3 Houston innovators to know this week

who's who

This week's roundup of Houston innovators includes Emily Reiser of Texas Medical Center Innovation, Atul Varadhachary of Fannin Innovation Studio, and Vicki Knott of Crux OCM. Courtesy photos

Editor's note: In this week's roundup of Houston innovators to know, I'm introducing you to two local innovators, as well as one honorary Houstonian, across industries — energy, health care, and more — recently making headlines in Houston innovation.

Emily Reiser, senior manager for innovation community and engagement for Texas Medical Center Innovation

Emily Reiser joins the Houston Innovators Podcast to discuss the latest at TMC Innovation. Photo courtesy of TMC Innovation

Over her past few years at Texas Medical Center Innovation, Emily Reiser has worked with over 1,000 startups. So, it's safe to say she knows what a good pitch looks like and what health tech startups need as far a support from mentors and experts goes.

She shares some of her advice and observations on this week's episode of the Houston Innovators Podcast. She also explains how TMC Innovation is uniquely positioned to advance the best and brightest in life science innovation.

"When we think about how a startup is going to be successful, we think about how they are going to build new partnerships. But we also think about all the people they're going to need to activate and bring them to the next level," Reiser says. "What we do is curate a community of high-value resources that can help these companies elevate to that next level." Click here to read more.

Atul Varadhachary, managing partner of Houston's Fannin Innovation Studio

Atul Varadhachary, managing partner of Fannin Innovation Studio, says that now is the time to invest in life sciences. Photo via fannininnovation.com

Fannin Innovation Studio is hard at work finding, supporting, and accelerating life science innovations, but, according to Managing Partner Atul Varadhachary, the organization can be doing so much more — if only the budget allowed.

Varadhachary makes a case for tripling or even quadrupling the number of participants in Fannin's federally accredited fellowship program. He says this one relatively small investment could push Houston closer to Boston in the life sciences stratosphere.

"I can think of nothing that could give a bigger return on investment for the city," Varadhachary says of expanding Fannin's fellowship program. Click here to read more.

Vicki Knott, co-founder and CEO of Crux OCM

A Canadian software company is expanding its presence in Houston to meet the needs of its clients. Photo courtesy of Crux OCM

For six months of the year, Vicki Knott plans to take up residence in Houston. As the co-founder and CEO of Calgary-based Crux OCM, Knott saw a big opportunity to expand her control room operations automation software business — especially when she nabbed Houston-based Phillips 66 as a client.

Calgary and Houston have a lot in common, Knott says, and she sees a very natural connection to the two regions. Knott plans to work six months of the year in Houston with the local office.

"A lot of the companies that head offices in Houston, they have head offices in Calgary," she says. "If a startup in Houston is getting traction, I think there's a natural movement to start in the Calgary market and vice versa." Click here to read more.

A Canadian software company is expanding its presence in Houston to meet the needs of its clients. Photo via Getty Images

Exclusive: Canadian energy software company plans to grow local team and open Houston office

new to Hou

One of the biggest obstacles heavy industry tech startups face — especially in oil and gas — is getting that first big customer, says Vicki Knott, co-founder and CEO of Crux OCM.

"Our biggest challenge is nobody wants to be first in energy," she tells InnovationMap.

But Crux OCM, based in Calgary, overcame that challenge and currently counts Houston-based Phillips 66 among its clients. The two companies announced a pilot program for Crux OCM's pipeBOT technology earlier this year.

Crux OCM's technology focuses on automating the control room operations — something that, like most automation software, increases revenue and reduces errors. The company, which was founded in 2017, also allows its clients consistency and reliability with its software.

"Even though the pumps and the equipment are automated, control room operators are still executing procedures, checklist, and rules of thumb on their own via screens," Knott says. "If you think of pilots and planes have autopilot software, why don't our control room operators? That's really the problem we set out to tackle."

Vicki Knott is co-founder and CEO of Crux OCM. Photo courtesy

Automation is certainly a growing opportunity for energy companies — especially in light of the pandemic that forced remote work and less on-site personnel across industries. Knott says just over a year ago, Crux OCM saw increased interest.

"We had a couple customers who had their capital budget cut when the pandemic hit and when oil went negative, and we had a couple customers who said they were doubling down on software like this," Knott explains.

The company has raised $3 million in venture funding, backed by Root Ventures, Angular Ventures, and Golden Ventures. Knott says another funding round is on the horizon as is growth for its Houston presence.

Crux OCM currently has three full-time Houston employees and is looking to grow that team in the next six months. Specifically, the local team will focus on sales, as well as product development, as the company's head of sales and senior product manager are both based here. As the local clientbase grows, Knott says they will also need to hire deployment engineers as well.

A new office to support this growing team is also in the works. Knott says she's looking for space in North Houston, and, depending on how comfortable people are returning to offices and meetings, it could open as early as later this year.

Calgary and Houston have a lot in common, Knott says, and she sees a very natural connection to the two regions. Knott plans to work six months of the year in Houston with the local office.

"A lot of the companies that head offices in Houston, they have head offices in Calgary," she says. "If a startup in Houston is getting traction, I think there's a natural movement to start in the Calgary market and vice versa."

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Cancer-fighting company based in Houston emerges from stealth and snags $74M in its latest round

fresh funds

A Houston-based clinical-stage biopharmaceutical company has raised millions in its latest round.

Tvardi Therapeutics Inc. closed its $74 million series B funding round led by new investors New York-based Slate Path Capital, Florida-based Palkon Capital, Denver-based ArrowMark Partners, and New York-based 683 Capital, with continued support and participation by existing investors, including Houston-based Sporos Bioventures.

"We are thrilled to move out of stealth mode and partner with this lineup of long-term institutional investors," says Imran Alibhai, CEO at Tvardi. "With this financing we are positioned to advance the clinical development of our small molecule inhibitors of STAT3 into mid-stage trials as well as grow our team."

Through Slate Path Capital's investment, Jamie McNab, partner at the firm, will join Tvardi's board of directors.

"Tvardi is the leader in the field of STAT3 biology and has compelling proof of concept clinical data," McNab says in the release. "I look forward to partnering with the management team to advance Tvardi's mission to develop a new class of breakthrough medicines for cancer, chronic inflammation, and fibrosis."

Tvardi's latest fundraise will go toward supporting the company's products in their mid-stage trials for cancer and fibrosis. According to the release, Tvardi's lead product, TTI-101, is being studied in a Phase 1 trial of patients with advanced solid tumors who have failed all lines of therapy. So far, the drug has been well-received and shown multiple durable radiographic objective responses in the cancer patients treated.

Dr. Keith Flaherty, who is a member of Tvardi's scientific advisory board and professor of medicine at Harvard Medical School, offered his support of the company.

"STAT3 is a compelling and validated target. Beyond its clinical activity, Tvardi's lead molecule, TTI-101, has demonstrated direct downregulation of STAT3 in patients," he says in the release. "As a physician, I am eager to see the potential of Tvardi's molecules in diseases of high unmet medical need where STAT3 is a key driver."

Networking with high-status colleagues isn't successful across industries, per Rice University research

houston voices

In a timeless scene from the mockumentary "This Is Spinal Tap," an 80s metal band swaggers in for a performance only to find they're billed second to a puppet show. Though the film is farce, real musicians often come to question the value of playing second fiddle to anyone – even an A-lister.

Now research by Rice Business professor Alessandro Piazza and colleagues Damon J. Phillips and Fabrizio Castellucci confirms those musicians are right to wonder. In fact, they discovered, the only thing worse than performing after a puppet may be opening up for an idol. Bands that consistently open up for groups with higher status, the researchers found, earn less money – and are more likely to break up than those that don't.

"Three cheers," The Economist wrote about the researchers, for confirming "what many people in the music industry have long suspected – that being the opening band for a big star is not a first class ticket to success."

While the findings may be intuitive for seasoned musicians, they fly in the face of existing business research. Most research about affiliations concludes that hobnobbing with high-status colleagues gives lowly newcomers a boost. Because affiliations give access to resources and information, the reasoning goes, it's linked with individual- and firm-level successes such as landing jobs and starting new ventures.

Both individuals and organizations, one influential study notes, benefit from the "sum of the resources, actual or virtual, that accrue to an individual or group by virtue of possessing a durable network of more or less institutionalized relationships."

That's largely because in many fields up and comers must fight to be taken seriously – or noticed at all. This problem is often called "the liability of newness:" In order to succeed, industry newcomers first need to be considered legitimate by the audience they're trying to woo.

Showing off shiny friends is a classic solution. In many fields, after all, linking oneself with a high-status partner is simply good branding: a shorthand signal to audiences or consumers that if a top dog has given their approval, the newcomer must surely have some of the same excellent qualities.

Unfortunately, this doesn't always hold true – especially in the creative world, Piazza's team found. In the frantic world of haute cuisine, for example, a faithful apprentice to a celebrity chef may actually suffer for all those burns and cuts in the star's hectic kitchen. Unless they can create meals that are not just spectacular, but show off a distinct style, consumers may sneer at the newcomer as a knockoff of the true master.

So what determines if reflected glory makes newcomers shine or merely eclipses them? It has to do with how much attention there is to go around, Piazza said. While partnering with a star helps in some fields, it can be a liability when success depends on interaction between audience and performer. That's because our attention – that is, ability to mentally focus on a specific subject – is finite. Consumers can only take in so much at a time.

Marketers are acutely aware of this scarcity. Much of their time, after all, is spent battling for consumer attention in an environment swamped by competitors. The more rivals for advertising attention, research shows, the less a consumer will recall of any one ad. In the world of finance, publicly traded companies also live and die on attention, in the form of analyst coverage of their stocks and angel investors' largesse.

Musicians who perform live, Piazza said, are battling for attention in a field that's gotten progressively more fierce, due to lower album sales and shorter career spans. Performing in the orbit of a major distraction such as Taylor Swift or Beyoncé, however, only reduces the attention the opening act gets, the researchers found. Though performances are just a few hours, the attention drain can do lasting harm both to revenue and career longevity.

To reach these conclusions, the researchers analyzed data about the live performances and careers of 1,385 new bands between 2000 and 2005. Supplementing this with biographical and genre information about each band along with musician interviews, the team then analyzed the concert revenue and artistic survival of each band.

They discovered that in live music, high status affiliation onstage clearly diluted audience attention to newcomers – translating into less revenue and lower chance of survival.

In part, the revenue loss also stems from the fact that even in big stadium performances, performing with superstars rarely enriches the underdogs. According to a 2014 Billboard magazine report, headliners in the U.S. typically absorb 30 to 40 percent of gross event revenues; intermediate acts garner 20 to 30 percent and opening acts for established artists bring as little as $15,000.

The findings were surprising, and perhaps dispiriting, enough for the researchers to carefully spell out their scope. Affiliation's positive effects, they said, are most often found in environments of collaboration and learning – for example academia. In these settings, a superstar not only can bestow a halo effect, but can share actual resources or information. In the music world, however, the fleeting nature of a shared performance makes it hard for a superstar band to share much with a lower-ranked band except, perhaps, some euphoric memories.

Interestingly, in many businesses it's easy for observers to quickly assume affiliations between disparate groups. In the investment banking industry, for instance, research shows that audiences infer status hierarchies among banks merely by reading "tombstone advertisements," the announcements of security offerings in major business publications. Readers assume underwriting banks to be affiliated with each other when they're listed as being part of the same syndicate – even if the banks actually have little to do with each other beyond pooling capital in the same deal.

In the music business, star affiliations mainly help an opening act a) if the audience understands there's an affiliation and b) if they believe the link is intentional. But that's not always the case because promoters and others in Big Music often line up opening bands. When possible, though, A-listers can do their opening acts a solid by making it clear that they've chosen them to perform there.

Otherwise, Piazza and his colleagues concluded, the light shed by musical supernovas typically gets lost in the darkened stadium. For the long term, business-minded bands may do best by working with peers in more modest venues – places where the attention they do get, like in Spinal Tap's classic metric, goes all the way up to 11.

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This article originally ran on Rice Business Wisdom and is based on research from Alessandro Piazza, an assistant professor of strategic management at Jones Graduate School of Business at Rice University.

Houston data management company closes $18M in fresh funding

money moves

A Houston company that's created a centralized log management solution has closed a new round in funding.

Graylog closed its $18 million growth equity round led by Richmond, Virginia-based Harbert Growth Partners, a new investor, and Minneapolis, Minnesota-based Piper Sandler Merchant Banking, the company announced today. The round also received contribution from existing investors Houston-based Mercury Fund and Integr8d Capital, as well as Germany-based HTGF.

"This investment will enable us to accelerate our global go-to-market strategies and enhancements to the award-winning solutions we deliver for IT, DevOps, and Security teams," says Andy Grolnick, CEO of Graylog, in a press release. "We're excited to have the support of new and existing investor partners to help us realize our potential."

Andy Grolnick is CEO of Graylog. Photo courtesy

Per the release, the funds will go toward growing the company's platform that allows its users the ability to capture, store, and enable real-time analysis of terabytes of machine data.

"Graylog is well-positioned to be a long-term winner in the rapidly growing market for log management and analysis solutions," says Brian Carney, general partner of Harbert Growth Partners, in the release. "With its focus on delivering a superior analyst experience coupled with a vibrant Open Source community, the company provides customers a compelling alternative to other log management solutions plagued with high complexity and high total cost of ownership (TCO). We are thrilled to partner with the Graylog team to leverage the significant opportunity that lies ahead for the company."

Over the past year, despite the challenging business climate, the company saw growth in business and even expanded its European operations, according to the release.

"As a long-standing customer, Graylog is strategic to our success. We are excited to see new investment that will enable the company to accelerate innovation and continue to deliver excellent log management and SIEM solutions," says Rob Reiner, CTO of PROS, in the release.