Startup wishlist

Houston needs 4 things to emerge as a startup hub, according to this entrepreneur

Houston has the potential to be a great place for startups, but it might need some fine tuning. Photo by Scott Halleran/Getty Images

I often think about why Houston's entrepreneurship ecosystem hasn't taken off as much as it should, given the talent pool and the industrial gravity that's concentrated here.

I joined Station Houston as one of the very early members in January of 2016 and since then been watching all the moving parts in the Houston innovation ecosystem as an entrepreneur. I wanted to share four practical ideas on how Houston can emerge as a startup hub.

1. Houston entrepreneurship needs to focus on deep tech and multidisciplinary endeavors
I believe a lot of breakthrough innovations will come from the interaction between different scientific disciplines or industries. We can target startups built on multidisciplinary sciences and provide a support system for them to thrive in Houston. We have the absolute best engineers, rocket scientists, and doctors in Houston, yet they aren't talking to each other as much as they should. Programs like Pipes and Pumps are great, but we need a modernized initiative that goes beyond holding a one-day event per year. A methodical and continuous program that brings professionals from energy, space, and medicine together to address the challenges these industries face. This may sound crazy, but it works. For example, my last startup commercialized DNA Sequencing in the oil and gas industry. Another startup is using microfluidics to simulate the reservoir, and there are startups using satellite data to identify methane emissions. Now, imagine if we were systematically identifying these opportunities and incubating these startups in Houston. We would be unstoppable and, more importantly, we would be ourselves. Let's help our entrepreneurial doctors, scientists, and engineers launch deep technology startups instead of trying to make apps.

2. Houston needs a structured startup program
Let's be honest, coworking space and 30-minute sessions with mentors isn't going to cut it. First-time entrepreneurs need a lot of help to gain experience and kick start their business model. What's missing is a structured program that can take a talented entrepreneur from the idea stage to raising their seed round (better or at least similar to Creative Destruction Lab or Breakout Lab).

3. Focus on helping the entrepreneurs, and the ecosystem will flourish
Any initiative around entrepreneurship that doesn't boil down to helping entrepreneurs is effectively useless. We need to pass all activities through the "entrepreneur benefit" filter. The current suite of entrepreneurship activities in Houston are skewed towards self-celebratory warm and fuzzy feeling for the ecosystem; we need to shift the attention and resources to entrepreneurs who are in the trenches trying to make it to the next level. Once we have good entrepreneurs, we will have good exits which makes investors happy and incentivize them to invest more. Those entrepreneurs then start building other companies or turn investor and this cycle gradually builds the ecosystem. What's happening now is quite the opposite; all the attention is on building the ecosystem and hoping that it's going to make everything else happen/

4. Houston could be the home for moonshots
Moonshots come from the application of deep technology, and I can't think of a better place to be the home for moonshot startups than Houston. From cure for cancer to rockets to Mars, to reversing climate change via CO2 capture and utilization. That said ideating and incubating moonshots requires vision and the appetite for risk-taking. The good news is that this model really works. As proof look at the OS Fund amazing and astronomically successful portfolio of the companies. According to Bryan Johnson, "OS Fund is investing in deep tech companies that marry hard science and technology to solve big problems and make money." We need a new breed of investment firms such as OS Fund in Houston.

Imagine if we had a portfolio of multidisciplinary deep technology startups in Houston, going through a rigorous program and had the support of the Houston industrial magnets and investors to take off. Now that's what Houston deserves.

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Moji Karimi is co-founder and CEO of Houston-based Cemvita Factory Inc.

A new report from the Greater Houston Partnership found that Houston saw over $33 billion in foreign investments over the past 10 years. Photo by Scott Halleran/Getty Images

Throughout the past decade, over 500 foreign-owned companies from 36 countries have planned investments in Houston. The investments are spread across more than 600 deals within 63 industries in Houston. Adding up the amount of disclosed valuations, the total exceeds $33 billion.

The city has a lot to offer these companies from all over the world, says Greater Houston Partnership's senior vice president of research, Patrick Jankowski, in a release.

"These foreign-owned companies came to Houston for a variety of reasons, from being closer to their clients to establishing a beachhead for entering the U.S. market," Jankowski says in the release.

The information is compiled in the new Global Houston report from the GHP that analyzes data on foreign investment over the past decade. The research shows that now

The foreign investment movement greatly impacts the local economy, Jankowski adds.

"It infuses new capital into the region, expands the manufacturing base, helps underpin jobs, facilitates the exchange of ideas and best practices, increases trade, adds to the tax base and stimulates growth," he says.

Aside from the investments, the report found that locally, more than 2,500 Houston manufacturing firms have their hands in global trade. Around 17.3 percent of Houston's economy is related to exports, which amounts to double than what was recorded in 2003, according to the Brookings Institution. The Bayou City regularly leads the nation in exports, such as oil field services, refined products, chemicals, and fabricated metals.

The report also took into account Houston's diversity, which has also evolved over the past 10 years. About one in four residents are born outside the country, and a third of the population growth is attributed to immigrants — who account for 390,000 of the city's new residents. In 2017 alone, foreign-born Houstonians made up almost a third of the total GDP of Houston, or $142.1 billion.

"Over the last couple of decades, Houston's economy has become more diversified," says Bob Harvey, GHP president and CEO, in a news release. "We've surged beyond traditional oil and gas to include a burgeoning energy tech and renewables industry, a thriving life sciences and healthcare sector, and a robust advanced manufacturing ecosystem. And in that time, as this report shows, Houston's trade and investment ties with the rest of the world have grown as well. These global connections are essential to our long-term success."

In 2018, Houston's top five trade partners all increased activity. The top countries are, Mexico ($24.6 billion in 2018, compared to $20.1 billion in 2017), China ($20.3 billion, compared to $18.8 billion in 2017), Brazil ($12.9 billion, compared to $12.6 billion in 2017), The Netherlands ($10.4 billion, compared to $8.6 billion in 2017), and South Korea ($10.3 billion, compared to $6.8 billion in 2017).

By the numbers

Here are some key findings from the report.

  • The Houston/Galveston Customs District handled 289.2 million tons of cargo in 2018, or 33,000 metric tons every hour.
  • The Houston/Galveston Customs District ranked first in the nation in foreign tonnage handled and 7th in the nation by dollar value in 2018.
  • The three ports of Houston, Galveston and Freeport support 343,525 jobs, according to a report from Martin & Associates and Texas A&M University
  • Of Houston's 1.6 million foreign-born residents, 39.8 percent are naturalized (i.e. U.S. citizens). That's up from 32.3 percent a decade ago.
  • Latin America leads among regions of origin for Houston's foreign-born population with 1.02 million people in 2017, up 42 percent from 2008. Asia follows at 409,395, up 37 percent and Africa with 95,017, a 14 percent increase.