Aug. 30, 2022

Exploring Austin's Draper Startup House, a Global Entrepreneurial Ecosystem

Exploring Austin's Draper Startup House, a Global Entrepreneurial Ecosystem

The growth of our ecosystem and the critical mass of startups coming to Austin leads to unique opportunities to experiment with support infrastructure. One of those experiments is the Draper Startup House, a global entrepreneurship ecosystem including a n

The growth of our ecosystem and the critical mass of startups coming to Austin leads to unique opportunities to experiment with support infrastructure. One of those experiments is the Draper Startup House, a global entrepreneurship ecosystem including a network of co-living houses and a pre-seed “pop-up” accelerator program. Today we are joined by the co-founders Katie Russel and Daniel Wiegand to talk the mission, the importance of storytelling for startups, and why Austin.

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Episode 48 Draper Startup House

Michael Scharf: Austin is the new innovation powerhouse, not the next Silicon Valley, but the first Austin, we are adapting to the future in real time.

Jason Scharf: I'm Jason Scharf, a biotech executive, and early stage investor.

Michael Scharf: And I'm Michael Scharf advisor and board member for multiple private companies.

Jason Scharf: You can call us optimists, abundance minded, up wing, and even solutionists. We see a bright future ahead that can be achieved through innovation and entrepreneurship.

Michael Scharf: In this podcast, we explore Austin superpowers, the people and companies driving our growth and the macro and microtrends that come together to create Austin today.

Jason Scharf: This is Austin Next.

Michael Scharf: The growth of our ecosystem and the critical mass of startups coming to Austin leads to unique opportunities to experiment with support infrastructures. One of those experiments is the Draper Startup House, a global entrepreneurship ecosystem, including a network of co-living houses and a pre-seed popup accelerator program.

Today we are joined by the co-founders Katie Russell and Daniel Weigand. Katie is the CEO of Draper startup house. She previously led business development and marketing at Draper University and was an investor with Draper U Ventures focusing on pre-seed founders. Katie obtained her BA from the Univeristy of Colorado at Boulder and her MBA from Quantic School of Business and Technology.

Daniel is the president of Draper Startup House. After graduating from the University of Oregon, with a degree in Business Administration, Daniel spent time with HP, the Golden State Warriors and a tech consulting firm. Daniel attended the Draper University in 2016, where he won first place during his class demo day against some 30 other entrepreneurs from across the world.

Daniel went on to work with Draper University as a mentor where he helped thousands of young entrepreneurs prepare for demo day and eventually raise money. From there, Daniel was chosen by Tim Draper to start the Draper Hero Institute. A nonprofit to help provide entrepreneurs with previously inaccessible tools and resources.

Katie, Daniel, welcome to the Austin Next podcast.

Katie Russell: Hi. Thanks for having us. We're so excited to be here.

Michael Scharf: We're glad you guys could make it. I've got a couple of basic questions about the Draper Startup House. What's the mission and the vision for DSH.

Katie Russell: Yeah, Daniel, do you want me to go or you wanna take this?

Daniel Wiegand: Yeah, go for it. You got it.

Katie Russell: I feel like I always, we have our own podcast and I always steal like the first line. So love to give Daniel the option to jump in there, keep it going. So at Draper Startup House, we to put it simply exist to connect, inspire, and empower the world's entrepreneurs. So we do this, but by providing people with people, specifically startups with resources access to our network, that's part of the larger Draper network and capital to entrepreneurs globally.

So our vision is really to create the largest network of physical spaces, combining capital and programming. For entrepreneurs, ecosystem builders, VCs that the world has ever seen. So this network will provide a place for entrepreneurs globally to come together to form their own mini communities and start up houses.

And we stand there really as the backbone, providing the technology, the capital and the programming.

Michael Scharf: Okay. So I have to make the comparison because a while back the first dotcom boom, the time I met Tim, I was actually one of the founders of a virtual incubator. So we had no physical facilities. It was all basically virtual. The focus on the physical, how does that differ from other things you guys have done in the past?

Daniel Wiegand: Yeah, so we feel very strongly about having entrepreneurs in person because we think. They can learn just so much more from each other while we provide a ton of value through our programming. There's so much value that they get just from learning from other entrepreneurs, you know, challenges they have may have already gone through helped save time. It's like, hey, this is a challenge, you know, I'm working through right now. Have you dealt with this? So we feel like there's a, just a ton of value there. And then also too, they really just inspire each other. Right. You. Through our program. If, if one founder is grinding late at night and another founder sees it, you know, there's just so much that goes into it of like, oh, maybe I should, you know, keep working and not go out after whatever it is.

So we feel very strongly about the, the in person part. I feel like it's just very hard to replicate.

Katie Russell: Yeah. And I'll add that before we even started this episode, we were talking to you guys a little bit about doing, you know, virtual podcast, reportings versus meeting the people in person. And there's just such an additional layer of rapport.

And I would say respect and help that you provide when you're actually meeting the person in real life. And so when you combine that with them living together, it's just a whole other element that is open for them that they can tap into. And so it's, you know, a million different things that you uncover, whether it's, you know, somebody that you're gonna be connected to the rest of your life, maybe you'll eventually hire them.

Maybe they become your co-founder. It's just, you know, being in person. There's no comparison.

Michael Scharf: So tell me about the physical facility itself.

Daniel Wiegand: For our accelerator. Here in Austin, we have two residential properties that we run our accelerator program in, two times a week. So they are pretty good size houses.

They share a backyard, which we put in a retractable fence. So when we're in session, we start, we open up that fence and it becomes a big compound. So what we do is we bring in entrepreneurs from really all over the world for a one month program here in Austin will invest in them up front, and then we'll bring in industry experts.

Leaders, former CEOs, current CEOs to help fill any skill gaps that they may have, and really, truly set them up to, to go raise the, the rest of their round. So the entrepreneurs all live together. Like Katie mentioned in these properties they sleep about, I wanna say 25 or so. So they're good sized and then, another thing we've done actually recently, I don't know if I'm getting too far ahead of myself here, but we've also recently opened it up for co-living for entrepreneurs during the program. And this is for startups or entrepreneurs who, you know, maybe just a bit too early for us to invest, or it's just not the right time for us, or, you know, we want to get an extended look at them before we do decide. So we've also opened it up for them as well. And we feel like it just creates a, a more vibrant community. We only invest in between five and seven companies per cohort, and we found that, you know, just the more of the merrier even if we're not investing, like I mentioned earlier, these entrepreneurs can learn so much just from each other and each other's networks. So that's what we're focusing on mainly right now.

Katie Russell: And, I don't know if this is too many details, but I think an important part of where we're at now is knowing where we came from in the past. And so there's not a lot of information out there about this because the timing was probably, I say the worst in history for this to happen.

But when Daniel and I started Draper startup house, we started it in 2019. We used the first three months of 2020 to build out a hostel on Sixth Street. So you may have seen it before. It's between Sabine and Red River. It's about 10,000 square feet of commercial space. We redid the entire thing, turned it into a hostel cuz our original concept was essentially everything we're doing now except without the fund and the programming.

So it was, hey, we're gonna build these physical spaces all over the world. So that entrepreneurs can come they can stay, whether it's for a night, whether it's for a month, six months and we can connect them directly to the ecosystem. So we were supposed to launch that at SXSW in 2020. And you guys are from Austin. So, you know, it was like back and forth for so many weeks. Are we gonna do it? Are we not gonna do it? And we didn't know what to do. So we just kept building and building. And finally, the day we were supposed to have our launch party. Or actually, maybe it was the day before everything got shut down. So we told our investor, we're like, don't come.

We canceled. You know, I think the rest of Austin also canceled everything. So it was definitely a good decision. But in the moment, you're like, what do we do? So us reincorporating, this co-living piece back in is really kind of going back to the roots where it's like, yes, we do have this fund. We want to invest in tons of entrepreneurs and we will continue to do so, cuz it really helps us.

And it really helps the founders. But then on top of that, there is this component where you know, we're bringing back in the old. So if you are a founder coming from a different part of the world, if you know, eventually when we expand, we're going back to that original mission, you know, we wanna be a hub so that if you can't get to Austin, you still have a different place to go and connect with all these founders.

Jason Scharf: You mentioned that the original plan was on Sixth Street, but the new house is not in downtown. Correct?

Katie Russell: It's pretty close. I would say it's like a five minute drive from where we originally were. So it's pretty much right next to rainy street.

Jason Scharf: How do you see that dynamic though changing? We've had lots of conversations, especially as we're getting kind of the post pandemic of what's a downtown for what's the, you know, suburbs you're having these kind of multi hub.

How are you thinking about that? Especially as you, as you kind changed it from right in the heart being Sixth Street. And obviously Rainey is still very much part of downtown, but were you seeing that dynamic especially kind of integrating in?

Katie Russell: Well, it's so funny cuz when we were looking for real estate originally, obviously we were like, we wanna be on Sixth Street, the best place in Austin to be Sixth street, especially as a hostel.

Oh, Sixth Street. Everyone wants to be there, especially if you're coming in from out of town, it's, you know, a great place to start. And so we built it there. We picked a location that we loved. We kind of, at the beginning, we're looking all over Austin, cuz there's so many different pockets that are just great here and everything's connected to something.

But we landed on Sixth Street. So we were, I would say now on, not the great side of Sixth Street. So when we moved in. Everything was great. And then when the pandemic started, everything got shut down around us. So businesses were closing. There was a lot of, I would say vandalism going on. It was just not a safe place to be.

And so we were, we ended up being, I think one of the. Only one of two businesses that were open on Sixth Street. And so we were just dealing with so many different like safety issues and parking issues. And a lot of people coming in just did not feel safe being there. Once they got into the building, they were fine, but it just, every day there was something new.

So when we were able to get out of that lease, we started thinking like, okay, well, where in Austin do we wanna be? Because you're right. You know, you don't have to go downtown anymore. Most people are like, this is great. There's no traffic, but I also can just stay at home and do everything over Zoom. So for us, it was more where do entrepreneurs wanna be?

And that's kind of the mentality we used when looking at any new city is where do we wanna be? Like, we are our demographic, where do we wanna be? And it was, Hey, we wanna be somewhere really close. So if I do wanna go downtown to network you know, I can easily get there. If I do wanna go to Rainey Street, if I wanna go do business meetings, I wanna go grab a bite to eat.

Everything is very central and maybe a scooter right away. So that's kind of how we thought about the locations and, you know, Two blocks from the lake. So there's just, and for us, it's like the perfect location to be.

Daniel Wiegand: Yeah. And the other thing I'll add to that is it's really interesting how sort of the narrative changed from when we had identified the first location to now.

I remember, you know, we were telling people, you know, we have this place on Sixth Street, it's gonna be a hostel everyone was like, oh wow. Amazing, amazing location. Great, great find this will be fantastic. And then fast forward two years later, and we told people where our location was and it was like, oh, wow.

Why? So it was definitely a unique change. And then, like Katie said, I think the east side is, you know, very vibrant. There's a lot going on. We see a lot of, you know, startups, coworking spaces, things like that popping up. And then we also feel like it's, it's also very centrally located, located.

You can get really anywhere. In the city from there for, in about 10 minutes or so.

Michael Scharf: Great. Let's talk about the rest of the, the Draper ecosystem. How does Draper Startup House fit within that ecosystem?

Katie Russell: Dan I think you love talking about this? So, yeah.

Daniel Wiegand: So we really see ourselves, so I don't know how familiar everyone will be with the entire Draper ecosystem, but really what we pride ourselves on is supporting entrepreneurs through the life cycle of an entrepreneurship. So ideation staged all the way to Series B or C to exit. So in Silicon Valley, there's Draper University, which is a paid program. A lot of it is ideation stage. I think it's, you know, almost like a pre accelerator and then across the street is Draper Associates, which is, you know, traditional Seed, Series A.

As well as Draper Venture Network and Boost VC, and we, we really saw this gap in the pre-seed stage. So that's really where we see ourselves as you know, in between a Draper University and Draper Associates, where you just flushed out an idea you're ready to get started. You maybe not ready for a true seed round, but you do need, you know, a little bit of a capital infusion to get started.

So we really see ourselves as the pre-seed arm of the Draper Ecosystem

Jason Scharf: So pivoting a moment here, Katie, you mentioned the, you know, we talked earlier about being on podcasts and in person versus not. And if you know our audience or doesn't, or doesn't know, you know, your fellow podcasters with your Pitch Please podcast, can you talk a little bit about what that is and how does that fit into the, a whole mission and vision?

Katie Russell: Yeah. Everyone knows what our podcast is. I'm pretty sure. No, I'm just kidding.

Daniel Wiegand: That's Katie's baby.

Katie Russell: It's like my favorite thing that we do well, not my favorite thing, but you know, one of them.

Jason Scharf: It is addictive. I will tell you that it.

Katie Russell: It is some days I'm like, oh my gosh, when are, are we gonna just do this forever?

Is there ever a stopping point? But that, I mean, I love it. So it's great. So we're actually recording our 85th episode this week. So we're on track to have a hundred released by Christmas. But I'll go back to kind of why we started it. So when we had the house going back to that time period in March 2020, the whole world, if you guys remember, didn't know what was gonna happen, we're like, okay, we're just gonna wait like a couple days.

And then like, everything will be back to normal. And then it turned into a couple weeks and it turned into a couple months. And so for us, our whole business was physical real estate. Getting people to come in, connecting with entrepreneurs, funneling those entrepreneurs, to other parts of the Draper ecosystem to other VCs.

And we were like, we can't even be in person. How are we, we gonna do this? So one of the outlets was why don't we create a podcast? You know, there's already a huge gap between close conversations between investors and entrepreneurs. We had known from working at Draper University and then meeting other founders just throughout our lifetime, that it, people, you know, were very confused about like, what are investors asking?

What do they wanna know? How do those meetings actually go when you get one? Cause I think there's this big gap between you're building your company. You have this great idea. Maybe you get it to you get your MVP out, but then you were trying to raise money and you're, you're just kind of back to square one in terms of, you know, what you need to have ready?

What investors are interested in, kind of what the focus point is. And then you think back on, okay, well then, you know, I talk to one investor and they ask me certain things and they tell me certain things. I talk to another investor and they're giving me completely different advice. And so it was just this whole world that we felt like, you know, people were not really understanding or that weren't giving the tools to help them kind of do their best when they did get those meetings.

And so what we decided to do was create a podcast where we would find really early entrepreneurs. So most of the startups that are on our podcast, you've probably never heard of. They're I would say all in about Pre-seed, Seed stage. So it's perfect for us cuz that's what we invest in. It will have some other entrepreneurs on there, like some bigger names just cuz you know, we're connected to them and it's really fun for the audience to kind of hear them. At their pitching stage, which is very unique, I think.

But so yeah, we started the podcast. We pair startups with VCs and we have them do their first meeting over podcast format. So this is the first time the investors are hearing about their startup. This is the investors just totally off cuff. We don't send questions.

They don't really prepare questions. Just asking the startups about their businesses. So it helps the audience really understand how startups pitch their companies, how venture capitalists ask their questions. And then Daniel and I will stay on after and kind of give an overall perspective kind of what we thought, how we thought the founders did, how.

You know, interpreted VC's questions. So it's really fun for everyone to kind of analyze the companies themselves. So if you think about shark tank, you love it. Cuz you're, you know, watching the show and you're like, that's an awesome idea. You're like, that's so stupid. What would you know, I would do it differently.

So it's been a really great experience for us. Yeah. On track to record our hundredth episode. And it's been really great cuz it helped us during that time where nobody could be together, get in front of tons of founders, founders, love talking about what they're doing. Like Daniel and I right now, you know, we could talk about this for hours.

So it's great cuz you know, we've been able to get in front of a lot of founders that, you know, we normally wouldn't have and we've actually invested in some of them just based on our conversations that we've had over the podcast. And then on the other side of things, you know, it helps us grow our VC network.

So asking VCs, you know, for their time is I would say, you know, hit or miss, but saying like, hey, we'll give you this marketing tool you can use has been really beneficial and we've got to meet some really great people. And then I would say, and you guys probably know this, but on the marketing side, it's really helped us as a business.

And it, we use it as our own marketing tool cuz the founders will share their episodes, the VCs will share their episodes. So we kind of have that organic marketing, you know, ingrained into the podcast. So it's been incredible. We love doing it. And I think people, people like hearing.

Jason Scharf: Do seem to be expanding in the media realm beyond the podcast, because I remember on LinkedIn, Katie, I saw you posted about shooting a documentary later this year. Can you tell us what you guys are thinking of doing and what the impetus behind that is?

Katie Russell: Yeah. Daniel, go ahead.

Daniel Wiegand: Yeah. Well, so this all started because every time we tell people what we do, they're like, this sounds like a reality show. You guys should film it. And we we've just heard that so many times that we're like, you know we agree. There's, there's just so much that goes into it. And it's, it's really a fun program. There's, you know, such unique characters. Again, we're bringing in founders who are, you know, always a, a unique person from all over the world, different experiences. We put them in a house, they live together for the month and go through an intensive program.

So there's just so much that goes on there that we thought, you know, this may be a good opportunity for us just again, kind of similar to the podcast, like really open up entrepreneurship and startups to the rest of the world, right? Like what are these startups going through on a day to day basis? Why are they doing what they're doing?

How did they get there? What challenges or struggles are they, are they dealing with? So we really see it again as an opportunity to really demystify startups in general and just tell their stories, help them tell their stories. And then hopefully, you know, get some good content out of it as well.

Katie Russell: Yeah. And what I'll add to that is I think what's really important about the documentary. And I thought this maybe like 10 years when I kind of got into all of this, but I was like, oh, well I can't be an entrepreneur. Like, I don't know anyone. Who's an entrepreneur. Like, I don't know any venture capitalist, like the only people that are successful founders are people who kind of grew up around it, who have this, you know, advantage, whatever it is.

And so what we're gonna focus on in the documentary is kind of picking some of the people out of the house. Telling their stories and kind of opening up that conversation. You know, everyone comes from a different path than entrepreneurship can be for everyone. If you're interested in it, it's not always for everybody, but really kind of understanding the back stories and then showing you know, what other founders think is important? You know, we meet some founders and they, you know, are focused 100% on networking and they're not just behind their computer coding. Other founders are just behind their computer coding all day. And there's so many different personalities. And then you add in just normal life to it.

Well, I'll say normal life while you're living with other founders. But just those different elements and learning about people's different cultures, religions, you know, food preferences, cleaning preferences. And so it adds this entirely different dynamic to things. So we're, we're gonna see how it goes. No guarantees that it'll be you know, extremely entertaining or anything, but I think, I think it will be.

Jason Scharf: Well, I've seen a number of these over the last 20 years. And one of the things that I think makes them even more interesting. And I say this partially as an Austin booster as well, is Austin itself being a character within the documentary and being, you know, why are they here? What are they interacting with? How are these different groups and institutions going?

I remember there was one. I think it was it was in Detroit. So obviously they had a lot of that kind of narrative going. And so, and it's, and it really resonated with me because I think both previously when we were in San Diego and even when coming to Austin, this concept of let's think about other mediums in which to get out and talk about the narrative that is going on in these cities.

And I think a documentary is kinda one of those perfect ways to do that.

Daniel Wiegand: Yeah. I, I mean, we're, we completely agree. I think Austin has a p ersonality of its own and people really want to be here. We've seen even in the last couple years, so many, like not startup related, but just shows being based here or, you know, different media sort of avenues, you know, incorporating in Austin. So yeah, we're super excited about it.

Katie Russell: I'd say also we, so there's two characters right in the documentary. One is Austin. So many founders, most of our founders are not actually from Austin. They come from different parts, but then they come here and they end up wanting to stay. And so I do think a lot of that will, most of it is the city itself.

Cause our program only lasts a month and then they meet so many incredible people and people who've been, you know, just so welcoming and open that they feel like this is like really where they wanna start their business. Then I'd say the second character is kind of the Draper ecosystem overall. So Tim Draper has like really cultivated this brand around the Draper brand, which is, hey, we're looking for bold.

We're looking for creative. We don't have many rules. You know, we want people to have the freedom to develop and be who they are and do crazy things. And so I would say with that in mind, you know, we're letting everyone kind of like play out exactly who they are, what they're building and pushing them to go to the extreme, you know, we want big ideas.

So I think those two characters combined Austin and the Draper ecosystem, I think we'll see some really creative things come out of.

Michael Scharf: I love that term. The character of Austin, Jason and I have talked a lot about Austin's superpowers and the special sauce that Austin have has. And, you know, we, we started this podcast talking about how Austin will never be the next Silicon Valley, but it very easily is going to be the first Austin.

So you guys launched here, you're doing your documentary, you've got your podcast, you've got the startup house. You are into Austin. Why?

Katie Russell: Yeah, well, it's so interesting. I lived in Austin when I graduated college and then I moved out to California. So I had this like, oh, I already like had a taste of Austin.

I knew what it was about, but I moved out to California at Silicon Valley specifically for work. And so I experienced like that whole different culture kind of backwards. And so when we were out in Silicon Valley, Daniel and I, you know, started this business and we're like, okay, where do we wanna be?

And that I think was the main question. I mean, there's tons of business cases for being in Austin, of course, but we're like, where do we wanna be? Like, what is the best city that we can pinpoint? And this was before, this was like, I would say mid 2019. So this was before like the big, you know, Tesla's coming, everybody's moving to Austin, real estate's going crazy.

And a lot of that was dictated by just everything in Austin. So it's the universities, the tech campuses, the hiking, the nature, the lakes, but then also. There's so many founders, there's so many resources. There's so many things that are built up here. You know, there's SXSW, ACL, F1.

And so for us, when we started thinking about it before, really getting into like the specifics of, you know, why it's a good reason to start a business here, we were like, Hey, we're young founders. This is where we wanna be. If this is where we wanna be, this is where we should start our business, because this is gonna be where other founders wanna be. And we were right.

Daniel Wiegand: Yeah. And I'll just add to that too. Katie alluded to it, but it's where do we see entrepreneurs? Like where do they wanna be? And for, for many of 'em, we, you know, Austin is that, and I think a big part of that is just how open for business Austin is how open to innovation and ideas Austin is.

It's a great testing ground where businesses are very receptive to startups coming in and trying things and, and building things out and working with them, which has been fantastic for a lot of our founders as well. And then you can sort of take that use case, you know, Austin is a big city, you can say, hey, we did this in Austin and we can replicate it in other cities, but for Austin to have that sort of starting point of allowing them to get their foot in the door, I think is, you know, a big draw.

And then as Katie mentioned, the tech talent, the fantastic colleges and universities nearby, and then just being a place where people want to be, you know, we're no longer, well, especially now, you know, confined to, hey, I need to be here because my office is here, but I can be anywhere. And where I want to be is in Austin.

Michael Scharf: It's interesting. You describe it that way. When we talk to Peter Rex about real estate in Austin and how he moved his business here, he was saying that the number one thing he has to do always is sell the spouse.

Daniel Wiegand: Yeah.

Michael Scharf: And it was those things that you mentioned were the things that he was said, Austin's an easy sale for the spouse.

Daniel Wiegand: Mm-hmm oh yeah. I can totally see that.

Michael Scharf: And therefore he was able to bring his entire business here in a very short period of time. I mean, you guys have created something special and unique and, and it's amazing, but how does Draper Startup House fit into the rest of the Austin ecosystem? Not just the big events, but everything else that's going on.

Daniel Wiegand: Yeah. I, I mean, the Austin ecosystem has been amazing, you know, ever since we started, we've had so much help. They've been so open to, you know, communicating, helping us with events, other VC funds coming in, doing VC office hours, for us mentors, speakers, whatever we've needed, they've been super receptive and so helpful for us.

And, you know, we really see ourselves as a hub and, you know, almost like a big community, right. Where if a startup comes to us and it's not a fit for us, we're more than happy to send them to, you know, Sputnik or Techstars. If they're more advanced, you know, we can send them to Ensemble ATX Venture Partners, Next Coast, S3, you name it.

So we really see ourselves as just a very small piece of this larger ecosystem. And, you know, I think everyone, and that's what I love about Austin is everyone really wants Austin to succeed and to have everyone else succeed. So we really just want to fit in where we can and provide the most value. And that's kind of how I see ourselves.

Jason Scharf: So there are a lot of reasons we're all here. There are a lot of positives you just kind of mentioned, but it's not, you know, growing the pace that we are and wanting to continue that growth doesn't come without its challenges. What do you think the biggest challenges our ecosystem faces?

Daniel Wiegand: I would say the biggest thing is, and this is, you know, a nationwide thing, but affordability and affordable housing, especially for entrepreneurs, right. Where, you know, when we first moved here 2019, it was very affordable. Right. We were looking around in the Bay Area we're like, this is insane. How is the startup founder supposed to survive here, especially if you're bootstrapping and fast forward to now. And it's climbing and it's not as accessible as it once was. Just based on cost. Right. You know, startups are pretty much the number one demographic that has no money because they poured all of it into their business and they're trying to, you know, just build. So I would say that's the number one factor.

But regardless people still want to be here and it, I think it it'll never go away, but I do think that that is the biggest challenge is just, I guess yeah. Affordability for those who can't, you know, or don't have a lot, right now.

Katie Russell: Yeah. And I'd say maybe to put it another way is Austin needs to maintain that appealing nature.

I mean, there's incredible things here, but if founders come and they don't feel like it's a place where they can, you know, live comfortably and still be, you know, central to everything that's going on, then it gets. You know, tougher and tougher to want to go here, especially now, cuz I'll say you can be absolutely anywhere in the world.

You can go live in, you know, Mexico for a month. You can go live in Miami for a month. You don't have to have the traditional, hey, I'm gonna move somewhere. I'm gonna get a lease. I'm gonna buy a house. I think that's shifting dramatically, especially with this new generation of founders. And so I think Austin's number one, struggle is gonna be, or number one challenge, I should say is that it's gonna have to figure out how to make sure that founders can still come here and find that, you know, network and that place that they wanna be no matter where it is that they're getting pushed to live to.

But I think that is, you know, something that we've identified as, you know, a problem, I would say in most major hubs right now is that exact thing is nobody has to live anywhere anymore. Especially as a founder, when you don't necessarily have anyone telling you where you have to be. So it's up to you entirely, if you want your whole team to be remote, if you wanna live somewhere specific or not, but you're not told like, hey, you have to be in the office anymore.

And so we've identified that and we're actually building out a marketplace, which we're considering is the Airbnb for startups, which essentially means that founders can connect to everyone, I should say, as founders or ecosystem builders, VCs, you know, engineers, designers, whoever it is, that's really interested in building up the startup ecosystem and they can, you know, list their properties.

They can create their own founders' houses together. And they can do this for a month. They can do it for six months. They can do it for two years if they want to. So we think that that's gonna help founders find, you know, great places that are more central to town. They can still live with people who are integrated into those ecosystems.

You know, whether they're coming to Austin, they're going to Miami, Nebraska, wherever it may be, they're going and they're directly getting connected to that ecosystem, which we've also seen as, you know, a bit of a challenge is when you go to a new city and you're a founder, there is so many resources, but it's like, you know, you can research all day every day, but unless you know where you're supposed to be and kind of what's you know, super high quality event instead of just kind of going and spending all your time, getting to network. You can really get plugged in automatically with that host that you're staying with. So we're super excited about that. And I think that's something that will work really well here in Austin.

And we've kind of already proved it out with what we're doing with the accelerator in terms of adding that additional co-living piece. So we were kind of blown away by how many people are like, yeah, absolutely. We wanna come co-live. And I think it's kind of pointing in the direction of people are looking for that, you know, I would say, experience living where, hey, yeah, I'm gonna come live in the house and I'm gonna get some additional value out of it and live with other people.

So we're excited for that to launch. It'll probably launch in two weeks from now, but so I think the podcast will be out by then.

Daniel Wiegand: The other thing I'll add to that too, and kind of Michael, going back to your question about integrating with the Austin ecosystem, what we really like about this and, you know, not just the accelerator, but the co-living piece as well.

Going back to our initial mission is we wanted to be the hub in every city. If you were a startup and you wanted to get plugged into the ecosystem. So not only ours, but if you're starting a business, you're in Austin for a month or a week, and you don't know who to meet, where to go, you can come to us and we'll point you in the right direction, whether it's us or not.

So we're super excited to still have that part of our business, because like we said, the whole Austin ecosystem has so much to offer. Great firms with, you know, amazing help and different resources. So we feel very proud that, you know, if they come to us, we can point them in the right directions. That'll be most beneficial to them and then also the rest of Austin,

Jason Scharf: I like this idea of the house being this kind of entry point into the ecosystem. And one of the things that we've talked about a lot is the Texas Triangle being this kind of super region. But the only way that continues to work is with further interconnectivity between Dallas, Houston, San Antonio, and Austin.

How do you see something like, you know, if you've got Draper startup houses or similarish models across that ecosystem that allows us to kind of connect in a different way?

Daniel Wiegand: Yeah. I mean, I, I think that's the, the whole idea, right? Is that you know, if we look at this from a 10 year perspective, what, you know, I think Katie and I would love to see is that no matter what big city you're in, if you're a startup and entrepreneur, you know exactly where to go to get pointed in the right direction and get all these tools and resources that were, you know, previously just hyper located in Silicon Valley.

So that's really. Going back to our mission is we want to provide the rest of the world access and the tools and resources that are in Silicon Valley. So we see that as a huge plus that I think there's so much value there for every ecosystem involved to, you know, connect with us so that we can connect the startups to you guys.

So that's kind of like the big vision there.

Katie Russell: Yeah. I'll add to that too. We build products that I think we need and we want to use, and we wanna see. So when you think about that, if Daniel and I went to Dallas tomorrow, we'd essentially be starting at square one. Like we know that the Ion's there, we know Capital Factory has a presence there.

Daniel Wiegand: That's Houston..

Katie Russell: Is that Houston? All right. We'll say Houston. Yeah. So yeah, you know, like we can do our research. We can go to Dallas or Houston. Figure out where we think we're supposed to be, but at the end of the day, it's like, okay, say we go to event and we're like, that's not actually what we thought it was. Or we go talk to VCs and, you know, we're researching like who's, you know, the most open VCs in Houston who wants to take meetings, who's really active in the community.

Like in Austin, we can point to 20 different things and that's cuz we're here. But we'd essentially be starting at square one if we go to any other city. And so when we're thinking about this platform, you know, we're starting with the hospitality piece, but you know, I think if you look at it, maybe in two or three years from now, hopefully sooner, it's gonna be an entire kind of membership based program where the hosts are gonna be people who are ecosystem builders themselves. So say you move, you come to Austin, you rent out my spare room. I'm gonna be like, hey, this is who I think you should meet. This is the events that I go to. This is really what I'm interested in. So you're gonna be able to filter based on industry, you know, job title.

You're gonna be able to really do your research. There's gonna be a whole communication platform within it. So you can really figure out, you know, where you wanna be and just immediately. Get plugged in. So we'll have tons of guides that we're gonna be creating where, you know, we'll be able to update it with all the, you know, most current events and things that we think are really important based on the hosts from each city, kind of helping us dictate that.

So when you look at this whole triangle, I think, you know, having those resources and being able to plug people in directly and quicker is gonna be extremely beneficial.

Jason Scharf: Well, this has been a lot of fun and a lot of learnings. We always like to ask the same question. All our. Katie Daniel what's next Austin?

Katie Russell: Yeah. So for, for us, I think we're gonna be expanding our presence here. We're gonna be expanding our presence all across the US and hopefully internationally soon, but you know, we are seeing founders flock to Austin and wanting to set up shop. Like I said, we have so many different founders coming from different cities and countries.

You know, they're really wanting to stay here and they're trying to figure out ways to stay here. So I think we're gonna get more of an international presence building in Austin. And I think, you know, it's gonna continue to expand and we're gonna have more pockets kind of building up in the city. As people are getting pushed further out, there's gonna be lots more of, you know little hubs that'll be popping up and we'll see, continue to see it grow.

I really don't see it slowing down. Again, we're at like a weird point in the economy to see kind of what happens, but I, I still feel like it's gonna continue to grow and we're gonna see lots of talent coming.

Daniel Wiegand: Yeah. And I'll just echo that, you know, We're gonna continue to bring entrepreneurs from all over the world to Austin. And the beauty of it is that Austin really sells itself. So I do see a lot of them coming here, either to enter the Austin market or just the US market. And then I think they will stay set up shop. This will lead to, you know, more innovation, more jobs, just more cool things going on in Austin. And I don't really see that changing.

I only see it accelerating, so we're super, super bullish on Austin as a whole. It's why we're here, why we're doing what we're doing. So, yeah. Can't wait to look back in five years and see what has changed.

Jason Scharf: Fantastic! Draper Startup House. Thanks for joining on Austin Next.

Katie Russell: Yeah. Thanks for having us.

Daniel Wiegand: Thanks guys.

Jason Scharf: So what's next Austin. We're glad you've joined us on this journey. Please subscribe with your favorite podcast catcher. Leave us a review and let your colleagues know about us. This will help us grow the podcast and continue bringing you unique interviews and insights. Thanks again for listening and see you soon.