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Why Tech Companies Are Choosing Houston

Published Mar 05, 2019 by Clint Pasche

The growth of Houston digital tech ecosystem continues to accelerate as companies from California and other “high cost of doing business” states discover the many benefits of locating in the Lone Star State, particularly in Houston.

The recent announcement by to choose Houston for it’s first headquarters outside Palo Alto was seen by many as a major win for the Houston region.

The Houston Business Journal recently featured the cover story: “Silicon Bayou: Why some tech companies are choosing Houston over California or Austin.” Cost of living and access to affordable digital tech talent are often-cited as reasons for a company to move to Houston.

Innovation corridor in Houston

From the piece:

Tech companies are moving to Houston for many different reasons, said Wilson Pulling, co-founder and CEO of Aatonomy, a startup that makes software and a phone app allowing affordable commercial drones to hover and fly by themselves. The company was founded in New York City in the summer of 2016 before moving to Silicon Valley. Pulling and his co-founder and chief technology officer, Yang Hu, relocated from California to Houston about two months ago, and chose the Bayou City over Austin, according to Pulling.

"Some huge considerations in this move were cost, quality of life and the ability to attract talent," Pulling said in an interview with the Houston Business Journal. "We have an 800-square-foot office in Midtown to ourselves. The boom (Austin) has seen makes the cost difference between Austin and Houston super real.

The differences in costs of paying workers between markets like San Francisco and Houston are also notable… and it is apparent why companies are looking to position themselves outside of the Bay Area. The cost of living in Houston is 44 percent lower than the cost of living in San Francisco, according to NerdWallet's cost of living calculator — the computer programmer earning $107,070 in San Francisco would only need to make $60,369 in Houston to maintain the same standard of living.

"If you're a college grad living in San Francisco and trying to get hired at a startup, you're saying 'I need to make $115,000 or I'm not going to be able to pay rent and eat,'" Pulling said. "You're able to hire someone (in Houston) that isn't a fresh college grad, that can help grow your company in a meaningful way and for that same salary they're going to be happy — that's a massive difference."

Read the full story here.

Note: Edited February 12, 2019 to add story.


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