LOCAL Houston | The City Guide February 2018 | Page 44

FOOD | ARTS | COMMUNITY | STYLE+LEISURE
FUTURE PROOF
TECHNOLOGY IS SHAPING HOUSTON’S NEXT ECONOMY
When oil prices hit rock bottom in 1986, the city of Houston followed
suit. By the end of the 80s oil bust, Houston had lost 225,000 jobs and
unemployment was at nearly 10%. While commercial projects ground to
a halt, thousands of homes were left abandoned and the future looked
bleak for the once-booming oil town. The decade was a brutal wake-up
call for a city whose livelihood was uncomfortably dependent on the well-
being of one volatile industry.
The events of the late 80s catalyzed efforts to diversify the city’s econ-
omy in preparation for future market downturns. Thirty years later, that
investment is paying dividends beyond what anyone could have imagined.
In the three decades since the oil glut, the Texas Medical Center has
become the largest medical center in the world, creating over 100,000
jobs and billions in annual revenue. Beyond healthcare, another industry
has emerged as a potential leader and future flag-bearer for the Houston
economy: technology. IT start-ups have been multiplying in the Bayou City
for the last several years, creating a small but extremely talented commu-
nity of entrepreneurs and innovators.
“I think [there was] a need,” says JOHN REALE, CEO and founder of
Station Houston, a co-working space and tech incubator downtown.
Station launched in 2016 to serve a young ecosystem of tech start-ups
in need of mentorship, work spaces and business resources. He explains
that the current boom in start-ups is the result of a “digital revolution” in
existing industries that created a need for third-party IT solutions. “There
are real opportunities to reimagine industries and solve problems,” says
Reale, “and corporations are finding new ways to engage start-ups.”
While most of the start-ups launched in Houston serve the needs of the
energy and healthcare sectors, they are simultaneously creating a new
local industry that may outlive its larger peers.
JOE ALAPAT, founder of Liongard, an IT security start-up and Station
Houston member, tells me that launching his business in Houston was a
no-brainer. Most founders first think of Silicon Valley when deciding where
to launch their tech start-up, but for Joe, it made more business sense to
be in Houston. “Getting real traction with customers is more important
than being cliché,” says Joe. “Houston has a huge number of [corporate]
headquarters.” For IT solution companies like Liongard, Houston presents
a much greater opportunity to reach customers locally. I asked Joe if this
city is missing the financial infrastructure that makes Silicon Valley so
enticing to founders. “Houston has a lot of wealth,” he replies, “it’s just
an issue of educating them.” While he admits that traditional venture cap-
italists are harder to find here, the sheer number of millionaires willing to
invest presents an important opportunity for local entrepreneurs. In terms
of creating a Sand Hill Road-type network of venture capitalists, Joe says
the city still has some work to do, “but we’re not that far off.”
Houston has come a long way since 1986. A thriving healthcare industry
and a growing community of tech entrepreneurs are shaping the future
of the Texas economy. With some experts predicting that fossil fuels
may never again see the booms of the 20th century, this diversification
could not have come at a better time. The technology infrastructure that
is being created in Houston will one day serve emerging markets in
sustainable energy, as well as continue to lead the world in healthcare
innovation. Though the city still depends largely on the condition of tradi-
tional energy markets, Houston is creating an economy that will no doubt
remain future proof, no matter what the future holds.
By Carlos Brandon
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L O C A L | 2 . 2018
2 . 2018 | L O C A L
45