Austin round-up: The new hotbed for mobile

By Levi Shapiro

Jim Messer started Transverse [1] last year in New York with a cadre of wireless industry veterans. This year, the company relocated to Austin. "We found everything we need in Austin--at happy-hour prices. My commute is 10 minutes and I get double the house I had in San Diego for half the price." The combination of technical talent, creative culture and low costs has made Austin the newest hotbed in the wireless industry.

Take a walk down 6th Street and in addition to live music at The Dizzy Rooster, "Kinky Friedman for Governor" posters and fried pickle spears at Katz's Deli, you will probably see signs saying "Keep Austin Weird." Austin's development owes as much to its vibrant, bohemian culture as the concentration of tech companies such as Dell, Qualcomm, Siemens, Intel, AT&T, IBM, Motorola, Apple, AMD, ARM, Marvel, Borland, Google, PayPal, Vignette, Texas Instruments, SD Micro, Silicon Labs, Broadcom, Freescale, nVidia, Trilogy, etc. In his groundbreaking book "The Rise of the Creative Class" (Basic Books, 2002), Professor Richard L. Florida correlated the density of "Bohemian Clusters" with a city's economic development. Austin has attracted wireless entrepreneurs by offering an eclectic, tolerant alternative to the sterility of Silicon Valley--which author Joel Kotkin calls "Nerdistan."

This is particularly true in the gaming sector. Paul Trowe, a 24-year veteran of the game industry, left the Bay Area to start Pulse Interactive [2]. "I have never felt more at home. Regardless of where I go in the city, I feel well-received by the community." Trowe also serves on the Advisory Board for the Gaming Program at Austin Community College [3]. Beginning with 10 students in 2005, the program now has 100 students enrolled. Similarly, Mark Pierce left a posh role at Atari to start Super Happy Fun Fun [4], a developer of mobile games and applications. "Austin has an adequate number of developers ... probably more than 1,000. And they all WANT to be here," Pierce said.

One stimulant for the Austin wireless community is the University of Texas. Fundamental research from UT's Wireless Networking and Communications Group [5], started by Dr. Ted Rappaport and led by Professor Jeff Andrews, has contributed to Austin's wireless expertise. Moreover, the Austin Technology Incubator [6], housed at UT, maintains several wireless companies within its portfolio. "We align companies with resources, domain experts, mentors, MBA teams and industry contacts," said Bart Bohn, ATI's assistant director. Recent ATI companies in the wireless sector include Affinegy [7], Vumasco [8] and eZee Inc. [9] The Founder of eZee, Enrique Ortiz, also serves as the director of the Austin Chapter of Mobile Monday [10], the global forum for independent wireless application developers.

The Austin Wireless Alliance [11], created by Randy Baker in 2004 and now chaired by Erin Defosse, has large corporate sponsors and focuses on enterprise mobility. AWA's premier event will be held Oct. 14-16 and includes the Texas Wireless Summit [12] and the Seed Stage Forum [13].

The biggest complaint among the Austin wireless entrepreneurial community is the limited access to capital. "Austin start-ups have lower burn rates for a good reason--we have less money," jokes Trey Ikard, president of wireless start-up MobiTX [14]. In fact, the only major Austin-based, early-stage investor is Austin Ventures [15], which is near closing its 10th fund for $900 million. As a result, Angel investors play a dominant role. The Central Texas Angel Network [16] cites mentoring as a core objective. Former CEO of Austin-based wireless services provider Solomio (funded by Austin Ventures and acquired by Openwave) and Angel investor Richard Schwartz says he tries "to speak with the CEO every day. That makes a big difference at an early stage company."

Other institutional resources include the state's $200 million Texas Emerging Technology Fund [17] as well as Gefinor [18], G51 [19], S3 [20] and Hunt Ventures [21], which has an office in Austin. Two Austin mobile companies in the location aware space currently raising money are Moximity [22] and Bones In Motion [23].

Larry Upton, CEO of Edioma [24], which makes mobile applications for Hispanics, believes that limited access to capital "made us a better company. Before raising a Series A, we secured distribution with two major carriers and advertising partnerships with two category leaders." David Sikora, president of mobile commerce applications developer Digby [25] agrees. "The most important task is to make great products that customers want. We have enabled Godiva and 1-800 FLOWERS with private branded stores and will continue to grow organically."

Unlike most municipalities, Austin's city government has a full-time emerging technologies coordinator [26], Eve Richter. Richter says the position was created last year and her role is to serve as a "connector." Richter works in concert with Tony Schum, the director of economic development for the Austin Chamber of Commerce. Says lifetime Austin resident Dave Gill, senior director for Nielsen Mobile, "I don't know too many places where the government, universities, and private sector collaborate. It's one of the reasons why I won't ever leave this place ... unless my boss doubles my salary." Keep Austin Weird.

Levi Shapiro, formerly of Telephia, is a wireless industry expert specializing in mobile content. He has founded three mobile media companies and sits on the board of two others. Levi can be reached at Levi.Shapiro@gmail.com