At a recent virtual event, experts discussed the hard tech wave that's coming for Houston. Photo via Getty Images

The past couple decades of innovation has been largely defined by software — and its been a bit of a boom. However, lately it's become evident that it's time for hardware innovation to shine.

At the HX Venture Fund's recent conference, Venture Houston, a few hard tech innovators joined a virtual discussion on the future of hardware — and what Houston's role will be in it.

When it comes to advancing technology for humankind, Adam Sharkawy, founder and managing partner of Boston-based Material Impact, a HXVF portfolio fund, says it's time to expand the walls of what is possible.

"Unlike other types of technologies that may facilitate the possible, deep and hard technologies expand what is in the realm of the possible," he says on the panel. "Software has caught up, and we need a new deep tech wave."

And the future looks promising, as Sharkawy says he's seen hard tech grow over the past 5 to 7 years by about 22 percent. Nic Radford, president and CEO of Houston Mechatronics agrees it's time to shift the focus to hard tech.

"The Information Age was the ubiquitous manipulation of the virtual world, but now we need to uncover the ubiquitous manipulation of the physical world is," he says. "And we need to make those investments toward that."

But investments seem, at least in the recent past, harder to come by for hard tech startups compared to software companies with quick exit strategies.

"Deep tech is traditionally thought of as requiring deep pockets," Sharkawy says.

Radford says there was over $167 billion in capital deployments last year, and only 8 percent of that went to industrial or hard tech. Hardware, he says, is tougher to evaluate, they take longer to exit and are tougher to scale.

"To me that's what makes them a gold mine," Radford adds. "It's an underserved market for sure, and that's because we're tougher to evaluate."

Something to note though, he continues, is that hard tech is going to have a bigger societal impact, but maybe it's not the one with the biggest return.

"I think corporates have an special role to play in the inevitability of hard tech," Radford says. "They aren't completely motivated by financial returns."

Gaurab Chakrabarti, CEO and co-founder of Solugen, says he's had a different experience with raising funds. The Houston entrepreneur has raised over $100 million and is planning to go public soon. He's achieved this by attracting investment from the top VC funds in the country. If you zero in on these powerful funds, you can see they are dedicating more and more funds to this arena. And, he predicts, other VC funds will follow.

"This is a unique time for hardware companies to go and and raise from the top venture capitals of the world," Chakrabarti says.

The city of Houston, with its firm footing in the energy and space industries has an important role to play in this new era.

"The Houston area has all the key ingredients to be an innovation hub — no question," Sharkawy says.

The panelists identified Houston's fine education institutions, major corporations present, access to talent, and more as indicators for success. But the innovation here needs to continue to develop intentionally.

"I'd love to see Houston not try to copycat into a general tech hub," Sharkawy says. "Instead it would be great for Houston leverage its unique position as a leader in energy and space and help its constituents of more traditional energy — big corporates, for example — transform into the new frontier."

Vanessa Wyche, deputy director at NASA's Johnson Space Center, says she's seen the space industry take off as the field becomes more and more commercialized. And locally there's a lot of potential for Houston and all the resources and infrastructure that already exists.

"It's about taking what you're good at, and making it better," she says.

Each of the panelists expressed confidence in this evolving wave of hard tech — and are keeping a close watch on the major players as well as the city of Houston.

"We're going to have to get into the world and do something," Radford says. "That next wave of innovation is specifically interacting with our environment, in my opinion."

The journey from ideation to creation, and then manufacturing can be difficult, but rewarding. Photo courtesy of OKGlobal

These are the risks and rewards of prototyping, according to Houston expert

Guest column

We live in a digital world. Music, movies, and even family photos have become primarily digital. Computer software offers us a range of comfort and efficiency and has become part of our daily routine. So, why would anyone want to build a career around physical product development?

Simple, almost every software product or next big thing relies on a well-executed physical product development project. Apps need a place to run, games need a console to be played, and pictures need a camera to be taken.

Physical product development means dreaming of something that does not yet exist and solves an existing problem. It means taking an intangible idea and making it into a physical item that people can see, touch, and use.

The journey from ideation to creation, and then manufacturing can be difficult, but rewarding. By understanding the process, you'll find that not only is your inspiration worth pursuing, but it may be one of the most fulfilling things you will ever do.

From inspiration to perspiration

Every product development project begins with a vision, the identification of a problem and a solution for that problem. That initial spark of inspiration is what drives the entire project.

Look for a problem that hasn't been solved and solve that problem, or try the reverse. Think of a product idea, and then work backwards to find the need. Regardless, one cannot be successful without the other.

Projects require this problem, or need, because it embodies the product's target market. A product idea without a well-defined need has no reason to exist, and if it did, it would be downright perplexing.

Once you identify your need and idea, start your research.

Test the validity of your idea. How much of a market exists for your problem-solving miracle? Send out surveys, look at various markets, conduct data analyses, and generally, do everything in your power to ensure that your product should be made.

Then, start making something.

From concept to reality

The design, prototype and manufacturing stages are what bring your inspiration closer to reality. Turning it into a concrete product means letting go, and that can be scary.

Initial concept designs can be done in a variety of different ways. Detailed sketches and blueprints could be drawn up, or CAD drawings can be created. This concept design can help you explain your idea to others, including partners and investors. What works even better, though, are prototypes.

A prototype is a preliminary model of your product that can help you determine the feasibility of different aspects of your design. You can make a functional prototype, which acts as a proof-of-concept for your idea, or you may create aesthetic prototypes that will test the look and feel of your product.

Once you nail down the ideal appearance and physicality of your product, you will need to combine the two disciplines as seamlessly as possible. This performance prototype will effectively demo your final product.

Finally, you can prepare your product for production. Designing for manufacturability (DFM) means ensuring that your product can be made efficiently and cost-effectively. DFM allows you to mistake-proof your product by choosing the best manufacturing materials and methods, while keeping in mind the appropriate regulations for your desired market.

From nothing into something

The product development process often changes. Trends like crowdsourcing and innovative fast-to-market solutions constantly upend the process and make it new again. Some automakers, for example, want to innovate the design process using existing customer data — similar to how companies like Microsoft and Apple create iterative versions of their software product development projects.

Getting your product to market can be tough, but certain approaches can ease the burden. Create a simpler product. Fail fast and fail cheap with lean development, meaning limit your risk to maximize your return. Also, never underestimate the importance of customer feedback and intellectual property protection throughout the process.

With that said, invest in yourself and your inspiration, and you will avoid that nagging what if-mentality that drives regret. Great reward always requires risk, but there are also ways to invest smarter. Use available resources and give your dream the best chance for success.

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Onega Ulanova is the founder of OKGlobal.

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New UH survey reveals concerns over AI data center growth in Houston

data findings

A new report out of the University of Houston shows that area residents remain wary of the long-term effects of operating data centers.

The recent survey from the University of Houston’s latest SPACE City Panel, conducted by the Center for Public Policy at the Hobby School of Public Affairs, shows that while 85 percent of Houston-area residents use AI, nearly 63 percent oppose the construction of AI data centers within 1 mile of their homes.

Respondents’ concerns centered around data centers’ high energy demand and the area’s power grid reliability. According to the survey, 32 percent of residents who oppose local data center projects would be more likely to support the centers if they relied on renewable energy over fossil fuels.

“Respondents understand that AI can bring economic and educational benefits, but they are also concerned about the physical infrastructure needed to fuel AI, especially data centers,” Soran Mohtadi, post-doctoral fellow at the Hobby School and a researcher on the report, said in a news release. “This physical infrastructure demands more electricity and water, leading to environmental impacts.”

Experts estimate that 6.5 gigawatts of data center capacity will be added to the Texas grid by 2030. And Houston’s data center capacity is predicted to more than double by 2028.

The Electric Reliability Council of Texas also projects electricity demand could reach 218 gigawatts by 2031, which would be more than double the record peak set in August 2023. Data centers are expected to account for 86 gigawatts of that new demand.

Survey respondents also said they are concerned about the state's future water supply, given the large amounts of water that data centers need to stay cool.

In terms of who’s responsible for that issue, 57.6 percent of respondents said they put the onus on Texas lawmakers, while 31.5 percent say tech companies should be responsible.

Additionally, more than 75 percent of respondents believed that data center developers and technology companies—not residents—should bear the cost of infrastructure upgrades to support data centers.

“Every decision legislators make has implications on residents’ everyday lives and local infrastructure now and in the future,” Maria P. Perez Arguelles, lead researcher on the report and research assistant professor at the Hobby School, added in the news release. “This issue is going to become more important in years to come, so this is just the beginning.”

Read the full report here.

Houston-born Cemvita makes breakthrough in sustainable fuel production

clean fuels

Houston-based biotech company Cemvita announced that it recently reached a critical milestone in the development of its FermOil product, which can be used to create Sustainable Aviation Fuel (SAF) and other renewable fuels at industrial scale.

The company shared in a news release that it completed a 75,000-liter industrial fermentation run at Belgium's Bio Base Europe Pilot Plant.

The campaign achieved target technical metrics for the production of FermOil, Cemvita’s renewable natural oil (RNO). FermOil is produced from industrial crude glycerin, an industrial byproduct, as opposed to traditional sugar-based feedstocks used in many bio-oil fermentation processes. It's designed to be a drop-in feedstock for creating SAFs.

Cemvita had previously advanced its FermOil production process through multiple scale-up stages before successfully reaching the 75,000-liter demonstration campaign, according to the company.

“This is not just a fermentation milestone,” Moji Karimi, CEO at Cemvita, said in the release. “It is a blueprint for how existing industrial infrastructure can evolve into circular bioeconomy infrastructure. Every biodiesel plant generating crude glycerin is a potential platform for renewable natural oil production.”

The milestone also supports the deployment of Cemvita’s industrial biomanufacturing platform, FermWorks, which integrates with existing energy and industrial infrastructure to turn waste carbon streams into SAFs and other materials. According to the release, Cemvita plans to move forward with commercial deployment discussions with partners in Brazil, Europe and in the UK. Cemvita already has a partnership with the Brazilian sustainable research institution REMA.

“We are proud to support innovative companies like Cemvita in scaling breakthrough industrial biotechnology solutions,” Hendrik Waegeman, head of business operations at Bio Base Europe Pilot Plant, added in the release. “Successfully operating at the 75,000-liter scale using a feedstock such as crude glycerin highlights both the maturity of the technology and the quality of the scale-up execution achieved by the Cemvita team.”

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This article originally appeared on our sister site, EnergyCapitalHTX.com.

Eli Lilly scoops up Houston biotech startup in $300 million deal

big pharma deal

Pharmaceutical giant Eli Lilly has acquired Houston biotech startup CrossBridge Bio, which develops antibody-drug conjugates for cancer, in a deal worth up to $300 million. The deal was celebrated by TMC Venture Fund and the University of Texas Health Science Center at Houston last week.

CrossBridge, founded in 2023, is developing ADCs based on research by Kyoji Tsuchikama and Zhiqiang An, both of UT Health Houston. Tsuchikama is an associate professor of medicinal chemistry and a globally recognized ADC pioneer, and An is a professor of molecular science and vice president of drug discovery.

Antibody-drug conjugates (ADCs) are a potent combination of targeted therapy and chemotherapy that kills cancer cells while saving healthy tissue.

Clinical trials for CrossBridge’s primary ADC candidate, CBB-120, are expected to start this year, pending approval from the U.S. Food and Drug Administration (FDA).

“I’m proud of how well our team has executed and advanced our platform in such a short time since the company’s founding,” Michael Torres, co-founder and CEO of CrossBridge, said in a news release. “By becoming a part of Lilly, a leader in patient-focused therapeutic development, we are well-positioned to further accelerate the clinical potential of this approach.”

Under the Lilly deal, CrossBridge shareholders were expected to receive an upfront payment along with a follow-up payment based on the achievement of certain milestones.

In 2024, CrossBridge closed a $10 million seed round. Among the investors in CrossBridge are the Texas Medical Center Venture Fund, CE-Ventures, Alexandria Venture Investments, Portal Innovations, Linden Lake Labs, and the Cancer Prevention and Research Institute of Texas (CPRIT). It was formed in TMC Innovation’s Accelerator for Cancer Therapeutics program."Built within the TMC ecosystem, CrossBridge Bio grew with the support, funding, and resources that helped shape its trajectory. TMC led the company's early financing and watched it evolve from its earliest days to its acquisition by Eli Lilly," William McKeon, president and CEO of the Texas Medical Center, shared in a LinkedIn post. "[This is a] strong reminder that breakthrough science and the right early backing can change what’s possible."