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Category Archives: Texas
Last month CEO Magazine produced its annual ranking of the best states in which to do business, and, as with previous surveys, our region does very well.
The best place to do business in the United States is Texas, followed by No. 2 Florida and, in a tie, No. 3 North Carolina and South Carolina, according to Chief Executive’s 2018 “Best and Worst States for Business.” CEOs ranked Indiana No. 5, rounding out the top five states.
Seem familiar? That’s because those are the exact same positions each of these states has occupied in each of the last four years in our annual poll of CEOs about business climates.
The entire ranking includes TN & GA in the Top 10, at #6 & #7 respectively. Those at the top tend not to change much because they have a consistent philosophy about how to approach the business climate, and they don’t see significant leadership changes. There’s a similar dynamic at the bottom of the list as well:
Meanwhile, the high-tax, high-cost environments created by the bottom states also tend to be self-reinforcing. Mostly, those places are kept afloat economically by legacy advantages such as strong education and healthcare systems, as well as by the fact that in-demand, digitally skilled millennials enjoy living in their cities.
But states like Massachusetts risk eroding even those advantages as the cost of living skyrockets in big cities and traffic and other annoyances mount. … The situations of bottom feeders could get worse before they get better, in part because of a particular effect of federal tax reform on high-tax states—like the basement dwellers. “The exit numbers of companies and owners are going to be higher,” McGuire says, “because people won’t be able to deduct as much in property and income taxes. They’re being taxed into oblivion.” Also, the coasts are losing some of their perceived edge in talent and lifestyle amid sharply higher costs of living—and facing steadily increasing digital capabilities in the heartland.
“It’s getting to the point now where if you’re a digital marketing specialist, you can move to Nashville or Omaha and have three or four opportunities,” says David Hall, vice president for investments at Revolution LLC, a Washington, D.C.-based seed fund. “Before it was so scattered. You’re seeing the density of the tech and startup ecosystem build on itself and create great network effects within a region.”
This is the most recent item in a long run of stories describing a geographic analog to the process of creative destruction. Those states who spray “startupicide” on the economy – suffocating regulations, inflated business taxes and fees, lawsuit-friendly legal environments, and political classes uninterested in business concerns, if not downright hostile to them – lose economic clout as people and capital migrate to other states with more favorable environments in which to work and live.
This migration of economic clout within the US has been more subtle than the California Gold Rush or Irish Potato Famine but is just as significant. Some states are chasing away their earners, workers, and entrepreneurs; this is their tax base.
The growth corridors of the high-tech South would have a mercantile-like advantage but for the fact that employers can (and do!) simply move in order to thrive under our growth-oriented tax policies, lower public sector debt burdens, stronger job creation, excellent climate for entrepreneurs, and a superior overall business climate. (The actual climate happens to be conducive to a great quality of life as well.)
“We are honored to be recognized by The Silicon Review Magazine as the one of the 50 Fastest Growing Companies of the Year 2017”
“The Silicon Review 50 Fastest Growing Companies of the Year 2017 program identifies companies which are revolutionizing the decision making and business growth process, and winning a spot on this list indicates the company has not only distinguished itself from peers by proving itself as one of the fastest growing companies but also helping other companies to gain momentum in the marketplace,” said Sreshtha Banerjee, Editor-in-Chief of The Silicon Review Magazine. The publication has selected Iconixx based on its financial growth, ability to retain customers, frequent innovation, and contribution to the IT sector at large.
“We are honored to be recognized by The Silicon Review Magazine as the one of the 50 Fastest Growing Companies of the Year 2017,” said Derrik Deyhimi, Founder and CEO at Iconixx. “We are very proud of our product, sales and customer service accomplishments, and expect to see that accelerated in the next year.”
Iconixx has increased its sales force significantly to continue its momentum of growth. The team is focused on making their customers’ lives better through product innovation and its unrivaled customer support.
Within every sales professional is a primal, quota-crushing beast. If you’re responsible for managing compensation, you are the beastmaster. The beastmaster has no time for tedious compensation routines using inferior tools like spreadsheets. The beastmaster, meanwhile, cannot abide the irritation of manual commission reconciliations. No. The beast cares only for the hunt. Iconixx is a sales compensation solution that automates commission plans and eliminates sales downtime caused by trivial administration. So get Iconixx – and unleash the beast. Iconixx is headquartered in Austin, Texas, and is online at www.iconixx.com.
AUSTIN, TX – MAY 16, 2017 – HotSchedules®, a leading provider of technology solutions for the restaurant and hospitality industries, announced Mike Arenth as Chief Executive Officer. Arenth started with the company in late 2016 and implemented key leadership changes to better support innovation and growth. Prior to joining HotSchedules, Arenth was a Senior Advisor to Silver Lake, an Executive Vice President at SAP and before that spent 10 years at Ariba as General Manager and Senior Vice President.
“Restaurants remain economic powerhouses but technology is rapidly changing the industry and I’m confident that Mike is the right person to lead HotSchedules forward,” said Kevin Costello, Chairman of HotSchedules. “He is a seasoned executive with proven ability to create strategic clarity, focus an organization and drive innovation and growth particularly in industries facing transformation.”
“HotSchedules is built on a solid foundation— great products, strong financials, very engaged users, world-class customers and a talented team dedicated to meeting the ever-changing needs of this evolving industry,” said Arenth. “I’m honored and excited to lead HotSchedules to create the next generation of intelligent back-of-house solutions that will help our customers drive into the future—thoughtfully, efficiently, successfully and profitably.”
The company also announced record usage numbers for its popular platform designed to streamline back-of-house operations including training, scheduling, time & attendance, shift communications, task management, inventory, financials and analytics. HotSchedules serves over 2 million users in over 130,000 locations across 26 countries.
In 2016 alone, HotSchedules customers:
- Scheduled 1.6 BILLION hours
- Exchanged 224 MILLION messages
- Traded 12.5 MILLION shifts
- Completed over 5 MILLION online training courses
- Completed over 1 MILLION online training certifications
- Generated over $65 BILLION in restaurant sales
- Purchased $24 BILLION in inventory through the platform
To further strategic momentum, the company has expanded its leadership team to include a dynamic group of executives to compliment the deep restaurant industry experience of Co-Founder David Cantu and the existing HotSchedules team.
The new leadership team includes:
- Ted Kondis, Chief Revenue Officer who brings experience in general management and sales from Ariba, Arthur Anderson and SAP.
- Neville Letzerich, Chief Marketing Officer who previously served as CMO at Forcepoint, LLC. Prior to that Letzerich held executive, product, marketing and consulting roles at EMC, Bazaarvoice and Accenture.
- Sean Fitzpatrick, Chief Operations Officer has been with the company for 3 years and is promoted to COO. Fitzpatrick previously served as Global Vice President of Strategy and Innovation at Oracle and has held senior leadership at BearingPoint, BroadVision and Lucent Technologies.
- Brian Gaffney, Senior Vice President of Engineering: After more than three years of engineering leadership within HotSchedules, Gaffney has been promoted to SVP Engineering. Prior to that, he spent fifteen years at software start-ups including, AmberPoint, App Dynamics, Symplified, and Emotive Communications.
HotSchedules provides mobile, cloud-based technology for the restaurant, retail and hospitality industries. The company is committed to serving those who serve others through a comprehensive suite of solutions that make working for and in restaurants – and beyond – more rewarding and efficient. The product suite solves the challenges associated with training, scheduling and managing labor, back-of-house operations and communications. HotSchedules is proud to serve more than 2 million users in over 130,000 locations across 26 countries. For more information visit: https://www.hotschedules.com.
Media Contact: Ryan Bearden, firstname.lastname@example.org
Posted August 31st, 2016 by The Zebra
Little joins The Zebra to build company’s finance function, bringing 20+ years of global finance and accounting experience from Match.com, Travelocity and AppFolio
AUSTIN, Texas — August 31, 2016 — The Zebra, the most comprehensive car insurance comparison marketplace in the U.S., today announced the addition of Brett Little as Executive Vice President of Finance & Administration. Little brings more than 20 years’ finance experience from Match.com, Travelocity and AppFolio, and will oversee The Zebra’s financial, legal, and human resources operations to help drive optimal consumer experience and continued disruption throughout the massive auto insurance industry.
“In a few short years, we’ve grown TheZebra.com into the most visited car insurance comparison website in the U.S. Now, with the addition of Brett, we can accelerate our growth as we strengthen the position of The Zebra and our partners,” CEO Adam Lyons said. “Brett has the right mix of skills and experience to complement an already world-class leadership team. We could not be more excited.”
Meet Brett Little, EVP of Finance & Administration
Little joins The Zebra after nearly four years at AppFolio, a California-based SaaS provider of workflow solutions, where he was part of the team that took the company public in 2015. Little’s tenure saw both a quadrupling of revenue and progress toward realizing operating leverage in the business.
Before AppFolio, Little was instrumental in growing the financial organizations at big-name consumer-facing brands Match.com and Travelocity. In his 10 years at Match.com, Little partnered with the leadership team as the company realized revenue and subscriber expansion and became a globally recognized name in the ever-popular world of online dating.
Prior to his tenure at Match.com, Little built and led a team at Travelocity that contributed to the company’s rapid revenue growth and emergence as a pioneer in the online travel industry.
At The Zebra, Little will focus on connecting all elements of the business to create the best possible product and experience for consumers seeking auto insurance in the modern, connected world.
“I’ve had great opportunities to grow fledgling ideas alongside industry-leading companies, and I’m incredibly excited to do that and more with The Zebra,” Little said. “The Zebra is already revolutionizing the highly regulated and complex auto insurance industry, which is a massive undertaking. I see so many opportunities to continue to tweak the formula and I’m excited to roll up my sleeves.”
About The Zebra
The Zebra is the most comprehensive online car insurance comparison platform in the U.S. Since 2012, the company has sought to bring transparency and simplicity to car insurance shopping — “car insurance in black and white.” With The Zebra’s real-time, side-by-side quote comparison tool, drivers can identify insurance companies with the coverage, service level, and pricing to suit their unique needs. Headquartered in Austin, Texas, The Zebra compares over 200 car insurance companies and provides agent support and educational resources to ensure drivers are equipped to make the most informed decisions about their car insurance.
AUSTIN, Texas – July 11, 2016 – Iconixx Software Corp., an Austin-based maker of compensation management software, has named sales veteran David Loia as its first chief revenue officer.
Loia was previously the vice president of sales for Austin software maker ZenossInc. and senior vice president of revenue for Austin-based HumanIntelligence Inc. Before that, he was vice president of sales for Spokane, Washington-based Next IT Corp. and a director of California-based Oracle CX Cloud, according to his online profile.
Iconixx Software, founded in 2010, develops software designed to manage sales compensation, bonuses and salaries. It employed about 80 workers last year.
Last August, Iconixx Software reported raising a $10 million financing from investors that included Florida-based Ballast Point Ventures LP and Alabama-based Harbert Venture Partners LLC, CEO Derrik Deyhimi said.
In December, the company hired William Getchell as its first chief financial officer. Then in April, Iconixx announced establishing a credit facility with Comerica Bank to fund future growth, but it didn’t disclose the financial details of the facility.
This article originally appeared in the Austin Business Journal.
The Weekend Interview in Saturday’s WSJ – “The Oilman to Thank at Your Next Fill-Up” – provides an absorbing look at the “shale revolution” and touches on several of our favorite themes: iterative collaboration, how to fail the right way, the incremental, adaptive ways by which success is achieved, and even the role of luck – although we’d describe it a bit more favorably as “serendipity.”
The pioneering company featured prominently in the article is EOG Resources, a former division of Enron discarded in 1999 when that company “decided to jettison tangible assets as they evolved into a trading company.” By 2007 – one year after the last remaining piece of pre-bankruptcy Enron had been sold off – the former red-headed stepchild had become an industry leader.
(That particular charming detail brings to mind one of our very first posts, Built to Flip or Built to Last, in which we mused about an alternate history in which Hewlett and Packard sat in their garage, sipping lattes, saying to each other, “If we do this right, we can sell this thing off and cash out in 12 months.”)
Flush with success, EOG looked at their innovation and thought: we’re doomed.
“About 2007,” (CEO) Mr. Papa recalls, “I looked around and said, EOG has found so much shale gas, but there are a whole lot of other companies that have found vast amounts of shale gas. All the other companies were ecstatic, and their whole business strategy was, ‘We’re going to find more shale gas.’ I stood back and said this probably doesn’t bode well for natural-gas prices in North America.”
If gas prices would remain depressed due to a glut, as in fact they would, Mr. Papa’s insight was that perhaps oil, as well as gas, could also be coaxed from shales. Oil molecules are several times as large as gas molecules, and “because the flow paths through these shales are very small, very narrow and restrictive, the general feeling was that you could not produce oil from shales commercially.”
Mr. Papa and his team suspected this was “an apocryphal old wives’ tale,” and no one had “really done the work to prove that conclusively. So we challenged that dogma, and it was incorrect.”
EOG maintains no central research-and-development department. “Our R&D was just applied R&D,” Mr. Papa notes. “We went out there, drilled some wells, and the first eight or nine were unsuccessful. We got improvements, improvements, improvements, until we finally ended up hitting the right recipe for success.” EOG’s decentralized technical operations and “minimum bureaucracy” encouraged engineers to experiment well by well.
Late in 2006, EOG showed that shale oil was feasible in the Bakken. This discovery meant that EOG could switch to oil, with production flipping to 89% liquids (mostly crude) this year from 79% gas in 2007. More to the point, by proving everyone else wrong—again—Mr. Papa changed the domestic industry as other companies chased his achievement. To the extent that U.S. shale oil is transforming world-wide markets, he deserves a lot of the credit.
EOG is a great example of a contrarian definition of entrepreneurship: see economic value where others see heaps of nothing, combine the self-confidence to defy conventional wisdom with the determination to overcome obstacles, and distinguish yourself more by the ability to achieve the impossible than the originality of your thinking. They’re also a great example of stupid experimentation:
(A)t the creative frontier of the economy, and at the moment of innovation, insight is inseparable from action. Only later do analysts look back, observe what happened, and seek to collate this into categories, abstractions and patterns.
More generally, innovation appears to be built upon the kind of trial-and-error learning mediated by markets. It requires that we allow people to do things that seem stupid to most informed observers — even though we know that most of these would-be innovators will in fact fail. This is premised on epistemic humility. We should not unduly restrain experimentation, because we are not sure we are right about very much.
Mr. Papa adds that, in retrospect, they “misjudged the upward slope of technological progress” and undershot by a factor or two or three times what the effect would be on total U.S. production:
“Where we sit today with shale is the same place a petroleum engineer sat in the 1940s with a conventional sandstone reservoir,” Mr. Papa says. The best recovery rate then was 10% to 15%, leaving the rest underground, much like shale now—but since has climbed to 40% or 50%. The technology doesn’t yet exist for shale to yield similar shares, but Mr. Papa is confident that over the next 10 years it will emerge, “which basically means we’re going to double or more the amount of oil we’re going to recover. . . . Technology is always going to find a way to unlock each increment of resources.”
Mr. Papa discounts what could be considerable political risks to the energy boom, like some carbon tax or a federal takeover of fracking oversight. On the latter, he thinks the business is well regulated by the states and “there’s been a million frack jobs performed in the U.S. with zero documented cases of damage to the drinking-water table. For my set of statistics, those are pretty good odds.”
As for everything else that might come out of Washington, Mr. Papa says: “It’s my belief that for likely the next 40 or 50 years, we’ll continue to be in a hydrocarbon-powered economy, the main drivers of which are natural gas and crude oil. . . . You have to rely on the logic of the American people and our legislators to say, look at the economic benefits. The benefits are so obvious that an objective person would question whether we want to impose punitive regulations that will diminish what’s accrued.”
Mr. Papa reels off a few examples: A new burst in employment, business investment and GDP. Self-sufficiency in natural gas “for probably the next 50 years” and a two- or threefold competitive price advantage over Europe and Asia, leading to a revival of in-sourced manufacturing. A state and federal tax-revenue bonanza. Diminishing the importance of Persian Gulf and Russian energy dispensations in foreign policy.
Mr. Papa observes that these disruptive gains confounded the zodiac readings of the experts. The gains were driven by smaller, independent, nimbler companies, risking their own capital on potential breakthroughs across mainly state and private lands without federal subsidies.
“If you want to point to a success of private enterprise, and how the capitalist system works for the benefit of the total U.S. economy,” he says, “I can’t come up with a more glowing example.”
On the first of this month we wrote about the planned “IPO” of shares in Arian Foster, running back for the Houston Texans. Fantex, Inc. is applying the concept of celebrity bonds to professional athletes and securitizing their potential future earnings.
At that time we expressed concerns about the business model and the ability to quantify risks or conduct due diligence: (a) it’d be analogous to a musician securitizing songs he planned to compose rather than his library of existing proven songs, (b) a professional athlete’s fortunes can turn on a dime, and (c) their “brand” is easily tarnished by revelations about past or current activities.
Last Tuesday brought unfortunate news for Mr. Foster. (Unfortunate but impeccably timed as follow-up to the original story…) He must have season-ending surgery and as a result, Fantex has postponed the IPO.
San Francisco-based Fantex last month filed with the U.S. Securities and Exchange Commission to raise $10.6 million in an initial public offering priced at $10 a share for Foster, who pledged 20 percent of his on- and off-field earnings to the company in exchange for most of the proceeds of the IPO. It was to be the first public offering for a professional athlete.
“After consideration, we have made the decision to postpone the offering for Fantex Arian Foster,” Fantex Chief Executive Buck French said yesterday in a statement. “We feel this is a prudent course of action under the current circumstances… We continue to support Arian and his brand, and we wish him well in his recovery. We will continue to work with him through his recovery and intend to continue with this offering at an appropriate time in the future based on an assessment of these events.”
Writing at Grantland Katie Baker discusses the proposed Arian Foster (Houston Texans, University of Tennessee) IPO and compares entrepreneurs to professional athletes:
When you think about it, many entrepreneurs share a number of similarities with professional athletes (and not just a predilection for hoodies or the phrase “at the end of the day”). A breakout success early in life — say, spending $6.7 million on a stake in eBay that would be valued at $5 billion two years later, or having a 1,600-plus-yard rushing season at age 24 — can be the platform that launches a career. But it can also become, for better or worse, the only thing that defines you. For every hit, there are multiple soul-crushing misses. Hard work and luck have a chicken-and-egg relationship, and the distinction between being the best and just being the best-positioned is often hard to spot.
Her focus on the similarities in career arcs is a bit ‘meta’ but that is an excellent point about luck and elsewhere in the piece she makes more practical comparisons: both have to be nimble and adaptable to their environments, and, like a pro athlete, an entrepreneur is (quoting Randall Stross) “the person who is afflicted by a monomaniacal fever, who cannot not be an entrepreneur.”
San Francisco start-up Fantex is seeking to issue 1,055,000 shares of Arian Foster tracking stock at $10 apiece – with $10 million of the $10.55 raised going to Foster, who, in turn, will owe Fantex 20 percent of his future income (with a few exceptions). They’re trying to apply the concept of Celebrity Bonds to a professional athlete – in this case, a “trailblazer” (their idea of his brand) like Arian Foster.
Celebrity bonds were pioneered in 1997 by David Bowie, who, faced with financial pressures that could have ultimately cost him the rights to his songs, chose to securitize the future cash flows from his catalogue. These “Bowie Bonds” received investment-grade ratings from the bond agencies because they were backed by assets: an “established portfolio of songs that generated mostly reliable, known cash flows.” Other asset-backed securitization had been done, but “not with what was essentially intellectual property.”
A better analogy for Fantex’s deal would be if a musician were to attempt to securitize the songs he planned to compose in the future. Baker again:
That’s because, when you look closer at the company’s SEC filing, you start to realize that at its root this isn’t really about Arian Foster, nor is it a more high-stakes version of fantasy football exactly. Buying a slice of the running back at the $10 IPO price does not give you any more ownership than buying his jersey would. (There are currently no plans, for example, for Foster to meet with investors or appear on quarterly earnings calls, and shareholders won’t have any voting rights.)
What it does get you is one share of a “Fantex Series Arian Foster Convertible Tracking Stock” that theoretically will benefit from his future earnings stream. Except that any actual distributions are at the discretion of Fantex, which will also take a 5 percent cut. If you want to buy or sell shares, you need to do so on Fantex’s proprietary exchange, for a brokerage commission. The stock that you own can be abruptly converted, at any time, into basic company stock. (And, again, at the discretion of Fantex.) I’d love to listen in on the customer service calls on the day that a bunch of fans with cash to burn wake up to find out that they’re now proud minority shareholders of an unlisted Silicon Valley venture capital–backed marketing firm.
Baker also mentions the challenge of conducting due dilly in these circumstances:
We all love Arian Foster, but just like the running back himself, things can turn on a dime. In his 2007 piece about Protrade, Lewis wrote: “Tiger Woods is a prime candidate to launch the new market. But Tiger Woods’ financial future is secure; he’s the sports equivalent of a blue-chip stock.” (He would soon turn into more of a … speculative investment.) The “Risks” section of the SEC filing on Foster makes mention of his recent admission that he received money while at the University of Tennessee as an example of where Fantex’s diligence failed to turn things up.
The Private Equity Growth Capital Council (PEGCC) reports that Texas received the most private equity investment in U.S. based companies in 2012: $46.6 billion in growth equity and venture capital invested in 222 companies. (Florida ranked 4th in companies and 5th in dollars invested: 115 companies and $17.3 billion.)
This is the latest confirmation of “the gradual but inexorable geographic spread of the start-up ethos throughout the country” we wrote of when recounting The Atlantic’s road-trip through the Southeast in search of the next Silicon Valley. The magaizine praised the Southeast as a place which “embrace(s) an ethos that encourages rather than crushes startups and the broader mentality from which they grow.” In the same article Paul Graham, founder of Y Combinator, coined the term “startupicide” when describing cities or regions that might as well have been sprayed with something to suppress entrepreneurial activity:
I could see the average town was like a roach motel for startup ambitions,” he wrote. “Smart, ambitious people went in, but no startups came out…The problem is not that most towns kill startups. It’s that death is the default for startups, and most towns don’t save them. Instead of thinking of most places as being sprayed with startupicide, it’s more accurate to think of startups as all being poisoned, and a few places being sprayed with the antidote.
The growth corridors of the high-tech South enjoy several advantages familiar to NVSE readers: growth-oriented tax policies, lower public sector debt burdens, stronger job creation, the best climate for entrepreneurs, and a superior overall business climate. (The actual climate happens to be conducive to a great quality of life as well.)