Three decades later, they are the toast of the Texas town, with their unofficial leader, Richard Linklater, fresh off a year of competing for Oscars, with "Boyhood," and the SXSW festival drawing hordes from Hollywood in its 20th year showcasing film.
"We keep getting voted best filmmaking city for independent movies," said Linklater, whom Austin film aficionados know as Rick. "It's a pretty self-sustaining, supportive community, it's not snarky, and it's just big enough to not feel like you're alone."
These weeks, they get plenty of company as 134,000 visitors descended on the city of fewer than a million people last year for the annual South by Southwest (SXSW) festival. Founded in 1987 as a music festival, SXSW has burgeoned into one of the top gatherings of technology, film and music, held over 13 days.
After moving to Austin, Linklater brought together a group of movie lovers to host screenings of films that would not be shown in Texas theaters, accumulating friends such as filmmakers Robert Rodriguez and Mike Judge.
In its 30th year, the Austin Film Society honored founder Linklater and his coming-of-age tale, "Boyhood," at an awards ceremony this week. The director said the organization and his movie community are what keep him living and working more than 1,000 miles away from Hollywood.
"It's up to every artist to put themselves in an environment where you can do your best work," he said. "Austin is where my brain works the best."
'LET THEIR HAIR DOWN'
Linklater, Rodriguez and Judge have paved a path for aspiring filmmakers in Texas, nurturing a community that has served up talent such as Mark and Jay Duplass, David and Nathan Zellner, Andrew Bujalski, Jeff Nichols and Kat Candler.
Filmmaker Katie Cokinos went from working on Linklater's 1991 film, "Slackers," and overseeing the Austin Film Society for a few years to making her directorial debut, "I Dream Too Much," with the director's help over the past year.
"When we were trying to raise money, having Rick present and people seeing that he gave his blessings and liked the script, that definitely helped," Cokinos said. "Rick's been a patron saint of the film."
Over the past two years, 27 feature films have been made with Texas tax credits and incentives, up from just seven over 2011 and 2012. Among the SXSW slate of 150 feature films this year, are 27 made in Texas, or by filmmakers with roots in Texas, including Cokinos' debut.
Unlike Robert Redford's annual Utah-based Sundance Film Festival, which is the top U.S. independent film festival and often serves up critically acclaimed movies, SXSW's film slate reflects Austin's laid-back vibe.
"We're very aware of what Austin means, and in Austin, people let their hair down," Pierson said. "It's fun, there's music and the audiences are smart and enthusiastic."
The premiere of Universal Pictures' comedy, "Knocked Up," at SXSW in 2007 was a game-changer, said the festival's film head Janet Pierson, in showing what films resonated with the Austin crowd.
She developed the festival's lineup of both independent and studio films, often skewing towards crowd-pleasing comedies. This year, 20th Century Fox is bringing Melissa McCarthy's new comedy, "Spy," while Warner Bros. will promote the antics of Will Ferrell and Kevin Hart in the comedy, "Get Hard."