Monday, 2nd of November 2009 at 10:40:57 AM
I recently learned that NutshellMail has decided to move their offices from Houston to Silicon Valley (see the announcement here). This move should be no surprise to those that have been tracking Nutshell Mail’s progress, seeing as how they were recently selected to join Facebook’s fbFund Rev Incubator Program and now have a great introduction into how business in the Valley works and are now a part of the deal flow.
For those of you who are not familiar, NutShellMail is a free, hosted service that transforms any email account into a universal inbox. It allows you to monitor all your email and social networking accounts directly through the email account you use most (and its free). Mark Schmulen and crew at NutShellMail have also been very supportive of Houston’s startup community, hosting different tweetups and coworking events, as well as being regular attendees at Houston’s BarCamps and HTC/StartupHouston Coffee Clubs and Happy Hours in the past.
In their blog post, Nutshell Mail had some great things to say about Houston, but at the end of the day said they chose to stay in Silicon Valley due to the fact that the entire business climate there revolves around startups. Here is an excerpt of their post:
Just the other day, standing in an elevator we landed a meeting with the founder of billion-dollar software company who has invited us to come to his office to discuss a potential business development deal. Technology is not just an economic driver in the Valley, it is a way of life.
We wish Mark Schmulen, David Lyman, Nirav Batavia, and all the rest of the crew there the best of luck in their new offices in Silicon Valley, but I can’t let them go without a challenge. I only ask that you guys remember your roots and come back to us on occasion (like Matt Mullenweg has done) and share the lessons that you have learned so that we can continue to grow the startup community here. You have been great ambassadors for Houston and I hope that continues to be the case.
On a similar note, I would like to ask all readers what they think it will take for Houston to continue to build a more vibrant startup community that is able to fund and retain top talent. Leave your thoughts in the comments.
Having spent many years in the SF Bay Area, I can tell you that it isn’t all as rosy as portrayed by that one elevator quote. You want to know how to make Houston a startup-friendly environment? Here’s how:
1.) Strategic Investments – There are more Fortune 500 companies here than anywhere outside New York state. Why aren’t they investing in complementary startups with an eye towards acquisition?
2.) *Individual* Angel Investment – What I mean by this is serious high net worth individuals that are willing to put at risk $250k-$1MM to fund startups. Angel networks are a nice idea, but they breed groupthink and end up not investing in garage-stage startups. We need the local equivalent of a Ron Conway or Jeff Clavier. I know there are folks like that here in Houston, they just aren’t doing technology angel deals. Our challenge is to show them there’s real value being generated and passed over because there wasn’t a $50k check written at the right moment in a company’s life.
2a.) Startup Feedback Loop (Angels part 2) – When Paypal had their exit, their founders and early employees used their proceeds to fund an amazing number of startups. Youtube, Founders Fund, movie deals, Tesla Motors, etc. This is a tough one, because you can’t fault someone for wanting to just enjoy the fruits of their labor, but to breed a startup community, Houston’s successful entrepreneurs need to put more of their earnings at risk to fund more startups.
It’s not that there aren’t talented people and companies here in Houston, there are. How else could we support two major universities, Nasa, HP and other major technology corporations? We just aren’t connecting at the right times. We need more entropy in the system, and the friction generated will produce one or two big startup winners, who must then be committed to putting time, energy and money back into the system to help grow the next crop of startups.
My $0.02,
Mike
I generally agree with Paul Graham’s popular articles on this topic. A lot of truth here:
How to be silicon valley:
http://www.paulgraham.com/siliconvalley.html
Can you buy silicon valley:
http://www.paulgraham.com/maybe.html
As a fan of Houston I have to say it might be tough for it to ever become a tech startup hub. It might do better in energy or biotech startups.
Michael,
I think you are spot on. I have seen some very large donations go to colleges (John Moores’ $51 million donation to UofH comes to mind) and wondered why not spread these investments around a little bit more and put $1m or $2m into some seed funds that would really bring the entrepreneurs out of the woodwork. Now, don’t get me wrong. I believe that education is a very worthy cause and helps to create the talent that may eventually come along to start those ventures, but I would like to see a lot more investment being made further along the food chain. It wouldn’t take much to put together an entity in Houston that could compete with the TechStars and YCombinators of the world. We definitely have the talent. I think we are just missing a funding pool with a greater tolerance for risk. People tend to invest in what they know. So getting people in town who have made money in energy or other means to invest in tech startups takes a bit more persuading. Here’s hoping that Houston continues to pump out additional interesting startups that make them see that it is worth it!
Thanks for your comment!
Brian,
I read both of the articles and they depressed me.
If I were to accept them as gospel, I would have to shut down the StartupHouston blog right now and move to Austin/Boulder/Portland/SV, but that’s not an option for me.
However, what I choose to do is look at the positive aspects of what he said could make a startup town.
- Does Houston have a thriving city center? (Downtown/Midtown/Montrose = Check)
- Does Houston have world-class universities? (Rice/UofH = Check)
- Does Houston have a vibrant young community of geeks? (Yes, and continuing to grow)
- Does Houston have an investment community that is interested in startups, has a high tolerance for risk, and is willing to spread their investment around? (This area needs work)
I think if anything, what we have to do is what we have been doing and that is continue to encourage and promote the organic growth of Technology Startups in Houston and continue to try and push to get sources of Funding for those startups. Then, if we can just get a few to be successful and to stay in Houston, hopefully we can get the process to be reinforcing.
Let me know if you have any other thoughts along these lines.
Thanks for posting your comment!