Austin’s Startup Scene: The Hottest in the USA

By    July 22, 2013

austin-skyline

When it comes to which U.S. startup hub is the hottest of the hottest, guess which city comes out on top? Our very own hometown of Austin, TX.

We already knew Austin boasts a great startup scene. After all, SpareFoot is part of it; we benefit from and witness this scene firsthand. But it’s always nice to see independent verification.

GoodApril, a free online tax-planning service, recently took a look at the country’s seven hottest startup scenes and compared them based on these five factors: median tech-employee earnings, maximum personal income tax, property tax, cost of housing and cost of office space.

Faring best was Austin, followed by Seattle; Boulder, CO; New York City; Boston; Washington, D.C.; and the San Francisco Bay Area.

“If you want to move to a hot startup scene without breaking the bank, consider heading to Austin, Texas,” Entrepreneur.com advised.

To see all of the numbers behind the ranking, take a look at this GoodApril infographic on Entrepreneur.com.

“Recent tax changes, increases in office and housing costs, and stratospheric salary expectations have all played a role in making it more expensive to start a business in San Francisco or the Silicon Valley,” Entrepreneur.com said in reporting on GoodApril’s findings.

goodbye-san-francisco

Fleeing San Francisco
On the GoodApril blog, Graham Hunter wrote that he’d recently met an entrepreneur who’s fed up with the Bay Area’s living costs and taxes, and is relocating to Austin.

This entrepreneur launched his startup in San Francisco several years ago. “The business case to move is just too compelling. Austin has everything we need at a much lower cost,” the entrepreneur told Hunter.

The entrepreneur’s startup has had an office in Texas for three years. In choosing to flee the Bay Area, the entrepreneur said a recent California tax hike was a “tipping point.”

GoodApril—which, ironically, is a startup based in San Francisco—points out that for states like Texas, Florida, Nevada and Washington, the lack of a state income tax is attractive to entrepreneurs.

“It may take Las Vegas or Austin 25 years to challenge Northern California as an incubator of new technology, but they are working on it. Zero state income tax gives them a big advantage,” Hunter wrote.

The California entrepreneur also cited housing costs in his decision to pack up and head to Austin.

“My employees can buy a large, three-bedroom house in Austin for less than a one-bedroom condo in (San Francisco neighborhood) Noe Valley,” the entrepreneur said.

According to GoodApril, the entrepreneur plans to keep a business development outpost in San Francisco for the foreseeable future. In addition, employees who don’t want to move can stay in the Bay Area. But the entrepreneur said he’s relocating to Austin and will focus on adding jobs at the new headquarters.

So, welcome to Austin, Mr. “I’m Leaving Northern California” Entrepreneur. Drop by our office in downtown Austin when you get the chance. Our co-founders, Chuck Gordon and Mario Feghali, probably can give you a few pointers on how to make the most of Austin’s hot startup scene.

John is editor of The SpareFoot Blog. He first moved to Austin in 1999, when downtown Austin wasn't nearly as lively as it is today. John's loves include pizza, University of Kansas basketball and puns.

  • Sportcut

    Excellent Article. We are considering Austin (seriously) for our startup, Sportcut. My cofounder and I created a MVP with an small angel round of 30k, and recently landed a seed round of $200k here in Charleston, WV. We have a strategic roadmap for the funds and are looking to relocate to an area with more of a startup vibe. We are launching soon and plan to begin the next phase of our venture in Austin. This article hits on all the right points as there is much more to survival than a great product e.g. affordable employees, housing, office space, etc.

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