164. San Antonio’s Startup Gap — One Big Win, and What We’re Missing

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Our guests this week are two former Rackers, the name adopted by the thousands of people who once worked at Rackspace, a company that was sold to Apollo Global Management for $4.3 billion in 2016. Erik Carlin and Chris Cochran helped build and operate Rackspace's cloud business. And along with former Racker Chris Keel, who could not join us today, they worked on a major pivot by Rackspace to bring its Fanatical support customer first business model to Amazon Web Services cloud business in 2015. That risk free opportunity to build a startup business within Rackspace led the three men to realize they could start their own cloud services company after they left Rackspace. ProsperOps, the company they started in 2018, is technically based in Austin, yet it's never had a physical address. It's a remote first company. Carlin lives in San Antonio and Cochrane and Kiel live in Austin. The company's 150 employees live near and far. To simplify, ProsperOps builds software that automatically reduces what companies spend on cloud infrastructure without requiring constant manual tuning by engineers or finance teams. Initial startup funding of $500,000 came from active Capital, the Pre Seed venture capital fund started in 2017 by another former Racker, Pat Matthews. Matthews joined Rackspace after it acquired webmail in 2007. That was his Virginia startup that allowed companies to outsource their email hosting to the cloud. Matthews and his investors today do more than write checks, though. They serve as coaches and mentors, an unusual hands on approach that gives startups access to expertise critical to surviving early challenges and later as they work to scale up. Cochran, Carlin and Kiel raised an additional $300,000 from friends and family, including other Rackspace founders and leaders in San Antonio. And here's where the story diverges from so many other tech startups. Prudent management of that $800,000 including minimal overhead. Remember, they didn't have an office and and modest$25,000 annual salaries for the founders, coupled with Prosper Ops quick success, winning and keeping customers meant they never had to go back out and seek additional funding. They never saw their own ownership stakes diluted, they resisted early offers to buy their company and continued to build it. Finally, in January, they sold to Flexera, a fintech company based in Chicago. With AI changing the tech landscape seemingly overnight, it seemed like a good time to sell. Flexera has more than 2,000 employees, most operating remotely, internationally and specializes in reducing a company's it, cloud and other operating costs. The sale price for Prosper Ops was not disclosed, but area investors are buzzing about the sale and the founder's lucrative exit, calling it one of the biggest deals for a locally launched tech company in Texas, and perhaps the biggest such exit in San Antonio, alongside Mailgun, another company spun out of Rackspace that was bought and sold twice before its acquisition by a Swedish tech company for more than $1 billion in 2021. Erik Carlin and Chris Cochran, welcome to big city, small town. Greetings. Greetings. It's great to be here. Good to be with you. I want to start today by taking you guys back to your days as Rackers and the remarkable culture that company's founders built, unlike anything San Antonio had ever seen or has seen since. How did that shape you? And then and later as founders of ProsperOps Rackspace, such a seminal part of my career journey. I spent Most of my 30s at Rackspace a great time. I think I joined 2008 when it was roughly about 500 million and maybe only a couple thousand people, and saw it grow to several billion, several thousand Rackers. And, you know, really I could just, you know, we could write a love letter to Rackspace. It, it taught us so much about how to think about business. We had a chance to work closely with many of the leaders and founders and it really shaped how we thought about doing it right. And I think when we started ProsperOps, a large part of the playbook, we tried to sort of either adopt directly or put our own little spin on what Rackspace was doing very well. It wasn't always great times, but there were more good days than bad days, for sure, at the Rack. Yeah, the culture at Rackspace was very seminal, I think, for me and all the founders in the sense that I was sort of in the corporate world and coming to Rackspace, I had just never seen a culture like that and a leadership that was so high caliber, had a servant oriented mindset towards the employees and the company. And it really showed me something I hadn't ever seen before. And when we sought to start a company, we just knew we wanted it to have the same sort of essence and culture that Rackspace had. And so certainly just the influence of, you know, Graham Lanham, Lou. The leadership at Rackspace. Graham Weston, Lanham Napier, Lou Moorman. Lou Moorman. In fact, we just met Lou for breakfast this morning, just to catch up. And so he warned you about this podcast ahead of time. Absolutely, absolutely. We had several calls coming in. We're on to you. But, you know, they invested in us, I think, and it's kind of exciting to be able to kind of go on after Rackspace and be successful in a technology startup. But I think that's one aspect for sure. I think the other thing Rackspace did for us is it gave us exposure to just the cloud technology infrastructure landscape. And so we spent eight to 10 years working in that space working with Amazon. And so, you know, that gave us kind of exposure to the general domain that we ultimately ended up starting a company to serve. So. And then of course you mentioned this in your introduction, but just the, a large portion of the capital to, you know, get ProsperOps off the ground came from Pad at Active and other Rackers as well. So I think in so many ways Rackspace has been an incredible part of our journey. Well, your capital came from what I often hear people refer to as the Racker family, which in itself is a telling phrase. It's curious, what do you think led to that being built that way? Because companies are so bottom line oriented, understandably in this era. What accounts for how that culture built and developed? And you didn't have to be out there to sense it. At the time I was the editor of the Express News and it was just one of the most extraordinary business business stories I think that I've ever encountered in, in my years as a journalist. And what, what made it so special or who made it so special? Yeah, well, I think it was, I think, you know, obviously a lot of the founders will get the credit, but the, the people that came to Rackspace who either grew up here in San Antonio or came to San Antonio to be part of Rackspace were absolutely people cut from sort of a very common cloth. And you could feel the energy when you walked into originally was Data Pointer, it was called Dirty, lovingly Dirty Point, Dirty Point. And then ultimately the former Windsor Park Mall, which was called the Castle. And the energy was just outstanding. And I remember when I had moved here from Dallas and worked from a very large IT services company. So I showed up and you know, Blazer and Ty, the first thing they said is like, look, before we get started, you are going to have to drop all of that. And that was like just the opening salvo in a place that was very much all about the customer, all about the culture and just doing it right. And everybody sort of bought in. You know, I've heard Lanham on a podcast talk about that. You know, it's. You had to build a company like Rackspace in San Antonio because if you were in a city with like lots of other things to do, lots of other pursuits, you couldn't maybe get the same level of buy in. And whether that's true or not, everybody at Rackspace was really bought into the mission and very much felt like a family. And to this day, I think probably not more than a couple days go by without being on a phone call or a text thread or whatever with friends from Rackspace, in addition to all the Rackers that we work with at ProsperOps. You said this, but the company, really, it was all about the customer and about their mantra was fanatical support and about creating this exceptional experience for the customer. And so everything worked back from that. And so it was all about getting the job done and serving the customer. And so, yeah, how you dressed, you know, all these things like, like Rackspace put what mattered first. And that is very powerful. And it was, you know, all the way through the entire sort of company. And, you know, I think when they hired, if people didn't fit in that culture, they just didn't work out, it didn't last. And so I think they hired well, and then if people didn't fit, they sort of moved on. And that allowed this culture to just build over time. Erik, you said you came from a corporate background before Rackspace. I think all of us outside always assumed everybody in there is a programmer that knows how to code. But in fact, it brought together a multitude of people with different skill sets. How did the three of you, Chris, Erik and the other Chris, come to realize that you had specific sets of skills or talents that meshed so well both in that Rackspace period, but later that led you to launch on your own? Yeah, I'm trying to remember when we first met. I don't totally remember, but I remember we had an issue at Rackspace where we had a security vulnerability and we had to do mass migrations of customers in order to patch the underlying vulnerability. And it was through that that I got connected with Chris Keel, our cto, and we just realized we both had this insane commitment to perfecting the experience for the customer and the wording that we were sending them. And I was like, who is this guy on the other end? And even to this day, Chris is sort of incredibly detailed when it comes to any of the copy that we write or any messaging. But I remember getting connected with him, and ultimately he actually started a product inside Rackspace called Rack Connect. So he was entrepreneurial even before what I'm about to talk about. Ultimately, we got connected and worked together for multiple years. And so I got to know Chris very well. And then towards the end of our tenure at Rackspace. You mentioned this in your introduction. We got to start a business called Fanatical aws, where we took Racksafe's fanatical support and we applied it to the Amazon Web Services cloud infrastructure platform. And that's where we really got connected with Chris Cochran. And I'd known of you and respected you, but we never really had a chance to work together directly. And so it was through that experience that the three of us really got to see each other in action, starting a new business and realized that we each had very complementary yet congruent skill sets and ways of thinking about things. And I hadn't really experienced that before. And I think, again, coming back to Rackspace, the blessing of Rackspace is it gave us that chance to work with other high quality people to encounter co founders and people that you would want to basically, you know, pay yourself $25,000 a year to go take a risk on. And so, you know, that I think it's really that falls experience where we saw that there was something special between the three of us. Did the three of you regard yourselves as entrepreneurial in nature before your years at Rackspace? And I wonder incidentally, whether you came into contact with Pat Matthews and knew about him and him creating his own company, selling it to Rackspace, joining Rackspace leadership after that, and if he was an influence on you back then. Yeah. One of the greatest ironies of my life is that I actually grew up on the East Coast. So I grew up in Baltimore. I went to Virginia Tech and lived in the D.C. area before I moved to San Antonio to work for Rackspace. And kind of like in Texas, lots of people went to either A and M or ut. Well, in Virginia it's either UVA or Virginia Tech. And I remember leaving Virginia, moving to Texas, thinking I would leave behind anything related to Virginia Tech. And I come to Rackspace and found out that Rackspace had just acquired Pat's company that was headquartered in Blacksburg, where Virginia Tech is. I got to go back to Blacksburg and visit the Mail Trust office and met Pat through that. So he was definitely a part of the journey because Rackspace acquired a number of companies over the years. And so I got to see these founders come in and really found myself personally gravitating towards them and various entrepreneurs. And so even as a kid, I was doing entrepreneurial things and sort of knew at some point that was an itch that I wanted to scratch. And, you know, I think another aspect of Rackspace is it really just exposed me to other tech founders In a way that helped me to see how to do it and help me realize that, yeah, this is something I can want to go give a shot at some point. Yeah, I mean, we were all largely roughly in our 30s. I mean, I spent most of my 30s at Rackspace. And so many of the other folks, I think Pat's probably around that age roughly, but there was a whole community of folks that had come in from larger companies, more of that stereotypical business background. And then you had the real deal entrepreneurs, Ev Conservoi, Pat Matthews, who started companies early on when they were young, just figured out a way to do it. And so you had a great little one that found a younger Jason seat. Jason. I worked with Jason very closely. You had this whole sort of group of folks that all mixed together. And Chris Keel, other co founder, I think. Did he manage the online presence of one of the big Austin barbecue spots when he was in college? He's just always, always entrepreneur as well. So he ran all their e commerce and websites when he was in high school, I think for Terry Blacks. So you just got to. You just got a sense that anything was possible. And so that was really cool to be in that environment. So I think that's what we want our audience to hear and be inspired by not just the, you know, the Rackspace story, which is a more familiar one, but the prosper Ops story and the fact that people can come together with divergent talents and build something out of nothing. Right here in San Antonio or in the Austin San Antonio corridor will take us back to 2018. You're all out of Rackspace by then. Apollo Management has had it. It's not the company that it was. And what made you decide to start up? Were you doing other things? Was there a lot of risk here? Families all behind this? How did it work out? I'll just say, you know, Erik and Chris are technologists and they are very, very talented technologists. And so for me, when they came up with this idea coming just from sort of the business side. Yeah. What are you? I'm the overhead. I'm the overhead. Really. I'm here for levity. But, you know, it was. It was literally I was telling Erik about this. I felt like when we started, we. We had the benefit of understanding the space that we were going to start a business in because we had gotten familiarity with it at Rackspace. Many of our colleagues had left Rackspace and had got on to be part of the leadership of other companies that ultimately would become our customers. And I got a chance to work with Chris and Erik. We'd been in the same networks for most of our time at Rackspace and then worked together for the last little bit. So when we started, to me it was, I was, I felt like I was dealt a hand with all face cards. So I felt, and I'm the most risk averse guy you could probably ever meet. But in this moment I just thought there's feels like all the stars have lined up and it's time to sort of do it. So we started the business unlike sort of the general mythology of entrepreneurs. We didn't start it right out of college, we didn't start it in a garage, we didn't start it with a blank sheet of paper. We had a lot of context, we had a lot of familiarity with the market. We understood, could you price it, could you make money here? We'd all had experience building multiple businesses at Rackspace and so it was amazing to be able to start and we literally never looked back. Yeah, I mentioned earlier Rackspace kind of allowed us to operate in the domain of cloud infrastructure. And so the ethos of Rackspace was largely about fanatical support. It was about sort of how do you bring humans and technology together for the benefit of the customer. And around that time was sort of the early dawn of AI and you started to see software start to do things that would deliver outcomes versus just be kind of an assistant for humans. And so the inspiration for us was really the world of robo advising. So if you're familiar with a company like A Betterment or Wealthfront, these are robo advisors that will invest your money on your behalf using algorithms and software to watch the market and sort of implement, you know, various financial investing strategies. Well, that I've actually been a longtime Wealthfront customer and we thought, you know, this is. The domain that ProsperOps operates in is called FinOps Financial Operations. And so the cloud is incredibly powerful, but can also be incredibly expensive. And so how do you use it in a cost efficient way? How do you eliminate waste? And so that term didn't even exist in 2018. We just saw that the cloud was becoming increasingly expensive. We saw things like Robo Advisors in the personal investing space. And we said, I wonder if there's a way to take software and do for cloud computing what Robo advisors have done for personal investing, which is automate it. Which is automate it. And so that was the thesis. In fact, our original tagline was the Robo advisor for cloud. And I remember actually meeting with Graham Weston. He was kind of consulting with us in the early days on the marketing. And was it Graham? He's like, what's a robo advisor? And we realized immediately that that was a horrible tagline because you can. No one knew what a robo advisor was. It was like 0 for 10. Well, I guess we gotta get a new tagline. But the principle still holds true, which is how do you basically use software and make it 100% computer science problem to basically not invest money, but manipulate cloud resources and manage them in a way that you can automatically reduce customers costs? So that was the thesis and I think it was. Sometimes the stars just align, right? Chris had left in 2016, Rackspace, and you were CEO of another software company for a little while and you had left or decided to leave, I can't remember. We got reconnected and it was right around the time we were thinking about this. And so the stars just sort of aligned for, you know, we think there's an opportunity here. Let's go. We know our team works well together. We kind of had success at Rackspace building the, what we call the fanatical AWS business and actually became at one point Amazon's largest managed service provider in the world. And so we had seen success inside Rackspace. We saw an opportunity that we thought was novel and everybody was sort of aligning to be available to give it a go. The best tech ideas seem to be those that solve a problem for somebody and prosper. Ops must have done that well. You must have executed that idea well because it seems like you came out of the gate pretty fast, particularly when we consider that you had to navigate the pandemic during, during that startup period. And yet here we are eight years after the launch, nine years after the launch, and that's a pretty short timeline, all things considered. It turns out saving money is sort of a universally applicable concept. So that actually was, I think, great for us. The pandemic was great because everybody was looking to save money. So we happened to have a, a business model and a solution that would actually help in a pandemic like situation or even in good times. You know, people want to, want to save money as well. So I think we were just fortunate with the opportunity. And you know, looking back, it seems like a good idea, but in the early days, you just don't know. We were like, is this even a business? Is this just a feature? Is this just a little thing like finops wasn't even a full blown concept at the time, but you have this kernel of an idea and we kind of knew we could make it work, but we wanted to go see if there was an opportunity there. And so turns out there was. Well, speaking of the pandemic, that's when it introduced the rest of the world outside of tech to remote work. And you didn't have to send employees home because you never had a home. And I wondered, how was that when you started? Would people take seriously a company that didn't have an address, that didn't have a city? People here thought, oh, that's an Austin company. But in fact, you didn't have a physical address anywhere. I forgot about COVID being sort of an intermediary spot of our history. The other week we had our company fly into Austin. And every year we sort of go back through our meetings, our company meetings, or what we call the summits of yesteryear. And, you know, we looked at the. The 2018 one, which was the three of us, and the 2019 one, and then it was like a long skip, like two or three years, I think, during that Covid period where we weren't together. But what was interesting is that even before COVID we were sensing that more and more companies were comfortable doing large deals online, never meeting any the actual provider. And then obviously, during COVID customers became very, very comfortable transacting very large deals that would normally require a flight and maybe multiple days sitting down, breaking bread with a customer. That just went away largely very quickly. So we were able to build the business fast. And our early hires, there's so many things that can go sideways in an early stage company. You want to try to minimize the risk. And so many of our first hires ended up being rackers. And so the remote model, because they're known quantities. They're known quantities. And so the remote model really wasn't a risk for us or a problem because you knew that even if you didn't know the person, you knew you grew up in the same culture, you grew up with the same sort of business values and business approach. And you could just show up on day one and start working together and not have to go through that normal, let's be around each other, let's figure it out, et cetera. We've been remote, and certainly that gravitates to a certain type of person in terms of what they want for their career. But in the early days, it was lots of rackers, and the remote was sort of a feature, not a bug. So do remote first companies have a culture? Oh, 100%, I'd say we do, yeah, for sure. I think One of the things that's important is that you mentioned what we call our summits. And so twice a year we bring the whole company together. We do it in Austin. And, you know, it's a week of sort of intense working together, teaching, team building, education. And those events allow you to interact with people face to face and, you know, laugh together, learn together, work together. And so when you go back and you're on Zoom and you're just seeing a person on a screen, it's a person. You know, I think if you're fully remote, you don't have that type of physical interaction, it becomes much harder. But I think this, this, I'll call it a hybrid model of, you know, we could spend money on an office, or we could take that money and we can put it towards, you know, twice annual summits to bring people together. And, you know, we. The ladder has worked out just incredible for us. We think that's a really powerful model. And quite frankly, just kind of coming back to almost Rackspace as really being, you know, so influential in how we think about business. We actually started that model when we did the falls business. It was actually kind of a remote first. It was kind of epicentered in San Antonio, Austin. But we ended up hiring people all over, and we brought people together for these sort of periodic summits. And so we kind of saw that work. That was another aspect that we sort of brought into prosperous. I'll tell you the other thing, though. Just if you get sort of very pragmatic, for most of the company history, we've kept the number of people very small. I think if you looked at our revenue and you said, if you were in the Bay Area, how many people would you have normally for revenue of a certain scale? The answer might be several hundred thousand people. We've got 100 folks. We tried to build the business from day one with a small number of people. Very, very few layers, if any. So you didn't have a lot of management bureaucracy. And the byproduct of that is that people had real autonomy, they had real ownership. They weren't sort of pigeonholed into a particular function or area that limited what they could work on. And so you really got an environment where people felt like, I'm an owner in this thing. They're empowering. And they were. And so the culture you get when everybody feels like this is sort of our thing collectively, not just your thing or your thing, I think that also makes a difference. So I think pragmatically, small numbers of team with lots of trust and autonomy with very few layers is not a bad way to live. I want to take you back to the decision to sell the Flexera and talk a little bit about that company. But I also want to mention first that in almost all of the founders that I've met from the rack, space world had to resist an earlier opportunity to exit. And they're thankful they did because they continued to build their companies and realized a much greater return on investment as a result. But, you know, if you're individuals that are out there that have never had money, millions of dollars on the table, all of a sudden, it can be very hard to resist that. And to say, well, at this point in time, we're successful, who knows if we'll stay successful? Let's get out. But you guys ultimately, probably with Pat Matthews help, decided to stay longer, and you're reaping the rewards from that. Do you have any reflections on that now, after the fact, over what could have been or almost was or wasn't? I tell my children that entrepreneurship is like the game Deal or no Deal by Howie Mandela. Hopefully your listeners know that, but basically, there's a bunch of suitcases on stage with various amounts of money. And when you expose a suitcase, it could be a high number or a low number, and as suitcases are eliminated, the remaining value is a certain amount. And there's somebody who basically makes you an offer that says you want to take the offer, do you want to proceed? And if you can get all the way to the end and unlock the highest value in the suitcase, you win. You could also bust. And so that's basically like entrepreneurship, which is, you know, each step along the journey, you have to decide do you want to press on or do you want to potentially take a deal? And so that game's largely about luck, calculated risk. Business actually has, you know, there's a lot more nuances to it than that. But, you know, we did start to get offers sort of along the way, and, you know, we had a lot of conviction about what we were building. You know, there was a lot of tailwind to cloud to finops, and, you know, we had advisors that helped us. Right. So Pat was very helpful in helping us think through the opportunity. Should we press on. Matt Bradley is another former racker that was friends and family investor and was instrumental in helping us sort of process these opportunities. And Pat was also creative as well. One of the things he did is he allowed us to sort of take a little bit of money off the table as we were going as a Way to de risk a bit and have the confidence to continue to press on. So all of these things were factors along the way, but ultimately, you know, we, we had the conviction to just keep going. We knew we're kind of onto something special and excited to keep going. So. So what made Flexera the right deal at the right time? That's a name that obviously most in our audience are not going to be familiar with. I mentioned at the outset they're Chicago based, but most of their 2000 plus employees are just scattered. I think they're a remote first company as well and they're all over the world. And looking at their website, they have been on an acquisition spree over the last decade. That's pretty impressive. And they must have been impressive when you first heard that they were interested. We knew of Flexera because in the cloud space there was an early mover in cloud called rightscale and we just interacted with them through our time at Rackspace. And Flexera acquired Rightscale maybe 2018. I don't remember the exact timeframe. So we knew of Flexera through that. There's also a very well regarded technology advisory company called Gartner which releases these things they call Magic Quadrants where they identify the leaders in different spaces. And Flexera was or is a Gartner Magic Quadrant leader in multiple areas. And so we knew them through the Wright School acquisition. We knew of them just because of their leadership in adjacent areas. And so it was a very natural fit because in the world of IT cost management, it's incredibly broad and we're the best in the world at what we do, but there's a very broad problem to solve. And so the idea of sort of teaming up and being able to be a part of a larger capability set where we can really deliver our expertise in the world of public cloud rate optimization and combine, that was sort of very compelling. You talked about the remote first culture. So as we think about coming together and being able to continue on the journey and the mission of delivering world class finops to companies in the world, it's a great cultural fit in terms of the remote workforce. So there's a whole bunch of areas, more than we have time to go into. I don't know if you want to add anything. No, no. I mean the only other item is that technology can be fickle. And going back to Rackspace again, you know, Rackspace really had its time in the sun as customer preferences moved between doing things in their own data center to doing things in the cloud. And Rackspace lived in that transition period. And so I think, you know, one of the things that I picked up from that time is that you really have to stay in tune with how customer preferences are shifting and changing and technology that can be very quickly. And, you know, one of the things that, as Erik talked about, customers want several jobs to be done, not just a job to be done. When you think about your role in solving their problem, you think about how large is that problem, and then who are the partners that I need to be working with that address the totality of what the customer needs to do? How do I position myself best to be part of their future? Flexera was just adjacent in all the spaces that we were not in. So it was a natural fit. And together we can actually solve a set of problems for customers that we would have had. No. Well, we would have had many, many years of building on our own to be able to go and solve. And so it just came together very naturally. And it's largely through the lens of the customer saying, I need someone to solve this set of problems. And together with Flexera, we address a lot of that. It seems like over the last 30 years or so that the pace of technology change has just been perpetually accelerating to where what we're seeing now with AI, for those of us that are incorporating it into our lives, and where it's incorporating our lives into it, whether we're watching or participating, it's breathtakingly fast how fast it's occurring, and companies of all sizes, including the very largest tech companies in the world, are having to rapidly adjust, and it's hard to see what's next in that environment. If you guys know, though, we'd love for you to share it right here. Oh, absolutely. Yeah. We've got the exact script on what's going to happen. There's an intimidating quality to that accelerating change, because you don't know if what's valuable today will be valuable tomorrow or what's next. Yeah. There's also an excitement to it as well. Absolutely. There's very few times, I think, in a lifetime that you come across these significant technology changes. The Internet was one. I think mobile was one. AI is certainly another one. And so that's kind of the point of it is the opportunity for change is so grand that you can't possibly fathom where is this going to go. And so that's part of the exciting aspects of AI as well, is that it'll just unlock new opportunities, new jobs, new things that, you know, aren't even on sort of our radar today. One thing we can say for sure is that the customers or the businesses out there who are obviously trying to adopt it, their costs are going up, skyrocketing. So one thing I can say with certainty is that the businesses that are going to use and be the beneficiaries of AI have this ballooning cost budget that they need help with. And so this is once again, places where companies like Prosperous can help with that, can weigh in. So for all the people you're inspiring in our audience, we're here at Geekdom. Is it a better time or a more challenging time for people that want to start something on their own? Better time for sure, in my opinion. Yeah. Because, you know, the ability to get leverage from AI and do more with less is as great as it's ever been. Right. There's so many things I think about in the early days that we had to go do and figure out that, you know, if we were to do it again, we were kind of talking about this earlier, if we could do it again, but we had AI, we probably would have hired, we would have gone faster, hired less people along the way, but be able to do more with less. And so I think AI is a critical tool to learn for sure. But once you learn it, it gives you leverage in a way that makes starting a company even more compelling. So let's have a brief conversation. We're going to be running out of time here soon about Austin and San Antonio. So Rackspace was in San Antonio. We all know it ran a daily shuttle to Austin to bring people back and forth. You guys have had a foot in each city. What do we have to do to make San Antonio a better, more welcoming environment, to build the tech ecosystem or the startup ecosystem more effectively than we've done in the past? Or are we doing better than. I'm suggesting this is a tough one. You're asking a born and raised San Antonio resident who is by choice, no doubt that's you, Chris. Yes, that's so, you know, actually, I don't know the answer to that question. I'll tell you that. I think there are different folks, some which came out of the Rackspace environment, who've been investing in the city, really trying to bring businesses here. And I think that that matters. Austin right now, for whatever reason, has generated a reputation as sort of a tech satellite hub. I would argue in some ways the reputation exceeds the reality in some ways, but I guess it's all relative. I mean, it's probably relative to SF or New York, but what I found personally was that you need a set of companies to be at different stages of the life cycle. Companies that are pre revenue, companies that are sort of early stage, you know, less than 100 million of recurring revenue, 250 million, 500 million, a billion. And the cities that have that backdrop, I think, end up benefiting disproportionately. I think San Antonio is thin in that area, and that's one of the reasons, I think you saw during this period, lots of talent come into Rackspace, and then when their chapter was over, they departed and left. There just wasn't a set of opportunities where they felt the calculus could be, I can make a life here, I can raise a family here, I can have different jobs that are going to help me grow and achieve whatever my personal goals are. So I think that's been a challenge in San Antonio. I think it's somewhat of a challenge in Austin still. Although I think Austin would suggest that maybe they're a little bit further ahead down the line. I don't know what the right answer is. I know the development in downtown and the move to try to create sort of centricity downtown is, I think, part of how San Antonio is saying. This can be a spot that can be vibrant with lots of arts, lots of culture, lots of innovation and business. People that want to go and build a career here have a long run, but I think it's probably work in progress that is nowhere near where it needs to be. Erik, any thoughts on that? Yeah, there's definitely something happening in Austin in the tech scene. And for me, of the three founders, I'm the one that lives in San Antonio, and I'm here because of Rackspace. But we love San Antonio, and it is. So much of our friends are here and the community of San Antonio, but there is definitely sort of a. The tech scene doesn't compare to what's going on in Austin. So for me, the ability to kind of get the best of both worlds is how I think about my life. There's so many things we enjoy about San Antonio, but the tech scene in Austin is stronger. And so, you know, the ability. I've actually started reading your book, the San Antonio, Austin Mega Region, about these two cities kind of coming together almost like Dallas, Fort Worth. And so I think for me, the question is, like, how does San Antonio, in a sense, almost draft off of what's going on in Austin? And, you know, how do we do more things in a way that, you know, San Antonio's much more affordable place to live, you know, it's hill country setting, just like Austin. And so how are there ways that we can do things to sort of draft and almost bring the two cities closer together? And I don't know all the answers to that, but to me the solution is somehow in these two cities kind of coming together in a way that both cities can benefit from just the combined growth and the benefits of each. It's interesting that we are building our advanced manufacturing sector of the economy so vibrantly here. We had no advanced manufacturing at all until 2008 with Toyota arriving. And the seeds of that were planted back in the 80s when Henry Cisneros was mayor, the lead author on the Mega Region book. And it took a long time for it to take root. But once it did take root, you look now at Port San Antonio and everything happening out near Texas A and M San Antonio, with the arrival of so many other companies, we, we've succeeded there. And those are smart jobs and they're very tech driven. AI is going to have a huge influence in advanced manufacturing. And yet we weren't able to. We had Data Point back in the day and then we had Rackspace, but it, we, it hasn't nurtured into a vibrant, permanent ecosystem. Yeah, maybe I should also just qualify. My comments are largely through the lens of software as a service companies that you'd expect to experience. Your point. Maybe the answer is not for San Antonio and Austin to compare themselves across that one dimension, but to play to their strengths. And if advanced manufacturing tends to be something where there's been critical mass forming, et cetera, then that may be. Is the answer for San Antonio as opposed to, you know, more software companies, et cetera. That chapter might be ending with AI anyway, so play to your strengths. I don't know. Is that ultimately the, is that ultimately the answer for a city like San Antonio? I don't know. And that's what I meant by the best of both worlds. So there are certain things Austin's good at. What are the things San Antonio is good at? How do you sort of draft off each other in a way that, you know, the, the, the sum is greater than the. Or the whole is greater than the sum of the parts? Well, we had Henry Cisneros on the podcast at the end of 2025 to talk about the Mega Region book and our producer here, Corey Ames, I think we had 3,500 comments on that posting and 3,000 of them were about i35. Yeah. And so that's the big impediment to this Mega Region. Fully realizing Its potential, I think, as can people get from A to Z and back. I was on it this morning and the answer is woof. It was terrible, absolutely terrible. So no high speed rail. That would be such an incredible unlock. It seems such an obvious path to take, but we're not there yet. Well, all three of you are now on the Flexera team, but each have considerable personal resources to deploy if you so choose. Last question. What does the future look like for all three of you founders? Honestly, we haven't really started thinking about the long term yet. You mentioned earlier we were talking about resisting opportunities to sell. I think for the three of us, some entrepreneurs start companies effectively to sell them, to flip them. We've always tried to build a company that is meaningful in the space, is delivering real value and just trying to build something that matters. And so we view what's happened with Flexera as being able to give us even more leverage and ability to do that. So we're all right now super committed to just continuing to build and try to do some great things in the FinOps space. Graham Weston had a saying that everyone has a last day at Rackspace at some point. And so, you know, who knows when that's going to be, you know, for us in Flexera, we're not really thinking about that yet. But it wouldn't shock me if at some point we end up doing something together again just because, you know, we've honestly, who you choose if you're going to start a company, your founders are almost like it's like a business marriage, it's like a spouse almost. And so, so many businesses. In fact, you mentioned Jason Seats earlier, who ended up becoming an advisor for techstars, which is a tech startup. And I remember talking to him once and he basically said, I got tired of counseling founders. It was almost like marriage counseling because they were having disputes and issues and he just felt like a business marriage counselor. And I think we've shown that we just have a complimentary skill set and ability to work together that is hard to find. And so who knows what the future holds. But it wouldn't surprise me at some point if we end up doing something together again. I don't know. Do you agree? Yeah. Look, we came over as part of the deal. ProsperOps stayed as a standalone business unit within Flexera and they've been great. And we're continuing to sort of run our play and get sort of the best of both worlds. So that's absolutely how we think about it right now is like, let's just keep going. There's more to do. I agree with Erik. I do feel like that partnership matters so much. And I know personally, Erik and Chris helped me sort of, I think, fulfill the best of my abilities and dampen all my worst tendencies. And in a way that I'm not sure I could recreate that with, with other people. And I'm not even sure I want to at this point. So it's. I could definitely see us doing something. Maybe we'll go build a calendar app or something. Something novel that hasn't been done yet. That's what our co founder says. It's like, why did we pick something that's so hard to do? Next time, let's pick. Let's just build a calendar app and call it a day. I think that's why you're so successful. So thank you so much for coming on to Big City Small Town and sharing your great story. Yeah, thanks for having us. It's been fun. Thanks. All right, y', all, thanks for listening to this episode of Big City Small Town. If you enjoyed this conversation, please share it with friends and colleagues who might find it interesting. You can also sign up for our newsletters, Bob Rivards, Monday Musings and My San Antonio Something. 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