No Stopping Austin Now

What happens when you take the intellectual ferment of a university town like Madison, Wis., stir in the entrepreneurial atmosphere of a Silicon Valley, add one of the nation’s best music scenes, and drop all of this into the relatively low-tax, business-friendly environment of Texas?

You come up with a good recipe for Austin, the state capital that is now being recognized nationwide as one of the best places to live and work in the United States and as a leading center for entrepreneurship and the growth of new businesses.

Consider the following:

• Entrepreneur magazine called Austin the top city in the nation when it comes to the proactive and progressive spirit of innovation.
• The city ranked fifth nationwide in a Bloomberg BusinessWeek survey of the top cities for recent college graduates to live.
• Under 30 CEO magazine just ranked Austin the third best city for a young entrepreneur to live in, based on business resources, schools, events, climate, and social life.
• Forbes magazine placed Austin second nationwide in its list of the places where Americans are relocating.

Austin is clearly doing something right. As a place to live, work, and start a business, it possesses several important advantages that have proved especially important in the still uncertain national economic environment.

First, the University of Texas has long been and remains the city’s largest employer. The university and the state government make Austin far more stable and far less susceptible to the shifting economic winds. In this way, Austin is similar to a few other cities that are both state capitals and centers of major state universities. These similar cities, such as Atlanta and Columbus, Ohio, are also thriving.

Second, and not coincidentally, the university has taken significant steps to encourage entrepreneurship. The university’s nonprofit Austin Technology Incubator works with early-stage technology companies to help them succeed. In 20 years, the incubator has provided mentoring and other assistance to 150 teams of entrepreneurs who have collectively raised more than $725 million in investor capital.

Third, the university’s efforts only add more pizzazz to a healthy business culture that already exists in Austin. The city already has a highly educated population, with 43 percent of residents holding a bachelor’s degree or higher, and a strong venture capital scene. It’s also a place where new entrepreneurs aren’t afraid to form affinity groups to help each other get through the first couple of difficult years. Happy hours, seminars, and conferences of small business people are an almost daily routine in Austin.

Fourth, the city has a history of successful business ventures. Dell Inc., Whole Foods Market and National Instruments Corp. all got started in Austin and are still headquartered there.

Earlier this year, Facebook opened an office in downtown Austin that will eventually house 200 employees. This was, notably, Facebook’s first major U.S. expansion outside California. This decision by Facebook was considered a major coup for the city and one that adds to its reputation as a technology center.

It isn’t just the tech giants that are thriving in Austin. To name one smaller, lower-tech company, Sweet Leaf Tea — one of the fastest-growing natural beverage companies in the United States — moved to Austin in 2003 to take advantage of the city’s opportunities. In early 2009, Nestlé made a $15.6 million investment in Sweet Leaf, with an option to buy the company near the end of 2012.

Sweet Leaf’s co-founder, Clayton Christopher, told Entrepreneur magazine that the Austin name was a significant part of the company’s success.

As Austin continues to grow in the face of The Great Recession, it does so with an assured confidence that its secret is out and that, as a result, it will continue to attract and retain the best and the brightest.