloud services, reported it did not intend to comment on the situation until its board approves a specific partnership or transaction. The company has faced increasing competition from giants Google and Amazon, which provide cloud hosting services.
In February, Lanham Napier, 43, retired as Rackspace’s chief executive officer. He had led the company since 2000 from a small startup to a large publicly traded company with more than 5,000 employees worldwide and more than $1.5 billion in revenue.
A year earlier, Lew Moorman, Rackspace’s president, left the company because of health issues with a family member.
Since February, Graham Weston, Rackspace’s chairman and co-founder, has served as its CEO.
Rackspace, founded in 1998, is the largest technology company in San Antonio with more than 3,000 employees occupying the old Windsor Park Mall in Northeast San Antonio. It also has an office in Austin and has international offices in London and Hong Kong.
Rackspace’s stock, traded under the symbol RAX on the New York Stock Exchange, soared on the news of the possible sale last week. Rackspace’s stock closed at $36.12 on Friday, up nearly 18 percent. The company’s stock traded as low as $26 and as high as $54 in the last 52 weeks. The stock traded as high as $81 per share in January of 2013, according to Forbes.

Students Showcase Engineering Skills at FIRST Robotics Super Regional Championship

Founder of Silicon Hills News

Dean Kamen, founder of FIRST Robotics, at Alamo FIRST Regional Robotics Championship

Dean Kamen, founder of FIRST Robotics, at Alamo FIRST Regional Robotics Championship

Want to see some of the best and brightest young minds in our country in action?
Go to the Henry B. Gonzalez Convention Center Saturday for the finals of the FIRST Robotics Super Regional Championship, a three-day robotics competition with more than 3,500 students and more than 200 teams from across the U.S. and Canada.
Rackspace is sponsoring the event.
The FIRST programs are important because they are creating the STEM workers the U.S. needs so much, said Dean Kamen, inventor and founder of FIRST Robotics. He attended the event Friday.
“Everybody has finally figured out that the future of our country, our competitiveness, our ability to deal with problems like healthcare, environment and energy, requires way more kids to get involved in science and technology and inventing as a career,” Kamen said.
IMG_2766Kids need more role models so they can envision themselves as scientists. “Particularly, young women don’t think about it as a career because they don’t see women in science and technology on TV,” Kamen said.
There are very few jobs in the world of sports and entertainment compared to the millions of jobs available in technology, he said.
Kamen founded FIRST, which means For Inspiration and Recognition of Science and Technology, 25 years ago to provide four hands-on Science, Technology, Engineering and Math focused programs for students in grades kindergarten through high school. His goal is to make FIRST available in every school in the country.
“The great thing about FIRST is not that we teach anything, that’s what teachers do, that’s what schools do,” Kamen said. “What we do is create a whole movement, a generation of kids excited about participating to learn, to become part of the tech community.”
FIRST also appeals to women and minorities, Kamen said. Through the robotics program he’s hoping to reach students everywhere, he said.
“So that over the next ten years I hope through FIRST the U.S. will re-emerge as the country in this world that has the most and the best scientists, technologists, engineers, inventors because that’s what raises the bar of every generation, compared to the last one.,” he said.
Every field that has seen improvement, it’s because of technology, Kamen said.
“We used to pretty much be the only country in the world focused on technology,” Kamen said. “But now the rest of the world has figured out that the key to the future is tech and their kids are focused like laser beams, which we invented, on technology and our kids are distracted by things that are amusing and fun.”
The U.S. focuses too much on sports and entertainment, he said.
“I think they are great too. But they are a pastime,” he said.
The kids in this generation have got to start with technology early at the FIRST Lego League competitions and stick with it and develop their skills.
“They’ve got to come out ready to be the best in the world.” Kamen said.
IMG_2778Rackspace CEO Graham Weston also spoke to students about the importance of STEM education at the opening ceremony on Friday.
“We think FIRST robotics is the cornerstone event for getting future geeks and getting more kids into science and technology,” Weston said. The FIRST programs develop critical thinking and problem solving at a young age, he said.
“It’s much better to start tackling these engineering challenges when you’re young,” Weston said. “When you’re mind is still open and ready to tackle big questions. This is a competition but it is one of the most intellectual and toughest troubleshooting and engineering competitions in the world. It takes real skill to win these prizes.”
Rackspace also considers FIRST to be a great place to “hire future Rackers,” Weston said.
Sean McDonald, member of the Purple Gear team from North Carolina, holding up one of the team's patents

Sean McDonald, member of the Purple Gears team from North Carolina, holding up one of the team’s patents

In the mechanics pits before the competition, Sean McDonald, programmer for Purple Gears from Raleigh, North Carolina, showed off his team’s two pending patents. And they’ve got another one in process, said Sean Greene, the team’s modeler.
“We’ve got a patent on the wheel,” Greene said. “So we’ve reinvented the wheel.”
Their robot was competing in the FIRST Robotics Tech Challenge in the “Block Party” game in which their robot has to place plastic blocks into goals in an arena competition. The teams also can raise their team alliance flag up a pole and pull their robots up on a bar to earn extra points.
“We’re learning a lot about engineering in this process,” said Jessica Bayeh, junior at Cinco Ranch High School in Katy. She’s a member of Cryptonite 624. All of the team members wore spiked up green hair. Cryptonite’s robot, Sidewinder, is competing in the FIRST Robotics Competition game Aerial Assist, in which large robots must score as many balls in goals during a two minute and 30 second match.
Libby Perego, freshman, and Jessica Bayeh, junior at Cinco Ranch High School in Katy.

Libby Perego, freshman, and Jessica Bayeh, junior at Cinco Ranch High School in Katy.

Bayeh attended a special lunch to honor women in technology on Friday. She wants to pursue a career in engineering.
Her teammate, Libby Perego, a freshman, said she loves engineering. The robotics program has taken most of her time after school and on the weekends, but it’s been worth it, she said.
“I’m really interested in engineering in general,” Perego said.
Susan Pope, assistant director in the department of space science at the Southwest Research Institute in San Antonio, gave the keynote address during the Women in Technology luncheon. More than 200 students and mentors attended.

San Antonio MX Challenge Seeks to Solve Problems and Realize Dreams

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IMG_2424The XPRIZE Foundation organized a four-day adventure trip to visit tech companies in California last February.
XPRIZE Founder Dr. Peter Diamandis wanted to showcase space and ocean innovation to a select group of entrepreneurs.
Part of the event involved a Zero G flight in which the passengers float about weightless for several minutes. That’s where software entrepreneur Christian Cotichini literally crashed into Graham Weston, chairman and co-founder of Rackspace, during the flight.
When the flight ended, Cotichini, Diamandis and Weston met and dreamed up the idea for HeroX, a smaller, community-oriented version of the XPRIZE, which seeks to solve the world’s big challenges by creating and managing large-scale incentivized prizes focused on learning, exploration, energy & environment, global development and life sciences.
On Thursday night at an invitation-only event on the fourth floor of the Rio Plaza on the Riverwalk in downtown San Antonio, the first HeroX challenge officially launched. It’s called the San Antonio MX Challenge, a two-year $500,000 prize to foster entrepreneurship between San Antonio and Mexico.

The team behind the San Antonio MX Challenge: Tito Salas, Emily Fowler, Christian Cotichini, Lorenzo Gomez and Graham Weston

The team behind the San Antonio MX Challenge: Tito Salas, Emily Fowler, Christian Cotichini, Lorenzo Gomez and Graham Weston

“XPRIZE was a grand idea for very lofty things at an ivory tower aspiration level,” Weston said. “What I love about HeroX is it takes what we learned about offering big grand prizes and it brings it down to a city-level. We are not going to Washington, D.C. to change the world; we can change it in our city. The most important unit of economic action is the city. The HeroX prize is about bringing that innovation and technology to the city level.”
San Antonio has the opportunity to be the gateway to America for the entrepreneurs in Mexico and the San Antonio MX Challenge will serve as that catalyst to make it happen, Weston said.
San Antonio has so much of the infrastructure to offer entrepreneurs in the startup world, Weston said.
“Mexican entrepreneurs can come to America to launch their products and then go back to Mexico to build their companies,” Weston said.
San Antonio is the first city to launch a HeroX prize, but soon it will be everywhere, Weston said.
“HeroX is going to be in every city around the world from London to Lubbock,” he said.
HeroX democratizes innovation, Cotichini said, co-founder and CEO of HeroX. He sold his software company, Make Technologies, based in Vancouver, to Dell in 2011. He soon became immersed in studying the world’s problems. It almost made him become depressed until he read Diamandis’ book Abundance, which paints an optimistic view of the future. Cotichini then knew he wanted to be part of making that vision become a reality.
“This is the very first HeroX branded challenge,” Cotichini said. “The Internet is creating new models that allow us to be far more powerful as a species. These new models are going to change the world.”
Open innovation can change cities and companies. It’s a tool for anybody who needs innovation, he said.
HeroX is an online crowdsourcing platform that allows people to realize visions and live out dreams, said Emily Fowler, co-founder and vice president of possibilities for HeroX.
HeroX plans to launch hundreds of competitions worldwide.
Whereas the XPRIZE challenges offer prizes from $10 million to $30 million and last from five to eight years, the HeroX challenges offer prizes of $10,000 to millions and last from six months to a few years, Fowler said. Anyone can take on a challenge or offer one up, she said.
“We’re stimulating a new generation of entrepreneurs and it’s really interesting,” Cotichini said. “The millennial generation really gets the power of crowdsourcing and collaboration.”
One of those is Tito Salas, project manager of San Antonio MX Prize. He was born in Northern Mexico and graduated from the University of Texas with a double major in marketing and business management.
“The San Antonio MX Challenge wants to make it easy for Mexican entrepreneurs to move to San Antonio to launch their business,” Salas said. His role is to help provide Mexican entrepreneurs with Visas, mentors, business services, access to capital and more.
“We’re also looking to get together all of the entrepreneurs from Mexico in San Antonio and bring them to Geekdom to make something bigger,” Salas said.
Walter Teele, co-founder of ParLevel Systems .

Walter Teele, co-founder of ParLevel Systems .

Walter Teele and Luis Pablo Gonzalez are both from Mexico. They came to the U.S. to go to college. They graduated recently and launched ParLevel Systems, a company that connects vending machines to the Internet to monitor them remotely. ParLevel last year graduated from the Techstars incubator program. Teele and Gonzalez are building their company at Geekdom.
Teele sees the San Antonio MX Challenge as a way to fill a need that exists in helping Mexican startups.
“I think it’s going to give entrepreneurs in Mexico awareness that there are people here that want to support them and help them realize their dreams,” Teele said. “We don’t have a startup culture in Mexico. You have it here.”
Mexican entrepreneurs can benefit from the infrastructure that already exists in San Antonio, Teele said.
So far three people have expressed interest in registering for the San Antonio MX Challenge, said Lorenzo Gomez, director of Geekdom. The organization provides the criteria a company needs to meet to win the prize, but they don’t provide any seed stage capital or pre-determined solutions, Gomez said. Early registration ends on Aug. 25 and final registration is Jan. 14, 2015.
“The beauty of the prize models is it’s always the person that didn’t know they could win it that wins it,” Gomez said. “It’s probably going to be someone you never thought or maybe it’s someone that was very obvious. That’s one of the exciting parts of the prize is to see who steps up to solve it. It might just be one person with a magic Rolodex that makes it happen.“

San Antonio MX Prize Officially Launches

Graham-WestonThe San Antonio MX Challenge has officially kicked off.
Silicon Hills News broke the story about the first local X-Prize challenge late last year when some members of the HeroX organization briefed the technology community about the contest at Geekdom.
Now the contest has officially launched at Geekdom, a collaborative co-working space in downtown San Antonio that serves as the catalyst for the local technology startup community.
The San Antonio MX Challenge seeks to foster greater collaboration between Mexico and San Antonio in the technology industry.
The prize is worth $500,000 and will be awarded to the individual, team or organization that creates a model to assist Mexican tech companies with opening offices in San Antonio.
“This challenge will be the catalyst between the San Antonio startup ecosystem and Mexican Entrepreneurs wishing to expand into the US,” Graham Weston, Co-founder & Chairman of Rackspace Hosting said in a news release. “We are already famous for this in San Antonio. Now we are going to show the rest of the world.”
The San Antonio Mx Challenge is the first to be launched through HeroX, a spinoff of XPRIZE, the world leader in incentivized prize competitions.
“I am proud to see the first competition launched on HeroX. It has been my dream for years to offer a platform that allows anyone to use incentive competitions to solve problems and drive innovation,” Dr. Peter Diamandis, Chairman & CEO of XPRIZE and Co-founder & Board Member of HeroX, said in a news release. “By bringing in solutions from anywhere, I’m convinced that competitions like this one will have a bright future both for social issues and for driving innovation faster than we can imagine.”
The criteria for winning the prize is listed on the San Antonio MX website. The challenge runs for 26 months and with early registration ending on Aug. 25th and final registration ending on Jan. 14, 2015.
A San Antonio MX Summit will also be held on Sept. 16, 2014.
The final winner will be announced on May 4, 2016.

Startup Grind Features Graham Weston of Rackspace

mqdefaultGraham Weston, co-founder and chairman of Rackspace Hosting, grew up in the greater San Antonio area.
At his first job, he worked in his dad’s cookie plant balancing the books from delivery drivers and occasionally packaging cookies. His dad owned Grandma’s Cookies and later sold the company to Frito Lay.
Weston’s first venture into entrepreneurship in grade school involved selling organic pork from his family’s ranch through advertisements proclaiming “Go Hog Wild” in the local newspaper. He also ran a photography business in high school.
In college, he would drive back and forth from Texas A&M in his VW Diesel Rabbit listening to get rich quick tapes in his cassette player.
His junior year at Texas A&M, Weston launched a successful real estate venture while going through college. He successfully protested his family’s property tax appraisal and then figured that there might be a business doing that for others. He founded a company that protested commercial property taxes.
Because of his property tax business, Weston was well positioned to see opportunities in real estate during the financial crisis of the late 1980s.
After school, Weston ended up buying one of the tallest buildings in downtown San Antonio, later named the Weston Centre at the age of 27. The building had fallen into foreclosure and then bankruptcy during the Savings and Loan Crisis of the late 1980s. He wanted to buy the KCI Tower, but wasn’t able to do it. Later the former National Bank of Commerce building came open. It was way more than Weston wanted to spend. But he raised more money and then bid against real estate mogul Sam Zell and won.
The Weston Centre later contained one of the first data centers for Rackspace. It housed some of the first websites on the Internet for YouTube and HotorNot and other Internet pioneers.
Rackspace, now a multi-billion dollar company, had a humble beginning.
Weston and his partner, Morris Miller, met three college students who bid to wire the Weston Centre with high-speed Internet access. The students didn’t get the contract, but Weston and Miller liked them. They asked them what else they were working on. That’s when Pat Condon, Dirk Elmendorf and Richard Yoo told them about their hosting business, which would later come to be known as Rackspace.
Weston recounted how they invested $1 million and in less than a year another company wanted to buy the business for $20 million. That deal fell through. But they knew they had a solid business, which was making money every month. They grew Rackspace by adding more servers and data centers and in 2001 they planned to take the company public, but the dot com bust occurred. They went through a few tough years, but they were able to persevere and succeed where many failed largely through Rackspace’s focus on providing “fanatical” customer support.
In 2008, Rackspace went public at $12 a share. Its stock closed Wednesday at $37 a share. The company has a market capitalization of more than $5 billion.
Today, Rackspace has more than 5,000 employees worldwide and is San Antonio’s largest high-tech employer with close to 3,000 employees in Central Texas. Rackspace also has an Austin office.

Rackspace expands its “Castle” headquarters

In 2007, Rackspace Hosting moved into the former Windsor Park Mall in Windcrest, a suburb of San Antonio.
Rackspace set up its main headquarters in the old Mervyn’s department store.
Now the global web hosting company has expanded further into the former mall’s food court and the Rackspace culture of fun continues to permeate the new space. Rackspace has added a two-story sleek steel tubular slide, along with colorful Gondolas, repurposed from the old and now defunct skyline ride at Brackenridge Park downtown.
Graham Weston, chairman of Rackspace, says the company has nearly 3,000 employees in San Antonio now. It’s also moving its employees from its former headquarters on Datapoint Drive. The mall headquarters is dubbed “The Castle” after the Britsh monarchy’s Windsor Castle.
Eventually Rackspace plans to convert the entire 1.2 million square foot mall into “Tech Town,” a vibrant technology campus complete with a park for outdoor recreation.
The video posted below was shot by a Racker a few days ago and posted on Youtube.

TechStars for a day at Geekdom

The TechStars Cloud could serve as a catalyst to ignite San Antonio’s startup technology community.
That’s because ten new startups will locate here for the 12-week program, which kicks off in January. Also, Nicole Glaros, TechStar managing director, will move here with her family. She will run the TechStars Cloud along with Jason Seats.
On Saturday, about 120 applicants, mentors, funders and others gathered at Rackspace’s new collaborative workspace downtown, called Geekdom. The 15,000 square foot offices on the 11th floor of the Weston Centre will host the TechStar Cloud companies.
At TechStars for a Day, applicants listened to speakers and panel discussions about what it’s like to be a TechStars entrepreneur. They also networked. The program ended at 4 p.m. but many stayed until past 6 p.m. to drink Dos Equis and Shiner beer and chat.
Seats ran the TechStars for a Day program. People sat in bright red, black and white stools and chairs or on large red bean bags in front of a giant screen on which Seats projected the images of Glaros and TechStars Founder David Cohen, both located in Denver, via Skype. Glaros is in the last trimester of her pregnancy and can’t travel right now. But she gave sage advice and insight into the program.
“TechStars’ secret sauce is its mentors,” Glaros said, which include some of the best and brightest minds nationwide, she said. “These mentors are giving freely of their time to make sure these companies get to the next level.”
Glaros told the room to “put down your smart phones and start talking” and to “participate actively” to get the most out of the day. She also told them to “nail your elevator pitch. It should be two sentences and less than 30 seconds.”
“Don’t hog too much of anyone’s time,” Glaros said. “Keep conversations to five minutes.”
And on that note, Glaros’ broadcast froze. Seats tried to fix the connection, which prompted Rackspace Chairman Graham Weston to say “This is the only production in town where the guy running the show is also the audio and visual guy.”
The lean production speaks to the culture of the TechStars startups to do as much as they can on strict budgets. But all of the TechStar Cloud winners get money. They receive $18,000 and access to a $100,000 loan. They must relocate to San Antonio for the duration of the program, which culminates in April with a TechStars Cloud Demo Day, in which they pitch their companies to investors. Weston, Rackspace Founders Pat Condon and Dirk Elmendorf have provided the funding for TechStars Cloud for the next four years.
Cohen, also spoke to the group via Skype because his mother was visiting him. TechStars has already funded 100 companies of which nine have been acquired by larger companies and 14 have failed. Collectively, the startups have raised $100 million. Anyone can apply for the program, including foreign companies, as long as they obtain Visas. The program is about “a community” of expertise around funding technology startups, Cohen said. Successful entrepreneurs serving as mentors, combined with alumni and TechStar’s network of 75 venture funds and angels nationwide help to make the program a success, Cohen said.
“A large focus is on quality,” Cohen said. TechStars provides 10 mentors to one company, he said.
“Our goal is to make every single company we fund successful,” Cohen said.
The two biggest startup killers are lack of a market for a product and issues with the team, Cohen said. TechStars mentors can help with those issues because they have faced them before in their own startups. To succeed, the companies need to “be the best in the world at what you do,” Cohen said.
Trying new things, failing and learning from the mistakes are some of the biggest advantages startups have over large and well funded companies, Cohen said.
In response to a question from the audience, Cohen said the biggest misconception about TechStars is it’s “only for very young companies or 21 year old white dudes.” The average age of a applicant is 31 and the age range of TechStar entrepreneurs is generally between 22 and 42 years old, although they’ve had older entrepreneurs, he said. Lots of companies are already established in a market but need help getting to the next level, Cohen said.
“Many companies come into TechStars with $1 million in revenue or $1 million in funding,” he said.
The inaugural TechStars Cloud program focuses on “companies that are building the cloud and not building on the cloud,” Cohen said. The cloud provides companies the ability to deliver computer services online.
After the overview of the program and advice from Cohen and Glaros, Seats introduced Weston to the crowd.
“The legacy of this man is going to be all about this town,” Seats said. “Graham Weston has done more for this town than any single man since Davy Crockett.”
Rackspace knows how to help startups because it was one not too long ago.
At a San Antonio hamburger joint in 1998, Weston and his partner Morris Miller met with three Trinity University students, Elmendorf, Condon and Richard Yoo, the founders of Rackspace, a startup hosting company. Rackspace has since evolved into a publicly traded hosting giant with $1 billion in revenue and nearly 4,000 employees. It is San Antonio’s largest technology company and Weston, Elmendorf and Condon want to create more like it.
Weston, referencing the book “The Coming Job’s War,” said most of this country’s net new jobs are produced by companies less than five years. Startups are fueling the country’s economic growth now and into the future, he said.
Then Weston gave a pitch on the city’s shining attributes that would have made the Greater San Antonio Chamber of Commerce proud. He mentioned the city’s low unemployment rate and huge medical and biotechnology industry, which is larger than the tourism industry. He touted the city’s rapidly developing urban life with thousands of apartments and condos being built in the downtown area and the city’s 68 miles of bike trails and 11,000 acres of urban parks. San Antonio has affordable housing, Weston said.
“You can buy a great house for less than $200,000,” he said.
San Antonio has the benefits of a large city, but the feel of a small town, Weston said. It’s kid friendly and a great place for families, he said. He also mentioned the city’s 31 higher education institutions and 100,000 students and its thriving arts community.
The city also has five Fortune 500 companies and a few large private companies like USAA and HEB. The startup community in San Antonio is poised to take off, Weston said.
“The founders and I are determined to create the next Rackspace over the next 20 years,” Weston said.
Weston then introduced Seats, who founded Slicehost, which Rackspace acquired in 2008. Rackspace’s cloud revenue has grown from zero to $200 million since that acquisition, Weston said. One of the requirements of the acquisition was that Seats move to San Antonio, Weston said.
“He’s the sort of entrepreneur San Antonio needs more of,” he said.
Seats has an office in Rackspace’s Geekdom and is looking forward to helping other entrepreneurs succeed with their ventures.
In addition to the entrepreneurs, Ned Hill, a venture capitalist with DFJ Mercury in Houston, gave the audience advice on how to seek funding. DFJ Mercury provides investments ranging from $50,000 to $1 million and has $110 million under management. One of DFJ Mercury’s hot portfolio companies is Austin-based Game Salad, which allows anyone to create a game for a variety of devices without knowing any coding.
Hill often gets asked “How do I choose the right VC?” He says “The right VCs are easy to spot. They are the ones writing the checks.”
He told the entrepreneurs to be flexible and persistent.
“You’ve got to be really good at telling your story,” he said. VCs invest in ideas that make sense and have value and in people who are passionate and know their market better than anyone, he said. “Vision, passion and drive,” Hill said. “Let it shine though. Don’t give up, make it happen.”
Deals can take only a few days or up to a year to get funded, he said. DFJ Mercury likes to own at least 20 percent of the company upon exiting the investment. VCs like to see the opportunity to earn ten times their investment when they give a company money, but most deals don’t earn anywhere near that, he said.
He advised the entrepreneurs to always be thinking about their exit strategy, especially if they receive funding.
“You can’t be in it for the lifestyle,” he said. “If you’re not able to sell a company in five to seven years then you’ve got a problem. Try to exit your business within five years.”
Elmendorf told the group that one of their greatest strengths was not knowing a lot.
“You literally have no idea how hard it is what you’re trying to do,” he said.
But that’s ok, and failing is also Ok, he said.
“As long as you keep doing this, it’s a learning process,” he said. “Failing is totally awesome as long as you don’t stop. If you stop and go get a real job, then you’re a failure.”
Starting a company is a “messy, hard endeavor,” Elmendorf said.
Startup companies need to know what problem they are trying to solve. It’s easy to get sidetracked, so entrepreneurs must constantly focus and ask themselves what they’re trying to work out, he said.
Entrepreneurs often play multiple roles in the organization early on, but they’ve got to spin those off and hire more people as the organization grows.
“I was HR because I had the most jobs,” Elmendorf said. “I slowly carved off the other things that weren’t related.”
Other panel discussions and talks featured former Techstars entrepreneurs, some who succeeded and others who did not.
Don’t be afraid to try something that doesn’t work out, said Josh Fraser, founder of EventVu and Torbit. He shut down EventVue after three years in February of 2010. EventVue created an app that allowed people to network at conferences. After closing up shop, he started getting calls from Facebook and other large companies that wanted to hire him. He also got calls from former investors who wanted to know what he was working on next. He’s now founder of Torbit.
Donning a brown stetson and cowboy boots, Lance Walley founder of Chargify and a TechStars Cloud mentor, talked about customer acquisition and pricing.
“Pick a niche and charge enough for your products,” he said. “If you know who your customer is, you can acquire them.”
In a later panel featuring other TechStar mentors, Rackspace Founder Condon said that narrowing the market and focusing the product on a specific customer is the best way to succeed.
“You have to say no to a lot of folks,” he said.

The application deadline for the Rackspace TechStars Cloud program is Monday, Nov. 7.

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