Why Outdoor Voices, Apple, and America’s Coolest Entrepreneurs Want to Be in Austin

Just a few blocks from a forest of glassy new skyscrapers, including the tallest apartment building west of the Mississippi, about 70 young women in yoga pants (and a couple of men) dance and stretch to a Cardi B song on an incredibly green lawn. At the head of the group is Tyler Haney, the 30-year-old founder and CEO of Outdoor Voices, who uprooted her New York sports e-apparel company Moved to Austin in 2017.

“All right, everyone! Woo!” Haney yells before she groups the crowd on the lawn next to her company’s first store. Then they jog to begin the company’s first “hippie triathlon,” which includes laps in the Deep Eddy Pool, a local institution, and burgers and beers in a tiki restaurant behind a pub.

The scene borders on a parody of Austin around 2018, no longer the scruffy college town known for its laid back culture, noisy live music venues, and festivals with optional clothing. Today the Austin area is one of the fastest growing in the country with a population of 2.1 million. Funky old Austin still exists, but it lives in the shadow of the city’s now shiny lifestyle brand defined by Whole Foods and South by Southwest (both are headquartered here; both used to be neglected).

And now through ambitious transplants like Haney, whose company has raised nearly $ 60 million in venture capital and whose trade chairman is retail legend Mickey Drexler of J.Crew. The Austin store (“possibly the worst retail location I’ve ever seen in the world,” Haney recalls Drexler, a lifelong New Yorker, called it when he first saw it) now sells something like this much like the company’s operations in New York and San Francisco.

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Haney had just started Outdoor Voices in New York when she first visited Austin in 2013. A former athlete from Boulder, Colorado who had ended up in New York to attend the Parsons School of Design, she found herself in Barton Springs, a legendary swimming spot in Austin Loch just across from downtown. “The moment I got in the water I said, ‘Holy shit, this could be the spiritual home for OV, possibly the long-term home,'” she says. New York was filled with online clothing brands, but as Haney’s business began to grow, she kept returning to Austin (where she was dating a restaurateur at the time). “I noticed that the city is very supportive of entrepreneurship,” she says. She decided to take the step.

Haney is hardly alone. Startups from Nebraska (Spreetail), Tennessee (SnapShot Interactive), Arkansas (YouEarnedIt) and California (Optimizely, Outdoorsy) have recently opened or moved to offices, along with Peter Thiel’s venture capital firm Mithril Capital Management, which announced this in September San Francisco fall in favor of the city. Technology giants like Facebook, Amazon and Dropbox have established their presence here. Google recently put a giant “G” logo on a skyscraper in the city center. And in December, Apple, which already has its second largest outpost in Austin with around 6,000 employees, announced that it would be investing $ 1 billion in building a new campus less than a mile away and expected to provide 15,000 new jobs . According to our Surge Cities Index analysis, Austin ranks first in the country for population growth, third for density of high-growth businesses, and sixth for job creation.

But the city’s rise took three long decades. When Dell coined a number of so-called Dellionaires, the resulting wave of tech startups in their early infancy reinforced the nickname of Silicon Hills in Austin. After Whole Foods grew to be a major force in the grocery business around the same time, it became a launch pad for dozens of startup brands in food and personal care products. After a late ’90s software outfit, Trilogy, attracted hundreds of elite college graduates to Austin with great benefits, many of them started a B2B software industry in town. The Trilogy Mafia, as they are known, still controls many of the city’s most influential companies, like the WordPress hosting platform WP Engine, operated by a former Trilogy vice president, Heather Brunner. Another Trilogy alum, Joshua Baer founded and runs the Capital Factory, an incubator, co-working place, and mutual fund. And then there’s South by Southwest, which began as a music festival in 1987 and has since grown into a two-week extravaganza of music, film, comedy, games, and everything startup-related.

According to our analysis, the amount of money pouring into Austin’s startup scene still ranks fourth in the nation when it comes to early-stage funding deals. According to Baer at Capital Factory, Austin doesn’t have to produce a huge, transformative consumer tech company just yet, which usually leads to a flood of venture capital. But he thinks it’s only a matter of time. “Talent is the leading indicator and funding is the lagging indicator,” he says. “This is where all the talent goes.”

As the Austin skyline fills with construction cranes, it is easy to draw parallels with cities like Seattle, where an Amazon boom has brought house prices and homelessness to unsustainable levels. This may affect locals in Austin, but for arrivals from places like New York and San Francisco, the city is still very affordable (the average price for a house here is $ 385,000, according to Zillow). The state’s stance on taxes – “The only good tax is a dead tax,” Governor Greg Abbott once said – doesn’t hurt either.

When Haney decided to relocate Outdoor Voices to Austin, about 40 employees came to see her from across the country. 34 made the move with her – they all went down in a trailer – and few have left town since. According to Haney, the company has grown by three digits every year since it was founded and currently employs 130 full-time employees. She finds that Austin’s lifestyle often seals the deal when hiring New York designers – just as she does for her. “At first I was nervous that we wouldn’t be able to attract any talent at all,” she says. “But being away from New York has actually become an asset.”

Breaking the Austin formula

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Austin Mayor Steve Adler offers his advice to other cities looking to discover their juju.

Create an atmosphere Talent is attracted. “A lot of the people who want to hire businesses want to live in Austin. It’s pretty nice here. But beyond that, it’s a progressive city that is leading to immigration and refugee protection, LGBTQ rights, and climate protection. A lot of people see it as one Is a place that corresponds to their values. “

Be authentic to your roots. “Our identity goes back to the idea of ​​’Keep Austin Weird’. When Willie Nelson tried to reinvent country music, he came to Austin to do it. The bourgeois heroes here are the people who try, learn, iterate, try , learn, iterate. And that happens to be the formula for startups too. “

Make entrepreneurs constructive members of the community. “I speak to a lot of people who have come from Silicon Valley and a year after they arrive I ask them to tell me how it’s going. Three quarters of the time I get something like, ‘When I came here guys, who started opening their Rolodexes to help me and I couldn’t believe this was happening – it was so strange, I was suspicious of the names they gave me and eight months later I’m doing it for others now People.’ This is a real phenomenon here. “

From the 2018/2019 winter edition of Inc. Magazine

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