Starting a Business in Austin, TX: What Makes this City Perfect for Entrepreneurs

Texas has been rated as one of the best states to start an LLC, and Austin, Texas, is a big reason why the Lone Star state is a major center of entrepreneurial activity. Austin is home to a vibrant startup scene, with lots of tech companies, innovators and investors looking to create the next big business breakthrough.

We talked with a few Austin startup CEOs to learn more about why they decided to build their businesses in Austin and why it is an ideal place for entrepreneurs to start a business.

David Franklin - KnowRX

David Franklin's company was born out of personal experience. In 2018, he lost his father to a medication-induced side effect during an ICU stay. "During my time in the ICU, I saw many families suffer the same consequence as we eventually did and knew something had to change," he shared. He created KnowRx as a mobile app that provides vital drug information and clinical research reports to help providers and patients with the right selection of medication and therapy.

As a long-time Austin resident, Franklin began his company there. "I've resided in the greater Austin area since 1997 and have really seen the city mature and I've participated in its growth. Austin is an exciting city to launch a company, and although the scene for health tech is light, we plan to help elevate Austin as a hub for health tech companies in the future."

Franklin has found Austin to offer several community resources for entrepreneurs. Whether you want to meet investors, network with other entrepreneurs or get mentorship for your business idea, Austin has a variety of unique resources to help your business get started.

"The most useful resource has been the Founder Institute and the local community. Everyone is willing to mentor, speak with you and listen. The startup culture is very close and everyone is pulling for each other. We celebrate each other's success and push each other forward," shared Franklin.

April Dominguez & Nikki Dominguez - Handsome App

April and Nikki Dominguez are sisters who founded the Handsome App, a career and education network for beauty professionals. They decided to merge their skills and separate careers in order to create their app. Nikki had 10 years of experience in the beauty industry and April had worked with Austin-based startups to build communities. Realizing that startups and tech had online communities like LinkedIn, but beauty professionals were lacking in this area, led them to create Handsome.

While operating remotely for the first year, the sisters decided to move their business to Austin. "What ultimately led us to fully headquartering in Austin was a number of things. The startup landscape is explosive here. It is completely community driven, which is at the core of our mission and thesis for our business. There had been a rise on the focus of female founders in Austin and technology-based startups (Bumble, Kendra Scott, Outdoor Voices). Austin was a no-brainer for building our brand, community and business," they said.

Nikki and April offer some advice for anyone thinking about starting a company: "You’ve got to know 1000 percent that you’re willing to go the distance. Before you take that leap, you should have a series of life events where you’ve proven to yourself your ability to stay focused, disciplined and gritty through the worst of times."

Chris Ciabarra - Athena Security

Chris Ciabarra is the founder of Athena Security, which started out as an AI-driven surveillance technology product that detects handguns and long guns to help prevent workers or students from an active shooter situation. Due to COVID, the company decided to provide additional products. "COVID hit two years later and we added temperature detection to our products using the same camera," said Ciabarra. Pivoting to change or grow your company in the face of a tough economic climate is essential for any business owner.

Despite starting out in California, Ciabarra and his cofounder, Lisa Falzone, decided to move to Austin in 2017 for a "fresh start." They found the kindness of others and the great business resources in Austin to be top-notch. As Falzone told Forbes, "It’s definitely smaller than the Bay Area, but really friendly. The people are really sweet, less intense, but really nice.” Ciabarra finds the startup culture in Austin to be "fun and very relaxed — it's up to you to get stuff done. Startup resources are great — lots of help at Capital Factory and from mentors too. Investors are waiting for you here."

Mary Haskett - Blink Identity

Mary Haskett is the founder of Blink Identity, a company that provides biometric matching software to help concerts and live events companies identify ticket buyers more quickly and securely with an enhanced customer experience. The system puts end users in control of data and privacy.

Haskett believes that Austin is a great place for tech startups, not only because of the talent and resources, but because of the collaborative spirit. “Given the state of technology, I don’t think it matters as much where you are physically located. Still, Austin has a lot of tech talent, and a wonderful startup culture,” Haskett said. “The startup culture in Austin is special. You would think we would all be hyper-competitive, but everyone is friendly and extremely helpful.”

Even though Austin is not as large of a city or as competitive of a market as New York or Silicon Valley, there are enough larger established companies based in Austin that new startups can find a lot of great business partnerships. Austin is an active startup ecosystem that makes it possible for founders to connect with like-minded entrepreneurs, learn from each other and build the next big thing. " ... There is a Techstars Austin program and they welcomed us with open arms when we got back to Texas. The Techstars family is amazing — it’s a huge network and full of resources to help founders. Austin also has Capital Factory, which is another great resource for founders," shared Haskett.

When it comes to starting a business, Haskett has practical advice: "Research your idea, the market and who invests in that space. How are you going to get your first 100 customers? Don’t quit your day job until you have researched everything you can and you have a detailed idea of what you want to do and how it is all going to work."

Roman Gonzalez - Gardenio

Roman Gonzalez is the founder of Gardenio, a gardening startup that helps people grow their own food at home, with plants, soil and fertilizer sent by mail, and tips and reminders from the app to help people keep their gardens thriving. He also feels that Austin has an especially supportive feel to the startup culture. “It's great because, as a smaller ecosystem, people are very supportive, and by and large, really want to help,” Gonzalez said. “There's a lot of collaboration, and that's what you see in Austin entrepreneurship at the tech level but also at the local small business level and I love that."

Austin is home to the University of Texas and many corporate headquarters, making it a mecca for young adults with college degrees, good-paying jobs and disposable incomes. These young adults are often interested in new ideas and new technologies and are willing to try new things. This can make Austin an ideal testing ground for new business ideas.

“We focus on younger folks, millennials mostly, and Austin has a lot of them, and they tend to have more expendable income than other folks,” Gonzalez said. “We didn't try for that, we just lucked out. Austin has been home for a long time for me now. The startup ecosystem is active, buzzing, and largely supportive, you have great organizations like Divinc helping founders of color ... "

"We feel like this is the best place in America for the next big gardening startup to come from, and we want to do it on the shoulders of some of the best brands out there like Alamo Drafthouse, or even like local breweries and coffee shops and art spaces like Zilker Brewing or Flightpath or Vortex. We take a lot of cues from them," shared Gonzalez.

Gonzalez believes that getting help and feedback from others is key to getting a new business off the ground. "... Tap into your local startup ecosystem. Most cities have something. Now, as things are even more digital than they were before with COVID, you can access multiple startup scenes, learn from them, contribute to them and network. I recommend using LunchClub.ai."

Karyn Scott - Care2Rock

Austin is famous for its live music scene, and this sense of creativity can also be found in the city’s tech startups. Karyn Scott is a former juvenile Assistant District Attorney with a passion for music. She wanted to combine her interests in helping vulnerable children with her love of music, so she started a company called Care2Rock that helps connect music teachers with students for private online lessons via remote technology, while also offering free music lessons for children in foster care.

Scott believes that Austin was an ideal place to start her business because of the unique culture, values and spirit of the place. “Austin is a great music town and a place where teachers and the music community have always wanted to give back,” Scott said. “It also is my hometown and has a great support system for entrepreneurs. The startup culture in Austin was thriving before COVID hit and hopefully can get there again. It is a place where ideas and tech have always combined in the best possible way."

For aspiring business owners, Scott shared this: "Make sure that you have the resources and support you need to get started and to keep it going. It is a long, hard trip and takes a certain personality type to not give up." And she echoes what other Austin business owners shared about the availability of resources in town, "For local resources, Capital Factory is a good one, as well as the other incubators in town such as Techstars."

If you’re ready to start a business in Austin, Texas, be sure to form an LLC and file any necessary paperwork with the Texas regulatory authorities. Learn more about how to form a Texas LLC and how Bizee can create and file an LLC for you for free — just $0 + state fee.