Everything’s bigger in Texas, including Tesla. This week the company announced plans for a $1.1B manufacturing plant near Austin. Elon says the campus will be an “ecological paradise” fully open to the public while manufacturing cybertrucks, the Tesla semi, and passenger car models.
Wait…Texas…Tesla…is this the origin of the great state of Texla? Learn more about how the pair could emerge stronger together later in this issue.
Tesla’s Fremont, CA facility remains critical to its operations despite threats earlier this year to close over COVID shutdowns. Bay Area tech employees are equally ready to move, though not due to government efforts to keep them safe. 42% still maintain they will move to less expensive cities if allowed to work from home full-time.
For high-skill tech talent, emerging hubs like Raleigh-Durham offer cultures of innovation, collaboration, and education for a fraction of the cost. Our Unvalley Spotlight section unpacks the phenomenal Tar Heel Triangle in North Carolina. It’s not as mysterious as Bermuda, but it might be just as disruptive. Keep reading to decide for yourself.
We’ll spare you from any regurgitating everything that happened with the Big Tech hearings this week. But it will be interesting to see how the outcomes impact tech hubs beyond the epicenter of Big Tech in Silicon Valley.
In This Issue:
- 🍎Mighty Middle Keeps Appeal
- 👽Austin’s Newest Weirdo
- 💥Uncovering the Unvalley: The Triangle, NC
🍎Mighty Middle Keeps Appeal
Can you fight honey with vinegar? Employers in the nation’s traditional economic hubs, including tech companies, threaten a significant number of employees with pay cuts or even termination if they follow their desire to relocate for lower cost of living and other lifestyle improvements.
Some companies claim salary adjustments based on residence are an essential move to ensure smaller markets don’t become depressed due to high wages from outside employers. Others suspect it’s just a move to keep depressed employees working where they are.
It’s true that onboarding, training, and collaboration are some challenges requiring teams to return to the office within the next 3-6 months, and plus, everyone is getting cabin fever. Data from Visual Capitalist reflects that while 50% of startup employees now want to work remote 3 days a week or more, only 10% want to work remote full-time.
Are you wondering what the future of remote work will look like?
A study of startups was completed at various levels and employee profiles by Visual Capitalist.
— OutsideCapital (@Outside_Capital) July 28, 2020
For startups in the Mighty Middle, this means pushing to become attractive alternative employers against tech giants keeping talent hostage on the coasts. Venture capitalist Brad Feld and co-author Ian Hathaway published a new book advising startups and communities on how to grow in these unknowable times by focusing on elements within our control. The Startup Community Way… Feld’s 2016 book on Startup Communities (which just released an updated edition) has been a priceless guidebook for Powderkeg as we’ve expanded into new markets, so this new one is guaranteed to make an impact.
🚙Tech’s “On the Road” Moment
Silicon Valley’s kids are all grown up and moving out! Though it’s an undisputed birthplace of tech innovation, the Bay Area may be on the brink of empty-nesting due to the cost of living and operations expenses, including the fiercely competitive talent pool.
Heartland talent hubs stand out as a fresh opportunity for expansion and innovation outside the status quo of Silicon Valley. Here’s a few examples of how tech is blossoming between the coasts:
- In Indianapolis and Columbus, Indiana, the One America Works project connects young startups with early talent making the migration out of the Valley.
- Cleveland is continuing its impressive multi-decade comeback by courting large tech companies to relocate to the Forest City.
- In Oklahoma, Tulsa Service Year is now offering a lucrative paid talent-development program.
- Chicago needs no introduction, but Amazon adding two fulfillment centers in the south suburbs cements the city’s position in the US top 5.
The 20 best cities in the Midwest to live in after the pandemic https://t.co/ebPHMyex83
— Business Insider (@businessinsider) July 12, 2020
Journalists are enthusiastically ranking the best Midwest cities for young professionals to move to. Fargo, Springfield, Bismarck, and Oklahoma City are among the locales finally getting their due representation as amazing places to live. Forget flyover, with this Midwest growth and love it’s time for newcomers to land and build something awesome.
👽Elon Keeps Austin Weird
Say what you will about Elon Musk, and not just because he’ll probably retweet you. Though he’s often a divisive figure in the tech world, his acumen of success has always come from taking smart risks. Tesla’s intended cybertruck facility in Austin will bring work and innovation to town and spur the global electric car boom. The timing may have something to do with Michigan-based competitor Rivian closing a $2.5B investment round while also accused by Musk of stealing Tesla’s trade secrets.
But even if it’s a flex, the choice to center this cutting-edge facility in Texas’ hippest city is anything but a ploy. For years, tech journalists and experts have pointed to Austin as a potential successor to Silicon Valley’s throne. The city is already home to mega-companies and manufacturers like IBM, Facebook, Google, and Amazon.
To lure the Tesla Giga factory to Austin, Travis County and Del Valle ISD offered 60 million in tax subsidies over 10 years. A look at the details of the deal: https://t.co/Kf4WaoiXKw
— Texas Monthly (@TexasMonthly) July 30, 2020
Austin’s startups are the real indie stars, such as RigUp, an oil business-focused workforce platform that scored a $1.9 billion evaluation. However, since the spread of coronavirus, that culture of startup success has slowed. RigUp, along with other innovators like Guild, Kazoo, and Disco had to make significant layoffs. So, the arrival of Musk feels like a good omen. But others point to Tesla’s push for massive tax credits as a worrisome first impression.
Regardless, it’s safe to say Elon Musk loves a good old fashioned dust-up. How long ‘til he starts wearing a cowboy hat?
EXPLODING WITH OPPORTUNITY
Top fundings, acquisitions, and IPOs between the coasts.
- Rising insurtech startup The Helper Bees raised $6M in Series A funding.
- The large insurtech company Hippo Insurance opened a new office in Austin after a $150M investment round.
- Chowbus, a delivery service startup for family-owned Asian restaurants, closed a $33M investing round.
- The landlord software company Avail raised $4.2M.
- Known for its premier CRE software, Buildout received $8M in funding from Susquehanna Growth Equity.
Los Angeles, CA
- Religion of Sports, which focuses on funding brand storytelling empowering creatives, raised $10M.
- Insur-tech company Sidecar Health closed a $20M funding round for point-of-service payments.
- Mira announced $10M more in funding to support its augmented reality tech.
- SaaS startup Swoop raised $3.2M to modernize mom-and-pop transportation companies.
💥UNCOVERING THE UNVALLEY
Raleigh-Durham, NC: Concentrated High-Skill Tech Talent Accelerates Synchronicity & Startup Growth
In this new section of The Spark, we illuminate some of the biggest opportunities in tech beyond Silicon Valley. This week, we’re covering Raleigh, Durham, and Chapel Hill!
North Carolina’s tech sector is growing at twice the national average, with Triangle metros Raleigh, Durham, and Chapel Hill forming a hub for the momentum. To sketch just some of the power of this Triangle:
- Raleigh was the second-best city to land a tech job in 2019, according to the Computing Technology Industry Association, and it’s predicted to be the East Coast’s biggest tech hub by 2025.
- Durham-Chapel Hill is #5 in the nation for STEM employment, with over 12% of its workforce in science, tech, engineering, or math.
- The 7,000-acre Triangle Research Park is home to tech companies, government agencies, nonprofits, three tier-one academic institutions and more.
“What’s interesting about the Triangle is that we are purposefully innovating,” said Daisy Magnus-Aryitey of Code the Dream, a nonprofit committed to helping advance coding skills in marginalized communities.
17 universities with emphasis on entrepreneurship and tech education provide a deep talent pool sustaining the tech growth in the Raleigh-Durham metro area. Over 25 venture capital firms help fund success of the future, to the tune of billions of dollars raised each year by NC startups since 2018.
“One beautiful thing here in the Triangle is it’s easy to get a meeting. But the next beautiful thing is they give great feedback on the concept, particularly when you’re starting small.” said Sonja Ebron, cofounder of civil law startup Courtroom5.
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