Dallas Startup Ecosystem

Dallas Startup Ecosystem Report

Introduction to Dallas Startup Ecosystem

Click here to View Dallas Startup map

The Dallas/Fort Worth Metroplex is in North Texas, located approximately two hours from the Oklahoma and Louisiana borders. Its total population is 7.2 million, which makes it the second largest metropolitan area in Texas behind Houston.  Importantly, in StartupBlink’s 2019 report, Dallas ranked 10th in the United States and 22th globally.

Known for being a modern metropolis, Dallas, is often considered the commercial and cultural hub of North Texas. Many recall the city for its historical significance as the site of John F. Kennedy’s assassination on Commerce Street at the grassy knoll in 1963. (X’s in the middle of the street denote the shots fired.)

Referred to as the “Big D” (for a wide variety of strategic and comedic reasons), Dallas lives up and plays up the hype of “everything is bigger in Texas.” For example: DFW Airport is bigger than the Island of Manhattan; Cowboys Stadium, now known as AT&T Stadium, is one of the most expensive sports venues ever built, with current construction costing its owner, Jerry Jones, $1.15 billion… not to mention that it’s among the top ten largest in the NFL; and, Las Colinas, Dallas hosts the largest bronze equestrian sculptures in the world with the Mustangs at Las Colinas.

Dallas has roots in cotton, cattle, and oil due to its major railways, but the city has grown to incorporate a community of startups and resources to support the ecosystem. Capitalizing on its central location, proximity to bigger businesses, and hub of the restaurant and retail headquarters, the Dallas community works together to create a small community feel out of its widespread sprawl.

Click here for an interactive map of resources (i.e. coworking spaces, incubators, makerspaces, offices, etc).

Most Successful Dallas Startups

CoHabitat – Started by Blake Burris and Dave Coops in 2008, Cohabitat was one of the first coworking spaces in Texas and the first in Dallas. It was the spark for a whole era of entrepreneurs and companies, such as:

    • Brain Space, née Pure Discovery (Dave Copps)
    • Tech Wildcatters (Gabriella Draney)
    • Mobestream (Chris Fagan and Ross Bates)
    • Brand Protection Agency (Jeff Borden)
  • Dialexa (Scott Harper)

The Dallas Entrepreneur Center – A nonprofit that was a city, regional chamber, and corporate initiative to provide a model for coworking, events, and services to help entrepreneurs connect and grow. The founder, Trey Bowles, was recently appointed to the National Advisory Council on Innovation and Entrepreneurship.  Mark Cuban – Owner of the Dallas Mavericks (NBA Basketball team) and outspoken advocate for businesses and startups in Dallas. In 1999 he harvested $5.7 billion from the sale of his startup, Broadcast.com, by Yahoo. Based in Dallas, his venture firm Radical Ventures funds 10+ companies per year from around the world.

Softlayer – A dedicated server, managed hosting, and cloud computing provider, was started by Lance Crosby in 2005. In 2013 Softlayer was acquired by IBM for over $1 billion.

Ustream – A scalable, live, online broadcasting platform was started by John Ham, Brad Hunstable, and Dr. Gyula Feher in 2007 and was acquired by IBM for its video streaming services for $130 million in 2016.

Masergy Communications – Started in 2000, Masergy Communications is hybrid networking, managed security, and cloud communication solution. To date, Masergy is the largest independent Software Defined Platform in the world. Run by Chris MacFarland (and based out of Plano, TX), Masergy was acquired by ABRY Partners for an undisclosed amount of money. Its revenues are now $120 million.

Advantages for Startups in Dallas

Centrally located, with generally pleasant weather year-round, and a downtown revitalization effort, Dallas is a great place to start, grow, and build a business. Surrounded by big B2B and B2C businesses, a growing talent pool due business relocations, code programs, and colleges/universities, and a less expensive cost of living, Dallas is an attractive location for entrepreneurs. But, since this is about doing business in Dallas, here are some of the comparatively inexpensive business requirements:

According to Entrepreneur Magazine, Dallas’ office space per square foot (~$15.62) is more than 60% less than San Francisco (~$35.99) and more than 70% less than New York City (~$49.98).  Don’t even get us started on trying to buy groceries, rent an apartment, or a round of drinks on a night out. Trust us, it’s less expensive than San Francisco and New York.

As of 2016, Dallas had over 20 Fortune 500 companies which makes it a great local market for almost any industry startup. And 2017 will mark Toyota’s big move to Plano to open their US Headquarters. That means there isn’t only an influx of people entering the area, but real estate being developed to support the influx.

In 2016 the US Patent & Trademark Office opened a Texas Regional Office and began offering walk-up services, patent searches, classes and trainings to Alabama, Arkansas, Louisiana, Mississippi, New Mexico, Oklahoma, Tennessee, and Texas entrepreneurs. Dallas, luckily, has easy access to the resources available with the office being located right downtown.

Not to be outdone by other “big cities” Dallas is home to two airports, DFW International Airport, and Love Field. DFW is within the top five busiest airports in the world and is the biggest hub and headquarters of American Airlines. (Fun fact: DFW Airport is bigger than Manhattan Island.) Love Field is home and headquarters to Southwest Airlines. Both airports offer many direct flights to other startup hubs and business centers, which makes it easy to do business from Dallas in other parts of the country and world. Plus, as of 2014, both airports are now accessible by Dallas Area Rapid Transit (DART).

The regional co-working brand, Common Desk has expanded with offerings to include: Deep Ellum (2014), Oak Cliff (2015), and Plano (2017), with several others coming on-line. WeWork, a National brand, has also entered the market with offerings in Uptown (2017), and soon to be downtown and Plano options. Both options offer flexible spaces suitable for small businesses in need of multiple location options. Additionally, there are several other single location coworking spaces to accommodate a wide variety of other interests.

The above supports the bottom lines of businesses in the DFW area, however, there are also a bevy of resources available for those businesses interested in the triple bottom line: people, planet, and profit. The Grove co-working (2013), a space dedicated to social impact organizations, works with local organizations to create an environment for social innovation through their programming efforts. The Grove hosts the social impact hyper-accelerator program for North Texas, Unreasonable Labs, for social enterprises, in partnership with Unreasonable Institute.

Disadvantages for Startups in Dallas

Historically speaking the people in Dallas have invested their time, efforts, and energy into physical asset-based companies: real estate development and oil/gas, specifically. Those who have capitalized on those investments have not been inclined to take on a riskier business, like a startup company. Startups, tech or otherwise, raise a seed round of funding (albeit slowly) in Dallas and then typically go outside of the market, e.g., New York, San Francisco in pursuit of larger Series A or B raises.

Dallas could be lacking in investors for a plethora of reasons. It could be that investors feel uninformed on the startups seeking investment, they could be risk-averse to new technologies, the startups may not be pitching effectively, or there may not be enough proven success in the DFW region. To combat the last reason, entrepreneurs from Dallas have been known to put too much focus on “the exit” in hopes of cashing out and not enough focus on taking risks worth taking, solving problems worth solving, and building teams worth building. (This may not be a strictly Dallas-trend.)

Lastly, though the DFW region has a sizable population and several code schools for students to choose from, there is still (seemingly) a shortage of developers at times, like many other cities. This causes startups seeking technology products to seek outside or offshore resources.

Biggest Players in Dallas Startup Ecosystem

Startup News Outlets

Dallas Business Journal TechFlash – Hosted by the Dallas Business Journal, TechFlash keeps the community up-to-date on tech-oriented news by filtering its main publication down to the latest news, articles, quotes, blog posts, photos, videos, etc. specific to tech/startups.

LaunchDFW – A hyper-local digital publication that has a specific interest in startups, entrepreneurship, and technology across the Dallas/Fort Worth metroplex. LaunchDFW fills the gap between obscurity and traditional publications by covering the important happenings of the local seed and early stage startup community.

D Magazine – A monthly magazine covering general information in the Dallas/Fort Worth area: best restaurants, food, what to do in Dallas, art, theater, night clubs, politics, and commentary about Dallas.

D Innovates A division of D Magazine, and in collaboration with the Dallas Regional Chamber, D Innovates focuses on what’s new and next in the North Texas innovation ecosystem. Started in 2015 the publication focuses on six fields of interest: education, social, creative, enterprise, invention, and startups.

D CEO – A division of D Magazine, D CEO strives to build community among top North Texas executives by providing insightful, authoritative, and provocative articles about local businesses.

Dallas Morning News – Dallas Morning News is a regional publication that has dedicated resources to covering tech business news. The publication is distributed through traditional and digital channels.

Tech Titans – Tech Titans is the largest technology trade association in Texas who collaborate, share, and inspire creative thinking that fuel’s tomorrow’s innovations. Weekly, Tech Titans shares an insights e-mail aggregating articles from across the web for its subscribers.

Start-up Accelerators:

Tech Wildcatters  @techwildcatters

Started in 2009, Tech Wildcatters is the oldest tech accelerator in Dallas. The organization has seen 25+ startups through its program and recently disrupted its own accelerator model to accommodate for step-wise growth and investment incentives in their selected companies.

Health Wildcatters   @hwildcatters

Similar in name to Tech Wildcatters though unrelated, Health Wildcatters, is a mentorship-driven seed accelerator that seeks to provide investment and key resources to support healthcare entrepreneurs. The Health WIldcatters team curates unique and informative events for the startup community and offers networking, educational seminars, investor office hours, happy hours, and meetups to its cohort companies, alumni, mentors, and related industry professionals.

RevTech   @revtechventures

With the largest concentration of national restaurant and retail chains, Dallas is the perfect market to host the REVTECH accelerator. REVTECH is the venture accelerator and seed fund dedicated to identifying and developing the best early-stage, high-growth ventures focused on tech and product innovation for restaurant, retail, and hospitality.

Unreasonable Labs   @TheGroveDallas #UnreasonableLabsNTX

Unreasonable Labs are five-day hyper-accelerators supporting local, early-stage entrepreneurs tackling their region’s most pressing social or environmental problems. Unreasonable Labs is run by the team at The Grove and are supported by the Unreasonable Group in Boulder, CO.

Coworking Spaces in Dallas:

The Dallas Entrepreneur Center   @theDECtx

A coworking space and 501(c)(3) non-profit created to help entrepreneurs start, build, and grow companies through education, mentorship, and community. The Dallas Entrepreneur Center powers several other entrepreneur-focused centers in the DFW region.

The Grove   @TheGroveDallas

The Grove, Dallas is a community with strong values, a commitment to social impact, and a history of making good things happen in the cities it serves. As a nexus for North Texas social enterprises, The Grove, Dallas is a dedicated space for change-agents to ideate, collaborate, and launch their initiatives and businesses.

NoD Coworking   @nodDFW

NoD is the North Dallas coworking space whose mission is to create an environment where entrepreneurs and freelancers can create, connect, and collaborate.

Common Desk   @TheCommonDesk

Common Desk is a regional brand of coworking spaces (inspired by coffee shops) which has set-up shop in alternative, up-and-coming, neighborhoods. Their locations cater to a diverse community of freelancers, startups, and small companies and are driven by a staff that is passionate about building lasting relationships within their communities.

WeWork   @WeWork

With more than 150 locations in nearly 50 cities, WeWork launched three spaces for the DFW area (Uptown, Downtown, and Plano) marking Dallas a city worth doing business in for the behemoth. Far from local in their pricing, WeWork brings its top-notch offering with a price to match (which means you might want to more closely consider the cost of your office space).

Startup Investors in Dallas:

Sevin Rosen   @srfunds

Fully invested (as of 2017) and focusing on their portfolio companies.

Mark Cuban   @mcuban

Dallas-based and focused on Mark Cuban Companies and other seed-stage investments.

CenterPoint Ventures

Committed to Texas and the Southwest, the Centerpoint team pursues technology startups within their industry expertise.

Deep Space Ventures (Stephen Hays)

A very active seed stage fund, their primary investments are focused on B2B solutions, while also developing E-Sports companies. Deep Space Ventures does pursue ventures outside of their focus areas when the deal dynamics justify their time.

Interlock

Pursuing Series A investments who are focused on transformation changes in enterprise technology.

Green Park & Golf Ventures

Focused on investment opportunities for medical-based startups.

Other Start-up Resources:

The Dallas startup community has several options for remote interactions. The Startup Digest is a weekly e-mail that aggregates events happening in and around Dallas and usually has some news which highlights a few companies. Facebook also has a group for DFW startups to post questions, events, and share information. The Slack group, however, has become more popular and synonymous with the community. Those on the platform are active and use it to discuss current events, jobs, investments, and a wide variety of problem-solving initiatives. Lastly, D Innovates and the Dallas Regional Chamber partnered to create an interactive map of Dallas startup resources.

If you’re looking to connect in-person while in Dallas, LaunchDFW is a media outlet that also plays host to several events, including Dallas New Tech, IgniteDFW, Startup Happy Hour, Startup Town Hall, and all of the Open Coffee Clubs around the Metroplex.

Start-up Events in Dallas:

Each week the Dallas community connects to discuss tech at the Open Coffee Clubs around town. Search #BigDOCC for one near you in the Metroplex. Here are some of the other big startup/IT events around town:

Dallas Startup Week – A week-long event that has panels, networking events, working sessions, and many other features. Each event (unless otherwise specified) is free to attend.

Dallas State of Entrepreneurship – Hosted by the Dallas Entrepreneur Center, the night features networking, updates on the startup ecosystem and an empowering message for next steps towards making Dallas the startup hub that it aspires to be for entrepreneurs nationwide.

Tech Week First hosted in 2016, Tech Week is a week-long conference dedicated to building a unique experience around tech to foster the emergence of substantial and sustainable businesses that incubate talent, ideas, and (most importantly) spinoffs.

HackDFWA forum for inspiration, idea generation, and empowerment, students and professionals have the opportunity to meet, form an idea, and execute it within 24 hours.

The Pulse – A series of breakfast events that connect entrepreneurs, medical professionals, and innovators from the Dallas healthcare and business communities for joint learning, networking, and collaboration.

Dallas New Tech – A monthly showcase of startup companies with an ever-evolving format to include a combination of pitching and Q&A.

1 Million Cups – Weekly on Wednesday mornings at 9 AM, 1 Million Cups consists of two companies pitching with an extensive Q&A session to provide the entrepreneurs with feedback to improve, an opportunity to engage with the community, and connect with other entrepreneurs.

The Capacitor – A three-day immersive entrepreneurial experience for kids 18 and under where companies are conceived, built, and pitched over the course of a weekend crash course.

Code Day – A 24-hour event where student programmers, artists, musicians, actors, and anyone with an idea gets together and build apps and games with the help of mentors and new friends.

Conclusion:

Dallas has all the makings of a powerful startup ecosystem, including education, infrastructure, and a vibrant start-up community, however, it needs a little push on the investment front to make a splash on the global level.

About the authors:

Blake Burris

Blake is a veteran of the Dallas startup scene having co-founded CoHabitat (2008) and Barcamp Dallas (2006). He was on the founding team at Vinli (2014). He is now CEO of Flux IoT, an Isreali-borne company focused on sensors and AI. Their product, Eddy, is an easy button for home growers.  www.GrowWithEddy.com

Twitter: @blakeburris

Devin Ellis

Devin Ellis curates the Startup Digest and helps startups with go-to-market strategy and execution, and connects startups to resources they need. He also volunteers and gives his time to help the community.

Debra Swersky

Debra Swersky devotes her enterprising energy to helping startups engineer singular customer and employee experiences so that they can grow and scale effectively. Prior to landing in Dallas, Debra worked with tech, hospitality, events, and consulting startups in New York and Boston, structuring systems and applications to increase the personal touch of her clients and partners.

Twitter: @debraswersky

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