As great as Houston may be, for a city trying to cultivate a vibrant startup culture, it still lacks three key ingredients for innovation success. The capstone panel at the MBA Council of Houston’s Impact Investing Seminar discussed in-depth what we as Houstonians must build over the next 20 years if we want to become a hub for startups and innovators worldwide.
1. Successful Exits for Startups and the Return of Founders
Houston currently does not have a startup culture. It is an all too common story that an up and coming venture, building a cool product, needing more funding, is forced to leave Houston either for Austin or for California never to return. A startup ecosystem requires smart, motivated entrepreneurs who are starting companies, but it also needs successful founders, who have achieved financial success, to return and invest in those new companies. But, before we can have more successful exits and founders, we need…
2. Funding for Companies Raising More Than $1 Million
The successful individuals in Houston are typically from oil and gas and do not have an intimate understanding of what makes a good startup. They are willing to invest early at the angel stage, but, when a company really needs cash to grow, it is often unable to find willing investors in Houston. The company must move to Austin or California because those places have sophisticated startup investors who are willing and able to write the big checks. It is a chicken and egg problem, and at the present time, it is unclear how we can have successful exits if we don’t have big fundraising.
3. Break the Golden Handcuffs that Trap Our Best Minds in Oil and Gas
According to the panel, Houston has three times the software developers of Austin. In spite of this, many startups are starved for coding talent because if you are a great developer in Austin, you start a company but if you are a great developer in Houston you go work for oil and gas and make tons of money. Startups cannot compete for talent in Houston because our JOBS are too good. Until startups can find a compelling reason for the talented developers to leave their comfortable day jobs, Houston will not have the right, available talent to compete with places like Austin or California.
None of these problems are insurmountable, and there are many in the city, including those on the panel, who are working hard everyday to solve them. If you want to join the solution and make Houston the startup capital of the world, join one of these organizations below and #startsomething:
- Start Houston [coworking]
- Platform Houston [coworking]
- Surge Accelerator [accelerator]
- Redlabs [accelerator]
- Owlspark [accelerator]
- Houston Technology Center [incubator]
- Houston Angel Network [investors]
- Rice Alliance [entrepreneurship development]
- Enventure [medical entrepreneurship]
Edit: Added Enventure to the bullet list. Anyone else?