Rackspace gains a foothold in San Francisco with its coworking space Geekdom
San Antonio is not exactly a startup hot spot. It's the boring cousin of much hipper Austin, known for Airforce operations, medical research and oil companies. But $4 billion dollar data center company Rackspace is slowly trying to change that.
Rackspace employs 5,000 people in San Antonio, recruiting techies out to Texas since ’98. And in 2011, Rackspace co-founder and billionaire Graham Weston launched a co-working space called Geekdom to further develop the startup ecosystem. Weston grew up outside San Antonio on a cattle ranch. The city is dear to his heart and Rackspace’s future, given that the company is based there.
In the last two years, Geekdom has become a focal point of the city's tech scene. Geekdom is the largest co-working space in Texas, and hosts TechStars Cloud, the cloud computing version of the accelerator.
A few weeks ago, Weston soft launched the chain in San Francisco, opening up a location in the much more crowded Bay Area market.
Weston and his good friend Nick Longo, who co-founded Geekdom together, see Geekdom’s mission as one of collaboration. Although they do rent out 200 desks, the focus of the organization is paid memberships. 700 people have joined to attend fireside chats with visiting entrepreneurs, workshops, and other programs. That puts the emphasis on networking and idea generation instead of isolated company work. Longo estimates they run two to three events a day.
Co-working spaces in SF that promise “smart people changing the world” might inspire eye rolls from the seasoned Silicon Valley crowd. After all, who isn’t trying to do that here? But in a non-techie Southern town, a space like Geekdom can be the foundation needed to build a sustainable startup culture.
It helps people overcome their fear of getting started. “If your parents weren't entrepreneurs, think about how scary it is just to tell your friends that you want to invent something,” Weston says. “Having a support system that helps you work with peers and get support from peers...these things are ways that we bring down the fear level.”
It’s clearly a passion project for Longo and Weston, who both grew up in Texas and want the thriving tech scene to benefit their home communities. Weston isn't expecting to make money on the venture he's funding -- he hopes to just break even.
The duo met during Rackspace's earlier days. Longo ran a company called CoffeeCup Software, that was one of Rackspace's biggest customers in the late nineties. After he sold it, he decided to found Geekdom with Weston.
“What am I supposed to do, hold onto everything I know and sit on a couch watching TV all day?" Longo says. “Everything we go through -- the failures and the successes -- that's the legacy to pass on.”
Good.co, a TechStars San Antonio company that originally came from San Francisco, got their venture off the ground at Geekdom in Texas. Good.co founder Samar Birwadker reflected on the experience.
Very quickly, we realized that taking the team out from their natural habitat does wonders. As fertile as Silicon Valley is for startups, it can be easy to get caught up in the excitement and build only for the valley bubble. Being in San Antonio and in Geekdom was invaluable perspective from outside of the bubble, allowing us to better understand and build for a practical & larger market.For Rackspace of course, a local hotbed of talent makes it easier to recruit people, keep an eye on what’s up and coming, and potentially acquire or partner with companies that look promising.
“We have had a number of people from multiple countries approach us wanting to bring Geekdom to their city, and it’s something we're seriously considering,” Weston says.
So why pick SF, potentially the most over-saturated market in the country, for the second location instead of a more remote place? Weston and Longo didn’t have a clear answer. [UPDATE: Longo responded, saying, "Yes we do. San Francisco has great coding and development knowledge to share, and San Antonio has a lot to offer San Francisco when it comes to business models & operations."]
The new SF Geekdom is based on Folsom Street, and it's mostly empty at the moment. Robert Scoble, video blogger extraordinaire and Rackspace employee, has his studio set up in the corner. He’s helping oversee the recruitment of companies into Geekdom SF. “No assholes,” Scoble says. “I can't have any assholes, because then it causes problems for me if I bring in big CEOs for interviews."
Although SF certainly doesn’t need a co-working space, it could be that Rackspace needs SF. Setting up Geekdom helps the San Antonio based company get a more established foothold here, a place from which to host events, network, engage in the dialogue, discover new startups, and keep an ear close to the ground.
Weston and Longo think there's space for Geekdom in SF's co-working scene, because of its mentorship and collaborative elements. “It’s a mashup of an incubator but without equity,” Longo says. “It's like a really long accelerator that never ends.”