Is Austin losing its luster? | Hacker News Reader

Is Austin losing its luster?

techcrunch.com

48 pointsbratao73 comments

I spent a few months in Austin for the first time this year. I hadn't expected much from it, but by the time I had left it had grown on me. I loved that it still had 24-hr coffee shops, I couldn't even find those in Seattle this summer. I also met a bunch of really kind, fun, and ambitious people in my age group (30s) through board groups, including other people interested in founding startups. Overall, it's definitely way more exciting than Raleigh, and the music scene was great too. I think it will continue to attract talent, especially from tech/startup-oriented southerners who may not feel culturally at home on the West Coast. The only other southern city I've organically ran into founders was Nashville, which is nice, but also quite expensive and doesn't have the history of tech investment that Austin does.

I don’t understand this tier 2 and tier 3 city tour

everything you like is in the densely populated tier 1 cities

fly over, it’s an objective crowded trade for a reason

This might sound crazy, but people also like houses they can afford. Good luck finding one within an hour's drive of NYC, LA, or Seattle if you don't have a spare million or so.

settling for less does sound crazy to me, but thanks for reminding me people do that and more should

OP sounded like they were randomly choosing areas around the entire continent and just skipping the big timeless beacons of living, as if everyone else was missing something, while OP simply hadn’t considered trying their hand at those places either.

You're reading way too much into the cities I mentioned! I work remote and have been city-hopping to places where I have friends and family, and none of my friend group are in tier 1 cities. I would love to do a long stay in LA and NYC in the future, but they're excluded from the housing program I use to bounce around.

props, hope you get to do that

What are board groups? Like board games?

Same question. And why in the world was this person downvoted for asking?

Austin may not have jumped the proverbial shark, but this place sure has. Very different audience than the people who were here just a few years ago.

Lots of jaded, unemployed SWE with free time here now

As in any such case, whether a city or a forum, it's not different people, it's the same people getting older.

Yep, I missed a word. Board game groups.

> 24-hr coffee shops, I couldn't even find those in Seattle this summer

In Seattle? If New York is the city that never sleeps, Seattle is the tiny city with a narcolepsy approaching that of the twin cities. With the exception of a few restaurants, only the bars are open late nights and they all close by 2 am.

There are a few coffee shops that open late (a Starbucks that opens 24h) but they're all on the east side (suburbs). I would have expected them be in the city, but I guess there's no late night coffee culture there -- it's bars or nothing.

Just a little bit north in Vancouver BC, there are a ton of coffee places that open late.

Durham is more exciting than Raleigh . That said I have found the Raleigh-Durham area a nice antidote to be in tech and not be in a hyper competitive, hustling , aggressive environment. There are a bunch of tech, pharma companies and universities which make the culture more research oriented and a little bit of what tier 1 tech cities were pre 2010. Personally I moved from the west coast after burning out and I have found the slower pace nicer but also enough tech opportunities to just continue as a programmer and not want to suddenly become a yogi or venture capitalist or reinvent myself as a farmer .

i'm in Canada but from the US and if I had to move back the RDU would be on the short list.

Is it Austin that lost its luster, or all that low interest capital funding is gone so startups are drying up in general?

My question too. Having lived in Seattle it seems like every time tech boomed there were stories about it becoming the next SV and every time there was a general tech recession there were stories about how it had failed to become the next SV. This article seems very anecdotal and some of the anecdotes contradict each other: Austin has become too crowded and expensive, so companies are moving back to California; Austin doesn’t have a big enough “scene”, so one company is moving to Tulsa?

Ime, the Austin startup and tech scene is BizOps and SalesOps SaaS driven. This isn't too surprising as CS, Sales, and PS teams for most major companies have clustered in ATX. There is deep tech stuff but it ends up leaving for the bay in order to scale. That said, it's a strong regional hub and def 3rd best after the Bay and Seattle.

Cloudflare, Crowdstrike, IBM, and Oracle's investment in ATX will help it massively

You think Austin is a bigger software/tech hub than NYC?

Absolutely.

The network is much stronger in Austin over NYC, and there is a better established pipeline between the ATX scene and the Bay plus Seattle. Also, I've found Texans operate on a similar wavelength as other West Coast folks. And you can't discount the absolute behemoth of a pipeline UT Austin and IBM Austin is - something that no university in NY-NJ can compete with (come at me salty Rutgers and Columbia bros /s)

Austin is big enough that you can have a self sustaining ecosystem, but small enough that you can still experiment. On top of that, there are enough early career PMs, Sales, SWEs in the area to get startups off the ground.

I've also found the NYC scene to be immature and piggybacking off European/Israeli founders trying to build a US beachhead due to American VCs.

I simply can't think of a recent major IPO from an organically grown NYC tech startup. Spotify was large, but largely built out of Sweden.

I've seen delusion before, but holy shit.

You're gonna get dunked on for saying that Austin > NYC in terms of tech scene, but you're 100% right about UT Austin > Rutgers + Columbia combined.

Yes? Isn’t that implied by “losing its luster,” considering the publisher and audience of the article? I think it goes on to talk about the relationship to venture capital and local govt. so it’s more than a general thing?

This.

Lived and worked in Austin tech 7 years. This article is all about startup funding, plus it quotes one unicorn whose home base / frame of reference was Houston, not another tech hub.

Austin was always a great place to build a tech career if you, for example, had a family. The talent pool is great but, in my experience, has a lower risk tolerance (read: prefers bigger and more established companies) than SF. So if you're evaluating by startup formation or funding, sure, the Bay was and remains in the lead. And as that stuff dries up, it's going to dry up faster in Austin, because the culture in Austin always had a slant toward optimization over disruption.

For the big SF/Seattle-based companies, Austin seems like a cheap second city. For a Houston-based startup, Austin seems like an expensive second location. And for a new startup trying to take risks and go big, the Bay is just set up better for it.

I don't see this as losing a luster. I see it as... very little change at all.

Its funny to see govt falling all over itself to regulate crypto but crypto got nothing over the biggest ponzi scheme of all time that they themselves created called 'the us housing market'. Tons of ppl in know in austin, dallas area have like dozen houses where they are now partial owners. Most of those draw rentals less than the monthly mortgage but ppl buying them regardless because "housing always goes up/govt will never let housing fall" .

Real estate is a bigger donator than the crypto bros.

Not shocked that governments favor a world were every homeowner pays taxes vs crypto as a scheme to avoid government control

Which is why government should break their own scheme by building houses and selling them at-cost, or even subsidized (i.e., no-interest mortgage).

I'll fully admit that I've been radicalized by an adulthood of housing insecurity, and I no longer care about housing as an investment or even a market. The current system is cruel, and while I understand that it can never be perfect, the ease with which people's stable shelter can be ripped from them is appalling. Yes, even with eviction and foreclosure proceedings. There are many who would object vociferously to this because their own stability is based on housing's scarcity and inflated value, and while that may be a reality whose collapse we'd have to contend with, I have to think that anyone of good moral thought would recognize the fundamentally perverse nature of the status quo.

Complaints about the weather and then moving operations to Houston? I’ve lived in both cities and Houston is much worse for weather.

I just looked at new home price in Austin though and it’s $2m for 4k square foot house. That seems like a bad idea but there’s plenty of people out there willing to risk going underwater. Houston housing is still much cheaper.

I dunno. From Austin but also lived in Houston. The weather sucks in both places from May-October. But in the cool half of the year, Houston is much more consistent with mild and sunny weather, while Austin gets gray a lot and has more cold snaps. But most importantly, Houston doesn’t have cedar fever.

Houston pollen is tremendously bad though as well.

And the hurricanes deal a lot of flood damage to houses there every few years.

I don’t like Austin weather but I could go running in the morning during the summer.

In Houston in the morning when I would go running I would be literally soaked because of the humidity.

After living in Dallas, Austin, and Houston I have to rank it just as I listed.

Maybe it was bad timing, but Houston has felt like a hot swamp every time I've visited, like an energy sapping heaviness. Austin hasn't felt that way, although it certainly gets hot of course.

> I just looked at new home price in Austin though and it’s $2m for 4k square foot house. That seems like a bad idea

The old saying "don't buy the biggest house in the street" still rings true.

Austin's median home size is 1800-2000 sqft.

Unless you are looking to house a lot of people (i.e. a big extended family) a 4k sqft house is usually a bad idea from an investment perspective because, should you ever want to sell, the pool of potential buyers interested in a house that large is smaller.

That's true whether in Austin or Houston.

Fort Worth is not a hip microcosm of California in Texas but it is about to leave Austin in the dust. They have been growing at similar rates for about the last 20 years but Austin is slowing down and growth in Fort Worth continues to accelerate. Fort Worth is scheduled to be the first to reach 1 million residents out of Jacksonville, Austin, Seattle, and San Jose.

If you ignore the non-numerical trend nonsense the writing has been on the wall for more than 5 years based on raw data commonly available to everyone.

> it is about to leave Austin in the dust

Overall as a city, most likely.

As a tech hub in TX? Absolutely not.

DFW doesn't have a concentrated enough operator scene. Tech isn't just software, it's also sales, PM, marketing, pricing, VCs, etc. And that doesn't exist in DFW or Houston.

If you said Richardson or Plano, it might be understandable due to the Telco industry and UTD, but Ft Worth just doesn't have it.

I disagree. If you are talking about startups that could be true because tech startups are greater 50% financial operations.

Houston continues to have more Fortune 500 companies than any other US city after New York. If you group Plano, Irving, Frisco, and Dallas together then Dallas might take the top spot from New York.

I've previously product managed F500 accounts HQed in the Central Sales zone.

Most of their engineering is located outside the US, and whatever staff they do have is augmented by staffing/contracting companies. You have to remember EDS and Professional Services was basically invented by Ross Perot in Dallas back in the 70s.

The only large dedicated F500 software dev teams I can think of in DFW (not Ft Worth) are C1 and JPM, and most of that is sustaining engineering.

Schlumberger does some cool HPC/ML stuff but their footprint is relatively small compared to the larger market.

> Fort Worth is scheduled to be the first to reach 1 million residents out of Jacksonville, Austin, Seattle, and San Jose.

San Jose had over 1 million residents in 2020, the population declined.

And it has emporium pie, which I assume is the reason for all the growth.

(They have really, really good pie if you're in the metroplex. I go every time I visit family there.)

The "1 million residents" is based on arbitrary administrative boundaries within a single metropolitan area. San Francisco also has < 1 million people when measured this way. It is also weird to put San Jose on the list since it is the main city of literal Silicon Valley.

Except for Jacksonville, all of those other cities dwarf DFW in venture capital investment, which is a much more relevant metric than population.

If that were true then economic health indicators would indicate the Bay Area is drastically, like orders of magnitude, more economically healthy than the DFW area. Not only is that not the case there is every reason to believe the contrary.

The article cites a few data points for "Austin losing its luster":

- Techstars pausing their Austin tech accelerator and venture funding being down 46%. This is the most compelling data point in the article, however venture funding is down 48% globally [0], so this has nothing to do with Austin specifically.

- A startup moving its HQ from Austin to Houston (where they previously were before moving to Austin), specifically because it is looking for non-software talent that they believe will be more plentiful in Houston.

- A laundry company that has ~10 employees moving from Austin to Tulsa

- An "online travel agency aimed at Millenials" with ~10 employees moving to Sacramento

Meanwhile, companies like Google, Apple, Amazon, Oracle have some of their largest office locations in Austin and show no signs of slowing down, as far as I can tell. This is definitely a new side of Austin, which used to be known for smaller tech startups and didn't have these giant behemoths - so I'll agree that it's losing luster in that way, if that's what is being looked at.

I mean no disrespect towards the company's listed in the article, but I'll wait to make conclusions until there's better data points than a few random companies I've never heard of moving.

0: https://www.reuters.com/business/finance/venture-capital-fun...

Devil's advocate - a couple years ago Google ATX was much heavier on the sales/customer success side than on dev, and I think Amazon ATX was originally started to help jumpstart the graviton project via Annapurna Labs. That said, I agree the article isn't the most convincing.

> moving from Austin to Tulsa

Don't shit on Tulsa. It's basically like Austin in the 90s and 2000s but without STEM and with better BBQ. Most of the hipster artists got priced out there

I mean, the whole deal in Austin was that it was super cheap, and for a super cheap town it was kinda interesting and had a funky vibe.

Now it’s very expensive while still far behind other major cities in quality of life and cultural amenities. Not a good deal anymore.

Relatedly, the funky vibe is going away as it was largely generated by interesting people living there and doing things that didn’t necessarily pay that well but worked when space was super cheap. And once you lose the community it’s really hard to get it back.

Where is a good deal?

College towns probably. Very high QoL:CoL, assuming you can get a high-paying job there.

Anyplace with lots of high paying jobs is going to be expensive. So you want to go with somewhere that is still nice that doesn’t have great jobs, and then start a startup community there. Like Berlin 15-20 years ago, or Tokyo today.

I haven’t seen many cheap college towns on this side of the country. Even Missoula is expensive, but that’s because that side of Montana has always been expensive. Maybe Pullman/Moscow would be a good place for a startup scene?

I consider high-paying to be relative to the cost of living. Out west is going to be more expensive, outright, and there are fewer college towns to choose from.

The Midwest, South, and parts of the Mid-Atlantic region seem to be the best value right now. A lot less isolated than anywhere in Idaho too, though I've looked at Moscow and it looks like a decent place to live.

I can't really imagine living anywhere else other than the Mountain or Pacific time zones in the USA. From those, New Mexico is the cheapest by far, for remote work. But I have a kid so education is going to keep in an expensive city for the next decade or so.

Houston is way better designed to be a tech hub for several reasons:

1. It's way bigger than Austin

2. It's international airport is a key hub for United and has an expansive route network, including routes to China

3. It's road network has significantly more capacity,

4. It has much better suburban infrastructure, and those suburbs are growing rapidly, and

5. Surprisingly its public transit is better!

Yeah, it's hot and swampy in the summer months, but you're probably inside something air conditioned anyway.

Houston beats Austin hands down every day of the week for me.

> Houston is way better designed to be a tech hub for several reasons:

> Houston beats Austin hands down every day of the week for me.

Never hear much about the Houston startup scene - is this real or imagined ?

Doesn't exist. But it should.

>During the COVID-19 pandemic, investors and startup founders alike flocked to the Texas capital

Wasn't this mainly a number of Silicon Valley transplants?

That would be like a number of Houston energy technology growth enthusiasts moving to Sacramento to be right where the action is in the middle of the California software entrepreneur ecosystem.

There was a lot of hype tbh. A decent number of people did move to ATX, but ime it was on the field side and some remote dev.

Given the perceived state of the economy and housing prices/interest- sure. As others pointed out... if you have ever lived any of these mid-market cities, this is a cycle that tracks to SV... I think we saw an increase during COVID thanks to remote... but just like everything during covid, castle made of sand.

>just like everything during covid, castle made of sand.

not the housing market.

give it time.

My co-worker (remote) lives in Austin and he says he’s more out because it’s basically becoming too commercial and unaffordable. I noticed that he’s also having a child soon, I feel like this is the classic urban paradox, young people like towns for young people.

Did it ever have a luster? It always seemed sort of overhyped and underwhelming to me. And now it is super expensive and is an island in an insane state.

It's a sparkling example of Gerrymandering, eg https://www.austinchronicle.com/news/2017-03-17/the-texas-ha...

I suppose you’re talking about abortion rights, not the right to vote. Making a pretty sweeping claim about an entire state there…

Some states have reputations based on their policies. As a lifelong Texan, many here refer to California with the same sweeping brush.

Yea it’s a bit weird on HN. Houston, Dallas, San Antonio, and El Paso vote the way they want but get lumped in with rural populations they don’t like.

For example seattle is liberal but Tacoma and Spokane are definitely not. I see huge Trump flags and trucks with trump stickers literally as soon as i drive out of seattle.

The abortion issue in Texas is being driven by the current executive branch - and it won’t last. Unfortunate it’s happening this way instead of by referendum such as what happened with Kansas.

> The abortion issue in Texas is being driven by the current executive branch - and it won’t last.

Chances are good it'll last long enough for people to become sterilized (or worse) due to an inability to get an abortion. That ought to be enough reason to avoid the state, especially when there are states where these sorts of laws would never even be considered.

Ok then you should avoid it. I however will not.

Spokane is blue-ish on this map: https://www.nytimes.com/interactive/2021/upshot/2020-electio...

The problem is that there are state level laws that apply even if you live in an enclave like Austin.

Thats a nice little tool. Maybe it just feels red because the Trump supporters are so egregious. I’m not sure why this isn’t reflecting my experience here in person. Without a doubt seattle is liberal. But Tacoma and Spokane? I feel like I’m dissociating now

I'm sure Spokane is less liberal than Seattle, and it's also kind of an island if you look at that map. It doesn't take much driving to get you into pretty red areas.

Tacoma and Spokane are definitely liberal. The outskirts of Spokane are not, however, and Spokane has a lot of people in its suburbs these days (incidentally, most eastern Washington cities are liberal, they just aren’t very big, Inslee even got his political start in Yakima). I have no idea why you listed Tacoma, it’s pretty much WA’s only soul city, but ya, you’ll find Trumpers in Kent, Puyallup, and all those small cities between Tacoma and Olympia/seattle. Incidentally, Bellevue used to be conservative also, and still is more so than Seattle, but it is even more immigrant heavy than Seattle is, and while Asians are both on average economically and socially conservative, they don’t like Republicans at all.

As a longtime Texan—yes this state is completely insane.

> the right to vote.

Texas is trying to mess with that too: https://www.texastribune.org/2023/09/11/texas-voting-laws-tr...

Every tech-centric area is losing its luster. It's called the end of the era of free money.

Why only Austin got that kind of boom and not any other US city? Was there a government backing?

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