Austin is one of the top American cities that is growing as an important startup hub in the region. The city offers low taxes and affordable accommodation, the two very vital factors motivating a lot of people to move to Austin every year. This crowd of people moving here are not just entrepreneurs who aim to set up a new venture but also professionals who want to work in a startup to get the best learning experience from its dynamic environment. If you are one of them, here is a quick and definitive guide that can help you in understanding the city’s startup ecosystem before moving to Austin.
Ranked as the number one place for startups and entrepreneurs by CNBC, Austin provides low risk and growth-inducing opportunities for businesses of all scales. The city is an exciting alternative to Silicon Valley and has seen a number of success stories. 2017 saw an influx of funding of over $ 1.2 Billion into the small-scale ventures and many entrepreneurs moving to Austin to be a part of its startup wave.
This article intends to cover everything you need to know about the startup scene in the city before you move to Austin to discover and polish your entrepreneurial talents. There are close to 7 million people in Austin and the city has a GDP of $321 billion. The primary industries that are driving factors behind Austin’s steadily growing economy are advanced manufacturing, data management, clean technology, and space technology. Entrepreneurs moving to Austin can consider starting up in one of these prominent sectors as it already has a strong foundation and all the important resources in place.
What does Austin have in Store for Startups?
With close to 5,000 startups in its kitty and several important knowledge centers, Austin is growing incredibly as a startup hub. The ecosystem received $1.2 billion in 2017 in venture capital investments and is home to success stories of startups like Mozido, a digital payment solutions provider which raised $307 million so far.
Move to Austin for its Low Costs of Living and Working
One of the essential goals of any new startup or individual running one is to decrease the costs especially if you are bootstrapped. Austin provides a high quality of work life at meager costs. The money-saving feature is not just great for you on a professional front but also on the personal front. Get the best lifestyle without burning a hole in your pocket, right here in Austin. It is one of the best American state capitals to live in according to WalletHub and offers some of the most exceptional dining and entertainment opportunities.
Not just that, you don’t have to pay any federal income tax in Austin which can help you save a lot of money when setting up a startup.
Startups in Austin enjoy Advantages of the State Capital
Austin being the state capital of Texas offers a lot of advantages. Startups can be positive about getting a lot of offers for tying up with government agencies as the city is home to some of the important ones of the state. State capitals tend to create more job opportunities as compared to other cities so moving to Austin can be an excellent step for startup job seekers and startups alike.
Move to Austin for its Fantastic Pool of Talent
From an HR point of view, hunting for talent in Austin is convenient. The constant pool of professionals graduating out of the prestigious University of Texas and the other colleges can make it easier for you to set up a team for your firm. The startup jobs in Austin are ample , and the talent the city provides is quite balanced.
Startups in Austin have Access to the Right Guidance and Leadership
If you are looking for setting up a startup in a city where you can find adequate guidance and leadership from other startups and initiatives, Austin is the place you need to move to. One of the biggest startup stories to have come out of Austin is of Dell, but other than that the city is a host to small and big firms from diverse backgrounds. Dell has set up the High Performance Computing and AI Innovation Lab, an important resource for the startup community in Austin.
The city’s growth as a startup hub can be measured with the increasing number of accelerators and incubators in Austin. TechStars, Thinktiv, Incubation Station, and Capital Factory are some of the top ones in the city.
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The importance of a supportive community for growing your business can never be stressed on enough. A report of the startup Genome showed that the sense of community index in Austin was at 4.3, making it one of the top ones in this category. The city sees a healthy relationship between competing startups with every member of the community extending unlimited support to each other in many ways.
Popular Tech Sectors for Start-Ups in Austin
While there are a number of startup ecosystems that are doing well in Austin, the city is mainly a startup hub for tech-based companies. Some of the tech sub-sectors that have outshone the others have been highlighted below.
A Well Funded AI, Big Data and Analytics Sub-Sector
This tech sub-sector alone took a whopping 19% of the total VC investment in the city. This growth can be attributed to the presence of Microelectronics and Computer Consortium which is not just the first but also the most significant computer research industry and development association in the country. SparkCognition and Tethr are some of the many successful AI firms that have grown exponentially in the city. The latter raised $15 million in Series A funding and offers AI products that help in monitoring and analyzing customer calls.
SparkCognition is one of the trailblazing companies that offer AI products and solutions for use in sectors like oil & gas, security, and defense among the others. They raised an impressive $56.5 million in Series B funding and are a promising Austin based startup growing at an exponential rate.
Cleantech Startups in Austin
Cleantech is another major subsector contributing significantly to the local economy. Cleantech alone employed nearly 20,000 professionals directly in 2015. The number has only grown over the years. One of the notable stories of a local startup is that of Hyliion. The company shot to success with its innovative idea of developing a system for reducing the fuel consumption in tractor-trailers. They aim to reduce fuel consumption to up to 30%. It successfully raised $24 million in Series A funding. The cleantech sub-sector is one of the well-thrived ones and is expected to grow by 11% by 2020. This would also translate to a better job market in this niche.
Healthtech Startups in Austin
Healthtech scene in Austin has seen some significant achievements and some of the best innovations. One of the health tech success stories from Austin worth mentioning is that of Medici. It is a healthcare app that aims to make it easier for patients to meet and consult doctors by allowing them to contact doctors with their smartphones. The firm was able to raise $24 million in Series A funding very soon after they had launched the product. There are a number of institutions in this state capital that have acted as a catalyst for the growth of the various health tech startups in Austin. These include the Dell Medical School, the University of Texas, and the Merck IT hub among the others. These institutions have some of the best health tech talents studying and training with them.
Austin may not be at par with its rivals like New York, Boston, and Silicon Valley when it comes to the overall VC scenario but offers a host of other benefits for startups in the long run – the low taxes being one of the most important ones especially for early stage startups. The city offers a very lucrative arena for especially for B2B companies.
The startup scene in Austin is growing fast with a rampant decrease in any funding gaps. So if you are a startup in the early stages and considering whether or not move to Austin, do not think further and just take the plunge as the city has a lot of offer. There is everything from beautifully designed and economical co-working spaces to business incubator organizations to training schools offering entrepreneurial courses for the professionals, everything you need to grow in a safe and conducive business environment.
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