HBO is gearing up for its third season of Silicon Valley, the popular comedy about five friends and their quest to build Silicon Valley’s hottest startup from a small living room in the Bay Area. The show is critically acclaimed for its truths about the tech industry and cultural nuances of Northern California.
While fans anxiously await for the third season, the show’s producers might want to consider a small change—the San Francisco Bay Area might not be “Silicon Valley” for much longer. As the tech industry continues to grow, and Northern California prices continue to climb, many startups are packing up shop and moving across the country to Austin, Texas—America’s next Silicon Valley.
Welcome to Silicon Hills
Much like the gold rush to California during the frontier, tech companies are rushing to Austin, now called Silicon Hills by the industry. Texas state officials estimate that one third of new companies have originated in California, showing the exodus east is very real. But what makes Austin so attractive, especially when industry giants like Apple and Google still call Silicon Valley home? A lot of it comes down to money, but there’s so much more when you look deeper.
California has some of the highest state taxes in the country. Texas has no state taxes at all. That juxtaposition alone is enough to incentivize new companies to set up shop in the south, but it doesn’t end there. Housing costs in Austin, while rising due to the new popularity of Silicon Hills, are still just a fraction of what it costs to live in Northern California; other living expenses like gas and groceries are also much lower. And the Austin Chamber of Commerce is dedicated to accommodating these businesses in any way possible to keep local startups growing.
If Texas is so affordable, what’s so special about Austin? Why isn’t Dallas, Houston, or San Antonio seeing the same surge in the tech industry? The simple answer is these cities don’t have the cool factor that Austin carries well. It’s home to mega cultural events like SXSW and the University of Texas, which supplies tons of local talent to these new tech companies. Naturally, college towns like these will always be a cultural hub over their bigger-city neighbors.
All it takes is a small wave to create a giant movement. Once Austin gained even the slightest reputation as Silicon Hills, it became the can’t-miss town every tech startup had to see. According to Innovate Austin, more than 4,700 high-tech companies operate in Silicon Hills and more than $1 billion was invested in these companies in 2014. There isn’t another up and coming community with those numbers, and now everyone wants in on the action.
4. Diversity Encourages Growth
Silicon Valley is a one-trick pony, but Silicon Hills has more to offer than just tech startups. The diversity is good for the community as a whole. Austin employs more than 2,000 people from major corporations like Apple and Microsoft. The city also has a booming bio-tech industry with more than 8,000 employees. Overall, the diversified economy makes the community healthier, similar to a diversified portfolio for an investor.