When the Austin Technology Incubator launched in 1989, Austin was a much different city.
Austin had one of the highest commercial vacancy rates in the country. Its economy struggled to recover after the Savings and Loan Crisis.
The technology industry was in its infancy.
Thanks to ATI, the longest running incubator in the country, Austin diversified its economy and became a technology boom town, said Mitch Jacobson, ATI director and director of UT Blackstone LaunchPad.
On Monday evening, about 400 invited guests celebrated ATI’s 30th anniversary at an event held at the AT&T Conference and Education Center. ATI is part of the University of Texas at Austin.
To date, ATI has helped more than 300 companies, which have graduated from its incubator. They have gone on to produce 10 public companies, 50 mergers, and acquisitions, and raised $1.7 billion in funds, according to ATI. It estimates the companies have had a $3 billion economic impact.
Throughout the evening, everyone kept recognizing one man who made it all happen: George Kozmetsky, former Dean of the University of Texas School of Business and founder of the IC2 Institute and ATI. He had a long-term vision of Austin developing as a major Technopolis.
Laura Kilcrease, the founding executive director of ATI, who Kozmetsky recruited to run the incubator as an unpaid employee, headed up the ATI’s founder panel at the event.
ATI ran on $125,000 for each of the first two years and by the end of the third year ATI had become self-supporting because of the county, chamber and the business community, Kilcrease said.
Kozmetsky, who had previously co-founded and run Teledyne in Silicon Valley, started calling on companies in California and recruiting them to relocate to Austin.
In 1992, 92 companies visited Austin to talk about relocating, said Carol Thompson, tech entrepreneur and former board chair, Greater Austin Chamber of Commerce and ATI board. Out of that, 25 companies expanded to Austin, she said.
“We didn’t have a lot of jobs in Austin early on so university graduates had to go elsewhere always yearning to come back to Austin,” Thompson said.
MCC was one of Austin’s early technology companies. A spinoff from that, ETI, Evolutionary Technologies Inc, owned by two females including Kay Hammer went into ATI had a robust life, Thompson said.
“Today the emphasis is on entrepreneurs in Austin and the emphasis is on minorities and female entrepreneurs in Austin,” Thompson said. “We’ve had some success; you’ve heard about the steppingstones so far, but we still have a long way to go I think for us to be a total expanding global city. We still have to make a concerted effort with women and minorities in the city of Austin.”
Former Austin Mayor Lee Cooke recalled meeting in a parking lot with Kozmetsky for a 75 second conversation that was the beginning of the money and the gas in the gas tank to put ATI together.
ATI was key for Austin to diversify its economy, Cooke said.
In 1992, Cooke founded Medical Polymers Technologies which spent three years at ATI. Today, the class one medical device maker is still in business, he said.
ATI is still needed today, and the city also needs a medical incubator to take the city forward with UT Dell Medical school, he said.
ATI exceeded all expectations when it launched, Kilcrease said. It was supposed to create 200 jobs and fill one million square feet of office space within 10 years, she said. ATI created 350 jobs in three years and within seven years, it had filled more than one million square feet of office space. In the first two years, ATI raised more than $70 million for its startups, Kilcrease said.
ATI started an angel network, the Austin Software Council, which is now the Austin Technology Council and many other infrastructure organizations, Kilcrease said.
“That was the beginning then. What we have today is a new beginning,” Kilcrease said. “Because ATI has never stayed the same from any one period. It has evolved, improved, grown. And today is a new beginning under Mitch Jacobson’s leadership for the next phase of ATI and the next phase of what we’re going to do in the greater Central Texas community.”
Next, ATI gave the 2019 Laura Kilcrease Civic Entrepreneurship Award to Capital Factory. Previous winners included Michael Dell, Pike Powers, Gary Farmer, Lee Walker
Capital Factory, founded in 2009, went through Texas Ventures Lab, said Joshua Baer, its co-founder and director.
“We all work together in Austin,” Baer said. “It takes a whole bunch of people to make this all work.” Capital Factory has 80 people on its team, he said.
“We would not be here if it weren’t for ATI,” Baer said.
The event also included remarks from Dan Jaffe, vice president for research, the University of Texas at Austin, University of Texas at Austin President Greg Fenves, and Austin Mayor Steve Adler. It also included panels from former students and entrepreneurs who graduated from the ATI incubator. And KLRU created a special video focused on ATI’s founding and contributions to the city’s technology industry.
And John S. Butler, director UT Texas Venture Labs, former director of IC2 Institute, gave the John S. Butler Distinguished Student Award to Katherine Allen, Plan II honors and mechanical engineering senior. As a sophomore, she co-founded Genesis, a venture capital fund, to provide capital to student-run startups. Genesis raised $1.2 million and has funded more than 20 student led startups. Those startups have raised $7 million in follow on funding. Allen also founded Flo Recruit.
ATI also awarded graduation certificates to the 2019 ATI graduating companies include AdBm, Aiqueous, Apptronik, Enervalis, LungTherapeautics, Seachange Technologies, SimplifySolar, Smarter Sorting and Water lens.
Admiral Bobby Inman and Pike Powers both received the George Kozmetsky Lifetime Achievement Award for their ecosystem contributions to the Austin tech economy. Greg Kozmetsky, CEO and president of KMS ventures, chairman and president of RGK Foundation, presented the award.
