For years, the City of San Antonio has poured money into StarTech, formerly known as the San Antonio Technology Accelerator Initiative, to jumpstart the city’s high technology industry.
But now a new place, smack dab in the middle of downtown at the Weston Centre, might be able to do that with a collaborative workspace called Geekdom.
Geekdom is a nonprofit organization that will host technology workshops, lectures and events. It also provides office space to startups and desks to other technology workers through an application process. The center has an outreach effort to local high school and college students. Rackspace Chairman Graham Weston has put up the money to get the center established.
The desks will cost about $125 a month to rent and will come with a parking space. The community membership will cost around $50 and does not come with a dedicated space, Longo said. The offices will be open around the clock and members will have access codes and keys to get in to the building after hours.
“It’s like a gym membership for geeks,” he said.
Some people want to hang out all the time and write code, while others will want to just pop in and out from time to time, Longo said. The space hasn’t officially opened yet but one guy comes there every night after his regular job to code until midnight, he said.
Longo plans to have a strategic layout for assigning desks by putting “coders” next to “creatives” so that different groups get to network. And all residents (people who have desks) must give one hour of their time a week to help others, Longo said. Or they can put on a workshop once a month on programming languages, design or marketing. The idea is to create a collaborative environment, Longo said.
“Mentorship is the new classroom,” Longo said. The Geekdom is nice. The 11th floor of the Weston Centre formerly housed a law firm. Large windows provide a panoramic view of downtown. Red, black and white decor pay homage to Rackspace, which is a sponsor of the site. The 15,000 square foot space includes a pool table, some arcade video game machines, a kitchen area with a couple of refrigerators stocked with beer and soda.
In addition to the offices, Longo wants to set up rooms for people to make things, ranging from painting to soldering metal to sculpture, robotics, Legos and more. It’s all about the Maker’s movement, Longo said, fashioned after Maker Faire and Make Magazine, which encourages people to build stuff from scratch.
Two weeks ago, the Geekdom hosted its first big event Startup Ignite’s all night Hack-a-thon, which garnered praise from its participants. It plans do another Hack-a-Thon on Nov. 18th at Geekdom.
Starting this Friday, San Antonio’s latest three day startup weekend takes place there.
Entrepreneurs travelled to San Antonio from as far away as Toronto and the United Kingdom for a chance to become one of ten companies selected for the inaugural TechStars Cloud program. Here’s a few of them giving their elevator pitches at the TechStars for a Day program.
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.
The deadline to apply for the TechStars Cloud program is Monday.
But already the program has received several hundred applications for the inaugural TechStars program in San Antonio, said Jason Seats, managing director for TechStars Cloud and cofounder of Slicehost, which San Antonio-based Rackspace acquired.
On Friday night, several of those entrepreneurs met with Rackspace employees and tech company mentors at the Esquire Tavern on the Riverwalk downtown. Some of them travelled from Nashville, Portland, San Francisco, Madison, Wisc. and the United Kingdom.
On Saturday, they will gather on the 11th floor of the Weston Centre downtown from noon until five to hear speakers from Rackspace including one of the founders, Dirk Elmendorf and Rackspace Chairman Graham Weston along with speakers from TechStars.
Seats calls it “TechStars for a day.”
Elmendorf says Rackspace has remade the 11th floor of the Weston Centre into “Geekdom” with plenty of space for start up companies to work and mingle.
The 13-week TechStars Cloud program will start in January and culminate with the TechStars Demo Day in April in which the selected companies will pitch to potential investors. San Antonio is the fifth site for a TechStars program with other locations in Boston, Seattle, New York and Boulder, Colo.
“This location is all about cloud,” Seats said.
The cloud is like “the plumbing of the Internet,” Seats said. It’s the “heavy-lifting technology stuff that takes place behind the scene.”
Seats says the applicants for the TechStars Cloud program, so far, have more of a business to business focus, rather than a business to consumer focus. The applicants span a wide range of industries including music, hosting, infrastructure, video and gaming.
The interest in the program is high because not only do the 10 TechStars Cloud companies receive $18,000 in initial investment but they receive mentoring and access to a network of accomplished entrepreneurs and potential funders.
“It’s a fantastic time to start a new company,” Seats said. “If you’re a developer with a great startup idea, the economy is not hurting for you.”
Most of the TechStar cloud companies will come from outside of San Antonio, Seats said. He expects just one to two to be from this area. And he hopes that the injection of new talent into the San Antonio startup community will serve as a catalyst to spur further companies here. And he hopes some of the companies may decide to stay in San Antonio permanently upon completion of the program.
Seats has met with several of San Antonio’s angel investors and he says the community is starting to invest in technology and biotechnology companies locally.
“There is no scarcity of money in San Antonio,” Seats said. “There’s always money for good ideas and good people.”
Seats just returned from TechStars Demo Day in Seattle. He was especially impressed with Romotive, which creates a kit to turn an iPhone into a robot, Everymove, which works with companies to provide healthy incentives to their employees, Vizify, a social network data analysis site and GoChime, connecting brands with people on social media.
The organizers of TedxSanAntonio selected Gurvinder Pal “G.P.” Singh, founder of San Antonio-based Karta Technologies, as one of its speakers for next weekend’s event.
Singh now serves as CEO of Paras Capital Management. He will speak on his “Entrepreneurial Journey: From Expert Technologist to Servant Leader.”
Singh started Karta Technologies in his garage and sold it in 2007 to NCI, Inc., a government contractor in the information technology industry, for nearly $65 million.
Karta, a privately-held company, worked as a military and government contractor as well as for commercial customers. At the time of the sale, Karta had more than 400 employees and offices in 25 locations.
The second TEDxSanAntonio will be held at Trinity University’s Stieren Theatre on Oct. 15. Last year, about 250 people attended the inaugural TEDxSanAntonio event. TEDx is affiliated with the TED Conference held in Long Beach, Calif. every year. But the x stands for independently organized.
Last year’s event featured a speech by Rackspace Chairman Graham Weston on treating employees well.
“What we all want is to be valued members of a winning team on an inspiring mission,” Weston said.
In June of 2009, C4 Workspace opened in the King William neighborhood of South San Antonio.
This Friday, San Antonio’s only full-time dedicated co-working space closes.
The business, originally located at 108 King William, fell into debt and never gained enough customers to meet its expenses. C4 Workspace moved into cheaper headquarters this year at 1001 S. Alamo St., next to Madhatters Teahouse. But it still wasn’t able to make ends meet. Its expenses totaled $4,275 a month, but it had only $1,000 in revenue coming in, according to a post on the C4 Workspace Facebook page.
C4 Workspace catered to digital nomads like consultants, freelancers, home-based business owners and others. C4 Workspace rented desks by the day or month. It also offered a conference room. People would drop by to use a desk, plug-in and use the Wi-Fi, but they also met for coffee and networking.
Co-working is thriving in areas that have a robust entrepreneurial base. That does not bode well for San Antonio that it cannot provide community support for one dedicated co-working space. Meanwhile, Austin has more than a dozen co-working sites. In fact, The Atlantic, in a special labor day report, called freelancing the industrial revolution of our time. The nation has undergone a sea change in the way it does business from desk-bound office workers and factory workers to freelancers and telecommuting, according to its article.
Todd O’Neill and his wife Debbie Curtis poured their life’s savings into the business. Perla Escobar was also an investor. They worked hard to make a go of it. Unfortunately, the community support was not there in the end, according to O’Neill’s Facebook post.
TechCrunch reports that San Antonio-based Rackspace has teamed up with Boulder-based TechStars to bring its innovative startup program to San Antonio.
The program is called the TechStars Cloud. It’s a “themetically focused accelerator that will fund companies working exclusively on cloud computing, cloud infrastructure, and Openstack.”
The program’s mentors include Pat Condon, one of Rackspace’s founders, Jeff Lawson, founder and CEO of Twilio, Brad Feld of Foundry Group, George Karidis of SoftLayer, Rajat Bhargava, founder and CEO of StillSecure and others.
The program runs from January to April next year at Rackspace Hosting’s offices at the Weston Centre on the Riverwalk.
TechStars plans to select 10 companies which will receive seed funding, mentors and other perks. Jason Seats, the founder of Slicehost, which Rackspace acquired in 2008, and Nicole Glaros, managing director of TechStars, will head up the program.
Startups focused on building cloud-based infrastructure must apply to program by Oct. 21st.
A reality show based on TechStars debuts tonight on Bloomberg TV. Here’s a clip of the show, which provides an inside look at the TechStars startup process and some of its high-profile mentors.
The Geekdom is nice. The 11th floor of the Weston Centre formerly housed a law firm. Large windows provide a panoramic view of downtown. Red, black and white decor pay homage to Rackspace, which is a sponsor of the site. The 15,000 square foot space includes a pool table, some arcade video game machines, a kitchen area with a couple of refrigerators stocked with beer and soda.
