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The elevator dings and the metal doors slide open. While the second floor is filled with construction workers and other floors host the commotion of startups, established businesses and freelancers, the fourth floor of the Rand Building is a quiet place. It’s nearly empty save for a few desks in side offices and a large conference table with chairs in the center of the large space.
The downtown tech community in and around the Rand Building has been buzzing with speculation about which company will be leasing the entire fourth floor. Building management firmly declined to comment. The space will likely remain shrouded in mystery until the company comes forward.
Meanwhile, new companies are setting up shop downtown seemingly every month. It’s not your imagination — more and more tech companies are being drawn to or founded in San Antonio, and it’s no accident.
It all started with an email. In 2007, Rackspace acquired Webmail.us, an email company based in Blacksburg, Va., and asked its founders to relocate to San Antonio. One of the three founders, in particular, decided he had no interest or intention of moving to San Antonio. He instead wrote an email to Rackspace Co-founder and Chairman Graham Weston firmly stating his reasons for never moving to San Antonio: absence of a vibrant downtown, lack of a web developer community, and a dearth of tech startups.
Weston gave a copy of the email to then-Mayor Julían Castro, telling him San Antonio needed to start building a vibrant urban core, complete with a thriving tech ecosystem. Weston also created three separate entities: Weston Urban, the 80/20 Foundation, and Geekdom. All three share the same mission: “To help create an ecosystem where the next Rackspace can grow in San Antonio,” said Geekdom’s CEO Lorenzo Gomez.
Founded in 2012 by Rackspace chairman Weston and former Rackspace vice president and now Weston Urban CEO Randy Smith, Weston Urban is focused on downtown redevelopment to help showcase San Antonio as a city on the rise for young professionals and their families. Since April 2013 when Weston Urban purchased from Frost Bank the Rand Building at 100 E. Houston Street, the Rand has become home for Geekdom, the 80/20 Foundation, Techstars and Tech Bloc — ground zero for technology startups.
The 80/20 Foundation invests in nonprofits that support entrepreneurship and technology education for high-skill jobs. Geekdom is the startup incubator and co-working space with more than 900 members paying monthly fees to share office space and network. Since moving from the Weston Centre to the Rand Building in April 2014, Geekdom now occupies the top three floors of the eight-story building.
“We have 450 tech companies, many of them startups at Geekdom,” Gomez said. “While many cybersecurity companies are throughout the San Antonio area, we’re focused on creating that gravitational pull to help bring tech startups downtown.”
Now that the fourth Techstars Cloud class has graduated, there are a few more tech companies opening an office in San Antonio. With headquarters in San Francisco, newcomer ScaleFT opened its satellite office in January on Rand’s seventh floor in order to be closer to two of its big customers, Rackspace and JungleDisk. ScaleFT, an example of a cloud computing company, uses its cloud-native security platform to provide dynamic authentication to cloud infrastructure using short-lived certificates.
Protecting the credentials of information technology staff or contracted developers is important as some recent corporate hacks were possible because the individuals had stolen passwords that were still valid from authorized personnel.
Having companies set up a satellite location in San Antonio is a huge accelerator to the local ecosystem’s growth because it brings good paying tech jobs to the market right away from companies already scaling up operations. ScaleFT received $800,000 in seed capital from Rackspace in May 2015 to get started.
“San Antonio is motivated to attract tech talent,” said Jason Luce, ScaleFT CEO and co-founder. “The tech ecosystem is here, with Rackspace, Geekdom, Codeup and Tech Bloc. I can also hire qualified people here in San Antonio, while in Austin, I can’t find people easily — they already have jobs at Facebook or Google. San Antonio today is ripe, it’s where Austin was 10 years ago.”
Advocates like Rackspace, Geekdom, Codeup and Tech bloc have helped draw others to the tech ecosystem. San Antonio Entrepreneur Center (SAEC), which opened in February, is a nonprofit focused on stimulating job growth and driving the San Antonio economy. SAEC provides resources needed to make startups successful and economic growth in San Antonio achievable and sustainable.
“The Center has planted its flag deliberately on Houston Street,” said SAEC Co-Founder Peter French. “We recognize lots of folks are concentrating their energies on creating a downtown attractive to tech companies and we want to be part of that.”
San Antonio’s proximity to Austin and lower cost of living also helps grow the tech ecosystem.
“We’re talking to venture capitalists active in Austin who are now interested in San Antonio, especially since Austin’s City Council has become too unpredictable lately, which is bad for business,” French added. “We (San Antonio) need to take advantage of this, especially since we’re more affordable.”
Growing San Antonio’s tech ecosystem also means more people seeking training and certifications. The local demand from cybersecurity companies, cloud computing businesses and tech startups shows no signs of slowing down.
“I think the proof is in the pudding. The number of Codeup grads working in Geekdom and on Houston Street is pretty high now. Some companies have three to four working there. So, that’s exciting,” Michael Girdley, founder and CEO of Codeup, the coding boot-camp that recently moved out of the Weston Centre to The Vogue building on 600 Navarro St.
The combined strategies — training more local talent, growing and leveraging the tech ecosystem network, fostering more partnerships — appear to be working.
“We want a critical mass of tech startups downtown,” Tech Bloc’s Director Marina Gavito said. “We find that startups think about checking out San Antonio’s downtown first by co-working at Geekdom to see if it works out for them to open an office here. Tech Bloc also partners with Techstars to leverage (Bexar) County Innovation Funds to provide startups incentives.”
Bexar County approved in February an incentive program, the Innovation Fund, to attract more tech companies to San Antonio. Tax incentives don’t help companies that are starting out, so this new program will help tech startups launch businesses in San Antonio. At publication time, there are at least four graduating Techstars companies applying for the incentives and five other startups are participating in the County-funded Tech Fuel competition.
With more construction slated for downtown, such as Weston Urban’s planned Frost Tower, there should be more space available for more tech companies to join the growing downtown tech corridor.
“I think Houston Street will be full of tech companies in just a few years. The Vogue is already home to four: Codeup, Turner Logic, Grok Interactive and Boldbrush. Our landlord, GrayStreet (Partners), is super interested in getting more tech companies in their properties too,” Girdley said.
Conditions are ripe for growing the tech ecosystem and San Antonio’s downtown stands a good chance of seeing more tech companies set up operations.
Note: The map above and the list below is not meant to be an exhaustive listing of all tech companies in the greater downtown area. It does show the growth of the tech ecosystem throughout San Antonio’s urban core
219 E. Houston Street
- Open since February, the San Antonio Entrepreneur Center is beginning its mission to drive future economic activity in the city’s urban core.
110 E Houston St (Rand Building)
- Geekdom (with 450 company members, such as ScaleFT) provides collaborative coworking spaces where entrepreneurs, technologists, and developers can work and network.
- 80/20 Foundation grants nonprofit organizations small, short term grants to help them create more urban options for professionals, support the growing technology community, and promote tech education.
- Techstars offers a startup accelerator and development program to help tech startups raise startup and learn how to launch their business.
- Tech Bloc works to change the San Antonio economic landscape by creating a tech ecosystem.
- Rackspace’s Open Cloud Academy teaches cloud computer and system administration skills.
- WP Engine is a hosted service provider specifically tailored for WordPress websites and apps.
- Jungle Disk offers online storage for desktops and workgroups, supporting data centers and multiple platforms.
600 Navarro Street (The Vogue)
- Codeup was founded in 2013 to address the lack of quality web developers in San Antonio. Too big to move with the rest of Geekdom to the Rand Building, Codeup now leases 5,775 square feet in the Vogue.
- Grok Interative builds web applications for clients beginning with the software architecture phase, through planning to finish product.
- Chris Turner founded Turner Logic in 2012 to provide custom software and hardware development for clients.
- BoldbrushdevelopedFASO, an art-focused social network that helps visual artists market their artwork online as well as connect with other artists and art enthusiasts.
112 E Pecan Street (Weston Centre)
- PLS Logistics proprietary PLS PRO tool provides companies a cloud-based supply management tool that integrates with existing business systems so a company does not need training on new systems, instead using PLS Logistics’ centralized network for supply chain optimization.
- Parlevel offers a vendor management system application that works seamlessly with the latest generation of vending machines and can be used to retrofit older generation machines for supply chain optimization across an entire vendor operation.
- Endgame provides clients a comprehensive software platform that automates the hunt for cyber adversaries, using hunt teams, incident responders, and security operations teams to significantly reduce the time to detect and stop cyber adversaries.
118 Broadway Street
- SASTEMIC is a nonprofit advocacy group for Science, Technology, Engineering and Math (STEM). Their mission is to advance STEM education and economic development by strengthening connections among communities servicing K-12 students, colleges, industry and government for the San Antonio area.
- Heavy Heavy develops a brand identity for clients in the digital landscape in an integrated way that incorporates design and content work for clients. Clients to date include Codeup, Techstars and Keep SA Real.
- Filestack was founded in 2012 by four MIT students and created an easy way for clients to upload files directly from multiple cloud sources and complete file infrastructure.
- SeatSmart is a direct broker-to-fan ticket marketplace, offering ticket buyers a more cost-efficient alternative to secondary ticket marketplaces like TicketMaster.
310 S St Mary’s St (Tower Life Building)
- With headquarters in Colorado Springs, Root9b opened its San Antonio office in January. Named the top-ranked cybersecurity company among the “500 companies to watch in 2016,”root9B provides real-time operationstomonitor and stop a cyber intrusion in progress.
Full Disclosure: Tech Bloc founding member Lew Moorman, an investor in Filestack, sits on the Rivard Report board of directors. Learn more here.
Top image: Codeup student Anna Morton works at her desk. Photo by Scott Ball.