5 Houston innovators to know in 2020

Who's who

From M&A action to the development of Houston's innovation corridor, these are five Houston innovators to keep an eye on in 2020. Courtesy photos

For so many Houston innovators, 2020 will be a year of growth, execution, proof of concept, piloting, pivoting, fundraising, and more.

It's hard to narrow down the list of movers and shakers in Houston innovation, but a few have stood out for making waves in the new year. From M&A action to the development of Houston's innovation corridor, these are five Houston innovators to keep an eye on in 2020.

Rakesh Agrawal, founder and CEO of SnapStream

Photo courtesy of SnapStream

This past year has been good to SnapStream, but it's only the beginning of the company's next growth phase. The software company's technology allows its clients to easily record, search, and share video and broadcast content and has attracted clients from the likes of Saturday Night Live and Last Week Tonight.

In 2019, the company was named the transition partner for Volicon Observer, a company Verizon brought under its umbrella and then changed its mind about, Rakesh Agrawal, CEO of SnapStream, explains on an episode of the Houston Innovators Podcast. Volicon's specialty is in monitoring and compliance, and with that move, SnapStream brought on around 150 new clients. To maintain those clients and grow its services, SnapStream has rolled out a whole new department. The launch of SnapStream Monitoring and Compliance is the next step for SnapStream's takeover of Volicon, according to a news release.

The M&A activity sparked a move to hire and expand the SnapStream team as the division grows throughout 2020.

Allison Thacker, president of the Rice Management Company

Natalie Harms/InnovationMap

Houston has its eyes on The Ion, a 270,000-square-foot building innovation center being developed in the former Sears building in Midtown. Behind the project is the Rice Management Company, which is led by Allison Thacker, president of the organization.

The Ion broke ground in May, and also named its operations leader, Gabriella Rowe, CEO of Station Houston earlier this year. While the project isn't expected to deliver until 2021, next year will likely entail determining a few key things about The Ion and the surrounding innovation corridor Rice Management and the city will be developing.

The Houston Coalition for Equitable Development without Displacement, a newly formed organization, has recently expressed its concerns with the development of the property in the historic Third Ward. The community organization wants Rice Management and all parties involved with the innovation corridor to agree to a Community Benefits Agreement, which would protect local residents and provide positive initiatives for growth. The CBA is expected to be arranged in 2020 as the project moves forward.

Andrew Bruce, founder and CEO of Data Gumbo

Photo courtesy of Data Gumbo

Another Houston company that plans to grow throughout 2020 is Data Gumbo. The blockchain-as-a-service company has raised some significant funds — a $6 million series A round closed in May — and will be putting that money to work by expanding the company's footprint and services.

Earlier this year, the company announced its entrance into the construction industry — Andrew Bruce, CEO of Data Gumbo, says in a recent episode of the Houston Innovators Podcast that the funds will also take Data Gumbo to new global markets, including the Middle East.

"The whole thing for us is building this blockchain network of interconnected companies," Bruce says. "The more companies that are a part of that network, the more value that network has."

Payal Patel, director of corporate partnerships at Plug and Play Tech Center in Houston

Courtesy of Payal Patel

San Francisco-based Plug and Play Tech Center quickly established its new energy-focused Houston location — from announcing its entrance into the market in June to hiring its director of corporate partnerships, Payal Patel, in September. The first cohort of portfolio companies were named in October, and several new Houston partner corporations have been announced as well.

Next year, the local team is expected to grow and is currently hiring for a few positions, as well as announce its office space in town. Patel, specifically, will spearhead the initiatives to grow the organizations already impressive list of corporate partners.

"[Plug and Play ha] great Fortune 500 corporate partners, they work and know the best tech startups all over the world, and they have a strong investment capability," Patel previously told InnovationMap. "I'm excited that those resources and capabilities are coming to Houston."

Travis Parigi, CEO of LiquidFrameworks

Courtesy of LiquidFrameworks

Travis Parigi has always been the one to write the code for his company's software technology, but now, he's in acquisition mode thanks to new support from private equity. Last January, LiquidFrameworks entered into a partnership with private equity firm, Luminate Capital. The new financial partner has opened doors for Parigi, CEO of LiquidFrameworks, and the company as a whole — including putting merger and acquisition activity on the table.

The company has grown its team and even moved to a bigger space in Greenway Plaza. LiquidFrameworks, which has created a suite of software solutions for upstream and downstream oil and gas companies called FieldFX, is also working on key updates and new features for its software.

Andrew Bruce talks Data Gumbo expansion on the most recent episode of the Houston Innovators Podcast. Courtesy of Data Gumbo

Houston blockchain company plans for huge growth — from new offices to new industries

HOUSTON INNOVATORS PODCAST EPISODE 9

Andrew Bruce saw that the oil and gas industry had a data problem. If energy companies were ever going to be able to set up autonomous drilling, they needed to integrate data and challenge the commercial model.

On this week's episode of the Houston Innovators Podcast, Bruce, CEO of Data Gumbo Corp., shares how he created a solution to move the needle on streamlining data within industry.

"Data Gumbo was originally founded to solve that integration problem. Take data from different sources, standardize it, clean it up, and make sure only the people who have the authority to get access to the data, can get access to the data," Bruce says on the podcast. "That's why we're called Data Gumbo — take a bunch of data, put it in the pot, stir it up, and make it taste good."

Since its inception in 2016, Bruce has led the company to raise a total of $9.3 million — recently closing a $6 million series A led by Saudi Aramco's venture arm. While that recent pop of investment means expanding to new industries — the company announced its entrance into the construction industry — Bruce says the funds will also take Data Gumbo to new global markets, including the Middle East.

"The whole thing for us is building this blockchain network of interconnected companies," Bruce says. "The more companies that are a part of that network, the more value that network has."

Bruce discusses his planned growth, the origin story of Data Gumbo, and how the Houston innovation ecosystem has helped the company grow in the episode. Listen to it below and subscribe wherever you get your podcasts.

This week's Houston innovators come from industries across the spectrum. Courtesy photos

3 Houston innovators to know this week

Who's who

This week in Houston is chock full of events from The Houston Innovation Summit, but before you get too swept away, check out these three innovators to know this week.

We have a life-long innovator whose passion has taken him from industry to industry, a construction specialist joining a growing Houston startup, and a man who let his personal struggles motivate him to find solutions.

Brad Rossacci, creative director at Accenture's Houston innovation hub

Brad Rossacci

Brad Rossacci, creative director for Accenture's Houston innovation hub, talks neuroscience, design, technology, and the upcoming Digital Fight Club on November 20 on this week's episode of the Houston Innovator's Podcast. Photo courtesy of Accenture

The guest on the Houston Innovators Podcast this week is Brad Rossacci, who's passion exudes from him in person — and podcast too. One of his recent passions? The Digital Fight Club, which is coming to Houston on November 20. The event puts two "fighters" on a stage with a referee to discuss various technology topics — cybersecurity, medicine, etc.

"I really fell in love with the approach [the event] takes," Rossacci says. "It takes this format that allows you to share ideas in a very short-form content kind of way." Read (and listen!) more.

Michael Matthews, industry principal at Data Gumbo

Michael Matthews

Data Gumbo has named the newest member of its executive team — and the newest industry it's looking to do business in. Photo courtesy of Data Gumbo

Michael Matthews was tapped to lead a brand new market that Houston blockchain startup, Data Gumbo, has announced an expansion into: Construction. The company uses blockchain to make it easier and faster to process industry contracts, payment, and more.

"The construction industry lags far behind other industries in both productivity improvement and technology adoption, resulting in billions of lost value," Matthews says in a news release. "The way companies come together to execute projects remains essentially the same despite technology's improvement and we have to make fundamental, disruptive changes to deliver more value." Read more.

Brigham Buhler, founder of Ways2Well

brigham buhler

Through his own patient journey, Brigham Buhler saw a need for Ways2Well to exist. Photo via ways2well.com

Sometimes, it's just too hard to find the answers you seek in health care. The waiting rooms, the parking, the forms — it's all a bit much only to leave empty handed. This was Brigham Buhler's experience, and finally, after months, he learned he had a hormone deficiency. Now, Buhler's company, Ways2Well, allows patients to quickly do a blood test at a lab and receive their results digitally.

"While most virtual health care providers focus on sick care — treating patients experiencing symptoms that indicate sickness — Ways2Well is focused on preventative health care," says Buhler. Read more.

Data Gumbo has named the newest member of its executive team — and the newest industry it's looking to do business in. Photo courtesy of Data Gumbo

Houston blockchain company taps into a new industry, hires new exec

diversifying

A Houston blockchain company that makes it easier and faster to process industry contracts, payment, and more has diversified its business again.

After expanding into the water services industry in August, Houston-based Data Gumbo Corp. has announced its next market: Construction. The startup, which works out of The Cannon Houston, has hired industry veteran Michael Matthews hired as industry principal to work directly on the company's efforts in the $9 trillion sector.

"Construction is one of the world's largest industries, but it has clearly fallen behind others in adopting technology and driving efficiency," says Andrew Bruce, CEO of Data Gumbo, in a news release. "Michael is a recognized leader in the industry and his vision and experience make him an excellent fit to scale Data Gumbo into the construction sector."

Matthews has over 30 years of experience in construction. He says in the release that some of the issues of current practices result in 30 to 40 percent of project costs to be hidden, and he wants to use the GumboNet platform to provide solutions.

"The construction industry lags far behind other industries in both productivity improvement and technology adoption, resulting in billions of lost value," Matthews says in a news release. "The way companies come together to execute projects remains essentially the same despite technology's improvement and we have to make fundamental, disruptive changes to deliver more value."

The growing blockchain-as-a-service company closed $6 million series A round earlier this year. Courtesy of Data Gumbo

Originally built for upstream drilling and completions within the oil and gas industry, Data Gumbo has grown its clientbase over the past few years. The company provides its blockchain-as-a-service services as a subscription for its clients.

Recently, the company was announced to be one of the two Houston-based companies in Plug and Play Tech Center's inaugural Houston cohort, and, earlier this year, the company was named among Crunchbase's top 50 hottest tech companiesCrunchbase's top 50 hottest tech companies. The growing company also hired another executive this summer —the company's new chief commercial officer is Sergio A. Tuberquia — following the closing of a $6 million series A round.

Plug and Play Technology Center has named its first 15 startups in its Houston Energy and Sustainability cohort. Getty Images

Exclusive: Plug and Play announces 15 energy tech companies for inaugural Houston cohort

onboarding

A Silicon Valley accelerator program has announced the companies that will participate in its first Houston cohort just as the program begins to foster energy tech innovation in town.

Plug and Play Technology Center, which announced its entry into the Houston market this summer, named the 15 companies that will complete the program. While there are only two Houston-based companies in the mix this time around, all 15 companies will be operating locally with Houston corporate partners and startup development organizations.

"By being a part of this Plug and Play cohort, our corporate partners have validated that there is an interest in these startups' technology solutions," says Payal Patel, director of corporate partnerships for Plug and Play in Houston. "This will encourage these non-Houston based startups to spend more time in Houston, likely (and hopefully) leading to them doing business with our corporations, raising money from local investors, hiring local talent, and setting up an office in Houston."

Patel says the selection process was similar to the due diligence done in investor research, since Plug and Play treats its startups like a portfolio of sorts. Plug and Play hosted a pitch night in September as a way to introduce the cohort finalists to the ecosystem before making the final selection.

"We used the technology focus areas of our corporate partners to source 100 startups with commercial viability in Houston," Patel says. "Through consultation with our partners and voting at our Selection Day event in September, we ultimately narrowed the group to 15 startups we believe we can provide value to over the next few months."

The startups are off to Plug and Play's headquarters in California for a Focus Week, Patel says, then will return to Houston for various corporat events, converences, and more as part of the program.

Here are the 15 companies that will participate in the energy and sustainability accelerator from Plug and Play Tech Center.

Alchera Inc.

Founded: 2016
Money raised: $6 million
Employees: 45 full time, 60 part time
Headquarters: South Korea
About: Alchera's technology uses artificial intelligence image to prevent the loss of lives and money in dangerous situations on site.

Ario Technologies Inc.

Founded: 2016
Money raised: $2.3 million
Employees: 8 full time, 1 part time
Headquarters: Norfolk, Virginia
About: Ario has a augmented reality technology that allows its users to search its data in the real world.

Blacksands Inc.

Founded: 2012
Money raised: $1 million
Employees: 5 full time, 7 part time
Headquarters: Sunnyvale, California
About: Blacksands has a secured connection as a service business model for fast-paced cybersecurity.

BlastPoint

Founded: 2016
Money raised: $1.3 million
Employees: 7 full time, 3 part time
Headquarters: Pittsburgh, Pennsylvania
About: Using internal insights and data, BlastPoint helps make innovative ideas a reality in the workplace.

ForePaas

Founded: 2015
Money raised: $10 million
Employees: 40 full time, 1 part time
Headquarters:
About: The ForePaas platform combines cloud-based technology and data applications to optimize and accelerate industrial internal enterprise data initiatives.

Capella Space

Founded: 2016
Money raised: $50 million
Employees: 50 full time, 0 part time
Headquarters: San Francisco
About: Capella Space is building a large commercial radar satellite constellation to speed up the informed decision making process for industrial workers down on earth.

Cumulus Digital Solutions

Founded: 2018
Money raised: $4.5 million
Employees: 14 full time, 4 part time
Headquarters: Cambridge, Massachusetts
About: Using data collection and cloud-based software, Cumulus is eliminating poor work quality that causes accidents in the field.

Data Gumbo

Founded: 2016
Money raised: $3.2 million
Employees: 19 full time, 4 part time
Headquarters: Houston
About: Data Gumbo has developed a blockchain network for automated contract execution for industrial clients

Latium Technologies

Founded: 2019
Money raised: $1 million (Canadian)
Employees: 8 full time, 0 part time
Headquarters: Edmonton, Canada
About: Latium has developed a better industrial IoT platform for heavy industry.

Indegy

Founded: 2014
Money raised: $18 million
Employees: 53 full-time, 0 part-time
Headquarters: New York
About: Indegy specializes in real-time security for industrial campuses.

Ingu Solutions

Founded: 2014
Money raised: $2.1 million (Canadian)
Employees: 10 full-time, 0 part-time
Headquarters: Calgary, Canada
About: Ingu wants to revolutionize the economics of the pipeline industry with new technology and initiatives.

Cemvita Factory

Founded: 2017
Money raised: None disclosed.
Employees: 8 full time, 10 part time
Headquarters: Houston
About: Cemvita has patented technology that can mimic photosynthesis to lower carbon emissions.

KX

Founded: 1999
Money raised: None disclosed.
Employees: 2,500 full-time and 0 part-time
Headquarters: Northern Ireland
About: KX is a data company that uses its global technology in the finance, retail, pharma, manufacturing, and energy industries.

Ondaka Inc.

Founded: 2017
Money raised: $1.6 million
Employees: 8 full time, 2 part time
Headquarters: Palo Alto, California (has a local office at Station Houston)
About: Ondaka uses an alphabet soup of buzzword technologies — IoT, AI, VR — and allows oil and gas companies to really visualize their infrastructure.

Terrapin

Founded: 2016
Money raised: $3 million
Employees: 10 full time, 5 part time
Headquarters: Edmonton, Canada
About: Terrapin is a designer and developer of industrial heat recovery projects.

Houston-based Data Gumbo is entering a new phase of business within oil and gas. Courtesy of Data Gumbo

Houston oil and gas blockchain company expands into new sector

Building blockchain

With a new partnership, Houston-based Data Gumbo Corp. will move into a new sector within oil and gas, allowing the startup to tap into the Permian Basin.

Austin-based Antelope Water Management, which provides sustainable water solutions within the O&G industry, has partnered with Data Gumbo on its blockchain network, called GumboNet™, allowing the Houston startup to go beyond the drilling sector. The partnership means Data Gumbo will have life operations in both onshore and offshore drilling, including in the shale basins, according to a news release.

"As an integrated water management company in the Permian Basin providing tailored management services for water infrastructure, we look forward to incorporating Data Gumbo into each of our business units," says Dustin Brownlow, CEO of Antelope, in the release. "Data Gumbo is a game changer enabling us to provide customers, vendors, and regulators the best experience that smart contracts can offer."

According to the release, this partnership is the first use of a blockchain platform for water management services in U.S. shale sites in the industry.

"Data Gumbo was the first blockchain in offshore drilling and now we are the first in oil and gas water management. We anticipate continuing to break ground across the industry as companies realize the vast benefits we afford them such as security, certainty of data and, most of all, savings to the bottom line," says Andrew Bruce, CEO of Data Gumbo, in the release.

The technology allows for valuable cost-saving initiatives, including lower overhead expenditures, fewer outstanding payments between parties, and data certainty for business transactions.

Data Gumbo operates as a blockchain-as-a-service company, where clients across midstream, drilling and completions opt into the network service. The company was founded in 2016 and recently closed a $6 million Series A round.

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These 3 Houston research projects are aiming to fight or prevent cancer

Research roundup

Cancer remains to be one of the medical research community's huge focuses and challenges, and scientists in Houston are continuing to innovate new treatments and technologies to make an impact on cancer and its ripple effect.

Three research projects coming out of Houston institutions are providing solutions in the fight against cancer — from ways to monitor treatment to eliminating cancer-causing chemicals in the first place.

Baylor College of Medicine's breakthrough in breast cancer

Photo via bcm.edu

Researchers at Baylor College of Medicine and Harvard Medical School have unveiled a mechanism explains how "endocrine-resistant breast cancer acquires metastatic behavior," according to a news release from BCM. This research can be game changing for introducing new therapeutic strategies.

The study was published in the Proceedings of the National Academy of Sciences and shows that hyperactive FOXA1 signaling — previously reported in endocrine-resistant metastatic breast cancer — can trigger genome-wide reprogramming that enhances resistance to treatment.

"Working with breast cancer cell lines in the laboratory, we discovered that FOXA1 reprograms endocrine therapy-resistant breast cancer cells by turning on certain genes that were turned off before and turning off other genes," says Dr. Xiaoyong Fu, assistant professor of molecular and cellular biology and part of the Lester and Sue Smith Breast Center at Baylor, in the release.

"The new gene expression program mimics an early embryonic developmental program that endow cancer cells with new capabilities, such as being able to migrate to other tissues and invade them aggressively, hallmarks of metastatic behavior."

Patients whose cancer is considered metastatic — even ones that initially responded to treatment — tend to relapse and die due to the cancer's resistance to treatment. This research will allow for new conversations around therapeutic treatment that could work to eliminate metastatic cancer.

University of Houston's evolved brain cancer chip

Photo via uh.edu

A biomedical research team at the University of Houston has made improvements on its microfluidic brain cancer chip. The Akay Lab's new chip "allows multiple-simultaneous drug administration, and a massive parallel testing of drug response for patients with glioblastoma," according to a UH news release. GBM is the most common malignant brain tumor and makes up half of all cases. Patients with GBM have a five-year survival rate of only 5.6 percent.

"The new chip generates tumor spheroids, or clusters, and provides large-scale assessments on the response of these GBM tumor cells to various concentrations and combinations of drugs. This platform could optimize the use of rare tumor samples derived from GBM patients to provide valuable insight on the tumor growth and responses to drug therapies," says Metin Akay, John S. Dunn Endowed Chair Professor of Biomedical Engineering and department chair, in the release.

Akay's team published a paper in the inaugural issue of the IEEE Engineering in Medicine & Biology Society's Open Journal of Engineering in Medicine and Biology. The report explains how the technology is able to quickly assess how well a cancer drug is improving its patients' health.

"When we can tell the doctor that the patient needs a combination of drugs and the exact proportion of each, this is precision medicine," Akay explains in the release.

Rice University's pollution transformation technology

Photo via rice.edu

Rice University engineers have developed a way to get rid of cancer-causing pollutants in water and transform them into valuable chemicals. A team lead by Michael Wong and Thomas Senftle has created this new catalyst that turns nitrate into ammonia. The study was published in the journal ACS Catalysis.

"Agricultural fertilizer runoff is contaminating ground and surface water, which causes ecological effects such as algae blooms as well as significant adverse effects for humans, including cancer, hypertension and developmental issues in babies," says Wong, professor and chair of the Department of Chemical and Biomolecular Engineering in Rice's Brown School of Engineering, in a news release. "I've been very curious about nitrogen chemistry, especially if I can design materials that clean water of nitrogen compounds like nitrites and nitrates."

The ability to transform these chemicals into ammonia is crucial because ammonia-based fertilizers are used for global food supplies and the traditional method of creating ammonia is energy intensive. Not only does this process eliminate that energy usage, but it's ridding the contaminated water of toxic chemicals.

"I'm excited about removing nitrite, forming ammonia and hydrazine, as well as the chemistry that we figured out about how all this happens," Wong says in the release. "The most important takeaway is that we learned how to clean water in a simpler way and created chemicals that are more valuable than the waste stream."

Deloitte lays out the benefits of digital innovation

Some workers fear technology, wondering "will a robot eventually replace my job?" Yet, Deloitte Insights and MIT Sloan Management Review found in a recent study that the more a company uses digital technology, the more likely it is to be innovative, which can benefit individuals, teams, organizations, and groups of organizations.

Deloitte and MIT collaborated for the fifth time to conduct a global study about digital innovation. They surveyed more than 4,800 businesspeople and interviewed 14 subject matter experts. The results were published in a June 2019 report titled "Accelerating Digital Innovation Inside and Out."

Deloitte and MIT shared two main findings from the survey:

  1. Digitally maturing companies innovate at higher rates — both internally and externally — than companies with early or developing digital maturity.
  2. Companies should know their ethics so that they can innovate wisely.

Internal innovation
Most digitally maturing companies innovate internally in two ways. First, they typically allow individuals to innovate within their jobs. The more digitally mature a company is, the more likely an employee was to say that more than 10 percent of their work involves the opportunity to experiment and innovate. The opposite was also true. Employees of less digitally mature companies were more likely to say that less than 10 percent of their work involves the opportunity to experiment and innovate.

In addition to encouraging individuals to innovate, most digitally maturing companies urge groups to innovate by establishing cross-functional teams. These teams are generally comprised of individuals from across multiple departments and roles and often exist to accomplish a specific task. Deloitte and MIT found that 83 percent of digitally maturing companies surveyed use cross-functional teams. This is far higher than respondents of either developing or early-stage companies' cross-functional team use — 71 percent and 55 percent, respectively.

External innovation
In addition to having employees innovate internally (both individually and in groups), digitally maturing companies often innovate externally by collaborating with others (e.g., their customers, their competitors, government institutions, and more) in their ecosystem. Ecosystems, which are formal or informal networks of organizations working toward a common goal, typically feed innovation in two ways. First, they integrate platform companies, meaning that companies that provide services to other companies — such as Amazon and PayPal — are both a part of the ecosystem and also strengthen it by being part of it.

Second, digitally maturing companies allow all organizations within the network to get better feedback. A company is not just getting feedback from their own customers, but from all customers within the ecosystem.

Ethics and innovation
In order to get the most benefit from their internal and external collaborations, companies should use "loose coupling," a term first coined by organizational theorist Karl Wieck. This means that individuals are linked to teams, teams to the organization, and the organization to fellow members of its ecosystem — but not too tightly. This model allows people the freedom to have both some autonomy and also some oversight as they innovate. If people are micromanaged, they are not able to innovate as well.

Because innovation requires loosening the reins somewhat, companies should have strong ethics systems in place. Otherwise, innovation can get out of hand, and a company risks having employees develop goods or services which aren't in line with organizational values.

Survey conclusion
Over half (56 percent) of survey respondents said they think their organization will exist and be in a much stronger position in 10-20 years due to the organization's use of digital capabilities. A similar percentage (44 percent) of survey respondents said that in 10-20 years, they think that their organization will have been bought out or gone out of business. Companies can act based on market and competitive forces but cannot control them. Companies can, however, decide how much of a priority digital innovation will be.

If they decide it is a priority, how can companies become more innovative? Companies should consider several tips:

  1. Work with other organizations within your ecosystem.
  2. Prioritize cross-functional teams.
  3. Use loose coupling which allows room for trial and error.
  4. Establish and continually update your ethics guidelines.

Innovation in Houston
The Houston innovation scene is thriving, and local organizations know that they are stronger together than apart. Houston Exponential is a "nonprofit organization created to accelerate the growth of Houston's innovation ecosystem" which hopes to "turn Houston into a hub for high-growth high-potential companies by creating pathways for innovation to flow at scale." Houston Exponential has stakeholders from companies, non-profits, government entities, and academic institutions.

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This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee ("DTTL"), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as "Deloitte Global") does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.

Copyright © 2020 Deloitte Development LLC. All rights reserved.

Growing Houston thrift startup aims to impact the unsustainability of the fashion industry

do goodfair

A Houston-based online retailer for second-hand clothing is quickly growing, aiming to make "No New Things" the mantra of the fashion world.

As the popularity of "Fast Fashion," or cheap clothing produced rapidly by mass-market retailers, begins to decline, brands are refocusing on upcycled, recycled, and sustainable clothing — and Goodfair has bet its business plan on this movement.

"I realized that there was too much stuff out there," says Topper Luciani, founder and CEO of Goodfair, "and there is an environmental crisis being caused by the clothing industry. They're manufacturing so many items, they're using slave labor, they're pumping dyes and other chemicals into rivers. It's absolutely wild."

The fashion industry contributes 10 percent of the world's carbon emissions, is the second-largest user of the earth's water supply, and pollutes the oceans with microplastics according to a report from Business Insider in October 2019. Additionally, the outlet reports that 85 percent of all textiles go to the dump every year.

"Still, we have an enormous demand for these clothes that are being thrown away and that demand is just being filled by more cheap new clothes at malls and things like that, instead of reintroducing second-hand clothes," says Luciani. "I've been working really hard on creating a way to make a frictionless process for reintroducing those clothes."

Luciani, tells InnovationMap that he predicts the size of the recycled clothing industry will grow to $51 billion by 2023. Following in the footsteps of second-hand online retail giants such as thredUP and Poshmark, Luciani takes things to the next level by focusing on adding ease to the online shopping experience, telling InnovationMap that it should be as easy as clicking one button.

The idea of Goodfair was surprisingly not inspired by the apparel industry at all. Luciani tells InnovationMap that he was influenced by the founder of Uber, Garret Camp, and Camp's idea for a one-click car service.

"Their whole concept was to just hit a button and a taxi comes, says Luciani. "I wanted to look at a thrift store through that lens."

Goodfair, which launched in 2018, adds to the trend of second-hand clothing with the introduction of "mystery shopping," shipping all of their clothing in variety packs chosen according to a customer's size and taste. This eliminates the cost of photographing, measuring, lowering the price for both the customer and the company.

"I had this idea that not only would mystery shopping eliminate the paradox of choice, but everyone loves a surprise," he tells InnovationMap.

Luciani tells InnovationMap that he sees a trend among Gen Z, individuals born between 1995–2009, for buying second-hand, noting that about 90 percent of Goodfair customers are between the ages of 18 and 25. thredUP also reports that Gen Z and Millennials are driving the growth of used clothing retailers, noting that "18–37 year-olds are adopting second-hand clothing 2.5 times faster than other age groups" in the company's 2019 Resale Report.

"This was the generation that was forged in the Great Recession and they saw the ills of decadence," says Luciani. "They saw the ills of not having financial literacy. Ultimately, these woke kids are aware that branding is kind of a heist."

Goodfair taps into this market, leaning into social media platforms such as Instagram and Snapchat to promote the company. The company recently kicked off an Instagram series called "In the racks, in the rags" where followers can win a random item from their warehouse, located in Houston's East End.

Goodfair joins the growing roster of local companies focused on sustainable fashion. For example, Magpies & Peacocks, the nation's only nonprofit design house, opened a new store in the East End last year. Houston is home to a number of brick-and-mortar stores which line Westheimer Boulevard in the heart of the city, including Buffalo Exchange, Leopard Lounge, Pavement, and LO-FI.

Luciani, who moved to Houston from Brooklyn, New York, leads Goodfair with Emily Keeton, COO. Keeton joined the company in October 2019, leaving her previous leadership role at WeWork. The company announced in January 2020 that they will be adding a vice president of marketing to the team.

In the coming years, Luciani tells InnovationMap that he hopes to launch an app for the brand, and also expand into offering other goods.

"I have a vision of essentially creating a used Amazon," says Luciani, "Everything that gets donated to thrift stores can get donated in this mystery mechanic."

Luciani has a long history in the textile industry. In 2004 while in college, he launched a men's polo shirt brand, Sir Drake.

"When I reflected on the experience and as I educated myself about the clothing industry, this was right when fast fashion was taking off, I realized that if I launched another fashion brand that I would just be contributing to industrial pollution problem," he says.

He tells InnovationMap that he then started selling used neckties on eBay, launching his mission with sustainable fashion.

"We expect that a year from now we will be generating five times the sales we did in 2019 and become a multi-million dollar business," Luciani says.