IBM's design studio in Austin
As thousands of visitors descend on Austin for SXSW, jockeying for limited accommodations and crowding streets already congested with the traffic of more than 100 daily transplants, it’s harder than ever to ignore the city’s boom.
But it hasn’t always been this way.
"Austin was a sleepy little college town 30 years ago," said Eureka Software Solutions, Inc. founder and CEO Monty Myers (pictured left) in a recent interview. "It wasn’t anything like it is today. The only tech we had was hardware manufacturing. Texas Instruments had built a plant, IBM had one. Mostly on the hardware manufacturing side."
Phil Gilbert, head of design at IBM, said the company’s history in Austin is part of why they decided to center their global network of design studios here.
"We’ve grown up with the Austin tech scene since we came here in 1966," said Gilbert (pictured right). "In 2012, we wanted a campus where we had a strategic and historical commitment, and in a city where we could attract designers at scale. It was clear Austin was a place they’d love to live."
At the time of the interview, IBM had 23 studios worldwide, and has since announced opening a new facility in Dubai, with plans to launch in San Francisco soon.
But not everyone opens offices in Austin as part a scheme for world domination.
Jason Westland launched ProjectManager.com in 2010 with a staff of four developers in his native New Zealand. Since then, his software has attracted 13,000 users, including clients such as the United Nations and NASA.
As his company grew, Westland (pictured above) traveled stateside to search for a hub where he could open a second office and better serve the more than half of his customers who are U.S.-based.
“I looked at Seattle, but the weather’s atrocious,” Westland said. “Also, I didn’t want to be in Microsoft’s backyard, since we’re competing with them. New York didn’t feel like the fit for a startup at the time; it seemed to be more established businesses.”
But when Westland came to Austin, he said it was a perfect fit for his goals. Not only was the culture friendly to startups, but he knew he would find the right people here.
"It’s beautiful and people are friendly," he said, "but from a business perspective, it’s easy to recruit people at our stage of growth, who aren’t all coming from mature companies like Microsoft or Google. It’s not expensive to retain good staff with the right incentives in place. You can get exactly the right people with exactly the right KPIs working on exactly the right product at exactly the right compensation level, etcetera."
Westland cited Google’s compensation as an example of competition for resources edging startups like his own out of a market. "When they’re paying $400,000 for senior engineers, it’s hard to compete when you’re a startup only able to pay $100,000 or $150,000."
Cost aside, Westland said avoiding the valley was no accident.
"People play stock options games there," he said, referring to the often calculated decisions about where to work based on the likelihood of a windfall from an exit. "If they don’t IPO quickly, they churn."
ProjectManager.com now employs a team of 10 in Austin Oaks.
Even more established brands are finding their place in Austin's ecosystem. With Apple, Amazon and Facebook setting up shop locally, other household tech brands are finding their footing in the area.
That was the case for Box as the company looked to expand from its headquarters near San Francisco.
"We looked across the country to find the best location for our first major U.S. office outside of California," Senior Vice President of Customer Success Jon Herstein wrote in a 2014 blog post. "Austin is not only one of the fastest growing metropolitan areas in the country, it also has great talent and a rapidly growing technology ecosystem."
The company announced its downtown Austin office near 6th and Congress in May 2014, planning to eventually fill it with 200 employees. At the time, Business Insider noted the company’s biggest competitor, Dropbox, had an office on the same block with a similar headcount.
"The transition to the cloud is still in its very early days, and while Box has had tremendous success, the opportunity to help every organization in the world transform how they work is a massive one," said Sarah Lovelace, Box’s senior manager of recruiting operations in Austin. "We have many new products and capabilities in store for our customers this year, and Austin will continue to be a huge part of how we deliver on our vision."
It was a big year for that block. Three months before the Box announcement, Sprinklr established its own presence at 6th and Congress.
The enterprise software company, which makes tools for managing brands across media channels and the way customers experience them, acquired brand analytics firm Dachis Group.
That’s how Brian Kotlyar joined Sprinklr. He’s now the company’s area vice president of demand generation. He explained how Sprinklr’s center of gravity has shifted toward the breathtaking penthouse office it inherited from Dachis Group, now one of Sprinklr’s largest global offices and host to roughly ten percent of its 1,000-member workforce.
"Dachis Group had amazing talent," Kotlyar said. "It’s not easy to find great technologists who understand that space and how to work in it. To get a bunch of them in one fell swoop was advantageous."
Kotlyar said patents were also part of the rationale for the acquisition and have since been incorporated into Sprinklr products. He also cited the advantage of a footprint near UT Austin SXSW.
As for the future in Austin and beyond, Kotlyar said Sprinklr is expanding widely from here.
"It may sound trite to say we plan to keep growing and doing great things, but the best way I can say it is we dream really big at Sprinklr," he said. "We’re in it for the long haul for everything we do, and what we’re doing serves a need that’s not going anywhere."
"Austin is a core, anchor office where we’ll do that work."