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How Should Houston Encourage New (Tech) Startups?


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I hope you don't mind, but I'm splitting your post off into its own thread because I think that the topic of tech startups in Houston needs its own discussion space.


It's an interesting proposal. As someone who's been to a number of private and municipal-backed startup incubators (including the 1871 that you mentioned in your article), Houston could use more of this.

Historically, the city's business philosophy has been to leave it mostly to the private sector to sort out. Kind of an economic Darwinism. But as a society, we've advanced beyond the notion that Darwinism is the solution to our problems. That's why we have ambulances and hospitals and Social Security and car seats for babies.

Based on my experiences, here's what I think Houston (and other cities) should do to help tech entrepreneurs:

Make starting a business easy. In Washington State, you only need three forms -- the IRS, the Secretary of State, and the city. The city form is short and handles your company's registrations with most state and local agencies. But there's no reason it couldn't just be two forms -- Federal and state/local.

I started my first company in Chicago, and it was a real pain because I had to register with the IRS, the Illinois Secretary of State, the Cook County Recorder of Deeds, Illinois Department of Revenue, Illinois Bureau of Employment Security, City of Chicago Clerk's Office, City of Chicago Board of Zoning Appeals.

Make starting a business cheap. Why is it that to register HAIF as a trademark in Texas costs $50, but in other states it's only $15? When you're starting out, every dollar counts. The big reason I moved my company from Chicago to Seattle was the cost of government compliance. To keep my company registered in Washington (state and local) costs $69/year. In Chicago? $500+. I don't know what the cost is in Houston, but if it's more than $69, it's no longer competitive.

Make starting a small business explicitly legal. Since Houston doesn't have zoning, it's easier than in some places. But just because a law allowing people to run businesses out of their homes isn't strictly required, doesn't mean it isn't helpful. It will give people who just want to run a web site or an eBay business legally from their home some leverage against a landlord who doesn't understand the internet. A lot of cities encourage home businesses because they keep people employed, while reducing the burden on public amenities like roads. Houston, if it doesn't have one already, should have an ordnance that specifically spells out the rights and responsibilities of home business owners.

Support small/micro businesses. There are lots of ways to do this. Again, my experience is limited to Seattle and Chicago. In Seattle, in public spaces like the state convention center, there are super-comfy places to set up your laptop and get some work done. Sometimes they're just like old school desks with cupholders drilled into them. Sometimes they're recliners with built-in desks, power outlets, and free internet. The idea is to encourage people to mingle, be creative, and work on their businesses. It also helps utilize under-utilized public spaces and creates a entrepreneurial atmosphere. In Houston, there could be a "Tech Tent" in Discovery Park during the nice weather to encourage people to get out and collaborate. It's not expensive, and pays for itself by getting just a few people off the unemployment line.

In Chicago, the city has a constant stream of free seminars and conferences for businesses large and small to attend. Right now, it's participating in the global Social Media Week. And by "participating" I mean hard-core pushing this to its citizens, not just being a sponsor in name-only. Check out the http://socialmediaweek.org web site's Chicago conferences: The Legal and Business Issues Surrounding Review Sites, How to Make Facebook Ads Work For Your Business, and hundreds of others -- all free! Plus the city's usual free seminars offered year-round.

I'm not going to go on about the benefits of the 1871 incubator because they're covered in the article lined to above, but I will reiterate that having flex space to meet with clients, get mail, and look professional, is very important.

Again, I'm not up on everything happening in Houston's startup culture; my experience is elsewhere. But there's room in every city for improvement and the exchange of ideas.

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