All's Dell

So long to slackers and laid-back lifestyles. Now that cash-rich techies have taken over, can Austin survive the great digital divide?

Internet access as a solution for the digitally divided is pooh-poohed as a solution by even Ana Sisnett, who was named one of the most powerful Texans in high tech by a business magazine. Sisnett, a soft-spoken Panamanian native, serves as head of Austin Free-Net, a nonprofit group that provides free computers and Internet access to Austin public sites. The problem is not the skin color or the ethnic background of the digitally divided, Sisnett says. "It's not about black and Latino people not having access to computers," she says. "It's about poor people not having access to computers. It's just a rearticulation of old issues, like racism, sexism and classism."

Talking to people like these, you get the impression that they think the digital divide is something a bunch of rich, white, well-educated techies cooked up to explain away their outsize share of the wealth. Talking to a well-educated registered professional engineer like Dr. Sterling Lands, pastor of the Greater Calvary Missionary Church in East Austin, that impression is resolved into a certainty, at least in his view.

"It's a euphemism that covers up a bigger problem," says Lands. He describes the whole idea of a digital divide as something dreamed up by people who know nothing about the communities they claim to be describing. "Who in the hell cares about computers in the library?" he asks. "It just makes them feel good," he says. "Then they go back and shake each others' hands." What companies like Dell should do, if they want to help, he says, is provide jobs for people who lack technical skills, not donate computers to public-access sites.

Nate Hess loaded up with loot and a flashy car after his move from California.
John Anderson
Nate Hess loaded up with loot and a flashy car after his move from California.

Community leaders and activists in East Austin, itself a euphemism for minorities and poor people, describe West Austin -- the flip side of that euphemism -- as out of touch. But they don't describe much of an effort to inform the techies of reality. Sisnett, for example, didn't attend the much-touted 360.00 Summit, an opulent gathering of hundreds of local venture capitalists, entrepreneurs and other members of the technology industry that took place in the spring. Its avowed intention was to boost social equity and include "all citizens in the economic success of our region," she explains. "The focus for a gathering like that was not to have nonprofit groups."

There were, however, numerous nonprofits at the 360.00 Summit, which was otherwise distinguished by having Zandan and another local entrepreneur ride mountain bikes onto a stage and invite the audience to pelt them with thousands of Wiffle Balls. One of those on hand was Paula Fracasso, executive director of a new organization called the Austin Entrepreneurs Foundation.

Fracasso, at 31 a veteran of Austin fund-raising and community improvement organizations, is heading up an experiment in corporate philanthropy. Wally Bock, CEO of Dazel Corp., which was sold to Hewlett-Packard, began AEF as a way to tap the nascent equity value in startup ventures. Instead of making cash contributions, young technology companies are urged to donate shares of their companies. That stock is generally worth little to begin with; some of her 31 member companies' shares are valued at as little as a dime. Fracasso says the idea is that when the companies go public, the shares could be worth millions. Her largest stock donor has given the foundation 50,000 shares. "The potential for the size of this foundation," Fracasso enthuses, "is limitless."

That's on the upside, of course. The downside potential is extensive as well. There's a good chance many or even all of the companies in her portfolio will never amount to anything. Only one, Silicon Laboratories, has gone public, and Securities and Exchange Commission insider trading rules prevent Fracasso from selling her shares for a year.

Still, she says it's not all about the money. AEF wants to tap the entrepreneurial creativity and energy of these famously hardworking and innovative entrepreneurs, and apply their ideas and risk-taking attitude to social works. Those entrepreneurs' risk orientation doesn't mean letting go of their wealth entirely, however. Though AEF has the shares, the donors will get to decide how the money will be spent, if it ever is. Fracasso hopes to have money to give out in six months to a year, depending on the results of her negotiations with the SEC for an exception to the insider trading rules. When that happens, there's no telling where the donors will decide to spend it, although education and infrastructure (read: roads) will probably get a hard look.

Her vision for how AEF will help Austin, says Fracasso, is rooted in the memories she has built up since moving there as a girl in 1976. Looking ahead 50 years, she says, "If you can still swim in Barton Creek and see the capitol from Bluebonnet Hill -- and we're producing world-class companies -- that's the bare minimum of what we want to achieve."

Relatively few of the techies, of course, are taking much time from their pursuit of mammon to take dips in Barton Springs. And even for those who got here early, worked hard, stayed late and seemed to have everything going for them, there's no guarantee of vast wealth. Harry Pape arrived from Wichita in 1989, intending to become a policeman. But he quickly was seduced by the computer business and started working at a small company called ABM Data Systems that sold to the security industry. Then came a string of startups in hardware, software and, finally, the Internet. Pape has worked with or for more than a half dozen total.

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