Why Amazon should select Austin for its second headquarters


Amazon RFP City Select VC

By Mike Smerklo, co-founder and managing director, Next Coast Ventures

Jeff Bezos has sparked a mini “arms race” where cities across North America are looking to stockpile credibility as to why Amazon should select them as its home away from home.

Game on.

Austin, Texas has been included in nearly every “Best Cities” list published over the past decade, from work-life balance to raising a family to just plain best place to live in the United States. With well over 200 days a year of sunshine and a spring-fed swimming pool that hovers at a breathtaking 69 degrees year round, it’s no wonder that Austin remains one of the fastest growing cities in the country.

And it’s no wonder that Austin is among those on the shortlist for Amazon’s new headquarters.

Austin Texas VC
Mike Smerklo, co-founder and managing director, Next Coast Ventures. Zona Foto | www.zonafoto.net.

Of course, as an Austin-based venture capital firm, we put our investment dollars where our mouth is and can proclaim with confidence Amazon would find a welcoming home here in the heart of Texas. On that note, let’s quantify the case for Austin:

The cool factor

First, let’s just start with the fact that Austin is one of the coolest (and we’re certainly not talking summer temps here) places to live in the country. If you’ve ever lived in San Francisco, then you know all about the crushing ubiquity of work over life. Work days are long, and life outside of work is even longer. Time off is often spent networking, going to hackathons, attending tech events and, well, working some more. While Austin may offer all the networking, hackathons and tech events your heart desires, it also offers so much more: The true Austinite attitude that life is more than work.

In Austin, time off is spent at Barton Springs cooling off, kayaking Lady Bird Lake, hiking the greenbelt, dining at one of Austin’s many restaurants and attending the countless concerts that made this city known as the Live Music Capital of the World. We truly work hard and play even harder. Not that there aren’t amazing cultural, culinary institutions and events in San Francisco or other major cities, but we have one giant foot up on the rest of those metropolises, and that is…

Standard of living

…it’s still (relatively) cheap to live here. And we’re talking about downtown living, house buying, renting, what have you. Compared to cities like New York, San Francisco, Boston, and so many others, Austin offers a cost of living that makes it possible to take the time off you need to stay sane, while still doing more than just barely paying the bills. With the cost of living here, it’s no wonder that tech workers looking to leave the Bay Area are moving here and in droves. An estimated 110 people move to Austin every day, and that’s not just because of the thriving economic scene. Austin’s Eanes Independent School District is the second-best in Texas, giving families looking to raise children in the Austin area an excellent option.

Location, location, location

Not only is Austin already home to the Whole Foods headquarters, which Amazon recently purchased for $13.7 billion, but it’s also home to a pair of logistics centers the company operates in the area, as well as an already-established sales office. Texas is known for its business friendly attitude and that extends all the way to Austin, which will soon be home to Oracle‘s new campus. Speaking of friendly, Texas is also one of seven states in the country that doesn’t have an income tax, much like Amazon’s home state of Washington. And if that’s not enough, Austin is a college town, with all the collateral cultural events and resources attached. All of these factors add up to the next two points that make Austin a perfect candidate for Amazon’s new headquarters.

Established tech culture

Also known to some as Silicon Hills, Austin has been on the inside track since the beginning. We like to say that the blood that pumps technology through the veins of this city runs burnt orange here (a University of Texas Longhorn reference). Already, the city is home to several other tech giants, such as Dell, HomeAway, Apple, IBM and AMD, and host to a thriving tech scene. While you may recognize Austin simply has the home to the tech sector’s Spring Break, also known as South By Southwest or SXSW, it is also host to a constantly growing list of startups, startup events, hackathons, co-working spaces, and all the ingredients of a homegrown tech culture. With access to a flourishing tech ecosystem such as the one in Austin, Amazon will have the pick of the litter when it comes to talent acquisition, investment, innovation, and R&D.

Access to talent

In Austin, more than one in eight workers is in an industry related to tech, science or professional services. More so, according to one report in Brookings, Austin is just one of five metros in the country that has significantly increased their share of digital jobs since 2010. Amazon has said that it will need to hire in excess of 50,000 workers, and Austin, which is growing, will be more than capable to meet that demand. A total of twelve colleges, including the University of Texas, call Austin home. With one of largest computer science programs in the country, It’s a hotbed of educational opportunities and potential talent – part of what makes it such a thriving, innovative community. The opening of the Dell Medical School in Austin is only going to serve as another catalyst for this growing pool of talent.

Keep Austin wired

Let’s face it, any city on Amazon’s shortlist is going to try to cut a deal, and Austin is no exception. With what Austin already has to offer, it’s a strong candidate, and it has nothing but room to grow. Land close to downtown near an international airport and a major thoroughfare is abundant, as are the tax cuts a city like Austin is likely to offer. By moving its next headquarters to a city already committed to growing its technology sector with a healthy work-life balance, Amazon will be guaranteed a return on its investment, and tremendous upside potential.

Mike Smerklo is a co-founder and managing director at Austin, Texas-based Next Coast Ventures

Photo of an Amazon package courtesy of Reuters/Toby Melville

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