Business leaders must focus on risks as much as on profit to ensure business success, according to Rice University research

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When it comes to getting a good return on investment, businesses should be equally focused on mitigating risks as they are on earning a profit. Getty Images

Consider for a moment the race to build the next super computer. Google, Alibaba and other U.S. and China companies are racing to build a machine — called quantum computing — far more powerful than anything the world has ever seen. In this race, China reportedly has the lead.

Given that this kind of technology can protect trillions of dollars in corporate and even national secrets, why do American companies lag behind? If such research and development represents an unknown and is a potential business risk, should U.S. companies be interested in assuming such a task? Rice Business professors Vikas Mittal, Yan Anthea Zhang and a Rice Business Ph.D. student Kyuhong Han, may have answers.

They researched the various ways companies create strategic advantages for themselves. What is the relationship between these strategies and the risks involved? Companies create value through innovation-based activities such as research and development or else via branding and advertisement. As there's no set formula for success, each company has its own approach — which could affect the risk associated with the company's stock price (called idiosyncratic risk).

Typically, the two strategic pillars are examined separately, rather than jointly. But when they compared the two approaches, they found that one presented far more risk than the other.

To reach their conclusions, the Rice team looked at a data set of 13,880 firm-year observations that included 2,403 firms operating in 59 industries over 15 years (2000–2014). The data sets were from the firms' annual operational and financial information from Standard & Poor's Compustat, the University of Chicago's Center for Research in Security Prices and from the Kenneth French Data Library. What the data revealed was the stock price of companies that placed a higher strategic emphasis on marketing and branding (called value appropriation) than companies that focused research and development (called value creation).

If it is less risky for a firm to emphasize branding and marketing over research and development it stands to reason that firms would want to exercise caution in big new research and development efforts. What's the payoff for making a quantum computer or even Space X, after all, if the research and development risks associated with the endeavor are extraordinarily high? In some instances, it may be much safer to rebrand and market. Closer to home, many companies in the oil and gas industry bet big on innovative ventures — costly product features, digitization initiatives and so on that may only increase the risk to their stock price than meet customer needs.

The researchers found that firms that plunge big efforts into research and development have more to worry about than whether their innovations will work. They have to weather the fluctuations of industry demand. When industry demand is volatile, the downside of excessive research and development, at the cost of customer-relevant strategies is even worse.

For the Rice Business researchers, the lessons for managers are clear. The return on investment is intimately linked not only with optimizing potential profits but also minimizing potential risks. Research and development heavy endeavors like Space X and quantum computers may be flashy, but in the event of an unexpected drop in demand, they're also more likely to plummet to earth, creating stock-price volatility.

Managers need to think about the elements that create risk — like demand instability. The more companies create a stable and predictable client base, the less risk that they have to face in the stock market. There is still a tendency among many firms to see advertising and research and development as preceding and guiding customer perceptions, preferences and behaviors. But perhaps the relationship is just the opposite.

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This article originally appeared on Rice Business Wisdom. Vikas Mittal is the J. Hugh Liedtke Professor of Marketing at the Jones Graduate School of Business at Rice University. Yan Anthea Zhang is a Fayez Sarofim Vanguard Professor of Management at the Jesse H. Jones Graduate School of Business at Rice University. Kyuhong Han is a marketing Ph.D. student at the Jones Graduate School of Business at Rice University.

The stock market has been using tech for years — why shouldn't the private sector have the same convenience? Getty Images

Private securities investment company plans to use tech to simplify the process

Digital upgrade

When private companies are trying to raise capital, it's a pretty antiquated process. You take meeting after meeting, exchange dozens of emails, and then, when it's actually time to make an investment, there's a lot of paperwork to do. Seeing this over complicated way of handling things, Rashad Kurbanov thought introducing technology into the process could help simplify the investing for both sides of the equation.

"What we do, and where technology helps us, is we can take the entire process of receiving interest from investors, signing the transactions, issuing the subscription agreements, and processing the payments and put that all online," says Kurbanov, CEO and co-founder of Houston-based iownit.us.

Iownit has been in the works for about 18 months now, and has major growth plans, which includes hiring over a dozen new employees focused on tech and support.

The company is still seeking regulatory approval, but once that happens, the technology and platform will be ready to launch. The platform is a digital site that connects investors to companies seeking money. The investors can review the companies and contribute all online while being encrypted and protected by blockchain.

Diversifying the investment ecosystem
Kurbanov says the convoluted process of private securities investment has meant that startup companies are much more likely to focus on receiving funding venture firms, because they want to have a one-stop-shopping experience. When entrepreneurs add in multiple investors, they end up juggling too much of the logistics side of things, rather than running their company. Iownit's platform simplifies this process, which then allows for a diversity of investments in the ecosystem that's in the past been dominated by huge VCs.

Another way to look at it is that when it comes to investments, public investments has operated in a digital way for years — think of the stock market, for instance. But the private market has been limited to a small amount of accredited investors. The Jobs Act put into effect by Congress in 2012 changed the game a little bit, but the tech hasn't played a role yet.

"We realized there's a big section of the overall capital market that has not necessarily been touched by technology, and that's the space of private securities," Kurbanov says.

Reaching out to underserved communities
Kurbanov is based in New York, but he chose to start his company in Houston because, being focused on diversifying investments, he saw a huge opportunity when you move away from either coast. Houston has a strong corporate environment, access to capital, and great universities, says Kurbanov, but when it comes to the startup companies, it's not as proportional as it is on the East and West Coasts.

"Our goal is to put our technology and platform in use to support the capital formation in the entrepreneurial ecosystems that today don't have easy access to capital."

Every penny counts when you're starting a company. Getty Images

4 financial concerns to keep in mind when launching a startup

Must be the money

You have been working on a new creative technology idea for months, an idea that will solve a problem or make a current process even better. Your innovative idea is ready for the next step, and you, in turn, are prepared to begin your tech startup. Building a company can be stressful and exhausting, but also exhilarating and rewarding. As you begin your product launch, keep these financial tips in mind when starting out.

Consider your funding
Determine how much funding you can use from your personal accounts to jumpstart your business. By investing some of your own money into your company, you show good faith in your business plan and product. This method is appealing to investors because it shows you have a long-term commitment to the company. Next, determine how much you will need from other sources and what those other sources should be. Potential options of funding in addition to traditional bank loans are venture capitalists, angel investors, government grants, and support from business incubators.

Determine your budget
An essential step of starting up is concluding how much funding you need to get started. Establishing a realistic budget is crucial. It can make the difference between having a successful business or joining the 50 percent of small businesses that fail in the first four years. The hiring of employees, leasing office space or lab space, purchasing office equipment, paying for insurance (health and liability) and providing yourself a salary are all items that need to be included in your budget.

Unanticipated extra costs occur from time to time, so overestimate your expenses. Underestimating expenses can sink your startup. Ensure your business is solvent by preparing your budget for more. Additionally, keep in mind different types of expenses, and budget accordingly. For example, you may have one-time costs and on-going costs or fixed costs and variable costs.

Cash flow
According to a U.S. Bank Study, 82 percent of businesses that fail do so because of cash flow problems. Managing your cash flow is crucial to success. Without positive cash flow, you are not able to pay your employees, rent, or taxes. Having profits does not necessarily mean you have positive cash flow. Keep ongoing cash flow work sheets to ensure you have the cash you need to continue on a successful path.

Managing for life
As mentioned earlier, make sure you pay yourself something. It does not have to be a big salary in the beginning, but you need to eat. Additionally, you need to save for emergencies. An old rule of thumb states that an emergency fund should consist of three to six months' worth of expenses. As a result, an emergency fund can make the months where business is slow, or between projects, more sustainable.

Meanwhile, it is a good idea to separate your personal and business banking accounts. Doing so will allow you to stay more organized and help tracking and managing expenses easier. Additionally, separate accounts may be beneficial when paying taxes. Consult a tax professional for additional guidance on taxes. Finally, do not forget to save for your retirement. While it is important to focus on your new business, do not neglect to take care of your personal financial health.

With proper planning and continued financial monitoring, starting your own tech business can be done well and bring years of career satisfaction.

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Joseph Radzwill is senior vice president and a financial adviser with the wealth management division of Morgan Stanley in Houston.

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AI-powered Houston startup helps restaurants boost customer loyalty

order up

It’s no secret that restaurant trends move fast and margins run thin. And with the proliferation of platforms like Uber Eats, DoorDash and Easy Cater, customer loyalty is fleeting.

The solution?

How about an AI-powered restaurant technology platform that helps restaurant brands cut back on third-party platforms in favor of driving direct discovery, conversion and loyalty?

Enter Saivory. Founded in 2025 by Stephen Klein, a software investor, and Fajita Pete’s restaurateur Hugh Guill, the Houston-based startup aims to help eateries better understand and activate guest behavior across digital channels as AI increasingly reshapes how consumers discover and engage with brands.

In less than a year, Saivory has partnered with Shipley Do-Nuts and Fajita Pete’s to bring AI-powered ordering to life.

“With Saivory, we were able to answer the question of, ‘what if the ordering process could be reduced to a single step, where customers simply tell us what they want and AI takes care of the rest?’” Klein tells InnovationMap.

The Houston-based startup made such an immediate impact that it was selected as a semi-finalist during Start-Up Alley at MURTEC, the restaurant industry’s leading technology conference, which took place last month in Las Vegas.

“Houston is a great hub for technology innovation, and we were proud to represent the city at MURTEC this year,” says Klein. “We didn’t win, but we were able to talk about some of the work that we have existing in the market for clients right now and a little bit about what we’re working on in the future.”

In the current restaurant technology ecosystem, the third-party aggregators own the customer attention that brings volume to restaurants, while also taking big commissions and having control over the end relationships with the customer.

That can often make it difficult for restaurants to grow loyalty and repeat business from customers. Saivory aims to level the playing field for restaurants, helping them stay more connected to their customers.

Take Saivory’s recent application with Shipley’s Do-Nuts, for example.

Saivory powered the donut giant’s AI-ordering and launched Shipley's website and mobile app to support its over 300 locations in Texas alone.

Shipley’s new AI-powered assistant helps users create personalized order recommendations based on individual or group preferences. And unlike standard chatbox features, the new assistant makes custom recommendations based on multiple customer factors, including budgetary habits, individual flavor preferences and order size. It can also be used for large catering orders.

“They're seeing more traffic to the site and they're seeing when customers use our AI-enabled flows,” Klein says. “And they're seeing higher basket sizes, bigger tickets, by about 25 percent.”

Klein says Saivory’s technology helps strengthen first-party digital relationships, reduce friction and cart abandonment, improve average order value, and delivers personalized, efficient experiences.

“It’s a win-win: the customer gets the right order quickly, while the restaurant gets a bigger margin,” he adds.

Additionally, the technology makes it easier for restaurants to share rewards, loyalty and discounts, ultimately growing more direct traffic and making restaurants less reliant on third-party delivery apps.

Next up for Saivory is adding new components to its platform to enhance the relationship between restaurant and customer, as well as technology around making it easier for restaurants to get found on Google.

“A lot of people are still searching for the best donuts near me,” Klein says. “Or what’s the best Mexican food near me? Customers will increasingly move to AI, where they’re going to ask where they should eat dinner and expect it to just order them dinner. They will eventually expect the technology to know how to do that. So that’s what we’re driving at.”

Houston leads U.S. in population growth for 2025, Census says

Boomtown

Imagine that the Houston metro area swallowed a city the size of Pearland in just one year. That’s essentially what happened from 2024 to 2025, with the Houston metro ranking first in the U.S. for population growth based on the number of people.

New estimates from the U.S. Census Bureau show the 10-county Houston metro added 126,720 residents from July 1, 2024, to July 1, 2025. That’s just shy of Pearland’s roughly 133,000-resident tally.

To calculate population, the Census Bureau counts births, deaths, new residents, and moved-away residents.

Region’s population approaches 8 million

On July 1, 2025, the Houston metro’s population hovered slightly above 7.9 million, up 1.6 percent from the same time in 2024. In the very near future, the region’s population should break the eight million mark.

This follows massive growth in the past 20 years. From 2005 to 2025, the region’s population soared by 39 percent. By comparison, the growth rate from 2021 to 2025 sat at nine percent.

A forecast from the Texas Demographics Center indicates that under a middle-of-the-road scenario, the Houston metro’s population will reach nearly 8.5 million in mid-2030 and more than 9.5 million in mid-2040.

Dan Potter, director of Rice University’s Houston Population Research Center, attributes much of the region’s population surge to people moving to the area from outside the U.S. In Harris County, this means a combination of military personnel returning home, people living or working overseas coming back to the U.S., and immigrants relocating to the U.S., he tells CultureMap.

But Harris County fell short from 2024 to 2025 when it comes to people moving here from elsewhere in the U.S., according to Potter. Counties surrounding Harris County benefited from that trend, drawing new residents who preferred to settle in the suburbs.

“The incredible pull and attraction of the Houston area is its economy, its people, and its affordability, and the significant growth that was observed in 2024 and again in 2025 speaks to the magnetism of the region,” Potter says. “That pull to Houston is too strong to be turned off overnight.”

Cooling economy and immigration shifts slow down growth

Whether looking at urban or suburban places, population growth in the Houston area slowed in 2025 and appears to be slowing even more this year, Potter says.

“A cooling economy and changes to immigration policy are a one-two combination that could knock out the region’s population growth,” says Potter, citing the region’s addition of a less-than-expected 14,800 jobs in 2025 as an example.

Weaker population growth may not be felt evenly across the metro area, according to Potter.

A continuing influx of people from Houston to outlying counties such as Brazoria, Fort Bend, Liberty, Montgomery, and Waller could curb growth in Harris County, Potter said. Why? If the number of people arriving from other other countries flattens or even drops, then there could be “doughnut-style population growth for the next few years, where Harris County and Houston see declines while the suburban counties see an increase.”

Harris County represents 40 percent of region’s population lift

Houston-anchored Harris County accounted for almost 40 percent of the region’s population spike from 2024 to 2025. In one year, Harris County grew by 48,695 residents, or 1 percent, pushing its population past five million. That increase put Harris County in first place for numeric growth (rather than percentage growth) among all U.S. counties.

From 2020 to 2025, Harris County’s growth rate was 6.6 percent. It remains the country’s third largest county based on population, behind Southern California’s Los Angeles County and Illinois’ Chicago-anchored Cook County.

Harris County is on track to surpass Cook County in size in the near future. As of July 1, 2025, a nearly 150,000-resident gap separated population-losing Cook County and fast-growing Harris County.

The Texas Demographics Center predicts Harris County’s population will be 5.37 million in mid-2030 and just short of six million in mid-2040.

Suburban counties see significant population gains

Harris County isn’t the only county in the area that experienced a growth spurt from 2024 to 2025:

  • Waller County’s population climbed 5.69 percent, winding up at 69,858. Its growth rate ranked second among U.S. counties.
  • Liberty County’s population rose 4.4 percent to 121,364, putting its growth rate in eighth place among U.S. counties.
  • Montgomery County gained 30,011 residents, with its population landing at 781,194. That placed it at No. 4 among U.S. counties for numeric growth.
  • Fort Bend County picked up 24,163 residents, arriving at a total of 975,191 and positioning it at No. 8 among U.S. counties for numeric growth. Fort Bend County, the region’s second largest county based on population, is projected to break the one million-resident mark by July 2030, according to the Texas Demographics Center.

“Lower mortgage rates from 2009 to 2022 and the rise of remote work have made suburban housing more attractive, especially for families seeking affordability,” Pramod Sambidi, the Houston-Galveston Area Council’s assistant director of data analytics and research, said last year. “Additionally, suburban areas are seeing more multifamily developments than before the pandemic.”

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This article originally appeared on CultureMap.com.

5 Houston-area companies named among world's most innovative for 2026

In The Spotlight

Led by Conroe-based Hertha Metals, five organizations in the Houston area earned praise on Fast Company’s list of the World’s Most Innovative Companies of 2026.

Hertha Metals ranked No. 1 in the manufacturing category.

Last year, Hertha unveiled a single-step process for steelmaking that it says is cheaper, more energy-efficient and just as scalable as traditional steel manufacturing. It started testing the process in 2024 at a one-metric-ton-per-day pilot plant.

At the same time, Hertha announced more than $17 million in venture capital funding from investors such as Breakthrough Energy, Clean Energy Ventures, Khosla Ventures, and Pear VC.

“We’re not just reinventing steelmaking; we’re redefining what’s possible in materials, manufacturing, and national resilience,” Laureen Meroueh, founder and CEO of Hertha, said at the time.

Meroueh was also recently named to Inc. Magazine's 2026 Female Founders 500 list.

Hertha, founded in 2022, says traditional steelmaking relies on an outdated, coal-based multistep process that is costly, and contributes up to 9 percent of industrial energy use and 10 percent of global carbon emissions.

By contrast, Hertha’s method converts low-grade iron ore into molten steel or high-purity iron in one step. The company says its process is 30 percent more energy-efficient than traditional steelmaking and costs less than producing steel in China.

Last year, Hertha said it planned to break ground in 2026 on a plant capable of producing more than 9,000 metric tons of steel per year. In its next phase, the company plans to operate at 500,000 metric tons of steel production per year.

Here are Fast Company’s rankings for the four other Houston-area organizations:

  • Houston-based Vaulted Deep, No. 3 in catchall “other” category.
  • XGS Energy, No. 7 in the energy category. XGS’ proprietary solid-state geothermal system uses thermally conductive materials to deliver affordable energy anywhere hot rock is located. While Fast Company lists Houston as XGS’ headquarters, and the company has a major presence in the city, XGS is based in Palo Alto, California.
  • Houston-based residential real estate brokerage Epique Realty, No. 10 in the business services category. Epique, which bills itself as the industry’s first AI brokerage, provides a free AI toolkit for real estate agents to enhance marketing, streamline content creation, and improve engagement with clients and prospects.
  • Texas A&M University’s Nanostructured Materials Lab in College Station. The lab studies nano-structured materials to make materials lighter for the aerospace industry, improve energy storage, and enable the creation of “smart” textiles.
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This article first appeared on our sister site, EnergyCapitalHTX.com.

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