El Paso is not known for its startup ecosystem. While existent, not many startups take off from the area.
This concerns my co-founders and me as we set out to launch our freight-tech startup. The city only has one prominent VC (who invested in us) and a handful of wealthy individuals that angel invest (we’ve also received angel investment locally).
However, we’re only the second investment this VC has made in the region (the first was just acquired). The angel investor made his first (and only) investment in us.
Most people with money here do real estate investments… and have no idea about angel investing.
The city government typically supports small businesses with proven models but rarely supports the innovative startups that are born (and typically die) here.
So yeah… that’s an excellent summary of what it’s like being in El Paso as a startup.However, a few good things have allowed us to stand out and keep chugging along with massive support.
More support, less competition
Being in El Paso allows startups to get their legs up and running because the startup scene seeks to help one another.Some of the few other venture-backed startup founders have assisted us in connections, knowledge, and resources.There is no “stabbing in the back” here because everyone is doing something different.
Easier to stand out
Being in SF or NYC would take a lot of work to stand out. However, we can stand out here because there are few venture-backed startups.This gives it nearly free publicity, more accessible access to “top” people within the region, and more.When visiting El Paso, Microsoft’s President and Vice Chair Brad Smith wanted us to pitch him our idea… and this led to $100k of Azure credits being committed to our development team.That never would have happened at our stage in a bigger city.
Easier to find good talent
UTEP is full of great talent who typically leaves El Paso to work at companies like Raytheon, Amazon, or Microsoft.However, the Hispanic community is big on family, making it hard for graduates to leave.So, by being able to employ some of this incredible talent, what they sacrifice in premium wages that they could earn at those companies… they make up for by being able to stay close to family.On top of that, Juarez, MX also has a lot of talent that we have been able to contract.One of our software developers lives in Juarez, and although his pay in the US may look mediocre, in Juarez, he makes enough in two weeks to fulfill all of his financial obligations… with some left over.
Less money can go a long way
Lastly, being next to Juarez, MX, we can get certain services and products for less than half the price.On top of that, the cost of living is meager in El Paso, so this helps with wages, office rent, and more. We’re pitching a VC firm now, and they were stunned by how long we could stretch a $250k investment (roughly into 2025).
Building a tech company in El Paso may not seem ideal, but beneath the surface, I’m glad we’re starting here instead of one of those significant startup hubs… we’d get swallowed alive!
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I’m curious about your thoughts on other regional entrepreneurial ecosystems nationwide. I’ve heard Denver, CO, is growing to become a significant hub in years to come.
I’m starting a company in a small city. I recently went to SF for 3 months for an accelerator. I see the value of being in SF for proximity to investors and talent. If you need to move fast being in SF is probably the best place to be. Lots of talent hire and investors to talk to.
But it comes at a large cost would and it would be about 3-4x more expensive to hire the same team in SF.
$250k into 2025 is great and I’m all for sustainable growth (I’m a solo bootstrapped founder myself). But that could also mean you don’t expect to grow as rapidly, which VCs need given the economics of their funds (they’re looking investments to return the fund).
Just a passing thought and of course hard to tell without more details.