Houston Voices

Houston, we have liftoff: Preparing your startup for launch

What you need to know before your startup takes off. Miguel Tovar/University of Houston

Everyone wants to know how to build a startup. Venture capital, hiring employees, marketing, all happen once you're in the process of actually launching your startup. But nobody ever talks about what needs to happen before you start a startup. What do you have to do to position yourself to be ready to even think about launching your company?

"There is this attitude among universities that it's only a matter of time before you generate massive revenue from your newly developed tech. Fiction. It's fiction. You have to be realistic about what to expect," warns Shay Curran, professor of physics, associate director of the UH Advanced Manufacturing Institute, and CEO and chairman of Integricote, Inc. Shay spoke in front of an engaged audience at the Startup Pains event at the Technology Bridge in early March.



Integricote is one of 28 startups that have launched at the University of Houston over the last decade. This startup is a nanotechnology company that has developed its own brand of reactive penetrating sealers called CaraPro, a non-film-forming sealer that protects wood, stone, and concrete from water damage.

"Integricote didn't just pop up overnight and it certainly didn't start pumping money into my wallet right away. It took a lot of time, patience and sweat just to get to a point where we were ready to even launch the startup," Curran says.

Discovering your tech

Before you even dream about a startup, you have to have something to sell. For Google it was PageRank technology. For Chuck Hull it was the 3D printer. For Integricote it was CaraPro. For Tinder it was love. Okay, maybe not love. Tinder did have an innovative, game changing swipe feature that spawned a generation of dating apps emulating it. The point is, every tech startup starts with the discovery of innovative technology.

"Whenever you ask how long it takes to commercialize your technology, you usually get the same answer. Five years. Sounds great. After a few years you'll commercialize your sci-fi tech and be loaded. That's just not true. Even Google took six years!" Curran tells the audience at the Startup Pains event.

Build your IP profile

The next step on the road to launching your startup is building an IP portfolio. There's a lot more to building your IP portfolio than merely protecting your flux capacitor, or whatever your technology is. A solid IP strategy will protect any artwork, branding, literature, software, or any other aspect of your technology that may qualify for protection by trademark, patent, or copyright.

Your job is to identify at an early stage which parts of your technology can be protected. This is a lengthy process because each kind of IP, whether it be patent, copyright, trade secret, or trademark, has its own unique protocol that will protect them from pirating.

Failure to protect all relevant aspects of your technology before you launch could lead to having to protect it defensively later. That's never a good thing. It is a costly, messy ordeal that involves myriad attorneys and a lot of time away from focusing on your company.

"If you build a single patent, you open the pathway for others to see how you did something, and they tend to go around you. The singular patent is almost dead. It will take a family of patents to cover all your bases and protect your technology in all its aspects," Curran says.

Don't hate — validate

So, you've got this great piece of tech and you have an IP portfolio that protects your technology like a junkyard dog. Sure, it's taken you years to get to this point. It's taken a lot of time, perspiration, mistakes, stress, and Advil, but you're here. It's time to validate your startup idea now.

Validation is essentially proof that your product is something people will pay for. No matter how game-changing your tech is, you won't be making money if people aren't going to pay for it. You could have created a piece of technology that rivals Robin Williams's flubber, it's all for naught if you don't have proof that your tech solves a problem, is something people want, and is something they will actually spend money on.

"First, you'll need to find a problem that's worth solving to commercialize your technology," Curran says. "For Integricote, we found that our product could be used by companies to save money on annual cleaning and renovation expenses, since CaraPro keeps their walls, signs, and structures free of water damage and stains for long periods of time throughout the year. There was no need for them to continue to pay for cleaning multiple times a year."

All systems go

It's time.

You've gone through all of the painstaking, hot coal steps just to get to this point. Pat yourself on the back with that robotic arm you just developed in your lab.

You've discovered highly innovative technology, you've taken the necessary steps to protect it as much as possible, and you've proven that it's marketable and something people will throw their wallets at. It took years. You're almost burnt out. You've pulled your hair out so much people mistake you for Walter White.

What now?

Now, you get to do it all over again.

"Anybody who tells you this is an easy process is either lying or highly uninformed. There will be no sugarcoating here. All of the steps involved in launching and running a company take a long time, and if you're not willing to commit and work hard, there's no point in wasting your own time," says Curran as he wrapped up the Startup Pains event.

Now that you've positioned yourself for launching your startup, it's time to, you know, launch your startup. All you did was complete the road to getting you on the road to bringing your tech to market. Now, you'll get to experience a whole other set of seemingly insurmountable obstacles, frustrating mistakes, and demoralizing setbacks.

Don't worry. The Big Idea's Startup Experience section will produce more pieces to help guide you with the help of established entrepreneurs from UH's Technology Bridge who've been there and done that.

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This article originally appeared on the University of Houston's The Big Idea.

Rene Cantu is the writer and editor at UH Division of Research.

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Building Houston

 
 

Cheers Health has expanded its product line as it evolves as a wellness-focused brand. Photo courtesy of Cheers

Houston-based startup Cheers first got a wave of brand devotees after it was passed over by investors on Shark Tank in 2018. In the years since, Cheers secured an impressive investment, launched new products, and became a staple hangover cure for customers. When the COVID-19 pandemic disrupted businesses, the company rose to the occasion and experienced its first profitable year as drinking and wellness habits changed across America.

Cheers initially started its company under the name Thrive+ with a hangover-friendly pill that promised to minimize the not-so-fun side effects that come after a night out. The capsules support the liver by replacing lost vitamins, reduce GABAa rebound and lower the alcohol-induced acetaldehyde toxicity levels in the body. The company's legacy product complemented social calendars and nights on the town, providing next day relief.

With COVID-19 lockdowns and social distancing measures, the days of pub crawls and social events were numbered. Cheers founder Brooks Powell saw the massive behavior change in people consuming alcohol, and leaned into his vision of becoming more than just a hangover cure but an "alcohol-related health company," he says.

When the pandemic first hit, Powell and his team noticed an immediate dip in sales — a relatable story for businesses in the grips of COVID-19.

"There is a three day period where we went from having the best month in company history to the worst month in company history, over a 72 hour stretch," he remarks.

He soon called an emergency board meeting and rattled off worst-case "doomsday" scenarios, he says.

"Thankfully, we never had to do any of these strategies because, ultimately, the team was able to rally around the new positioning for the brand which was far more focused on alcohol-related health," he says.

"We found that a lot less people were getting hangovers during 2020, because generally when you binge drink, you tend to binge drink with other people," he explains.

He noticed that health became an important focus for people, some who began to drink less due to the lack of social gatherings. On the contrary, some consumers began to drink more to fill the idle time.

According to a JAMA Network report, there was a 54 percent increase in national sales of alcohol for the week stay-at-home orders began last March, as compared to the year prior.

"All of a sudden, you have all of these people who probably aren't binge drinking but they're just frequently consuming alcohol. Their drinks per week are shooting up, and they're worried about liver health," explains Powell.

Outside of day-after support, Cheers leaned into its long-term health products to help drinkers consume alcohol in a healthier way. Cheers Restore, a dissolvable powder consumers can mix into their water, rehydrates the body by optimizing sodium and glucose molecules.

For continued support, Cheers Protect is a daily supplement designed to increase glutathione — an antioxidant that plays a key role in liver detoxification — and support overall liver health. Cheers Protect, which was launched in 2019, became a focus for the company as they pivoted its brand strategy and marketing to accommodate consumer behavior.

"The Cheers brand is just trying to reflect the mission statement, which is bringing people together through promoting fun, responsible and health-conscious alcohol consumption," says Powell. "It fits with our vision statement, which is a world where everyone can enjoy alcohol throughout a long, healthy and happy lifetime,."

At the close of 2020, Cheers had generated $10.4 million in revenue and over $1.7m in profit — its first profitable year since launch.

During the brand's mission to stay afloat during the pandemic, the Cheers team was also laying the groundwork for its entry into the retail space. When Powell launched the company during his junior year at Princeton University, bringing Cheers to brick-and-mortar stores had always been a goal. He envisioned liquor and grocery stores where Cheers was sold next to alcohol as a complementary item. "It's like getting sunscreen before going to the beach, they kind of go hand in hand," he says.

"When we spoke with retailers, specifically bars and liquor stores, what we learned is that a lot of these places were hesitant to put pills near alcohol," he says. Wanting an attractive and accessible mode of alcohol-support, the Cheers team created the Cheers Restore beverage.

Utilizing the technology Cheers developed with Princeton University researchers, the Cheers Restore beverage incorporates the benefits of the pill in a liquid, sugar-free form. The company states that its in-vivo study found that the drink is up to 19 times more bioavailable than pure dihydromyricetin (DHM), a Japanese raisin tree extract found in Cheers products and other hangover-related cures.

"What we figured out is that if you combine DHM — our main ingredient — with something called capric acid, which is an extract from coconut oil, the bioavailability shoots way up," says Powell. He notes the unique taste profile and the "creaminess" capric acid provides. "Now you have this lightly carbonated, zero-sugar, lemon sherbert, essentially liver support, hangover beverage that tastes great in 12 ounces and can mix with alcohol," he explains.

The Cheers Restore beverage is already hitting the Houston-area, where its found a home on menus at Present Company. The company has also run promotions with Houston hangouts like Memorial Trail Ice House, Drift, and The Powder Keg.

Currently, the beverage is only available in retail capacity and cannot be ordered on the Cheers website. As Powell focuses on expanding Cheers Restore beverage presence in the region, he welcomes the idea of expanding nationally in the future to come. While eager customers await the drink's national availability, they can actively invest in Cheers through the company's recently-launched online public offering.

Though repivoting a company and launching a new product is exciting, the process did not come without its caveats and stressors. While Cheers profited as a business in 2020, the staff and its founder weren't immune to the struggles of COVID-19.

"I think 2020 was the first year that it really became real for me that Cheers is far more than just some sort of alcohol-related health brand and its products," says Powell. "Cheers is really its employees and everything that goes into being a successful, durable company that people essentially bet their careers on and their family's well-being on and so forth," he continues.

"It really does weigh on you in a different way that it's never weighed on you before," says Powell, describing the stress of the pandemic. The experience was "enlightening," he says, and he wants others to know it's not embarrassing to need help.

"There is no lack of great leaders out there that at long periods of their life they needed help in some way," he says. "For me that was 2020 and being in the grinder and feeling the stress of the unknown and all of that, but it could happen to anyone," he continues.

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