An honest look at business in Austin
#WhyAustin is a special ongoing series featuring interviews with business leaders, politicians, and even outsiders. We’re taking a meaningful look at what makes Austin great while honestly examining the challenges our business and startup culture has.
Instead of talking about how Austin graces nearly every desirable Top 10 list ever published, we’re asking some of the most relevant names in business to opine. We’re interviewing company founders, politicians, startup investors, programmers, artists, musicians, and we’ve even interviewed leaders outside of Austin for their perspective. That is how you get honest feedback, folks.
Talking with a fellow native
In the video above, we chat with Hugh Forrest, Director at South By Southwest (SXSW), an internationally famous conference, music festival, film festival, and so much more as it has grown exponentially over the years.
As we put on our tech-casual outfits to jump on the Metro Rail to get our badges here in a few minutes, we reflect on what is special about Austin, what the challenges are, and whether or not SXSW would ever relocate headquarters. And the bonus is that Forrest and I are both natives – a rare treat! Below is the full transcript of our chat.
I understand you grew up here. Have you ever moved away?
I am a townie who grew up here. I first left to go to school in the Midwest. I went to a small liberal arts school in Ohio called Kenyon. Spent four years there and came back to Austin. Lived here for about another decade then lived on various places on the west coast from Portland to Seattle to L.A., but always ended up coming back to Austin.
What was it about Austin that always drew you back?
I think Austin is just, one, an easy place to live, particularly when you’re not quite sure what you want to do. Two, the creative, cool vibe that’s in Austin. There are a lot of cities like that, but I don’t think anyone quite has it the way we do.
what is the most attractive part of doing business in Austin?
I think the most attractive thing about doing business in Austin is we have an Austin-centric way to approach these things. It’s about having fun, but also being productive. Sometimes in that order, sometimes in the inverse order.
That’s very reflective of what we do with SXSW. It’s an event that’s a ton of fun, but it’s also an event where you can get a lot of business done.
Mixing those two together, I think, has been a pretty good formula for Austin and also pretty good formula for SXSW.
How does the quality of life in Austin compare to other cities?
Traditionally, one of the big quality of life points in Austin was that cost of living [was] fairly low. That was particularly good for me when I was in my twenties and thirties when I was kind of not completely sure what I wanted to do, was switching jobs a lot, was thinking a lot, was reading a lot, doing a lot of things that didn’t pay too much money.
Certainly the cost of living has increased as we’ve seen these boom years over the last decade, but we’re still cheaper than a lot of places and still have that creativity factor which is so, so important.
Have you ever considered relocating SXSW headquarters?
We have done events in other cities. We did an event in St. Louis for a few years. We did an event in Portland, Oregon for a few years. We did an event in Las Vegas. We were kind of nominally associated with an event in Toronto.
Those are all great cities and all have lots of strong points, but doing an event like SXSW has never been as successful in those cities as it has been in Austin.
Have we thought about moving SXSW? We’ve thought about everything and in terms of infrastructure, there are certainly other places that would have more hotel rooms, more convention center space, more of the things that we kind of depend on.
But at the end of the day SXSW is so much a reflection of Austin and Austin is so much of a reflection of SXSW, the two are so much connected that I just don’t think it would ever make sense to base this thing somewhere else.
Again, SXSW, our mission is to help creative people achieve their goals. That mission very much aligns with what the city of Austin is all about where creative people work here every day on their creativity in many, many different ways. That’s one of the things that makes the city so special.
Is Austin as small business or startup friendly as polls proclaim?
I think that we’ve done a great job of branding ourselves as a hub for startups and that is a big part of the success of attracting more startups. I’d like to see more successful startups come out of Austin. More exits, more funding, all of those things.
I think that there are ways we can always improve, but the city has developed an ecosystem here that attracts people from all over the U.S. and all over the world. It is certainly one of the big drivers of economic growth, of new jobs in the city at this point. I’m pretty proud of what we’ve all done to create that kind of ecosystem.
How is SXSW helping with those startup funding challenges here?
First and foremost, a lot of investors come to Austin for SXSW. Sometimes they meet companies and startups and founders from Austin, sometimes they meet companies, startups, founders from outside of Austin; but it brings that energy into Austin. That is extremely important.
I think, as well, helping to attract more startups to the city creates, again, an ecosystem where more funders want to be here. It is a long term project here.
Certainly as much as we grow the funding piece here, we are never, ever, ever going to be like what Silicon Valley is, that is leagues above us, and we shouldn’t be like Silicon Valley.
We should leverage and exploit the things we do really well as opposed to trying to pattern ourselves off of some other place.
What are the biggest challenges when hiring talent here in Austin?
I think some of the challenges we have in terms of SXSW is that it is a fairly unique job. There’s not a whole lot of training that someone can do for this until you get in-house, on site and go through a season or two. There’s the challenge of just training and how that works.
I think that it’s also become a challenge finding qualified people as the marketplace has become more competitive for job seekers. That is a, kind of, first world problem that I think we can live with. If we’ve got more job opportunities in Austin, more employment opportunities for more qualified people, that’s a good thing.
Are Austinites frequently generous with their contacts?
I do think that there is a spirit of cooperation, a spirit of community, a spirit of camaraderie here amongst many people in the startup/tech ecosystem that is a good thing, that helps the whole ecosystem.
In Austin, I think there’s a general acknowledgement that a rising tide lifts all boats.
The more we can all improve and help each other improve, the more chances we all have of continued success far beyond today and tomorrow. In that sense, I think we are fairly sharing of our contacts, fairly willing to mentor people, fairly willing to give out a hand, but I also think that is a general characteristic of a lot of the startup community. That a lot of this community around the U.S., around the world, came out of the open source movement where people share a lot of things. There is certainly competition, but there is also a lot of cooperation.
Is Austin’s past, present, or future brightest?
I still think our future is brightest and our best days are in front of us. I have an old friend who told me this once and I repeat it often:
Austin reinvents itself every seven years.
The city changes like crazy and some of those changes we miss. We miss having Las Manitas downtown and that kind of sucks that it went away, but at the same time I really like the J.W. Marriott. I really like the restaurant there, I like the opportunities that that has created. The fact that we change, continue to change, is a good thing. What you don’t want is a city, a region, that just stays the same, because if you’re staying the same, you’re not growing and you’re falling behind.
Again, we do a really good job of pushing forward and that’s really exciting. It’s an exciting place to be.
How can Austin attract more talent and more business?
How do we attract more talent and more business? I think, again, having another generation of high profile success stories come out of Austin will help a ton. That’s happening, but maybe not yet at the level of a Michael Dell. At the level of John Mackey from Whole Foods.
But that next generation is coming and coming up quickly and I think the more that we have, the more that people can see and identify of the success stories that are here, the more that attracts interest, the more that attracts people to want to come to Austin, want to move their business to Austin, do new things, do new creative things.
Again, that’s one of the things I think works really well about SXSW. It brings new people to the city. They’ve never seen the city before. They come in the spring when the weather’s nice, they fall in love with the city, they want to move here. We can say all we want about there are too many people moving here, but again, these are first world problems that we are lucky to have.
What do you think the local or state government’s role is in Austin’s growth?
Well, I think from a local and state perspective try not to mess too much with the formula is made this place successful and that formula is strong attention to creativity, strong attention to diversity, strong attention to new ideas.
It’s one of the reasons that we’ve come out strongly against the Bathroom Bill. That really goes against everything that what we believe in in Austin and what we believe in with SXSW. We are morally opposed to it. We also think it’ll be very bad for business and that’s not good.
Again, we’re the poster child for Keeping Austin Weird is good for business and very concerned what happens when you change that formula.
Can you tell us about the evolution of the Keep Austin Weird movement?
I’m sure everyone has a very different impression about how that worked and how that went. My particular impression is that 15 years ago at this point, or 20 years ago, Keep Austin Weird was very much a rallying point of the forces that didn’t want development here, that opposed growth and particularly that was when the Save Our Springs movement was very strong.
I think it’s amazing that, again, 20 years later that idea, that concept, has very much been adopted or co-opted or however you want to phrase it by the mainstream. The Chamber of Commerce, who I’m good friends with, very much agrees that Keep Austin Weird is good for business.
I think the Chamber of Commerce now understands that the creative culture in Austin is good for business. These were things that weren’t necessarily the case two decades ago. I remember we get Richard Florida as a keynote speaker at SXSW in, I think, 2003 or 2004. He had just come out with Rise of the Creative Class.
I remember at the last minute we ended up having to pay for some his travel and I was going around trying to find people who would sponsor that. Even though Austin was the poster child of very much the model city for this creative city movement and creative class, I couldn’t get anyone to bite that they should support this weird author who had these weird theories.
Again, in 2017 I think there’s a ton more agreement that having a strong creative class, having musicians, artists, filmmakers, web developers, mobile developers, whatever you want to call it, is part of of a vibrant scene. I’ll also say that having had a great opportunity to travel a lot around the U.S. and a lot around the world, everyone wants what we have in Austin.
Every other city wants to have this creative culture. Every other city wants to have a SXSW and ACL and F1. We have created something real, unique and special here and we’re the envy of the world.
What impact does having so many colleges in town have on Austin’s business ecosystem?
I think the impact of having a lot of colleges and a huge state university here is one of the many factors that has pushed this strong creative vibe here. You’ve got a lot of young people who are doing a lot of interesting thinking and that interesting thinking has, again, pushed a lot of the interesting, unique, weird ways that Austin has evolved.
It’s certainly one of the biggest things, i.e. the University of Texas, as well as other colleges, is one of, I think, our biggest reasons for success on a number of levels. Ranging from ideas to the number of volunteers that we get from those institutions.
How do you feel about Austin being on every Best Of list ever?
I’m torn on that. I feel a sense of pride that we’re recognized by more and more people. I also know that too much hype tends to kill anything and we’re in a little bit of a over-hype phase. It’s often better to be farther down on the list than number one.
We’ve been fortunate enough to be number one on a lot of lists recently, but again, I’ll say what I’ve said a few times – these are first world problems.
These are good problems to have, that we’re on too many lists of great cities to live in. Where we really have problems is when we fall off those lists. Thankfully we haven’t fallen off yet.
What is the biggest flaw in the city’s business culture?
I think the biggest challenge we have now, 2017, is a direct result of our success. It’s become a less affordable city to live in. Cost of living has increased. In some ways, or in many ways, that threatens the creativity that made Austin so unique in the first place. When it costs more to have some kind of basic dwelling, basic rental property, you’re forcing these people farther outside of Austin and, again, you’re potentially threatening what made the city so unique in the first place.
Again, that affordability challenge is huge. I think that most of our city leaders recognize that at this point and there are lots of interesting, innovative solutions that are being worked on. I’m optimistic that those will help stem that problem.
I think it’s also interesting that those challenges with the city of Austin very much reflect some of the challenges we have at SXSW. That the event itself has moved from something very affordable to attend 10 or 15 years ago to something that is not quite as affordable to attend now.
Again, same challenges there. Are we pushing out that creative class? Those smaller developers, those students, those innovators, those people with new and different ideas that made the event cool in the first place? There are always challenges, but these are better challenges to have than some of the other ones.
Words of advice for anybody moving their business to Austin or starting a business here?
Words of advice to people coming to Austin? As with anything, try to do as much research as possible. We are fortunate to benefit from a lot of hype, but you should probably investigate and figure out what is hype and what is reality.
If you are going to move to Austin or are making that step, take some time to try to meet as many people as possible.
Again, people here are generally friendly, generally friendly to outsiders who can contribute to our ecosystem. The more people you meet, the more people you can connect to. Those small connections can lead to big, big things and make our ecosystem even strong.
A special thanks to StoryCraft who diligently crafted the above video – we’re proud to partner with a crew that consistently offers such high quality work!