When the Texas legislature passed the most restrictive abortion law in the nation, Austin-based Bumble, a dating app that went public in February, reacted right away.
The company announced on social media that the company would establish a fund that will go to organizations that support women’s reproductive rights. “Bumble is women-founded and women-led, and from day one we’ve stood up for the most vulnerable,” the company said. “We’ll keep fighting against regressive laws like #SB8.”
Many major corporations stayed firmly out of the backlash against the law (and the Supreme Court’s refusal to send it back to the district court for further deliberation). But in Austin, which has been emerging as the country’s most important second-tier innovation hub, the calculus is a little different.
“Texas has so many advantages, and we’re at, in my opinion, a dangerous risk of losing that competitive advantage because of the [divisive political climate] that is happening because it makes us not welcoming of all people in all talent and young talent,” said Mellie Price, founder of Austin-based Purposeful Capital and executive director of University of Texas at Austin’s Texas Venture Labs.
The recent law that made it illegal to get an abortion after six weeks of pregnancy, and set up rewards for people who turn others in for seeking an abortion. Meanwhile, another bill to tighten voting laws, which many see as voter suppression, was signed by Gov. George Abbott on Tuesday.
Texas and Austin have increasingly attracted big companies and big tech CEOs, from Elon Musk, who also stayed silent on the law. It has no personal income tax, no corporate tax, and a relatively low cost of living.
But what can be great for corporations might not be great in the view of its customers or its employees. Some 59% of Americans and 62% of American women think abortion should be legal in all or most circumstances, according to Pew Research. Meanwhile, an increasing number of consumers, especially young ones, are paying much more attention to the values of the companies they buy and invest from — or work for.
The biggest fear of progressives in the tech community is that the voter restriction law — which has been widely condemned, even by big corporations — and the abortion law could stop tech employees from wanting to move to the state. Though abortion is a divisive issue, one particular aspect of that law makes it particularly divisive. The new law established a reward, saying that anyone who successfully sues a health care worker, abortion provider or anyone who helps someone access an abortion after six weeks can be paid $10,000 by the defendant.
San Francisco-based Lyft and Uber announced they would be covering all legal feels of its drivers sued under the bill for assisting a woman seeking an abortion.
The future of tech and innovation, particularly, relies on drawing more women and people of color into the sector as companies in the United State face more competition from diverse ecosystems in other countries.
“The recent abortion bill here could make young women workers really reluctant to relocate to to Texas,” said Nathan Jensen, a government economic policy professor at UT.
The Case For Inclusion
It’s in the state and city’s best interest to be more inclusive and for the community to tackle the disparities within the tech ecosystem, said Preston James, the co-founder of Austin-based incubator DivInc, which focuses on incubating tech startups founded by underrepresented entrepreneurs. “All the data points to being more inclusive will drive greater job creation, wealth creation, across the board — people of color, women — in a greater innovation ecosystem,” he said. “And so that’s what we need to have happen, short term and long term.”
Ecosystems with more diversity are more likely to obtain economic prosperity. Also, teams with inclusive leaders are 29% more likely to report behaving collaboratively, according to research in the Harvard Business Review. When there’s a 10% improvement in perceptions of inclusion, work attendance increased by nearly 1 day a year per employee, according to the research.
“Part of me is afraid that some really critical things are going to be broken, and then you layer on top of that, what’s been going on from a political standpoint, we’ve got some really interesting dynamics that are happening in Austin and across Texas in general,” James said, adding by email: “I know Austin means well in all aspects, and there is a deep and rich history here. I believe for Austin to become the city it wants to be in the future, all of us must acknowledge its good and bad and become better because of it.”
Bumble has not released details about its fund — either its size, or whether it would be controlled by the company or its founder, Whitney Wolfe Herd, who became the world’s youngest self-made billionaire this year. It encouraged people to donate to the Lilith Fund and the National Network of Abortion Funds. Dallas-based and women-led Match, which owns Tinder, also announced a similar fund last week.
There’s always been a tension between Austin’s position as the Texas capital and its stature as a hub of education and innovation. It’s rare that a city can hold on to both identities. In fact, in the 19th century, efforts to place the new University of Texas in Austin faced some opposition. “Parents were warned that sending their sons to school so close to lawmakers would be a terrible influence on their morals,” notes the Austin Library in its history of the city.
Keep Austin Weird
The state’s recent hard shift rightward is happening as Austin itself grows more corporate.
Ian Bidot, the program manager at Texas Venture Labs and lifetime Austinite, remembers the days when Austin felt more like a college town than a city. In the 2000s, he watched as highrises went up and shopping centers were installed.
In 2009, he moved away from the city for five years. When he returned, Austin had changed so much that he hardly recognized it. “I was looking around and thinking, this isn’t Austin anymore,” Bidot said.
Twenty years ago, those same concerns about a too-corporate Austin gave rise to the “Keep Austin Weird” movement. It was born out of a local bookstore called BookPeople, which used the slogan to fight off a new Borders bookstore that was planned a few blocks away.
You wouldn’t know this from the general information out there, says longtime Austin-based journalist Chad Swiatecki. The slogan took on a life of its own and quickly became the unofficial mantra for the city.
Artists and hipsters clung onto it as a term for having pride in a city that celebrated them through an extensive creative and music scene, as well as in large ways, such as SXSW. Small businesses, too, as their own version of “shop local.”
You can find it on the bumper of Austinites’ cars and on T-shirts at the Austin-Bergstrom International Airport, said Laura Huffman, the president and CEO of the Austin Chamber of Commerce. The local spirit still exists — the city is still riddled from head to toe in small business — in 2013, the city had 44,163– said Art Markman, the director of the IC2 Institute, a “think-and-do” tank working to develop the city and nearby communities.
Keep Austin Weird is still part of the character of the city. But some say Austin has changed so much already it’s no longer weird — and that the spirit of collaboration and live-and-let-live that drew artists and innovators is fading. Whole Foods, once a counter culture mainstay, is now owned by Amazon. Dell, once a hardware innovator, is now the 28th largest U.S. company, according to Fortune.
The Texas state government has branded the state’s ability to grow and attract companies as the Texas Miracle. Though the image of economic prosperity is not the reality for all Texans — Black and Latino people continue to struggle despite the “miracle” messaging from city and state officials, a study from the University of Texas and Texas Tribune found.
A Western Community Grows Up
The city’s tech hub has been slowly bubbling since the 1970s. Many attribute its surge to UT Business School president George Kozmetsky, who advocated for policy to allow the school to commercialize its intellectual developments. This led to UT-spawned military electronics maker Tracor becoming Austin’s first IPO in 1976, which in turn grew many angel funders who invested back into the ecosystem.
The city, like other regional tech hubs, benefitted as the Internet became more accessible and smaller funding rounds could suffice for building innovation, Price said. Since then, more firms with funds of a few million dollars have planted stakes in Austin. They provide the city with the funding it needed to support its innovations and what experts call a bottomless labor pool. But it was the first decades of tech groundwork that allowed for the hub to become what it is today, she said.
But at the same time, the city was gaining big names, drawn by the talent pool. Those include Musk and Tesla, which could bring 10,000 new jobs, and Oracle, which moved its headquarters to the city at the end of 2020. The city is home to an Apple Technology Park and the ground for the U.S. Military’s Center for Defense Innovation, hosted by venture firm Capital Factory.
The city has excelled in other industries as well, such as manufacturing and clean energy. A new hospital at the University of Texas-Austin has sparked life science and health care innovation, too. It’s part of what makes Austin’s ecosystem so robust and resilient.
Meanwhile, the growth has also tripled Austin’s population, which surged from 350,000 in the 1980s to close to 1 million today.
What people have had a reaction to is less the growing corporate presence and the right-wing politics, and more the skyrocketing housing prices, cost of living and the traffic. “The backlash is really more of a development backlash,” Jensen said. “It’s less about tech.”
“What I find is that people fall in love with whatever version of the city it is that they meet when they get here,” said Kevin Newsum. “And then when it inevitably keeps changing, they don’t like the change.”
He is an Austinite and founder of Steamm Espresso and 20×2 event at SXSW.
Identity is Essential
As James reflected on whether “Keep Austin Weird” was still alive, he realized he has heard it less and less over the last few years. That could be due to the pandemic and the racial reckoning in 2020.
When James first moved to Austin from New York City, the culture was very different. But he learned to embrace what “Keep Austin Weird” means to him. “It’s kind of that feeling of, come as you are, bring the best of you, no matter what,” he said. “And that’s awesome, right? You want to be proud of that. I know Austin does not want to lose that.”
Yes, Texas offers some cushy incentives for many corporations. But Austin’s specific “weird” culture makes it a place people want to live.
“These CEOs…could live anywhere in the world,” Huffman said. “They’re choosing Austin because of its quality of life.”
Instead of suits, most Austinites opt for sandals and sweatshirts, she said. The tech community itself is very collaborative — the ecosystem often offers open arms to help new entrepreneurs and connect each other. It’s a quality of Austin that’s transcended large companies moving in.
“Austin remains a city full of [people] who are really comfortable with swimming against the stream,” Newsum said.
“Since I got here, people have been complaining that Austin isn’t what it once was. But nothing’s ever what it was,” Markman said. “In that 24 year period, while it isn’t what it was, it still has launched lots of local business. It has not become more generic.”
This story has been updated to reflect that Mellie Price’s firm is called Purposeful Capital.
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