A new study declares that Houston boasts the talent pool, tax advantages, and business-friendly environment to lead in energy transitions. Photo via Getty Images

These days, the term "green energy" has quickly evolved from a potential new resource avenue to political lighting rod — especially in Houston. But now, a new report suggests that the nation's oil and gas leader could be primed to be a green leader.

Houston's "energy capital of the world" status is here to stay — no matter the type of energy — says a new report from Rice University's Baker Institute for Public Policy. The study declares that Houston boasts the talent pool, tax advantages, and business-friendly environment to lead in energy transitions.

"With the Port of Houston consistently ranked the nation's largest for waterborne tonnage, foreign imports and vessel transits, Houston has earned its stripes as a global epicenter for logistics and complex supply chain operations," Rice's Ken Medlock notes.

"Managing supply chains, handling materials and deep expertise in chemistry and engineering are all skill sets that drive the oil and gas industry, and they form the basis of Houston's comparative advantage. All are transferable, and will remain important for the development and delivery of all energy services."

The Bayou City is actually "well-positioned" to pioneer the continuing evolution of the global energy system, the study continues.

Public perception aside, Texas is already prepared for the green energy transition, Medlock continues, offering up these stats:

Texas already has more wind capacity than any other state (more than 26 percent of the entire U.S.), and the Lone Star State is home to almost 10 percent of the nation's installed solar capacity and 10 percent of the nation's installed battery capacity

Texas currently accounts for 20 percent of the nation's total non-hydro renewable power capacity, despite only accounting for only 11 percent of the nation's total installed generation capacity.

"This means Texas is ranked No. 1 in wind capacity, No. 2 in battery capacity and No. 3 in solar capacity among every state in the U.S., which puts Texas at the top of all states in terms of installed green power technology capacity," says Medlock.

More on the report can be found here.

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This article originally ran on CultureMap.

Rice's Baker Institute has done it again. Courtesy of Rice University

Brainy Rice University institute named No. 1 think tank in the world

top dog

Furthering its reputation as a world-class educational and intellectual hallmark, Rice University has ascended to the top of yet another ranking.
The school's Baker Institute for Public Policy has been named the No. 1 think tank in the world, according to the 2020 Global Go To Think Tank Index Report published January 28. This is a leap from No. 2 overall last year.

Additionally, its Center for Energy Studies (CES) was again named the top energy and resource policy think tank and was recognized as a Center of Excellence for being ranked No. 1 for three consecutive years, per a press release.

Rice's Baker Institute is also ranked No. 15 out of 110 of the top think tanks in the U.S. overall. It is also listed among the best think tanks globally in the category "Best Quality Assurance and Integrity Policies and Procedures."

Also on the prestigious list are the London School of Economics and Political Science (No. 2) and Institute of Development Studies at the University of Sussex, U.K. (No. 3).

Meanwhile, CES is followed in the regular rankings by the Oxford Institute for Energy Studies, U.K., and the Institute of Energy Economics, Japan.

Founded in 1993, the Baker Institute houses fellows and scholars who conduct research on domestic and foreign policy issues. Core fields of study include energy, the Middle East, Mexico, health policy, public finance, private entrepreneurship and economic growth, international economics, presidential elections, science and technology, China, space policy, and drug policy, according to the school.

CES was founded in October 2012 and provides policymakers, corporate leaders, and the public with quality, data-driven analysis of issues that influence energy markets, per Rice. The Baker Institute Energy Forum is considered an integral part of CES by the university.

"The rise of the Baker Institute and our Center for Energy Studies to the very top rankings in this year's Global Go To Think Tank Index is the culmination of what we created over a quarter of a century ago and of our adherence to excellence in data-driven, nonpartisan research and policy recommendations on public policy issues that reach decision-makers in the private and public sectors," said Baker Institute director Edward Djerejian, in a statement. "I commend all our fellows, scholars and staff, as well as our Board of Advisors and Roundtable members, for this outstanding achievement."

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This article originally ran on CultureMap.

Rice's Baker Institute could change the fortunes of rural Texans. Photo via rice.edu

Houston program in the running for prestigious $10 million prize

Rice to the rescue

Rice University is once again in the spotlight for innovation, this time for its work in potentially assisting rural communities across the Lone Star State. And this idea could score the university a $10 million prize.

A new project proposed by the Rice's Baker Institute for Public Policy is among five finalists for the coveted Lone Star Prize, the school announced. The Baker Institute project proposal, titled "Texas Dirt: The Key to Environment, Economy and Resilience," aims to transform the state's environment "through implementation of a soil carbon storage market while growing new economic opportunities for rural Texans" according to a press release.

Atmospheric accumulation of carbon dioxide (CO2) contributes to climate change, which disproportionately affects poor and marginalized populations, according to the Baker Institute team.

"Rural communities have long been disadvantaged relative to the urban and industrial centers that are focal points for economic activity and CO2 emissions," the team wrote in a project description. "A soil carbon market is a Texan approach that addresses both of these issues as part of a long-term solution." The team aims to "implement a Texas soil carbon storage market that utilizes photosynthesis to abate atmospheric CO2 by storing it as organic matter in soils of prairies, farms, ranches and grasslands of Texas."

Beyond an economic boost, say the team, benefits the Texas water supply, regional flood resilience, and the restoration of local ecosystems.

As for the prestigious prize, the Texas-based, statewide competition was launched in early 2020 by Lyda Hill Philanthropies and Lever for Change to improve the lives of Texans and their communities, per a statement.

Project members include attorney Jim Blackburn, a professor in the practice of environmental law at Rice and co-director of the university's Severe Storm Prediction, Education and Evacuation from Disasters Center (SSPEED); Caroline Masiello, a professor of Earth, Environmental and Planetary Sciences at Rice; and Kenneth Medlock, the James A. Baker III and Susan G. Baker Fellow in Energy and Resource Economics and senior director of the Baker Institute's Center for Energy Studies.

Other statewide finalists include Austin's JUST Community, which invests in low-income, female entrepreneurs to create more resilient communities in the U.S.; Dallas-based Meadows Mental Health Policy Institute, which will will improve quality of life and mental health access; the Dallas location of Merit America, which will will build new pathways to upwardly mobile careers for low-wage Texans without bachelor's degrees; and Austin's Texas Water Trade, which aims to deliver clean water to households most in need.

More than 172 proposals were submitted for the Lone Star Prize. A final grant recipient will be announced in late spring 2021.

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This article originally ran on CultureMap.

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CultureMap Emails are Awesome

7 lessons from a Houston-based unicorn startup founder

taking notes

At a fireside chat at SXSW, a Houston founder pulled back the curtain on his entrepreneurial journey that's taken him from an idea of how to make the chemicals industry more sustainable to a company valued at over $2 billion.

Gaurab Chakrabarti, the CEO and co-founder of Solugen, joined the Greater Houston Partnership's Houston House at SXSW on Monday, March 13, for a discussion entitled, "Building a Tech Unicorn." In the conversation with Payal Patel, principal of Softeq Ventures, he share the trials and tribulations from the early days of founding Solugen. The company, which has raised over $600 million since its founding in 2016, has an innovative and carbon negative process of creating plant-derived substitutes for petroleum-based products.

The event, which quickly reached capacity with eager SXSW attendees, allowed Chakrabarti to instill advice on several topics — from early customer acquisition and navigating VC investing to finding the right city to grow in and setting up a strong company culture.

Here are seven pieces of startup advice from Chakrabarti's talk.

1. Don’t be near a black hole.

Chakrabarti began his discussion addressing the good luck he's had standing up Solugen. He's the first to admit that luck is an important element to his success, but he says, as a founder, you can set yourself up for luck in a handful of ways.

“You do make your own luck, but you have to be putting in the work to do it," Chakrabarti says, adding that it's not an easy thing to accomplish. “There are things you can be doing to increase your luck surface area."

One of the principals he notes on is not surrounding yourself with black holes. These are people who don't believe in your idea, or your ability to succeed, Chakrabarti explains, referencing a former dean who said he was wasting his talent on his idea for Solugen.

2. The co-founder dynamic is the most important thing.

Early on, Chakrabarti emphasizes how important having a strong co-founder relationship is, crediting Solugen's co-founder and CTO Sean Hunt for being his "intellectual ping-pong partner."

“If you have a co-founder, that is the thing that’s going to make or break your company,” he says. “It’s not your idea, and it’s not your execution — it’s your relationship with your co-founder.”

Hunt and Chakrabarti have been friends for 12 years, Chakrabarti says, and, that foundation and the fact that they've been passionate about their product since day one, has been integral for Solugen's success.

"We had a conviction that we were building something that could be impactful to the rest of the world," he says.

3. Confirm a market of customers early on.

Chakrabarti says that in the early days of starting his company, he didn't have a concept of startup accelerators or other ways to access funding — he just knew he had to get customers to create revenue as soon as possible.

He learned about the growing float spa industry, and how a huge cost for these businesses was peroxide that was used to sanitize the water in the floating pods. Chakrabarti and Hunt had created a small amount of what they were calling bioperoxide that they could sell at a cheaper cost to these spas and still pocket a profit.

“We ended up owning 80 percent of the float spa market,” Chakrabarti says. “That taught us that, ‘wow, there’s something here.”

While it was unglamourous work to call down Texas float spas, his efforts secured Solugen's first 100 or so customers and identified a path to profitability early on.

“Find your niche market that allows you to justify that your technology or product that has a customer basis,” Chakrabarti says on the lesson he learned through this process.

4. Find city-company fit.

While Chakrabarti has lived in Houston most of his life, the reason Solugen is headquartered in Houston is not due to loyalty of his hometown.

In fact, Chakrabarti shared a story of how a potential seed investor asked Chakrabarti and Hunt to move their company to the Bay Area, and the co-founders refused the offer and the investment.

“There’s no way our business could succeed in the Bay Area," Chakrabarti says. He and Hunt firmly believed this at the time — and still do.

“For our business, if you look at the density of chemical engineers, the density of our potential customers, and the density of people who know how to do enzyme engineering, Houston happened to be that perfect trifecta for us," he explains.

He argues that every company — software, hardware, etc. — has an opportunity to find their ideal city-company fit, something that's important to its success.

5. Prove your ability to execute.

When asked about pivots, Chakrabarti told a little-known story of how Solugen started a commercial cleaning brand. The product line was called Ode to Clean, and it was marketed as eco-friendly peroxide wipes. At the time, Solugen was just three employees, and the scrappy team was fulfilling orders and figuring out consumer marketing for the first time.

He says his network was laughing at the idea of Chakrabarti creating this direct-to-consumer cleaning product, and it was funny to him too, but the sales told another story.

At launch, they sold out $1 million of inventory in one week. But that wasn't it.

“Within three months, we got three acquisition offers," Chakrabarti says.

The move led to a brand acquisition of the product line, with the acquirer being the nation's largest cleaning wipe provider. It meant three years of predictable revenue that de-risked the business for new investors — which were now knocking on Solugen's door with their own investment term sheets.

“It told the market more about us as a company,” he says. “It taught the market that Solugen is a company that is going to survive no matter what. … And we’re a team that can execute.”

What started as a silly idea led to Solugen being one step closer to accomplishing its long-term goals.

“That pivot was one of the most important pivots in the company’s history that accelerated our company’s trajectory by four or five years," Chakrabarti says.

6. Adopt and maintain a miso-management style.

There's one lesson Chakrabarti says he learned the hard way, and that was how to manage his company's growing team. He shares that he "let go of the reins a bit" at the company's $400-$500 million point. He says that, while there's this idea that successful business leaders can hire the best talent that allows them to step back from the day-to-day responsibilities, that was not the right move for him.

“Only founders really understand the pain points of the business," Chakrabarti says. "Because it’s emotionally tied to you, you actually feel it."

Rather than a micro or macro-management style, Chakrabarti's describes his leadership as meso-management — something in between.

The only difference, Chakrabarti says, is how he manages his board. For that group, he micromanages to ensure that they are doing what's best for his vision for Solugen.

7. Your culture should be polarizing.

Chakrabarti wrapped up his story on talking about hiring and setting up a company culture for Solugen. The company's atmosphere is not for everyone, he explains.

“If you’re not polarizing some people, it’s not a culture,” Chakrabarti says, encouraging founders to create a culture that's not one size fits all.

He says he was attracted to early employees who got mad at the same things he did — that passion is what makes his team different from others.

3 Houston innovators to know this week

Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to three local innovators across industries — from space tech to software development — recently making headlines in Houston innovation.


Michael Suffredini, CEO and president of Axiom Space

Axiom's CEO announced a new mission and space suit design. Photo courtesy of Axiom Space

It was a big news week for Axiom Space. The Houston company announced its next commercial space mission with NASA to the International Space Station a day before it unveiled its newly design space suit that will be donned by the astronauts headed to the moon.

“We’re carrying on NASA’s legacy by designing an advanced spacesuit that will allow astronauts to operate safely and effectively on the Moon,” says Micahel Suffredini, CEO of Axiom, in a statement. “Axiom Space’s Artemis III spacesuit will be ready to meet the complex challenges of the lunar south pole and help grow our understanding of the Moon in order to enable a long-term presence there.”

Called the Axiom Extravehicular Mobility Unit, or AxEMU, the prototype was revealed at Space Center Houston’s Moon 2 Mars Festival on March 15. According to Axiom, a full fleet of training spacesuits will be delivered to NASA by late this summer. Read more.

Julie King, president of NB Realty Partners

Houston's access to lab space continues to be a challenge for biotech companies. Photo via Getty Images

In terms of Houston developing as an attractive hub for biotech companies, Julie King says the city still has one major obstacle: Available lab space.

She writes in a guest column for InnovationMap that biotech startups need specialized space that can hold the right equipment. That's not cheap, and it's usually a challenge for newer companies to incur that cost.

"However, with realistic expectations about these challenges, the good news is that once settled into a facility that is a fit, Houston’s emerging biotech companies can thrive and grow," she writes. Read more.

Owen Goode, executive vice president at Zaelot

Houston software development firm Axon is planning its Texas expansion thanks to its recent acquisition. Photo via LinkedIn

Owen Goode is a huge fan of Houston. That's why when his software design firm, Axon, got acquired by Zaelot, led by CEO Jeff Lombard, in January, he made sure the deal would mean growth in the region.

Zaelot is a global, software firm with a presence in 14 countries, mostly focused in the United States, Uruguay, and Iceland. With the acquisition of Axon, the combined company is poised to expand in Texas, beginning in Houston, Goode says.

“Together we have a strong suite of offerings across a wide variety of domains including full-stack development, cloud/data engineering, design, staff augmentation, project management, and software architecture. We also have experience in multiple domains, including health care, aviation, defense, finance, and startups,” says Goode. Read more.

Following Silicon Valley Bank collapse, banking diversification is key for Houston founders

SVB shake up

Last week, Houston founder Emily Cisek was in between meetings with customers and potential investors in Austin while she was in town for SXSW. She was aware of the uncertainty with Silicon Valley Bank, but the significance of what was happening didn't hit her until she got into an Uber on Friday only to find that her payment was declined.

“Being positive in nature as I am, and with the close relationship that I have with SVB and how they’ve truly been a partner, I just thought, ‘OK, they’re going to figure it out. I trust in them,'” Cisek says.

Like many startup founders, Cisek, the CEO of The Postage, a Houston-based tech platform that enables digital legacy planning tools, is a Silicon Valley Bank customer. Within a few hours, she rallied her board and team to figure out what they needed to do, including making plans for payroll. She juggled all this while attending her meetings and SXSW events — which, coincidentally, were mostly related to the banking and fintech industries.

Sandy Guitar had a similar weekend of uncertainty. As managing director of HX Venture Fund, a fund of funds that deploys capital to venture capital firms around the country and connects them to the Houston innovation ecosystem, her first concern was to evaluate the effect on HXVF's network. In this case, that meant the fund's limited partners, its portfolio of venture firms, and, by extension, the firms' portfolios of startup companies.

“We ultimately had no financial impact on venture fund 1 or 2 or on any of our portfolio funds or our underlying companies,” Guitar tells InnovationMap. “But that is thanks to the Sunday night decision to ensure all deposits.”

On Sunday afternoon, the Federal Deposit Insurance Corp. took control of SVB and announced that all accounts would be fully insured, not just up to the $250,000 cap. Customers like Cisek had access to their accounts on Monday.

“In the shorter term, the great news is SVB entity seems to be largely up and functioning in a business as usual manner,” Guitar says. “And they have a new leadership team, but their existing systems and predominantly the existing employee base is working well. And what we're hearing is that business as usual is taking place.”

Time to diversify

In light of the ordeal, Guitar says Houston founders and funders can take away a key lesson learned: The importance of bank diversification.

“We didn't think we needed one last week, but this week we know we need a resilience plan," she says, explaining that bank diversification is going to be added to "the operational due diligence playbook."

"We need to encourage our portfolio funds to maintain at least two banking relationships and make sure they're diversifying their cash exposure," she says.

A valued entity

Guitar says SVB is an integral part of the innovation ecosystem, and she believes it will continue on to be, but factoring in the importance of resilience and diversification.

"Silicon Valley Bank and the function that they have historically provided is is vital to the venture ecosystem," she says. "We do have confidence that either SVB, as it is currently structured or in a new structure to come, will continue to provide this kind of function for founders."

Cisek, who hasn't moved any of her company's money out of SVB, has similar sentiments about the importance of the bank for startups. She says she's grateful to the local Houston and Austin teams for opening doors, making connections, and taking chances for her that other banks don't do.

"I credit them to really being partners with startups — down to the relationships they connect you with," she says. "Some of my best friends who are founders came from introductions from SVB. I've seen them take risks that other banks won't do."

With plans to raise funding this yea, Cisek says she's already started her research on how to diversify her banking situation and is looking into programs that will help her do that.

Staying aware

Guitar's last piece of advice is to remain confident in the system, while staying tuned into what's happening across the spectrum.

“This situation that is central to the venture ecosystem is an evolving one," she says. "We all need to keep calm and confident in business as usual in the short term while keeping an eye to the medium term so that we know what happens next with this important bank and with other associated banks in the in our industry."