“Small business incubators serve as the foundation of most innovation ecosystems." Graphic by Miguel Tovar/University of Houston

If you plan to start a new business or already have but you don’t have an office or lab space, why should you consider working with a small business incubator?

An incubator is an organization that offers assistance and resources to help newly-formed businesses get started and supports them as they move forward. Small business incubators also provide space to house these companies in a shared work environment.

According to the executive director of the University of Houston Office of Technology Transfer and Innovation, Christopher Taylor, “Small business incubators serve as the foundation of most innovation ecosystems and for startups, these hubs provide connectivity, support, and resources they can leverage to improve their odds of success.”

Community connectivity

In a small business blog on Chron.com, the author points out that even after a business leaves an incubator, the connections they make with other business owners are relationships that will continue to grow. There, startups can learn and grow together and, in turn, incubators foster a continuously growing community by looking for businesses and growing companies that serve the same field.

For example, an incubator that is focused on technology will look for companies that are in the technology sector. At Texas Medical Center Innovation, two programs support the development of health technologies. The Cancer Therapeutics Accelerator is a nine-month program where startups get support in market and technical research. The Health Tech Accelerator is a six-month program for digital health and medical device startups.

Startup support

Business incubators offer support in many ways, including critical services that help move businesses forward.

For example, the UH Technology Bridge connects new business owners to the Small Business Development Center, where they can get help with all their preliminary operational tasks. Companies housed at incubators also gain access to programming like focused workshops that cover how to find funding, how to build a business strategy and other business fundamentals.

Startup incubators also give startups with limited funds access to expensive equipment that they would otherwise not be able to afford. They also offer office space, usually at a lower cost than other commercial space. These spaces usually include office amenities such as central printing and conference rooms. They are able to offer lower costs because they are usually funded by a school, city or investors.

Some for-profit incubators make money by directly selling their services to startups or others. Some may make money indirectly, meaning their services generate sales for other services.

The Big Idea

“Many successful startups come out of incubators because they have the ability to create tremendous velocity as companies work towards commercializing their technologies,” Taylor said.

Starting a business is not an easy feat. But incubators can help improve a startup’s chances of success.

If you are in the Houston area and looking to partner with a small business incubator, visit the UH Technology Bridge, The Cannon, The Rice Alliance or any of the other many incubators in the area.

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This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton, the author of this piece, is the communications coordinator for The Division of Research.

Taking these first steps will help you determine if entrepreneurship is a good fit. Graphic by Miguel Tovar/University of Houston

University of Houston: First steps toward faculty entrepreneurship

houston voices

If you are a faculty inventor, you’re likely also interested in becoming a faculty entrepreneur. Aspiring to be an entrepreneur is the first step, but what should you do next?

Take action

Bruce Fischer, professor of business and economics at Elmhurst University, said in a blog post that “above all, you should take action” and not procrastinate.

Fischer suggests taking a course in entrepreneurship that covers the fundamentals of management.

Your university is a great place to start. For instance, the University of Houston houses the Gulf Coast chapter of the Small Business Development Center, which offers in-person and online trainings as well as free business advising.

The Bauer School of Business at UH also has programming suited to entrepreneurs at various stages of experience. Depending on where you live corporate, nonprofit, and government-sponsored startup development organizations may also provide resources to introduce you to the fundamentals of entrepreneurship.

Find a mentor

Fischer also stresses the importance of finding a mentor. Find someone, maybe someone you know, that is already in the entrepreneurial space. Maybe they already have their own business, and they can give you help on your entrepreneurial journey.

The Associate Director of Startup Development at UH, Tanushree Chatterji, offered some advice for first time entrepreneurs.

“Networking is the key. Going to every relevant event and introducing yourself and talking about what you are doing is the most effective way to network. There are a lot of folks looking to mentor, you have to find them,” she said.

One way to get the conversation going is to reach out to your university’s office of technology transfer.

What's the big idea?

If you are a creative and passionate person, then maybe entrepreneurship is right for you. Taking these first steps will help you determine if entrepreneurship is a good fit while giving you exposure to the fundamentals of establishing your own business.

Fischer leaves us with some parting words of encouragement: “Don’t be afraid to ask for help. Entrepreneurs are a close community because they can relate to one another through their shared experiences.”

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This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton, the author of this piece, is the communications coordinator for The Division of Research.

Go and get connected to this global research system. Graphic by Miguel Tovar/University of Houston

University of Houston: New open index of scholarly articles helps researchers connect

houston voices

We have all needed scholarly articles to cite in our academic careers. Now, there is a place where researchers can get millions of them, all on one site.

Named after the Library of Alexandria, OpenAlex is an index of over 200 million scientific documents including publication sources, author information and research topics that can be used to conduct studies and build research tools. According to its founders, the goal of this index is to “create a comprehensive, interlinked database of the global research system.”

So, how can researchers use this database and why is it beneficial?

More data

After Microsoft announced the closure of the Microsoft Academic Graph, a non-profit scholarly service firm, OurResearch, created OpenAlex.

OpenAlex gets its information from MAG and other sources. It also integrates with Unpaywall, which has over 30 million articles. This allows for access to much more information.

There are not just free articles to read, but OpenAlex will also tell you the license and the version of the articles.

OpenAlex updates every two weeks and brings in even more data from its other sources. With all this extra information, researchers have everything they need to conduct studies using scholarly articles by their peers.

Free and easy to use

Who doesn’t like free stuff? Everyone does! OpenAlex is 100% free to use. You don’t have to register for anything or sign in every time. You just go to the website and look for what you need.

According to one researcher, “for somebody who is more computer savvy, MAG might be easier… For researchers who want to try small projects on their own, OpenAlex will be way easier to start with.”

While it can take several days to a week to get started on MAG, it only takes a few hours on OpenAlex.

What's the big idea?

If you’re a researcher looking for an open index of millions of scholarly articles, you should try OpenAlex. A more user-friendly search engine will be added in February, making it that much easier to use the site. OpenAlex’s goal is to make connections between an expansive database of scholarly articles. Go and get connected to this global research system.

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This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton, the author of this piece, is the communications coordinator for The Division of Research.

University of Houston's The Big Idea highlights the three things to consider when starting a business. Graphic by Miguel Tovar/University of Houston

University of Houston research: When's the best time to start a business?

houston voices

Have you ever thought about opening your own business, but you didn’t know when to do it? Maybe you’ve heard the phrase: “the best time to start a business is today.” Is this actually good advice?

Yaro Starak, entrepreneur, blogger and podcaster, answers this question on his blog. Starak highlights three things aspiring entrepreneurs should do first when they decide to open a business.

What to do today:

1. Get prepared 

Starak believes there is some truth to the statement that starting a business today is the best time because it focuses on action and “to take action, means you need to be prepared to do so.”

He says that once you start your business you’ve, at least, taken a step towards being prepared because chances are, you’ll never have the right timing in the beginning. “By starting now, you begin the process of learning and putting in place resources that, in time, will lead you to be prepared for taking advantage of an opportunity when it presents itself,” Starak said.

2. Start building resources

“Whether you succeeded or failed, or pivot to something else, you’re always gaining experience, learning from mistakes, and building resources for your next project, whether they be financial (or capital), mental or skill-based resources,” Starak said. This is why today is the best day to start a business because everything that you do, once you get started, will contribute to you gathering the necessary resources and experiences that will help your business to excel.

3. Start building an audience

Starak believes that, just like the self-help books suggest, “the best asset to work on is yourself,” but that shouldn’t be all you focus on. “Even if you’re not sure if you intend to sell coaching, courses, write books or sell services or software or physical products, your audience is the door to taking advantage of all new opportunities… No attention, means no customers,” Starak said.

According to Starak, marketing and sales are the two most important skills to work on in order to be prepared to start a business. He suggests that aspiring business owners should learn how to use internet resources to post content in order to reach people and build their audience. Then they can use that content to advertise and sell.

What's the big idea?

Now is always the best time to start a new business because even if you’re not quite sure what it’s going to be yet, you can get yourself prepared, start building resources and start building an audience.

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This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton, the author of this piece, is the communications coordinator for The Division of Research.

Should you lead the company that's taking your technology to commercialization? Maybe. But maybe not. Graphic by Miguel Tovar/University of Houston

University of Houston: What should a faculty inventor’s role be in their startup?

houston voices

Are you a faculty member at a university? Are you a researcher with an invention that you want to monetize? Do you want to start your own startup company? If you answered yes to these questions, another question you need to consider is, should you leave your research position at the university to lead your company or get out of the way entirely?

The answer to that question will be different for everyone. Some faculty inventors want to leave and launch a company based on their research. In most cases, faculty members want to keep their university roles. What is the right decision for you?

Douglas Hockard, the assistant vice president of Tech Launch Arizona at The University of Arizona, said, in a Tech Launch blog post, to consider your passion, time and expertise.

Do you have the passion?

Passion is required for anyone to enjoy their chosen career paths. Without passion, you are not going to want to dedicate your time or seek the expertise to become the best.

“Faculty researchers chose their careers intentionally, dedicating years of study and research to arrive where they are today. Most faculty are not interested in abandoning that career path,” Hockard said.

Leading a startup requires the same dedication that it took to get where you are in your university role.

Do you have the time?

A startup is not a part-time job. “While faculty researchers are rarely interested in leaving their career in the university, investors want a committed, and focused, leadership team. More than anything, the startup needs someone to focus full-time… to eschew any other pursuits and devote themselves fully to the success of the startup,” Hockard said.

Do you have the expertise?

Hockard mentions in his blog that there are roles that exist in startups for university faculty. The faculty inventor is the technology expert, and their knowledge will help in the commercialization of their technology. Sometimes there are better ways to support the startup while remaining in your university position.

“A scientific role in the company allows them to help guide the company technology direction while allowing someone else to focus on company formation, strategic planning, business development, and importantly, raising capital. What is most important is aligning the myriad needs of the startup with the knowledge, skills, and singular focus best suited to fulfill those needs,” Hockard said.

What's the big idea?

If you don’t have the passion, the time, or the expertise to run a startup or you just simply want to keep your university, maybe someone else should lead your startup.

“Without a doubt, identifying leadership can be daunting. While the desire might be to zero in on a ‘superstar,’ a startup needs someone that can commit the time and the effort and knows ‘what to do next.’ How can startups find that person?” Hockard said.

Your university’s technology transfer office can provide support and can be a good place for you to start. “TTOs provide myriad resources to help inventors move innovations ahead, including technology and market analysis, intellectual property protection, marketing, and more. Many full-service TTOs also have dedicated personnel to help launch startups based on university technologies.” Of course, it’s up to you who should join the company— especially to lead it— but having the support of “experienced potential partners” will help you make the right decision.

Startups need a lot of resources to become successful. Bringing in someone to help, if you don’t have the passion, time or expertise, could be very beneficial. If you do have all three of those things and you want to leave your university role, then go be the lead in your startup.

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This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton is the communications coordinator for The Division of Research.

There are several things faculty need to think about before even considering spinning out their research. Graphic by Miguel Tovar/University of Houston

University of Houston: How to spin out university research into a startup as faculty

houston voices

Most inventors, whether they are university faculty or not, want to eventually start a company and capitalize on their inventions and research. For university faculty, this could be, or at least seems like a much more difficult thing to do. Why? Well, they already have a full-time job as a professor.

There are several things faculty need to think about before even considering spinning out their research. In his blog post on Y Combinator, Jared Friedman, the Managing Director, Software and Group Partner at Y Combinator and co-founder of Scribd, suggests to first decide if you should spin out and when.

“In a typical spin-out situation, there are several people who worked on the research, including a mix of students, post docs and faculty. The first thing you need to decide is who is going to work on the company and who is going to stay at the university,” Friedman said.

Friedman suggests that the “ideal situation” is for one or more people, who were originally involved in the research and lab work, to leave and start the company as co-founders. “One full-time founder is also ok. One of the people who leave to start the company should be the CEO.”

The others who stay behind at the university usually still want to be involved. Friedman said that this is fine. They are often call “academic cofounders” or “scientific cofounders”.

Leaving something you’re comfortable with, like your university position, can be scary but Friedman says, don’t wait too long, eventually being at a university will start to slow your progress down.

“In the early stages of developing a new technology, you’ll make faster progress still at the university, taking advantage of university resources. It’s the ideal place to do the initial experiments to prove that your idea could work. There’s a temptation to make the technology perfect before spinning out, and there’s always ‘one more experiment’ you could do. If you don’t stop this cycle, you’ll never leave,” Friedman said.

So, after you’ve decided you want to spin your research out and when, what do you do next?

Split the equity

Friedman offers two rules on how you should do this.

1) Founders who will be working on the company full-time should get equal or nearly equal amounts of equity.
2) Founders who will be leaving their job to work at the company full-time should get much more equity than founders who are going to remain in academia. Academic cofounders should typically own no more than 10% unless they are going to continue to be hands-on.
Jared Friedman, “How to spin your scientific research out of a university and into a startup”

The point of allocating equity is not to reward past contributors from the university but instead to anticipate new ones. It’s going to take an exceptionally long time to make a new company successful. The academic founders may have been helpful at first, but it’s those full-time founders that will take the company all the way. “The equity split between founders has to reflect the expected contributions over time.”

Sometimes, this means “the founders who leave will end up with much more equity than their former boss. This can be an awkward conversation, but it’s entirely sensible.”

Connect with your transfer office

If you want to commercialize the research that you started at your university, you will need to negotiate the right to the intellectual property with the university’s office of technology transfer.

Friedman mentions FOUR “key terms” in these types of agreements.

Equity

“Typically, the university will get equity in the company. This is ok as long as it is not too much. 3-5% is typical. Above 10% will cause problems.”

Royalty

“This means that you pay a percentage of revenue or profits to the university. If this is too high, it can affect the viability of the company to raise money and operate. Ideally you would make this zero. If you can’t do that, try to keep it < 5%, and to have it terminate after a certain number of years and/or a certain level of payments.”

Milestone Payments

“I.e., ‘You owe us $250K when the company raises its first $10M,’ or ‘You owe us $500K when you reach Phase II clinical trials.’ Because cash is scarce in the early days of a startup, you want to keep these as low as possible. You should never need to spend more than a few percent of the money you raise.”

Exclusivity

“If a license is not exclusive, the university could theoretically turn around and license the same IP to a big company to go compete with you. This sounds like a real problem, but often it’s not. For many inventions, in practice other companies won’t know how to use the IP and won’t value it until you’ve done years of work further developing it (at which point the university-owned IP isn’t sufficient). It may be optimal to have a non-exclusive license initially with an option to make it exclusive later, or a right of first refusal clause.”

Friedman also offers some advice on how to negotiate these agreements. First, start talking with these offices ASAP. This will give you more time to work out an agreement that you like, and you can learn how the tech transfer office works.

Also, “don’t wait for the agreement to start the company. Getting an agreement can take 6 months or longer. Many investors will fund companies before they have an agreement in place. The more progress you make on the company, the more leverage you have in the negotiation,” Friedman said.

Most importantly, get advice from other founders that have agreements with the same office to see what worked for them. You can also ask inventors, lawyers and other advisors what your best course of action is.

After spinning out

Friedman said, the first thing to do, once you’ve spun out, is to incorporate your company. He also said that it would probably make sense to keep collaborating with your university.

“In some cases, you may want to continue doing experimental work using university labs. University core facilities are commonly available to companies, albeit for higher fees. It’s possible to save a lot of money using university resources instead of buying equivalents commercially. That’s fine, as long as it isn’t slowing you down significantly and doesn’t create IP issues. Unfortunately, there is often a tradeoff between speed and cost,” Friedman said.

The big idea

The adjustment from academia to running a company is big and there are plenty of things to consider before even getting to that point. You should determine if you should even spin your research out of the university. If you decide you should, then decide when.

Once you’ve done that, then you must consider how to split the equity, negotiate with your university’s tech transfer office and continue collaborating with your university even after the spin out is successful.

A full understanding of everything that should be done when starting a business is the best way to set yourself up for success.

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This article originally appeared on the University of Houston's The Big Idea. Cory Thaxton is the communications coordinator for The Division of Research.

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Houstonian designs new experiences to encourage innovation in students

HOUSTON INNOVATORS PODCAST EPISODE 154

As director of social innovation at Teach For America Houston, it's Sarah Essama's job to come up with new ways for the organization to support both students and teachers. But, as she explains on the Houston Innovators Podcast this week, Essama realized a huge lesson modern students needed was to learn this innovation process themselves.

Part of being an educator is to prepare students for tomorrow, Essama explains, but with rapid technology development and adaption, no one knows what the future will hold for the job market or the world in general. The best way to prepare the future generation of the workforce is to teach them how to innovate, think differently, and adapt to new ways of doing things.

"That's what people are looking for right now — people who can provide out-of-the-box solutions to problems," Essama says on the show.

This line of thinking turned into Essama founding The Dream Lab, powered by Teach for America Houston.

"The Dream Lab is a set of immersive design spaces where young people leverage their imagination and creativity to innovate and solve problems within their community," she explains.

Last month, the new concept rolled out to high school students in partnership with DivInc Houston, a nonprofit focused on social and economic equity in entrepreneurship, and 21 ninth graders spent the day at the Ion for a mini-innovation accelerator and design showcase.

Strategically, Essama tapped into the Houston innovation ecosystem with the intent of showcasing the community.

"Innovation to me is being able to create something that has never been seen or done before — and that has a very important purpose," she says. "Exposing ourselves to innovation and people who think this way — and learning from them —is key to be able to be competitive tomorrow."

Essama says this program is still in the development phase. She's been testing out the concept with fourth graders and now ninth graders. She hopes the full program will be up and running by next fall.

She shares more details about the grant and the future of The Dream Lab on the podcast. Listen to the interview below — or wherever you stream your podcasts — and subscribe for weekly episodes.

Houston-based virtual reality startup raises $3.2M in first outside capital round

fresh funding

HTX Labs, a Houston-based company that designs extended reality training for military and business purposes, announced last week that it has raised its first outside capital.

The company has received a $3.2 million investment from Cypress Growth Capital. Founded in 2017, HTX Labs — developer of the EMPACT Immersive Learning Platform — has been granted funding from the Department of Defense as well as grown its client base of commercial Enterprises. The platform uses virtual and extended reality that "enables organizations to rapidly create, deploy, measure, and sustain cost-effective, secure, and centralized immersive training programs, all within engaging, fully interactive virtual environments," per a news release.

“We have been looking to secure outside capital to accelerate the growth of our EMPACT platform and customer base but we hadn’t found the right partner who provided an investment vehicle that matched our needs,“ says HTX Labs CEO Scott Schneider in the release. “We found everything we were looking for in Cypress Growth Capital. They have a non-dilutive funding model that aligns with our capital expectations and have the level of experience that really makes this smart money.

"Cypress has a decade-long track record of success in helping emerging software and services companies achieve scale," he continues. "It is clear that the team’s collective entrepreneurial and operating experience will be of tremendous benefit to us as we focus on expanding our customer base in a very intentional way.”

The fresh funding will go toward growing and scaling the company's operations — both within the current Department of Defense and expansion opportunities into key commercial markets, like heavy industry, manufacturing, and higher education. Additionally, the funding will support increased customer adoption.

“Scott and his team have built an exceptional business that is poised for dramatic growth,” says Cypress Partner Pat McCaffrey in the release. “HTX Labs’ modern, immersive training solution provides clients with a force multiplier for modernizing training and an unmatched ROI.”

Houston's biggest benefactors gift massive $50M to pivotal Rice University institute

big money

Houston’s most generous couple has once again gifted a massive sum to a local institution. Rich and Nancy Kinder’s Kinder Foundation has donated $50 million to Rice University’s Kinder Institute for Urban Research, the organization announced.

The Kinder's generous grant will assist the institute’s focus on what it dubs “inclusive prosperity” — that is, “ensuring that everyone can contribute to Houston's success and share in its opportunities.”

This new grant follows the approximately $30 million he Kinder Foundation previously gifted Rice’s Kinder Institute and its affiliates to facilitate its headquarters.

“Over the past decade, the Kinder Institute has played an integral role in shaping Houston,” said Rich Kinder, chairman of the Kinder Foundation. “However, we can do more to inform and more directly address the challenges our communities face, particularly in the areas of housing, education, economic mobility, health and population research.”

To that end, the Kinders’ funds will ensure the institute can assist its partners regardless of their ability to pay for research. Funds will also help the institute respond to community research needs quickly during times of crisis — such as a catastrophic storm or pandemic — when funds aren’t readily available.

Kinder Institute director Ruth López Turley calls the grant “a gift to all of Houston,” speaking to the institute’s work to improve lives through data, research, engagement and action.

“Inclusive prosperity doesn’t just happen spontaneously,” she noted in a statement. “It requires an explicit effort informed by research. Lots of organizations are working hard to make things better, but most of them have very limited research capacity, and that’s what the Kinder Institute is primed to do.”

Founded in 2010, the institute has evolved into a leader in research, data, and policy analysis of critical issues such as housing, transportation, and education. The institute also releases the familiar Kinder Houston Area Survey, which charts significant changes in the way area residents perceive and understand Houston’s ongoing challenges and opportunities.

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This article originally ran on CultureMap.