By: Phillip Bogdanovich
I was sitting in a room last week listening to entrepreneurs pitch, and at one point I distinctly recall thinking, “Why am I here?”
“I’m here for the free food and the beer.” I hear entrepreneurs express some version of this phrase three or four times whenever I attend an event. This type of interaction is a clear indication to me that there is a sense of hopelessness in the Austin Tech Community where growth opportunity is concerned.
What creates the perception that there’s a dearth in growth potential for Austin-based companies? Simply put: limited access to investment capital, talent, and successful entrepreneurs, and mentors. We have a surplus in some combination of pretty good leaders driving pretty good talent doing pretty good work with a little bit of money. Apart from maybe three companies no one is doing ground breaking work with a stellar team in a well-funded company. Although leaders and founders are in large part responsible for their own trajectory, they must feel as though the opportunity and momentum are there for them to plug into. When individuals feel there is a lack of opportunity they just show up for the beer and food.
There is no shortage of entrepreneurial talent in Austin, and the potential and desire to build large, successful companies exists. A key reason for the stagnant growth rates in Austin are largely the result of poor board direction and limited investor support.
There’s a sense of ownership among senior leadership in the military that I simply don’t see here: When there’s failure the responsibility ultimately rests with the most senior leaders. Similarly, when there is poor performance within a funded and boarded company the mentors, advisors, and investors all assume some culpability. Why? Because you shouldn’t throw money at a problem. Don’t invest in a company you can’t help. No money is better than dumb money and as a senior leader in a startup community you have a responsibility to reinforce that ideology and if necessary save new founders from themselves.
The majority of good entrepreneurs are fearless. They have superman syndrome, and are completely oblivious to what they don’t know. To grow big companies, fearlessness must be a present trait. The job of the founder is to be fearless and take risks while the job of the advisors and investors is to keep that founder energy loosely pointed in the right direction.
We need to do a better job of attracting world class talent, and not just programmers. Tech is bigger than developers, CS, and even engineering yet for some reason whenever there is a conversation about tech in Austin the focus becomes programmer centric.
No matter how delicious, no one wants to eat the same pizza day in and day out for their entire career. Similarly, no brilliant, skilled, rising star in tech wants to get pigeonholed into an environment where there is no cross-platform exposure and no opportunity to experience a multitude of companies doing interesting work across multiple industries. There are a few people in every startup environment that are truly in a position of leadership who have the voice and the power to effect real change. Those individuals need to advocate for diversity at all levels: Women in executive roles, funding and advising companies that are not the status quo, and networking to name a few. We like our work like we like our beer. With options.
Networking, accessibility, connecting… Call it what you want, the concept is the same. Startup founders need to be able to get in a room or on the phone with other entrepreneurs at varying levels of success. Unfortunately, in many places including Austin the small group of truly well-connected people is a good-ol’ boys club and it’s hard to break in. This type of dynamic isn’t good for anybody.
The newly indoctrinated must learn a lot of unnecessarily hard lessons because they don’t have the opportunity to benefit from the mistakes of other entrepreneurs. Entrepreneurs who are connected become insulated and have no view of the world outside of their microcosm. A lack of perspective and the insulation may be the most damaging side effect of the lack of access.
These effects lead to a black hole of innovation; a stagnation in development. Ironically, while progress stops, the view of the world from the vantage of those insulated remains unchanged. They believe they are still on the edge of development; that they are still relevant. By the time those embedded in an environment whose clock has stopped realize they’re living a Groundhog’s Day, it’s too late.
I’ve lead with the problems because there are numerous ways to solve them. Awareness is critical, the rest is preference. I would like to see the following happen in Austin:
I would like to see the established entrepreneurs get out of the way. Stop being a roadblock. The way an established, known leader stays relevant is by helping new leaders excel. Become a mentor and provide knowledge. Don’t force ideas but make suggestions and guide. Don’t try to steer. This is an important distinction to make. You had your shot. Help someone else make theirs.
Give access to those looking to make progress – thoughtful access – to your network and extended network. I agree with Brad Feld on this point. If an entrepreneur wants to be a functioning part of your environment, give them the chance. In a lot of ways, success in the startup world is a numbers game. The more people who have access, the better the odds the ecosystem survives and thrives. Conversely, if a peer comes to you and has an up-and-comer they want to introduce you to, take the meeting. Give them an opportunity to surprise you. You aren’t special because you were successful, you’re special because your success has given you a unique view of the business landscape that you can now share with the new generation.
Money guys need to be willing to diversify and push their comfort zones. They also need to be willing to follow the guidelines above. Don’t make a bad investment; put your money into companies you can actually help. If you can’t work with a particular entrepreneur because the fit isn’t there, give them constructive feedback and whenever possible introduce them to an investor who might be a good fit. Motion creates openings and starving companies of cash doesn’t help anyone.
Talent loss or talent need must be addressed in a subtler way. Finding talent is a hunt. No one hunts by banging drums, blowing horns, and hiring a marching band. We hunt by creating an enticing opportunity- access, money, talent- and waiting. Anything other than actually creating real opportunity is just noise. It has been my experience that providing great feedback loops to founders, making networking possible and cash accessible leads to a type of buzz and social equity that top talent wants access to. Austin is a great place – except for July and August – and hungry, healthy people love it here. They love the access to the lakes and the greenbelt, the architecture is awesome, and the food and nightlife are excellent. Give these people a great place to work and they’ll come. We won’t pull those drawn to the mountains away from Denver or Boulder CO or the surfers away from San Francisco or Los Angeles, but we can entice the world-class talent who are health-focused and want a diverse experience.
If you build it they will come. Talent and money tend to follow one another. The fact is that the older generation of entrepreneurs successful in the 80’s, 90’s and even the early and mid 2000’s are on the way out. The leaders who are coming up today will very soon be in a position to drive change, so don’t quit. If the people you look to are resistant to change, fine. Let it go.
Start working the change yourself with your generation of leaders. You will have the reins soon enough. I don’t ever want to hear that Austin, Texas is where California money and businesses come to get a great deal on pretty good talent again. Pretty good isn’t something that should ever be acceptable. Let’s drink beer and eat pizza because we’re plotting together to take over the world, not because we’re shame-eating away the pain of mediocrity or burning the midnight oil while building the walls that insulate us from reality.