This past week, Amazon founder and CEO Jeff Bezos spoke at The Economic Club of Washington D.C. , creating another buzz in the press that the DC area would ultimately be the new location for Amazon’s second headquarters (HQ2).
During his speech, spectators sat at the edge of their seats hoping for an announcement (or at least a hint) that DC would be chosen as the location for HQ2.
When confronted directly by interviewer and Economic Club president David M. Rubenstein about where HQ2 will end up, Bezos carefully dodged the question, saying simply that, “a decision would be made by the end of the year,” offering nothing more to the crowd besides increased suspense.
Unlike most of the press and public speakers like Scott Galloway, I’m not convinced that Amazon will choose the DC area, or any city/area along the Northeast United States for the location of HQ2.
Below are 10 of the top reasons why I believe Amazon will choose either Austin or Dallas, Texas as the location for their much anticipated new headquarters.
TOP 10 REASONS AMAZON WILL CHOOSE TEXAS FOR HQ2
- Best State for Business – What company wouldn’t want to operate in a state with a strong infrastructure and low cost of doing business? Simply put, Texas is a magnet for business.
- Climate – Winters suck! I may be biased, but I’ll happily avoid a winter in Boston, NYC, or DC. In Texas, it’s practically summer year around. No need putting on multiple clothing layers, avoiding the ice, shoveling snow off your driveway, or calling in sick because it’s too cold to get out of bed. Good weather, means higher productivity, happier employees, easier shipping, and other benefits that Amazon is certainly factoring into their decision.
- People – Austin has become a tech hub, with industry leaders like Apple, Google, IBM, and Oracle, all increasing their presence and local human capital. Texas is also home to 6 of the country’s top 20 largest cities. So their is a large population of people already in urban communities in Texas. And as many Yankees may disagree, we are educated down here in the South! Texas ranks in the top four for number of Colleges and Universities.
- Acquisition of Whole Foods – Enough about Jeff Bezos purchasing a $23 million home in DC (which he paid for in cash)… What about Amazon’s recent $13 billion acquisition of Whole Foods? Amazon has made it clear they’d like to take over the grocery game. For those of you who don’t know, Whole Foods is headquartered out of Austin, Texas. Also, Texas has a reputation and history for helping large companies (like Sam Walton with Wal-Mart) scale for new markets.
- Time Zone/Geographic Location – Texas is in the Central Standard Time (CST) zone. This is one hour behind Eastern Time (ET), and two hours behind Pacific Time (PT). Since Amazon is currently headquartered out of Seattle, it would make sense to have their new headquarters in a time zone closer to what they’re currently operating under (PT). This will make it easier for executives from both locations (HQ1 and HQ2) to schedule meetings and stay in sync.
- Dell EMC – Amazon Web Services (AWS) accounts for roughly 10% of Amazon’s total revenue, and is quickly growing. In fact, this division of Amazon is so large that if it were its own company, AWS would rank as the fifth largest software business in the world. Many people don’t realize this, because Amazon has far more customers on Amazon.com than they do AWS customers – but that side of their business is quietly booming. In general, AWS is working to provide companies IT infrastructure. Dell EMC may have a different strategy for infrastructure, but this market (IT infrastructure) is exactly what they’re targeting as well, making AWS and Dell EMC direct competitors. Dell EMC is headquartered out of Round Rock, Texas (just north of Austin). What better way to take on a competitor than to build a brand new shiny HQ right in their backyard.
- Bezos’ Preference – It’s no secret that Jeff Bezos is a fan of Texas. Having spent his summers from age 4-16 on his grandparents ranch in Texas, Bezos refers to these memories as some of the most meaningful times in his life. Leading me to believe that Mr. Bezos is a cowboy at heart. Oh, and did I mention that he’s cousin with George Strait? Better known as the “King of Country” music.
- Blue Origin – At a number of occasions (including this past week in DC), Bezos has said that he believes the most important work he will do in his life will be with his space company Blue Origin. Where is Blue Origin headquartered? You guessed it, TEXAS baby. Texas is also home to NASA’s Johnson Space Center, which was established in 1961 as the Manned Spaceflight Center, the home and Mission Control Center for the U.S. human space flight program. It’s also no argument that Houston, Texas is “Space City”.
- Relations with Mexico – When Amazon initially announced plans to build a second headquarters, the list included 238 cities. The locations weren’t limited to the US, as a couple spots in Canada and multiple locations in Mexico were originally up for consideration. Amazon is a global company, with global ambitions. They have their eyes set on the future, looking much further than the USA horizon.
- Republican Backing – Many believe that DC will win the bid for HQ2, because Amazon would like to strengthen relations with the Federal Government and Executive Branch. This makes sense, because Amazon’s rapid growth and tremendous size, put them in uncharted and potentially dangerous waters. In the last few decades, most technology companies seem to lean Democrat. So it’s no shock that President Trump (and other Republicans) might not support Amazon’s goals. I think it would be a smart political move for Amazon to make an alliance with Texas. An alliance with Texas would give Amazon the backing of a very strong (if not the strongest) state that is traditionally red.
Oh, and what’s this???