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They say everything is bigger in Texas. The maxim includes the growing Texas population, which at 27 million people, currently represents ~8.5% of the total US population. Austin was the single fastest growing major metropolitan area in the United States again in 2018 for the 8th straight year, and the city is quickly becoming recognized as a global tech startup hub in its own right. 

As the fastest growing state in the country (*measured by raw numeric growth, not percentage population increase), we wanted to better understand how the Texas statewide startup ecosystem is working to attract its top startups and talent to the Lone Star state.

After investigating, we at the Founder Institute are convinced that now is a better time than ever to build a startup in Texas. If you’re building a company in Texas, you can apply to the Houston or Austin Founder Institute today!

 

What’s in a Texas Entrepreneur?

According to proprietary Founder Institute internal data aggregated from our Entrepreneurial Assessment information aggregated from over 30,000 entrepreneurs in more than 100 cities worldwide, Texas has the highest Emotional Stability of any region in the world. In fact, Texas has a 12% higher Emotional Stability than the North American average, and 19% higher than the European average.

For clarity, “Emotional Stability” here is defined as measured by the Founder Institute standard Entrepreneurial Assessment, and refers to a person's ability to remain stable and balanced. People with high emotional stability tend to have high impulse control, and remain calm in stressful situations. High emotional stability is an ideal quality for entrepreneurs to possess, and has been found to correlate with success in operating a business. 

Compared to other US tech hubs, Texans show a 16% higher Emotional Stability than entrepreneurs in Silicon Valley, 14% higher than New York, 19% higher than LA, and 12.7% higher than Boston. 

So what’s in a Texan? One answer is STABILITY. And the truth is that Emotional Stability, at least as it is perceived by others, translates into how much people feel they can count on you. 

And Founder Institute research shows that Texans are, on average, the kind of stable people that you know you can count on. But a higher-than-average regional Emotion Stability is just one of the many reasons why now is a great time to build a company in Texas.

The Lone Star(tup) Legacy

Texas entrepreneurs past and present have a lot of accomplishments to be proud of. Texas companies helped create the personal computing industry in the 1980s through companies like Dell, Tandem, Compaq, and Texas Instruments; home to the Johnson Space Center Mission Control, Texas boasts a technology legacy of successes beyond the stratosphere; as well as holds the rare good fortune to claim a whopping 52 Fortune 500 Companies that call Texas home. 

Global companies from all across the world frequently choose to relocate to Texas, and startups choose to lay down their roots in Texas, each for a wide variety of business-friendly reasons. These include:

  • Access to a highly educated workforce, much of which can be sourced locally from the UT system, as well as great private Texas universities like Rice
  • A lower cost of living, relative to either the East or West Coasts
  • Centrally located at the US/Mexico border as well as at the middle of the continental US, location offers a geographic advantage to many Texas industries, from logistics to energy, and more
  • Low to zero personal income taxes and other generally low-tax and business-friendly local laws and regulations

According to Austin Founder Institute Director Paul O’Brien though, the biggest single reason for Texas business success likely boils down to something even simpler,

The cost of living, tax benefits, talent pool and more are all compelling reasons companies are favoring Texas--but at the end of the day, it’s that within spitting distance of one another are Dallas, Fort Worth, Houston, Austin, San Antonio, and even beyond, within an hour more, Oklahoma City and New Orleans.

The 4 Biggest Nodes of Texas Tech:

While Silicon Valley’s relative geographic density undoubtedly contributes to its stereotypical image in the minds of many as the unrivaled US tech and startup citadel, collectively it is actually the cities of eastern Texas that comprise the largest single regional economy in the world, spanning from Houston to Dallas and Austin to San Antonio. 

Sometimes referred to as the Texas Triangle or the Texaplex, this urban megaregion is bound together by Interstates 45, 10, and 35, and is home to 13.8 million people, or 70% of the Texas population--and in the next 40 years, the Texas Triangle is projected to grow by more than 65% with an additional 10 million inhabitants.

But, how do the Big Four Node Cities of Texas compare to one another?

Austin

Austin is among the most exciting startup scenes in the country, if not the entire world - and if forced to select just one Texas city as the most obviously entrepreneurially up-and-coming, you would have to pick Austin. The city is home to the most startups in Texas, and as noted above, it is the fastest growing major metropolitan area in the United States for the past 8 straight years.

Austin is often noted especially for its semiconductor and enterprise software industries, but can claim a huge variety of businesses that actively choose to relocate to the rapidly growing Austin metro area. Crunchbase News shows that these relocations correspond directly with new job creation, meaning the Austin startup scene is absolutely mature enough to be producing meaningful new employment growth for the region.

If you’re building a technology-enabled company in Austin, then apply to the Austin Founder Institute today!

Houston

Nicknamed the Space City, Houston actually has a lot more going on than just NASA’s Mission Control at the Johnson Space Center. In fact, Houston is not only the most diverse metropolitan area in Texas, but has even been described as the most racially and ethnically diverse major city in the country.  

Many Houstonians’ other most well established industries revolve around the energy sectors and commodities-trading, specifically as a global leader in oil and natural gas technologies--but clean energy technologies including solar and wind also now have a significant foothold in Houston.

Click here to checkout our Houston Startup Ecosystem Canvas, the most comprehensive local Startup Resources List ever compiled, with 450+ accelerators, incubators, advisors, and investors for entrepreneurs building companies in Houston!

In addition to the city’s tremendous diversity, Houston also has a big potential advantage in its relatively youthful population, where ~45% of residents are between the ages of 18 and 44

If you're working to grow your company in Houston, you can apply to the Houston Founder Institute here!

San Antonio 

San Antonio is home to one of the greatest concentrations of military bases and installations in the county, lending it the nickname of Military City, USA. But the diversified San Antonio economy is also home to many healthcare and biomedical research facilities, hospitals, clinics, and institutions of higher education, including the South Texas Medical Center, the Southwest Research Institute, and the Texas Biomedical Research Institute.

In addition to strong financial services and energy industries, over the past few decades the region has also recently experienced high growth rates in American-based customer service centers as well as in the automotive manufacturing sector.

Dallas & Ft. Worth "Metroplex"

Perhaps best known for its large telecoms companies like AT&T alongside its longstanding industry titans like Texas Instruments, the Dallas-Fort Worth ‘Metroplex,’ when taken together collectively, can lay claim the title of largest inland metropolitan area in the United States.

Sometimes referred to by the moniker of the Silicon Prairie or the Telecom Corridor, the DFW Metroplex is home to more than just IT and telecoms though. Other major local employers include the aerospace and defense industries in American Airlines and Lockheed Martin, and commercial banking in Bank of America and JP Morgan Chase, among many others.


 Recently, Founder Institute CEO Adeo Ressi spoke onstage at Austin’s famous SXSW technology conference.

While Adeo didn’t speak about the Texas startup ecosystem specifically while onstage at SXSW, we at the Founder Institute are hugely bullish on Texas startup growth. Having dived in and explored some of the trends affecting the Texas startup scene and surrounding wider business community above, we now know that outsized growth and positive network effects are among the key factors driving positive Texas startup trajectories statewide.   

From our research, we believe now a better time than ever before to start and grow a company in Texas.

According to Austin Founder Institute Director Paul O’Brien,

It’s my belief that nowhere else in the world can you reach such significant local economies, healthy ecosystems, vibrant entrepreneurs and dozens of top universities increasingly focused on technology. 

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Graduates of the Founder Institute are creating some of the world's fastest growing startups, having raised over $1B in funding, and building products people love across over 185 cities worldwide.

See the most recent news from our Grads at FI.co/news, or learn more about their stories at FI.co/journey.

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