[ryanmarsh]

As a Houstonion this gives me pause. Houston is a massive economic center by nearly every measure. It is also home to the most diverse county and university in the US. There are large successful technology companies here. Yet, Detroit and Dallas (arch enemy of Houston) are getting TechStars before us.

Part of the reason we don't attract accelerators like TechStars is the lack of a healthy startup ecosystem. I am NOT saying that the well intentioned community organizers aren't working hard. It's just that most of the VC here goes to Oil & Gas projects. If your tech isn't energy related it won't hit the radar. The technology startup successes I've seen in my 30 or so years here were built inspite of a (nonexistent) local startup ecosystem. Lastly, 9 out of 10 great people I've worked with here have left to go places with more tech opportunity. The talent is voting with its feet. Frankly, I'm done too. I'm on the first airplane out of here once I get my feet under me. I'm sad that it has to be this way. Maybe if I make it rich I'll come back and invest.

edit: spelling

[jusben1369]

I guess the question is what makes for a good techhub/incubator. It seems to me embracing of a counter culture lifestyle is the key early differentiator. Certainly the Bay Area once had that. Austin. Seattle. Even Durham NC where I'm based now and is having a (relative) boom rose out of abandoned tobacco warehouses that could afford to support all types of people. I haven't been there in 8 years but I hear Detroit has that going for it now too. Houston with it's established booming energy sector probably doesn't draw in the right type of culture. (Although I have no response for Dallas vs Houston so you've got me there)

Sure you need good universities and cheap accommodation etc but it strikes me there has to be something unique and alternative to draw in the igniters of a new hub.

[ryanmarsh]

Oddly Houston has always been a wildcatter's town. People come here specifically to make money. I promise they're not here for the climate. People here are more entreprenurial than other places I've lived. People here have their own style of counter culture that more resembles a lack of f*s to give. Texans feel like they can do whatever they want. You'd think that would be great for business, and it is, the state and specifically Houston have done great during the recession. However tech just lags here.

[humanrebar]

How do you explain the pushback against Uber then?

[CoachRufus87]

Fyi, San Francisco just sued Uber.

The interests of a business community don't necessarily reflect that of a local government.

[bluedino]

One thing that San Francisco has that somewhere like Detroit doesn't, is the affluent residents with the ability to sustain a service like Uber or startups such as food delivery. Those kind of services are viable to create a startup focused on in SF but not in Detroit.

[GFK_of_xmaspast]

I've been told that the suburbs immediately outside Detroit city limits are rich as Croesus.

[phkahler]

>> I've been told that the suburbs immediately outside Detroit city limits are rich as Croesus.

Yup. Oakland County was once the 4th richest county in the US. Michigan leads the nation in families with second homes. Everyone around here has a second home (cottage, cabin, etc) on a lake from 1-3 hour drive away. OK, not everyone. Part of it is that there are so many lakes that they're relatively cheap. I even knew a guy who bought an entire lake - property was like 100 acres and lake was within that. This cost him less than a two bedroom place in SF.

[valarauca1]

Northern Michigan (extreme north) is dirt cheap. Yes your looking at a 8+ hour drive to get there, but excellent winter sports, and out doors stuff.

[karpodiem]

What? What are you start/end points?

Northern suburbs (Royal Oak) to Traverse City is 4.5 hours.

[valarauca1]

Bloomfield is nowhere near the city limits. Its a suburb. Detroit is all about the suburban sprawl. Its total area is massive. I think we're at about 200 miles east/west 250 miles north/south.

Its gotten to the point that some suburbs are big enough to develop their own suburbs. Notable Troy, South-field, Ypsilanti, Ann Arbor, Sterlining Heights.

These started out as satellite cities to Detroit, but since Detroit suburbs grew, the satellite cities suburbs grew. Its just a massive sprawl.

[jerf]

The thought has crossed my mind more than once that while Detroit may well pull out and survive that it will be a very long time before it leads the area again, because in the meantime a lot of the surrounding area has learned how to survive and even thrive again without Detroit qua Detroit. On a long enough timescale its geographical positioning theoretically gives it an edge (Ann Arbor will simply never have a port, for instance, Southfield can't have an international border without a lot crazier things than the collapse of Detroit happening), but that might be a while before it dominates.

[Igglyboo]

Grosse Pointe doesn't count? IIRC it has a literal boundary with Detroit.

[akgerber]

Not quite. Here's a huge house right off a lakefront park in just such a rich suburb: http://www.trulia.com/property/3172627452-736-Bedford-Rd-Gro...

You could buy two of them for the monthly cost of a nice 1-bedroom in SF.

[Igglyboo]

Grosse Pointe is immediately outside of Detroit and multi million dollar houses are the norm there.

[jerf]

"One thing that San Francisco has that somewhere like Detroit doesn't, is the affluent residents with the ability to sustain a service like Uber or startups such as food delivery."

On the other hand, one thing Detroit has that San Francisco doesn't have (or at least not to the same extent) is ready access to a lot of industry, especially automotive (even now), and the recovering Midwestern manufacturing base, in Michigan, easy access to Toledo, and feasible driving to several other industrial cities. If Detroit doesn't produce the next WhatsApp I'd guess it would be because the attraction of more business/industrial opportunities would be too great to ignore.

[jusben1369]

I think these are both great points. San Francisco seems well suited to launching consumer/mobile focused startups. The risk is we assume those are the only types of startups that need launching due to gravitational pull of all things Bay Area. But there are exciting new opportunities in drones/electric transport/manufacturing that a place like Detroit with much cheaper real estate and a different type of local skill set could excel at.

[ryanmarsh]

The valley and SF also have VC with vision when it comes to software.

VC here are willing to fund a liar standing next to a hole in the ground, but lax to fund a software venture.

[heurist]

Startups also don't have to be consumer-oriented, there are plenty of businesses in the midwest that need better tools and solutions than they have.

[Igglyboo]

Detroit has a ton of affluent residents within 30 minutes of the city that regularly venture down there for various sporting events, gambling, and other events like NAIAS. Getting them to actually move to the city is the problem.

I live 30 minutes from detroit and come from an upper-middle class household.

[emcrazyone]

and why would you? Detroit has problems picking up the trash, snow removal, and keeping the lights on. Who would pay taxes for no services coupled with the crime stats.

See my post further up. I grew up 30 minutes in what many around here call the down river area (Riverview) and when I bought my first house, I went north. I'll happily pay more taxes for blue ribbon schools, trash pick up, snow removal, and be able to take an evening bike ride under street lights in a safe neighborhood.

Why would anyone trade any of this for living in Detroit. The bad areas are where people go who can't afford to live anywhere else. A hard cycle to break.

[karpodiem]

I live on Virginia Park St., just a couple blocks north of the Fisher building, between Second and Woodward (New Center). I grew up in Troy, MI - went to school at UofM. Hometown guy, I've seen a good portion of the metropolitan area.

You are spot-on; until it's safe to raise a family in Detroit (which, based on the lead and heavy metals residing in the soil from the torn down structures, this may never happen) I can't see myself raising a family in the city. I'll be moving to the suburbs, if I'm still living Detroit.

D3 and Loveland are doing a great job documenting the upcoming housing apocalypse - and I don't care how geneous the city gets with payment terms to the debtors, if there is no present or future income to service the debt, it's game over.

For as much building as going on in Midtown/Downtown along with the new entertainment megaplex that Illitch is constructing, there is a two factorial amount that's decaying in concrete/wood/basic raw building materials, because there is zero disposable resident income to upkeep the property.

The city will have to decompose fully to thrive. I've sometimes played with with the idea in my head to split Detroit into three or four separate cities (to help certain portions thrive), but this of course would be politically untenable.

ps - See the 'Detroit by Air' article from a few days ago.

[Igglyboo]

I wouldn't. But if those problems were alleviated I would in a heartbeat, I would love to live in a big city but do not want to move far from where I am now.

Also, the downtown area of Detroit is extremely nice and if the rest of it was even half as nice I would consider moving there.

[7Figures2Commas]

> Part of the reason we don't attract accelerators like TechStars is the lack of a healthy startup ecosystem.

As an entrepreneur, you do not need a "healthy startup ecosystem" to build a successful company. Let me repeat: as an entrepreneur, you do not need a "healthy startup ecosystem" to build a successful company. If you have a great product or service and are willing to make the effort to get in front of customers, you can build a successful company anywhere. Starting today.

I won't argue that the things that come with a "healthy startup ecosystem" (accelerators, venture capital firms, etc.) can't be helpful, particularly to certain kinds of entrepreneurs chasing certain kinds of opportunities, but as a general rule, the people who are going to build successful companies aren't waiting for their cities to become startup hubs. It's simply irrelevant to their ability to execute.

> If your tech isn't energy related it won't hit the radar.

Any entrepreneur in any industry passively waiting to "hit the radar" is going to be disappointed. If you want attention from customers, investors, media, etc., you almost always have to go out and get it. Ironically, this is even more true in the Bay Area because there are so many companies and there is so much noise.

> The technology startup successes I've seen in my 30 or so years here were built inspite of a (nonexistent) local startup ecosystem.

Even in Silicon Valley, which has the "startup ecosystem" that is the envy of the world, most startups fail. You just don't see the graves because they're covered by the latest batch of startups.

> Lastly, 9 out of 10 great people I've worked with here have left to go places with more tech opportunity. The talent is voting with its feet.

While it's easy to get the impression otherwise, lots of people come and go in the Bay Area too. Just because this is the tech capital of the world doesn't mean the grass is greener for everyone.

[ryanmarsh]

I think you're agreeing with me. The tech startups that are successful here do so in spite of the ecosystem. We're missing whatever that seed is that gets a healthy community going that would feed on itself and create more successes and make us appeal to TechStars.

[7Figures2Commas]

No, I think you're placing way too much emphasis on the "ecosystem." Again looking at Silicon Valley, there are exponentially more failures than successes even though it has the ecosystem that is the envy of the world.

[ryanmarsh]

I can't help but wonder how much you actually know about the history of Silicon Valley, Fairchild, and military funding.

[7Figures2Commas]

I know people who lived here when Silicon Valley still had orchards and whose parents were employed by some of the early companies. Silicon Valley's history, however, has little relevance to the discussion at hand.

You seem absolutely convinced that entrepreneurs can't build successful companies without a certain kind of "ecosystem" in their city. It's simply not true, but please don't take my word for it.

If and when you leave Houston and come to an area with a great ecosystem, like the Bay Area, you'll soon discover that despite the ecosystem, there are tons of entrepreneurs and wantrapreneurs who aren't any better off. The only difference might be that instead of the excuses you've provided ("there's no ecosystem", "the investors don't invest in tech") you'll hear a different set of excuses ("I can't find a co-founder", "YC rejected me for the fifth time", "the VCs won't invest in my company").

[ryanmarsh]

You are projecting. I am under no such illusion. I've lived and worked in the Bay Area at startups and in Houston, Austin, and Chicago at startups. I'm not saying the ecosystem is the constraint on entrepreneurial success. I'm saying there's something that would attract TechStars and Houston is missing it. My guess is community. I assert that ecosystem helps more than you appreciate.

[Cyranix]

I'm a Rice University alumnus (Hanszen '07), and your sentiment definitely resonates with me. When I took my first programming job, I had two offers come in at the same time: one to stay in Houston and write Java code for pipeline scheduling, the other to head to Austin and work for a small crummy independent company. Houston has so much going for it, and if I had felt like a vibrant tech startup scene were present, I might have stayed. Instead, I left behind my entire friend group and taking a job that paid half of what the energy industry was offering, purely for the sake of better future opportunities.

I know there are some entrepreneurial efforts being made at my alma mater, but overall it feels like a huge missed opportunity. The business school is strongly walled off from the undergrad population, the excellent CS department tends toward the academic side (with rare exceptions like COMP 410/415 [1]), and personally I never saw much of an attempt on the part of the local tech scene to get students integrated. There is the Rice Alliance [2] but it isn't quite the same as an organic grassroots-y scene.

[1] http://www.bandgap.cs.rice.edu/classes/comp410/ [2] http://alliance.rice.edu/

[yesimahuman]

Well, both San Antonio (Cloud) and Austin have TechStars programs. San Antonio's exist largely because of Rackspace, and Austin because the city is mature for a startup city. So, Houston either needs that large sponsor or organic growth, of which the former doesn't seem far fetched in the somewhat near term.

[saryant]

I have to agree. I love Houston but I left it for San Antonio because the tech scene in SA was much more lively with Geekdom and Techstars. Though I'm now in Boulder I've been keeping in eye on SA and there's a lot of cool stuff going on there, plus the VC activity has really picked up—multiple $1+ million rounds have been announced or will be announced in the next few weeks.

[avelis]

I am a part of the young tech startups in SA and I would also suggest for anyone to come back or give it a look see. I transplanted from SF and find the playing field wide open for new opportunities.

[mgirdley]

As a San Antonio VC (GeekdomFund.com), I hope you come back.

[saryant]

Hi Michael.

[kgomez]

+1 for SA! Thanks for your comments :)

[yeldarb]

I lived in Houston for 6 months a few years ago while my girlfriend was student teaching there. It was so foreign to me that I couldn't find any semblance of a startup community in such a large city.

[saryant]

It's there, but it's not young and it's not the sort of tech that you see in SV. If you want to talk to startups building oil pipeline monitoring or healthcare software, it's the place.

[7Figures2Commas]

Pipeline monitoring? Healthcare software? How in the world will anybody ever make any money in oil or healthcare?

Seriously, keep in mind that for all of the companies in Silicon Valley that do truly groundbreaking or meaningful things, there are many more startups that fall into one of the following categories:

1. Doomed to failure chasing inane consumer internet ideas that 50 other companies are chasing.

2. Doomed to failure leeching off of other startups, something that won't be viable when the current cycle ends.

3. Doomed to failure pursuing legitimate opportunities that their founders don't have the domain expertise to exploit.

[saryant]

I certainly wasn't trying to disparage either oil or healthcare tech. I grew up around oil and have huge respect for that industry. I think my overarching point was that startups in Houston aren't sexy, they don't get coverage on TechCrunch, but there are people building some solid, necessary products.

San Antonio is similar with companies like WellAware raising a $37 million series A for oil field monitoring tech.

[mbesto]

I'm surprised there isn't more healthcare based startups (with underlying tech) in Houston. My understanding is that Houston is mostly Oil&Gas + Healthcare.

[davidw]

FlightAware is in Houston, apparently.

[ryanmarsh]

Yup. I've also never met anyone from there at any community events.

[davidw]

Maybe they're busy working on the company, or going to pilot events :-) I think there's a balance to be struck there: you see some places that are crawling with startup "scene" events and happenings and networking and you wonder how any work gets done. But if everyone stays holed up all the time, that's probably not healthy long term either, in terms of pulling new people in.