2019-034 Tech EntrepreneurshipDate: Feb. 22, 2019 Report No. 2019-034
INFORMAL STAFF REPORT
TO MAYOR AND CITY COUNCIL
SUBJECT:
Alternative strategies to promote and support tech entrepreneurship and tech enabled-business
growth
EXECUTIVE SUMMARY:
This Informal Staff Report was prepared in response to a request for information from Council
member Paul Meltzer on the possible strategies to promote user tech entrepreneurs. This ISR
provides information on successful tech startup communities/regions in the nation; brief case
studies of two communities; and the essential components of an entrepreneurship ecosystem. The
report also highlights the current assets and programs already in place in Denton to foster
entrepreneurship and tech through: the creation of Stoke, a coworking space and entrepreneurial
center, university and DISD’s role in educating the workforce; and the necessary infrastructure to
support tech and tech enabled businesses. Finally, the report addresses the current and possible
strategies for tech and Science Technology Engineering and Mathematics (STEM) development
and growth in our community.
BACKGROUND:
Tech Communities
Staff conducted research on successful tech communities and will highlight some of the main
drivers for growth in tech and STEM occupations across the nation. The Praxis Strategy Group
looked at job growth of 52 Metropolitan Statistical Areas (MSAs) from 2001 to 2013. The study
examined the commonly associated tech industries such as software engineering and computer
programing, as well as STEM related occupations. The study found that the four regions that
experienced the greatest increase of tech jobs over the 12-year period were not located in the Bay
Area, but were found in areas with lower cost of living and business friendly communities.
Austin, Round Rock, San Marcos, Texas increased tech employment by 41% and STEM related
jobs by 17%. Austin alone, was ranked number 1 for the most recent (2010-2013) period. Raleigh-
Cary, North Carolina increased tech sector employment since 2001 by 54.7% and 24.6% increase
in STEM jobs. Raleigh is similar to Denton for the major university presence in the community.
Nashville, Tennessee’s tech employment rose 65.8%, with a significant increase of 160% in
computer system design. This is due to the concentration of hospital management and healthcare
related technology. Nashville is similar to Denton for their music presence in the community.
San Jose, Sunnyvale, Santa Clara, California have experienced a decrease in STEM occupations
by 12%, while Seattle, Tacoma, Bellview, Washington remain strong at 45% growth in tech jobs
and a 19.5% rise in STEM occupations. The study found that this was due to the diversity of
companies in the region. It also stated that Seattle, Nashville and Houston’s growth could be
explained by manufacturing and increased demands for software services. Houston, Sugarland,
Baytown, Texas has seen an increase in STEM industries by 24%, due to the “technology-
intensive” energy sector in the region. The Houston area was ranked second to Silicon Valley in
Date: Feb. 22, 2019 Report No. 2019-034
their concentration of engineers. The study pointed out that the majority of the scientists and
engineers in the nation are employed in the manufacturing industry.
Case Studies
The Chamber of Austin has an economic initiative, Innovate Austin, to develop and grow tech and
innovation oriented businesses. They have 85 incubators, accelerators, maker and coworking
spaces in Austin. Their strategy is to provide information on five areas that drive innovation:
talent, capital, innovation ecosystem, Dell Medical School Innovation District and international
investment.
The Austin Technology Council (ATC) supports the growth goals of businesses by providing
knowledge and access in the following: capital, talent, mentoring, and networking. They advocate
for a supportive environment for the success of tech companies through public policy, education
and thought leadership. The ATC acts as a navigator for its members to provide a resource and
talent channel. The Council was described as a platform for collaboration attracting regional tech
and innovation leaders to Austin.
The City of Boulder, Colorado has not become a leading tech community overnight. Their path
toward technology began in 1950, with the creation of the National Bureau of Standards-Atomic
Energy Commission, which acted as a catalyst for other colleges and the University of Colorado
to create tech and computer study programs. The education system and investment in the tech
sector have created a virtuous cycle where graduates can enter into the tech field following
graduation. Some of this investment has come through smaller companies being acquired by larger
tech firms.
One of the most prominent books in the field by Brad Feld, Startup Communities: Building an
Entrepreneurial Ecosystem in your City, focuses on Boulder, Colorado. The book has some
interesting insights contrasting government and entrepreneurs. Government is described as not
being self-aware, slow to act quickly and precisely, and as a bureaucracy. Networking is key to
tech development, which is compared with the governmental hierarchy. The network model has
no need for hierarchy, according to Feld. He also states that it is impossible to control a startup
community and that this is the most important reason why government should not play a leadership
role in the tech community.
Entrepreneurship Ecosystem
The essential components of an entrepreneurship ecosystem are presented below, courtesy of Don
Mack at the Center for Rural Entrepreneurship, The importance of inclusive entrepreneurship
ecosystems, according to Mack, requires a different set of skills for the development of this
ecosystem. Staff needs to have the abilities to act as a network weaver, collaboration catalyst
policy advocate, and cultural transformer, to name a few.
Date: Feb. 22, 2019 Report No. 2019-034
Current Assets and Mechanisms to Foster Entrepreneurship and Tech
Stoke
Denton was ranked number 6 by City Lab as one of America's Top 25 High-Tech Hotspots. One
of the catalysts for this growth in high-tech is Stoke, Denton’s coworking space and entrepreneurial
center. Hickory & Rail Ventures took over the management of the coworking space in 2018. Their
vision for Stoke is to make it the first of many places Denton entrepreneurs can call home. The
center currently has 41 member companies.
Hickory & Rail Ventures will bring Stoke exclusive partnerships with Denton organizations that
will incubate, fund, and support Denton startups. One of the partners that already has committed
since the management transition is the University of North Texas, which will offer extended-
learning entrepreneurship programs at Stoke. Some other recent examples of their success include:
• Flyp – An app that allows users to operate multiple phone numbers from a single smart
phone. Flyp will assign users real, working phone numbers from any area code they choose.
Users can then text and make/receive calls from those numbers, which each have a unique
ringtone and voicemail box.
• Upventur – Upventur is a social startup that gives outdoor enthusiasts and hobbyists a place
to connect with fellow explorers, service providers, and experts. Upventur also offers
athletes a platform to share their passion for their game and to connect with fans and fellow
outdoor adventurists.
• Kubos – Kubos is a satellite software company targeting the emerging commercial space
industry. It combines quality engineering, modern software development, and mission-
critical services to serve the satellite industry better.
When asked about what the City and City Council can do to attract/encourage growth of tech and
tech-enabled businesses, Heather Gregory stated that she thinks that when government leadership
supports the work and understands how to best provide that support, it can be very attractive to
companies looking to start/stay or relocate in Denton. She suggested the following:
• Attend events - we would love for members of council to join when we have mixers,
headshot day, or the forthcoming entrepreneurship conference (or anything else for that
Date: Feb. 22, 2019 Report No. 2019-034
matter). Being in attendance at Stoke or TechMill events, meeting
entrepreneurs/mentors/investors would be very valuable to everyone.
• Consider attending/sending some representation to one of the Kauffman Foundation
conferences. Dates haven't been published for 2019 yet, but here are links to the ESHIP
Summit and Mayors Conference on Entrepreneurship.
• Read the books and/or blogs about the startup revolution and building startup communities.
Tech and STEM Education
Education is one of the greatest assets our community with the UNT, Texas Woman’s University
(TWU) and will soon have a branch campus of North Central Texas College (NCTC), the First
State Bank Exchange, in Downtown Denton.
• UNT is ranked as a Tier One Research University by Carnegie, has been aggressive in its
growth of both graduate and Ph.D. programs, and is considered a leader in computer
sciences, video game design, logistics, and design thinking. UNT has been recognized for
its work in many different fields, from Advanced Materials and Manufacturing Processes
to Logistics Research.
• TWU holds a distinctive position as the nation’s largest university primarily for women,
and advancing women’s careers and leadership abilities are key elements of its vision,
mission, and strategy. In 2017, the State of Texas funded TWU to create the state’s only
Center for Women’s Leadership in Business, Politics, and Public Policy.
• NCTC is the State of Texas’ workforce training partner in Denton County and has trained
thousands of workers in various industries. NCTC is the only Department of Labor
TechHire grant recipient in the state. Through this four-year, $4 million grant, NCTC is
increasing the tech talent pipeline in Denton and the region.
Denton Independent School District (DISD) is one of the fastest-growing public educational
systems in the region, and recognizes that coding and development are becoming fundamental skill
requirements to prepare students for the workforce. At the K-5th grade level, DISD offers robotics
and Minecraft clubs along with coding and Raspberry PI summer camps. Middle school and high
school campuses have a computer science course pathway from 8-12th grade, participate in the
Hour of Code global initiative, and offer robotics clubs. What’s more, DISD’s Advanced
Technology Center provides high school juniors and seniors with professional training and/or high
school/university dual credit opportunities, including nine professional computer certifications.
Infrastructure
The City of Denton wants to foster an environment that attracts the technology industry to Denton
and nurtures the growth of new technology companies. Available, affordable, and reliable high-
speed broadband is critical to accomplishing those goals. There are a number of internet providers
and services offered to business and industry in Denton to include: Charter, Frontier, and Unite
Private Networks (UPN). The City also provides free WiFi in the Downtown square and East
Hickory corridor.
CONCLUSION/RECOMMENDATIONS:
Economic Development staff have made strides in the development of tech and tech enabled
businesses and industry. Networking and training events are critical areas that the City can
Date: Feb. 22, 2019 Report No. 2019-034
continue to foster and will continue to work with Stoke to support their efforts to provide these
resources to launch, build and grow tech businesses. Economic Development recruitment efforts
will continue to highlight the university, college and DISD tech assets and their ability to produce
a high-skilled workforce in Denton. Public private academic partnerships and training programs
will also continue to be pursued. Staff will work with the CVB, Stoke, and other partners to
encourage a culture and climate that promotes entrepreneurship and tech development.
Denton participated in the SXSW Accelerator Pitch Event in Austin, Texas in 2018, had a booth
at the SXSW Interactive show in 2016, 2017, and is monitoring the leads from this endeavor. The
site location and recruitment process is very competitive and may take a year to several years for
a community to successfully recruit a prospect.
Staff will examine possible funding sources, tools and mechanisms for new targeted incentives. A
grant program that may work well for tech and tech enabled businesses could be job based, since
many of these businesses do not have a high capital investment. Staff could also look at the
development of an innovation district around Stoke and the Transit Oriented Development in
Downtown Denton. Staff has looked at creating and maintaining a diversified tax base. This
concept should also be applied to include tech diversification when recruiting. Staff can examine
tech and STEM occupations to target for recruitment, similar to the targeted industry sector that
are identified in our incentive policy.
One of the most prominent books in the field by Brad Field, which Heather Greggory
recommended, provided some interesting insights contrasting government and entrepreneurs.
Government can still play an active role in the tech community, but should not have a leadership
role. After providing the key aspects that promote entrepreneurship and tech/STEM development,
government should at times, get out of the way in order for the tech community to flourish.
STAFF CONTACT:
Caroline Booth, Director
Department of Economic Development
940-349-7751
Caroline.Booth@cityofdenton.com