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Austin is eCommerce

by / Wednesday, 15 January 2014 / Published in eCommerce, Industry, Startups
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Leave it to me to spend 14 hours in Dallas on the very day that 3 of my favorite industries crush capital…

* Social marketing, with $14M through Bessemer Venture Partners and Harrison Metal Capital to Main Street Hub

* WordPress, by way of $15M via North Bridge Growth Equity in WPEngine

* eCommerce, as Volusion wraps up $35M with Silicon Valley Bank

Though, I’m glad that I did.  The morning, spent with the incredible group of entrepreneurs fostering #bigDOCC (Big “D” Open Coffee Club – Dallas that is), was focused on not just what it means to be a startup in Dallas, but Texas, and the role that industry plays therein.  The afternoon, with Tech WIldcatters‘ Gabriella Draney and a handful of still-stealth eCommerce ventures, solidified that the industry of commerce is in Texas.

The eCommerce Game Goes to TexasI talk a lot about the role of industry; the culture of an ecosystem is as great a determiner of your success as an entrepreneur (or investor), as is the culture of your startup.

Drucker, who famously said, “Culture trumps strategy,” I believe, was alluding not just to the characteristics of a business, but of the economic development of a city, a state, and a country.

The idea is hard to refute; The United States is the economic powerhouse that it is because of a culture of innovation, entrepreneurs, and the “can do” attitude that makes it so distinct. While we entertain startup strategies such as being lean or agile, it’s impossible to ignore that, for example, LA has a culture of entertainment, Nashville that of music, New York, a culture of finance and fashion, and Silicon Valley, indeed, a culture of disruptive innovation. Such cultures, those industries, are what drives investment, talent, and success to those locations, as the entire ecosystem is designed to foster growth therein that very culture.

Outside of cattle, boots, and oil, are Texas’ industries readily apparent?

The eCommerce Game Goes to Austin

And, while granted, I’m no Shawn Collins, founder of the Affiliate Summit, within a matter of months of his moving here (so, yes, add eCommerce’s affiliate industry to the list), I left my own history with Yahoo! Shopping, hpshopping, and eBay to call Austin home. The industry of eCommerce is in Austin, TX.

This foundation, eCommerce, which is not eTail if you will (the likes on which Dell was established – truly transacting online rather than the infrastructure, technology, and webs services to drive such commerce), but eCommerce, will drive the entirety of the consumer web to follow.

Texas and eTail

icebergIt’s as subtle, yet important, as the distinction between “social marketing” and “social media.”  eCommerce is the foundation of eTail which is where Retail bleeds online; and that’s not the tip of the iceberg but what lies beneath the water when it comes to the consumer internet.

In my mind, having spent years working with Yahoo Shopping and hpshopping before launching several commerce ventures as a CMO and advisor, Austin is the home of eCommerce.  The talent, technology, investment, and entrepreneurs who want to build the future of commerce online, will come to and from Austin.

Josh Baer, Austin angel investor and founder of Capital Factory, has put a stake in the ground, having supported dozens of consumer internet startups.

More Consumer Internet investors are coming. Every week people move to Austin from Silicon Valley, New York City and other locations where there have been many Consumer Internet successes,” Baer asserts. “They will be more open to consumer businesses than our traditional B2B base.  DreamIt Ventures and Techstars Austin both had a significant percentage of Consumer Internet startups in their recent batches.”

Granted, Comparison Shopping, the industry in which Tuffwerx, Equipboard, and Bidaway arguably exist, is spreadout throughout the country as though a shotgun blasted entrepreneurs at a map of the United States – and yes, the same can be said of deal sites which continue to pop up as fast as someone can put up a website.  But Baer’s reference to “consumer internet,” is validated through this foundation of the consumer internet: eCommerce is here.

What’s incredible about Austin’s role in eCommerce is that the combined economic significance of the cities within 3 hours of Austin, Texas, comprises the bulk of the retail industry and as such, eTail, the next layer of the consumer internet.

I can think of few arguments to refute this… eBay, Amazon (granted)… Minneapolis with Best Buy and Target… Bentonville, Arkansas and Walmart?

Given the significance of the Texas economy and the strength of the Texas Triangle (Dallas, Houston, and Austin), as well as the corridor (San Antonio, Austin, Dallas), Texas is home to a staggering roster of direct to consumer brands:

  • Golfsmith
  • Calendars.com
  • JC Penney
  • Southwest, Continental, and American Airlines
  • Gamestop
  • RadioShack
  • Fossil
  • Michaels
  • Mary Kay
  • Men’s Warehouse
  • The Container Store
  • Pier 1 Imports
  • Whole Foods Market
  • Zale Corporation
  • Conn’s
  • Dell

And that’s not counting indirect consumer brands such as AT&T, Dean Foods, Kimberly-Clark and the Dr. Pepper Snapple Group, Bordon Milk Products, Frito-Lay, Haggar Clothing, Rolex, Brach’s, and Dickies… No, by no means all of the major brands and yet their support, their innovation, on top of the eCommerce infrastructure, simply adds layers to the cake.

And the icing on the cake?  Addison, Texas is home of The open source eCommerce framework Broadleaf. Move Square or Paypal to Texas and the entire commerce stack will be in the Lone Star State… wait, isn’t that what Visa is doing here?

Larrisa Faw and I, in Forbes last year, discussed the fact that as those loosely distinct, yet related, industries support one another, as major brands, retailers, and eCommerce providers, work together, industries excel. The consumer web will continue to blend into one through the foundation in eCommerce in Austin, and Texas is where the global economy will turn for commerce.

14 Responses to “Austin is eCommerce”

  1. ShawnMon says :

    How difficult would it be to bring the Deal Leader (Offers.com) and the Coupon King (RetailMeNot) together into one ecommerce Giant that gave consumers
    “a whole slew of coupons; and daily deals!”

    We’d call it…
    Slewpons

    It would make that list up there as “the Mecca of bargain-shopping”. Slewpon.

    Is it possible with some API’s or does it require four hundred and one employees in order to get started…?

  2. SEO'Brien says :

    I’m going to get AV on the phone right now. Slewpons is genius and the validation is in that Groupon, RetailMeNot, and Offers are already huge, how can it fail!!?

  3. The other beauty of Texas (overall) and each city/metro area (individually) is the immense opportunity to develop businesses (be it B2B or B2C) and have a ready base for local customer development. In DFW, there are over 8MM people and more than 10 Fortune 500 companies. That microcosm is a seed base for much greater expansion over time.

  4. SEO'Brien says :

    Precisely this Kevin. The distinction about Silicon Valley, and the reality about the NE (Boston, NY, Phila, etc.) that few ever talk about, when fully considering why things work well there, is that it’s one big economy comprised of many cities. As Texas truly comes together as one, imagine the possibilities.

  5. Shawn says :

    Hey, I’m on board with Slewpon.com
    Funny story; I can remember Groupon reached the Austin market (me) in 2010, and at that time it was just a “daily” deal. Just one deal per day. I immediately recognized it as a revolution in the industry and I said to my family at the dinner table “we need to do this with multiple deals! why in the world have they limited this to one deal!! omg! lets do this! we’ll give people a whole slew of group coupons! we’ll call it Slewpon.com!!”

    I bought the domain, struggled to connect with a developer, and exactly 8 months later, groupon started rolling out multiple deals per day, and now it is what it is today… a lifestyle. A revolution in it’s industry, no doubt.

    Well, I’ve hung on to it, so if you’d like to do this; I’m on board!
    Slewpon.com ” a whole slew of coupons and daily deals”

  6. Shawn says :

    and hey, if the aggregation isn’t enough of a business model, here’s just one lil idea to scale to…

    Imagine a world where people open our app anytime they think of something they want to buy, and they add it to their wishlist. Then, anytime they get within a certain radius of that product, it pushes a notification to them, hopefully on sale. And, anytime a coupon/daily deal of that product surfaces, a notification is pushed to them with a link to it.
    They can take it off their wishlist anytime they want, and wallah, no more push notifications of that product…

    (this particular concept is just a start. it scales even further)

  7. SEO'Brien says :

    Another deal site… not in me. An app like that though…

  8. Shawn says :

    well, your the first partner in consideration if you can share the vision and bring value.
    who’s a great app dev partner(s) to make it happen, captain?

    Slewpon.com “slingin’ a slew of coupons atchya when ya need’em the most!”
    (that was done in my best Willie Nelson voice because he’s the white noise in this cafe right now)

  9. Jon Weisblatt says :

    Hi Paul – Don’t forget that the e-business payment plan innovator UpgradeUSA is based here too! We just closed our second year, we’re profitable, and we have some big plans coming in 2014! Stay tuned for more!

    Jon

  10. SEO'Brien says :

    Brilliant point Jon! Thank you for chiming in. Added to the list. And congrats on the continued success

  11. Austin is eCommerce perhaps, and yes, one must ask about the other factors that make, and have made, this possible.

    Last night I was sitting in Cover 3 with a gf and she lamented on how she hated Gov. Perry for cutting her state budget annually. Gov. Perry has lured many of these businesses in at a discount to them. Of course, for the small fries like me, our businesses do not get a direct boost, but he still builds the larger infrastructure, which makes the tech pie bigger for all of us, so he is to be commended.

    As for Austin and what it’s known for, and perhaps this is a lofty goal of which myself and only Kevin Koym aspire, we should never forget that Austin is famous for its inclusivity and community of sharing. We help each other get started and we do so freely.

    In private conversations, you have disagreed. To that I would have to say that perhaps you are correct in some cases when ongoing business happens, but to get started, I would have to argue that Austin has more opportunities, compared to other cities. New start-ups can begin their businesses, while spending little money, simply by getting connected to the abundance that is already here.

    Am I naïve? Perhaps. I prefer to say that I surround myself with those who share my beliefs and make it a point to help others whenever I can. Of course, you are more connected than I, so you see behaviors that are perhaps….suspect.

    Is ignorance bliss? You bet it is.

    Counting my blessings daily,

    Paula ?

  12. SEO'Brien says :

    Great thoughts Paula

    Perry’s approach is a dual edged sword with benefits and disadvantages. Does it give other businesses moving here a break? Yes. Does that disadvantage other businesses? Yes. But do most of those businesses that move here bring high level jobs and professionals or entry level jobs? They are primarily account managers, support staff, etc. so… is the arrival of those businesses here really helping?? Are we getting more engineers and executives? No. So in the long term, are local businesses really hurt by not getting the same advantage? You said it yourself, he is making the pie bigger and a bigger pie means more capital, customers, partners, etc…. the benefit is a short term perk in that the best businesses/business owners, will eventually win out and IF indeed they are the best, they’ll benefit far more by way of that larger pie. No? Think even bigger though… those relocations foster PR about Texas, commerce, relocation of talented professionals who want to live where it’s happening, etc. All good, no? Is it though? If those companies are moving primarily low level jobs, when the economy goes south, they are the first to go, those companies will pack up and out of Texas, leaving countless unemployed in their wake. Unless we, the businesses already here, step up and demand better, together.

    Yes, Austin is supportive, shares, and is inclusive, it’s ALSO more exclusive (there was a wonderful discussion over dinner just the other night with some investors about how no where else in the country have they had to pay to have access to a startup pitch event – only here), less sharing (a running gag in the startup community among those of us from Silicon Valley is that we have to sign NDAs here… NDAs went the way of the dodo, a decade ago in California where people REALLY appreciate that the only way to grow/excel is to share your ideas), and it’s supportive of businesses, not true collaboration which fosters industry, competition, and economic growth more than the success of a business.

    In fairness, my perspective isn’t critical. I’m here for a reason and you’re right, Austin has more opportunity – you can start a business here with far less capital and the easy access to a few connections in Austin. My goal, in questioning things, is that very goal that Perry has… to grow the pie, not just the success of A business. Not just to support, but to collaborate so that everyone benefits. And to help entrepreneurs realize that an inclusive economy is one in which they are welcome everywhere, not just where they get in, are accepted, or pay for access.

  13. Jeff Pesek says :

    Valiant effort to some extent, yet provocative & shallow…any actual data or metrics, other than a list, to support the thesis?

  14. SEO'Brien says :

    “Shallow;” interesting choice of words Jeff. I never claimed to write to the expectations of the audience here. I’ve made a provocative and somewhat founded claim. You could certainly argue that other elements of online shopping go to other communities: Chicago, Minneapolis, Silicon Valley (e-tail without question goes to another city), but when many of the leading commerce solutions (Offers.com, RetailMeNot, BigCommerce, Volusion, Revionics, Bazaarvoice) are in Austin, what more data need one provide to support that claim? By what measure is the claim agreed to be accurate? Jobs? Investor returns? Number of entrepreneurs per capita or in total?

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