Friday, 29th of February 2008 at 11:39:04 PM
Longtime friend of Startup Houston, Stacey Higginbotham of GigaOM (Stacey is in Austin and used to write for The Deal), authored a post this week about the elements needed to develop a High-Tech-Hub:
“Money, big companies and good weather. That last one isn’t a joke; quality of life is important. For example, many people want to live in Austin, while few want to live in Houston. So even though there are a lot of huge companies, money, and a real effort by folks at places like the Houston Technology Center and Startup Houston, building an information economy there is going to be a challenge. Blame it on the humidity.”
Now I am a big fan of Stacey’s work and the attention she brings to Texas technology startups (and our site) but I have to respectfully disagree with her assessment. If I were to identify the needed components to bring about a High-Tech-Hub, I would list them as follows (actually I am borrowing this from a presentation that Jacqueline Northcut, CEO of BioHouston gave last week):
- Money (agree on this)
- Experienced leadership (could be semantics so possibly in agreement on this)
- Critical mass
By critical mass, I point to every well-known High-Tech-Hub: San Francisco, Seattle, Boston, Austin (yes Stacey, Austin is a High-Tech-Hub…I am fascinated why people from Austin don’t get this). Each of these cities has what Houston lacks, proximity to other technology companies to facilitate collaborative effort. I have a client in San Francisco that I talk to weekly and I am always amazed at the number of other notable startups that are “right across the street from us.”
Houston is not too hot; Houston is too sprawled. Try to collaborate with someone in the Woodlands or Sugarland; it’s a nightmare of traffic and schedule coordination.
But what I think is not as important as what you think…let’s hear it!
With all due respect, I find myself disagreeing with both of you. What people seem to be blind to is the fact that Houston is a high tech hub. It’s not a leading hub in the arena of personal computing or Internet applications for individuals. So perhaps it’s a matter of semantics if that is what defines a high tech hub. In my view that is too limiting.
Houston’s primary industries are energy, medicine, NASA and to a degree shipping as a result of the Port. The first three are exceedingly high tech, and shipping is rapidly becoming high tech if not there already. The computer applications in the oil industry dwarf most others in terms of sophistication and ongoing research. Houston also has an entrepreneurial culture that surpasses most places.
What is missing (sorry Rice and U of H), is the presence of highly regarding major research universities. Silicon Valley has Stanford and Berkeley. Boston has Harvard, MIT etc. Houston also falls behind in quality of public education and public transportation.
All that said, Josh has a point in his reference to sprawl. If Houston had a nice large industrial park dedicated to high tech research oriented companies, the synergy would improve. Since that’s missing HTC, Startup Houston, and others need to fill in.
Great topic. I grappled with a lot of this doing a project a few years ago on a marketing project for a region in another state working to position themselves as a center for business investment – the importance of educational institutions that Dan mentions is key (and they were very fortunate in that regard, despite being a much smaller area than Houston).
IT in particular is always going to be overshadowed in Houston by energy and NASA – that’s part of the fundamentals of the Houston economy. Here’s a question I’ve been thinking of – can improvements in online collaboration (thanks to social media) help overcome the sprawliness of Houston?
Contrary to popular belief, distance isn’t irrelevant, and a combination of online and face to face interactions works better than strictly online. So there is potential there.
Another question: should we be trying to steer Houston’s tech businesses into a limited set of geographic areas to achieve that physical critical mass – say around the Tech Center, or somewhere else? Sort of an IT version of the energy corridor on the west side of town?
This brings up a lot of good points. I worry about the climate issue. Houston’s the kind of place where people work hard and then catch a plane somewhere else for a long weekend. At least it doesn’t get terribly cold, but we need to do more to develop what natural resources/greenspace we do have.
Social networking could be particularly valuable in a sprawling, fast-paced culture like Houston’s. I’ve started a small experiment on Twitter for this, hoping to add as many serious tech/entrepreneurial folks as possible from Houston as well as Austin/DFW/Bryan/San Antonio:
http://twitter.com/FBendHouston
We have to work harder at making and maintaining connections and social networking could really help.
Finally, John brought up the question of “trying to steer Houston’s tech businesses into a limited set of geographic areas to achieve that physical critical mass”. I think civic leaders really need to look at this.
When I first got out of college (1986), the economy was terrible, but Houston had just been given this really great asset next to NASA, Ellingtion Field. I kept expecting the city to jump on that as an entrepreneurial park, but there has never seemed to really be much of a vision for capitalizing on our main tech assets.
Stimulating such a vision among civic leaders is where groups like HTC could really play a valuable role.
Interesting points in the comments here – I think that the university issue might be a valid point. Rice & U of H are not focused on churning out IT geeks like the schools in those other areas.
Also, how much of a factor is the hippie factor? Think about it … every one of those places are places that I consider a bit “hippie, granola, crunchie”. In a very good way. Houston just isn’t that – which is one of the main reasons I’ve always wanted to move.
But I think we have a LOT of technology in Houston – it is just focused in different areas than startups. More older, established businesses. So really, it is just a matter of perspective, and what you’re looking at.
Also, I don’t know how much proximity matters — I think it is more about associations with others, and working with others, and blogs, etc. make all of this possible. When I launched my hosting company years ago, I had a ton of support and instantly a lot of clients, all thanks to the people I knew in San Francisco and other places.
I think it all comes down to how you look at it, and what rule you’re using to measure. Plus Austin isn’t that much cooler than Houston in the middle of the summer, and we have better airports with easier access to travel around the country or world.
You’re right, critical mass is an important factor – it’s like a snowball, though. A small start and a push in the right direction is all it takes. Often, universities are that important “small start”, so it is somewhat disturbing how few “spin-offs” – businesses derived from leading-edge research – are created from Rice U. and the Texas Medical Center. Having large companies is great, because they’re often the first customers of small, entrepreneurial businesses; but when these large businesses suck up all the talent by hiring everyone … not so good!
Humidity a problem? Never stopped Seattle. It’s good for the skin – we’ll all be younger-looking many, many years longer than those arid folks in Silicon Valley and Austin
Bohemian – yes, important. There’s a connection there to creativity. That’s why I think as Houston’s high tech community takes off, it will be found in the Midtown/Montrose area, which is our bohemian enclave, and close by to a few major universities too. Houston is happening now, but I’ll be happy when I can sit any any coffee house (or, hey, tea house!), and overhear tech conversation most any time – that’s how it was when I lived in Palo Alto, and I’d love to have more of that here!
On the bohemian subject – Houston has great cultural resources, which are often not recognized outside (or even inside!) the region. Our local art scene is very good, especially in the folk art department (which is the definition of bohemian!) and there’s quite a lot going on in the music and live theater areas too.
At the same time, a little bohemia goes a long way. I worked for a number of years in the northern Virginia/DC tech sector, and that’s a pretty un-bohemian place – the region has a reputation for stuffiness (not entirely deserved).
I was thinking today about what got things going there. (I think it’s a good model to look at – like Houston, it’s spread out, tech is overshadowed by a bigger local industry, etc.)
1. Lots of tech workers buzzing around (perhaps working for the gov’t, consulting companies, etc. but there)
2. At least one cluster of related big companies – telecom in the NoVA case (MCI/Worldcom, Cable & Wireless, etc.)
3. in the heyday of AOL options being worth something, people leaving entrepreneurial organizations with a wad of cash, looking to do something interesting.
4. A few hubs – Tysons Corner and the Dulles corridor for IT, and Rockville MD for biotech. That is important. I worked in the former two areas at one point or another, and you really would go to Starbucks and hear tech talk, go out to lunch and hear tech talk, etc. It was easy for people to meet up after work for networking. That stuff matters.
(While people think of the DC area as a dense eastern city, northern Virginia is a lot like Houston. Except with traffic that’s five times worse.)
Oh, and one other: low costs, at least in the 90s. In the mid-90s people would come there from CA and be shocked at how much better they could live in Virginia. That advantage is gone for them at this point – but not for Houston.
We do have a cluster of related big companies – they are just oil & gas companies.
As I was trying to say the other day – I think Houston is already a hot technology city – it just hasn’t been recognized as such because it isn’t one in the same terms as San Francisco. I think there is something to be said for the stability of not having a startup on every corner, and having a lot of established industry. After all, isn’t that the goal of every startup? To become established for years to come?
And let me say that I’m saying this after starting my own soap-making business 10 years ago, starting my own blog-hosting business in the early 2000s, and starting my own photography business in 2006. I’m all for startups. But isn’t the goal of the startup to be something that sticks and last?
On a side note, I’ve been to Seattle, and it is nowhere near as humid as Houston. Orlando is the only place I’ve ever been to that comes close to our humidity.
A couple of thoughts. The point about the need for critical mass to enhance collaboration among tech companies is important and valid.
From a different angle, I would argue that the lack of critical mass (perceived or real) keeps talent from moving here, and consequently limits the technology sector dynamism and the number of start ups. My reasoning on this point is not about collaboration, but risk management. Tech talent does not want to move to a place where they perceive that the job prospects are not plentiful if their company or job goes south.
Josh, you are too diplomatic. I fully expect to be tarred and feathered when I next hit town. Here’s what I said on the blog in response to your post and its comments:
“I liked your point about distance, but I would compare it to California. San Jose is almost as far from San Francisco as Sugarland is from The Woodlands, so I’m not sure how limiting that is. I will say that the points in the comments about Houston’s tech scene comprising energy and NASA related tech is something the city should do more to exploit. In all honesty technology helping extract more natural gas more efficiently is far more interesting than another free VoIP platform.”
I do believe that consumer tech may always have a hard time in Houston, although that’s not to say successes won’t happen. But there are some very real innovations in nanotechnology, oilfield services and life sciences happening there that you guys should trumpet to the world. And hell, I’m only a few hours away and would very much love to cover the hottest startups coming out of Houston. I’ll even brave the humidity to come meet them
Stacey, we’ve been stocking up on tar and feathers for that very occasion!
But seriously, I appreciate that you started the conversation. As is apparent from posts on both of our sites, there is little agreement on the ingredients required for a high tech hub. Houston unquestionably has the ingredients for biotech and nanotech. Energy tech get evaluated here but most of it comes from the North Sea.
I think you’re dead on about consumer tech. One of the most gaping holes we have that I believe Austin has in spades is product marketing talent. This is due to the 2nd item needed that you pointed out, a lack of big consumer or software companies in Houston. I am not sure what happened to the minions that left Compaq after HP came in but they don’t seem to be having the same impact that the Dellionaires have.
Please don’t let the tar and feathers keep you from coming to Houston. We should set up a tour for you when you come to meet the growing startups here in town so you can tell Om all about them.
I’ll chime in just once more on the distance dynamic, in response to Stacey’s comment “San Jose is almost as far from San Francisco as Sugarland is from The Woodlands”.
It’s not quite the same. In the early days of “Silicon Valley”, even up to the mid-1990s, all the real action in the software/IT world could be found between Cupertino and Redwood City, with Palo Alto the center of the universe. Within that stretch of 16 miles were a pearl string of small towns and hot IT activity. SF was where the media action was at – San Jose was mostly hardware, and the groups in these 3 distinct centers rarely interacted. At least, that’s the way I remember it, from the little time I spent there in the 80s and 90s.
By comparison, the “Dulles Corridor” that John mentions is at most a 10 mile stretch; a very nice concentration in an otherwise traffic-jammed region. Heck, no one in Fairfax would ever make it to an event in Silver Spring MD if meetups required it.
Downtown Houston to Sugar Land is 16 miles. If all the startup activity were happening just along that stretch, it’d be a very different dynamic from the scattering of activity between the Woodlands to NASA and I-10 West’s “Energy Corridor” to Baytown’s refinery row. This city has got the sprawls! There is still a dynamic down here, but it has different challenges at present.
Just my observations on the lofty subject of “Urban Geography and Business Development”
[...] Higginbotham with the Austin office of GigaOm as well as StartupHouston’s own Josh Tabin talking about what it takes to make a town a successful breeding area for technology startups and decided [...]