2nd Annual High-Tech Hot Spots

#1 Austin, Texas

Make it a two-fer-because last year, Austin also topped this list. By now, there's no question that the transformation of this Texas town into a global tech powerhouse is complete. Best news about Austin just may be that it blends blockbuster home-grown tech successes (Dell, Vignette) with entrenched tech leaders that maintain large, local presences (Motorola, IBM) and an ever-growing roster of start-ups. Add in the vibrancy provided by one of the nation's best and biggest universities-the University of Texas, Austin-and there are the ingredients that make for a winning tech hub. Talk with Austin folks, and they exude civic pride-they definitely like where they are.

Why it's hot: The big plusses are the obvious ones-the established tech businesses and the university. But there are many more, including an affordable housing market (nice homes sell for under $200,000); a strongly youth-oriented culture that's fueled by UT; "pay scales that are lower than in Silicon Valley," says Rob Carruthers, managing partner of the Austin office of STARTech, a high-tech business accelerator; and "favorable taxation rates," adds Carruthers, who points out that Texas doesn't have a state income tax.

What's not hot: Ouch, it gets literally hot in the summer-but that's not the biggest negative here. "[It's] the traffic," says Betty Otter-Nickerson, chair of the board of directors of the Austin Software Council and a vice president at BMC Software, an e-business systems management provider.

Another negative: "In the past five years, the cost of living here has jumped," says Carruthers. And another: "The labor market is super tight," he says. "Fortunately, it's still easy to recruit people to work in Austin. People moving here from California, not people moving there."

Hot eats: For breakfast, go to the swank Four Seasons downtown; lunch at Z Tejas Grill; end the day with supper at Louie's 106. Want to meet Michael Dell? He often eats at Sullivan's Steak House, which is always filled "with bigwigs doing deals," says PR executive Angela Garris of the PetersGroup.

Hot networking spot: The place to meet and greet is the popular High Tech Happy Hour (HTHH). Host 33-year-old Harry Pape, founder/president of Networker.com, says 1,250 people dropped by a recent HTHH. Proceeds go to charity. Contact Pape at harry@austin.rr.com.


A dozen years ago, Julie Fergerson was a fresh dropout from the University of Texas, Austin ("I liked the tech classes, but English?"). Flash forward to now, and the 32-year-old is Chief Technology Officer and a major shareholder of Austin-based ClearCommerce Corp. (www.clearcommerce.com), a company she co-founded in 1995 and which today is a leading provider of e-commerce transaction software. Its tools process credit card payments and guard against fraud, and customers include name-brand outfits, from Mary Kay Cosmetics to Hewlett-Packard and Apple Computer. This is one very hot company-in February 2000 it raised $30 million in a venture funding round (with money coming from local VC firm Austin Ventures as well as global players like Intel)-and, says Fergerson, the Texas location is all to the good. "We have customers on both coasts, and, being centrally located, it's easier for us to serve all of them," she says. "We find it very easy to recruit the people we want, and, once people live in Austin, they don't want to leave." Herself an Ohio native whose family moved to Dallas when she was a high school senior, Fergerson adds: "This is beautiful country. There are lakes everywhere; it's green most of the year. You quickly learn to love it."

Oh, and Fergerson loves her work, too. "Here I always get to play with the best toys. This is my dream come true."


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This article was originally published in the November 2000 print edition of Entrepreneur with the headline: 2nd Annual High-Tech Hot Spots.

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