Austin became the #1 entrepreneurial city through a multi-step incubating process over several decades: 1) Large tech companies like IBM established operations in Austin in the 1980s, attracting talent. 2) Employees from these companies went on to found startups of their own, spinning off 29 companies from IBM's Tivoli division between 1989-1996. 3) These new companies and their employees further spawned new startups, nurturing a culture of entrepreneurship and continuing the cycle of new venture creation that made Austin a hub for technology and startups.

1. How did Austin become the #1 entrepreneurial city in the United States?
2016 Mayors Conference on Entrepreneurship
St. Petersburg, FL
November 30 – December 2
Special Thanks to:
the Kauffman Foundation
Dr. Elsie Echeverri-Carroll, Principal Investigator, IC2 Institute
Professor MichaelOden, Co-PrincipalInvestigator, Community and Regional Planning
Research Support Team of Graduate Students:
Evan Johnston, Yimeng Zhao, Jayson Varkey, Karina Alvarez, Jacob Walters, Fiza Mairaj, Alyse Polly

2. We have a solid understandingof the eventsthat lead to attracting largehigh-tech
companies to Austin

3. 1,141
1,296 1,595 2,131 2,582 2,808 3,364 3,507 3,928 4,544 5,266 5,487 5,919 6,622 7,484 8,248 8,813
9,997
8,672 9,035
10,492
13,679
15,591
16,653
17,251
30,612
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
RegistrationFilings
Year
Global
Financial
Crisis
Tech Bust
6 years 7 years 7 years
Source: TexasSecretaryof State.
Notes:For-profitfirmsinclude corporations,LLCs,and LPs.SOS doesnotinclude sole proprietorships.
General Trends from the Texas Secretary of State in Austin
1990 - 2015

4. Start-ups: Industry trends for five ICT sectors in Austin
1990 - 2010
0
100
200
300
400
500
600
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
EstablishmentBirths
First Year
Software Publishers, Computer Systems Design,
and Related Services
High-Tech Business Services (Architectural,
Engineering, Management Consulting, and other
Scientific and Technical Consulting Services)
Commercial Equipment Wholesalers &
Telecommunication Related Services
Semiconductor & Electrical Equipment Mfg.
Computer & Related Equipment Mfg.
Source: NETS.
Notes: Non-sole proprietor startups in NETS satisfy criteria 1-5. These criteria are: (1) first year is between 1990 and 2012 with a first zip code in the Austin-Round Rock MSA, (2) establishment is
not categorized as a branch, (3) establishment does not have a non-profit legal status, (4) establishment has never been classified in a non-UI NAICS code, (5) establishment is not a sole
proprietorship by employment (had more than one employee in first year) or by legal status. NETS revises data for three years after collection.

5. Entrepreneurial Spawning Effects
No *: Founded years from SOS
*: founded year from NETS
**: founded year from website/Bloomberg
Total: 47 startups
Black: 29 startups Tivoli employees founded
Red:18 startups where Tivoli employees works as managers
IBM
Tivoli Spinoffs in Austin/Founders
and Top Managers in Austin

6. How did Austin Become a High-Tech Entrepreneurial Ecosystem:
Expansion of the Incubating Process
Corporations (spinoffs)
IBM  Tivoli (1989 – 1996; 7 years)
Entrepreneurs (spawning)
Tivoli  Dazel Corporation (1994)
Entrepreneurial Community
BuildASign (2005)
Dan Graham
1980 1996 2009 2016