February 2, 2017
The Dallas area is the economic and technological hub of North Texas, which is no easy feat. More impressively, it’s officially the largest inland metropolitan area in the United States (Sorry, Chicago). But what does the startup community look like?
Dallas, and the entire DFW area (an acronym that stands for “Dallas-Fort Worth,” not “down for what,” for those wondering), holds plenty of signs of a healthy startup world: The area is home to over 40 colleges, which means plenty of talent to choose from. 25 of the world’s billionaires live in the area, from Mark Cuban to a Walmart heiress. In fact, you should go ahead and get out your startup city checklist, because the Dallas area hits all the marks fairly well: diverse workforce, growing economy, pro-business community, central location, and an affordable cost of living. However, the venture capital funds can be limited, and the area’s still getting used to startups, so you won’t be coddled.
In short, Dallas hosts a startup ecosystem that’s more fresh than anything the massive hubs on the east or west coast offer. Since all those pros and cons deserve a closer look, here’s a list of CEOs and startup founders who spoke with Tech.Co on the variety of challenges and benefits to life in the Metroplex.
You’re Kinda Under the Radar
Here’s Will Rosellini, CEO of Nexeon Medsystems:
“Dallas is off the startup map and instead was a center of Fortune 500 companies looking for a good business climate, affordable real estate and high-quality talent. In recent years, it has become more active with startups due to a concentration of high-tech workers that were trained in the telecom corridor and now are instrumental in the internet of things world.”
Dallas Is a Melting Pot, Offering Plenty of Perspectives
Any region that welcomes different perspectives will remain a healthy, intelligent community, so I’m happy to report on two founders who have opened a window into a few Dallas demographics worth mentioning. First up: Blake Burris is the CEO of Flux, a company figuring out how to craft an AI-based robot to help people grow food — even on Mars.
“It’s a lot like ‘home.’ My startup is half Israeli, half American and the two cultures, Texan and Israeli seem to get on surprisingly well. They are both warm and loyal cultures, who love to put in an honest day’s work, so for us it’s a perfect fit.”
Co-founder and CEO Paula Marie Jones runs Memories Alive, a web-based memory care app. She offers insight on Dallas’ older inhabitants:
“Dallas is a melting pot of talented and eager professionals serving up ideas that can redefine life for many on a global scale. This incentive and passion in part is driven by the fastest growing population in Texas, which is seniors age 60 and above. Specifically in Dallas, one-third of seniors in Dallas are caregivers for their spouses or elderly parents many of which are living with memory care issues.
Therefore we’ve seen a great business opportunity in the growing need for personalized senior care and engagement, and the community’s unique culture has allowed us to build a company which is for-purpose, as well as for-profit.”
Venture Capital Is Lacking
Kristina Libby, CEO of the solutions agency the Social Works Co, spoke on the VC situation:
“As a founder here I’m struck by the fact that there is a lot of excitement about entrepreneurship through programs like the Dallas Entrepreneurship center, private capital developments, and more, but there isn’t enough venture capital. As a company going through a funding round, we’re concerned that we will have to leave Dallas and with it our potential to create hundreds of jobs. We need a better connection between capital and big vision startups and the community who clearly wants to support them.”
Dallas Has a Great Cooperative Nature
When Victor Montalvo went through the process of co-founding drone service company HiFly Photography, he learned firsthand what the startup community was like:
“When I got here I didn’t even have an apartment lined up, much less a place to work from, but within a few weeks I met the owner of a local incubator that let us work out of his space for free (since it would be temporary while we got stuff figured out). Just from working out of downtown we familiarized ourselves with other founders, were invited to join mastermind groups and got access to workshops and speaker series practically overnight. Coming from a routine of late night coding, copywriting and online research sessions in an apartment the difference was like night and day.
My experience was not the cutthroat startup world that the average layperson talks about; Instead it was an extra resource I could rely on besides the Google searches that helped us build our startup to where it was before coming to Dallas. From my experiences here and based on the people I have met and the projects they are working on I don’t think it is too long before the Dallas startup community is recognized as established as opposed to up and coming.”
Communities to Watch: Gaming, Sports
Cole Egger, CEO and co-founder of Cosmunity, has been an entrepreneur in the Texas city for the last 13 years, creating a dozen companies from the ground up as well.
“Dallas is a massive emerging market for the tech community with some of the top gaming companies in the country located here, exciting programs like Launch DFW, Launch Pad City and Dallas Startup week. There is also a tremendous amount of untapped tech talent with-in the community and opportunities to partner with universities like UTD and SMU.”
Meanwhile, Greg Bobolo, CEO at Immerss, puts in a good word for the sports community:
“Moving from the startup tech scene in media from New York to the media tech scene in DFW I wasn’t sure what to expect. Does Dallas even have a tech scene or media companies for that matter? The answer is yes, and yes. I came from the world of pro-sports and didn’t realize (for some reason) that Dallas is home to some major media entities. Learfield sports for example (recently sold for $1.3B) is located in Dallas, in fact Dallas has some impressive sports and media companies. The marketing Arm (now owned by Omnicom) was started out of Dallas and several others. I’ve also found DFW to be a very livable city with lots of angel / venture dollars floating around. With DFW being home to over 25 Billionaires and over 50 different colleges and universities in the DFW vicinity Texas is definitely a tech scene more may want to start to mess with!”
Classic “Texas” Communities Are Still On the Top
This note is a little more sobering: No matter how great the community is, it still relies on the familiar industry trends: oil and real estate are still popular. From Cassidy Fischer, Founder of Circle Seven Five, a subscription service company for millennial women in Dallas:
“Cons: In Dallas it’s easier to start a hedge fund than a tech company. More so than on the west and east coast, women can often feel they are outsiders in the business community, especially female founders. The start-up culture reflects the culture of Dallas: if you’re in oil, gas, or real estate Dallas is the place to be.
Pros: Being self-funded and starting Circle Seven Five as a young person was definitely easier in Dallas than in someplace like Silicon Valley or New York City because the cost of living and operating your business is relatively low. Texas is business friendly. The start-up community in Dallas is growing with companies like We-Work and Common Desk promoting co-working space and entrepreneurship, making it seem more ‘trendy’ than playing it safe at a ‘normal job.’ I’m excited to see what the start-up culture looks like in five years.”
The Local Talent Is Awesome
From Marshall Hudes, who’s a co-founder of Truss, a leasing platform that helps businesses find office spaces in Dallas.
“One major takeaway from building startups in Dallas is the benefit of hiring local talent. Like other cities, Dallas has its own unique culture, and finding a person that best matches the city’s personal vibe works to everyone’s benefit. People from Dallas naturally connect with local businesses in a way outsiders otherwise struggle.
Once I hired someone from New York to sell to local tech companies, and he simply could not get the meetings booked. The most successful sales people by far were the ones who truly understood the fiber of the city and those they were selling to. Too often, workers from other cities can’t quite grasp the culture and uniqueness that make Dallas Dallas, and that is why I will continue to hire locally as my startups grow.”
It Lacks a History of Incubating Early-Stage Startups
Tim Houlne, CEO of Dallas-based startup Humach, lists a few of the positives I’ve already covered — resources, talent — but also reveals a challenge that any would-be Dallas entrepreneurs should definitely be aware of:
“The Dallas atmosphere for startups is uniquely different from more prominent startup cities like Austin, San Francisco, New York City. Primarily based on the resources and the level of maturity of candidates for employment Dallas often outpaces these other areas in employee tenure but lack a long history of supporting early stage startups.”
It’s Getting There
Houlne continues with a little good news:
“Having started a business in Dallas many years ago, and recently starting Humach in 2015, the support network for startups has grown significantly. With such a large influx of businesses and people moving into the Dallas area I have seen an upswell of positivity in and around the local startup community.”
And he’s backed up by Neil Smiley, CEO and founder of Dallas-based Loopback Analytics, a care transitions management platform:
“I like what I am seeing with local entrepreneurial activity and start-up incubators. That did not exist when I did my first startup in the late 1990’s. It’s time for Dallas to be recognized as a hub for innovation. We are getting there.”
The Area Is Large Enough to Let You Scale Up
Here’s a tidbit of startup knowledge: A small, friendly ecosystem is great at first, but can easily become too constraining. Luckily, the DFW area won’t give you any such growing pains. At least, not according to Smiley, who had this to say (in addition to backing up that earlier statement on the limited VC interest):
“Dallas is a great place to launch a business that has national ambitions. The DFW market is big enough to prove out a model at scale. Once you start to grow, there is a good local talent pool from which to draw with reasonable cost of living. Most of our folks have commutes of less than 30 minutes. From Dallas you can get pretty much anywhere in the country with a direct flight and be only one or two time zones away. A weakness of Dallas is the lack of local venture capital. If you need more money than angel investors can supply then you are probably going to have to look outside the Dallas area.”
It’s a Great U.S. Travel Hub
Following up on Smiley’s words on air travel comes similar advice from Charissa Thornton Fitch, the founder of a Dallas startup launching early this summer:
“With such a global economy, I have used companies and services from all over the country and world- not just Dallas. But, because Dallas is so centrally located it is easy to access many locations in the U.S. I can easily fly two hours to Atlanta to meet with my IP attorneys or three hours to the west coast to meet with a potential packaging supplier. I’ve found simple geography to be one of the great things about starting a business in Dallas!”
Small Businesses Have Untapped Potential
I know all entrepreneurial types love hearing about anything “disruptive,” so perk up your ears for this word of wisdom from Dr. Lucas Lu, CEO and founder of online mobile marketplace 5miles:
“One interesting thing the team and I have learned since launching 5miles in Dallas two years ago is the huge, under-tapped potential of small businesses. From used car dealers to local service providers, many have relied on traditional marketing methods like the Yellow Pages or direct mail; or digital ones like Facebook, Craigslist, or Angie’s List. Up against larger competitors with bigger advertising budgets, SMBs in North Texas are hungry for more effective, direct-to-consumer sales channels to move inventory and grow their business.”
Mentors Are Friendly, Too
“Major takeaways I’ve learned over the years from opening businesses in Dallas. Mentorship: DFW is full of great business people. Pick up the phone and call. Invite them to lunch. Very rarely have I ever been turned down when I ask for mentorship. Resources: From the Dallas Entrepreneur Center to the SBA to various other co-working spaces. Relationships: Dallas is a very, very big city but a really small town. Don’t burn your bridges.”
One thing everyone appears to agree on: The region is currently on the upswing, and there’s no telling what the startup ecosystem will look like in another five years. Check out our Dallas tag for more articles detailing the technology trends and greater startup community life in the region.
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