In a recent Austin Technology Council (ATC) CEO Summit, talent shortage were a hot topic.  Which sounds crazy when the unemployment rate is north of 8% in Austin, and in Texas.  AustinStartup’s George Dearing did a good job addressing a few of the key issues.  It’s a really good read.

• 77% of respondents agree that there will be a shortage of technically skilled talent in the future.
• 71% of respondents agree that there is a shortage of technically skilled talent at the present time in Austin.
• More than half of respondents believe that talent issues have limited their organization’s productivity and efficiency.

Future Talent Shortage:  I think the overall concern for the future is valid – but overstated.  Technology and productivity advancements often have surprisingly dislocating affects on employment.  In the 1990′s, VLSI and CAD tools got to the point where 4 Electrical Engineers could do the work that had required 100 engineers just a couple years previously.  I watched my fellow class of ’94 graduates in EE go into software companies instead of working for Intel and the like – there just weren’t the number of new jobs in electrical engineering and chip design that there had been in previous years.  In Austin I’ve followed the chip business with some interest – and I would venture to say that the number of chip designers employed here probably declined into the early 2000′s… until the market changed.  Now there are a lot of different chip applications – mobile devices and analog applications have created opportunities for a lot more applications – and for more engineers.  And, with the tools at our disposal today, it may make economic sense to tweak chip designs for much smaller volumes than in 1995.

What’s my point?  Technology employment is volatile.  That results in under-representation in STEM (Science Technology Engineering Math) majors, and it results in people with little STEM education joining STEM-related fields in boom times… and it results in people with STEM backgrounds exiting these fields when the boom eventually turns to bust.

When I was entering college I heard and read the same concerns about there not being enough engineers.  Somehow we made it to 2011 anyway. All I know is, STEM majors are going to be good choices for college students for many years to come.

Shortage of Talent in Austin Right Now:  I don’t see it.  I was just talking with someone today at a local software company who commented how hard it was to find the right people in Austin.  I expressed sympathy – after all, BPM is a bit of a niche business,  so I can relate in that not everyone is an expert in BPM software.  But his complaint was that people don’t spend enough time retraining themselves to be prepared for the technology shifts – learning a new platform or language.  He has a point – if you’re in high tech and you’re not willing to invest in your own skills you’re making a mistake.  But it seemed clear his expectation was that his company shouldn’t have to make an investment in someone ramping up.

But, on the other hand.  This reminds me a bit of companies who hire interns but don’t expect to teach the intern anything.   If you’re hiring high tech workers, you have to be willing to mix it up.  Sure, hire a few people with expertise in the relevant technologies.  But don’t be afraid to hire people with varying degrees of learning curve required to be proficient in the job.  We hired an intern this summer who didn’t know how to do what we wanted him to do this summer.  And he figured it out.  And I dare say he probably has a bit more confidence that the next time someone asks him to just figure something out, he will.

Talent Issues Limiting Growth.  All I can say here is – developing talent and growing costs money.  For many years, many companies have gotten by with minimum investment in people.  I don’t mean training classes.  I mean investing in real opportunities for people to learn by doing as well as training.  And then investing enough in retaining talent so that the investment in education and self-improvement pays off.

I have to quote a telling paragraph from the original post:

Brooking’s analysis opens up several discussion points. With diversity and the educational pieces presumably in place, what then are the  obstacles to acquiring the right talent? Are companies just terrible at recruiting? Are all the good engineers are in Silicon Valley or overseas? Perhaps even more provocative, are companies really investing in people and training their employees to become more highly-skilled instead of sourcing things out to get the razor-thin margins necessary to sustain their models? Whatever the case, the NYT surfaced data from the National Employment Law Project [below] showing low-end jobs are actually the ones making a comeback, again leading me to question how aggressive some companies are really approaching the recruiting process.

Great work.  By next summer, I’ll report on some of our own talent investments at BP3.  Maybe it is just the lack of VC funding that allows us to look further out for our investments than just the next year.  We have time to invest and grow with the team we hire.

SXSW-interactive fully exposes its process for selecting panels and sessions to attendees. I’m not sure what the genesis of this crowd-sourced way of planning content was, but the effect is remarkable. It starts with nominating ideas.  Then there’s a round of voting. An expert panel also has input to the final outcome.  Amazingly, it scales.  Why does it work?

For one, SXSWi (SWSX interactive) is constantly being reinvented.  What at one point was primarily a vehicle for bloggers to gather and share, has morphed into an event that covers a range of topics:

• Blogging
• Social media
• Mobile tech
• Startups of all stripes
• Design
• Freelancers
• Social issues
• Raising capital, venture capital, etc.
• Etc.

The balance of these topics has been shifting over time.  A few years ago there weren’t really any topics on geolocation – but there were a lot of those last year.  There was even a whole day focused on lean startups.

This process for selecting sessions and panels is not only a great way to engage with the community – it is a great way to let the conference evolve and adapt with the interests of attendees.  It is impossible to imagine the organizers of SXSWi coming up with several thousand sessions over 5 days. But crowdsourced – it is not only possible to do, the attendees will create the content, give the presentations, mediate the discussions… SXSWi actually has to prune the content, and yet there are still time slots with 150 concurrent sessions.

All of this benefit is managed through their panel picking process. SXSWi is being reborn again as we speak, with round 1 of panel picking under way.  You can get a sense for the variety in sessions just from that Austin Startup link – social media, semantic web, women in Tech, elevator pitches.  And that’s a small sampling of the options.

Don’t like the sessions from last year?  Nominate and vote for your own for 2012!  I’ve voted, and I’m looking forward to see what makes the cut for next year.

Bazaarvoice has filed for an IPO:

In the “you knew this was coming” category, Bazaarvoice filed for an Initial Public Offering (IPO) of it’s stock today. The news is being covered by TechCrunch and The Statesman. The company is one of the fastest growing in Austin, going from 70 employees in April 2007 to over 600 today. In conversations with company co-founder and CEO Brett Hurt, he has always characterized the company’s financial condition by saying that they could stop growing and be a profitable company any time they wanted to. But as long as the market for their software continues to be strong, the company will invest in losses.

I think this IPO will be really good for Austin’s economy, and in particular the startup ecosystem.  Austinites have been saying for years that we needed a few wins under our belt, to keep the virtuous cycle of capital formation and talent development going.  With wins like HomeAway and hopefully now Bazaarvoice (not to mention a few other IPOs over the last year), and the respectable fundraising for new startups – it feels like we’re setting up Austin for the next 5-10 years of startup ecosystem.

Congratulations to our friends over at Bazaarvoice, and good luck in the public stock market!

We’re still waiting for the killer BPM iPhone App, but in the meantime, Austin-based Spiceworks has released an iPhone app that could be the killer IT professional app, and points toward the kind of purpose-built App that might unlock value in the BPM space:

“IT professionals spend much of the day away from their desks fixing and deploying network equipment or helping employees troubleshoot problems,” said Francis Sullivan, co-founder and CTO of Spiceworks. “That’s why facilitating mobile management of IT products and services is so important. Our new iPhone app helps by allowing users to tap into the power of Spiceworks whenever and wherever they need it.”

Rod Favaron was our CEO at Lombardi during my tenure there, and continued on through the transition to IBM.  The news today in Austin is that he has now joined Spredfast as the CEO.  From AustinStartup:

Spredfast today announced that Rod Favaron has joined the company as chief executive officer, effective immediately. In addition, Favaron will join the Spredfast board of directors. Favaron’s appointment caps off a year of successes for Spredfast which include aggressive customer acquisition, Series A funding from Austin Ventures in April 2010 and ongoing recognition by industry analysts as an innovative player in social media marketing and the growing social customer relationship management (CRM) market.

“2010 was a great year for Spredfast and the social CRM market. Companies now realize that social media is a crucial communication platform for engaging customers, and companies that embrace social get a great advantage,” said Ken Cho, co-founder of Spredfast. “We’re thrilled to have someone with Rod’s talent and background on board as Spredfast gears up for another year of explosive growth.

Congratulations to Rod, and to Spredfast.  They’ve had a great year, they have some great talent, and hopefully Rod can help them get to the next level.

Demand Media (NASDAQ:DMD) isn’t based in Austin, but a few years ago it bought an Austin-based company, Pluck, and has maintained (and grown) its presence in Austin ever since.  By all accounts the IPO today exceeded expectations – both in initial pricing and in how it finished the day (up 33%).

This is great news for the Livestrong foundation (previously known as the Lance Armstrong Foundation), and great news for Austin, rewarding some hard-working software engineers and friends of ours here in Austin.  Hopefully the business and stock will do well for employees and investors – it will certainly help the local economy.  And who knows what additional startups might sprout from their success.  From the Austin-American Statesman this morning:

The Santa Monica, Calif.-based company, run by former MySpace Inc. Chairman Richard Rosenblatt, raised $151 million, 34.5 percent more than it had expected, with shares going to institutional buyers at $17 each — $1 more than the expected high price.

Congratulations to local Austin Software company Zilliant, which just raised $13M in a Series G financing round.  Zilliant was founded in 1999 by a group of people that includes a few former colleagues.  And I still have some friends working there. Thanks to Austin Startup for breaking the story (for me at least).

Zilliant’s software helps companies optimize their pricing.  If there is a process for pricing – and I’m confident there is – it is folks like Zilliant and Mimiran that will figure it out in specialized software. At the very least, they’ll figure out the hard part (optimum price).  It looks like the surrounding process of signaling, proposing, refining, approving, and rolling out pricing changes is also being targeted by these packages.  You might call it BPM for Pricing…

Austin’s economy has already been demonstrating a fair amount of resiliency in the last couple of years.  This week there’s been a flurry of good news for startups and entrepreneurs here.

First there’s the article from Bijoy Goswami in the Austin Business Journal, “Time has come for Austin’s entrepreneurs to make a scene.”  The ABJ has become primary source of business news for Austin business owners.  The article announces the launch of a news portal for Austin Entrepreneurs – www.abjentrepreneur.com.

Two of the first three articles:

Dachis buys third firm in 3 weeks

and

SolarBridge collects $15M in VC

Not sure how much overlap there will be with the kind of coverage we see on Austin Startup, which also focuses on entrepreneurs and startups in Austin, but it more of a blogging format.

Congratulations to Bryan Menell for landing an interview with Fast Company about Austin’s startup ecosystem, as well as the background contributors to Austin being a great place to start a company.

I’ll boil it down to what I think matters most:

1. Great quality of life.
2. Abundant educated workforce
3. Abundant housing
4. Access to funding
5. Great ecosystem to support entrepreneurs (especially first-timers) and startups

Great quality of life is in the eye of the beholder- some like Austin for the weather (and some hate it), some like Austin for the music (and some hate the noise), some like it because it is “Weird” (and some hate the weirdness), some like the abundant water recreation (and some people prefer dry land).  Some people even like UT sports events!  (And some really really don’t)  Almost everyone likes the food in Austin.

The point is, there’s something for everyone, and usually more than one something. I think the quality of life in Austin retains people who otherwise might move: when they get laid off, when they pursue another job opportunity, etc.  In fact many people return to Austin after flirting with the Bay Area or Boston.

Bryan’s list of startups only scratched the surface.  What I find interesting about Austin is the diversity of businesses that have been started: furniture,  groceries, consumer websites, enterprise software, chips, food and beverage firms, ad firms, music venues, ticket sales, music promoters, manufacturing, biotech, batteries, green building.  And I’m still just scratching the surface still.  I think you get this diversity in Austin because of the background support for entrepreneurship, and the willingness of the workforce in Austin to bet on startups and work in them. Well that, and because you can work at a startup and then play with your band at the Saxon Pub.

The news this morning in Austin (besides the chill wind blowing here today) is that BMC just bought local startup Phurnace.  Additional coverage from Austin Startup and Redmonk.    There are a few friends and former colleagues over there, and I wish them well at the new firm!  There have been a flurry of IPOs and (mostly) acquisitions in Austin lately, which will hopefully presage a new round of interesting startups growing up in our town.

I recently wrote a guest article for Austin Startup that just went live today here, about Conformity, a startup in Austin attempting to solve a core process problem for enterprises using SaaS and Cloud applications – how to manage, govern, and provision these applications in an enterprise that cares to protect itself.  Its a clear need in the market and another demonstration of the confluence of enterprise and Web 2.0 innovations.  If Conformity is successful it should help make SaaS applications (even BPM SaaS applications) more palatable to the Enterprise market.  Thanks to Bryan Mennel for the opportunity to contribute to the discussion.