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Best Cities 2010: Austin, Texas
Our number-one Best City for the Next Decade is a hotbed for small business -- and music.
By Bob Frick, Senior Editor
From Kiplinger's Personal Finance magazine, July 2010
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Everything may be bigger in Texas, but Austin’s genius is nurturing the power of small. Just ask Rob Neville, who wants to develop his biotech firm, Savara Pharmaceuticals, into a major player in the field of inhaled-drug therapy. The firm started in Kansas, but Neville transplanted it to Austin because the city is arguably the country’s best crucible for small business.
Neville, a native of South Africa, has rooted his company in a city with, he says, “a huge angel-financing network, billionaires who will freely offer you advice,” plus a culture that “attracts the best and brightest, who will work for less just to be in Austin.” Savara is based in the city’s renowned Austin Technology Incubator. Austin Technology is a joint project of the University of Texas, which is a research powerhouse, the city of Austin and the business community -- just one example of the collaboration that characterizes the city.
Neville isn’t himself a scientist. “Many people could have done a life-sciences company better than me,” he admits. But he has faith in Austin. His first company, software firm Evity, blossomed in Austin; Neville sold it to BMC Software for $100 million in 2000.
And the Austin magic isn’t limited to high-tech businesses. Blair Smith is co-owner of Dirty Dog, a dog-grooming business (you can wash your own pet or let the pros do the job). When Smith needed capital, she found it through Meet the Lender, a community program that allows business owners to participate free of charge. “We’re such a weird business that traditional banks don’t get us,” says Smith.
Meet the Lender is but one of a dozen Austin programs that form a neural network of business brainpower to help entrepreneurs. Now overlay that net with a dozen venture-capital funds and 20 or so business associations (Refresh Austin and Bootstrap Austin, to name just two), plus incubators, educational opportunities and networking events. Mix all these elements in what many call a classless society, where hippie communalism coexists with no-nonsense capitalism, and you’ve got a breeding ground for start-ups. “People act in a loose confederation with each other,” says Bijoy Goswami, who heads Bootstrap Austin.
No wonder Austin topped Portfolio.com’s small-business-vitality charts in 2010. Between 2004 and 2009, when employment nationwide dropped a bit, Austin’s employment increased by almost 16%. Plus, the number of small businesses jumped by 6% between 2006 and 2007 -- far more than in any other market, according to Portfolio.com.
And don’t discount the fun factor, especially when it comes to music. As the self-proclaimed live-music capital of the world, Austin has 200 venues, ranging from rowdy college rock bars to sophisticated jazz clubs to blues joints with sticky floors and waitresses who call you darlin’.
Music and business creativity riff off one another. The city’s famous South by Southwest festival, where concerts, independent film screenings and emerging technology overlap, is a prime example. And performers infuse local businesses with bright ideas inspired by their music. Alex Victoria is a director of software engineering at HomeAway, an online business that matches owners of vacation homes with renters. But on nights and weekends, you can find him practicing and performing in a punk-rock band, The MidgetMen. Especially in Internet businesses, says Victoria, “you’re moving fast, taking lots of things and mashing them together -- a lot like musicians playing off each other.”
As important as music is to Austin, the area’s atmosphere -- its lakes and parks, plus its unique and funky businesses -- also defines the vibe. The epicenter of “Keep Austin Weird,” a slogan adopted to promote small, local businesses, is South Congress Avenue. If you don’t enjoy SoCo spots -- such as the massive Allens Boots shop, Lucy in Disguise With Diamonds costume store or breaded, deep-fried avocado served from the Mighty Cone taco truck -- you can always live in nearby Round Rock, which is more strait-laced. But that wouldn’t be weird, now would it?
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Reader Comments (17)
POSTED BY: dena (05/27/2010 05:48:15 PM)
good to know, Austin is again on the top of the world. Go Horns, poke some one.
POSTED BY: Brad (05/28/2010 06:42:27 PM)
Austin's good - however, don't overlook North Texas - anchored by Fort Worth and Dallas. Great universities such as Texas Christian University, SMU, UT Dallas, UT Arlington and U. of North Texas. Significant entrepreneurial activity supported by incubators, the business community,university research and investor dollars. Music is pretty darn good,too!
POSTED BY: A. Cross (06/02/2010 02:50:50 AM)
Surely you jest about Austin, Texas. I just returned from there, AND the weather was horrendous and humid, even in May..The music scene over-subscribed and mundane..There were no world class cultural venues. The art museum looked like it was thrown together as an afterthought, the galleries were so empty...The topography was flat and uninteresting. The downtown was not in the least picturesque, except for the capital building. The real estate was abnormally high for so few city amenities. The traffic was frightful..The air quality was poor. The local people were really disinterested and unaccommodating when we asked them nicely for simple directions. It was as if they disliked tourists. The city bus driver let us off way off our stop, and showed little concern about our welfare, though it was night...Two cab drivers were absolutely clueless about their own city. There was no connecting public transportation-you were a slave to your car. Many of the downtown areas were not pedestrian friendly. There seemed to be absolute extremes of wealth among the social classes, and there didn't seem to be much social mobility, unless you possessed specialized high tech skills (this according to the people). Salaries were not commensurate with the cost of living, and it was difficult to find jobs in education or the humanities, according to new arrivals. The property taxes were extremely high. Frankly, I felt that Austin's rapid growth has swamped its infrastructure. If you were looking to retire, I would certainly look at other alternatives to Austin. It seemed that you would need to be very solvent financially to live there comfortably.
POSTED BY: jocostar (06/02/2010 07:26:03 AM)
You will especially enjoy the annual Mountain Cedar Pollen Festival. As a native of Texas I can say without reservation that there is nothing quite like the experience if you have even a slight pollen allergy. Don't say they didn't warn you.
POSTED BY: neoREgen (06/05/2010 07:00:58 PM)
I live in Austin and your comment seems entirely founded, from my vantage point at least. Seeing my city come up as number 1, despite the fact I do quite like it, is disheartening. Surely there are other, much better places to live in the US?
POSTED BY: Ben Around (06/08/2010 05:12:52 PM)
A. Cross, thanks for your post. I hope that it is effective in doing the job of keeping more people away from Austin. We who were born here and expect to die here appreciate your kind efforts. We know that there are plenty of other fine cities in the U.S. in which to relocate. Sorry you didn't have a nice visit, but on the positive side I guess you won't ever come back. Maybe try North Dakota or Arizona for a fun time.
POSTED BY: hmmm (06/10/2010 01:27:58 PM)
Ditto Ben Around!!! Austin is a huge bummer and you dont wanna move here A.Cross!
POSTED BY: did not liked ATX (06/19/2010 11:17:37 AM)
Comments are true! I moved in '06 for grad school & could not wait for the 2 years to be over. Unless, you have a good job offer then you would do well and then there is nothing to spend it on bc the city is 'understock' as many posted. The prices for real estate/taxes are really high. The only mall at the time was an outlet & a tiny Saks. I would have to drive to Dallas to shop n party. Anything on 5th street was really good and restaurants, too...but then u get tired. This city but if you live on the lake it's really nice & that's all it has going for it. This city suxs! Sorry, but another word for 'hippie' is poor...sorry, but nobody is faking the whole 'starvin' artist' thing.....
POSTED BY: Katy P. (07/07/2010 03:37:34 PM)
Totally with Ben Around. This place sucks, please don't move here....
POSTED BY: rdub (07/13/2010 01:04:54 AM)
so ive lived here for 7 months and haven't found a job i think it has to do with my out of state resume, i truly love the town but it is apparent that the locals do not want new people moving here, hence jobless. but that's ok im going to start my own business .and too all you negative people try living in new york or california then you will know high prices for homes and taxes on everything. austin is a great place to live the locals just don't want it to change and i have to agree no change is good but with the times come change so let's hope the change stays to the outer edges of austin.
POSTED BY: Andrew (07/14/2010 02:35:46 PM)
Having researched business opportunities now for 5 years, Austin seems clearly to be a winner going forward--a place that fits nicely into our country's post-recession "new normal". It's clear to me that A. Cross needs to get his/her FACTS straight. Low unemployment, job potential, cost of living, cheap housing, quality of life, and one of the highest-educated work forces all make Austin very attractive compared to just about everywhere else. If the locals lament all the growth, they can take solace in knowing their relative central locations will grow ever more dear in value, as will their fine city's tax base, allowing everyone to enjoy a modern, improving, thriving metropolis. Or perhaps A. Cross can go back to whatever rotting, delapidated, un-green metro he/she came from and look at all the pretty pictures encased in their dusty air conditioned rooms, enjoy breathing all the sooty air again, over-paying for housing in an obsolete building, with depressed neighbors, jobless friends, etc., etc.
POSTED BY: Lee (07/29/2010 06:25:31 PM)
yeah, you're all right, Austin sucks, so please don't move here. Dallas, go to Dallas. Dallas is GREAT! ;)
Posted by: Pat Cos at 07/29/2010 11:36:29 PM
To the guy who wrote the endless screed about how over-rated Austin is--you are a either a local having a great time dissing the place to keep people from moving here, or you are a total buffoon. Anyone who says the music scene is mundane and the topography is flat and mundane knows nothing about the place an has probably never been there. Ever hear of the Texas Hill country? Ever heard of Willie Nelson, Asleep at the Wheel, Patty Griffin, Alejandro Escovedo, Shawn Colvin, Los Lonely Boys, Roky Erickson, Jimmie Vaughan? You did one thing right, it is hot during the summer. So try Peoria or Oxnard.