The Catalyst for an Ecosystem

By Jonathan Crowder on January 4, 2019

It takes a village…  That phrase is so overused that it borders on cliche.  But when it comes to building innovation ecosystems — it’s true.  As more and more cities strive to craft themselves into tech powerhouses, they come to realize that the recipe for a vibrant startup community is pretty complex, and changes with your surroundings.  
 
It’s a mixture of culture and social standards that encourage reciprocity, a service-first mindset, and a community that challenges entrepreneurs to think on a grand scale. It requires local institutions like universities, or companies both small and large, to churn out talent.  A great example is how Microsoft, Amazon and Google have become product manager talent factories, the spillover of which has become a great boost to their local startup communities.  
 
It also requires that large local corporations play other important roles as well, serving as early pilot customers or strategic investors for startups that will become disruptive forces within their respective industries.  It’s for these reasons that startups in a given city tend to specialize in a given industry or industries, in order to take advantage of the compounding effects of their local community.  We’ve already begun to see the effect of this in places like Boston, Atlanta and Nashville.
 
But as a venture capital firm based in Texas, we often find ourselves pondering the question of which specializations our local startup communities are developing.  The Dallas startup ecosystem is rapidly expanding, and while there are a number of exciting things happening, we’re particularly excited by the telecom expertise here, and the ways that knowledge base will translate to the upcoming IIoT revolution that will transform the utility space.
 
A few weeks ago, we traveled to Houston for the Houston Exponential Capital Summit to watch Houston stake it’s claim.  It’s no secret that the gulf city has historically been a powerhouse in the oil and gas markets, and while it remains early, we expect to see a significant amount of related technology emerge from the city over the next few years.  There is also an impressive collection of healthcare resources and talent, and the city is well placed to leverage it effectively.
 
We returned from the HX Summit with a few takeaways.  While Houston is still developing its identity as a startup ecosystem, the city knows what it is… and what it isn’t.  On the ground, there is a real sense of coordinated will to capitalize on their opportunities in these industries.  
 
It remains early, but on the basis of these first steps, Houston is on an exciting trajectory.  The entire team at Houston Exponential has done a tremendous job getting all stakeholders rowing in the same direction, and the future looks bright.  As a team, we look forward to playing our role in helping Houston continue to build a vibrant startup ecosystem and are excited by the prospect for Texas to someday lay claim to three great cities for innovation.