Then the numbers came out Friday morning, as reported by the Austin-American Statesman and other outlets:

In the most impressive surge for the job market since the middle of last decade, the United States added 243,000 jobs in January, far more than economists expected. The unemployment rate dropped to 8.3 percent, the lowest in three years.

Hiring accelerated across the economy and up and down the pay scale. The high-salary professional services industry added 70,000 jobs, the most in 10 months. Manufacturing added 50,000, the most in a year.

Not only did the jobs report come back nicely, but an extra 200,000 jobs were added via revisions to the 2011 statistics.  The economy may not be screaming back, but it is slowly but surely improving.   Most surprising was that the hiring was really across the board, across a wide range of industries (including manufacturing and construction).  Let’s hope the economy continues to mend.

No related posts.

Appian reported “record growth in 2011″ the other day with some key statistics:

• 90 new-name customers
• 219% YoY license order increase for Appian BPM Software
• Appian Cloud represented 37% of their total license orders in 2011
• Highlighted new customers include several government agencies.

The press release goes on to describe Appian’s mobile BPM offering and several industry awards they won over the course of 2011.  Appian’s press release and blog certainly support the thesis that BPM still has room to grow.

But what I find interesting is the wordsmithing of what seem like otherwise healthy numbers:

• “90 new-name customers”  – how is a customer defined, then? As a department, subsidiary, purchasing group, or corporate entity?  (the use of new-name rather than just “new customers” makes one wonder what the caveat is).
• 219% year-over-year license growth sounds fantastic. But then they added another word – they didn’t actually say license dollars, they said “license order increase”.  An increase in orders could happen if you lowered the price to free, which isn’t nearly as interesting as a 219% year-over-year revenue increase in license dollars.
• I’m surprised the 37% cloud customers is as low as it is.

My beef isn’t that the numbers are good – they’re great numbers, but part of the value of a number is the context.  If Appian grew license revenue 219% why didn’t they just say so?  So if they didn’t just say so, then why did they feel the need to trump up the numbers by obscuring which metric they’re really reporting? It just isn’t necessary.

This isn’t a problem unique to small private companies though.  Just the other day Google reported some misleading vanity metrics about Google+.  The effect of using these misleading figures though was to undermine their credibility rather than enhance it.

This odd cherry picking of metrics isn’t new however, 6 months ago Appian reported “Sales orders for the Appian BPM Suite grew 158%” – again, orders, not revenue.

Of course, as a private firm, they don’t have to report anything, but if your business is growing it is hard to resist crowing about it at least a little! But I would encourage private companies reporting metrics to use plain words in what ever language you need to get through to your audience.  Finessing the terminology only undermines credibility.

No related posts.

• Just today, OtherInbox announced it is selling to ReturnPath for an undisclosed amount.  Based on the smiles from the OtherInbox team, this was a good sale, at a good time, for the team.  Looks like a great fit with the parent company. It marks another success for Joshua Baer, who (along with a few others) has really re-energized the startup scene in Austin.  Interestingly, part of the value ReturnPath perceived in the deal was getting a good footprint in Austin, TX:

“The decision to acquire OtherInbox was based on its technology and its broad customer base, but separately we’ve been talking about where we might expand operations, and Austin was on that list,” Forman said. “The cost of living, the tech scene and the talent pool were very attractive to us. The opportunity to get that as part of the bargain with OtherInbox is awesome.”

• Socialware just landed an investment from the CrunchFund.  I’ve known Chad Bockius since ’99 and I’m impressed at how he’s been able to get visibility for the company with investors outside of Austin (note that Austin Ventures is also an investor in the company, however).
• The Austin office rental market is tightening up.  This trend has been going on for some time.  Locally, in our office building, this is noticed as I have to drive one extra floor up in the parking garage to get parking these days.  There just isn’t any vacancy.  Prices are moving more gradually but they are starting to move.  I saw a lot of growing firms in Austin reach for bigger space in 2011, with designs on growing headcount, and a belief in the stability of their businesses.
• There are IPOs on tap for Austin as well.  Bazaarvoice is the most likely candidate with a strong growth track record and a strong product offering.  Chuy’s, a Tex-Mex restaurant chain based in Austin is also planning to go public to fuel expansion (if a location comes your way, two recommendations:  DO order the “macho burrito”, and DO order the tres leches for dessert – but find a friend to share it with).  3 other companies are up to bat this year, having already filed for an IPO.
• All of this really has me looking forward to the Angelou Economic Forecast.  I took a look back at my notes from last year, and it looks like he pretty well nailed the economic forecast for Austin and Texas.  Not only does AngelouEconomics provide some of the best economic development consulting, it is also a local Austin startup-made-good story itself.  Quite a local success story.

Here’s to 2012!

Related posts:

1. Congratulations to OtherInbox
2. Seven Austin IPOs this Year?
3. Jobs and the Economy

• Formula 1 is back on track.  There’s some debate, locally, about the value this has for Austin’s economy, but it is clearly a net-positive for the next 10 years.  Perhaps not coincidentally, a couple of new hotels are scheduled to be built downtown over the next couple of years.
• The Samsung plant in Austin is producing the A5 chip for Apple.  This was a massive investment from Samsung in local infrastructure ($3.6B).  Those of us following the news in Austin a few years ago probably recall what a close decision this was for Samsung.  It was the biggest investment in chip manufacturing capacity since the heydey of silicon in Austin.  These days, Austin is more of a hotbed of design than manufacturing.    As I understand it, Austin is Samsung’s second largest infrastructure investment – and the largest outside of South Korea.  People often forget how much is manufactured in the US in general – but this kind of high-tech component is particularly unusual to be manufactured onshore.
• Austin is attracting more early stage investments than other parts of Texas. $280M in Austin alone last quarter.  Fifty Austin companies received funding.  This reminds me of the 90′s in Austin.  There have always been complaints about it being much harder to raise money in Austin than in the Valley, and perhaps it is.  But it clearly is easier in Austin than it is in many other parts of the country.
• It looks like the “best performing cities” are moving to Texas…
• The unemployment rate nationally recently dropped to 8.6%.  But in Texas?  8.1% (down .3%).  A half-point better than the country as a whole. Austin, however, is a full point lower still, at 7.1% – 1.5 points lower than the national average.

So it appears to be a good time to be bullish on Austin.  But if you’re just now noticing, you’re late to the party.  All through the downturn, it seemed clear to those of us who live here that Austin was building up, slow and steady, a diverse and growing economy.  I’m looking forward to going to the Angelou Economic Summit in January – there are typically some key insights into how the local economy has been performing, and this year should be particularly interesting.

Related posts:

1. How to Make Austin the Next Silicon Valley?
2. More Money Raised in Austin
3. Austin Entrepreneurship gets another Voice

The company, which launched its service last year, received the funding from InterWest Partners of Menlo Park, Calif., and Austin Ventures. It has raised a total of $16 million.

Spredfast’s software lets clients manage campaigns and conversations on social media sites, including Facebook, Twitter, LinkedIn, YouTube and blogging platforms. Rather than going to each social site, Spredfast lets users publish and monitor social activity from one central platform.

[...]

“This is a big step for us, and we’re ready for the next stage of growth,” said CEO Rod Favaron, who joined the company in February. Favaron was previously CEO of Lombardi Software Inc., which was acquired in 2010 by IBM Corp. for an undisclosed price.

It is both a vote of confidence in Spredfast, and in Austin.  In 2010 it was common to read about the dearth of funding in Austin, but almost ever since then, we’ve been seeing more news about funding in Austin than I can remember since the ’90s.

In a followup to the previous post about recruiting talent to Austin, I think news like the above fundraising does more to recruit industry veterans to Austin than the recruiting trip they recently embarked on.  The coverage on MarketWatch wasn’t flattering:

In fact, I have to report that the Austin group’s recruiting night in San Francisco was something between a bust and a learning experience for the group.

It sounds like the two main events were, basically, a tough learning experience.  But hopefully the CEOs took advantage of the trip to prearrange a bunch of meetings with likely recruits rather than just depending on the group events.  Still, the target and the optics are all wrong.  Instead of getting a story about what a great place Austin is to work, and that people are coming here to work at our high tech companies, we got an article essentially about indifference in the Bay Area and how hard it is to find talent in Austin (which isn’t quite as dire as the article makes it out).

Imagine if these same CEOs had gone on a tour of Universities in California (or other states) to recruit talent?  To put the idea out there for college students to think about Austin as a destination.  University is the right place to strike.  The experienced industry veterans don’t need to go to a job fair to find companies in Austin – they’ll leverage their connections to find a job.  Its the college kids who need some help discovering Austin and Austin companies as a place to land.

The rest of the article focuses on “solutions”… and here’s one perhaps the 30 tech CEOs could get behind – an Austin-funded scholarship at several universities – giving us some press out there on the coasts.

Update:  This article on Austin startups finding funding via Angel List is probably relevant as well.  It just speaks to how the world of fundraising is changing, and there are fewer barriers than ever for Austin entrepreneurs:

Even for Austin startups that aren’t actively raising money, AngelList is becoming a way to get on the radar of potential investors, partners and customers.

Bill Boebel, an Austin entrepreneur and angel who has invested in 15 companies, calls it the “LinkedIn for startups.”

“It’s a startup’s resume,” he said. “Just like when you’re recruiting an employee and want to learn a little more about that person, it’s a great way to find out more about a company.”

And further, Ravikant says:

“Entrepreneurs inside Silicon Valley already have access to investors here, but it can be harder for a promising startup in Austin to break in,” he said.

“We have helped Austin startups get exposure to Silicon Valley and New York investors, and we also give those investors the lay of the land in Austin.”

Has there been a better time to invest in people and talent?

Related posts:

1. Investing in Austin, Investing in People
2. Austin is a Great Place to Start Your Company
3. Investing in People Revisited

American companies must be provided with the incentives to invest in their workers as they used to. As recently as the 1970s, America’s most respected companies would make significant investments in workforce training. IBM, for example, took non-technical workers and taught them technical skills. They then trained these technicians to be computer programmers, sales reps, or product managers. New recruits received a year or more of training before they were expected to become productive.

I don’t know any company doing this anymore.

Today, nearly all American companies, including IBM, expect new hires to be productive on day one. These employees are given a day or two of “orientation” at best. Companies routinely fire people whose skills are obsolete and hire replacements with the right skills to maximize quarterly revenue and profits. Employers often fear that if they spend too much on skill development, employees will become more marketable and leave.

I’m afraid we are guilty as charged.  At a small company, I can understand this problem more than at a larger company.  At a small company one might not have the resources to invest in training in the early days.  And yet, it is precisely at these small companies that many people investments are made.  Are being made. Right now.  If you’re one of those small companies making excuses about investing – stop.  Stop making excuses.  Just start figuring out how to invest.

Related posts:

1. Investing in Austin, Investing in People, Part 2
2. Investing in Austin, Investing in People
3. Talent Shortage? Invest in People

“These events are about Austin making a pretty loud statement in the Bay Area,” said Julie Huls, president, Austin Technology Council.  “Texas is a New Economy State, and we have a killer combination to support it: high-paying tech jobs, fast-growing companies, a low cost of living, and a relaxed way of life.  Over 100 of our area CEOs were together in May at an ATC CEO Summit and one key call to action was to bring more tech talent to Austin.  We are proud to deliver on that idea in a couple weeks in San Francisco and Sunnyvale.”

Some of the best companies in Austin are represented in this trip – and some great CEOs for sure.  These are people that Austin has a lot to be thankful for.  I may not be sure that sending the CEOs en masse is the best way to recruit tech talent to Austin, but I certainly don’t blame Austin CEOs for recruiting in other markets.  From my time at Trilogy and Lombardi, and now BP3, I know a thing or two about recruiting talent to a firm.  I think this event in the Bay Area is more about news cycle than actual recruiting.  Hoping to plant the seeds for the future.  Clearly there is a need for more skilled people in Austin:

Austin currently has several dozen technology companies hiring 40 or more new programmers each.

Integrating new talent into Austin is clearly good for the local economy and ecosystem.  I was part of one of these waves of immigration to Austin back in the mid-90′s – and the imports are now the CEOs and hiring managers at literally dozens of local companies.  But the long term solution to this problem should be a mix of approaches – recruiting and retaining talent from universities, industry, and various locations inside and outside of Austin. Too many of the startups in Austin have stopped college recruiting and really developing their own talent – which is easy to understand when a company has a horizon to exit of less than four years. But it isn’t just college recruiting – it is also hiring people with experience who have the potential to do more – and then challenging them to do it!  Don’t just hire Ruby on Rails experts and developers – hire people that you believe can become Ruby on Rails experts.

The strategy we take at BP3 isn’t to import talent – but to hire our talent where they live – so long as they’re willing to travel to customer sites.  If they live in California, that’s where we hire them and where they base out of.  If we hire them in Minneapolis, that’s where they’re based out of.  It is actually part of our goal to have geographic diversity, and it means that we can hire people that other companies can’t touch as easily. But it has a bigger benefit for our clients-  as we add staff, we’re more likely to be able to serve our customers with local staff rather than a team that has to travel to be there in person.  High touch, high value, we like to call it.

Vivek Wadhwa’s article in the Washington Post was a brilliant assessment of the “talent shortage” in the USA – first by calling out the objectives of the President’s Council on Jobs and Competitiveness:

The council is holding a series of meetings to find ways to fix a perceived national problem: an engineering shortage. Otellini and the council claim that such a shortage seriously threatens America’s ability to create jobs, and that the U.S. risks losing its innovation edge to China and India, which are producing a million engineers per year — 12 times as many as the United States.

But next, by explaining what is wrong with this logic:

The graduation statistics most commonly touted then were: China graduates 600,000 per year, India, 350,000, and the U.S., 70,000. We found that, in 2004, when comparing apples with apples, the U.S. had graduated more engineers (roughly 140,000) than India had (roughly 120,000).

Wow.  Wadhwa’s analyis just does not agree with conventional wisdom.  Wadhwa predicts that great numbers of engineers in India and China will face unemployment or jobs in fields unrelated to engineering.  This is where he cuts to the heart of it:

Then there is the question of whether there is a shortage of engineers in the United States. Salaries are the best indicator of shortages. In most engineering professions, salaries have not increased more than inflation over the past two decades. But in some specialized fields of software engineering in Silicon Valley and in professions such as petroleum engineering, there have been huge spikes.

So, there are shortages in a few critical areas, but overall there is not a shortage of engineering talent.  Again, this matches with the data that I’ve been seeing.  It also better reflects the proliferation of engineering-derivative majors in US universities.

If I were these local Austin CEOs, however, I’d also be shopping in other parts of the country outside of Silicon Valley and Austin, and I might also focus more time on universities – graduates are more likely to relocate and take a chance on a place like Austin.  But that requires a long-term strategy toward staffing that not all companies have.

I’m hoping that companies in Austin, and in general, will start taking the time to invest more in the people they’ve got, and hiring more people with potential, rather than just looking to find someone who has done it all before.

Related posts:

1. Investing in Austin, Investing in People, Part 2
2. Good News, Bad News for Austin Employment
3. Investing in People Revisited

Now here’s the interesting thing about Groupon: Despite its massive unprofitability, it’s a jobs-creating behemoth. According to its last updated S-1 filing, it’s got 9,625 employees, up from 37 in June 30, 2009.

So awesome, especially since that explosion basically coincides with the bottom of the recession.

But it’s not making money. So why is it adding so many jobs? Simple, because demand for its services and offers has been ridiculous.

Demand = jobs.

Right.  It isn’t actually profit that creates jobs.  At BP3, we don’t hire more people because we are more profitable and want to spend those dollars on hiring.  We hire more people because there is additional under-served demand for our services.  The article goes on:

If you offered Groupon a tax break, it wouldn’t make a difference because it’s not profitable. But even if it were, and you cut its corporate taxes, allowing more money to filter to the bottom line, unless that somehow translated into more demand for its products, it wouldn’t need to hire more people.

Again, correct.  Higher taxes aren’t “good for business”, but lower corporate taxes don’t lead to hiring (and jobs) either.  But hey, maybe this Groupon thing is just an exception.  Maybe other businesses with demand are refusing to hire because of their high tax burden? But I haven’t heard of such.  SalesForce seems to be doing fine, if you listen to Benioff:

We’re adding more than 1,000 new positions this year. Plus acquisitions. We’re aggressively growing the company….I’m not an economist, I don’t look like an economist. But as I said on our last earnings call, I don’t think there’s going to be a double dip because I talk to customers and they’re all growing, maybe not at 10% or 20% or 30%, but they’re all growing. I feel good about jobs, I feel good about the economy….

There’s demand for BPM as well – and so my colleagues in BPM aren’t seeing the recession or the possibility of one either.  Our customers are investing in their businesses (and most of them appear to be hiring in IT).  The jobs are just going where the demand of customers is strongest.

Related posts:

1. More on Jobs in Texas
2. About that Jobs Report
3. Jobs Jobs Jobs

• 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.

Related posts:

1. Another Take on the Talent Shortage
2. In the End, it is All about People
3. Takeaways from Driven 2009: Leadership and Talent are in Demand

Credit to Austin Startup for bringing it to my attention first – there’s also an article on the Austin-American Statesman.  I also learned something new from the Austin Startup post:

Note that both Rich and Evernote’s CEO Phil Libin are no strangers to Austin; during the early 2000′s they spent their time at Vignette.

I didn’t realize they were previously at Vignette.  Nice Austin connection.  They’re getting started the right way – hosting a happy hour downtown and getting their job postings up.

Coming next week, several startup-oriented events, culminating in Capital Factory’s Demo Day ’11, and the ATX Startup Crawl afterward.

Related posts:

1. Austin-based Vignette Acquired by OpenText
2. Another Vote for the Experience: Evernote
3. Austin Entrepreneurship gets another Voice