I just returned from my first trip to Austin and came away pleasantly surprised. Had heard all the write up about how it’s a great place to live so figured I’d visit and check it out for myself.

I’m not a techie at all but have a startup catering company. It would nice to buy a home (condo or house), but I’m a startup and I have minimal W-2 income to report. Met some people who work for Dell and a spinoff of Motorola. You indicate that there will be a shortage of housing in 2-3 years. Does this take into account Southeast Austin which I understand is next for development?

Perhaps Austin’s biggest new industry of late is simply being Austin. We continue to be a major draw for a lot of reasons. I’ve helped numerous people relocate themselves to Austin, often without a job lined up, and I’ve seen small business owners not related to tech move their businesses here from California. Several of those – one is closing on a new house this week.

We have a high percentage of elective relos, people who can live/work from anywhere in the U.S., or run their business from anywhere in the U.S., who conclude that Austin offers the best set of metrics for them. It helps greatly that Texas is for the most part a business friendly state. Oddly, the elective relos are just as likely to be young as old, and you might find either hanging out on S. Congress or at Barton Springs pool. There is just something about Austin that makes it attractive across a wide range of generations and lifestyles.

Finally, we will have a shortage of housing in the next 2 or 3 years. Austin is creating household, even without inmigration, faster than housing is being created. The builders have over corrected. And since our fine city leaders have it as their mission to make it ever more expensive to create housing in the city limits, we will continue to see the outer rings sprawl while the central neighborhoods continue to lose families in favor of young, hip people or empty nesters.

And besides the startups you’ve mentioned let me add Spawn Labs, http://www.spawnlabs.com, a 100% Austinite company doing no-lag, remote access gaming hardware and software that just blowed my mind the last time I’ve tried it.

Go Longhorns!

There is a lot of early-stage activity in Austin. The difference is that many early stage startups in Austin are constrained by the local VC attitude toward revenue first — many consumer plays are never funded here in Austin because of this town’s orientation towards semiconductor & enterprise software businesses. So for Web 2.0 type companies, this is an environment for more bootstrapping and smaller victories/singles than perhaps the next Google or Twitter home run. I’d prefer an environment that supported the latter, but the former isn’t so bad and may just end up being more efficient and sustainable in the end.

Add to that the fact that there are a lot of promising companies that either have recently IPO’d or are in a position to do so (SolarWinds, Bazaarvoice, HomeAway, etc.). Austin isn’t dead — it’s just different (as it’s always been) and it’s going to be defined in the future by different types of businesses.

see: http://www.sanantoniostartups.com

As for tech jobs, there are plenty of competitors for positions in Austin..I’m thinking there are more people than opportunities, not the other way around.

No… lack of talent sure isn’t the problem here; quite the opposite — ask any recruiter (and I’ve talked to a lot of them) there are not nearly enough good opportunities for the number of people looking.

The reason for that is exactly what you are talking about — startups here have no money to hire people. If they are not getting the quality of candidates they want, it is probably because too many of them are looking for senior level supermen at entry level salaries. That obviously isn’t going to work, the people will just stay where they are or they will continue to work remotely for people who will pay.

Any business who can’t find the people they are looking for in Austin just doesn’t know how/where to look or they’ve got very unrealistic ideas about what they are looking for.

Tons of money flowed into venture capital as an asset class, while at the same time the costs to build technology companies were dropping. This horrible mismatch has created an early stage funding vacuum. Therefore startups have to get to revenue quicker, on less capital. Which isn’t a bad thing.

Austin has a ton of smaller tech companies that are bootstrapped, profitable, and growing despite the economy. But they’re more focused on their customers than PR, and they’re not as sexy to write about as Facebook or Twitter. What Austin is lacking is enough tech talent that truly understands today’s technologies. Almost every startup I know is constrained by tech talent, and that keep innovation from coming to market.